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                                                                   EXHIBIT 10.57


                        FIRST AMENDMENT TO LOAN AGREEMENT

         THIS FIRST AMENDMENT TO LOAN AGREEMENT is made and entered into as of
the 16th day of June, 1998, by and among RAILAMERICA, INC., a Delaware
corporation, KALYN/SIEBERT INCORPORATED, a Texas corporation, RAILAMERICA
INTERMODAL SERVICES, INC., a Delaware corporation, RAILAMERICA CARRIERS INC., a
corporation organized under the laws of the Province of Ontario, STEEL CITY
CARRIERS INC., a corporation organized under the laws of the Province of
Ontario, SAGINAW VALLEY RAILWAY COMPANY, INC., a Delaware corporation, HURON AND
EASTERN RAILWAY COMPANY, INC., a Michigan corporation, WEST TEXAS AND LUBBOCK
RAILROAD COMPANY, INC., a Texas corporation, PLAINVIEW TERMINAL COMPANY, a Texas
corporation, CASCADE AND COLUMBIA RIVER RAILROAD COMPANY, a Delaware
corporation, OTTER TAIL VALLEY RAILROAD COMPANY, INC., a Minnesota corporation,
MINNESOTA NORTHERN RAILROAD, INC., a Delaware corporation, and DELAWARE VALLEY
RAILWAY COMPANY, INC., a Delaware corporation (collectively, the "Initial
Borrowers"), and ST. CROIX VALLEY RAILROAD COMPANY, a Delaware corporation ("St.
Croix"; collectively with Initial Borrowers, the "Borrower" or "Borrowers"),
NATIONAL BANK OF CANADA, a Canadian Chartered Bank, as agent (the "Agent"), and
NATIONAL BANK OF CANADA, a Canadian Chartered Bank ("NBC"), and COMERICA BANK, a
Michigan Banking Corporation ("Comerica"; Comerica and NBC being referred to
herein collectively as the "Initial Lenders"), and SOUTHTRUST BANK, NATIONAL
ASSOCIATION, a national banking association ("SouthTrust"; collectively with the
Initial Lenders, the "Lender" or "Lenders").

                              W I T N E S S E T H:

         WHEREAS, the Initial Borrowers, the Agent and the Initial Lenders
previously entered into that certain Loan Agreement dated as of May 23, 1997
(the "Loan Agreement");

         WHEREAS, SouthTrust and Agent have executed a Lender Joinder Agreement
dated as of even date herewith, pursuant to which SouthTrust has become an
Additional Lender under the Loan Agreement;

         WHEREAS, St. Croix and Agent have executed a Borrower Joinder Agreement
dated as of even date herewith, pursuant to which St. Croix has become an
Additional Borrower under the Loan Agreement;

         WHEREAS, the Borrowers have requested, and the Lenders have agreed, to
modify the Initial Loans and make an Additional Loan in the amount of Fifteen
Million Dollars ($15,000,000.00), such that the Loans, as modified and
increased, shall be in the aggregate amount of Fifty-five Million Dollars
($55,000,000.00), subject to the terms and conditions contained herein and in
the Loan Agreement; and

         WHEREAS, the parties hereto wish to amend the Loan Agreement as
provided herein.



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         NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and in consideration of the loans or extensions of credit
heretofore now or hereafter made or to be made for the benefit of the Borrower
by the Lender, the parties do hereby agree as follows:



1.       The Borrowers and the Lenders agree that the recitals set forth above
         are true, correct, and complete, and are hereby incorporated herein.

2.       All capitalized terms used herein and not otherwise defined herein
         shall have the meanings ascribed to them in the Loan Agreement.

3.       Subparagraph (f) of Section 1.2 of the Loan Agreement is hereby amended
         and restated so that, from and after the date hereof, it shall read in
         its entirety as follows:

         (f)      "ADVANCE": A disbursement by the Lenders of a portion of the
                  Loan proceeds to be utilized by the Borrowers for the purposes
                  set forth in Section 2.1 of this Agreement.

4.       Subparagraph (n) of Section 1.2 of the Loan Agreement is hereby amended
         and restated so that, from and after the date hereof, it shall read in
         its entirety as follows:

         (n)      "CHANGE DATE": June 16, 1999, the date upon which the
                  outstanding principal balances of the Loans shall convert from
                  revolving lines of credit to term loans, as more fully set
                  forth in the Notes.

5.       Subparagraph (s) of Section 1.2 of the Loan Agreement is hereby amended
         and restated so that, from and after the date hereof, it shall read in
         its entirety as follows:

         (s)      "COMERICA NOTE": A Modification Master Revolving/Term
                  Promissory Note in the amount of Fifteen Million and 00/100
                  Dollars ($15,000,000.00) from Borrowers to Comerica dated as
                  of June 16, 1998, and any modifications, amendments or
                  renewals thereof, evidencing a portion of the Loans.

6.       Subparagraph (aa) of Section 1.2 of the Loan Agreement is hereby
         amended and restated so that, from and after the date hereof, it shall
         read in its entirety as follows:

         (aa)     "FRANCHISES": All franchises, sanctions, rights, licenses,
                  privileges and operating agreements or authorities, third
                  party agreements and interchange agreements, including without
                  limitation agreement(s) (direct and indirect) between
                  Borrowers or any of them and the State of Michigan Department
                  of Transportation, to operate over 206 miles of track, or
                  thereabouts, agreement(s) (direct and indirect) between
                  Borrowers or any of them and the State of Texas Department of
                  Transportation, to operate over 131 miles of track, or
                  thereabouts, agreement(s) (direct and 


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                  indirect) between Borrowers or any of them and the State of
                  Washington Department of Transportation, to operate over 131
                  miles of track, or thereabouts, agreement(s) (direct and
                  indirect) between Borrowers or any of them and the State of
                  Minnesota Department of Transportation, to operate over 279
                  miles of tract, or thereabouts, and agreement(s) (direct and
                  indirect) between Borrowers or any of them and the State of
                  Pennsylvania Department of Transportation, to operate over 23
                  miles of track, or thereabouts.

7.       Subparagraph (dd) of Section 1.2 of the Loan Agreement is hereby
         amended and restated so that, from and after the date hereof, it shall
         read in its entirety as follows:

         (dd)     "GETTYSBURG MORTGAGE DOCUMENTS": Collectively, Mortgage Deed
                  and Security Agreements and Assignments of Rents, Leases and
                  Deposits, as modified by Mortgage Modification Agreements, and
                  as the same may be further amended from time to time, from
                  Delaware to Agent, which partially secure the Notes to the
                  extent of $1,250,000.00, and are valid first liens on the
                  Gettysburg Real Property and the personal property associated
                  therewith, together with UCC-1 Financing Statements and other
                  documents associated therewith.

8.       Subparagraph (ww) of Section 1.2 of the Loan Agreement is hereby
         amended and restated so that, from and after the date hereof, it shall
         read in its entirety as follows:

         (ww)     "MATURITY DATE": June 16, 2001, upon which date the entire
                  principal balance and accrued interest and all other
                  applicable charges under the Loans shall become due and
                  payable in full.

9.       Subparagraph (xx) of Section 1.2 of the Loan Agreement is hereby
         amended and restated so that, from and after the date hereof, it shall
         read in its entirety as follows:

         (xx)     "MICHIGAN EPA AUDIT": Copies of all existing Phase I and, if
                  applicable, Phase II environmental audits and assessments,
                  certified to Agent, and other reports and evidence of any
                  remediation which has been effectuated to date with respect to
                  the Michigan Real Property and the Huron and Eastern Real
                  Property, together with any new environmental audits of the
                  Michigan Real Property and the Huron and Eastern Real Property
                  required by Agent, the results of which must be satisfactory
                  to the Majority Lenders in their sole and absolute discretion.

