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                                                                   EXHIBIT 10.36

                                 AMENDMENT NO. 2

         THIS AMENDMENT NO. 2 (this "Amendment") dated as of February 2, 1999,
to the Credit Agreement referenced below, is by and among RAILWORKS CORPORATION,
a Delaware corporation, the subsidiaries identified herein, the lenders
identified herein, and NATIONSBANK, N.A., as Administrative Agent. Terms used
but not otherwise defined shall have the meanings provided in the Credit
Agreement.

                                   WITNESSETH

         WHEREAS, a $75 million credit facility has been extended to RAILWORKS
CORPORATION, a Delaware corporation (the "Borrower"), pursuant to the terms of
that Credit Agreement dated as of August 4, 1998 (as amended and modified, the
"Credit Agreement") among the Borrower, the Guarantors and Lenders identified
therein, and NationsBank, N.A., as Administrative Agent;

         WHEREAS, the Borrower has requested certain modifications to the Credit
Agreement which require the consent of the Required Lenders;

         WHEREAS, the Required Lenders have agreed to the requested
modifications on the terms and conditions set forth herein;

         NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:

         1.       The Credit Agreement is amended in the following respects:

                  1.1      In Section 1.1, the following definitions are amended
or added to read as follows:

                  "Amendment Date" means February 2, 1999 (being the date of
         Amendment No. 2).

                  "Bridge Credit Agreement" means that certain Credit Agreement
         dated as of February 2, 1999 by and among the Borrower, the Guarantors,
         the lenders party thereto and NationsBank, N.A., as Administrative
         Agent, as amended, modified, extended or renewed.

                  "Bridge Repayment Date" means the date on which all loans and
         obligations under the Bridge Credit Agreement are paid in full.

                  "Consolidated EBITDA" means for any period for the
         Consolidated Group, the sum of Consolidated Net Income plus
         Consolidated Interest Expense plus all provisions for any Federal,
         state or other domestic and foreign income taxes plus depreciation and
         amortization minus, to the extent not deducted in determining
         Consolidated Net Income, earn-out payments made in connection with the
         Permitted Acquisitions, in each case on a consolidated basis determined
         in accordance with GAAP applied on a consistent basis, but excluding
         for purposes hereof extraordinary gains and losses and related tax
         effects thereon.



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                  "Consolidated Fixed Charges" means for any period for the
         Consolidated Group, the sum of the principal amount of Consolidated
         Interest Expense (excluding the amortization of debt discount and
         premium) plus the greater of (i) (A) from the Amendment Date until the
         Bridge Repayment Date, ten percent (10%) of the sum of Obligations
         outstanding hereunder plus loans outstanding under the Bridge Credit
         Agreement, in each case on the date of determination and (B) subsequent
         to the Bridge Repayment Date, twenty percent (20%) of Obligations
         outstanding hereunder on the date of determination, or (ii) Two Million
         Dollars ($2,000,000), in each case on a consolidated basis determined
         in accordance with GAAP applied on an consistent basis. Except as
         otherwise expressly provided, the applicable period shall be for the
         four consecutive fiscal quarters ending as of the date of
         determination.

                  "Consolidated Senior Debt" means Consolidated Funded Debt less
         Subordinated Debt of the Consolidated Group on a consolidated basis as
         determined in accordance with GAAP.

                  "Consolidated Senior Leverage Ratio" means, as of the last day
         of any fiscal quarter, the ratio of Consolidated Senior Debt on such
         day to Consolidated EBITDA for the period of four consecutive fiscal
         quarters ending as of such day.

                  "Debt Transaction" means, with respect to any member of the
         Consolidated Group, any sale, issuance or placement of Subordinated
         Debt permitted by Section 8.1.

                  "Intercreditor Agreement" means that certain Intercreditor
         Agreement dated as of the date hereof by and among NationsBank, N.A.,
         as Administrative Agent under the Bridge Credit Agreement, NationsBank,
         N.A., as Administrative Agent under this Credit Agreement, and the
         Credit Parties, as amended or modified from time to time, in
         substantially the form of Exhibit A attached hereto.

                  "Permitted Acquisitions" means the acquisition by the Borrower
         or any of its Subsidiaries of the following entities: (a) Gantrex
         Group, (b) FCM Rail, LTD, (c) Walpar Inc., (d) Midwest Railroad
         Construction and (e) F&V Metro Contracting Corp. and Affiliates.

