exv10w1






Exhibit 10.1




 





CREDIT AGREEMENT




Dated as of June 23, 2009




among




RAILAMERICA, INC.,

as

a Borrower




RAILAMERICA TRANSPORTATION CORP.,

as

a Borrower




The Several Lenders

from Time to Time Parties Hereto




CITICORP NORTH AMERICA, INC.,

as Administrative Agent and Collateral Agent




CITIGROUP GLOBAL MARKETS INC.,

as Sole Lead Arranger and Sole Bookrunner




 





 









 





TABLE CONTENTS




	 	 	 	 	 
	 	 	Page
	SECTION 1. DEFINITIONS
	 	 	 	 
	1.1. Defined Terms
	 	 	1	 
	1.2. Exchange Rates
	 	 	36	 
	 
	 	 	 	 
	SECTION 2. AMOUNT AND TERMS OF CREDIT
	 	 	 	 
	2.1. Commitments
	 	 	36	 
	2.2. Minimum Amount of Each Borrowing; Maximum Number of Borrowings
	 	 	39	 
	2.3. Notice of Borrowing
	 	 	39	 
	2.4. Disbursement of Funds
	 	 	40	 
	2.5. Repayment of Loans; Evidence of Debt
	 	 	41	 
	2.6. Conversions and Continuations
	 	 	41	 
	2.7. Pro rata Borrowings
	 	 	42	 
	2.8. Interest
	 	 	42	 
	2.9. Interest Periods
	 	 	43	 
	2.10. Increased Costs, Illegality, etc.
	 	 	44	 
	2.11. Compensation
	 	 	46	 
	2.12. Change of Lending Office
	 	 	46	 
	2.13. Notice of Certain Costs
	 	 	47	 
	2.14. Defaulting Lenders
	 	 	47	 
	2.15. Incremental Facilities
	 	 	50	 
	2.16. Reserves
	 	 	51	 
	 
	 	 	 	 
	SECTION 3. LETTERS OF CREDIT
	 	 	 	 
	3.1. Letters of Credit
	 	 	51	 
	3.2. Letter of Credit Requests
	 	 	52	 
	3.3. Letter of Credit Participations
	 	 	52	 
	3.4. Agreement to Repay Letter of Credit Drawings
	 	 	54	 
	3.5. Increased Costs
	 	 	55	 
	3.6. Successor Letter of Credit Issuer
	 	 	56	 
	3.7. Cash Collateralization
	 	 	56	 
	 
	 	 	 	 
	SECTION 4. FEES; COMMITMENTS
	 	 	 	 
	4.1. Fees
	 	 	57	 
	4.2. Voluntary Reduction of Commitments
	 	 	58	 
	4.3. Mandatory Termination of Commitments
	 	 	58	 
	 
	SECTION 5. PAYMENTS
	 	 	 	 
	5.1. Voluntary Prepayments
	 	 	58	 
	5.2. Mandatory Prepayments
	 	 	59	 
	5.3. Payments Generally
	 	 	60	 
	5.4. Net Payments
	 	 	62	 






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	 	 	Page
	5.5. Computations of Interest and Fees
	 	 	65	 
	5.6. Limit on Rate of Interest
	 	 	65	 
	 
	 	 	 	 
	SECTION 6. CONDITIONS PRECEDENT TO INITIAL BORROWING
	 	 	 	 
	6.1. Credit Documents
	 	 	66	 
	6.2. Collateral
	 	 	66	 
	6.3. Legal Opinions
	 	 	66	 
	6.4. No Default
	 	 	66	 
	6.5. Concurrent Financings
	 	 	66	 
	6.6. Existing Credit Agreement
	 	 	67	 
	6.7. Corporate Documents
	 	 	67	 
	6.8. Officers’ Certificate
	 	 	67	 
	6.9. Fees
	 	 	67	 
	6.10. Representations and Warranties
	 	 	67	 
	6.11. Borrowing Base Certificate
	 	 	68	 
	6.12. Closing Availability
	 	 	68	 
	6.13. Solvency
	 	 	68	 
	6.14. Lien Searches
	 	 	68	 
	6.15. Appraisals and Field Exams
	 	 	68	 
	6.16. Perfection Certificate
	 	 	68	 
	6.17. USA PATRIOT Act
	 	 	68	 
	 
	 	 	 	 
	SECTION 7. CONDITIONS PRECEDENT TO ALL CREDIT EVENTS
	 	 	 	 
	7.1. No Default; Representations and Warranties
	 	 	68	 
	7.2. Notice of Borrowing; Letter of Credit Request
	 	 	69	 
	7.3. Availability
	 	 	69	 
	7.4. No Legal Bar
	 	 	69	 
	 
	 	 	 	 
	SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS
	 	 	 	 
	8.1. Corporate Status
	 	 	69	 
	8.2. Corporate Power and Authority
	 	 	70	 
	8.3. No Violation
	 	 	70	 
	8.4. Litigation
	 	 	70	 
	8.5. Margin Regulations
	 	 	70	 
	8.6. Governmental Approvals
	 	 	70	 
	8.7. Investment Company Act
	 	 	71	 
	8.8. True and Complete Disclosure
	 	 	71	 
	8.9. Financial Condition; Financial Statements
	 	 	71	 
	8.10. Tax Returns and Payments
	 	 	71	 
	8.11. Compliance with ERISA
	 	 	72	 
	8.12. Subsidiaries and Investments
	 	 	72	 
	8.13. Intellectual Property
	 	 	73	 
	8.14. Environmental Laws
	 	 	73	 
	8.15. Properties
	 	 	74	 
	8.16. Solvency
	 	 	74	 






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	 	 	Page
	8.17. Compliance with Laws and Agreements
	 	 	74	 
	8.18. Canadian Pension Plans
	 	 	74	 
	8.19. Labor Matters
	 	 	75	 
	8.20. Security Documents
	 	 	75	 
	8.21. Anti-Terrorism Law
	 	 	76	 
	 
	 	 	 	 
	SECTION 9. AFFIRMATIVE COVENANTS
	 	 	 	 
	9.1. Information Covenants
	 	 	77	 
	9.2. Books, Records and Inspections
	 	 	80	 
	9.3. Maintenance of Insurance
	 	 	81	 
	9.4. Payment of Taxes
	 	 	81	 
	9.5. Existence
	 	 	81	 
	9.6. Compliance with Statutes, Obligations, etc.
	 	 	81	 
	9.7. ERISA
	 	 	81	 
	9.8. Good Repair
	 	 	82	 
	9.9. End of Fiscal Years; Fiscal Quarters
	 	 	82	 
	9.10. Additional Subsidiary Guarantors and Grantors
	 	 	82	 
	9.11. Use of Proceeds
	 	 	83	 
	9.12. Further Assurances
	 	 	83	 
	9.13. Field Examinations
	 	 	83	 
	9.14. [Reserved]
	 	 	83	 
	9.15. Information Regarding Collateral
	 	 	83	 
	9.16. Cash Management
	 	 	84	 
	 
	 	 	 	 
	SECTION 10. NEGATIVE COVENANTS
	 	 	 	 
	10.1. Limitation on Indebtedness
	 	 	85	 
	10.2. Limitation on Liens
	 	 	88	 
	10.3. Limitation on Fundamental Changes
	 	 	88	 
	10.4. Limitation on Sale of Assets
	 	 	90	 
	10.5. Limitation on Investments
	 	 	91	 
	10.6. Limitation on Restricted Payments
	 	 	93	 
	10.7. Limitations on Debt Payments and Certain Amendments
	 	 	94	 
	10.8. Limitations on Sale Leasebacks
	 	 	96	 
	10.9. Fixed Charge Coverage Ratio
	 	 	96	 
	10.10. Transactions with Affiliates
	 	 	96	 
	10.11. Restrictive Agreements
	 	 	97	 
	10.12. Changes in Business
	 	 	97	 
	10.13. Limitation on Issuance of Capital Stock
	 	 	98	 
	 
	 	 	 	 
	SECTION 11. EVENTS OF DEFAULT
	 	 	 	 
	11.1. Payments
	 	 	98	 
	11.2. Representations, etc.
	 	 	98	 
	11.3. Covenants
	 	 	98	 
	11.4. Default Under Other Agreements
	 	 	98	 
	11.5. Bankruptcy, etc.
	 	 	99	 






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	 	 	Page
	11.6. ERISA
	 	 	99	 
	11.7. Guarantee
	 	 	100	 
	11.8. Security Agreement
	 	 	100	 
	11.9. Judgments
	 	 	100	 
	11.10. Change of Control
	 	 	100	 
	 
	 	 	 	 
	SECTION 12. THE AGENTS
	 	 	 	 
	12.1. Appointment and Authority
	 	 	101	 
	12.2. Agents Individually
	 	 	101	 
	12.3. Duties of the Agents; Exculpatory Provisions
	 	 	102	 
	12.4. Reliance by Agents
	 	 	103	 
	12.5. Delegation of Duties
	 	 	103	 
	12.6. Resignation of Agents
	 	 	104	 
	12.7. Non-Reliance on Agent and Other Lenders
	 	 	105	 
	12.8. No Other Duties, etc.
	 	 	106	 
	12.9. Withholding Tax
	 	 	106	 
	12.10. Reports
	 	 	107	 
	12.11. Indemnification
	 	 	107	 
	 
	 	 	 	 
	SECTION 13. MISCELLANEOUS
	 	 	 	 
	13.1. Amendments and Waivers
	 	 	108	 
	13.2. Notices
	 	 	110	 
	13.3. No Waiver; Cumulative Remedies
	 	 	111	 
	13.4. Survival of Representations and Warranties
	 	 	111	 
	13.5. Payment of Expenses and Taxes
	 	 	111	 
	13.6. Successors and Assigns; Participations and Assignments
	 	 	112	 
	13.7. Replacements of Lenders under Certain Circumstances
	 	 	116	 
	13.8. Adjustments; Set-off
	 	 	116	 
	13.9. Counterparts
	 	 	117	 
	13.10. Severability
	 	 	117	 
	13.11. Integration
	 	 	117	 
	13.12. GOVERNING LAW
	 	 	117	 
	13.13. Submission to Jurisdiction; Waivers
	 	 	117	 
	13.14. Acknowledgments
	 	 	118	 
	13.15. WAIVERS OF JURY TRIAL
	 	 	118	 
	13.16. Confidentiality
	 	 	118	 
	13.17. Citigroup Direct Website Communications
	 	 	119	 
	13.18. USA PATRIOT Act
	 	 	120	 






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	SCHEDULES
	 	 	 	 
	 
	 	 	 	 
	Schedule 1.1(b)

	 	Commitments of Lenders
	 	 
	Schedule 6.3

	 	Local Counsel Jurisdictions	 	 
	Schedule 8.12

	 	Subsidiaries	 	 
	Schedule 8.14

	 	Environmental Matters	 	 
	Schedule 8.19

	 	Labor Matters	 	 
	Schedule 10.1

	 	Closing Date Indebtedness	 	 
	Schedule 10.2

	 	Closing Date Liens	 	 
	Schedule 10.5

	 	Closing Date Investments	 	 






	 	 	 	 	 
	EXHIBITS
	 	 	 	 
	 
	 	 	 	 
	Exhibit A

	 	Form of Borrowing Base Certificate
	 	 
	Exhibit B

	 	Form of Guarantee	 	 
	Exhibit D

	 	Form of Perfection Certificate	 	 
	Exhibit D-1

	 	Form of Perfection Certificate Supplement	 	 
	Exhibit F

	 	Form of Security Agreement	 	 
	Exhibit G

	 	Form of Letter of Credit Request	 	 
	Exhibit H-1

	 	Form of Legal Opinion of Skadden, Arps, Slate, Meagher & Flom LLP	 	 
	Exhibit H-2

	 	Form of Legal Opinion of General Counsel	 	 
	Exhibit I

	 	Form of Assignment and Acceptance	 	 
	Exhibit J

	 	Form of Promissory Note (Revolving Credit and Swingline Loans)	 	 
	Exhibit K

	 	Form of Joinder Agreement	 	 
	Exhibit L-1

	 	Form of Tax Certification	 	 
	Exhibit L-2

	 	Form of Tax Certification	 	 
	Exhibit L-3

	 	Form of Tax Certification	 	 
	Exhibit L-4

	 	Form of Tax Certification	 	 
	Exhibit M

	 	Form of Solvency Certificate	 	 






-v-









 





          CREDIT AGREEMENT, dated as of June 23, 2009, among RAILAMERICA, INC., a Delaware corporation
(“RailAmerica”); RAILAMERICA TRANSPORTATION CORP., a Delaware corporation (“RATC,”
together with RailAmerica, the “Borrowers” and each individually, a “Borrower”);
the lenders party hereto from time to time (the “Lenders”), the LETTER OF CREDIT ISSUER
party hereto from time to time; CITICORP NORTH AMERICA, INC., as administrative agent (in such
capacity, the “Administrative Agent”) and collateral agent (in such capacity, the
“Collateral Agent”) for the Lenders; and CITIGROUP GLOBAL MARKETS INC. (“CGMI”), as
sole arranger and sole book manager (in such capacity, the “Lead Arranger”).




          The parties hereto hereby agree as follows:




          SECTION 1. Definitions




          1.1. Defined Terms.




          (a) As used herein, the following terms shall have the meanings specified in this Section 1.1
unless the context otherwise requires (it being understood that defined terms in this Agreement
shall include in the singular number the plural and in the plural the singular):




          “ABR” shall mean, for any day, a rate per annum (rounded upwards, if necessary, to the
next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1% and (c) 3.50%. Any change in the ABR due
to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate or the Federal Funds
Effective Rate.




          “ABR Loan” shall mean each Loan bearing interest at the rate provided in Section
2.8(a) and, in any event, shall include all Swingline Loans and Protective Advances.




          “ABR Margin” shall mean 3.00% per annum.




          “Account” shall mean, individually and collectively, any “Account” referred to in the
Security Agreement.




          “Account Debtor” shall mean any Person obligated on an Account.




          “Account Reserves” shall mean any and all reserves which the Administrative Agent
deems necessary, in its Permitted Discretion, to maintain (including, without limitation, Dilution
Reserves, and reserves for Permitted Liens on Eligible Accounts ranking prior to the Lien of the
Administrative Agent for the benefit of the Secured Parties) with respect to the Eligible Accounts.
The Administrative Agent may, from time to time, in its Permitted Discretion, adjust Account
Reserves used in computing the Borrowing Base upon not less than one Business Day prior written
notice to RailAmerica.




          “Adjusted Eligible Accounts” shall mean the excess, if any, of (i) Eligible Accounts
over (ii) Account Reserves.




 









 








          “Administrative Agent” shall mean Citicorp North America, Inc., as the administrative
agent for the Lenders under this Agreement and the other Credit Documents.




          “Administrative Agent’s Office” shall mean the office of the Administrative Agent
located at 1615 Brett Road, OPS III, New Castle, Delaware 19720, or such other office as the
Administrative Agent may hereafter designate in writing as such to the other parties hereto.




          “Administrative Agent Fee Letter” shall mean the Administrative Agent Fee Letter dated
as of the Closing Date, between the Administrative Agent and the Borrowers.




          “Affiliate” shall mean, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common control with such Person.
A Person shall be deemed to control a corporation if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and policies of such
corporation, whether through the ownership of voting securities, by contract or otherwise.




          “Agents” shall mean the Administrative Agent and the Collateral Agent.




          “Agreement” shall mean this Credit Agreement, as the same may be amended, amended and
restated, supplemented or otherwise modified from time to time.




          “Applicable Percentage” shall mean, with respect to any Lender, (a) with respect to
Revolving Credit Loans, Letters of Credit Outstanding or Swingline Loans, a percentage equal to a
fraction the numerator of which is such Lender’s Commitment and the denominator of which is the
Total Commitment (if the Total Commitment has terminated or expired, the Applicable Percentages
shall be determined based upon such Lender’s share of the Total Credit Exposure at that time); and
(b) with respect to Protective Advances or with respect to the Total Credit Exposure, a percentage
based upon its share of the Total Credit Exposure and the unused Commitments; provided that
in the case of Section 2.14 when a Defaulting Lender shall exist, any such Defaulting Lender’s
Commitment shall be disregarded in the calculation.




          “Assignment and Acceptance” shall mean an assignment and acceptance substantially in
the form of Exhibit J.




          “Authorized Officer” shall mean the Chairman of the Board, the President, the Chief
Financial Officer, any Senior Vice President, the Treasurer or any other senior officer of
RailAmerica designated as such in writing to the Administrative Agent by RailAmerica.




          “Availability” shall mean, at any time, an amount equal to (a) the lesser of (i) the
Total Commitment and (ii) the Borrowing Base minus (b) the Total Credit Exposure.




          “Available Commitment” shall mean an amount equal to the excess, if any, of (a) the
amount of the Total Commitment over (b) the sum of (i) the aggregate principal amount of all
Revolving Credit Loans then outstanding and (ii) the aggregate Letters of Credit Outstanding at
such time.




-2-









 








          “Bankruptcy Code” shall have the meaning provided in Section 11.5.




          “Blockage Notice” shall mean a notice pursuant to which the Administrative Agent
exercises its right under a Deposit Account Control Agreement.




          “Board” shall mean the Board of Governors of the Federal Reserve System of the United
States (or any successor).




          “Board of Directors” shall mean, with respect to any person, (i) in the case of any
corporation, the board of directors of such person, (ii) in the case of any limited liability
company, the board of managers, the sole member or other governing body of such person, (iii) in
the case of any partnership, the Board of Directors of the general partner of such person and (iv)
in any other case, the functional equivalent of the foregoing.




          “Borrowers” shall have the meaning provided in the preamble to this Agreement.




          “Borrowing” shall mean and include (a) the incurrence of Swingline Loans from the
Swingline Lender on a given date, (b) the incurrence of a Protective Advance from the
Administrative Agent on a given date, and (c) the incurrence of one Type of Revolving Credit Loan
on a given date (or resulting from conversions on a given date) having, in the case of Eurodollar
Loans, the same Interest Period (provided that ABR Loans incurred pursuant to Section
2.10(b) shall be considered part of any related Borrowing of Eurodollar Loans).




          “Borrowing Base” shall mean, at any time, (a) the product of 85% multiplied
by the Adjusted Eligible Accounts at such time, minus (b) Reserves.




          “Borrowing Base Certificate” shall mean a certificate, duly completed and signed by an
Authorized Officer of RailAmerica, in substantially the form of Exhibit A or another form
which is reasonably acceptable to the Administrative Agent in its sole discretion.




          “Business Day” shall mean any day excluding Saturday, Sunday and any day that shall be
in The City of New York a legal holiday or a day on which banking institutions are authorized by
law or other governmental actions to close, provided that, when used in connection with a
Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.




          “Capital Expenditures” shall mean, for any period, expenditures (including the
aggregate amounts expended or capitalized under Capital Leases incurred during such period) made by
RailAmerica or any of its Restricted Subsidiaries to acquire or construct fixed assets, plant and
equipment (including renewals, improvements and replacements, but excluding repairs) during such
period computed in accordance with GAAP; provided that the term “Capital Expenditures”
shall not include (a) expenditures made in connection with the replacement, substitution or
restoration of assets to the extent financed (i) from insurance proceeds paid on account of the
loss of or damage to the assets being replaced or restored or (ii) with awards of compensation
arising from the taking by eminent domain or condemnation of the assets being replaced, (b) the
purchase price of equipment that is purchased simultaneously with the trade-in of existing




-3-









 







equipment to the extent that the gross amount of such purchase price is reduced by
the credit granted by the seller of such equipment for the equipment being traded in at such time
or (c) the purchase of plant, property or equipment made within one year of the sale of any asset
(other than sales of inventory in the ordinary course of business) to the extent purchased with the
proceeds of such sale.




          “Capital Lease” shall mean, as applied to any Person, any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is, or is
required to be, accounted for as a capital lease on the balance sheet of that Person.




          “Capitalized Lease Obligations” shall mean at the time any determination thereof is to
be made, the amount of the liability in respect of a Capital Lease that would at such time be
required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes
thereto) in accordance with GAAP.




          “Cash” shall mean money, currency or a credit balance in any demand or Deposit
Account.




          “Cash Collateralize” shall mean, in respect of an obligation, to provide and pledge
(as a first priority perfected security interest) cash collateral in Dollars, at a location and
pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent
(and “Cash Collateralization” has a corresponding meaning).




          “Cash Dominion Period” shall mean (i) each period commencing on any date that
Availability shall have been less than $15.0 million (provided that such amount shall be
decreased to $10.0 million if at such date the total cash balance in the Control Accounts is at
least $5.0 million) for three calendar days and ending on the date that Availability shall have
been at least equal to $15.0 million (provided that such amount shall be decreased to $10.0
million if at such date the total cash balance in the Control Accounts is at least $5.0 million)
for 30 consecutive calendar days, (ii) each period commencing on the occurrence of an Event of
Default and ending on the date on which such Event of Default has been cured or waived.




          “Cash Management Agreement” shall mean any agreement or arrangement to provide cash
management services, including treasury, depository, overdraft, credit or debit card, purchase
card, electronic funds transfer, controlled disbursement services, foreign exchange facilities,
merchant services (other than those constituting a line of credit) and other cash management
arrangements.




          “Cash Management Bank” shall mean any Person that at the time it enters into a Cash
Management Agreement is a Lender or an Affiliate of a Lender, in its capacity as a party to such
Cash Management Agreement.




          “Change of Control” shall mean the occurrence of any of the following:





     (1) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act, other than one or more Permitted Holders, is or becomes the



-4-









 






beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except
that for purposes of this clause such person or group shall be deemed to have “beneficial
ownership” of all securities that such person or group has the right to acquire, whether
such right is exercisable immediately or only after the passage of time), directly or
indirectly, of Voting Stock representing 50% or more of the voting power of the total
outstanding Voting Stock of RailAmerica;




     (2) during any period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors of RailAmerica (together with any new
directors whose election to such Board of Directors or whose nomination for election by the
stockholders of RailAmerica was approved by a vote of the majority of the directors of
RailAmerica then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved), cease for any
reason to constitute a majority of the Board of Directors of RailAmerica; or




     (3) at any time a change of control occurs under (x) the Secured Note Indenture (y) the
indenture governing any Permitted Additional Secured Debt or (y) the indenture governing any
Permitted Unsecured Debt.



          “Closing Date” shall mean June 23, 2009, the date that conditions precedent set forth
in Section 6 have been satisfied.




          “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and
the regulations promulgated and rulings issued thereunder.




          “Collateral” shall have the meaning assigned to such term in the Security Agreement.




          “Collateral Agent” shall mean Citicorp North America, Inc., as the collateral agent
for the Lenders under this Agreement and the other Credit Documents.




          “Collections” shall mean all cash, checks, notes, instruments, and other items of
payment (including insurance proceeds, proceeds of cash sales, rental proceeds, and tax refunds).




          “Commitment” shall mean (a) with respect to each Lender that is a Lender on the
Closing Date, the amount set forth opposite such Lender’s name on Schedule 1.1(b) as such
Lender’s “Commitment” and (b) in the case of any Lender that becomes a Lender after the Closing
Date, the amount specified as such Lender’s “Commitment” in the Assignment and Acceptance pursuant
to which such Lender assumed a portion of the Total Commitment, in each case of the same may be
changed from time to time pursuant to terms hereof. The aggregate amount of the Commitments as of
the Closing Date is $40.0 million.




-5-









 








          “Commitment Fee Rate” shall mean, with respect to the Available Commitment on any day,
the rate per annum set forth below opposite the Status in effect on such day:




	 	 	 	 	 
	 	 	Commitment
	Status	 	Fee Rate
	Level I Status
	 	 	1.00	%
	Level II Status
	 	 	0.75	%





Notwithstanding the foregoing, the term “Commitment Fee Rate” shall mean 1.00%, during the period
from and including the Closing Date to but excluding December 31, 2009.




          “Commitment Utilization Percentage” shall mean, on any date, the percentage equivalent
to a fraction (a) the numerator of which is the Total Credit Exposure and (b) the denominator of
which is the Total Commitment.




          “Confidential Information” shall have the meaning provided in Section 13.16.




          “Consolidated Depreciation and Amortization Expense” means with respect to any Person
for any period, the total amount of depreciation and amortization expense, including any
amortization of deferred financing fees and amortization in relation to terminated Hedge
Agreements, of such Person and its Restricted Subsidiaries for such period on a consolidated basis
and otherwise determined in accordance with GAAP.