10.      Subparagraph (yy) of Section 1.2 of the Loan Agreement is hereby
         amended and restated so that, from and after the date hereof, it shall
         read in its entirety as follows:

         (yy)     "MICHIGAN MORTGAGE DOCUMENTS": Collectively, (A) (Railroad)
                  Mortgage and Security Agreements and Assignments of Rents,
                  Leases and Deposits, as modified by Mortgage Modification
                  Agreements and Receipts for Future Advance, Mortgage
                  Modification and Spreader Agreements, and as the same may be
                  further 



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                  amended from time to time, from Saginaw and Huron, as
                  applicable, to Agent, which secure the Notes to the extent of
                  $13,000,000.00 and are valid first liens on the Michigan Real
                  Property and the personal property associated therewith,
                  together with UCC-1 Financing Statements and other documents
                  associated therewith, and (B) a Mortgage and Security
                  Agreement, as the same may be amended from time to time, from
                  Huron to Agent, which secures the Notes to the extent of
                  $440,000.00 and is a valid first lien on the Huron and Eastern
                  Real Property and the personal property associated therewith,
                  together with UCC-1 Financing Statements and other documents
                  associated therewith.

11.      Subparagraph (zz) of Section 1.2 of the Loan Agreement is hereby
         amended and restated so that, from and after the date hereof, it shall
         read in its entirety as follows:

         (zz)     "MICHIGAN REAL PROPERTY": Collectively, certain real property
                  lying and being situate in Lapeer County, Michigan, Saginaw
                  County, Michigan, and Tuscola County, Michigan owned by
                  Saginaw, and, real property lying and being situate in Saginaw
                  County, Michigan, Tuscola County, Michigan, Huron County,
                  Michigan and Sanilac County, Michigan owned by Huron, more
                  particularly described on Composite Exhibit "F" appended
                  hereto and made a part hereof.

12.      Subparagraph (ccc) of Section 1.2 of the Loan Agreement is hereby
         amended and restated so that, from and after the date hereof, it shall
         read in its entirety as follows:

         (ccc)    "MINNESOTA MORTGAGE DOCUMENTS": Collectively, a Mortgage,
                  Security Agreement and Fixture Financing Statement and an
                  Assignment of Rents, Leases and Deposits from Minnesota to
                  Comerica, as assigned by Comerica to Agent, and as modified by
                  an Amendment No. 1 to Mortgage, Security Agreement and Fixture
                  Financing Statement and an Amendment No. 1 to Assignment of
                  Rents, Leases and Deposits, as further modified by an
                  Amendment No. 2 to Mortgage, Security Agreement and Fixture
                  Financing Statement and an Amendment No. 2 to Assignment of
                  Rents, Leases and Deposits, and as the same may be further
                  amended from time to time, which partially secure the Notes to
                  the extent of $1,500,000.00, and are valid first liens on the
                  Minnesota Real Property and the personal property associated
                  therewith, together with UCC-1 Financing Statements, UCC-2
                  Fixture Financing Statements, UCC-3 Assignment and Amendment
                  Statements and other documents associated therewith.

13.      Subparagraph (eee) of Section 1.2 of the Loan Agreement is hereby
         amended and restated so that, from and after the date hereof, it shall
         read in its entirety as follows:

         (eee)    "MINNESOTA REAL PROPERTY": Collectively, certain real property
                  lying and being situate in Red Lake County, Polk County,
                  Norman County, Pennington County, Marshall County, Roseau
                  County, Pine County, Chisago County, and Kanabec 



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                  County, Minnesota, as more particularly described on Exhibit
                  "G" appended hereto and made a part hereof.

14.      Subparagraph (fff) of Section 1.2 of the Loan Agreement is hereby
         amended and restated so that, from and after the date hereof, it shall
         read in its entirety as follows:

         (fff)    "MORTGAGE DOCUMENTS": Collectively, the Gettysburg Mortgage
                  Documents, the Michigan Mortgage Documents, the Minnesota
                  Mortgage Documents, the Ontario Mortgage Documents, the Texas
                  Deed of Trust Documents, the Washington Deed of Trust
                  Documents and the West Texas and Lubbock Deed of Trust
                  Documents.

15.      Subparagraph (ggg) of Section 1.2 of the Loan Agreement is hereby
         amended and restated so that, from and after the date hereof, it shall
         read in its entirety as follows:

         (ggg)    "NBC NOTE": A Modification Master Revolving/Term Promissory
                  Note in the amount of Twenty-five Million and 00/100 Dollars
                  ($25,000,000.00) from Borrowers to NBC dated as of June 16,
                  1998, and any modifications, amendments or renewals thereof,
                  evidencing a portion of the Loans.

16.      Subparagraph (hhh) of Section 1.2 of the Loan Agreement is hereby
         amended and restated so that, from and after the date hereof, it shall
         read in its entirety as follows:

         (hhh)    "NOTE" or "NOTES": Collectively the Comerica Note, the NBC
                  Note, the SouthTrust Note and the Additional Notes, which
                  Notes are cross-defaulted and cross-collateralized.

17.      Subparagraph (qqq) of Section 1.2 of the Loan Agreement is hereby
         amended and restated so that, from and after the date hereof, it shall
         read in its entirety as follows:

         (qqq)    "PURCHASE AGREEMENTS": Collectively, the Cascade Purchase
                  Agreement, the Minnesota Purchase Agreement, the CSX Purchase
                  Agreement, the St. Croix Purchase Agreement and the Delaware
                  Valley Purchase Agreement.

18.      Subparagraph (sss) of Section 1.2 of the Loan Agreement is hereby
         amended and restated so that, from and after the date hereof, it shall
         read in its entirety as follows:

         (sss)    "RAILROAD TRACKAGE APPRAISAL": Collectively, (i) that certain
                  Railroad Trackage appraisal prepared by Rail Associated
                  Services, Inc. dated December 27, 1993, as updated by Main
                  Line Management Services, Inc., by two (2) updates, both
                  updates dated August 30, 1996, (ii) that certain Development
                  of Net Liquidation Value Appraisal prepared by Main Line
                  Management Services, Inc., dated October 17, 1995, as updated
                  by Main Line Management Services, Inc., by virtue of update
                  dated August 16, 1996, (iii) that certain Fair Market Value of
                  Real Property prepared by Main Line Management Services, Inc.,
                  dated August 13, 




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                  1996, (iv) that certain fair market value appraisal of the
                  railroad trackage owned by Minnesota and prepared by Main Line
                  Management Services, Inc., dated December 12, 1996, (v) that
                  certain Development of Net Liquidation Value Appraisal
                  prepared by Main Line Management Services, Inc., dated
                  December 14, 1995, (vi) that certain Railroad Trackage
                  Appraisal prepared by Main Line Management Services, Inc.
                  dated March 20, 1998 (updating a Railroad Trackage Appraisal
                  prepared by Main Line Management Services, Inc. dated
                  September, 1995), and (vii) that certain Evaluation Study of
                  the North Branch and Mora Branch (railroad trackage appraisal)
                  prepared by Main Line Management Services, Inc. dated
                  September 8, 1997; provided, however, that Majority Lenders
                  reserve the right to require Borrowers to provide Agent with
                  updated appraisals of the same at any time during the term of
                  the Loans (provided, however, that unless an Event of Default
                  shall have occurred and be continuing, that said appraisals
                  shall be limited to one (1) appraisal per year), said
                  appraisals to be performed at Borrowers' sole cost and
                  expense.

19.      Subparagraph (uuu) of Section 1.2 of the Loan Agreement is hereby
         amended and restated so that, from and after the date hereof, it shall
         read in its entirety as follows:

         (uuu)    "REAL ESTATE APPRAISALS". Satisfactory fair market value
                  appraisals of each of the Texas Real Property, the Michigan
                  Real Property, the Huron and Eastern Real Property, the
                  Minnesota Real Property, the Ontario Real Property, the
                  Washington Real Property, and the West Texas and Lubbock Real
                  Property.