              1.2      The definition of "Credit Documents" in Section 1.1
shall be amended to include the "Intercreditor Agreement".

              1.3      In the definition of "Permitted Liens" in Section 1.1, 
clauses (xv) and (xvi) are renumbered as clauses (xvi) and (xvii), and a new 
clause (xv) is added to read as follows:

                  (xv)    Liens in favor of the administrative agent and lenders
         under the Bridge Credit Agreement securing the loans and obligations
         owing under the Bridge Credit Agreement on a pari passu basis with the
         loans and obligations owing under this Credit Agreement, but only to
         the extent (A) such Liens are on the same collateral as to which the
         Lenders also have a lien and (B) such Liens are subject to the
         Intercreditor Agreement.

              1.4     Section 7.1(d) is amended to read as follows:

                  (d)      Borrowing Base Certificate. Within 30 days after the
         end of each calendar month, a statement of the Borrowing Base and its
         components as of the end of such calendar month, in form



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         and content satisfactory to the Administrative Agent and certified by
         the chief financial officer of the Borrower to be true and correct as
         of the date thereof (the "Borrowing Base Certificate").

              1.5     Section 7.9(a) (Consolidated Leverage Ratio) is amended to
         read as follows:

                  (a)      Consolidated Leverage Ratio. As of the end of each
         fiscal quarter ending during the respective periods set forth below,
         the Consolidated Leverage Ratio shall not be greater than the ratio set
         forth opposite such period:

                           Closing Date through June 30, 1999      3.0:1.0

                           July 1, 1999 and thereafter             2.5:1.0

                           provided that, notwithstanding the foregoing, on the
                  date of and subsequent to any Debt Transaction of at least
                  $25,000,000, the Consolidated Leverage Ratio shall not be
                  greater than 4.0:1.0.

              1.6     Section 7.9(c) (Consolidated Net Worth) is amended to read
as follows:

                  (c)      Consolidated Net Worth. As of the end of each fiscal
         quarter, Consolidated Net Worth shall be not less than the sum of
         $95,000,000 plus on the last day of each fiscal quarter to occur after
         the Closing Date, seventy-five percent (75%) of Consolidated Net Income
         for the fiscal quarter (but not less than zero), such increases to be
         cumulative, plus one hundred percent (100%) of any increases in
         Consolidated Net Worth resulting from Equity Transactions occurring
         after the Closing Date.

              1.7     Section 7.9(d) (Consolidated Fixed Charge Coverage Ratio)
is amended to read as follows:

                  (d)      Consolidated Fixed Charge Coverage Ratio. As of the
         end of each fiscal quarter ending during the respective periods set
         forth below, the Consolidated Fixed Charge Coverage Ratio shall not be
         less than the ratio set forth opposite such period:

                           Closing Date to the date of any             1.75:1.0
                           Debt Transaction of at least $25,000,000

                           On or subsequent to the date of any         1.50:1.0
                           Debt Transaction of at least $25,000,000

              1.8     A new clause (f) is added to Section 7.9 to read as 
follows:

                  (f)      Consolidated Senior Leverage Ratio. As of the end of
         each fiscal quarter, beginning with the fiscal quarter ending the
         earlier of (i) on June 30, 1999 or (ii) on or subsequent to the date of
         any Debt Transaction of at least $25,000,000, the Consolidated Senior
         Leverage Ratio shall not be greater than 2.5:1.0.

              1.9     Clause (f) of Section 8.1 is amended to read as follows:



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                  (f)      Subordinated Debt of the Borrower, provided that (i)
         the Borrower shall demonstrate it will be in compliance with the
         financial covenants in Section 7.9 after giving effect thereto on a Pro
         Forma Basis, (ii) no Default or Event of Default shall exist after
         giving effect thereto, and (iii) the net proceeds therefrom shall be
         applied first to repay the term loan and other obligations under the
         Bridge Credit Agreement;

              1.10    Clause (h) of Section 8.1 is amended to read as follows:

                  (h)      other unsecured Indebtedness of any of the Credit
         Parties of up to $2,500,000 in the aggregate at any time outstanding;