          “Consolidated EBITDA” means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period plus (without duplication) (a)
provision for taxes based on income or profits, plus franchise or similar taxes, of such Person for
such period deducted in computing Consolidated Net Income, plus, (b) Consolidated Interest
Expense of such Person for such period to the extent the same was deducted in calculating such
Consolidated Net Income, plus (c) Consolidated Depreciation and Amortization Expense of
such Person for such period to the extent such depreciation and amortization were deducted in
computing Consolidated Net Income, plus (d) any expenses or charges related to any equity
offering, Investment permitted hereunder, acquisition, disposition, recapitalization or
Indebtedness permitted to be incurred hereunder (whether or not successful), including Transaction
Expenses, and deducted in computing Consolidated Net Income, plus (e) the amount of any
restructuring charge deducted in such period in computing Consolidated Net Income, including any
one-time costs incurred in connection with acquisitions after the Closing Date, plus (f)
any other non-cash charges reducing Consolidated Net Income for such period, excluding any such
charge that represents an accrual or reserve for a cash expenditure for a future period,
plus (g) the amount of any non-controlling interest expense deducted in calculating
Consolidated Net Income (less the amount of any cash dividends paid to the holders of such minority
interests), plus (h) any net loss (or minus any net gains) resulting from currency exchange
risk Hedge Agreements, plus (i) foreign exchange loss (or minus any gain) on debt,
plus (j) the amount of management, monitoring, consulting and advisory fees and related
expenses paid to Sponsor or any of its Affiliates, plus (k) expenses related to the
implementation of enterprise resource planning system, less (l) non-cash items increasing
Consolidated Net Income of such Person for such period, excluding any items which represent




-6-









 







the reversal of any accrual of, or cash reserve for, anticipated cash
charges in any prior period, all as determined on a consolidated basis for RailAmerica and the
Restricted Subsidiaries in accordance with GAAP.




          “Consolidated Interest Expense” shall mean, with respect to any Person for any period,
the sum, without duplication, of (a) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, to the extent such expense was deducted in computing
Consolidated Net Income (including amortization of original issue discount resulting from the
issuance of Indebtedness at less than par, non-cash interest payments (but excluding any non-cash
interest expense attributable to the movement in the mark to market valuation of Hedge Agreements
or other derivative instruments pursuant to Financial Accounting Standards Board Statement No.
133—Accounting for Derivative Instruments and Hedging Activities” and excluding non-cash interest
expense attributable to the amortization of gains or losses resulting from the termination prior to
or reasonably contemporaneously with the Closing Date of Hedge Agreements), the interest component
of Capitalized Lease Obligations and net payments, if any, pursuant to interest rate Hedge
Agreements, and excluding amortization of deferred financing fees and any expensing of bridge or
other financing fees), and (b) consolidated capitalized interest of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued less (c) interest income for such
period.




          “Consolidated Net Income” means, with respect to RailAmerica and the Restricted
Subsidiaries, for any period, the aggregate of the Net Income, of RailAmerica and its Restricted
Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with
GAAP; provided, however, that (1) any net after-tax extraordinary, non-recurring or
unusual gains or losses (less all fees and expenses relating thereto) or expenses (including,
without limitation, relating to severance, relocation and new product introductions) shall be
excluded, (2) the Net Income for such period shall not include the cumulative effect of a change in
accounting principles during such period, (3) any net after-tax income (loss) from disposed or
discontinued operations and any net after-tax gains or losses on disposal of disposed or
discontinued operations shall be excluded, (4) any net after-tax gains or losses (less all fees and
expenses relating thereto) attributable to asset dispositions other than in the ordinary course of
business, as determined in good faith by the Board of Directors of RailAmerica, shall be excluded,
(5) the Net Income for such period of any Person that is not a Subsidiary, or is an Unrestricted
Subsidiary, or that is accounted for by the equity method of accounting, shall be excluded;
provided that Consolidated Net Income of RailAmerica shall be increased by the amount of
dividends or distributions or other payments that are actually paid in cash (or to the extent
converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such
period, (6) solely for purposes of determining compliance with Sections 10.6(c) and (e) and
Sections 10.5 (j) and (k), the Net Income for such period of any Restricted Subsidiary (other than
any Subsidiary Guarantor) shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of its Net Income is not at the
date of determination wholly permitted without any prior governmental approval (which has not been
obtained) or, directly or indirectly, by the operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation
applicable to that Restricted Subsidiary or its stockholders, unless such restriction with respect
to the payment of dividends or in similar



-7-









 






distributions has been legally waived; provided that Consolidated Net Income of RailAmerica
will be increased by the amount of dividends or other distributions or other payments actually paid
in cash (or to the extent converted into cash) to RailAmerica or a Restricted Subsidiary in respect
of such period, to the extent not already included therein, (7) the effects of adjustments
resulting from the application of purchase accounting in relation to any acquisition that is
consummated after the Closing Date, net of taxes, shall be excluded, (8) any net after-tax income
(loss) from the early extinguishment of Indebtedness (including under Hedge Agreements) or other
derivative instruments shall be excluded, (9) any impairment charge or asset write-off pursuant to
Financial Accounting Standards Board Statement No. 142 and No. 144 and the amortization of
intangibles arising pursuant to No. 141 shall be excluded, and (10) any non-cash compensation
expense recorded from grants of stock appreciation or similar rights, stock options or other rights
to officers, directors or employees shall be excluded.




          “Consolidated Senior Secured Debt” shall mean, as of any date of determination, the
aggregate principal amount of all Indebtedness of RailAmerica and the Restricted Subsidiaries
determined on a consolidated basis in accordance with GAAP that is secured by a Lien.




          “Consolidated Senior Secured Debt to Consolidated EBITDA Ratio” shall mean, as of any
date of determination, the ratio of (a) Consolidated Senior Secured Debt as of the last day of the
relevant Test Period to (b) Consolidated EBITDA for RailAmerica and the Restricted Subsidiaries for
such Test Period, provided that the Consolidated Senior Secured Debt to Consolidated EBITDA
Ratio shall be calculated on a Pro Forma Basis.




          “Control Account” shall mean a Deposit Account or a Securities Account that is the
subject of an effective Control Agreement.




          “Control Agreement” shall mean a Deposit Account Control Agreement or a Securities
Account Control Agreement.




          “Credit Documents” shall mean this Agreement, the Security Documents, each Letter of
Credit, any promissory notes issued by the Borrowers hereunder and the Fee Letters.




          “Credit Event” shall mean and include the making (but not the conversion or
continuation) of a Loan and the issuance, extension or amendment (to the extent such amendment
increases the amount thereof) or renewal of a Letter of Credit.




          “Credit Exposure” shall mean with respect to any Lender the sum of the following on
such date: (i) the outstanding amount of Revolving Credit Loans of such Lender plus (ii)
the Letter of Credit Exposure of such Lender plus (iii) the Swingline Exposure of such
Lender plus (iv) an amount equal to such Lender’s Applicable Percentage, if any, of the
aggregate principal amount of Protective Advances outstanding at such time.




          “Credit Party” shall mean each of the Borrowers and the Guarantors.




          “Default” shall mean any event, act or condition that with notice or lapse of time, or
both, would constitute an Event of Default.




-8-









 








          “Defaulting Lender” shall mean, at any time, a Lender as to which the Administrative
Agent has notified RailAmerica that (i) such Lender has failed for three or more Business Days to
comply with its obligations under this Agreement to make a Revolving Credit Loan, make a payment to
the Letter of Credit Issuer in respect of a L/C Participation and/or make a payment to the
Swingline Lender in respect of a Swingline Loan (each a “Revolving Credit Commitment Funding
Obligation”), (ii) such Lender has notified the Administrative Agent, or has stated publicly,
that it will not comply with any such Revolving Credit Commitment Funding Obligation hereunder, or
has defaulted on its Revolving Credit Commitment Funding Obligations under any other loan agreement
or credit agreement or other similar agreement, (iii) such Lender has, for three or more Business
Days, failed to confirm in writing to the Administrative Agent, in response to a written request of
the Administrative Agent, that it will comply with its Revolving Credit Commitment Funding
Obligations hereunder, or (iv) a Lender Insolvency Event has occurred and is continuing with
respect to such Lender (provided that neither the reallocation of Revolving Credit
Commitment Funding Obligations provided for in Section 2.14 as a result of a Lender’s being a
Defaulting Lender nor the performance by Non-Defaulting Lenders of such reallocated Revolving
Credit Commitment Funding Obligations will by themselves cause the relevant Defaulting Lender to
become a Non-Defaulting Lender). Any determination that a Lender is a Defaulting Lender under
clauses (i) through (iv) above will be made by the Administrative Agent in its sole discretion
acting in good faith. The Administrative Agent will promptly send to all parties hereto a copy of
any notice to RailAmerica provided for in this definition.




          “Deposit Account” shall have the meaning assigned to such term in the Security
Agreement.




          “Deposit Account Control Agreement” shall have the meaning assigned to such term in
the Security Agreement.




          “Dilution” shall mean, as of any date, a percentage, based upon the experience of the
twelve-month period ending as of the last day of the immediately preceding fiscal month, which is
the result of dividing the Dollar amount of (i) deductions, credit memos, adjustments, allowances,
bad debt charge-offs, discounts, profit sharing deductions or other non-cash credits that are
recorded to reduce accounts receivable in a manner consistent with current and historical
accounting practices of the Credit Parties, by (ii) such Credit Party’s gross billed accounts
receivable with respect to the twelve most recently ended fiscal months.




          “Dilution Reserve” shall mean, as of any date, an amount sufficient to reduce the
advance rate against Eligible Accounts by one-tenth of a percentage point for each one-tenth of a
percentage point by which Dilution is in excess of 5.0%.




          “Disqualified Capital Stock” means, with respect to any Person, any Equity Interest of
such Person which, by its terms, or by the terms of any security into which it is convertible or
for which it is putable or exchangeable, or upon the happening of any event, matures or is
mandatorily redeemable, other than as a result of a change of control or asset sale, pursuant to a
sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, other
than as a result of a change of control or asset sale, in whole or in part, in each case prior to
the date 91 days after the Maturity Date; provided, however, that if such Equity Interest is issued to




-9-









 







any plan for the benefit of employees of RailAmerica or its Subsidiaries or by any such
plan to such employees, such Equity Interest shall not constitute Disqualified Capital Stock solely
because it may be required to be repurchased by RailAmerica or its Subsidiaries in order to satisfy
applicable statutory or regulatory obligations.




          “Document” shall have the meaning assigned to such term in the Security Agreement.




          “Dollars” and “$” shall mean dollars in lawful currency of the United States
of America.




          “Domestic Subsidiary” shall mean each Subsidiary of RailAmerica that is organized
under the laws of the United States, any state thereof, or the District of Columbia.




          “Drawing” shall have the meaning provided in Section 3.4(b).




          “Eligible Accounts” shall mean, at any time, the Accounts of any Credit Party which in
accordance with the terms hereof are eligible as the basis for the extension of Loans and Swingline
Loans and the issuance of Letters of Credit hereunder. Eligible Accounts shall not include any
Account:





     (a) as to which the Collateral Agent’s Lien (for the benefit of the Secured Parties)
thereon is not a first priority perfected Lien;




     (b) is subject to any Lien of any other Person, other than Liens in favor of the
Collateral Agent (for the benefit of the Secured Parties);




     (c) that is in default; provided, that, without limiting the generality of the
foregoing, an Account shall be deemed in default upon the occurrence of any of following:




          (i) the Account is unpaid more than 90 days after the date of the original
invoice therefor;




          (ii) the Account Debtor obligated upon such Account suspends business, makes a
general assignment for the benefit of creditors or fails to pay its debts generally
as they come due;




          (iii) a petition is filed by or against any Account Debtor obligated upon such
Account under any bankruptcy law or any other federal or state receivership,
insolvency relief or other law or laws for the relief of debtors or such Account
Debtor has become insolvent or admitted in writing its inability to pay its debts as
they become due; provided that so long as post-petition financing is being
provided to such Account Debtor, post-petition Accounts of such Account Debtor may
be deemed Eligible Accounts by and to the extent approved by the Administrative
Agent, in its Permitted Discretion, on a case-by-case basis; or



-10-









 






          (iv) the Account has been written off the books of the Credit Parties or
otherwise designated as uncollectible;




     (d) that, at the date of issuance of the respective invoice therefor, was payable more
than one hundred twenty (120) days after the date of issuance;




     (e) which is owing by an Account Debtor for which more than 50% of the Accounts owing
from such Account Debtor and its Affiliates are ineligible pursuant to clauses (c)(i) or
(iv) above;




     (f) which is owing by an Account Debtor to the extent the aggregate amount of Accounts
owing from such Account Debtor and its Affiliates to the Credit Parties exceeds 10% (or (i)
in the case of an Account Debtor with an Investment Grade Rating, 15% or (ii) in the case of
Union Pacific Railroad Company and its subsidiaries, 30%) of the aggregate amount of
Eligible Accounts of the Credit Parties but only to the extent of such excess over the
applicable threshold;




     (g) as to which any covenant, representation, or warranty in the Credit Documents
pertaining to Accounts has been breached or is not true in any material respect;




     (h) (i) that does not arise from the performance of services by any Credit Party in the
ordinary course of its business or (ii) relates to payments of interest or;




     (i) with respect to which an invoice, in the form used as of the Closing Date or
otherwise reasonably acceptable to the Administrative Agent in form and substance, has not
been sent to the applicable Account Debtor;




     (j) (i) upon which a Credit Party’s right to receive payment is not absolute or is
contingent upon the fulfillment of any condition whatsoever or (ii) as to which such Credit
Party is not able to bring suit or otherwise enforce its remedies against the Account Debtor
through judicial process, or (iii) if the Account represents a progress billing consisting
of an invoice for services rendered pursuant to a contract under which the Account Debtor’s
obligation to pay that invoice is subject to such Credit Party’s completion of further
performance under such contract or is subject to the equitable Lien of a surety bond issuer;




     (k) which is owed by any Account Debtor which has sold all or a substantially all of
its assets;




     (l) that is the obligation of an Account Debtor located in a foreign country or that is
not organized in the United States unless payment thereof is assured by a letter of credit
payable in U.S. dollars assigned and delivered to the Collateral Agent;




     (m) which is owed in any currency other than U.S. dollars;



-11-









 






     (n) that is the obligation of an Account Debtor that is the United States government or
a political subdivision thereof, or any state, county or municipality or department, agency
or instrumentality thereof unless the Administrative Agent has agreed to the contrary in
writing and a Credit Party, if necessary or desirable with respect to such Accounts, has
complied (and delivered to the Administrative Agent evidence of such compliance) with
respect to such obligation with the Federal Assignment of Claims Act of 1940 or any
applicable federal, state, county or municipal law restricting the assignment thereof with
respect to such obligation;




     (o) that arises from a sale to any director, officer, other employee, stockholder or
Affiliate of any Credit Party, or to any entity that has any common officer with any Credit
Party;




     (p) which is owed by an Account Debtor or any Affiliate of such Account Debtor to which
such Credit Party is indebted, but only to the extent of such indebtedness or is subject to
any security, deposit, progress payment, advance payment or deposit, retainage or other
similar advance made by or for the benefit of an Account Debtor, in each case to the extent
thereof;




     (q) to the extent that any defense, counterclaim, deduction, setoff or dispute is
asserted as to such Account;




     (r) to the extent such Account is evidenced by a judgment, instrument, promissory note
or chattel paper;




     (s) which is owed by an Account Debtor located in any jurisdiction which requires
filing of a “Notice of Business Activities Report” or other similar report in order to
permit the Borrowers to seek judicial enforcement in such jurisdiction of payment of such
Account, unless the Borrowers have filed such report or qualified to do business in such
jurisdiction;




     (t) with respect to which such Credit Party has made any agreement with the Account
Debtor for any reduction thereof, other than discounts and adjustments given in the ordinary
course of business, or any Account which was partially paid and such Credit Party created a
new receivable for the unpaid portion of such Account;




     (u) which does not comply in all material respects with the requirements of all
applicable laws and regulations, whether Federal, state or local, including without
limitation the Federal Consumer Credit Protection Act, the Federal Truth in Lending Act and
Regulation Z of the Board;




     (v) which consists of any rents, revenues, proceeds, issues, profits, royalties, income
or other rights to payment arising from any lease, license, occupancy agreement, concession
or other use agreement relating to any right, title or interest of any Credit Party in any
real property or any fixtures, buildings or other improvements of any kind or nature located
thereon or attached thereto, whether now owned or hereafter acquired arising



-12-









 






as a result of the use of such real estate and not any services provided in
connection therewith;




     (w) which the Administrative Agent determines in its Permitted Discretion may not be
paid by reason of the Account Debtor’s inability to pay based on such credit and collateral
considerations as the Administrative Agent, in its Permitted Discretion, deems appropriate;




     (x) that is not a true and correct statement of bona fide indebtedness incurred in the
amount of the Account for services rendered and accepted by the applicable Account Debtor;
or




     (y) to the extent such Account exceeds any credit limit established by the
Administrative Agent, in its Permitted Discretion, following prior written notice of such
limit by the Administrative Agent to the Borrowers.



          In determining the amount of an Eligible Account, the face amount of an Account may, in the
Administrative Agent’s Permitted Discretion, be reduced by, without duplication, to the extent not
reflected in such face amount, (i) the amount of all accrued and actual discounts, claims, credits
or credits pending, promotional program allowances, price adjustments, finance charges or other
allowances (including any amount that the applicable Credit Party may be obligated to rebate to an
Account Debtor pursuant to the terms of any agreement or understanding (written or oral)) and (ii)
the aggregate amount of all cash received in respect of such Account but not yet applied by such
Credit Party to reduce the amount of such Account.




          Standards of eligibility may be made more restrictive (and such increased restrictiveness
subsequently reversed in whole or in part) from time to time solely by the Administrative Agent in
the exercise of its Permitted Discretion, with any such changes to be effective one Business Day
after delivery of notice thereof to RailAmerica and the Lenders.




          “Environmental Claims” shall mean any and all administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation,
investigations (other than internal reports prepared by RailAmerica or any of the Subsidiaries (a)
in the ordinary course of such Person’s business or (b) as required in connection with a financing
transaction or an acquisition or disposition of Real Estate) or proceedings relating in any way to
any Environmental Law or any permit issued, or any approval given, under any such Environmental Law
(hereinafter, “Claims”), including (i) any and all Claims by governmental or regulatory
authorities for enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law and (ii) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting
from Hazardous Materials or arising from alleged injury or threat of injury to health, safety or
the environment.




          “Environmental Law” shall mean any applicable Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code and rule of common law now or hereafter in effect
and in each case as amended, and any binding judicial or administrative interpretation thereof,



-13-









 






including any binding judicial or administrative order, consent decree or judgment, relating
to the environment, human health or safety or Hazardous Materials.




          “Equity Interest” shall mean, with respect to any person, any and all shares,
interests, participations or other equivalents, including membership interests (however designated,
whether voting or nonvoting), of equity of such person, including, if such person is a partnership,
partnership interests (whether general or limited) and any other interest or participation that
confers on a person the right to receive a share of the profits and losses of, or distributions of
property of, such partnership, whether outstanding on the Closing Date or issued after the Closing
Date, but excluding debt securities convertible or exchangeable into such equity.




          “Equity Rights” shall mean, with respect to any Person, any subscriptions, options,
warrants, commitments, preemptive rights or agreements of any kind (including any shareholders’ or
voting trust agreements) for the issuance, sale, registration or voting of, or securities
convertible into, any additional shares of capital stock of any class, or partnership or other
ownership interests of any type in, such Person.




          “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended
from time to time. Section references to ERISA are to ERISA as in effect at the date of this
Agreement and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or
substituted therefor.




          “ERISA Affiliate” shall mean each person (as defined in Section 3(9) of ERISA) that
together with a Borrower or a Subsidiary would be deemed to be a “single employer” within the
meaning of Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of the Code.




          “Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time to time.




          “Eurodollar Loan” shall mean any Revolving Credit Loan bearing interest at a rate
determined by reference to the Eurodollar Rate.




          “Eurodollar Margin” shall mean 4.00% per annum.




          “Eurodollar Rate” shall mean, for any Interest Period, the greater of (i) an interest
rate per annum equal to the rate per annum obtained by dividing (a) the rate per annum (rounded
upward to the nearest whole multiple of 1/100 of 1% per annum) appearing on Reuters LIBOR01 Page
(or any successor page) as the London interbank offered rate for deposits in Dollars or the at
approximately 11:00 A.M. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period or, if for any reason such rate is not
available, the average (rounded upward to the nearest whole multiple of 1/100 of 1% per annum, if
such average is not such a multiple) of the rate per annum at which deposits in Dollars is offered
by the principal office of each of the Reference Banks in London, England to prime banks in the
London interbank market at 11:00 A.M. (London time) two Business Days before the first day of such
Interest Period in an amount substantially equal to such Reference Bank’s




-14-









 







Eurocurrency Loan comprising part of such Borrowing to be outstanding during such Interest Period and
for a period equal to such Interest Period by (b) a percentage equal to 100% minus the Eurocurrency
Rate Reserve Percentage for such Interest Period and (ii) 2.50%. If the Reuters LIBOR01 Page (or
any successor page) is unavailable, the Eurodollar Rate for any Interest Period shall be determined
by the Administrative Agent on the basis of applicable rates furnished to and received by the
Administrative Agent from the Reference Banks two Business Days before the first day of such
Interest Period, subject, however, to the provisions of Section 2.8.




          “Eurodollar Rate Reserve Percentage” for any Interest Period for all Eurodollar Loans
comprising part of the same Borrowing means the reserve percentage applicable two Business Days
before the first day of such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve System in New York City with respect
to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to
any other category of liabilities that includes deposits by reference to which the interest rate on
Eurodollar Loans is determined) having a term equal to such Interest Period




          “Event of Default” shall have the meaning provided in Section 11.




          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.




          “Excluded Accounts” shall mean any Deposit Account or Securities Account (i) used
exclusively for payroll and withholding tax payments, (ii) that constitutes a fiduciary account
containing solely funds held for the benefit of third parties (other than any Credit Party), (iii)
as long as the aggregate balance for all such Credit Parties in all such accounts excluded pursuant
to this clause (iii) does not exceed $2.0 million at any time and (iv) that is a collateral account
established pursuant to the Secured Note Indenture (as in effect on the date hereof).




          “Excluded Taxes” shall mean any Taxes imposed on the Administrative Agent or any
Lender (which term shall, for the purpose of this definition, include the Letter of Credit Issuer
and any L/C Participant) that is (i) an Other Connection Tax, (ii) in the case of any Non-U.S.
Lender, any U.S. federal withholding tax that is imposed on amounts payable to such Non-U.S. Lender
other than as a result of a change in any Requirement of Tax Law occurring after the date such
Non-U.S. Lender becomes a party to this Agreement or designates a new lending office, except to the
extent that (X) such Non-U.S. Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional amounts or
indemnification payments with respect to such U.S. federal withholding tax pursuant to Section 5.4
or (Y) such assignment or designation was made at the request of any Credit Party; and (iii) any
Taxes to the extent attributable to a Lender’s failure to comply with Section 5.4(d) or (e).




          “Existing Credit Agreement” shall mean the First Amended and Restated Credit
Agreement, dated as of July 1, 2008, among the Borrowers, Holdings, the lending institutions from
time to time parties thereto, Citigroup Global Markets Inc., as co-lead arranger and joint
bookrunner, Morgan Stanley Senior Funding, Inc., as co-lead arranger and joint bookrunner,




-15-









 







Morgan Stanley Senior Funding Inc., as syndication agent, Citicorp North America, Inc., as
administrative agent and collateral agent.




          “Federal Funds Effective Rate” shall mean, for any day, the weighted average of the
per annum rates on overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day,
the average of the quotations for the day of such transactions received by the Administrative Agent
from three federal funds brokers of recognized standing selected by it.




          “Fee Letters” shall mean the Administrative Agent Fee Letter and the Lender Fee
Letter.




          “Fees” shall mean all amounts payable pursuant to, or referred to in, Section 4.1.




          “Final Date” shall mean the date on which the Commitments shall have terminated, no
Loans shall be outstanding, the Letters of Credit Outstanding shall have been reduced to zero and
all other Obligations under this Agreement (other than (a) obligations under Secured Hedge
Agreements not yet due and payable, (b) obligations under Cash Management Agreements not yet due
and payable and (c) contingent indemnification and expense reimbursement obligations with respect
to which no claim has been asserted) shall have been paid in full.




          “Fitch” shall mean Fitch Ratings, Ltd., a division of Fitch, Inc., or any successor by
merger or consolidation to its business.