20.      Subparagraph (dddd) of Section 1.2 of the Loan Agreement is hereby
         amended and restated so that, from and after the date hereof, it shall
         read in its entirety as follows:

         (dddd)   "TEXAS DEED OF TRUST DOCUMENTS": A Deed of Trust, Assignment
                  of Leases and Rents and Security Agreement, as modified by a
                  Deed of Trust, Assignment of Leases and Rents and Security
                  Agreement Modification Agreement, and as the same may be
                  further amended from time to time, from Kalyn to Agent, which
                  secures the Notes to the extent of $2,045,000.00, which is a
                  valid first lien on the Texas Real Property and the personal
                  property associated therewith, together with UCC-1 Financing
                  Statements and other documents associated therewith.

21.      Subparagraph (hhhh) of Section 1.2 of the Loan Agreement is hereby
         amended and restated so that, from and after the date hereof, it shall
         read in its entirety as follows:

         (hhhh)   "WASHINGTON DEED OF TRUST DOCUMENTS": Collectively a Deed of
                  Trust Agreement and an Assignment of Rents, Leases and
                  Deposits from Cascade to Agent, as modified by a Receipt for
                  Future Advance and Deed of Trust Modification Agreement, and
                  as the same may be further amended from time to time, which
                  secure the Notes to the extent of $12,000,000.00 and are valid
                  first liens on the Washington Real Property and the personal
                  property associated 



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                  therewith, together with UCC-1 Financing Statements and other
                  documents associated therewith.

22.      Subparagraph (kkkk) of Section 1.2 of the Loan Agreement is hereby
         amended and restated so that, from and after the date hereof, it shall
         read in its entirety as follows:

         (kkkk)   "WEST TEXAS AND LUBBOCK DEED OF TRUST DOCUMENTS": A Deed of
                  Trust, Assignments of Leases and Rents and Security Agreement,
                  as modified by a Receipt for Future Advance, Deed of Trust,
                  Assignment of Leases and Rents and Security Agreement
                  Modification Agreement, and as the same may be further amended
                  from time to time, from West Texas to Agent which secure the
                  Notes to the extent of $7,250,000.00 and are valid first liens
                  on the West Texas and Lubbock Real Property and the personal
                  property associated therewith, together with UCC-1 Financing
                  Statements and other documents associated therewith.

23.      The following subparagraphs are hereby added to Section 1.2 of the Loan
         Agreement effective from and after the date hereof:

         (mmmm)            "CSX PURCHASE AGREEMENT": That certain Purchase and
                           Sale Agreement dated April 13, 1998, between Saginaw
                           and CSX Transportation, Inc., a Virginia corporation
                           (as the same may be amended from time to time).

         (nnnn)            "DELAWARE VALLEY PURCHASE AGREEMENT": Collectively,
                           that certain Option to Purchase Agreement between
                           Delaware and James Cornell dated November 15, 1996,
                           and that certain Indemnification Agreement between
                           Gettysburg Railroad Company and Sloan Cornell dated
                           November 15, 1996 (as the same may be amended from
                           time to time).

         (oooo)            "ST. CROIX PURCHASE AGREEMENT": That certain
                           Agreement for Sale of Certain Assets, Rights and
                           Obligations of The Burlington Northern and Santa Fe
                           Railway Company to St. Croix Valley Railroad Company
                           dated as of August 22, 1997 (as the same may be
                           amended from time to time).

         (pppp)            "HURON AND EASTERN REAL PROPERTY": Certain real
                           property lying and being situate in Tuscola County,
                           Michigan owned by Huron, more particularly described
                           on Exhibit "R" appended hereto and made a part
                           hereof.

         (qqqq)            "SOUTHTRUST NOTE": A Master Revolving/Term Promissory
                           Note in the amount of Fifteen Million and 00/100
                           Dollars ($15,000,000.00) from Borrowers to SouthTrust
                           dated as of June 16, 1998, and any modifications,
                           amendments or renewals thereof, evidencing a portion
                           of the Loans.



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         (rrrr)            "LOCOMOTIVE APPRAISAL": That certain appraisal of
                           locomotives prepared by Norman W. Seip & Associates
                           dated May 12, 1998.

24.      Exhibit "F" of the Loan Agreement is hereby amended to (a) add the real
         property described on Exhibit "F-1" attached hereto and made a part
         hereof, and (b) delete the real property described on Exhibit "F-2"
         attached hereto and made a part hereof, effective from and after the
         date hereof.

25.      Exhibit "G" of the Loan Agreement is hereby amended to add the real
         property easement described on Exhibit "G" attached hereto and made a
         part hereof, effective from and after the date hereof.

26.      Exhibit "I" of the Loan Agreement is hereby amended and restated so
         that, from and after the date hereof, it shall read in its entirety as
         provided on Exhibit "I" attached hereto and made a part hereof.

27.      Composite Exhibit "J" of the Loan Agreement is hereby amended to add
         the Railroad Trackage described on Composite Exhibit "J" attached
         hereto and made a part hereof, effective from and after the date
         hereof.

28.      Exhibit "R" attached hereto and made a part hereof is hereby added to
         the Loan Agreement as Exhibit "R", effective from and after the date
         hereof:

29.      Section 2.1 of the Loan Agreement is hereby amended and restated so
         that, from and after the date hereof, it shall read in its entirety as
         follows:

         2.1      Provided there does not exist an Event of Default, and no
                  event with which notice or lapse of time or both would become
                  such an Event of Default, and subject to the terms and
                  provisions of this Agreement, Lenders will under the Notes,
                  lend or advance for the account of Borrowers from time to
                  time, and, Borrowers may borrow, repay and re-borrow (provided
                  that unless Borrowers intend to pay and satisfy the Loans in
                  full, Borrowers shall not reduce the outstanding principal
                  balance under any of the Notes to a sum of less than
                  $1,000.00) such amounts as may be required for the purpose of
                  (a) refinancing an existing Twenty-Five Million and 00/100
                  Dollar ($25,000,000.00) line of credit/term loan facility
                  currently outstanding and due and owing by certain of the
                  Borrowers to NBC, (b) refinancing an existing Fifteen Million
                  and 00/100 Dollar ($15,000,000.00) line of credit/term loan
                  facility currently outstanding and due and owing by certain of
                  the Borrowers to Comerica, (c) supporting short term working
                  capital requirements of the Borrowers, and, (d) providing for
                  the financing of future acquisitions by one or more of the
                  Borrowers or by an entity owned by or affiliated with one or
                  more of the Borrowers (hereinafter referred to as an
                  "Affiliate") of transportation related businesses, said
                  acquisitions to be subject to review by Lenders, and, in the
                  case of acquisitions requiring Acquisition 