              1.11    Clauses (h) and (i) of Section 8.1 are renumbered as 
clauses (k) and (l), and new clauses (h), (i) and (j) are is added to read as
follows:

                  (h)      other senior secured Indebtedness of the Credit
         Parties in an aggregate principal amount of up to $25 million incurred
         pursuant to the Bridge Credit Agreement;

                  (i)      purchase money Indebtedness (including Capital Lease
         Obligations) assumed in connection with the Permitted Acquisitions in
         an aggregate principal amount not to exceed $12,000,000 at any time
         outstanding;

                  (j)      seller financing obligations incurred in connection
         with the Permitted Acquisitions in an aggregate principal amount not to
         exceed $9,000,000 at any time outstanding;

              1.12    Section 8.10 is amended to read as follows:

                  8.10     No Further Negative Pledges.

                           Except with respect to (i) prohibitions against other
         encumbrances on specific Property encumbered to secure payment of
         particular Indebtedness (which Indebtedness relates solely to such
         specific Property, and improvements and accretions thereto, and is
         otherwise permitted hereby) and (ii) the Bridge Credit Agreement, no
         member of the Consolidated Group will enter into, assume or become
         subject to any agreement prohibiting or otherwise restricting the
         creation or assumption of any Lien upon its properties or assets,
         whether now owned or hereafter acquired, or requiring the grant of any
         security for such obligation if security is given for some other
         obligation.

              1.13    A new Section 8.11 is added to read as follows:

                  8.11     Amendment or Modification of Bridge Credit Agreement.

                           Amend or modify (or consent to, permit or acquiesce
         to the amendment or modification of) any of the terms of the Bridge
         Credit Agreement without the consent of the Required Lenders hereunder,
         unless such amendment or modification conforms to an amendment or
         modification under this Agreement.






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              1.14     Clause (i) of Section 9.1(c) is amended to read as
         follows:

                  (i)      Default in the due performance or observance of any
         term, covenant or agreement contained in Section 7.3(a), 7.9, 7.11,
         7.13 to 8.1 through 8.11, inclusive; or

              1.15     Clause (j) of Section 9.1 is renumbered as clause 
         (k), and a new clause (j) is added to read as follows:

                  (j)      The occurrence of an Event of Default under the
         Bridge Credit Agreement; or

              1.16     The address for all notices and other communications to 
the Borrower and the Guarantors as set forth in Section 11.1 is amended to read
as follows:

                      Railworks Corporation
                      1104 Kenilworth Drive
                      Suite 301
                      Baltimore, MD  21204
                      Attn:    Michael R. Azarela
                      Telephone:  (410) 512-0501
                      Telecopy:    (410) 825-6920

         2.       Notwithstanding any provision to the contrary in the Credit
Agreement, from the Amendment Date until the Bridge Repayment Date, (A) the
Applicable Percentage for Base Rate Loans shall be 1.25%, (B) the Applicable
Percentage for Eurodollar Loans shall be 2.50%, (C) the Applicable Percentage
for the Letter of Credit Fee shall be 2.50% and (D) the Applicable Percentage
for the Commitment Fee shall be 0.500%.

         3.       Notwithstanding the terms of Section 8.4 of the Credit
Agreement, other than the Permitted Acquisitions, no member of the Consolidated
Group shall make any Acquisition prior to the Bridge Repayment Date without the
prior written consent of the Required Lenders. Subsequent to the Bridge
Repayment Date, members of the Consolidated Group may make Acquisitions
permitted by Section 8.4 of the Credit Agreement; provided that all Acquisitions
prior to the Bridge Repayment Date shall not be considered when calculating the
dollar limit on cash consideration payable in respect of Acquisitions under
Section 8.4(b).

         4.       By execution of this Amendment, the Required Lenders authorize
and direct the Administrative Agent, on behalf of the Lenders under the Credit
Agreement, to enter into the Intercreditor Agreement.

         5.       This Amendment shall be effective upon satisfaction of the
following conditions:

                  (a)      execution of this Amendment by the Credit Parties and
         the Required Lenders; and



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                  (b)      receipt by the Administrative Agent of legal opinions
         of counsel to the Credit Parties relating to this Amendment.

         6.       The Credit Parties hereby affirm (i) the representations and
warranties set out in Section 6 of the Credit Agreement are true and correct as
of the date hereof (except those which expressly relate to an earlier period)
and (ii) no Default or Event of Default presently exists.