          “Fixed Charge Coverage Ratio” shall mean the ratio, for any Test Period, of (a)
Consolidated EBITDA for such Test Period minus the unfinanced portion of Capital
Expenditures made by RailAmerica and the Restricted Subsidiaries during such Test Period to (b)
Fixed Charges for such Test Period, all calculated for RailAmerica and the Restricted Subsidiaries
on a consolidated basis, provided that the Fixed Charge Coverage Ratio shall be calculated
on a Pro Forma Basis.




          “Fixed Charges” shall mean, with reference to any Test Period, without duplication,
Consolidated Interest Expense that is paid in cash during such Test Period plus scheduled
principal payments on Indebtedness made during such Test Period plus Restricted Payments
paid in cash during such Test Period from and after the Closing Date pursuant to Section 10.6(c) or
(d) plus expense for taxes paid in cash during such Test Period net of cash refunds
received during such Test Period, all calculated for RailAmerica and the Restricted Subsidiaries on
a consolidated basis.




          “Foreign Subsidiary” shall mean each Subsidiary of RailAmerica that is a controlled
foreign corporation within the meaning of Section 957 of the Code (a “CFC”).




          “Fronting Fee” shall have the meaning provided in Section 4.1(c).




-16-









 








          “GAAP” shall mean generally accepted accounting principles in the United States of
America as in effect from time to time; provided, however, that if there occurs
after the date hereof any change in GAAP that affects in any respect the calculation of any
covenant contained in Section 10, the Lenders and the Borrowers shall negotiate in good faith
amendments to the provisions of this Agreement that relate to the calculation of such covenant with
the intent of having the respective positions of the Lenders and the Borrowers after such change in
GAAP conform as nearly as possible to their respective positions as of the date of this Agreement
and, until any such amendments have been agreed upon, the covenants in Section 10 shall be
calculated as if no such change in GAAP has occurred. Notwithstanding any other provision
contained herein, all terms of an accounting or financial nature used herein shall be construed,
and all computations of amounts and ratios referred to herein shall be made, without giving effect
to any election under Statement of Financial Accounting Standards 159 (or any other Financial
Accounting Standard having a similar result or effect) to value any Indebtedness or other
liabilities of RailAmerica or any Restricted Subsidiary at “fair value,” as defined therein.




          “Governmental Authority” shall mean any nation or government, any state, province,
territory or other political subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.




          “Guarantee” shall mean the Guarantee, made by each Guarantor in favor of the
Administrative Agent for the benefit of the Secured Parties, substantially in the form of
Exhibit B, as the same may be amended, supplemented or otherwise modified from time to
time.




          “Guarantee Obligations” shall mean, as to any Person, any obligation of such Person
guaranteeing or intended to guarantee any Indebtedness of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, including any obligation of such
Person, whether or not contingent, (a) to purchase any such Indebtedness or any property
constituting direct or indirect security therefor (b) to advance or supply funds (i) for the
purchase or payment of any such Indebtedness or (ii) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor,
(c) to purchase property, securities or services primarily for the purpose of assuring the owner of
any such Indebtedness of the ability of the primary obligor to make payment of such Indebtedness or
(d) otherwise to assure or hold harmless the owner of such Indebtedness against loss in respect
thereof; provided, however, that the term “Guarantee Obligations” shall not include
endorsements of instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the Indebtedness in respect of which such Guarantee Obligation is made or,
if not stated or determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such Person in good
faith.




          “Guarantors” shall mean the Subsidiary Guarantors.




          “Hazardous Materials” shall mean (a) any petroleum or petroleum products, radioactive
materials, friable asbestos, urea formaldehyde foam insulation, transformers or other equipment
that contain dielectric fluid containing regulated levels of polychlorinated biphenyls, and radon
gas; (b) any chemicals, materials or substances defined as or included in the definition




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of “hazardous substances,” “hazardous waste,” “hazardous materials,” “extremely hazardous
waste,” “restricted hazardous waste,” “toxic substances,” “toxic pollutants,” “contaminants,” or
“pollutants,” or words of similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, which is prohibited, limited or regulated by any Environmental
Law.




          “Hedge Agreements” means with respect to any Person (a) currency exchange, interest
rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements and
currency exchange, interest rate or commodity collar agreements and (b) other agreements or
arrangements designed to protect such Person against fluctuations in currency exchange, interest
rates or commodity prices.




          “Hedge Bank” shall mean any Person that (a) at the time it enters into a Secured Hedge
Agreement is a Lender or an Affiliate of a Lender or (b) with respect to any Hedge Agreement
entered into prior to the Closing Date, any Person that is a Lender or an Affiliate of a Lender on
the Closing Date, in its capacity as a party to such Secured Hedge Agreement.




          “Historical Financial Statements” shall mean as of the Closing Date, the consolidated
financial statements of RailAmerica and its Subsidiaries, for (i) the immediately preceding three
fiscal years (which are audited) and (ii) the fiscal quarter ended March 31, 2009 and the
corresponding quarter of the prior fiscal year, in each case consisting of balance sheets and the
related consolidated statements of income, stockholders’ equity and cash flows for such periods.




          “Holdings” shall mean RR Acquisition Holdings LLC, a Delaware limited liability
company.




          “Increased Amount Date” shall have the meaning provided in Section 2.15.




          “Indebtedness” of any Person shall mean, without duplication, (a) all indebted ness of
such Person for borrowed money, (b) all indebtedness of such person evidenced by bonds, debentures,
notes or similar instruments, (c) the balance of the deferred purchase price of assets or services
that in accordance with GAAP would be included as liabilities in the balance sheet of such Person,
(d) the face amount of all letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (e) all Indebtedness of a second Person secured by any
Lien on any property owned by such first Person, whether or not such Indebtedness has been assumed,
(f) all Capitalized Lease Obligations of such Person, (g) all obligations of such Person under
Hedge Agreements and (h) without duplication, all Guarantee Obligations of such Person with respect
to the obligations of another Person of a type described in clauses (a) through (g) above, provided
that (i) Indebtedness shall not include trade payables and accrued expenses,arising in the ordinary
course of business and any earn-out obligations until such obligation becomes a liability on the
balance sheet of such Person in accordance with GAAP, and (ii) for purposes of Section 11.4, the
amount of any Indebtedness in respect of any Hedge Agreement at any time, shall be the amount of
any required early termination payment by any Borrower or any Subsidiary at such time.




          “Indemnified Taxes” shall mean Taxes other than Excluded Taxes.




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          “Initial Secured Notes” shall mean $740,000,000 aggregate principal amount of
RailAmerica’s 9.25% Senior Secured Notes due 2017 issued on the Closing Date and notes issued in
exchange for, and as contemplated by, the Initial Secured Notes and the related registration rights
agreement with substantially identical terms as the Initial Secured Notes.




          “Intercreditor Agreement” shall mean the Intercreditor Agreement, dated as of the
Closing Date, between the Collateral Agent and the trustee and the collateral agent under the
Secured Notes Indenture, as the same may be amended or supplemented or otherwise modified from time
to time.




          “Interest Coverage Ratio” shall mean the ratio, for any Test Period, of (a)
Consolidated EBITDA for such Test Period to (b) the sum of (i) Consolidated Interest Expense for
such Test Period and (ii) all cash dividend payments (excluding items eliminated in consolidation)
on any series of preferred stock and all cash dividend payments (excluding items eliminated in
consolidation) on any series of Disqualified Capital Stock for such Test Period, all calculated for
RailAmerica and the Restricted Subsidiaries on a consolidated basis; provided that the Interest
Coverage Ratio shall be calculated on a Pro Forma Basis.




          “Interest Payment Date” shall mean (a) with respect to any ABR Loan (other than a
Swingline Loan), the first day of each January, April, July and October and the Maturity Date, (b)
with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar Loan Borrowing with an
Interest Period of more than three months’ duration, each day prior to the last day of such
Interest Period that occurs at intervals of three months’ duration after the first day of such
Interest Period and the Maturity Date, and (c) with respect to any Swingline Loan, the day that
such Loan is repaid and the Maturity Date.




          “Interest Period” shall mean, with respect to any Eurodollar Loan, the interest period
applicable thereto, as determined pursuant to Section 2.9.




          “Investment” shall have the meaning provided in Section 10.5.




          “Investment Grade Rating” shall mean with respect to any Person, such Person has at
least the minimum rating indicated below from two out of the three ratings agencies named below:




	 	 	 
	Ratings Agency	 	Minimum Rating
	S&P

	 	BBB- (stable)
	 	 	 
	Moody’s
	 	Baa3 (stable)
	 	 	 
	Fitch
	 	BBB- (stable)






          “Joinder Agreement” shall mean an agreement substantially in the form of Exhibit
L.




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          “L/C Maturity Date” shall mean the date that is ten Business Days prior to the
Maturity Date.




          “L/C Participant” shall have the meaning provided in Section 3.3(a).




          “L/C Participation” shall have the meaning provided in Section 3.3(a).




          “Lender” shall have the meaning provided in the preamble to this Agreement.




          “Lender Fee Letter” shall mean the Fee Letter dated as of the Closing Date by and
among the Borrowers, Citicorp North America, Inc., JPMorgan Chase Bank, N.A., Wachovia Bank,
National Association and Morgan Stanley Senior Funding Inc.




          “Lender Insolvency Event” shall mean that (i) a Lender or its Parent Company is
insolvent, or is generally unable to pay its debts as they become due, or admits in writing its
inability to pay its debts as they become due, or makes a general assignment for the benefit of its
creditors, or (ii) such Lender or its Parent Company is the subject of a bankruptcy, insolvency,
reorganization, liquidation or similar proceeding, or a receiver, trustee, conservator, intervenor
or sequestrator or the like has been appointed for such Lender or its Parent Company, or such
Lender or its Parent Company has taken any action in furtherance of or indicating its consent to or
acquiescence in any such proceeding or appointment.




          “Letter of Credit” shall mean each standby letter of credit issued pursuant to Section
3.1.




          “Letter of Credit Commitment” shall mean $10.0 million, as the same may be reduced
from time to time pursuant to Section 3.1.




          “Letter of Credit Exposure” shall mean, with respect to any Lender at any time, such
Lender’s Applicable Percentage of the Letters of Credit Outstanding at such time.




          “Letter of Credit Fee” shall have the meaning provided in Section 4.1(b).




          “Letter of Credit Issuer” shall mean Citibank, N.A., any of its Affiliates or any
successor pursuant to Section 3.6. The Letter of Credit Issuer may, in its discretion, arrange for
one or more Letters of Credit to be issued by Affiliates of the Letter of Credit Issuer, and in
each such case the term “Letter of Credit Issuer” shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate. In the event that there is more than one Letter of
Credit Issuer at any time, references herein and in the other Credit Documents to the Letter of
Credit Issuer shall be deemed to refer to the Letter of Credit Issuer in respect of the applicable
Letter of Credit or to all Letter of Credit Issuers, as the context requires.




          “Letter of Credit Request” shall have the meaning provided in Section 3.2.




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          “Letters of Credit Outstanding” shall mean, at any time, the sum of, without
duplication, (a) the aggregate Stated Amount of all outstanding Letters of Credit and (b) the
aggregate amount of all Unpaid Drawings in respect of all Letters of Credit.




          “Level I Status” shall mean, on any date, the Commitment Utilization Percentage for
the fiscal quarter most recently ended prior to such date was less than or equal to 50%.




          “Level II Status” shall mean, on any date, the Commitment Utilization Percentage for
the fiscal quarter most recently ended prior to such date was greater than 50%.




          “Lien” shall mean any mortgage, pledge, security interest, hypothecation, assignment,
lien (statutory or other) or similar encumbrance (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement or any lease in the nature
thereof).




          “Loan” shall mean any Revolving Credit Loan, Swingline Loan or Protective Advance.




          “Management Group” shall mean, at any time, the Chairman of the Board, any President,
any Executive Vice President or Vice President, any Managing Director, any Treasurer and any
Secretary or other executive officer the Borrowers or any Subsidiaries at such time.




          “Mandatory Borrowing” shall have the meaning provided in Section 2.1(c).




          “Material Adverse Effect” shall mean (a) a material adverse effect on the business,
property, results of operations, or financial condition of RailAmerica and its Subsidiaries, taken
as a whole; (b) material impairment of the ability of the Credit Parties to fully and timely
perform their material obligations under any Credit Document; (c) material impairment of the rights
of or benefits or remedies available to the Lenders under any Credit Document, taken as a whole; or
(d) a material adverse effect on the Collateral or the Liens in favor of the Secured Parties on the
Collateral or the priority of such Liens, taken as a whole.




          “Maturity Date” shall mean the date that is four years after the Closing Date, or, if
such date is not a Business Day, the immediately preceding Business Day.




          “Minimum Availability Period” shall mean any period (a) commencing when Availability
for any consecutive three calendar day period is less than $15.0 million (provided that
such amount shall be decreased to $10.0 million if at such date the total cash balance in the
Control Accounts is at least $5.0 million) and (b) ending after Availability is at least $15.0
million (provided that such amount shall be decreased to $10.0 million if at such date the
total cash balance in the Control Accounts is at least $5.0 million) for a period of 30 consecutive
days.




          “Moody’s” shall mean Moody’s Investors Service, Inc. or any successor by merger or
consolidation to its business.




-21-









 








          “Net Income” means, with respect to any Person, the net income (loss) of such Person,
determined in accordance with GAAP and before any reduction in respect of preferred stock
dividends.




          “New Commitments” shall have the meaning provided in Section 2.15.




          “New Lender” shall have the meaning provided in Section 2.15.




          “Non-Defaulting Lender” shall mean, at any time, a Lender that is not a Defaulting
Lender or a Potential Defaulting Lender.




          “Non-U.S. Lender” shall mean a Lender that is not a U.S. person within the meaning of
Section 7701(a)(30) of the Code.




          “Notes Collateral” shall mean the assets securing the Initial Secured Notes and any
Permitted Additional Secured Debt, which shall not include the Collateral.




          “Note Security Documents” shall have the meaning assigned to such term in the
Intercreditor Agreement.




          “Notice of Borrowing” shall have the meaning provided in Section 2.3.




          “Notice of Conversion or Continuation” shall have the meaning provided in Section 2.6.




          “Obligations” shall have the meaning assigned to such term in the Security Agreement.




          “Organizational Documents” shall mean, with respect to any Person, (i) in the case of
any corporation, the certificate of incorporation and by-laws (or similar documents) of such
person, (ii) in the case of any limited liability company, the certificate of formation and
operating agreement (or similar documents) of such person, (iii) in the case of any limited
partnership, the certificate of formation and limited partnership agreement (or similar documents)
of such person, (iv) in the case of any general partnership, the partnership agreement (or similar
document) of such person and (v) in any other case, the functional equivalent of the foregoing.




          “Other Connection Taxes” shall mean any Taxes imposed on the Administrative Agent or
any Lender (which term shall, for the purpose of this definition, include the Letter of Credit
Issuer and any L/C Participant) by a jurisdiction as a result of a current or former connection
between the Administrative Agent or the Lender (as applicable) and the jurisdiction (other than any
connections arising solely from such recipient having executed, delivered, enforced, become a party
to, performed its obligations or received payments under, received or perfected a security interest
under, or engaged in any other transaction pursuant to, any Credit Document).




          “Other Taxes” shall mean any and all present or future stamp, court, documentary,
excise, property, intangible, recording, filing or similar Taxes that arise from any payment




-22-









 







made under, from the execution, delivery, performance, enforcement or registration of, or from
the registration, receipt or perfection of a security interest under, or otherwise with respect to,
any Credit Document.




          “Parent Company” shall mean, with respect to a Lender, the bank holding company (as
defined in Federal Reserve Board Regulation Y), if any, of such Lender, and/or any Person owning,
beneficially or of record, directly or indirectly, a majority of the economic or voting Equity
Interests of such Lender.




          “Participant” shall have the meaning provided in Section 13.6(c)(i).




          “PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to
Section 4002 of ERISA, or any successor thereto.




          “Perfection Certificate” shall mean a certificate of the Borrowers in the form of
Exhibit D or any other form approved by the Administrative Agent.




          “Perfection Certificate Supplement” shall mean a certificate supplement in the form of
Exhibit D-1 or any other form approved by the Administrative Agent.




          “Permitted Acquisition” shall mean any transaction for the (a) acquisition of all or
substantially all of the property of any Person, or of any business or division of any Person by
RailAmerica or a Restricted Subsidiary; or (b) acquisition (including by merger or consolidation)
of all of the Equity Interests of any Person by RailAmerica or a Restricted Subsidiary;
provided that each of the following conditions shall be met:





     (a) such acquisition and all transactions related thereto shall be consummated in
accordance with applicable law;




     (b) in the case of the acquisition of Equity Interests, all of the Equity Interests
acquired or otherwise issued by such Person or any newly formed Subsidiary of a Borrower in
connection with such acquisition shall be owned 100% by a Borrower or a Subsidiary Guarantor
thereof, such Person or any new formed Subsidiary shall become a Restricted Subsidiary and
the Borrowers shall have taken, or caused to be taken, as of the date such Person becomes a
Restricted Subsidiary of such Borrower, such actions necessary for such Person or newly
formed Subsidiary to become a Subsidiary Guarantor set forth in Section 9.10;




     (c) such acquisition shall result in the Administrative Agent for the benefit of the
applicable Lenders, being granted a security interest in any assets so acquired to the
extent required by Section 9.10 or 9.12;




     (d) the Person or business to be acquired shall be, or shall be engaged in, a business
of the type that Borrower and the Restricted Subsidiaries are permitted to be engaged in
under Section 10.12; and



-23-









 






     (e) no Default or Event of Default shall have occurred and be continuing or would
result therefrom.



          “Permitted Additional Secured Debt” shall mean any Indebtedness of RailAmerica (other
than the Initial Secured Notes) that is secured by a Lien on Notes Collateral ranking pari passu
with or junior to the Lien of the Initial Secured Notes; provided that (a) the terms of such
Indebtedness do not provide for any scheduled repayment, mandatory redemption or sinking fund
obligation on or prior to the Maturity Date (other than customary offers to purchase upon a change
of control, asset sale or event of loss and customary acceleration rights after an event of
default), (b) no Subsidiary of RailAmerica other than a Subsidiary Guarantor is a guarantor or
obligor with respect to such Indebtedness, (c) the holders of such Permitted Additional Secured
Debt (or a trustee or agent authorized to act on behalf of such holders) shall have executed a
supplement to the Note Security Documents agreeing to be bound by the Intercreditor Agreement on
the same terms applicable to the holders of Initial Secured Notes or shall have entered into a new
intercreditor agreement with the Collateral Agent having substantially the same terms as the
Intercreditor Agreement, (d) no Event of Default shall have occurred and is continuing immediately
after giving effect to the issuance thereof and the application of proceeds therefrom and (e) on a
Pro Forma Basis immediately after giving effect to the issuance of any Permitted Additional Secured
Debt (i) either (x) the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio as of the
last day of the most recent Test Period for which Section 9.1 Financials have been delivered is
less than 3.5 to 1.0 or (y) if the proceeds of such Permitted Additional Secured Debt are used
solely to finance the purchase or acquisition of Railroad Assets or Equity Interests of a Person
90% of whose assets are Railroad Assets (and/or the repayment of acquired Indebtedness and/or fees
and expenses incurred in connection therewith), in each case otherwise in accordance with this
Agreement, and, in each case, such Railroad Assets are purchased by a Credit Party or such Person
becomes a Subsidiary Guarantor, as applicable, then the principal amount of such Permitted
Additional Secured Debt does not exceed 4.0x the Consolidated EBITDA of such Railroad Assets or
Person for the most recently ended four full fiscal quarters for which internal statements are
available determined on a Pro Forma Basis (without duplication of the Consolidated EBITDA of such
Railroad Assets or Person included in the calculation of the Consolidated Senior Secured Debt to
Consolidated EBITDA Ratio for purposes of any Permitted Additional Secured Debt incurred under
clause (e)(i)(x) above), and (ii) the Fixed Charge Coverage Ratio for the most recent Test Period
for which Section 9.1 Financials have been delivered would be at least (I) for any Test Period
ended on or before June 30, 2010, 1.15 to 1.00 and (II) for any Test Period ended after June 30,
2010, 1.25 to 1.00.




          “Permitted Discretion” shall mean the Administrative Agent’s commercially reasonable
judgment, exercised in good faith in accordance with customary business practices for asset-based
lending transactions; provided that any standard of eligibility or reserve established or
modified by the Administrative Agent shall have a reasonable relationship to circumstances,
conditions, events or contingencies which are the basis for such standard of eligibility or
reserve, as reasonably determined, without duplication, by the Administrative Agent in good faith.




          “Permitted Holders” shall mean, collectively, Sponsor, its Affiliates and the
Management Group.




-24-









 








          “Permitted Investments” shall mean (1) United States dollars, (2) pounds sterling, (3)
(a) euro, or any national currency of any participating member state in the European Union, (b)
Canadian dollars, or (c) in the case of any Foreign Subsidiary that is a Restricted Subsidiary,
such local currencies held by them from time to time in the ordinary course of business, (4)
securities issued or directly and fully and unconditionally guaranteed or insured by the United
States or Canadian government or any agency or instrumentality thereof the securities of which are
unconditionally guaranteed as a full faith and credit obligation of such government with maturities
of 24 months or less from the date of acquisition, (5) certificates of deposit, time deposits and
eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’
acceptances with maturities not exceeding one year and overnight bank deposits, in each case with
any commercial bank having capital and surplus in excess of $500.0 million, (6) repurchase
obligations for underlying securities of the types described in clauses (4) and (5) entered into
with any financial institution meeting the qualifications specified in clause (5) above, (7)
commercial paper rated at least P-2 by Moody’s or at least A-2 by S&P and in each case maturing
within 12 months after the date of creation thereof, (8) investment funds investing 95% of their
assets in securities of the types described in clauses (1) through (7) above, (9) readily
marketable direct obligations issued by any state of the United States of America or any political
subdivision thereof or any Province of Canada having one of the two highest rating categories
obtainable from either Moody’s or S&P with maturities of 24 months or less from the date of
acquisition and (10) Indebtedness or preferred stock issued by Persons with a rating of “A” or
higher from S&P or “A2” or higher from Moody’s with maturities of 12 months or less from the date
of acquisition.




          Notwithstanding the foregoing, Permitted Investments shall include amounts denominated in
currencies other than those set forth in clauses (1) through (3) above; provided that such
amounts are converted into any currency listed in clauses (1) through (3) as promptly as
practicable and in any event within ten Business Days following the receipt of such amounts.




          “Permitted Liens” shall mean (a) Liens for taxes, assessments or governmental charges
or claims not yet overdue for 30 days or which are being contested in good faith and by appropriate
proceedings for which appropriate reserves have been established in accordance with GAAP;
provided that such proceedings shall suspend the enforcement of such Liens; (b) Liens in
respect of property or assets of RailAmerica or any of its Subsidiaries imposed by law, such as
carriers’, warehousemen’s and mechanics’ Liens and other similar Liens, in each case so long as
such Liens arise in the ordinary course of business and do not individually or in the aggregate
have a Material Adverse Effect; (c) Liens arising from judgments or decrees in circumstances not
constituting an Event of Default under Section 11.9; (d) Liens incurred or deposits made in
connection with workers’ compensation, unemployment insurance and other types of social security,
or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, contracts (excluding Indebtedness), government contracts, performance and return-of-money
bonds and other similar obligations incurred in the ordinary course of business; (e) ground leases
in respect of real property on which facilities owned or leased by RailAmerica or any of its
Subsidiaries are located; (f) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other charges or encumbrances not interfering in any material respect
with the business of any RailAmerica and its Subsidiaries, taken as a whole; (g) any interest or



-25-









 






title of a lessor or secured by a lessor’s interest under any lease permitted by this
Agreement and any rents or deposits paid with respect to any lease; (h) Liens in favor of customs
and revenue authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; (i) Liens on goods the purchase price of which is
financed by a documentary letter of credit issued for the account of RailAmerica or any of its
Subsidiaries, provided that such Lien secures only the obligations of such RailAmerica or
such Subsidiaries in respect of such letter of credit to the extent permitted under Section
10.1(A); (j) leases or subleases granted to others not interfering in any material respect with the
business of RailAmerica and its Subsidiaries, taken as a whole, (k) Liens (i) of a collecting bank
arising in the ordinary course of business under Section 4-210 of the Uniform Commercial Code in
effect in the relevant jurisdiction covering only the items being collected upon or (ii) in favor
of a banking institution arising as a matter of law, encumbering amounts credited to deposit or
securities accounts (including the right of set-off) and which are within the general parameters
customary in the banking industry, (l) Permitted Senior Easements; (m) Liens attaching to commodity
trading accounts or other commodity brokerage accounts incurred in the ordinary course of business
and (n) Liens encumbering reasonable customary initial deposits and margin deposits and similar
Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary
course of business and not for speculative purposes.