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                  Advances (as hereinafter defined) in excess of One Million and
                  00/100 Dollars ($1,000,000.00) to be subject to the consent of
                  the Majority Lenders, which consent shall not be unreasonably
                  withheld; provided further that the assets acquired pursuant
                  to an acquisition financed by Lenders shall be subject to a
                  negative pledge, or in the event the pro-forma asset ratio
                  coverage of the Borrowers immediately after the time of the
                  Acquisition Advance does not meet the required Minimum Asset
                  Ratio of not less than 1.4 to 1, pledged in favor of Agent as
                  security for the Loans, not exceeding in the aggregate an
                  amount equal to (i) the Eligible Receivables, less such
                  reserves as the Majority Lenders, in their reasonable
                  discretion elect to establish, provided further that a
                  receivable may be devalued in such amount as shall be
                  determined by the Majority Lenders in their reasonable
                  discretion due to "Dilution" which is defined as and is the
                  result of non-cash credits posted against the receivable which
                  results in payment or other satisfaction of all or any portion
                  of the receivable for reasons other than full payment of the
                  receivable in cash, together with an amount equal to (ii) the
                  Eligible Inventory, together with an amount equal to (iii) the
                  appraised aggregate fair market value of the Real Property as
                  determined by (A) that certain Real Property "Market Value"
                  Appraisal dated May 9, 1994, as updated by appraisal update
                  dated August 19, 1996, both the Appraisal and the update
                  prepared by M.B. Valuation Services, Inc. in connection with
                  the Texas Real Property, (B) that certain Appraisal of
                  Corridors, Land and Buildings, HURON AND EASTERN RAILWAY
                  COMPANY, INC., SAGINAW VALLEY RAILWAY COMPANY, INC., State of
                  Michigan, dated February 28, 1994 prepared by Oetzel Hanton
                  Williams in connection with the Michigan Real Property, said
                  appraisals updated by two (2) appraisal updates prepared by
                  Main Line Management Services, Inc., both updates dated August
                  30, 1996, (C) that certain Appraisal of Commercial Property
                  located at 710 Second Line West, Sault Ste. Marie, Ontario,
                  prepared by Area Real Estate Appraisals, Inc. dated August
                  1994 in connection with the Ontario Real Property, (D) that
                  certain Development of Net Liquidation Value Appraisal
                  prepared by Main Line Management Services, Inc., dated October
                  17, 1995, as updated by update appraisal prepared by Main Line
                  Management Services, Inc., dated August 16, 1996, in
                  connection with the West Texas and Lubbock Real Property, (E)
                  that certain Fair Market Value of Real Property prepared
                  by Main Line Management Services, Inc., dated August 13, 1996,
                  in connection with the Washington Real Property, (F) that
                  certain Fair Market Value Appraisal of the Minnesota Real
                  Property and the Minnesota Railroad Trackage prepared by Main
                  Line Management Services, Inc., dated December 12, 1996, in
                  connection with the Minnesota Real Property, (G) that certain
                  Development of Net Liquidation Value Appraisal prepared by
                  Main Line Management Services, Inc., dated December 14, 1995,
                  in connection with the Gettysburg Real Property, (H) That
                  certain Complete Summary Appraisal of RailAmerica, Inc., 101
                  Enterprise Drive, Vassar, Michigan dated May 11, 1998,
                  prepared by Johnson Appraisals, in connection with the Huron
                  and Eastern Real Property, (I) that certain Limited Appraisal
                  Summary Report, Subject Property: Minnesota 





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                  Northern Railroad Locomotive Repair Facility, Crookston,
                  Minnesota dated April 28, 1998, prepared by Agassiz Appraisal
                  and Consulting Services, Inc., in connection with the
                  Minnesota Real Property (the "Minnesota Appraisal"), (J) that
                  certain Railroad Trackage Appraisal prepared by Main Line
                  Management Services, Inc. dated March 20, 1998 (updating a
                  Railroad Trackage Appraisal prepared by Main Line Management
                  Services, Inc. dated September, 1995), in connection with the
                  Michigan Real Property, (K) that certain Complete Summary
                  Appraisal of Locomotive Maintenance Facility, 828 Omak Avenue,
                  Omak, Washington (File #98-11-8786) dated June 1, 1998,
                  prepared by Pacific Appraisal Associates, P.L.L.C., in
                  connection with the Washington Real Property (the "Washington
                  Appraisal"), and (M) Summary Appraisal of an Industrial
                  Property Located at 6010 Brownfield Highway, Lubbock, Texas
                  dated April 2, 1998, prepared by Harris Appraisal Company,
                  Inc., in connection with the West Texas and Lubbock Real
                  Property (the "West Texas Appraisal") (it being acknowledged
                  that no valuation attributed to (1) any of the Railroad
                  Trackage as set forth in the above set forth Real Estate
                  Appraisals or (2) any of the underlying land as set forth in
                  the Minnesota Appraisal, the Washington Appraisal or the West
                  Texas Appraisal, shall be included within the valuation
                  attributable to the Real Property), which (aggregate) fair
                  market value as determined by the above set forth appraisals
                  is subject to adjustment by the Majority Lenders, together
                  with an amount equal to (iv) the forced liquidation value of
                  the Machinery and Equipment as determined by (A) a Machinery
                  and Equipment appraisal prepared by Truck Locators, Inc. dated
                  January 20, 1995 (related to Steel City), and (B) an appraisal
                  prepared by Norman W. Seip & Associates dated May 12, 1998
                  (related to locomotives), which (aggregate) forced liquidation
                  value is subject to adjustment by the Lenders, together with
                  an amount equal to (v) the net liquidation value of the
                  Railroad Trackage as determined by the Railroad Trackage
                  Appraisal (it being acknowledged that (a) no value attributed
                  to any of the Real Property as set forth in the Railroad
                  Trackage Appraisal shall be included in the valuation
                  attributable to the Railroad Trackage and (b) upon such time
                  as the Borrowers (or any of them) apply to the Surface
                  Transportation Board and/or applicable governmental agencies
                  of the State of Minnesota for abandonment of any railroad
                  lines operated by St. Croix in the State of Minnesota (it
                  being further acknowledged that the Borrowers are obligated to
                  immediately notify the Agent of any proposed abandonment), the
                  value of the Railroad Trackage owned by St. Croix shall be
                  reduced by an amount equal to the amount required to be paid
                  by St. Croix under the terms of the St. Croix Purchase
                  Agreement upon abandonment), which net liquidation value is
                  subject to adjustment by the Majority Lenders, all of the
                  above set forth appraisals and values to be subject to
                  adjustment by the Majority Lenders, such that the final
                  amounts of the fair market values, the forced liquidation
                  values and the net liquidation value, shall be determined by
                  the Majority Lenders in their reasonable discretion (the
                  "Borrowing Base"); or, the aggregate sum of Fifty-Five Million
                  and 00/100 Dollars ($55,000,000.00), whichever is less,
                  provided that in connection with the Loans, that up to Five
                  Million Five Hundred Thousand and 00/100 Dollars
                  ($5,500,000.00) of the Loans 


                                       10
<PAGE>   11

                  may be used for the issuance of Letters of Credit, provided,
                  however, that collateral for the Letters of Credit will be one
                  hundred (100%) percent reserved and will reduce availability
                  for direct borrowings under the Loans on a dollar-for-dollar
                  basis in an amount equal to the face amount of the Letters of
                  Credit outstanding, and provided further that the outstanding
                  amount of the Loans shall in no event exceed the maximum sum
                  of Fifty-Five Million and 00/100 Dollars ($55,000,000.00),
                  provided further, that at no time shall the Borrowing Base
                  divided by the total outstanding principal amount of the Loans
                  (the "Minimum Asset Ratio") be less than 1.4 to 1, and in the
                  event that the Minimum Asset Ratio is less than 1.4 to 1, then
                  the outstanding principal balance of the Loans must be reduced
                  by the amount necessary to achieve a Minimum Asset Ratio of
                  equal to or greater than 1.4 to 1. The principal payment
                  necessary to effectuate such reduction shall be due and
                  payable in full on DEMAND.

                  Advances will be made based on the most recent "Minimum Asset
                  Ratio Certificate" submitted by Borrowers to Agent, which must
                  be submitted by Borrowers to Agent no less than one (1) time
                  in each month within thirty (30) days of the end of the prior
                  month evidencing the Minimum Asset Ratio for the immediately
                  preceding month, provided however, that the Minimum Asset
                  Ratio Certificate must also be submitted by Borrowers to Agent
                  each time an Advance or an Acquisition Advance is requested,
                  reflecting the above borrowing formula. The form of Minimum
                  Asset Ratio Certificate is attached hereto and made a part
                  hereof as Exhibit "N".