         7.       Except as modified hereby, all of the terms and provisions of
the Credit Agreement (including Schedules and Exhibits) shall remain in full
force and effect.

         8.       The Borrower agrees to pay all reasonable costs and expenses
of the Administrative Agent in connection with the preparation, execution and
delivery of this Amendment, including without limitation the reasonable fees and
expenses of Moore & Van Allen, PLLC.

         9.       This Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original and it
shall not be necessary in making proof of this Amendment to produce or account
for more than one such counterpart.

         10.      This Amendment shall be deemed to be a contract made under,
and for all purposes shall be construed in accordance with the laws of the State
of New York.








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         IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Amendment to be duly executed and delivered as of the date first above
written.

BORROWER:                      RAILWORKS CORPORATION,
                               a Delaware corporation

                               By:  /s/ Michael R. Azarela
                                   ----------------------------------
                               Name:    Michael R. Azarela
                               Title:   Executive Vice President and
                                        Chief Financial Officer

GUARANTORS:                    ALPHA-KEYSTONE ENGINEERING, INC.,
                               a Pennsylvania corporation 
                               ANNEX RAILROAD BUILDERS, INC., 
                               an Indiana corporation 
                               COMSTOCK HOLDINGS INC., 
                               a Delaware corporation 
                               COMTRAK CONSTRUCTION, INC., 
                               a Georgia corporation 
                               CONDON BROTHERS, INC., 
                               a Washington corporation 
                               CPI CONCRETE PRODUCTS INCORPORATED, 
                               a Tennessee corporation 
                               H.P. MCGINLEY INC., 
                               a Pennsylvania corporation 
                               KENNEDY RAILROAD BUILDERS, INC., 
                               a Pennsylvania corporation 
                               L.K. COMSTOCK & COMPANY, INC., 
                               a New York corporation 
                               MERIT RAILROAD CONTRACTORS, INC., 
                               a Missouri corporation 
                               MIDWEST CONSTRUCTION SERVICES, INC., 
                               an Indiana corporation 
                               MINNESOTA RAILROAD SERVICE, INC., 
                               a Tennessee corporation 
                               NEW ENGLAND RAILROAD CONSTRUCTION CO., INC., 
                               a Connecticut corporation
                               NORTHERN RAIL SERVICE AND SUPPLY COMPANY, INC., 
                               a Michigan corporation 
                               R. & M. B. RAIL CO., INC.,
                               an Indiana corporation 
                               RAILCORP, INC., 
                               an Ohio corporation

                               By:  /s/ Michael R. Azarela
                                  ---------------------------------------
                               Name:    Michael R. Azarela
                               Title:   Executive Vice President of each
                                        of the foregoing Guarantors




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                               RAILROAD SERVICE, INC.,
                               a Nevada corporation
                               RAILROAD SPECIALTIES, INC.,
                               an Indiana corporation
                               SOUTHERN INDIANA WOOD PRESERVING CO., INC.,
                               an Indiana corporation
                               U.S. TRACKWORKS, INC.,
                               a Michigan corporation
                               U.S. RAILWAY SUPPLY, INC.,
                               an Indiana corporation
                               WM. A. SMITH CONSTRUCTION CO., INC.,
                               a Texas corporation
                               WM. A. SMITH RERAILING SERVICES, INC.,
                               a Texas corporation

                               By:  /s/ Michael R. Azarela
                                   ------------------------------------------
                               Name:    Michael R. Azarela
                               Title:   Executive Vice President of each
                                        of the foregoing Guarantors

LENDERS:                       NATIONSBANK, N.A.,
                               individually in its capacity as a Lender and in 
                               its capacity as Administrative Agent

                               By: /s/ Monica R. Brandes
                                   ------------------------------------------
                               Name:  Monica R. Brandes
                               Title: Senior Vice President

                               FIRST UNION NATIONAL BANK

                               By:  /s/ Robert J. Bauer
                                   ------------------------------------------
                               Name:  Robert J. Bauer
                               Title: Vice President

                               CRESTAR BANK

                               By:
                                   ------------------------------------------
                               Name:
                               Title:

                               SUMMIT BANK

                               By:
                                   ------------------------------------------
                               Name:
                               Title:





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