          “Permitted Refinancing Indebtedness” shall mean any Indebtedness (“Refinancing
Indebtedness”) incurred to refinance, refund, renew or extend (including, without limitation,
pursuant to any exchange offer) any Indebtedness (the “Initial Indebtedness”) specified in
clause (i) of Section 10.1(A), provided that (a) the principal amount of any Refinancing
Indebtedness is not increased above the principal amount of the Initial Indebtedness refinanced
thereby (except by the amount of any accrued and unpaid interest thereon and by the amount of any
fees and expenses payable and reasonable premium or contractual premium required to be paid in
connection with such refinancing), (b) Initial Indebtedness of the Borrowers or a Subsidiary
Guarantor may not be refinanced with Refinancing Indebtedness incurred or guaranteed by any
Restricted Subsidiary that is not a Guarantor, (c) if the Initial Indebtedness is subordinated to
the Obligations, then such Refinancing Indebtedness shall be subordinated to the Obligations to at
least the same extent, (d) such Refinancing Indebtedness (x) does not have a final maturity on or
prior to the final maturity of the Initial Indebtedness refinanced thereby and (y) does not have a
Weighted Average Life to Maturity that is less than the Weighted Average Life to Maturity of the
Initial Indebtedness and (e) except in the case of Refinancing Indebtedness constituting Permitted
Additional Secured Debt, the Refinancing Indebtedness is not secured by a Lien on any assets of any
of the Borrowers or any of the Restricted Subsidiaries other than any assets subject to a Lien
securing the Initial Indebtedness.




          “Permitted Sale Leaseback” shall mean any Sale Leaseback consummated by RailAmerica or
any of the Restricted Subsidiaries after the Closing Date, provided that (i) with respect
to any property owned as of the Closing Date, the value of such Sale Leasebacks shall not exceed
$20.0 million in the aggregate and (ii) such Sale Leaseback is consummated for fair value as
determined at the time of consummation in good faith by RailAmerica and, in the case of any Sale
Leaseback (or series of related Sales Leasebacks) the aggregate proceeds of which exceed $15.0
million, the board of directors of RailAmerica (which such determination may take into



-26-









 






account any retained interest or other investment of RailAmerica or such Restricted
Subsidiary in connection with, and any other material economic terms of, such Sale Leaseback).




          “Permitted Senior Easements” means (a) easements that burden solely an asset which is
not used in the operation of a shortline railroad, (b) underground easements, (c) access,
pedestrian and vehicular crossing, longitudinal driveway, public and private grade crossing and
similar easements, (d) aerial easements or rights (including leases) granted in connection with
communications, fiber optic or utility facilities (including easements for installation of cellular
towers), (e) pylon sign and billboard easements and leases, (f) above-ground drainage or slope
easements, (g) scenic and clear vision easements, (h) liens and easements given to a public utility
or any municipality or governmental or other public authority when required or requested, or (i)
easements, licenses, rights of way or similar encumbrances granted in the ordinary course of
business; provided that in any case except clause (h), no material adverse effect on the fair
market value of the property or the use of the property for railroad operations or the operation of
the railroad line would result from granting such easement or other right.




          “Permitted Unsecured Debt” shall mean any Indebtedness of RailAmerica that is
unsecured; provided that (a) the terms of such Indebtedness do not provide for any
scheduled repayment, mandatory redemption or sinking fund obligation on or prior to the Maturity
Date (other than customary offers to purchase upon a change of control, asset sale or event of loss
and customary acceleration rights after an event of default), (b) no Subsidiary of RailAmerica
other than a Subsidiary Guarantor is a guarantor or obligor with respect to such Indebtedness, and
(c) on a Pro Forma Basis after giving effect to the issuance of such Permitted Unsecured Debt and
the application of proceeds therefrom, (i) no Event of Default shall have occurred and is
continuing and (ii) the Fixed Charge Coverage Ratio for the most recent Test Period for which
Section 9.1 Financials have been delivered would be at least (I) for any Test Period ended on or
before June 30, 2010, 1.15 to 1.00 and (II) for any Test Period ended after June 30, 2010, 1.25 to
1.00.




          “Person” shall mean any individual, partnership, joint venture, firm, corporation,
limited liability company, association, trust or other enterprise or any Governmental Authority.




          “Plan” shall mean any multiemployer or single-employer plan, as defined in Section
4001 of ERISA and subject to Title IV of ERISA, that is or was within any of the preceding five
plan years maintained or contributed to by (or to which there is or was an obligation to contribute
or to make payments to) a Borrower, a Subsidiary or an ERISA Affiliate.




          “Potential Defaulting Lender” shall mean, at any time, a Lender (i) as to which the
Administrative Agent has notified RailAmerica that an event of the kind referred to in the
definition of “Lender Insolvency Event” has occurred and is continuing in respect of any
Significant Subsidiary of such Lender, (ii) as to which the Administrative Agent, the Letter of
Credit Issuer or the Swingline Lender has in good faith determined and notified RailAmerica and (in
the case of the Letter of Credit Issuer or the Swingline Lender) the Administrative Agent that such
Lender or its Parent Company or a Significant Subsidiary thereof has notified the Administrative
Agent, or has stated publicly, that it will not comply with its Revolving Credit Commitment Funding
Obligations under any other loan agreement or credit agreement or other similar agreement




-27-









 







or (iii)
that has, or whose Parent Company has, a non-investment grade rating from
Moody’s or S&P or another nationally recognized rating agency. Any determination that a
Lender is a Potential Defaulting Lender under any of clauses (i) through (iii) above will be made
by the Administrative Agent or, in the case of clause (ii), the Letter of Credit Issuer or the
Swingline Lender, as the case may be, in its reasonable discretion. The Administrative Agent will
promptly send to all parties hereto a copy of any notice to RailAmerica provided for in this
definition.




          “Prime Rate” shall mean the rate of interest per annum publicly announced from time to
time by the Administrative Agent as its reference rate in effect at its principal office in New
York City (the Prime Rate not being intended to be the lowest rate of interest charged by Citibank,
N.A. in connection with extensions of credit to debtors). Any change in such rate announced by the
Administrative Agent shall take effect at the opening of business on the day specified in the
public announcement of such change.




          “Pro Forma Adjustment” shall mean, for any Test Period that includes any of the four
fiscal quarters first ending following any acquisition or disposition of any Restricted Subsidiary
or division or line of business, the pro forma increase or decrease in Consolidated EBITDA,
projected by RailAmerica in good faith as a result of reasonably identifiable and factually
supportable recurring net cost savings or recurring additional net costs, as the case may be,
realizable during such period as a result of such transaction, provided that so long as
such net cost savings or additional net costs will be realizable at any time during such
four-quarter period, it shall be assumed, for purposes of projecting such pro forma increase or
decrease to Consolidated EBITDA, that such net cost savings or additional net costs will be
realizable during the entire such period; provided further that any such pro forma
increase or decrease to Consolidated EBITDA shall be without duplication of net cost savings or
additional net costs actually realized during such period and already included in Consolidated
EBITDA.




          “Pro Forma Adjustment Certificate” shall mean any certificate of an Authorized Officer
of RailAmerica delivered pursuant to Section 9.1(i) or setting forth the information described in
clause (iv) to Section 9.1(d).




          “Pro Forma Basis” shall mean, with respect to any financial test specified herein as
of any date (a “Determination Date”) such test shall be determined on a pro forma basis
after giving effect to:





     (A) any acquisition or disposition of any Restricted Subsidiary or division or line of
business made following the first day of the most recent Test Period ending prior to the
Determination Date (the “Relevant Test Period”) and on or prior to such
Determination Date as though such acquisition or disposition had occurred on the first day
of the Relevant Test Period (including any Pro Forma Adjustment relating thereto);




     (B) any designation of a Restricted Subsidiary as an Unrestricted Subsidiary or any
redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary and any Restricted
Payment, in each case, following the first day of the Relevant Test Period and on or prior
to the Determination Date as though such designation, redesignation or Restricted Payment
had occurred on the first day of the Relevant Test Period;



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     (C) any incurrence or repayment of Indebtedness during the Relevant Test Period and on
or prior to the Determination Date as though such incurrence or repayment had occurred on
the first day of the Relevant Test Period;




     (D) any other transaction to occur on or prior to the Determination Date which requires
that any financial ratio be calculated on a Pro Forma Basis as though such Transaction had
occurred on the first day of the Relevant Test Period; and




     (E) any applicable Pro Forma Adjustment.



          “Protective Advance” shall have the meaning assigned to such term in Section 2.1.




          “Qualified Capital Stock” of any Person shall mean any Equity Interests of such Person
that are not Disqualified Capital Stock.




          “RailAmerica” shall have the meaning provided in the preamble to this Agreement.




          “Railroad Assets” shall mean assets that are used or useful in the operation of
shortline or regional railroads and assets reasonably related thereto.




          “RATC” shall have the meaning provided in the preamble to this Agreement.




          “Real Estate” shall have the meaning given to that term in Section 9.1(g).




          “Reference Banks” shall mean Citibank, N.A. and JPMorgan Chase Bank, N.A.




          “Register” shall have the meaning provided in Section 13.6(b)(iv).




          “Regulation T” shall mean Regulation T of the Board as from time to time in effect and
any successor to all or a portion thereof establishing margin requirements.




          “Regulation U” shall mean Regulation U of the Board as from time to time in effect and
any successor to all or a portion thereof establishing margin requirements.




          “Regulation X” shall mean Regulation X of the Board as from time to time in effect and
any successor to all or a portion thereof establishing margin requirements.




          “Regulation Z” shall mean Regulation Z of the Board as from time to time in effect and
any successor to all or a portion thereof establishing margin requirements.




          “Related Parties” shall mean, with respect to any specified Person, such Person’s
Affiliates and the directors, officers, employees, agents, trustees, advisors of such Person and
any Person that possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of such Person, whether through the ability to exercise voting power, by
contract or otherwise.




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          “Release” means any release, spill, emission, leaking, pumping, dumping, emptying,
injection, deposit, disposal, discharge, leaching, dispersal or migration on, into or through the
Environment on, into, through, or out of any property, facility or equipment.




          “Report” shall mean reports prepared by the Administrative Agent, the Collateral Agent
or another Person showing the results of appraisals, field examinations or audits pertaining to the
Credit Parties’ assets from information furnished by or on behalf of the Credit Parties, after the
Administrative Agent or the Collateral Agent has exercised its rights of inspection pursuant to
this Agreement, which Reports may be distributed to the Lenders by the Administrative Agent or the
Collateral Agent.




          “Reportable Event” shall mean an event described in Section 4043 of ERISA and the
regulations thereunder.




          “Required Lenders” shall mean, at any date, Lenders having or holding a majority of
the Total Commitment at such date or, if the Total Commitment has been terminated, Lenders having a
majority of the Total Credit Exposure at such date.




          “Required Supermajority Lenders” shall mean, at any date, Lenders having Commitments
representing at least
662/3% of the Total Commitment at such date or, if the Total Commitment has
terminated, having at least 662/3% of the Total Credit Exposure at such date.




          “Requirement of Law” shall mean, as to any Person, the Certificate of Incorporation
and By-Laws or other organizational or governing documents of such Person, and any law, treaty,
rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or assets or to which
such Person or any of its property or assets is subject.




          “Requirement of Tax Law” shall mean any law, treaty, rule or regulation, official
administrative guidance or determination of an arbitrator or a court or other Governmental
Authority relating to Taxes.




          “Reserves” shall mean any and all reserves (other than Account Reserves) which the
Administrative Agent deems necessary, in its Permitted Discretion, to maintain (including, without
limitation, reserves for accrued and unpaid interest on the Obligations, reserves for rent at
locations leased by any Credit Party, reserves for Secured Hedge Agreements and Secured Cash
Management Agreements, reserves for contingent liabilities of any Credit Party, reserves for
uninsured losses of any Credit Party, reserves for uninsured, underinsured, un-indemnified or
under-indemnified liabilities or potential liabilities with respect to any litigation and reserves
for taxes, fees, assessments and other governmental charges) with respect to the Collateral or any
Credit Party. The Administrative Agent may, in its Permitted Discretion, adjust Reserves upon not
less than one Business Day prior written notice to RailAmerica.




          “Restricted Domestic Subsidiary” shall mean each Restricted Subsidiary that is also a
Domestic Subsidiary.




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          “Restricted Foreign Subsidiary” shall mean a Foreign Subsidiary that is a Restricted
Subsidiary.




          “Restricted Payment” shall mean any (a) dividend or other distribution (whether in
cash, securities or other property) with respect to any equity interests of RailAmerica or any
Subsidiary, or any payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such equity interests in RailAmerica or any Subsidiary or any
option, warrant or other right to acquire any such equity interests in RailAmerica or any
Subsidiary, other than dividends or distributions by a Subsidiary payable to RailAmerica or any
Wholly-Owned Subsidiary that is a Subsidiary Guarantor and, in the case of a dividend or
distribution by a Subsidiary that is not a Wholly-Owned Subsidiary, to any other holder of its
Equity Interests, so long as RailAmerica or a Wholly-Owned Subsidiary that is a Subsidiary
Guarantor receives at least its pro rata share of such dividend or distribution in accordance with
its Equity Interest ownership, (b) designation of any Restricted Subsidiary as an Unrestricted
Subsidiary (which shall be deemed to be a Restricted Payment in an amount equal to the sum of (i)
the fair market value of the assets of such designated Subsidiary immediately prior to such
designation (such fair market value to be calculated without regard to any guarantee provided by
such designated Subsidiary) and (ii) the aggregate principal amount of any Indebtedness owed by
such designated Subsidiary to RailAmerica or any Restricted Subsidiary immediately prior to such
designation), all calculated, except as set forth in the parenthetical to clause (b), on a
consolidated basis in accordance with GAAP and (c) any Investment in an Unrestricted Subsidiary
(which shall be deemed to be a Restricted Payment in an amount equal to the fair market value of
such Investment at the time of such Investment).




          “Restricted Subsidiary” shall mean any Subsidiary of RailAmerica other than an
Unrestricted Subsidiary.




          “Revolving Credit Commitment Funding Obligation” shall have the meaning assigned to
such term in the definition of “Defaulting Lender.”




          “Revolving Credit Loans” shall have the meaning provided in Section 2.1(a).




          “S&P” shall mean Standard & Poor’s Ratings Services or any successor by merger or
consolidation to its business.




          “Sale Leaseback” shall mean any transaction or series of related transactions pursuant
to which RailAmerica or any of the Restricted Subsidiaries (a) sells, transfers or otherwise
disposes of any property, real or personal, whether now owned or hereafter acquired, and (b) as
part of such transaction, thereafter rents or leases such property that it intends to use for
substantially the same purpose or purposes.




          “SEC” shall mean the Securities and Exchange Commission or any successor thereto.




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          “Section 9.1 Financials” shall mean the financial statements delivered, or required to
be delivered, pursuant to Section 9.1(a) or (b) together with the accompanying officer’s
certificate delivered, or required to be delivered, pursuant to Section 9.1(d).




          “Secured Cash Management Agreement” shall mean any Cash Management Agreement that is
entered into by and between any Borrower or any of the Restricted Subsidiaries and any Cash
Management Bank.




          “Secured Hedge Agreement” shall mean any Hedge Agreement that is entered into by and
between any Borrower or any of the Restricted Subsidiaries and any Hedge Bank.




          “Secured Note Indenture” shall mean the Indenture dated as of the Closing Date, among
RailAmerica, the guarantors party thereto and U.S. National Bank Association, as trustee, pursuant
to which the Initial Secured Notes are issued, as the same may be amended, supplemented or
otherwise modified from time to time.




          “Secured Parties” shall have the meaning assigned to such term in the applicable
Security Documents.




          “Securities Account” shall have the meaning assigned to such term in the Security
Agreement.




          “Securities Account Control Agreement” shall have the meaning specified in the
Security Agreement.




          “Security Agreement” shall mean the Security Agreement entered into by the Borrowers,
the other grantors party thereto and the Collateral Agent for the benefit of the Lenders,
substantially in the form of Exhibit F, as the same may be amended, supplemented or
otherwise modified from time to time.




          “Security Documents” shall mean, collectively, (a) the Guarantee, (b) the Security
Agreement, (c) the Intercreditor Agreement and (d) each other security agreement or other
instrument or document executed and delivered pursuant to Section 9.10, 9.12 or 9.16 or pursuant to
any of the Security Documents to secure any of the Obligations.




          “Sole Lead Arranger” shall mean Citigroup Global Markets Inc., as the sole lead
arranger for the Lenders under this Agreement and the other Credit Documents.




          “Solvent” shall mean, with respect to RailAmerica and its Restricted Subsidiaries, on
a consolidated basis, that as of the date of determination, both (i) (a) the sum of RailAmerica’s
and its Restricted Subsidiaries’ debts (including contingent liabilities) does not exceed the
present fair saleable value of RailAmerica’s and its Restricted Subsidiaries’ present assets; (b)
RailAmerica’s and its Restricted Subsidiaries’ capital is not unreasonably small in relation to
their businesses as contemplated on the date of determination; and (c) RailAmerica and its
Restricted Subsidiaries have not incurred and do not intend to incur, or believe that they will
incur, debts including current obligations beyond their ability to pay such debts as they become due




-32-









 







(whether at maturity or otherwise); and (ii) RailAmerica and its Restricted Subsidiaries
are “solvent,” on a consolidated basis, within the meaning given that term and similar terms under
applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition,
the amount of any contingent liability at any time shall be computed as the amount that, in light
of all of the facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability (irrespective of whether such
contingent liabilities meet the criteria for accrual under Statement of Financial Accounting
Standard No. 5).




          “Specified Subsidiary” shall mean, at any date of determination (a) any Subsidiary (i)
whose total assets at the last day of the Test Period ending on the last day of the most recent
fiscal period for which Section 9.1 Financials have been delivered were equal to or greater than
10% of the consolidated total assets of RailAmerica and the Subsidiaries at such date or (ii) whose
gross revenues for such Test Period were equal to or greater than 10% of the consolidated gross
revenues of RailAmerica and the Subsidiaries for such period, in each case determined in accordance
with GAAP or (b) any Subsidiary when such Subsidiary’s total assets or gross revenues, as
applicable, is aggregated with the total assets or gross revenues, as applicable, of each other
Subsidiary that is the subject of an event described in Section 11.5, would constitute a Specified
Subsidiary under clause (a) above.




          “Sponsor” shall mean Fortress Investment Group LLC.




          “Stated Amount” of any Letter of Credit shall mean, at any time, the maximum amount
available to be drawn thereunder at such time, determined without regard to whether any conditions
to drawing could then be met.




          “Status” shall mean, as to RailAmerica as of any date, the existence of Level I Status
or Level II Status, as the case may be, on such date. Changes in Status shall become effective as
of the end of each fiscal quarter of RailAmerica.




          “Subsidiary” of any Person shall mean and include (a) any corporation more than 50% of
whose stock of any class or classes having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation (irrespective of whether or not at the time stock of
any class or classes of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or indirectly through
Subsidiaries and (b) any partnership, association, joint venture or other entity in which such
Person directly or indirectly through Subsidiaries has more than a 50% equity interest at the time.
Unless otherwise expressly provided, all references herein to a “Subsidiary” shall mean a
Subsidiary of RailAmerica.




          “Subsidiary Guarantors” shall mean (a) each Domestic Subsidiary (other than a Domestic
Subsidiary all of the material assets of which consist of stock in one or more Foreign
Subsidiaries) on the Closing Date and (b) each Restricted Domestic Subsidiary (other than a
Domestic Subsidiary all of the material assets of which consist of stock in one or more Foreign
Subsidiaries) that becomes a party to the Guarantee after the Closing Date pursuant to Section
9.10.




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          “Swingline Commitment” shall mean $10.0 million.




          “Swingline Exposure” shall mean, with respect, to any Lender at any time, such
Lender’s Applicable Percentage of the outstanding Swingline Loans at such time.




          “Swingline Lender” shall mean Citicorp North America, Inc. in its capacity as lender
of Swingline Loans hereunder.




          “Swingline Loans” shall have the meaning provided in Section 2.1(b).




          “Swingline Maturity Date” shall mean, with respect to any Swingline Loan, the date
that is ten Business Days prior to the Maturity Date.




          “Taxes” shall mean any current or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings (including additions to tax, interest
and penalties with respect thereto), now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority.




          “Test Period” shall mean, for any date of determination under this Agreement, the four
consecutive fiscal quarters of RailAmerica then last ended.




          “Total Assets” means the total assets of RailAmerica and the Restricted Subsidiaries
(or, if specified, of the Restricted Foreign Subsidiaries), as shown on the most recent balance
sheet constituting Section 9.1 Financials that been delivered immediately preceding the date on
which any calculation of Total Assets is being made, provided that Total Assets shall be
calculated on a Pro Forma Basis.




          “Total Commitment” shall mean the sum of the Commitments of all Lenders.




          “Total Credit Exposure” shall mean, at any date, the sum of the Credit Exposures of
all Lenders.




          “Transaction Expenses” shall mean any fees or expenses incurred or paid by RailAmerica
or any of its Subsidiaries in connection with the Transactions.




          “Transactions” shall mean (i) the negotiation, execution and delivery of this
Agreement, the Secured Note Indenture, (ii) the repayment in full of the Existing Credit Agreement
and the termination of all commitments thereunder and (iii) all other transactions in connection
with the foregoing.




          “Transferee” shall have the meaning provided in Section 13.6(e).




          “Type” shall mean, as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.




          “Unfunded Current Liability” of any Plan shall mean the amount, if any, by which the
present value of the accrued benefits under the Plan as of the close of its most recent plan




-34-









 







year, determined in accordance with Statement of Financial Accounting Standards No. 87 as in
effect on the date hereof, based upon the actuarial assumptions that would be used by the Plan’s
actuary in a termination of the Plan, exceeds the fair market value of the assets allocable
thereto.




          “Unpaid Drawing” shall have the meaning provided in Section 3.4(a).




          “Unrestricted Subsidiary” shall mean (a) any Subsidiary of RailAmerica that is formed
or acquired after the Closing Date (other than a Subsidiary that becomes or is required to become a
Credit Party hereunder), only if at such time (or promptly thereafter) RailAmerica designates such
Subsidiary an Unrestricted Subsidiary in a written notice to the Administrative Agent, (b) any
Restricted Subsidiary (other than a Restricted Subsidiary that is or becomes a Credit Party)
subsequently re-designated as an Unrestricted Subsidiary by RailAmerica in a written notice to the
Administrative Agent, provided that no Default or Event of Default would result from such
re-designation and (c) each Subsidiary of an Unrestricted Subsidiary, in each case under clause
(a), (b) or (c) to the extent such designation is permitted under Section 10.6; provided,
however, that at the time of any written re-designation by RailAmerica to the
Administrative Agent that any Unrestricted Subsidiary shall no longer constitute an Unrestricted
Subsidiary, such Unrestricted Subsidiary shall cease to be an Unrestricted Subsidiary to the extent
no Default or Event of Default would result from such re-designation. On or promptly after the
date of its formation, acquisition or re-designation, as applicable, each Unrestricted Subsidiary
(other than an Unrestricted Subsidiary that is a Foreign Subsidiary) shall have entered into a tax
sharing agreement containing terms that, in the reasonable judgment of the Administrative Agent,
provide for an appropriate allocation of tax liabilities and benefits.




          “Voting Stock” shall mean, with respect to any Person, as of any date, such Person’s
capital stock that is at the time entitled to vote for the election of directors of such Person.




          “Weekly Reporting Period” shall mean any period during which the Availability is less
than $15.0 million (provided that such amount shall be decreased to $10.0 million if at
such date the total cash balance in the Control Accounts is at least $5.0 million).




          “Weighted Average Life to Maturity” when applied to any Indebtedness, Disqualified
Capital Stock or preferred stock, as the case may be, at any date, the quotient obtained by
dividing (1) the sum of the products of the number of years from the date of determination to the
date of each successive scheduled principal payment of such Indebtedness or redemption or similar
payment with respect to such Disqualified Capital Stock or preferred stock multiplied by the amount
of such payment, by (2) the sum of all such payments.