                  In connection with any requests for an Acquisition Advance in
                  an amount in excess of One Million and 00/100 Dollars
                  ($1,000,000.00), said request shall be subject to the approval
                  of the Majority Lenders, which approval will not be
                  unreasonably withheld. ADDITIONALLY, ALL ACQUISITIONS IN AN
                  AMOUNT IN EXCESS OF ONE MILLION AND 00/100 DOLLARS
                  ($1,000,000.00) BY ONE OR MORE OF THE BORROWERS OR BY AN
                  AFFILIATE OF TRANSPORTATION RELATED BUSINESSES OR ANY OTHER
                  BUSINESSES MUST BE APPROVED BY THE MAJORITY LENDERS, WHICH
                  APPROVAL WILL NOT BE UNREASONABLY WITHHELD; PROVIDED, HOWEVER,
                  THAT ACQUISITIONS IN AN AMOUNT OF TWENTY MILLION AND 00/100
                  DOLLARS ($20,000,000.00) OR LESS WHICH ARE FUNDED UTILIZING
                  MONEY RAISED THROUGH PUBLIC OFFERINGS, PRIVATE PLACEMENTS OR
                  SUBORDINATED DEBT SHALL ONLY REQUIRE NOTIFICATION TO THE
                  LENDERS, BUT NOT THE APPROVAL OF THE MAJORITY LENDERS, SO LONG
                  AS NO MONETARY DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS
                  THEN CONTINUING, AND SUCH ACQUISITION (AND THE FUNDING
                  THEREFOR) WILL NOT RESULT IN A DEFAULT UNDER ANY FINANCIAL
                  COVENANTS OR RESULT IN ANY OTHER MONETARY DEFAULT OR EVENT OF
                  DEFAULT. NOTWITHSTANDING THE FOREGOING, ACQUISITIONS IN AN
                  AMOUNT IN EXCESS OF TWENTY 




                                       11
<PAGE>   12

                  MILLION DOLLARS ($20,000,000.00) BY ONE OR MORE OF THE
                  BORROWERS OR BY AN AFFILIATE OF TRANSPORTATION RELATED
                  BUSINESSES OR ANY OTHER BUSINESSES MUST BE APPROVED BY THE
                  MAJORITY LENDERS, WHICH APPROVAL WILL NOT BE UNREASONABLY
                  WITHHELD. In connection with the same, Borrowers shall provide
                  to Agent at the time of the request for an Acquisition Advance
                  or at the time Borrowers notify the Lenders or seek approval
                  from the Lenders in connection with a proposed acquisition by
                  any of the Borrowers, as applicable, certified copies of the
                  Contract for Purchase and Sale and all associated
                  documentation associated with the applicable Borrower's
                  acquisition of a transportation related business, including,
                  without limitation, all contracts, breakout of purchase price,
                  cash flow analysis, projected income from the acquisition,
                  historical performance of the business being acquired, and all
                  appraisals and environmental audits related to the property
                  being acquired by a Borrower or an affiliate of a Borrower.
                  Based upon Lenders' review of all of the above, the Majority
                  Lenders may effectuate or not effectuate the Acquisition
                  Advance or approve or not approve the acquisition, as
                  applicable, in Lenders' reasonable discretion. Lenders shall
                  approve or not approve each request for an Acquisition
                  Advance, or approve or not approve an acquisition, as
                  applicable, no later than five (5) business days after the
                  time that Agent has received the last item required to be
                  reviewed by Lenders in connection with the applied for
                  Acquisition Advance or approval of an acquisition, as
                  applicable. Lenders shall approve or not approve each request
                  for a Collateralized Acquisition Advance no later ten (10)
                  business days after the time that Agent has received the last
                  item required to be reviewed by Lenders in connection with the
                  applied for Collateralized Acquisition Advance. Borrowers
                  shall additionally provide to Agent copies of all closing
                  documentation associated with the acquisition and sale at the
                  time of the closing of said acquisition and shall execute
                  and/or provide all documentation required by Lenders and their
                  counsel (including, without limitation, mortgages, deeds of
                  trust, security agreements, reaffirmations, collateral
                  assignments, UCC-1 financing statements, UCC-3 statements of
                  change, lien searches and opinions of Borrowers' counsel), in
                  order to evidence and perfect Agent's security interest in the
                  newly acquired assets.

30.      It is acknowledged and agreed by the Borrowers and the Lenders that, in
         addition to the Loan Closing Fee specified in Subparagraph (a) of
         Section 2.2 of the Loan Agreement (which has already been paid), in
         connection with the transactions contemplated herein, an additional
         Loan Closing Fee shall be due and owing from Borrowers in the amount of
         Thirty-Seven Thousand Five Hundred and 00/100 Dollars ($37,500.00),
         which shall be paid to Agent, for pro-rata distribution to the Lenders,
         upon the closing of the transactions contemplated herein.


                                       12
<PAGE>   13

31.      Subparagraph (c) of Section 2.2 of the Loan Agreement is hereby amended
         and restated so that, from and after the date hereof, it shall read in
         its entirety as follows:

         (c)      UNUSED LINE FEE: An unused line fee shall be charged in
                  connection with the Loans, such that the unused portion of the
                  Loans shall be subject to an annual fee of one-eighth of one
                  percent (.125%) per annum, to be calculated and payable to
                  Agent upon a quarterly basis, for pro-rata distribution to the
                  Lenders.

32.      Subparagraph (d) of Section 2.2 of the Loan Agreement is hereby amended
         and restated so that, from and after the date hereof, it shall read in
         its entirety as follows:

         (d)      ADMINISTRATIVE FEE - COLLATERALIZED ACQUISITION ADVANCES:

                             Intentionally deleted.

33.      Section 3.3 of the Loan Agreement is hereby amended and restated so
         that, from and after the date hereof, it shall read in its entirety as
         follows:

         3.3      Notwithstanding anything to the contrary set forth above, and
                  as set forth in Section 2.1 above, in connection with any
                  requests for an Acquisition Advance in excess of One Million
                  and 00/100 Dollars ($1,000,000.00), said request shall be
                  subject to approval by the Majority Lenders, which approval
                  will not be unreasonably withheld. In connection with the
                  same, Borrowers shall provide Agent at the time of the request
                  for an Acquisition Advance certified copies of the Contract
                  for Purchase and Sale and all associated documentation
                  associated with the applicable Borrower's acquisition of a
                  transportation related business, which shall be purchased (in
                  part) from the proceeds of the Acquisition Advance, including
                  without limitation, all contracts, breakout of purchase price,
                  cash flow analysis, projected income from the acquisition and
                  historical performance of the business being acquired. Based
                  upon Lenders' review of all of the above, Lenders may
                  effectuate or not effectuate the Acquisition Advance in
                  Lenders' reasonable discretion. Lenders shall approve or not
                  approve each request for an Acquisition Advance no later than
                  five (5) Business Days, and shall approve or not approve each
                  request for a Collateralized Acquisition Advance no later than
                  ten (10) Business Days, after the time that Agent receives the
                  last item required to be reviewed by Lenders in connection
                  with the applied for Acquisition Advance or Collateralized
                  Acquisition Advance, as applicable. Borrowers shall
                  additionally provide to Agent copies of all closing
                  documentation associated with the acquisition and sale at the
                  time of the closing of said acquisition and shall execute all
                  documentation required by the Majority Lenders, including,
                  without limitation, execution of a Borrower Joinder Agreement
                  by an Additional Borrower, in order to evidence and perfect
                  Agent's and Lenders' security interest in the newly acquired
                  assets.