          “Wholly-Owned Subsidiary” of any Person shall mean a Subsidiary of such Person, all of
the Equity Interests of which (other than directors’ qualifying shares or nominee or other similar
shares required pursuant to applicable law) are owned by any one or more of such Person and its
Wholly Owned Subsidiaries.




          (b) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section references are to Sections of this Agreement unless




-35-









 







otherwise specified. The words “include,” “includes” and “including” shall be deemed to be
followed by the phrase “without limitation.”




          1.2. Exchange Rates. For purposes of determining compliance under Section 10.4, 10.5 or 10.6 with respect to any
amount in a foreign currency, such amount shall be deemed to equal the Dollar equivalent thereof
based on the average exchange rate for such foreign currency for the most recent twelve-month
period immediately prior to the date of determination in a manner consistent with that used in
calculating Consolidated EBITDA for the related period. For purposes of determining compliance
with Sections 10.1 and 10.2, the U.S. dollar-equivalent principal amount of Indebtedness
denominated in a foreign currency shall be calculated based on the relevant currency exchange rate
in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed,
in the case of revolving credit debt; provided that if such Indebtedness is incurred to
refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause
the applicable U.S. dollar denominated restriction to be exceeded if calculated at the relevant
currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated
restriction shall be deemed not to have been exceeded so long as the principal amount of such
refinancing Indebtedness does not exceed the principal amount of such Indebtedness being
refinanced. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if
incurred in a different currency from the Indebtedness being refinanced, shall be calculated based
on the currency exchange rate applicable to the currencies in which such respective Indebtedness is
denominated that is in effect on the date of such refinancing.




          SECTION 2. Amount and Terms of Credit




          2.1. Commitments.




          (a) (i) Subject to and upon the terms and conditions herein set forth, each Lender severally
(and not jointly) agrees to make a loan or loans denominated in Dollars (each a “Revolving
Credit Loan”) to the Borrowers which Revolving Credit Loans (A) shall be made at any time and
from time to time on and after the Closing Date and prior to the Maturity Date, (B) may, at the
option of the Borrowers be incurred and maintained as, and/or converted into, ABR Loans or
Eurodollar Loans, provided that all Revolving Credit Loans made by each of the Lenders
pursuant to the same Borrowing shall, unless otherwise specifically provided herein, consist
entirely of Revolving Credit Loans of the same Type, (C) may be repaid and reborrowed in accordance
with the provisions hereof, (D) shall not, for any such Lender, result in such Lender’s Credit
Exposure at such time exceeding such Lender’s Commitment at such time and (E) shall not result in
the Total Credit Exposure exceeding the lesser of (i) the Total Commitment at such time and (ii)
the Borrowing Base at such time.




               Each Lender may at its option make any Eurodollar Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan, provided that (A) any exercise of
such option shall not affect the obligation of the Borrowers to repay such Loan and (B) in
exercising such option, such Lender shall use its reasonable efforts to minimize any increased
costs to the Borrowers resulting therefrom (which obligation of the Lender shall not require it to
take, or refrain from taking, actions that it determines would result in increased costs



-36-









 






for which it will not be compensated hereunder or that it determines would be otherwise
disadvantageous to it and in the event of such request for costs for which compensation is provided
under this Agreement, the provisions of Section 3.5 shall apply).




          (b) Subject to and upon the terms and conditions herein set forth, the Swingline Lender in its
individual capacity agrees, at any time and from time to time on and after the Closing Date and
prior to the Swingline Maturity Date, to make a loan or loans (each a “Swingline Loan” and,
collectively, the “Swingline Loans”) to the Borrowers in Dollars, which Swingline Loans (i)
shall be ABR Loans, (ii) shall have the benefit of the provisions of Section 2.1(c), (iii) shall
not exceed at any time outstanding the Swingline Commitment, (iv) shall not result at any time in
the Total Credit Exposure at such time exceeding the lesser of (i) the Total Commitment at such
time and (ii) the Borrowing Base at such time and (v) may be repaid and reborrowed in accordance
with the provisions hereof. On the Swingline Maturity Date, each outstanding Swingline Loan shall
be repaid in full. The Swingline Lender shall not make any Swingline Loan after receiving a
written notice from the Borrowers or any Lender stating that a Default or Event of Default exists
and is continuing until such time as the Swingline Lender shall have received written notice of (i)
rescission of all such notices from the party or parties originally delivering such notice or (ii)
the waiver of such Default or Event of Default in accordance with the provisions of Section 13.1.




          (c) On any Business Day, the Swingline Lender may, in its sole discretion, give notice to the
Lenders that all then-outstanding Swingline Loans shall be funded with a Borrowing of Revolving
Credit Loans (and, if any Swingline Loan is outstanding on the seventh calendar day following the
date of Borrowing of such Swingline Loan, then on the first Business Day following such seventh
calendar day, the Swingline Lender shall be required to give such notice), in which case Revolving
Credit Loans constituting ABR Loans (each such Borrowing, a “Mandatory Borrowing”) shall be
made on the immediately succeeding Business Day by all Lenders with Commitments pro
rata based on each Lender’s Applicable Percentage, and the proceeds thereof shall be
applied directly to the Swingline Lender to repay the Swingline Lender for such outstanding
Swingline Loans. Each Lender hereby irrevocably agrees to make such Revolving Credit Loans upon
one Business Day’s notice pursuant to each Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the date specified to it in writing by the Swingline
Lender notwithstanding (i) that the amount of the Mandatory Borrowing may not comply with the
minimum amount for each Borrowing specified in Section 2.2, (ii) whether any conditions specified
in Section 7 are then satisfied, (iii) whether a Default or Event of Default has occurred and is
continuing, (iv) the date of such Mandatory Borrowing or (v) any reduction in the Total Commitment
or Availability after any such Swingline Loans were made. In the event that, in the sole judgment
of the Swingline Lender, any Mandatory Borrowing cannot for any reason be made on the date
otherwise required above (including as a result of the commencement of a proceeding under the
Bankruptcy Code in respect of any Borrower), each Lender hereby agrees that it shall forthwith
purchase from the Swingline Lender (without recourse or warranty) such participation of the
outstanding Swingline Loans as shall be necessary to cause such Lenders to share in such Swingline
Loans ratably based upon their Applicable Percentages, provided that all principal and
interest payable on such Swingline Loans shall be for the account of the Swingline Lender until the
date the respective participation is purchased and,




-37-









 







to the extent attributable to the purchased participation, shall be payable to the Lender
purchasing the same from and after such date of purchase.




          (d) Subject to the limitations set forth below, the Administrative Agent is authorized by the
Borrowers and the Lenders, from time to time in the Administrative Agent’s sole discretion (but
shall have absolutely no obligation to), to make Loans to the Borrowers, on behalf of all Lenders,
which the Administrative Agent, in its Permitted Discretion, deems necessary or desirable (i) to
preserve or protect the Collateral, or any portion thereof, (ii) to enhance the likelihood of, or
maximize the amount of, repayment of the Loans and other Obligations or (iii) to pay any other
amount chargeable to or required to be paid by the Credit Parties pursuant to the terms of this
Agreement, including payments of reimbursable expenses (including costs, fees, and expenses as
described in Section 13.5) and other sums payable under the Credit Documents (any of such Loans are
herein referred to as “Protective Advances”); provided that, the aggregate amount
of Protective Advances outstanding at any time shall not at any time exceed the lesser of (x) $5.0
million and (y) 10.0% of the Borrowing Base; provided further that the aggregate
amount of outstanding Protective Advances plus the aggregate amount of the other Total Credit
Exposure shall not exceed the Total Commitment. Protective Advances may be made even if the
conditions precedent set forth in Section 7 have not been satisfied. The Protective Advances shall
be secured by the Security Documents and shall constitute Obligations hereunder and under the other
Credit Documents. All Protective Advances shall be ABR Loans. The Administrative Agent’s
authorization to make Protective Advances may be revoked at any time by the Required Lenders. Any
such revocation must be in writing and shall become effective prospectively upon the Administrative
Agent’s receipt thereof. At any time that there is sufficient Availability and the conditions
precedent set forth in Section 7 have been satisfied, the Administrative Agent may request the
Lenders to make a Revolving Credit Loan to repay a Protective Advance. At any other time the
Administrative Agent may require the Lenders to fund their risk participations described in Section
2.1(e).




          (e) Upon the making of a Protective Advance by the Administrative Agent (whether before or
after the occurrence of a Default or Event of Default), each Lender shall be deemed, without
further action by any party hereto, to have unconditionally and irrevocably purchased from the
Administrative Agent without recourse or warranty an undivided interest and participation in such
Protective Advance in proportion to its Applicable Percentage. On any Business Day, the
Administrative Agent may, in its sole discretion, give notice to the Lenders that the Lenders are
required to fund their risk participations in Protective Advances (and, if any Protective Advance
is outstanding on the thirtieth calendar day following the date of Borrowing of such Protective
Advance, then on the first Business Day following such thirtieth calendar day, the Administrative
Agent shall give such notice) in which case each Lender shall fund its participation on the date
specified in such notice. From and after the date, if any, on which any Lender is required to fund
its participation in any Protective Advance purchased hereunder, the Administrative Agent shall
promptly distribute to such Lender, such Lender’s Applicable Percentage of all payments of
principal and interest and all proceeds of Collateral received by the Administrative Agent in
respect of such Protective Advance.




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          2.2. Minimum Amount of Each Borrowing; Maximum Number of Borrowings. Each Borrowing of Revolving Credit Loans shall be in a minimum amount of $1,000,000 and in
an integral multiple of $500,000 and Swingline Loans shall be in a multiple of $100,000 (except
that Mandatory Borrowings shall be made in the amounts required by Section 2.1(c) and Revolving
Credit Loans made to refinance Protective Advances pursuant to Section 2.1(e)). More than one
Borrowing may be incurred on any date, provided that at no time shall there be outstanding
more than five Borrowings of Eurodollar Loans under this Agreement.




          2.3. Notice of Borrowing.




          (a) Whenever the Borrowers desire to incur Revolving Credit Loans hereunder (other than
Mandatory Borrowings, Borrowings to repay Unpaid Drawings or Borrowings to repay Protective
Advances), they shall give the Administrative Agent at the Administrative Agent’s Office, (i) prior
to 12:00 Noon (New York time) at least three Business Days’ prior written notice (or telephonic
notice promptly confirmed in writing) of each Borrowing of Eurodollar Loans, and (ii) prior to
12:00 Noon (New York time) at least one Business Day’s prior written notice (or telephonic notice
promptly confirmed in writing) of each Borrowing of ABR Loans (each such notice, a “Notice of
Borrowing”). Each such Notice of Borrowing, except as otherwise expressly provided in Section
2.10, shall be irrevocable and shall specify (i) the aggregate principal amount of the Revolving
Credit Loans to be made pursuant to such Borrowing, (ii) the date of Borrowing (which shall be a
Business Day) and (iii) whether the respective Borrowing shall consist of ABR Loans or Eurodollar
Loans and, if Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall promptly give each Lender written notice (or telephonic notice promptly
confirmed in writing) of each proposed Borrowing of Revolving Credit Loans, of such Lender’s
Applicable Percentage thereof and of the other matters covered by the related Notice of Borrowing.




          (b) Whenever the Borrowers desire to incur Swingline Loans hereunder, they shall give the
Administrative Agent written notice (or telephonic notice promptly confirmed in writing) of each
Borrowing of Swingline Loans prior to 1:00 p.m. (New York time) on the date of such Borrowing.
Each such notice shall be irrevocable and shall specify (i) the aggregate principal amount of the
Swingline Loans to be made pursuant to such Borrowing and (ii) the date of Borrowing (which shall
be a Business Day). The Administrative Agent shall promptly give the Swingline Lender written
notice (or telephonic notice promptly confirmed in writing) of each proposed Borrowing of Swingline
Loans and of the other matters covered by the related Notice of Borrowing.




          (c) Mandatory Borrowings shall be made upon the notice specified in Section 2.1(c), with the
Borrowers irrevocably agreeing, by their incurrence of any Swingline Loan, to the making of
Mandatory Borrowings as set forth in such Section.




          (d) Borrowings to reimburse Unpaid Drawings shall be made upon the notice specified in Section
3.4(a).




          (e) Without in any way limiting the obligation of the Borrowers to confirm in writing any
notice they may give hereunder by telephone, the Administrative Agent may act




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prior to receipt of written confirmation without liability upon the basis of such telephonic
notice believed by the Administrative Agent in good faith to be from an Authorized Officer of the
Borrowers. In each such case, the Borrowers hereby waive the right to dispute the Administrative
Agent’s record of the terms of any such telephonic notice.




          2.4. Disbursement of Funds.




          (a) No later than 12:00 Noon (New York time) on the date specified in each Notice of Borrowing
(including Mandatory Borrowings) of Revolving Credit Loans, each Lender will make available its
Applicable Percentage, if any, of each Borrowing of Revolving Credit Loans requested to be made on
such date in the manner provided below. No later than 3:00 p.m. (New York time) on the date
specified in each Notice of Borrowing relating to Swingline Loans, the Swingline Lender shall make
available to the Borrowers its Swingline Loan to be made on such date, by depositing to the account
of RailAmerica (on behalf of the Borrowers) at the Administrative Agent’s office the amount of such
Swingline Loan.




          (b) Each Lender shall make available all amounts it is to fund to the Borrowers under any
Borrowing in Dollars in immediately available funds to the Administrative Agent at the
Administrative Agent’s Office and the Administrative Agent will (except in the case of Mandatory
Borrowings and Borrowings to repay Unpaid Drawings and Protective Advances) make available to the
Borrowers, by depositing to RailAmerica’s (on behalf of the Borrowers) account at the
Administrative Agent’s Office the aggregate of the amounts so made available in Dollars. Unless
the Administrative Agent shall have been notified by any Lender prior to the date of any such
Borrowing that such Lender does not intend to make available to the Administrative Agent its
portion of the Borrowing or Borrowings to be made on such date, the Administrative Agent may assume
that such Lender has made such amount available to the Administrative Agent on such date of
Borrowing, and the Administrative Agent, in reliance upon such assumption, may (in its sole
discretion and without any obligation to do so) make available to the Borrowers a corresponding
amount. If such corresponding amount is not in fact made available to the Administrative Agent by
such Lender and the Administrative Agent has made available the same to the Borrowers, the
Administrative Agent shall be entitled to recover such corresponding amount from such Lender. If
such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand
therefor the Administrative Agent shall promptly notify the Borrowers and the Borrowers, jointly
and severally, shall immediately pay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover from such Lender or the Borrowers, jointly
and severally, interest on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to the Borrowers to the date
such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to
(i) if paid by such Lender, the greater of (x) the Federal Funds Effective Rate and (y) a rate
determined by the Administrative Agent in accordance with banking industry rules on interbank
compensation or (ii) if paid by the Borrowers, the then-applicable rate of interest for ABR Loans.




          (c) Nothing in this Section 2.4 shall be deemed to relieve any Lender from its obligation to
fulfill its commitments hereunder or to prejudice any rights that the Borrowers may




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have against any Lender as a result of any default by such Lender hereunder (it being
understood, however, that no Lender shall be responsible for the failure of any other Lender to
fulfill its commitments hereunder).




          2.5. Repayment of Loans; Evidence of Debt.




          (a) The Borrowers, jointly and severally, shall repay to the Administrative Agent in Dollars,
for the benefit of the Lenders, on the Maturity Date, the then-unpaid Revolving Credit Loans. The
Borrowers, jointly and severally, shall repay to the Administrative Agent in Dollars, for the
account of the Swingline Lender, on the Swingline Maturity Date, the then-unpaid Swingline Loans.
The Borrowers, jointly and severally, shall repay to the Administrative Agent for the benefit of
the Lenders the then-unpaid amount of each Protective Advance on the earlier of the Maturity Date
and demand by the Administrative Agent.




          (b) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrowers to the appropriate lending office of such Lender
resulting from each Loan made by such lending office of such Lender from time to time, including
the amounts of principal and interest payable and paid to such lending office of such Lender from
time to time under this Agreement.




          (c) The Administrative Agent shall maintain the Register pursuant to Section 13.6(b), and a
subaccount for each Lender, in which Register and subaccounts (taken together) shall be recorded
(i) the amount of each Loan made hereunder, whether such Loan is a Revolving Credit Loan, a
Swingline Loan or a Protective Advance, the Type of each Loan made and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable or to become due
and payable from the Borrowers to each Lender, the Swingline Lender or the Administrative Agent
hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder from the
Borrowers and each Lender’s share thereof.




          (d) The entries made in the Register and accounts and subaccounts maintained pursuant to
paragraphs (b) and (c) of this Section 2.5 shall, to the extent permitted by applicable law, be
prima facie evidence of the existence and amounts of the obligations of the Borrowers therein
recorded; provided, however, that the failure of any Lender or the Administrative
Agent to maintain such account, such Register or such subaccount, as applicable, or any error
therein, shall not in any manner affect the obligation of the Borrowers to repay (with applicable
interest) the Loans made to the Borrowers in accordance with the terms of this Agreement.




          2.6. Conversions and Continuations.




          (a) The Borrowers shall have the option on any Business Day to convert all or a portion equal
to at least $1,000,000 of the outstanding principal amount of Revolving Credit Loans made to the
Borrowers from one Type into a Borrowing or Borrowings of another Type and the Borrowers shall have
the option on any Business Day to continue the outstanding principal amount of any Eurodollar Loans
as Eurodollar Loans for an additional Interest Period, provided that (i) no partial
conversion of Eurodollar Loans shall reduce the outstanding principal amount of Eurodollar Loans
made pursuant to a single Borrowing to less than $1,000,000,




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(ii) ABR Loans may not be converted into Eurodollar Loans if an Event of Default is in existence on
the date of the conversion and the Administrative Agent has or the Required Lenders have determined
in its or their sole discretion not to permit such conversion, (iii) Eurodollar Loans may not be
continued as Eurodollar Loans for an additional Interest Period if an Event of Default is in
existence on the date of the proposed continuation and the Administrative Agent has or the Required
Lenders have determined in its or their sole discretion not to permit such continuation, (iv) no
conversion or continuation of Eurodollar Loans may be made on a day other than the last day of the
Interest Period applicable thereto and (v) Borrowings resulting from conversions pursuant to this
Section 2.6 shall be limited in number as provided in Section 2.2. Each such conversion or
continuation shall be effected by the Borrowers by giving the Administrative Agent at the
Administrative Agent’s Office prior to 12:00 noon (New York time) at least three Business Days’ (or
one Business Day’s notice in the case of a conversion into ABR Loans) prior written notice (or
telephonic notice promptly confirmed in writing) (each a “Notice of Conversion or
Continuation”) specifying the Revolving Credit Loans to be so converted or continued, the Type
of Revolving Credit Loans to be converted or continued into and, if such Revolving Credit Loans are
to be converted into or continued as Eurodollar Loans, the Interest Period to be initially
applicable thereto. The Administrative Agent shall give each Lender notice as promptly as
practicable of any such proposed conversion or continuation affecting any of its Revolving Credit
Loans.




          (b) If any Event of Default is in existence at the time of any proposed continuation of any
Eurodollar Loans and the Administrative Agent has or the Required Lenders have determined in its or
their sole discretion not to permit such continuation, such Eurodollar Loans shall be automatically
converted on the last day of the current Interest Period into ABR Loans. If upon the expiration of
any Interest Period in respect of Eurodollar Loans, the Borrowers have failed to elect a new
Interest Period to be applicable thereto as provided in paragraph (a) above, the Borrowers shall be
deemed to have elected to continue such Borrowing of Eurodollar Loans into a Borrowing of
Eurodollar Loans with an Interest Period of one month’s duration effective as of the expiration
date of such current Interest Period.




          2.7. Pro rata Borrowings. Each Borrowing of Revolving Credit Loans under this Agreement shall be granted by the
Lenders pro rata on the basis of their Applicable Percentages. It is understood
that no Lender shall be responsible for any default by any other Lender in its obligation to make
Loans hereunder and that each Lender shall be obligated to make the Loans provided to be made by it
hereunder, regardless of the failure of any other Lender to fulfill its commitments hereunder.




          2.8. Interest.




          (a) The unpaid principal amount of each ABR Loan shall bear interest from the date of the
Borrowing thereof until maturity (whether by acceleration or otherwise) at a rate per annum that
shall at all times be the ABR Margin plus the ABR in effect from time to time.




          (b) The unpaid principal amount of each Eurodollar Loan shall bear interest from the date of
the Borrowing thereof until maturity thereof (whether by acceleration or




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otherwise) at a rate per annum that shall at all times be the Eurodollar Margin in effect from time
to time plus the relevant Eurodollar Rate.




          (c) If there is an Event of Default or if all or a portion of (i) the principal amount of any
Loan or (ii) any interest payable thereon or Fee shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), the Obligations shall bear interest at a rate per annum
that is (x) in the case of overdue principal, the rate that would otherwise be applicable thereto
plus 2% or (y) in the case of any other outstanding amount, to the extent permitted by
applicable law, the rate described in Section 2.8(a) plus 2% from and including the date of
such non-payment to but excluding the date on which such amount is paid in full (after as well as
before judgment).




          (d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan and upon termination of the Commitments; provided that (i) in the event of
any repayment or prepayment of any Loan (other than a prepayment of an ABR Loan that is a Revolving
Credit Loan prior to the Maturity Date), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment, (ii) in the event of any conversion
of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest
on such Loan shall be payable on the effective date of such conversion and (iii) interest accrued
pursuant to Section 2.8(c) shall be payable on demand.




          (e) All computations of interest hereunder shall be made in accordance with Section 5.5.




          (f) The Administrative Agent, upon determining the interest rate for any Borrowing of
Eurodollar Loans, shall promptly notify the Borrowers and the relevant Lenders thereof. Each such
determination shall, absent clearly demonstrable error, be final and conclusive and binding on all
parties hereto.




          2.9. Interest Periods. At the time the Borrowers give a Notice of Borrowing or Notice of Conversion or
Continuation in respect of the making of, or conversion into or continuation as, a Borrowing of
Eurodollar Loans (in the case of the initial Interest Period applicable thereto) or prior to 12:00
p.m. (New York time) on the third Business Day prior to the expiration of an Interest Period
applicable to a Borrowing of Eurodollar Loans, the Borrowers shall have the right to elect by
giving the Administrative Agent written notice (or telephonic notice promptly confirmed in writing)
the Interest Period applicable to such Borrowing, which Interest Period shall, at the option of the
Borrowers, be a one, two, three, six or, if agreed to by each Lender, a seven or fourteen day
period or a nine or twelve month period. Notwithstanding anything to the contrary contained above:





     (i) the initial Interest Period for any Borrowing of Eurodollar Loans shall commence on
the date of such Borrowing (including the date of any conversion from a Borrowing of ABR
Loans) and each Interest Period occurring thereafter in respect of such Borrowing shall
commence on the day on which the next preceding Interest Period expires;



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     (ii) if any Interest Period relating to a Borrowing of Eurodollar Loans begins on the
last Business Day of a calendar month or begins on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of the calendar month at the end of such Interest
Period;




     (iii) if any Interest Period would otherwise expire on a day that is not a Business
Day, such Interest Period shall expire on the next succeeding Business Day, provided
that if any Interest Period in respect of a Eurodollar Loan would otherwise expire on a day
that is not a Business Day but is a day that is after the last Business Day in such month,
such Interest Period shall expire on the next preceding Business Day; and




     (iv) the Borrower shall not be entitled to elect any Interest Period in respect of any
Eurodollar Loan if such Interest Period would extend beyond the Maturity Date.



          2.10. Increased Costs, Illegality, etc.




          (a) In the event that (x) in the case of clause (i) below, the Administrative Agent or (y) in
the case of clauses (ii) and (iii) below, any Lender shall have reasonably determined (which
determination shall, absent clearly demonstrable error, be final and conclusive and binding upon
all parties hereto):





     (i) on any date for determining the Eurodollar Rate for any Interest Period that (x)
deposits in the principal amounts of the Loans comprising such Eurodollar Loan Borrowing are
not generally available in the relevant market, (y) by reason of any changes arising on or
after the Closing Date affecting the interbank eurodollar market, adequate and fair means do
not exist for ascertaining the applicable interest rate on the basis provided for in the
definition of Eurodollar Rate or (z) the Administrative Agent is advised in writing by the
Required Lenders that the Eurodollar Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders of making their Loans included in such Borrowing for
such Interest Period; or




     (ii) at any time, that such Lender shall incur increased costs or reductions in the
amounts received or receivable hereunder with respect to any Eurodollar Loans (or, in the
case of increased costs attributable to Taxes, any Loan) because of (x) any change since the
date hereof in any applicable law, governmental rule, regulation, guideline or order (or in
the interpretation or administration thereof and including the introduction of any new law
or governmental rule, regulation, guideline or order), such as, for example, without
limitation, a change in official reserve requirements, and/or (y) other circumstances
affecting the interbank eurodollar market or the position of such Lender in such market
(provided that in the case of any increased costs attributable to Taxes, this clause
(ii) shall apply only to the extent such increased costs resulted from a change in a
Requirement of Law after the date such Lender becomes a party hereto, except to the extent
such Lender’s assignor, if any, was entitled to compensation for such increased costs
immediately prior to such assignment); or



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     (iii) at any time, that the making or continuance of any Eurodollar Loan has become
unlawful by compliance by such Lender in good faith with any law, governmental rule,
regulation, guideline or order (or would conflict with any such governmental rule,
regulation, guideline or order not having the force of law even though the failure to comply
therewith would not be unlawful), or has become impracticable as a result of a contingency
occurring after the date hereof that materially and adversely affects the interbank
eurodollar market;


then, and in any such event, such Lender (or the Administrative Agent, in the case of clause (i)
above) shall within a reasonable time thereafter give notice (if by telephone, confirmed in
writing) to RailAmerica and to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in the
case of clause (i) above, Eurodollar Loans shall no longer be available until such time as the
Administrative Agent notifies RailAmerica and the Lenders that the circumstances giving rise to
such notice by the Administrative Agent no longer exist (which notice the Administrative Agent
agrees to give at such time when such circumstances no longer exist), and any Notice of Borrowing
or Notice of Conversion given by the Borrowers with respect to Eurodollar Loans that have not yet
been incurred shall be deemed rescinded by the Borrowers, (y) in the case of clause (ii) above, the
Borrowers, jointly and severally, shall pay to such Lender, promptly after receipt of written
demand therefor such additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Lender in its reasonable discretion shall determine)
as shall be required to compensate such Lender for such increased costs or reductions in amounts
receivable hereunder (it being agreed that a written notice as to the additional amounts owed to
such Lender, showing in reasonable detail the basis for the calculation thereof, submitted to
RailAmerica by such Lender shall, absent clearly demonstrable error, be final and conclusive and
binding upon all parties hereto) and (z) in the case of clause (iii) above, the Borrowers shall
take one of the actions specified in Section 2.10(b) as promptly as possible and, in any event,
within the time period required by law. Notwithstanding anything to the contrary contained herein,
this clause (a) shall not apply to any increased costs attributable to (W) any Taxes that are
grossed-up or indemnified pursuant to Section 5.4, (X) any Taxes that are described in clause (ii)
of the definition of the Excluded Taxes, (Y) any Other Connection Taxes that are imposed on or
measured by net income or profits (or franchise or similar taxes imposed in lieu thereof) and (Z)
any Other Connection Assignment Taxes as defined in Section 5.4(b).




          (b) At any time that any Eurodollar Loan is affected by the circumstances described in Section
2.10(a)(ii) or (iii), the Borrowers may (and in the case of a Eurodollar Loan affected pursuant to
Section 2.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then being made pursuant
to a Borrowing, cancel such Borrowing by giving the Administrative Agent telephonic notice
(confirmed promptly in writing) thereof on the same date that the Borrowers were notified by a
Lender pursuant to Section 2.10(a)(ii) or (iii) or (y) if the affected Eurodollar Loan is then
outstanding, upon at least three Business Days’ notice to the Administrative Agent, require the
affected Lender to convert each such Eurodollar Loan into an ABR Loan, provided that if
more than one Lender is affected at any time, then all affected Lenders must be treated in the same
manner pursuant to this Section 2.10(b).




-45-









 








          (c) If, after the date hereof, the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, the National Association of Insurance
Commissioners, central bank or comparable agency charged with the interpretation or administration
thereof, or compliance by a Lender or its parent with any request or directive made or adopted
after the date hereof regarding capital adequacy (whether or not having the force of law) of any
such authority, association, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Lender’s or its parent’s or its Related Party’s capital or
assets as a consequence of such Lender’s commitments or obligations hereunder to a level below that
which such Lender or its parent or its Related Party could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender’s or its parent’s
policies with respect to capital adequacy), then from time to time, promptly after demand by such
Lender (with a copy to the Administrative Agent), the Borrowers, jointly and severally, shall pay
to such Lender such additional amount or amounts as will compensate such Lender or its parent for
such reduction, it being understood and agreed, however, that a Lender shall not be entitled to
such compensation as a result of such Lender’s compliance with, or pursuant to any request or
directive to comply with, any such law, rule or regulation as in effect on the date hereof. Each
Lender, upon determining in good faith that any additional amounts will be payable pursuant to this
Section 2.10(c), will give prompt written notice thereof to RailAmerica (on its own behalf) which
notice shall set forth in reasonable detail the basis of the calculation of such additional
amounts, although the failure to give any such notice shall not, subject to Section 2.13, release
or diminish any of the Borrowers’ obligations to pay additional amounts pursuant to this Section
2.10(c) upon receipt of such notice.




          2.11. Compensation. If (a) any payment of principal of any Eurodollar Loan is made by the Borrowers to or for
the account of a Lender other than on the last day of the Interest Period for such Eurodollar Loan
as a result of a payment or conversion pursuant to Section 2.5, 2.6, 2.10, 5.1, 5.2 or a required
assignment pursuant to 13.7, as a result of acceleration of the maturity of the Loans pursuant to
Section 11 or for any other reason, (b) any Borrowing of Eurodollar Loans is not made as a result
of a withdrawn Notice of Borrowing, (c) any ABR Loan is not converted into a Eurodollar Loan as a
result of a withdrawn Notice of Conversion or Continuation, (d) any Eurodollar Loan is not
continued as a Eurodollar Loan as a result of a withdrawn Notice of Conversion or Continuation or
(e) any prepayment of principal of any Eurodollar Loan is not made as a result of a withdrawn
notice of prepayment pursuant to Section 5.1 or 5.2, the Borrowers, jointly and severally, shall,
after receipt of a written request by such Lender (which request shall set forth in reasonable
detail the basis for requesting such amount), pay to the Administrative Agent for the account of
such Lender any amounts required to compensate such Lender for any additional losses, costs or
expenses that such Lender may reasonably incur as a result of such payment, failure to convert,
failure to continue or failure to prepay, including any loss, cost or expense (excluding loss of
anticipated profits) actually incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain such Eurodollar Loan.




          2.12. Change of Lending Office. Each Lender agrees that, upon the occurrence of any event giving rise to the operation of
Section 2.10(a)(ii), 2.10(a)(iii), 2.10(b), 3.5 or




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5.4 with respect to such Lender, it will, if requested by the Borrowers, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate another lending
office for any Loans affected by such event, provided that such designation is made on such
terms that such Lender and its lending office suffer no economic, legal or regulatory disadvantage,
with the object of avoiding the consequence of the event giving rise to the operation of any such
Section. Nothing in this Section 2.12 shall affect or postpone any of the obligations of the
Borrowers or the right of any Lender provided in Section 2.10, 3.5 or 5.4.




          2.13. Notice of Certain Costs. Notwithstanding anything in this Agreement to the contrary, to the extent any notice
required by Section 2.10, 2.11, 3.5 or 5.4 is given by any Lender more than 180 days after such
Lender has knowledge (or should have had knowledge) of the occurrence of the event giving rise to
the additional cost, reduction in amounts, loss, tax or other additional amounts described in such
Sections, such Lender shall not be entitled to compensation under Section 2.10, 2.11, 3.5 or 5.4,
as the case may be, for any such amounts incurred or accruing prior to the 180th day prior to the
giving of such notice to RailAmerica.




          2.14. Defaulting Lenders.




          (a) Reallocation of Defaulting Lender Commitment, Etc. If a Lender becomes, and
during the period it remains, a Defaulting Lender, the following provisions shall apply with
respect to any outstanding Letter of Credit Exposure and any outstanding Swingline Exposure of such
Defaulting Lender:





     (i) the Letter of Credit Exposure and the Swingline Exposure of such Defaulting Lender
will, subject to the limitation in the first proviso below, automatically be reallocated
(effective on the day such Lender becomes a Defaulting Lender) among the Non-Defaulting
Lenders pro rata in accordance with their respective Commitments;
provided that (a) the sum of each Non-Defaulting Lender’s total Credit Exposure may
not in any event exceed the Commitment of such Non-Defaulting Lender as in effect at the
time of such reallocation, (b) neither such reallocation nor any payment by a Non-Defaulting
Lender pursuant thereto will constitute a waiver or release of any claim the Borrowers, the
Administrative Agent, the Letter of Credit Issuer, the Swingline Lender or any other Lender
may have against such Defaulting Lender or cause such Defaulting Lender to be a
Non-Defaulting Lender;




     (ii) to the extent that any portion (the “unreallocated portion”) of the
Defaulting Lender’s Letter of Credit Exposure and Swingline Exposure cannot be so
reallocated, whether by reason of the first proviso in clause (i) above or otherwise, the
Borrowers will, not later than two Business Days after demand by the Administrative Agent
(at the direction of the Letter of Credit Issuer and/or the Swingline Lender, as the case
may be), (1) Cash Collateralize the obligations of the Borrowers to the Letter of Credit
Issuer and the Swingline Lender in respect of such Letter of Credit Exposure or Swingline
Expo-sure, as the case may be, in an amount at least equal to the aggregate amount of the
unreallocated portion of such Letter of Credit Exposure or Swingline Exposure, or (2) in the
case of such Swingline Exposure, prepay (subject to clause (iii) below) and/or Cash
Collateralize in full the unreallocated portion thereof, or (3) make other arrangements




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satisfactory to the Administrative Agent, and to the Letter of Credit Issuer and the
Swingline Lender, as the case may be, in their sole discretion to protect them against the
risk of non-payment by such Defaulting Lender; and




     (iii) any amount paid by the Borrowers for the account of a Defaulting Lender that was
or is a Lender under this Agreement (whether on account of principal, interest, fees,
indemnity payments or other amounts) will not be paid or distributed to such Defaulting
Lender, but will instead be retained by the Administrative Agent in a segregated
non-interest bearing account until (subject to Section 2.14(f)) the termination of the
Commitments and payment in full of all obligations of the Borrowers hereunder and will be
applied by the Administrative Agent, to the fullest extent permitted by law, to the making
of payments from time to time in the following order of priority: first to the
payment of any amounts owing by such Defaulting Lender to the Administrative Agent under
this Agreement, second to the payment of any amounts owing by such Defaulting Lender
to the Letter of Credit Issuer or the Swingline Lender (pro rata as to the
respective amounts owing to each of them) under this Agreement, third to the payment
of post-default interest and then current interest due and payable to the Lenders hereunder
other than Defaulting Lenders that are Lenders, ratably among them in accordance with the
amounts of such interest then due and payable to them, fourth to the payment of fees
then due and payable to the Non-Defaulting Lenders that are Lenders hereunder, ratably among
them in accordance with the amounts of such fees then due and payable to them, fifth
to pay principal and unreimbursed payments made by the Letter of Credit Issuer pursuant to a
Letter of Credit then due and payable to the Non-Defaulting Lenders that are Lenders
hereunder ratably in accordance with the amounts thereof then due and payable to them,
sixth to the ratable payment of other amounts then due and payable to the
Non-Defaulting Lenders that are Lenders, and seventh after the termination of the
Commitments and payment in full of all obligations of the Borrowers hereunder, to pay
amounts owing under this Agreement to such Defaulting Lender or as a court of competent
jurisdiction may otherwise direct.



          (b) Cash Collateral Call. If any Lender becomes, and during the period it remains, a
Defaulting Lender or a Potential Defaulting Lender, if any Letter of Credit, or Swingline Loan is
at the time outstanding, the Letter of Credit Issuer and the Swingline Lender, as the case may be,
may (except, in the case of a Defaulting Lender, to the extent the Commitments have been fully
reallocated pursuant to Section 2.14(a)), by notice to RailAmerica and such Defaulting Lender or
Potential Defaulting Lender through the Administrative Agent, require the Borrowers to Cash
Collateralize the obligations of the Borrowers to the Letter of Credit Issuer and the Swingline
Lender in respect of such Letter of Credit or Swingline Loan in amount at least equal to the
aggregate amount of the unreallocated obligations (contingent or otherwise) of such Defaulting
Lender or such Potential Defaulting Lender in respect thereof, or to make other arrangements
satisfactory to the Administrative Agent, and to the Letter of Credit Issuer and the Swingline
Lender, in their sole discretion to protect them against the risk of non-payment by such Defaulting
Lender or Potential Defaulting Lender.




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          (c) Right to Give Drawdown Notices. In furtherance of the foregoing, if any Lender
becomes, and during the period it remains, a Defaulting Lender or a Potential Defaulting Lender,
each of the Letter of Credit Issuer and the Swingline Lender is hereby authorized by the Borrowers
(which authorization is irrevocable and coupled with an interest) to give, in its discretion,
through the Administrative Agent, Notice of Borrowing pursuant to Section 2.3 in such amounts and
in such times as may be required to (i) reimburse an outstanding L/C Participation, (ii) repay an
outstanding Swingline Loan, and/or (iii) Cash Collateralize the obligations of the Borrowers in
respect of outstanding Letters of Credit or Swingline Loans in an amount at least equal to the
aggregate amount of the obligations (contingent or otherwise) of such Defaulting Lender or
Potential Defaulting Lender in respect of such Letter of Credit or Swingline Loan.




          (d) Fees. Anything herein to the contrary notwithstanding, during such period as a
Lender is a Defaulting Lender, such Defaulting Lender will not be entitled to any fees accruing
during such period pursuant to Section 4.1 (without prejudice to the rights of the Lenders other
than Defaulting Lenders in respect of such fees), provided that in the case of a Defaulting
Lender that was or is a Lender (x) to the extent that a portion of the Letter of Credit Exposure or
the Swingline Exposure of such Defaulting Lender is reallocated to the Non-Defaulting Lenders
pursuant to Section 2.14(a), such fees that would have accrued for the benefit of such Defaulting
Lender will instead accrue for the benefit of and be payable to such Non-Defaulting Lenders,
pro rata in accordance with their respective Commitments, and (y) to the extent any
portion of such Letter of Credit Exposure or Swingline Exposure cannot be so reallocated, such fees
will instead accrue for the benefit of and be payable to the Letter of Credit Issuer and the
Swingline Lender, as applicable, as their interests appear (and the pro rata
payment provisions of Section 5.3 will automatically be deemed adjusted to reflect the provisions
of this Section).




          (e) Termination of Defaulting Lender Commitment. The Borrowers may terminate the
unused amount of the Commitment of a Defaulting Lender upon not less than three Business Days’
prior notice to the Administrative Agent (which will promptly notify the Lenders thereof), and in
such event the provisions of Section 2.14(a)(iii) will apply to all amounts thereafter paid by the
Borrowers for the account of such Defaulting Lender that is a Lender under this Agreement (in each
case whether on account of principal, interest, fees, indemnity or other amounts), provided
that such termination will not be deemed to be a waiver or release of any claim the Borrowers, the
Administrative Agent, the Letter of Credit Issuer, the Swingline Lender or any Lender may have
against such Defaulting Lender.




          (f) Cure. If the Borrowers, the Administrative Agent, the Letter of Credit Issuer and
the Swingline Lender agree in writing in their discretion that a Lender that is a Defaulting Lender
or a Potential Defaulting Lender should no longer be deemed to be a Defaulting Lender or Potential
Defaulting Lender, as the case may be, the Administrative Agent will so notify the parties hereto,
whereupon as of the effective date specified in such notice and subject to any conditions set forth
therein (which may include arrangements with respect to any amounts then held in the segregated
account referred to in Section 2.14(a)), such Lender will, to the extent applicable, purchase such
portion of outstanding Loans of the other Lenders and/or make such other adjustments as the
Administrative Agent may determine to be necessary to cause the Credit Exposure, Letter of Credit
Exposure and Swingline Exposure of the Lenders to be on a pro rata




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basis in accordance with their respective Commitments, whereupon such Lender will cease to be
a Defaulting Lender or Potential Defaulting Lender and will be a Non-Defaulting Lender (and such
Exposure of each Lender will automatically be adjusted on a prospective basis to reflect the
foregoing); provided that no adjustments will be made retroactively with respect to fees
accrued or payments made by or on behalf of the Borrowers while such Lender was a Defaulting
Lender; and provided further, that except to the extent otherwise expressly agreed
by the affected parties, no change hereunder from Defaulting Lender or Potential Defaulting Lender
to Non-Defaulting Lender will constitute a waiver or release of any claim of any party hereunder
arising from such Lender’s having been a Defaulting Lender or Potential Defaulting Lender.




          2.15. Incremental Facilities. The Borrowers may by written notice to the Administrative Agent elect to request, prior
to the Maturity Date, an increase to the existing Commitments (any such increase, the “New
Commitments”) by an amount not in excess of $20.0 million in the aggregate and not less than
$5.0 million individually (or such lesser amount which shall be approved by Administrative Agent),
and integral multiples of $1.0 million in excess of that amount. Each such notice shall specify
(A) the date (each, an “Increased Amount Date”) on which the Borrowers propose that the New
Commitments shall be effective, which shall be a date not less than 10 Business Days after the date
on which such notice is delivered to the Administrative Agent and (B) the identity of each Lender
or other Person that is an eligible assignee pursuant to Section 13.6(b) (each, a “New
Lender”) to whom the Borrowers propose any portion of such New Commitments be allocated and the
amounts of such allocations; provided that the Borrowers shall first approach the Lenders
to provide all of the New Commitments in accordance with their Applicable Percentages (excluding
for this purpose the Commitment of any Lender that declines to provide any portion of the New
Commitments) prior to approaching any other Person that is an eligible assignee pursuant to Section
13.6(b) (and no such Person shall be offered to provide the New Commitments on terms (including
with respect to upfront fees and other economic terms) that are more favorable to such Person than
the terms offered to the existing Lenders) and no Lender shall provide a New Commitment unless the
Administrative Agent, the Swingline Lender and the Letter of Credit Issuer shall have consented
thereto; provided further that any Lender approached to provide all or a portion of
the New Commitments may elect or decline, in its sole discretion, to provide a New Commitment.
Such New Commitments shall become effective, as of such Increased Amount Date; provided
that (1) no Default or Event of Default shall exist on such Increased Amount Date before or after
giving effect to such New Commitments; (2) the New Commitments shall be effected pursuant to one or
more Joinder Agreements executed and delivered by the Borrowers, the Lender providing the New
Commitment and Administrative Agent, and each of which shall be recorded in the Register and shall
be subject to the requirements set forth in Section 5.4(c); (3) the Borrowers shall make any
payments required pursuant to Section 2.11 in connection with the New Commitments; (4) the
Borrowers shall deliver or cause to be delivered any legal opinions or other documents reasonably
requested by Administrative Agent in connection with any such transaction and (5) after giving
effect to the New Commitments, Availability is not less than zero.




          On any Increased Amount Date, subject to the satisfaction of the foregoing terms and
conditions, (a) each of the Lenders with Commitments shall assign to each of the New Lenders, and
each of the New Lenders shall purchase from each of the Lenders with Commitments, at



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the principal amount thereof (together with accrued interest), such interests in the Revolving
Credit Loans outstanding on such Increased Amount Date as shall be necessary in order that, after
giving effect to all such assignments and purchases, such Revolving Credit Loans will be held by
existing Lenders with Revolving Credit Loans and New Lenders ratably in accordance with their
respective Commitments after giving effect to the addition of such New Commitments to the
Commitments, (b) each New Commitment shall be deemed for all purposes a Commitment and each Loan
made thereunder shall be deemed, for all purposes, a Revolving Credit Loan and (c) each New Lender
shall become a Lender with respect to the New Commitment and all matters relating thereto.




          The Administrative Agent shall notify the Collateral Agent and the Lenders promptly upon
receipt of the Borrowers’ notice of each Increased Amount Date and in respect thereof (y) the New
Commitments and the New Lenders and (z) the respective interests in such Lender’s Revolving Credit
Loans, in each case subject to the assignments contemplated by this Section.




          2.16. Reserves. Notwithstanding anything to the contrary, the Administrative Agent may at any time and from
time to time in the exercise of its Permitted Discretion establish and increase or decrease
Reserves; provided that the Administrative Agent shall have provided the Borrowers at least
2 Business Days’ prior written notice of any such establishment or increase.




          SECTION 3. Letters of Credit




          3.1. Letters of Credit.




          (a) Subject to and upon the terms and conditions herein set forth, at any time and from time
to time after the Closing Date and thirty calendar days prior to the Maturity Date, (i) the
Borrowers may request that the Letter of Credit Issuer issue for the account of the Borrowers a
Letter of Credit or Letters of Credit in Dollars in such form as may be approved by the Letter of
Credit Issuer in its reasonable discretion.




          (b) Notwithstanding the foregoing, (i) no Letter of Credit shall be issued the Stated Amount
of which, when added to the Letters of Credit Outstanding at such time, would exceed the Letter of
Credit Commitment then in effect; (ii) no Letter of Credit shall be issued, amended (to increase
the Stated Amount thereof), extended or renewed if, after giving effect to such issuance,
amendment, extension or renewal, the Total Credit Exposure would exceed the lesser of (x) the Total
Commitment then in effect and (y) the Borrowing Base then in effect; (iii) each Letter of Credit
shall have an expiration date occurring no later than one year after the date of issuance thereof,
unless otherwise agreed upon by the Administrative Agent and the Letter of Credit Issuer,
provided that in no event shall such expiration date occur later than the L/C Maturity
Date; (iv) no Letter of Credit shall be issued if it would be illegal under any applicable law for
the beneficiary of the Letter of Credit to have a Letter of Credit issued in its favor; and (v) no
Letter of Credit shall be issued by a Letter of Credit Issuer after it has received a written
notice from the Borrowers or any Lender stating that a Default or Event of Default has occurred and
is continuing until such time as the Letter of Credit Issuer shall have received a




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written notice
of (x) rescission of such notice from the party or parties originally delivering such notice or
(y) the waiver of such Default or Event of Default in accordance with the provisions of Section
13.1.




          (c) Upon at least one Business Day’s prior written notice (or telephonic notice promptly
confirmed in writing) to the Administrative Agent and the Letter of Credit Issuer (which notice the
Administrative Agent shall promptly transmit to each of the applicable Lenders), the Borrowers
shall have the right, on any day, permanently to terminate or reduce the Letter of Credit
Commitment in whole or in part, provided that, after giving effect to such termination or
reduction, the Letters of Credit Outstanding shall not exceed the Letter of Credit Commitment.




          3.2. Letter of Credit Requests.




          (a) Whenever the Borrowers desire that a Letter of Credit be issued for their account, they
shall give the Administrative Agent and the Letter of Credit Issuer at least five (or such lesser
number as may be agreed upon by the Administrative Agent and the Letter of Credit Issuer) Business
Days’ written notice thereof. Each notice shall be executed by the Borrowers and shall be in the
form of Exhibit G (each a “Letter of Credit Request”). The Administrative Agent
shall promptly transmit copies of each Letter of Credit Request to each Lender.




          (b) The making of each Letter of Credit Request shall be deemed to be a representation and
warranty by the Borrowers that the Letter of Credit may be issued in accordance with, and will not
violate the requirements of, Section 3.1(b).




          3.3. Letter of Credit Participations.




          (a) Immediately upon the issuance by the Letter of Credit Issuer of any Letter of Credit, the
Letter of Credit Issuer shall be deemed to have sold and transferred to each other Lender that has
a Commitment (each such other Lender, in its capacity under this Section 3.3, an “L/C
Participant”), and each such L/C Participant shall be deemed irrevocably and unconditionally to
have purchased and received from the Letter of Credit Issuer, without recourse or warranty, an
undivided interest and participation (each an “L/C Participation”), to the extent of such
L/C Participant’s Applicable Percentage of such Letter of Credit, each substitute letter of credit,
each drawing made thereunder and the obligations of the Borrowers under this Agreement with respect
thereto, and any security therefor or guaranty pertaining thereto (although Letter of Credit Fees
will be paid directly to the Administrative Agent for the ratable account of the L/C Participants
as provided in Section 4.1(b) and the L/C Participants shall have no right to receive any portion
of any Fronting Fees).




          (b) In determining whether to pay under any Letter of Credit, the Letter of Credit Issuer
shall have no obligation relative to the L/C Participants other than to confirm that any documents
required to be delivered under such Letter of Credit have been delivered and that they appear to
comply on their face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by the Letter of Credit Issuer under or in connection with any Letter




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of Credit issued
by it, if taken or omitted in the absence of gross negligence or willful misconduct, shall not
create for the Letter of Credit Issuer any resulting liability.