                                       13

<PAGE>   14

34.      Section 4.1 of the Loan Agreement is hereby amended and restated so
         that, from and after the date hereof, it shall read in its entirety as
         follows:

         4.1      LETTERS OF CREDIT. The Issuing Lender agrees, subject to the
                  terms and conditions of this Agreement, upon request of the
                  Borrowers to issue from time to time for the account of the
                  Borrowers Letters of Credit upon delivery to the Issuing
                  Lender of an Application and Agreement for Letter of Credit
                  relating thereto in form and content acceptable to the Issuing
                  Lender; provided, that (i) the face amount of Letters of
                  Credit outstanding shall not exceed Five Million Five Hundred
                  Thousand Dollars ($5,500,000.00) and (ii) no Letter of Credit
                  shall be issued if, after giving effect thereto, the face
                  amount of Letters of Credit outstanding plus the outstanding
                  principal balance of the Loans shall exceed the Borrowing
                  Base. No Letter of Credit shall have an expiry date (including
                  all rights of Borrowers or any beneficiary named in such
                  Letter of Credit to require renewal) or payment date occurring
                  later than the earlier to occur of (a) (i) in the case of
                  standby Letters of Credit, one (1) year after the date of its
                  issuance and (ii) in the case of documentary Letters of
                  Credit, one hundred twenty (120) days after the date of its
                  issuance or (b) the Maturity Date.

35.      Subparagraph (d) of Section 6.1 of the Loan Agreement is hereby amended
         and restated so that, from and after the date hereof, it shall read in
         its entirety as follows:

         (d)      MACHINERY AND EQUIPMENT APPRAISALS. Agent hereby acknowledges
                  receipt of the Truck Locators, Inc. Appraisal and the
                  Locomotive Appraisal; provided however, that Lenders reserve
                  the right to require Borrowers to provide Agent with updated
                  appraisals of the Machinery and Equipment at any time during
                  the term of the Loans (provided however, that unless an Event
                  of Default shall have occurred and be continuing, or unless
                  Borrowers are refinancing Machinery and Equipment in
                  accordance with the terms set forth in the Security
                  Agreements, that said appraisals shall be limited to one (1)
                  appraisal per year), said appraisals to be performed at
                  Borrowers' sole cost and expense.

36.      Subparagraph (e) of Section 6.1 of the Loan Agreement is hereby amended
         and restated so that, from and after the date hereof, it shall read in
         its entirety as follows:

         (e)      REAL ESTATE APPRAISALS. Satisfactory fair market value
                  appraisals of each of the Texas Real Property, the Michigan
                  Real Property, the Huron and Eastern Real Property, the
                  Ontario Real Property, the Gettysburg Real Property, the West
                  Texas and Lubbock Real Property, the Minnesota Real Property
                  and the Washington Real Property; provided however, that
                  Lenders reserve the right to require Borrowers to provide
                  Agent with updated appraisals of the Real Property, or any
                  portion thereof, at any time during the term of the Loans
                  (provided however, that unless an Event of Default shall have
                  occurred and be continuing, that said 




                                       14
<PAGE>   15

                  appraisals shall be limited to one (1) appraisal per year),
                  said appraisals to be performed at Borrowers' sole cost and
                  expense.

37.      Article 7 of the Loan Agreement is hereby amended and restated so that,
         from and after the date hereof, it shall read in its entirety as
         follows:

                                    Article 7
                       USE OF LOAN PROCEEDS; MARGIN STOCK

                  The Borrowers desire to obtain extensions of credit of up to
         Fifty-five Million and 00/100 Dollars ($55,000,000.00) from the Lenders
         to be utilized by the Borrowers for the purposes set forth in Section
         2.1 of this Agreement. Borrowers do not own any margin securities and
         no portion of any Advance or Acquisition Advance or any of the Loans
         will be used for the purpose of reducing or retiring any indebtedness
         which was originally incurred by any of the Borrowers to purchase or
         carry any margin securities, and neither the making of any and all
         loans, Advances and Acquisition Advances nor the use of the proceeds
         thereof will violate or be inconsistent with the provisions of
         Regulations G, T, U or X of the Board of Governors of the Federal
         Reserve System of the United States.

38.      Section 10.15 of the Loan Agreement is hereby amended and restated so
         that, from and after the date hereof, it shall read in its entirety as
         follows:

         10.15    In connection with the Locomotive Appraisal, the Railroad
                  Trackage Appraisal, the Truck Locators, Inc. Appraisal and the
                  Real Estate Appraisals, Borrowers shall provide to the Agent
                  updated appraisals of all or any of the same as required by
                  the Majority Lenders at any time during the term of the Loans
                  (provided however, that unless an Event of Default shall have
                  occurred and be continuing, or unless Borrowers are
                  refinancing Machinery and Equipment in accordance with the
                  terms set forth in the Security Agreements, that each of the
                  above set forth appraisals shall be limited to one (1)
                  re-appraisal per year), said appraisals to be performed at
                  Borrowers' sole cost and expense. Additionally, Borrowers
                  shall have the right to obtain updated appraisals of all or
                  any of the above set forth appraisals for the purpose of
                  determining the then current value of the assets which are
                  re-appraised in order to apply for an increased amount of
                  availability under the Loans. Said re-appraisals shall be
                  performed at Borrowers' sole cost and expense, and, must be in
                  form and content acceptable to the Majority Lenders in their
                  sole discretion. The re-appraisal must additionally be based
                  upon the same standards as the initial appraisal related to
                  the property which is being appraised was based (e.g., if the
                  original appraisal was based on a forced liquidation
                  valuation, the new appraisal must also be based upon a forced
                  liquidation valuation; if the original appraisal was based
                  upon a fair market valuation, the new appraisal must be based
                  upon a fair market valuation). The determination as to
                  availability under the Loans, based upon said re-appraisal(s),
                  shall be determined by the Majority Lenders in




                                       15
<PAGE>   16

                  their sole discretion; provided further, that it is
                  acknowledged by Borrowers that in the event that said
                  re-appraisal indicates a diminution in value of the
                  reappraised assets that availability under the Loans will be
                  reduced accordingly.

39.      Subparagraph (g) of Section 10.16 of the Loan Agreement is hereby
         amended and restated so that, from and after the date hereof, it shall
         read in its entirety as follows:

         (g)      Borrowers shall at all times maintain a Tangible Net Worth
                  (which is defined as net worth plus subordinated debt, less
                  goodwill and other intangibles) of not less than Twenty-Two
                  Million and 00/100 Dollars ($22,000,000.00) plus (a) annual
                  net income for each fiscal year ended, beginning with the
                  fiscal year ending December 31, 1997, of Seven Hundred Fifty
                  Thousand and 00/100 Dollars ($750,000.00), it being
                  acknowledged that Borrower's annual net income must be in
                  excess of Seven Hundred Fifty Thousand and 00/100 Dollars
                  ($750,000.00) in each fiscal year, plus (b) seventy-five
                  percent (75%) of the aggregate net proceeds of any
                  subordinated debt or equity offerings. Additionally, excluding
                  Canada, at all times foreign investments, advances, joint
                  ventures, and other similar investments outside of the United
                  States cannot exceed fifty percent (50%) of the Borrowers'
                  consolidated Tangible Net Worth.

40.      Subparagraph (l) of Section 10.16 of the Loan Agreement is hereby
         amended and restated so that, from and after the date hereof, it shall
         read in its entirety as follows:

         (l)      Borrowers shall maintain a Cash Flow Coverage Ratio (which is
                  defined as average total senior funded debt over the last
                  twelve (12) month period divided by earnings before interest,
                  taxes, depreciation and amortization) calculated on a rolling
                  twelve (12) month basis of not greater than 4.0 to 1 from the
                  quarter ending March 31, 1998, and at all times thereafter.

41.      The following Section 10.22 is hereby added to the Loan Agreement,
         effective from and after the date hereof:

         10.22    Borrowers shall take all actions necessary to assure that
                  Borrowers' computer based systems are able to operate and
                  effectively process data including dates on and after January
                  1, 2000. At the request of Agent, Borrowers shall provide
                  Agent assurance acceptable to Agent of Borrowers' Year 2000
                  compatibility. Borrowers hereby covenant and agree that all of
                  Borrowers' information systems, including without limitation
                  all computer hardware and software, networks, databases, and
                  all other electronic data storage, retrieval and computation
                  hardware, software and devices of any kind (collectively, the
                  "Information Systems"), have been and/or will be updated and
                  modified to accommodate and conform to the Year 2000 date
                  change, and are and/or will be in full compliance with any and
                  all federal, state





                                       16
<PAGE>   17

                  and local laws, regulations and ordinances relating to the
                  same, whether now in effect, or hereafter enacted
                  (collectively, the "Information System Laws").