          (c) In the event that the Letter of Credit Issuer makes any payment under any Letter of Credit
issued by it and the Borrowers shall not have repaid such amount in full to the respective Letter
of Credit Issuer pursuant to Section 3.4(a), the Letter of Credit Issuer shall promptly notify the
Administrative Agent and each L/C Participant of such failure, and each L/C Participant shall
promptly and unconditionally pay to the Administrative Agent, for the account of the Letter of
Credit Issuer, the amount of such L/C Participant’s Applicable Percentage of such unreimbursed
payment in Dollars and in immediately available funds; provided, however, that no
L/C Participant shall be obligated to pay to the Administrative Agent for the account of the Letter
of Credit Issuer its Applicable Percentage of such unreimbursed amount arising from any wrongful
payment made by the Letter of Credit Issuer under a Letter of Credit as a result of acts or
omissions constituting willful misconduct or gross negligence on the part of the Letter of Credit
Issuer. If the Letter of Credit Issuer so notifies, prior to 11:00 a.m. (New York time) on any
Business Day, any L/C Participant required to fund a payment under a Letter of Credit, such L/C
Participant shall make available to the Administrative Agent for the account of the Letter of
Credit Issuer such L/C Participant’s Applicable Percentage of the amount of such payment on such
Business Day in immediately available funds. If and to the extent such L/C Participant shall not
have so made its Applicable Percentage of the amount of such payment available to the
Administrative Agent, for the account of the Letter of Credit Issuer, such L/C Participant agrees
to pay to the Administrative Agent, for the account of the Letter of Credit Issuer, forthwith on
demand, such amount, together with interest thereon for each day from such date until the date such
amount is paid to the Administrative Agent, for the account of the Letter of Credit Issuer at a
rate equal to the greater of (x) the Federal Funds Effective Rate and (y) a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank compensation. The
failure of any L/C Participant to make available to the Administrative Agent, for the account of
the Letter of Credit Issuer, its Applicable Percentage of any payment under any Letter of Credit
shall not relieve any other L/C Participant of its obligation hereunder to make available to the
Administrative Agent, for the account of the Letter of Credit Issuer its Applicable Percentage of
any payment under such Letter of Credit on the date required, as specified above, but, except as
provided Section 2.14, no L/C Participant shall be responsible for the failure of any other L/C
Participant to make available to the Administrative Agent such other L/C Participant’s Applicable
Percentage of any such payment.




          (d) Whenever the Letter of Credit Issuer receives a payment in respect of an unpaid
reimbursement obligation as to which the Administrative Agent has received for the account of the
Letter of Credit Issuer any payments from the L/C Participants pursuant to paragraph (c) above, the
Letter of Credit Issuer shall pay to the Administrative Agent and the Administrative Agent shall
promptly pay to each L/C Participant that has paid its Applicable Percentage of such reimbursement
obligation, in Dollars and in immediately available funds, an amount equal to such L/C
Participant’s share (based upon the proportionate aggregate amount originally funded by such L/C
Participant to the aggregate amount funded by all L/C Participants) of the principal amount of such
reimbursement obligation and interest thereon accruing after the purchase of the respective L/C
Participations.





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          (e) The obligations of the L/C Participants to make payments to the Administrative Agent for
the account of the Letter of Credit Issuer with respect to Letters of Credit shall
be irrevocable and not subject to counterclaim, set-off or other defense or any other
qualification or exception whatsoever and shall be made in accordance with the terms and conditions
of this Agreement under all circumstances, including under any of the following circumstances:





     (i) any lack of validity or enforceability of this Agreement or any of the other Credit
Documents;




     (ii) the existence of any claim, set-off, defense or other right that the Borrowers may
have at any time against a beneficiary named in a Letter of Credit, any transferee of any
Letter of Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, the Letter of Credit Issuer, any Lender or other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying transaction between the Borrowers
and the beneficiary named in any such Letter of Credit);




     (iii) any draft, certificate or any other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;




     (iv) the surrender or impairment of any security for the performance or observance of
any of the terms of any of the Credit Documents; or




     (v) the occurrence of any Default or Event of Default;


provided, however, that no L/C Participant shall be obligated to pay to the
Administrative Agent for the account of the Letter of Credit Issuer its Applicable Percentage of
any unreimbursed amount arising from any wrongful payment made by the Letter of Credit Issuer under
a Letter of Credit as a result of acts or omissions constituting willful misconduct or gross
negligence on the part of the Letter of Credit Issuer.




          3.4. Agreement to Repay Letter of Credit Drawings.




          (a) The Borrowers, jointly and severally, hereby agree to reimburse the Letter of Credit
Issuer, by making payment in Dollars to the Administrative Agent in immediately available funds for
any payment or disbursement made by the Letter of Credit Issuer under any Letter of Credit (each
such amount so paid until reimbursed, an “Unpaid Drawing”) immediately after, and in any
event on the date of, such payment, with interest on the amount so paid or disbursed by the Letter
of Credit Issuer, to the extent not reimbursed prior to 5:00 p.m. (New York time) on the date of
such payment or disbursement, from and including the date paid or disbursed to but excluding the
date the Letter of Credit Issuer is reimbursed therefor at a rate per annum that shall at all times
be the ABR Margin plus the ABR as in effect from time to time, provided that,
notwithstanding anything contained in this Agreement to the contrary, (i) unless the Borrowers
shall have notified the Administrative Agent and the Letter of Credit Issuer prior to 10:00 a.m.
(New York time) on the date of such drawing that the Borrowers intend to reimburse





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the Letter of
Credit Issuer for the amount of such drawing with funds other than the proceeds of Loans, the
Borrowers shall be deemed to have given a Notice of Borrowing requesting that the
Lenders with Commitments make Revolving Credit Loans (which shall be ABR Loans) on the date on
which such drawing is honored in an amount equal to the amount of such drawing and (ii) the
Administrative Agent shall promptly notify each relevant L/C Participant of such drawing and the
amount of its Revolving Credit Loan to be made in respect thereof, and, subject to the conditions
set forth in Section 2.1(a), each L/C Participant shall be irrevocably obligated to make a
Revolving Credit Loan to the Borrowers in the manner deemed to have been requested in the amount of
its Applicable Percentage of the applicable Unpaid Drawing by 12:00 noon (New York time) on such
Business Day by making the amount of such Revolving Credit Loan available to the Administrative
Agent. Such Revolving Credit Loans shall be made without regard to the minimum Borrowing amount
for ABR Loans set forth in Section 2.2. The Administrative Agent shall use the proceeds of such
Revolving Credit Loans solely for purpose of reimbursing the Letter of Credit Issuer for the
related Unpaid Drawing.




          (b) The obligations of the Borrowers under this Section 3.4 to reimburse the Letter of Credit
Issuer with respect to Unpaid Drawings (including, in each case, interest thereon) shall be
absolute and unconditional under any and all circumstances and irrespective of any set-off,
counterclaim or defense to payment that the Borrowers or any other Person may have or have had
against the Letter of Credit Issuer, the Administrative Agent or any Lender (including in its
capacity as a L/C Participant), including any defense based upon the failure of any drawing under a
Letter of Credit (each a “Drawing”) to conform to the terms of the Letter of Credit or any
non-application or misapplication by the beneficiary of the proceeds of such Drawing,
provided that the Borrowers shall not be obligated to reimburse the Letter of Credit Issuer
for any wrongful payment made by the Letter of Credit Issuer under the Letter of Credit issued by
it as a result of acts or omissions constituting willful misconduct or gross negligence on the part
of the Letter of Credit Issuer (as determined in a final non-appealable judgment by a court of
competent jurisdiction).




          3.5. Increased Costs. If after the date hereof, the adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or administration
thereof, or actual compliance by the Letter of Credit Issuer or any L/C Participant with any
request or directive made or adopted after the date hereof (whether or not having the force of
law), by any such authority, central bank or comparable agency shall either (a) impose, modify or
make applicable any reserve, deposit, capital adequacy or similar requirement against letters of
credit issued by the Letter of Credit Issuer, or any L/C Participant’s L/C Participation therein,
or (b) impose on the Letter of Credit Issuer or any L/C Participant any other conditions affecting
its obligations under this Agreement in respect of Letters of Credit or L/C Participations therein
or any Letter of Credit or such L/C Participant’s L/C Participation therein, and the result of any
of the foregoing is to increase the cost to the Letter of Credit Issuer or such L/C Participant of
issuing, maintaining or participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by the Letter of Credit Issuer or such L/C Participant hereunder in respect
of Letters of Credit or L/C Participations therein, then, promptly after receipt of written demand
to the Borrowers by the Letter of Credit Issuer or such L/C




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Participant, as the case may be (a copy
of which notice shall be sent by the Letter of Credit Issuer or such
L/C Participant to the
Administrative Agent), the Borrowers, jointly and severally, shall pay
to the Letter of Credit Issuer or such L/C Participant such additional amount or amounts as
will compensate the Letter of Credit Issuer or such L/C Participant for such increased cost or
reduction, it being understood and agreed, however, that the Letter of Credit Issuer or a L/C
Participant shall not be entitled to such compensation as a result of such Person’s compliance
with, or pursuant to any request or directive to comply with, any such law, rule or regulation as
in effect on the date hereof. A certificate submitted to the Borrowers by the relevant Letter of
Credit Issuer or a L/C Participant, as the case may be, (a copy of which certificate shall be sent
by the Letter of Credit Issuer or such L/C Participant to the Administrative Agent), setting forth
in reasonable detail the basis for the determination of such additional amount or amounts necessary
to compensate the Letter of Credit Issuer or such L/C Participant as aforesaid shall be conclusive
and binding on the Borrowers absent clearly demonstrable error. Notwithstanding anything to the
contrary contained herein, (I) in the case of any increased costs attributable to Taxes, this
Section 3.5 shall apply to only to the extent such increased costs resulted from a change in
Requirement of Law after the date such Lender becomes a party hereto, except to the extent such
Lender’s assignor, if any, was entitled to compensation for such increased costs immediately prior
to such assignment and (ii) this Section 3.5 shall not apply to any increased costs attributable to
(W) any Taxes that are grossed-up or indemnified pursuant to Section 5.4, (X) any Taxes that are
described in clause (ii) of the definition of the Excluded Taxes, (Y) any Other Connection Taxes
that are imposed on or measured by net income or profits (or franchise or similar taxes imposed in
lieu thereof) and (Z) any Other Connection Assignment Taxes as defined in Section 5.4(b).




          3.6. Successor Letter of Credit Issuer. A Letter of Credit Issuer may resign as Letter of Credit Issuer upon 60 days’ prior written
notice to the Administrative Agent, the Lenders and RailAmerica. If the Letter of Credit Issuer
shall resign as Letter of Credit Issuer under this Agreement, then the Borrowers shall appoint from
among the Lenders (with the consent of such Lender) with Commitments a successor issuer of Letters
of Credit, whereupon such successor issuer shall succeed to the rights, powers and duties of the
Letter of Credit Issuer, and the term “Letter of Credit Issuer” shall mean such successor
issuer effective upon such appointment (except with respect to Letters of Credit issued by the
resigning Letter of Credit Issuer). After the resignation of the Letter of Credit Issuer
hereunder, the resigning Letter of Credit Issuer shall remain a party hereto and shall continue to
have all the rights and obligations of a Letter of Credit Issuer under this Agreement and the other
Credit Documents with respect to Letters of Credit issued by it prior to such resignation, but
shall not be required to issue additional Letters of Credit. After any retiring Letter of Credit
Issuer’s resignation as Letter of Credit Issuer, the provisions of this Agreement relating to the
Letter of Credit Issuer shall inure to its benefit as to any actions taken or omitted to be taken
by it (a) while it was Letter of Credit Issuer under this Agreement or (b) at any time with respect
to Letters of Credit issued by such Letter of Credit Issuer.




          3.7. Cash Collateralization. If any Event of Default shall occur and be continuing, on the Business Day that RailAmerica
receives notice from the Administrative Agent or the Required Lenders demanding the deposit of cash
collateral pursuant to this paragraph, the





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Borrowers shall deposit on terms and in accounts
satisfactory to the Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to
one hundred five percent (105%) of the Letters of Credit Outstanding as of such date plus any
accrued and unpaid interest thereon; provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to the Borrowers described in Section 11.5. Funds so deposited shall be applied by
the Administrative Agent to reimburse the Letter of Credit Issuer for Unpaid Drawings for which it
has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of
outstanding Unpaid Drawings or, if the maturity of the Loans has been accelerated, be applied to
satisfy other Obligations of the Borrowers under this Agreement. If the Borrowers are required to
provide an amount of cash collateral under this Section 3.7 as a result of the occurrence of an
Event of Default, such amount plus any accrued interest or realized profits with respect to
such amounts (to the extent not applied as aforesaid) shall be returned to the Borrowers within
three Business Days after all Events of Default have been cured or waived.




          SECTION 4. Fees; Commitments




          4.1. Fees.




          (a) The Borrowers, jointly and severally, agree to pay to the Administrative Agent in Dollars,
for the account of each Lender having a Commitment (in each case pro rata according
to the respective Applicable Percentages of all such Lenders), a commitment fee for each day from
and including the Closing Date to but excluding the Maturity Date. Such commitment fee shall be
payable in arrears (i) on the first day of each January, April, July and October (for the
three-month period (or portion thereof) ended on the preceding day for which no payment has been
received) and (ii) on the Final Date (for the period ended on such date for which no payment has
been received pursuant to clause (i) above), and shall be computed for each day during such period
at a rate per annum equal to the Commitment Fee Rate in effect on such day on the Available
Commitments in effect on such day.




          (b) The Borrowers, jointly and severally, agree to pay to the Administrative Agent in Dollars
for the account of the Lenders pro rata on the basis of their respective Applicable
Percentages, a fee in respect of each Letter of Credit (the “Letter of Credit Fee”), for
the period from and including the date of issuance of such Letter of Credit to but excluding the
termination date of such Letter of Credit computed at the per annum rate for each day equal to the
Eurodollar Margin for Revolving Credit Loans on the average daily Stated Amount of such Letter of
Credit. Such Letter of Credit Fees shall be due and payable quarterly in arrears on the first day
of each April, July, October and January and on the date upon which the Total Commitment terminates
and the Letters of Credit Outstanding shall have been reduced to zero.




          (c) The Borrowers, jointly and severally, agree to pay to the Administrative Agent in Dollars
for the account of the Letter of Credit Issuer a fee in respect of each Letter of Credit issued by
it (the “Fronting Fee”), for the period from and including the date of issuance of such
Letter of Credit to but excluding the termination date of such Letter of Credit, computed at the
rate for each day equal to 0.25% per annum on the average daily Stated Amount of such





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Letter of
Credit. Such Fronting Fees shall be due and payable quarterly in arrears on the first day of
each April, July, October and January and on the date upon which the Total Commitment
terminates and the Letters of Credit Outstanding shall have been reduced to zero.




          (d) The Borrowers, jointly and severally, agree to pay directly to the Letter of Credit Issuer
in Dollars upon each issuance of, drawing under, and/or amendment of, a Letter of Credit issued by
it such Letter of Credit Issuer’s customary fees for issuances of, drawings under or amendments of,
Letters of Credit issued by it.




          (e) The Borrowers, jointly and severally, agree to pay the fees to the Administrative Agent as
set forth in the Administrative Agent Fee Letter.




          4.2. Voluntary Reduction of Commitments. Upon at least three Business Days’ prior written notice (or telephonic notice promptly
confirmed in writing) to the Administrative Agent at the Administrative Agent’s Office (which
notice the Administrative Agent shall promptly transmit to each of the Lenders), the Borrowers
shall have the right, without premium or penalty, on any day, permanently to terminate or reduce
the Commitments in whole or in part, provided that (a) any such reduction shall apply
proportionately and permanently to reduce the Commitment of each of the Lenders in accordance with
their Applicable Percentages, (b) any partial reduction pursuant to this Section 4.2 shall be in
the amount of at least $1,000,000 and (c) after giving effect to such termination or reduction and
to any prepayments of the Loans made on the date thereof in accordance with this Agreement, (i) the
Total Credit Exposure shall not exceed the lesser of (x) the Total Commitment and (y) the Borrowing
Base.




          4.3. Mandatory Termination of Commitments.




          (a) The Total Commitment shall terminate at 5:00 p.m. (New York time) on the Maturity Date.




          (b) The Swingline Commitment shall terminate at 5:00 p.m. (New York time) on the Swingline
Maturity Date.




          SECTION 5. Payments




          5.1. Voluntary Prepayments. The Borrowers shall have the right to prepay Revolving Credit Loans and Swingline Loans in
whole or in part from time to time on the following terms and conditions: (a) the Borrowers shall
give the Administrative Agent at the Administrative Agent’s Office written notice (or telephonic
notice promptly confirmed in writing) of their intent to make such prepayment, the amount of such
prepayment and (in the case of Eurodollar Loans) the specific Borrowing(s) pursuant to which made,
which notice shall be given by the Borrowers no later than (i) in the case of Revolving Credit
Loans, 10:00 a.m. (New York time) one Business Day prior to, or (ii) in the case of Swingline Loans
or Protective Advances, 10:00 a.m. (New York time) on, the date of such prepayment and, in the case
of a prepayment of Revolving Credit Loans or Swingline Loans shall promptly be transmitted by the
Administrative Agent to each of the Lenders or the Swingline Lender, as the case may be; (b) each
partial prepayment of any Borrowing of Revolving Credit Loans shall be in a multiple of $500,000
and in





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an aggregate principal amount of at least $1,000,000 and each partial prepayment of Swingline Loans or Protective Advances shall be in a multiple of $500,000 and in an
aggregate principal amount of at least $500,000, provided that no partial prepayment of
Eurodollar Loans made pursuant to a single Borrowing shall reduce the outstanding Eurodollar Loans
made pursuant to such Borrowing to an amount less than $1,000,000; and (c) any prepayment of
Eurodollar Loans pursuant to this Section 5.1 on any day other than the last day of an Interest
Period applicable thereto shall be subject to compliance by the Borrowers with the applicable
provisions of Section 2.11. Notwithstanding the foregoing, the Borrowers shall not be permitted to
prepay any Revolving Credit Loans or Swingline Loans under this Agreement, in whole or in part, if
at such time, any Protective Advances are outstanding.




          5.2. Mandatory Prepayments.




          (a) Mandatory Prepayments of Loans. If on any date the Total Credit Exposure exceeds the
lesser of (x) the Total Commitment and (y) the Borrowing Base, the Borrowers shall forthwith repay
on such date the principal amount of Protective Advances and, after all Protective Advances have
been paid in full, Swingline Loans and, after all Swingline Loans have been paid in full, Revolving
Credit Loans in an amount equal to such excess. If, after giving effect to the prepayment of all
outstanding Protective Advances, Swingline Loans and Revolving Credit Loans, the Total Credit
Exposure exceeds the lesser of (x) the Total Commitment and (y) the Borrowing Base, the Borrowers,
jointly and severally, shall pay to the Administrative Agent an amount in cash equal to such excess
and the Administrative Agent shall hold such payment for the benefit of the Lenders as security for
the Obligations of the Borrowers hereunder (including one hundred five percent (105%) of
Obligations in respect of Letters of Credit Outstanding) pursuant to a cash collateral agreement to
be entered into in form and substance reasonably satisfactory to the Administrative Agent.
Additionally, if on any date the Total Credit Exposure exceeds the Total Commitment for any reason,
the Borrowers shall forthwith reduce the Total Credit Exposure in the manner provided above.




          (b) Application to Revolving Credit Loans. With respect to each prepayment of
Revolving Credit Loans required by Section 5.2(a), the Borrowers may designate the Types of Loans
that are to be prepaid and the specific Borrowing(s) pursuant to which made, provided that
(x) Eurodollar Loans may be designated for prepayment pursuant to this Section 5.2 only on the last
day of an Interest Period applicable thereto unless all Eurodollar Loans with Interest Periods
ending on such date of required prepayment and all ABR Loans have been paid in full; (y) if any
prepayment by the Borrowers of Eurodollar Loans made pursuant to a single Borrowing shall reduce
the outstanding amount of the Revolving Credit Loans made pursuant to such Borrowing to an amount
less than $1,000,000, such Borrowing shall immediately be converted into ABR Loans; and (z) each
prepayment of any Revolving Credit Loans made pursuant to a Borrowing shall be applied pro
rata among such Revolving Credit Loans of each Lender in accordance with their respective
Applicable Percentages. In the absence of a designation by the Borrowers as described in the
preceding sentence, the Administrative Agent shall, subject to the above, make such designation in
its reasonable discretion with a view, but no obligation, to minimize breakage costs owing under
Section 2.11.




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          (c) Interest Periods. In lieu of making any payment pursuant to this Section 5.2 in
respect of any Eurodollar Loan other than on the last day of the Interest Period therefor so long
as no Event of Default shall have occurred and be continuing, the Borrowers at their option may
deposit with the Administrative Agent an amount equal to the amount of the Eurodollar Loan to be
prepaid and such Eurodollar Loan shall be repaid on the last day of the Interest Period therefor in
the required amount. Such deposit shall be held by the Administrative Agent in a corporate time
deposit account established on terms reasonably satisfactory to the Administrative Agent, earning
interest at the then-customary rate for accounts of such type. Such deposit shall constitute cash
collateral for the Obligations, provided that the Borrowers may at any time direct that
such deposit be applied to make the applicable payment required pursuant to this Section 5.2.




          (d) Cash Dominion Period. On each Business Day during any Cash Dominion Period, the
Administrative Agent shall apply all funds credited to the Concentration Account the previous
Business Day (whether or not immediately available) as follows (except as set forth in Section
5.3(c)): first, to repay the outstanding principal amount of the Swingline Loans and
Protective Advances until such Swingline Loans and Protective Advances have been repaid in full;
second, to repay the outstanding principal balance of the Loans until such Loans shall have
been repaid in full; third, to cash collateralize Letters of Credit Outstanding at one
hundred percent (100%) and then to any other Obligation then due and payable.




          5.3. Payments Generally.




          (a) Except as otherwise specifically provided herein, all payments under this Agreement shall
be made by the Borrowers, without set-off, counterclaim or deduction of any kind, to the
Administrative Agent for the ratable account of the Lenders entitled thereto, the Letter of Credit
Issuer, the Administrative Agent or the Swingline Lender, as the case may be, not later than 12:00
Noon (New York time) on the date when due and shall be made in Dollars in immediately available
funds at the Administrative Agent’s Office, it being understood that written or facsimile notice by
the Borrowers to the Administrative Agent to make a payment from the funds in the Borrowers’
account at the Administrative Agent’s Office shall constitute the making of such payment to the
extent of such funds held in such account. The Administrative Agent will thereafter cause to be
distributed on the same day (if payment was actually received by the Administrative Agent prior to
2:00 p.m. (New York time) on such day) like funds relating to the payment of principal or interest
or Fees ratably to the Lenders entitled thereto.




          (b) Any payments under this Agreement that are made later than 2:00 p.m. (New York time) shall
be deemed to have been made on the next succeeding Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day, the due date thereof shall
be extended to the next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect immediately prior
to such extension.




          (c) (x) Any proceeds of the sale, transfer or other disposition of Collateral outside of the
ordinary course of business received by the Administrative Agent after an Event of Default has
occurred and is continuing or (y) any other proceeds of Collateral received by the



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Administrative Agent after an Event of Default specified in Section 11.5 or a termination of
the Total Commitment or acceleration of the Obligations under this Agreement pursuant to Section 11
has occurred and is continuing shall in the case of either (x) or (y) be applied ratably
first, to pay any fees, indemnities, or expense reimbursements including amounts then due
to the Administrative Agent, the Collateral Agent and the Letter of Credit Issuer from the Credit
Parties (other than in connection with Secured Cash Management Agreements and Secured Hedge
Agreements), second, to pay any fees or expense reimbursements then due to the Lenders from
the Credit Parties (other than in connection with Secured Cash Management Agreements and Secured
Hedge Agreements), third, to pay interest due in respect of the Protective Advances,
fourth, to pay the principal of the Protective Advances, fifth, to pay interest
then due and payable on the Loans (other than the Protective Advances) ratably, sixth, to
prepay principal on the remaining Loans and Unpaid Drawings, ratably, seventh, to pay an
amount to the Administrative Agent equal to one hundred five percent (105%) of the aggregate
undrawn face amount of all outstanding Letters of Credit and the aggregate amount of any unpaid
Unpaid Drawings, to be held as cash collateral for such Obligations, eighth, to the payment
of any amounts owing with respect to Secured Hedge Agreements, ninth, to payment of any
amounts owing with respect to Secured Cash Management Agreements, and tenth, to the payment
of any other Obligation due to the Administrative Agent or any Secured Party.