                  Borrowers hereby jointly and severally agree, unconditionally,
                  absolutely, and irrevocably, to indemnify, defend, and hold
                  harmless Agent and Lenders, their affiliates, successors,
                  assigns, and their officers, directors, employees, and agents
                  against and in respect of any loss, liability, cost, injury,
                  expense, or damage of any and every kind whatsoever (including
                  without limitation, court costs and attorneys' fees and
                  expenses) which at any time or from time to time may be
                  suffered or incurred, directly or indirectly, in connection
                  with, with respect to, or as a direct or indirect result of
                  the failure of Borrowers to update or modify their Information
                  Systems to accommodate and conform to the Year 2000 date
                  change and/or fully comply with all Information System Laws
                  including, without limitation, any losses, liabilities,
                  damages, injuries, costs, expenses, or claims asserted or
                  arising under the Information System Laws, whether now known
                  or unknown.

42.      The following Section 10.23 is hereby added to the Loan Agreement,
         effective from and after the date hereof:

         10.23    BORROWERS AND LENDERS ACKNOWLEDGE THAT THE MINNESOTA
                  DEPARTMENT OF REVENUE MAY ASSERT THE POSITION THAT LIMITATION
                  OF THE INDEBTEDNESS SECURED BY THE MINNESOTA MORTGAGE
                  DOCUMENTS REQUIRES THAT THE MINNESOTA MORTGAGE DOCUMENTS BE
                  RELEASED OR BE DEEMED RELEASED AT SUCH TIME AS THE LENDERS
                  HAVE RECEIVED ONE MILLION FIVE HUNDRED THOUSAND DOLLARS
                  ($1,500,000.00) IN REPAYMENT OF PRINCIPAL UNDER THE LOANS,
                  NOTWITHSTANDING ANY OTHER ALLOCATION OF FUNDS AGREED TO BY
                  BORROWERS AND LENDERS. NOTWITHSTANDING ANY POSITION OF THE
                  MINNESOTA DEPARTMENT OF REVENUE CONCERNING THIS MATTER,
                  BORROWERS HEREBY WAIVE ANY AND ALL CLAIMS ANY OF THEM MAY NOW
                  OR HEREAFTER HAVE TO CHALLENGE THE VALIDITY OF THE MINNESOTA
                  MORTGAGE DOCUMENTS AS A RESULT OF THE LIMITATION OF THE
                  INDEBTEDNESS SECURED BY THE MINNESOTA MORTGAGE DOCUMENTS AND
                  THE REPAYMENT OF ONE MILLION FIVE HUNDRED THOUSAND DOLLARS
                  ($1,500,000.00) OF PRINCIPAL UNDER THE LOANS, AND BORROWERS
                  FURTHER AGREE THAT THE MINNESOTA MORTGAGE DOCUMENTS SHALL ONLY
                  BE RELEASED UPON SATISFACTION OF THE TERMS AND CONDITIONS
                  CONTAINED THEREIN AND IN THE OTHER LOAN DOCUMENTS.

43.      Section 14.6 of the Loan Agreement is hereby amended and restated so
         that, from and after the date hereof, it shall read in its entirety as
         follows:


                                       17
<PAGE>   18

         14.6     AGENT'S FEES. Commencing on July 1, 1998, and on the first day
                  of each quarter thereafter, the Borrowers shall pay to the
                  Agent such agent fees as are set forth in and in accordance
                  with the terms and provisions of the Credit Facility Letter
                  dated February 24, 1998, all of which agent fees shall be
                  retained by the Agent and not distributed pro-rata to the
                  Lenders.

44.      Subparagraph (b) of Section 17.9 of the Loan Agreement is hereby
         amended and restated so that, from and after the date hereof, it shall
         read in its entirety as follows:

         (b)      Initial
                  Borrowers:        RAILAMERICA, INC.
                                    KALYN/SIEBERT INCORPORATED
                                    RAILAMERICA INTERMODAL SERVICES, INC.
                                    RAILAMERICA CARRIERS INC.
                                    STEEL CITY CARRIERS INC.
                                    SAGINAW VALLEY RAILWAY COMPANY, INC.
                                    HURON AND EASTERN RAILWAY COMPANY, INC.
                                    WEST TEXAS AND LUBBOCK RAILROAD COMPANY
                                    PLAINVIEW TERMINAL COMPANY
                                    CASCADE AND COLUMBIA RIVER RAILROAD COMPANY
                                    OTTER TAIL VALLEY RAILROAD COMPANY, INC.
                                    MINNESOTA NORTHERN RAILROAD, INC.
                                    DELAWARE VALLEY RAILWAY COMPANY
                                    301 Yamato Road
                                    Suite 1190
                                    Boca Raton, Florida 33431
                                    Attn: Gary Marino

         With a copy to:            SCOTT G. WILLIAMS, ESQUIRE
                                    SHUTTS & BOWEN
                                    One Clearlake Centre
                                    Suite 500
                                    250 Australian Avenue South
                                    West Palm Beach, Florida 33402-3555

45.      The following Subparagraph (e) is hereby added to Section 17.9 of the
         Loan Agreement, effective from and after the date hereof:

         (e)      Additional
                  Borrowers:        Such addresses as are specified on the
                                    Borrower Joinder Agreements executed by
                                    the Additional Borrowers.



                                       18
<PAGE>   19

46.      WAIVER AND RELEASE. AS A MATERIAL INDUCEMENT FOR THE LENDERS TO EXECUTE
         THIS AMENDMENT, THE BORROWERS DO HEREBY RELEASE, WAIVE, DISCHARGE,
         COVENANT NOT TO SUE, ACQUIT, SATISFY AND FOREVER DISCHARGE THE AGENT
         AND LENDERS, THEIR OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS AND AGENTS
         AND THEIR AFFILIATES AND ASSIGNS FROM ANY AND ALL LIABILITY, CLAIMS,
         COUNTERCLAIMS, DEFENSES, ACTIONS, CAUSES OF ACTION, SUITS,
         CONTROVERSIES, AGREEMENTS, PROMISES AND DEMANDS WHATSOEVER IN LAW OR IN
         EQUITY WHICH THE BORROWERS EVER HAD, NOW HAVE, OR WHICH ANY PERSONAL
         REPRESENTATIVE, SUCCESSOR, HEIR OR ASSIGN OF THE BORROWERS HEREAFTER
         CAN, SHALL OR MAY HAVE AGAINST THE AGENT OR THE LENDERS, THEIR
         OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS AND AGENTS, AND THEIR
         AFFILIATES AND ASSIGNS, FOR, UPON OR BY REASON OF ANY MATTER, CAUSE OR
         THING WHATSOEVER, THROUGH THE DATE HEREOF. THE BORROWERS FURTHER
         EXPRESSLY COVENANT WITH AND WARRANT UNTO THE LENDERS AND THEIR
         AFFILIATES AND ASSIGNS, THAT THERE EXIST NO CLAIMS, COUNTERCLAIMS,
         DEFENSES, OBJECTIONS, OFFSETS OR CLAIMS OF OFFSET AGAINST THE LENDERS
         OR THE OBLIGATION OF THE BORROWERS TO PAY THE LENDERS ALL AMOUNTS OWING
         UNDER THE NOTES, THE LOAN AGREEMENT AND ALL ASSOCIATED LOAN DOCUMENTS
         AS AND WHEN THE SAME BECOME DUE AND PAYABLE.

47.      REAFFIRMATION BY BORROWERS. THE BORROWERS ACKNOWLEDGE AND REAFFIRM THAT
         ALL WARRANTIES, REPRESENTATIONS, AFFIRMATIVE COVENANTS AND NEGATIVE
         COVENANTS SET FORTH IN THE LOAN AGREEMENT REMAIN IN FULL FORCE AND
         EFFECT ON THE DATE HEREOF AS IF MADE ON THE DATE HEREOF.

48.      AMENDED AGREEMENT. THIS AGREEMENT AMENDS THE LOAN AGREEMENT, AND THE
         BORROWERS ACKNOWLEDGE AND AGREE THAT THE SECURITY INTERESTS, RIGHTS,
         DUTIES, AND OBLIGATIONS OF THE BORROWERS AND THE LENDERS CREATED BY THE
         LOAN AGREEMENT ARE NOT EXTINGUISHED, BUT ARE REAFFIRMED AND REMAIN IN
         FULL FORCE AND EFFECT AS PROVIDED IN THE LOAN AGREEMENT. IN THE EVENT
         OF ANY CONFLICT BETWEEN THE TERMS AND PROVISIONS OF THE LOAN AGREEMENT
         AND THE TERMS AND PROVISIONS OF THIS AMENDMENT, THE TERMS AND
         PROVISIONS OF THIS AMENDMENT SHALL CONTROL AND PREVAIL.



                                       19
<PAGE>   20

                            INTENTIONALLY LEFT BLANK





































                                       20
<PAGE>   21



         WAIVER OF JURY TRIAL. THE AGENT, THE LENDERS AND THE BORROWERS HEREBY
MUTUALLY, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY MAY HAVE
TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED HEREON OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT CONTEMPLATED OR TO
BE EXECUTED IN CONJUNCTION HEREWITH, UNDER ANY OF THE LOAN DOCUMENTS, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR
ACTIONS OF ANY PARTY. THE BORROWERS ACKNOWLEDGE THAT THIS WAIVER OF JURY TRIAL
IS A MATERIAL INDUCEMENT TO THE AGENT AND THE LENDERS IN ACCEPTING THIS
AGREEMENT, AND, THAT THE AGENT AND THE LENDERS WOULD NOT HAVE ACCEPTED THIS
AGREEMENT WITHOUT THIS JURY TRIAL WAIVER, AND, THAT THE BORROWERS HAVE BEEN
REPRESENTED BY AN ATTORNEY OR HAVE HAD AN OPPORTUNITY TO CONSULT WITH AN
ATTORNEY REGARDING THIS JURY TRIAL WAIVER, AND, UNDERSTAND THE LEGAL EFFECT OF
THIS JURY TRIAL WAIVER.

         IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment to Loan Agreement as of the day and year first above written.

Witnesses                                      BORROWERS:

                                               RAILAMERICA, INC., a Delaware
                                               corporation

---------------------------

---------------------------                    By: /s/ Donald D. Redfearn
                                                   -----------------------------
                                                   DONALD D. REDFEARN,
                                                   Executive Vice President

                                                            (Corporate Seal)

                                               KALYN/SIEBERT INCORPORATED, a
                                               Texas corporation

---------------------------

---------------------------                    By: /s/ Donald D. Redfearn
                                                   -----------------------------
                                                   DONALD D. REDFEARN,
                                                   Vice President

                                                            (Corporate Seal)


                   SIGNATURE PAGE NO. 1 TO FIRST AMENDMENT TO
                    LOAN AGREEMENT DATED AS OF JUNE 16, 1998




<PAGE>   22

                                        RAILAMERICA INTERMODAL SERVICES, INC., a
                                        Delaware corporation

---------------------------

---------------------------             By: /s/ Donald D. Redfearn
                                            -----------------------------
                                            DONALD D. REDFEARN,
                                            Executive Vice President

                                                      (Corporate Seal)

                                        RAILAMERICA CARRIERS INC.,
                                        a corporation organized under the laws
                                        of the Province of Ontario

---------------------------

---------------------------             By: /s/ Donald D. Redfearn
                                            -----------------------------
                                            DONALD D. REDFEARN,
                                            Vice President

                                                       (Corporate Seal)

                                        STEEL CITY CARRIERS INC., a
                                        corporation organized under the
                                        laws of the Province of Ontario

---------------------------

---------------------------             By: /s/ Donald D. Redfearn
                                            -----------------------------
                                            DONALD D. REDFEARN,
                                            Vice President

                                                       (Corporate Seal)

                                        SAGINAW VALLEY RAILWAY
                                        COMPANY, INC., a Delaware corporation

---------------------------

---------------------------             By: /s/ Donald D. Redfearn
                                            -----------------------------
                                            DONALD D. REDFEARN,
                                            Executive Vice President

                                                       (Corporate Seal)




                   SIGNATURE PAGE NO. 2 TO FIRST AMENDMENT TO
                    LOAN AGREEMENT DATED AS OF JUNE 16, 1998



<PAGE>   23

                                        HURON AND EASTERN RAILWAY
                                        COMPANY, INC., a Michigan
                                        corporation

---------------------------

---------------------------             By: /s/ Donald D. Redfearn
                                            -----------------------------
                                            DONALD D. REDFEARN,
                                            Executive Vice President

                                                         (Corporate Seal)

                                        WEST TEXAS AND LUBBOCK
                                        RAILROAD COMPANY, INC., a Texas
                                        corporation

---------------------------

---------------------------             By: /s/ Donald D. Redfearn
                                            -----------------------------
                                            DONALD D. REDFEARN,
                                            Executive Vice President

                                                         (Corporate Seal)

                                        PLAINVIEW TERMINAL COMPANY, a Texas
                                        corporation

---------------------------

---------------------------             By: /s/ Donald D. Redfearn
                                            -----------------------------
                                            DONALD D. REDFEARN,
                                            Executive Vice President

                                                         (Corporate Seal)

                                        CASCADE AND COLUMBIA RIVER
                                        RAILROAD COMPANY, a Delaware
                                        corporation

---------------------------

---------------------------             By: /s/ Donald D. Redfearn
                                            -----------------------------
                                            DONALD D. REDFEARN,
                                            Executive Vice President

                                                         (Corporate Seal)



                   SIGNATURE PAGE NO. 3 TO FIRST AMENDMENT TO
                    LOAN AGREEMENT DATED AS OF JUNE 16, 1998



<PAGE>   24


                                        OTTER TAIL VALLEY RAILROAD
                                        COMPANY, INC., a Minnesota
                                        corporation

---------------------------

---------------------------             By: /s/ Donald D. Redfearn
                                            -----------------------------
                                            DONALD D. REDFEARN,
                                            Executive Vice President

                                                      (Corporate Seal)

                                        MINNESOTA NORTHERN RAILROAD, INC., a
                                        Delaware corporation

---------------------------

---------------------------             By: /s/ Donald D. Redfearn
                                            -----------------------------
                                            DONALD D. REDFEARN,
                                            Executive Vice President

                                                      (Corporate Seal)

                                        DELAWARE VALLEY RAILWAY COMPANY, INC., a
                                        Delaware corporation

---------------------------

---------------------------             By: /s/ Donald D. Redfearn
                                            -----------------------------
                                            DONALD D. REDFEARN,
                                            Executive Vice President

                                                      (Corporate Seal)

                                        ST. CROIX VALLEY RAILROAD
                                        COMPANY, a Delaware corporation

---------------------------

---------------------------             By: /s/ Donald D. Redfearn
                                            -----------------------------
                                            DONALD D. REDFEARN,
                                            Executive Vice President

                                                      (Corporate Seal)



                   SIGNATURE PAGE NO. 4 TO FIRST AMENDMENT TO
                    LOAN AGREEMENT DATED AS OF JUNE 16, 1998