          (d) At the election of the Administrative Agent, all payments of principal, interest, Unpaid
Drawings, Fees, reimbursable expenses (including, without limitation, all reimbursement for fees
and expenses pursuant to Section 13.5), and other sums payable under the Credit Documents that are
not paid when due in accordance with the Credit Documents (after giving effect to any applicable
grace period(s)), may be paid from the proceeds of Borrowings made hereunder whether made following
a request by the Borrowers pursuant to Section 2.3 or a deemed request as provided in this Section
or may be deducted from any deposit account of the Credit Parties maintained with the
Administrative Agent. The Borrowers hereby irrevocably authorize solely to the extent a payment is
not paid by a Credit Party by the time when required to be paid, (i) the Administrative Agent to
make a Borrowing for the purpose of paying each payment of principal, interest and Fees as it
becomes due hereunder or any other amount due under the Credit Documents and agree that all such
amounts charged shall constitute Loans (including Swingline Loans, but such a Borrowing may only
constitute a Protective Advance if it is to reimburse costs, fees and expenses as described in
Section 13.5) and that all such Borrowings shall be deemed to have been requested pursuant to
Section 2.3 and (ii) the Administrative Agent to charge any deposit account of any Credit Party
maintained with the Administrative Agent for each payment of principal, interest and Fees as it
becomes due hereunder or any other amount due under the Credit Documents; provided that in
either case the Administrative Agent shall promptly notify the Borrowers of any such Borrowing or
charge.




          (e) Unless the Administrative Agent shall have received notice from the Borrowers prior to the
date on which any payment is due to the Administrative Agent for the account of the Lenders or the
Letter of Credit Issuer hereunder that the Borrowers will not make such payment, the Administrative
Agent may assume that the Borrowers have made such payment on such date in accordance herewith and
may, in reliance upon such assumption, distribute to the Lenders or the Letter of Credit Issuer, as
the case may be, the amount due. In such event, if the



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Borrowers have not in fact made such payment, then each of the Lenders or the Letter of Credit
Issuer, as the case may be, severally (and not jointly) agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender or Letter of Credit Issuer with
interest thereon, for each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.




          5.4. Net Payments.




          (a) Unless required by a Requirement of Tax Law (as determined in good faith by the
Administrative Agent or other applicable withholding agent), all payments made by or on behalf of
the Borrowers or any other Credit Party under this Agreement or any other Credit Document shall be
made free and clear of, and without deduction or withholding for or on account of, any Taxes. In
the event that an applicable withholding agent is required to deduct or withhold any Indemnified
Taxes from or in respect of any payment hereunder or under any other Credit Document (as determined
in good faith by the applicable withholding agent), then:





     (i) the applicable withholding agent shall deduct or withhold the full amount required
to be so withheld or deducted;




     (ii) the applicable withholding agent shall timely pay such withheld or deducted
amounts directly to the relevant Governmental Authority in accordance with the applicable
Requirement of Tax Law;




     (iii) if a Credit Party is the applicable withholding agent, such Credit Party will
promptly forward to the Administrative Agent an official receipt or other documentation
satisfactory to the Administrative Agent evidencing such payment to such Governmental
Authority; and




     (iv) the relevant Credit Party will pay to the Administrative Agent for the account of
each affected Lender (which term shall, for the purpose of this Section 5.4, include the
Letter of Credit Issuer and any L/C Participant) such additional amount or amounts as are
necessary to ensure that the net amount actually received by each such Lender will equal the
full amount such Lender would have received had no such withholding or deduction been
required.



          (b) The Borrowers shall timely pay any Other Taxes to the relevant Governmental Authority in
accordance with applicable Requirements of Tax Law, other than any Other Taxes that are Other
Connection Taxes arising as a result of a Lender’s voluntary assignment or transfer of, or
participation in, such Lender’s right’s or obligations hereunder (“Other Connection Assignment
Taxes”).




          (c) The Borrowers shall, jointly and severally, indemnify the Administrative Agent and each
Lender, within 20 days after demand therefor, for the full amount of any Indemnified Taxes
(including any Indemnified Taxes imposed or asserted on or attributable to amounts



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payable under this Section) and Other Taxes paid or payable by the Administrative Agent or
such Lender, as the case may be, and any reasonable expenses arising therefrom or with respect
thereto, whether or not such any Indemnified Taxes or Other Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to the Borrowers by a Lender (with a copy to the Administrative Agent), or
by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent
manifest error.




          (d) (1) Any Lender that is entitled to an exemption from, or reduction of, any applicable
withholding tax with respect to any payments under any Credit Document shall deliver to RailAmerica
and the Administrative Agent, at any time or times reasonably requested by RailAmerica or the
Administrative Agent, such properly completed and executed documentation reasonably requested by
RailAmerica or the Administrative Agent as will permit such payments to be made without, or at a
reduced rate of, withholding. In addition, any Lender, if requested by RailAmerica or the
Administrative Agent, shall deliver such other documentation prescribed by law or reasonably
requested by RailAmerica or the Administrative Agent as will enable RailAmerica or the
Administrative Agent to determine whether or not such Lender is subject to source withholding or
backup withholding or information reporting requirements. Notwithstanding anything to the contrary
in the preceding two sentences, the completion, execution and submission of such documentation
(other than such documentation set forth below in the following subparagraph (2) of this Section
5.4(d)) shall not be required if in the Lender’s judgment such completion, execution or submission
would subject such Lender to any material unreimbursed cost or expense or would materially
prejudice the legal or commercial position of such Lender. Upon the reasonable request of
RailAmerica or the Administrative Agent, any Lender shall update any form or certification
previously delivered pursuant to this Section 5.4(d). If any form or certification previously
delivered pursuant to this Section 5.4(d) expires or becomes obsolete or inaccurate in any respect
with respect to a Lender, such Lender shall promptly (and in any event within 10 days after such
expiration, obsolescence or inaccuracy) notify RailAmerica and the Administrative Agent in writing
of such expiration, obsolescence or inaccuracy and update the form or certification if it is
legally able to do so.




          (2) Without limiting the generality of the foregoing, each Non-U.S. Lender shall, to the
extent it is legally able to do so:





     (i) prior to the date on which a Lender becomes a Lender under this Agreement, deliver
to RailAmerica and the Administrative Agent two copies of either (x) in the case of Non-U.S.
Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c)
of the Code with respect to payments of “portfolio interest,” Internal Revenue Service Form
W-8BEN or any applicable successor form (together with a certificate substantially in the
form of Exhibit M-1, M-2, M-3 or M-4, as applicable,
representing that such Non-U.S. Lender is not a bank for purposes of Section 881(c) of the
Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the
Code) of RailAmerica, is not a controlled foreign corporation related to the Borrowers
(within the meaning of Section 864(d)(4) of the Code) and that no interest payments in
connection with the Credit Documents are effectively connected with such Non-U.S.



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Lender’s conduct of a U.S. trade or business (a “U.S. Tax Certificate”)), (y)
Internal Revenue Service Form W-8BEN or Form W-8ECI or any applicable successor form, in
each case properly completed and duly executed by such Non-U.S. Lender claiming complete
exemption from, or reduced rate of, U.S. federal withholding tax on payments by any Borrower
under any Credit Document or (z) in the case of a Non-U.S. Lender that is not the beneficial
owner (for example, where the Non-U.S. Lender is a partnership or participating Lender
granting a typical participation), Internal Revenue Service Form W-8IMY, accompanied by a
Form W-8ECI, W-8BEN, a U.S. Tax Certificate, Form W-9 and/or other certification documents
from each beneficial owner, as applicable; provided that, if the Non-U.S. Lender is
a partnership (and not a participating Lender) and one or more beneficial owners of such
Non-U.S. Lender are claiming the portfolio interest exemption, such Non-U.S. Lender may
provide a Certificate on behalf of such beneficial owner(s); and




     (ii) deliver to RailAmerica and the Administrative Agent two further copies of any such
form or certification (or any applicable successor form) on or before the date that any such
form or certification expires or becomes obsolete, and after the occurrence of any event
requiring a change in the most recent form previously delivered by it to RailAmerica and the
Administrative Agent.



          (e) Each Lender that is a U.S. person within the meaning of Section 7701(a)(30) of the Code
shall deliver to RailAmerica and the Administrative Agent on or prior to the date on which such
Lender becomes a Lender under this Agreement (and from time to time thereafter as prescribed by
applicable law, on or before the date that any such form or certification expires or becomes
obsolete, and after the occurrence of any event involving the Lender requiring a change in the most
recent form previously delivered by it or upon the request of RailAmerica or the Administrative
Agent) duly executed and properly completed copies of Internal Revenue Service Form W-9 or any
applicable successor form certifying that it is not subject to backup withholding.




          (f) If the Borrowers determine in good faith that a reasonable basis exists for contesting any
Indemnified Taxes for which indemnification has been made hereunder, the relevant Lender or the
Administrative Agent, as applicable, shall use reasonable efforts to cooperate with the Borrowers
in challenging such taxes at the Borrowers’ expense if so requested by the Borrowers in writing;
provided that nothing in this Section 5.4(f) shall obligate the Administrative Agent or any
Lender to take any action that, in its reasonable judgment, would be materially disadvantageous to
such person. If any Lender or the Administrative Agent, as applicable, receives a refund of an
Indemnified Tax for which a payment has been made by the Borrowers pursuant to this Agreement,
which refund in the sole good faith judgment of such Lender or Administrative Agent, as the case
may be, is attributable to such payment made by such Borrowers, then the Lender or the
Administrative Agent, as the case may be, shall reimburse the Borrowers for such amount (without
interest other than any interest received by the Governmental Authority with respect to such
refund) as the Lender or Administrative Agent, as the case may be, determines to be the proportion
of the refund as will leave it, after such reimbursement, in no better or worse net after-tax
position than it would have been in if the Indemnified Taxes giving rise to



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such refund had not been imposed in the first instance; provided that the Borrowers,
upon the request of the Administrative Agent or such Lender, agree to repay the amount paid over to
the Borrowers (plus any penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such
Lender is required to repay such refund to such Governmental Authority. Neither a Lender nor the
Administrative Agent shall be obliged to disclose any information regarding its tax affairs or
computations to the Borrowers in connection with this paragraph (f) or any other provision of this
Section 5.4.




          (g) The agreements of any Credit Party in this Section 5.4 shall survive the termination of
the Credit Documents and the payment of the Loans and all other amounts payable hereunder.




          5.5. Computations of Interest and Fees.




          (a) Interest on Eurodollar Loans and, except as provided in the next succeeding sentence, ABR
Loans shall be calculated on the basis of a 360-day year for the actual days elapsed. Interest on
ABR Loans in respect of which the rate of interest is calculated on the basis of the Prime Rate and
interest on overdue interest shall be calculated on the basis of a 365- (or 366-, as the case may
be) day year for the actual days elapsed.




          (b) Fees and Letters of Credit Outstanding shall be calculated on the basis of a 360-day year
for the actual days elapsed.




          5.6. Limit on Rate of Interest.




          (a) No Payment Shall Exceed Lawful Rate. Notwithstanding any other term of this
Agreement, the Borrowers shall not be obliged to pay any interest or other amounts under or in
connection with this Agreement in excess of the amount or rate permitted under or consistent with
any applicable law, rule or regulation.




          (b) Payment at Highest Lawful Rate. If the Borrowers are not obliged to make a
payment which they would otherwise be required to make, as a result of Section 5.6(a), the
Borrowers shall make such payment to the maximum extent permitted by or consistent with applicable
laws, rules and regulations.




          (c) Adjustment if Any Payment Exceeds Lawful Rate. If any provision of this Agreement
or any of the other Credit Documents would obligate the Borrowers to make any payment of interest
or other amount payable to any Lender in an amount or calculated at a rate which would be
prohibited by any applicable law, rule or regulation, then notwithstanding such provision, such
amount or rate shall be deemed to have been adjusted with retroactive effect to the maximum amount
or rate of interest, as the case may be, as would not be so prohibited by law, such adjustment to
be effected, to the extent necessary, as follows:





     (i) firstly, by reducing the amount or rate of interest required to be paid by the
Borrowers to the affected Lender under Section 2.8; and



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     (ii) thereafter, by reducing any fees, commissions, premiums and other amounts required
to be paid by the Borrowers to the affected Lender.


Notwithstanding the foregoing, and after giving effect to all adjustments contemplated thereby, if
any Lender shall have received from the Borrowers an amount in excess of the maximum permitted by
any applicable law, rule or regulation, then the Borrowers shall be entitled, by notice in writing
to the Administrative Agent to obtain reimbursement from that Lender in an amount equal to such
excess, and pending such reimbursement, such amount shall be deemed to be an amount payable by that
Lender to the Borrowers. Any amount or rate of interest referred to in this Section 5.6(c) shall
be determined in accordance with generally accepted actuarial practices and principles as an
effective annual rate of interest over the term that any Loan remains outstanding.




          SECTION 6. Conditions Precedent to Initial Borrowing




          The initial Borrowing of Loans under this Agreement or the initial issuance of any Letter of
Credit hereunder is subject to the satisfaction of the following conditions precedent:




          6.1. Credit Documents. All legal matters incident to this Agreement, the extension of the Loans hereunder and the
other Credit Documents shall be satisfactory to the Administrative Agent and there shall have been
delivered to the Administrative Agent and the Collateral Agent an executed counterpart of each of
the Credit Documents by each Credit Party.




          6.2. Collateral. All agreements, documents and instruments, including Uniform Commercial Code or other
applicable personal property security financing statements required or reasonably requested by the
Collateral Agent to be executed, filed, registered or recorded to create the Liens intended to be
created by the Security Agreement and perfect such Liens to the extent required by, and with the
priority required by, the Security Agreement shall have been executed, filed, registered or
recorded or delivered to the Collateral Agent for filing, registration or recording.




          6.3. Legal Opinions. The Administrative Agent shall have received the executed legal opinions of (a) Skadden,
Arps, Slate, Meagher & Flom LLP, special New York counsel to the Borrowers, substantially in the
form of Exhibit H-1, (b) Scott Williams, General Counsel to the Borrowers, substantially in
the form of Exhibit H-2 and (c) the opinions of special local counsel to the Borrowers from
the jurisdictions listed on Schedule 6.3, in form and substance reasonably satisfactory to the
Administrative Agent. The Borrowers, the other Credit Parties and the Administrative Agent hereby
instruct such counsel to deliver such legal opinions.




          6.4. No Default. After giving effect to the Borrowings on the Closing Date and the other transactions
contemplated hereby, no Default or Event of Default shall have occurred and is continuing.




          6.5. Concurrent Financings. Prior to or substantially simultaneously with the initial credit extension, the Borrowers
shall have received no less than $709,830,200 in gross




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proceeds from the issuance and sale of the Initial Secured Notes pursuant to the Secured Note
Indenture.




          6.6. Existing Credit Agreement. The Administrative Agent shall have received evidence that the Existing Credit Agreement
has been, or concurrently with the Closing Date is being, terminated and all amounts outstanding
thereunder are being repaid in full and all liens securing obligations under the Existing Credit
Agreement have been, or concurrently with the Closing Date are being, released.




          6.7. Corporate Documents. The Administrative Agent shall have received:




          (a) a certificate of the secretary or assistant secretary of each Credit Party dated the
Closing Date, certifying (A) that attached thereto is a true and complete copy of each
Organizational Document of such Credit Party certified (to the extent applicable) as of a recent
date by the Secretary of State of the state of its organization, (B) that attached thereto is a
true and complete copy of resolutions duly adopted by the Board of Directors of such Credit Party
authorizing the execution, delivery and performance of the Credit Documents to which such Person is
a party and, in the case of the Borrowers, the borrowings hereunder, and that such resolutions have
not been modified, rescinded or amended and are in full force and effect and (C) as to the
incumbency and specimen signature of each officer executing any Credit Document or any other
document delivered in connection herewith on behalf of such Credit Party (together with a
certificate of another officer as to the incumbency and specimen signature of the secretary or
assistant secretary executing the certificate in this clause (a));




          (b) a certificate as to the good standing of each Credit Party (in so-called “long-form” if
available) as of a recent date, from such Secretary of State (or other applicable Governmental
Authority); and




          (c) such other documents as the Lenders, the Letter of Credit Issuer or the Administrative
Agent may reasonably request.




          6.8. Officers’ Certificate. The Administrative Agent shall have received a certificate, dated the Closing Date and
signed by the chief executive officer and the chief financial officer of the Borrowers, confirming
compliance with the conditions precedent set forth in this Section 6, Section 7.1 and Section 7.4.




          6.9. Fees. The Lenders shall have received the fees set forth in the Lender Fee Letter and the
Administrative Agent shall have received the fees set forth in the Administrative Agent Fee Letter
and all expenses (including the reasonable fees, disbursements and other charges of counsel) for
which invoices have been presented on or prior to the Closing Date shall have been paid.




          6.10. Representations and Warranties. On the Closing Date, the representations and warranties made by each of the Borrowers shall
be true and correct in all material respects.




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          6.11. Borrowing Base Certificate. The Administrative Agent shall have received a Borrowing Base Certificate which calculates
the Borrowing Base as of a date preceding the Closing Date that is specified by the Administrative
Agent.




          6.12. Closing Availability. After giving effect to all Borrowings to be made on the Closing Date, the issuance of any
Letters of Credit on the Closing Date and payment of all fees and expenses due hereunder, the
Borrowers’ Availability shall not be less than $20.0 million.




          6.13. Solvency. The Administrative Agent shall have received a solvency certificate in the form of
Exhibit N, dated as of the Closing Date and signed by the chief financial officer of
RailAmerica.




          6.14. Lien Searches. The Administrative Agent shall have received the results of a recent lien search report in
such jurisdictions as may be reasonably requested by the Administrative Agent and such reports
shall reflect no Liens other than Liens permitted by Section 10.2 and Liens securing the Existing
Credit Agreement to be terminated on the Closing Date.




          6.15. Appraisals and Field Exams. The Administrative Agent shall have received satisfactory field exams from appraisers
satisfactory to the Administrative Agent.




          6.16. Perfection Certificate. The Administrative Agent and the Collateral Agent shall have received a duly completed and
signed Perfection Certificate together with all attachments thereto.




          6.17. USA PATRIOT Act. The Lenders and the Administrative Agent shall have timely received the information
required under Section 13.18.




          SECTION 7. Conditions Precedent to All Credit Events




          The agreement of each Lender to make any Loan requested to be made by it on any date
(excluding Mandatory Borrowings and Protective Advances) and the obligation of the Letter of Credit
Issuer to issue, extend, renew or increase the amount of any Letters of Credit on any date is
subject to the satisfaction of the following conditions precedent:




          7.1. No Default; Representations and Warranties. At the time of each Credit Event and also after giving effect thereto (a) no Default or
Event of Default shall have occurred and be continuing and (b) all representations and warranties
made by any Credit Party contained herein or in the other Credit Documents shall be true and
correct in all material respects (except that any representation and warranty that is qualified as
to “materiality” or “Material Adverse Effect” shall be true and correct in all respects) with the
same effect as though such representations and warranties had been made on and as of the date of
such Credit Event (except where such representations and warranties expressly relate to an earlier
date, in which case such representations and warranties shall have been true and correct in all
material respects (except that any representation and warranty that is qualified as to
“materiality” or “Material Adverse Effect” shall be true and correct in all respects) as of such
earlier date).




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          7.2. Notice of Borrowing; Letter of Credit Request.




          (a) Prior to the making of each Loan and each Swingline Loan, the Administrative Agent shall
have received a Notice of Borrowing (whether in writing or by telephone) meeting the requirements
of Section 2.3.




          (b) Prior to the issuance of each Letter of Credit, the Administrative Agent and the Letter of
Credit Issuer shall have received a Letter of Credit Request meeting the requirements of Section
3.2(a).




          7.3. Availability. After giving effect to any Borrowing or the issuance of any Letter of Credit, Availability
is not less than zero.




          7.4. No Legal Bar. No order, judgment or decree of any Governmental Authority shall purport to restrain any
Lender from making any Loans to be made by it. No injunction or other restraining order shall have
been issued or shall be pending or noticed with respect to any action, suit or proceeding seeking
to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a
result of, the transactions contemplated by this Agreement or the making of Loans hereunder.




          The acceptance of the benefits of each Credit Event shall constitute a representation and
warranty by each Credit Party to each of the Lenders that all the applicable conditions specified
above exist as of that time.




          In addition to the other conditions precedent herein set forth, if any Lender be-comes, and
during the period it remains, a Defaulting Lender or a Potential Defaulting Lender, the Letter of
Credit Issuer will not be required to issue any Letter of Credit or to amend any out-standing
Letter of Credit to increase the face amount thereof, alter the drawing terms thereunder or extend
the expiry date thereof, and the Swingline Lender will not be required to make any Swingline Loan,
unless the Letter of Credit Issuer or the Swingline Lender, as the case may be, is satisfied that
any exposure that would result therefrom is eliminated or fully covered by the Commitments of the
Non-Defaulting Lenders or by Cash Collateralization or a combination thereof satisfactory to the
Letter of Credit Issuer or Swingline Lender.




          SECTION 8. Representations, Warranties and Agreements




          In order to induce the Lenders to enter into this Agreement, to make the Loans and issue or
participate in Letters of Credit as provided for herein, each Credit Party makes the following
representations and warranties to, and agreements with, the Lenders, all of which shall survive the
execution and delivery of this Agreement and the making of the Loans and the issuance of the
Letters of Credit:




          8.1. Corporate Status. Each Borrower and each Subsidiary (a) is a duly organized and validly existing corporation
or other entity in good standing under the laws of the jurisdiction of its organization and has the
corporate or other organizational power and authority to own its property and assets and to
transact the business in which it is engaged and (b) is duly




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qualified and is authorized to do business and is in good standing in all jurisdictions where
it is required to be so qualified, except where the failure to be so qualified could not reasonably
be expected to result in a Material Adverse Effect.




          8.2. Corporate Power and Authority. Each Credit Party has the corporate or other organizational power and authority to execute,
deliver and carry out the terms and provisions of the Credit Documents to which it is a party and
has taken all necessary corporate or other organizational action to authorize the execution,
delivery and performance of the Credit Documents to which it is a party. Each Credit Party has
duly executed and delivered each Credit Document to which it is a party and each such Credit
Document constitutes the legal, valid and binding obligation of such Credit Party enforceable in
accordance with its terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors’ rights generally and subject to general principles
of equity.




          8.3. No Violation. Neither the execution, delivery or performance by any Credit Party of the Credit Documents
to which it is a party nor compliance with the terms and provisions thereof nor the consummation of
the Transactions and the other transactions contemplated hereby or thereby will (a) contravene any
applicable provision of any material law, statute, rule, regulation, order, writ, injunction or
decree of any court or governmental instrumentality, (b) result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the property or assets
of RailAmerica or any of the Restricted Subsidiaries (other than Liens created under the Credit
Documents) pursuant to, the terms of any material indenture (including the Secured Note Indenture,
loan agreement, lease agreement, mortgage, deed of trust, agreement or other material instrument to
which RailAmerica or any of the Restricted Subsidiaries is a party or by which it or any of its
property or assets is bound or (c) violate any provision of the certificate of incorporation,
By-Laws or other constitutional documents of RailAmerica or any of the Restricted Subsidiaries.




          8.4. Litigation. There are no actions, suits, investigations or proceedings (including Environmental Claims)
pending or, to the knowledge of the Borrowers, threatened with respect to the Borrowers or any of
the other Subsidiaries that (i) could reasonably be expected to result in a Material Adverse Effect
or (ii) involves this Agreement or the Transactions.




          8.5. Margin Regulations. Neither the making of any extension of credit hereunder nor the use of the proceeds thereof
will violate the provisions of Regulation T, U or X of the Board.




          8.6. Governmental Approvals. No order, consent, approval, license, authorization, or validation of, or filing, recording
or registration with, or exemption by, any Governmental Authority is required to authorize or is
required in connection with (a) the execution, delivery and performance of any Credit Document or
(b) the legality, validity, binding effect or enforceability of any Credit Document except for (i)
those obtained or made and (ii) filings and recordings in respect of Liens created under the Credit
Documents.




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          8.7. Investment Company Act. None of the Credit Parties is an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.




          8.8. True and Complete Disclosure.




          (a) None of the factual information and data (taken as a whole) heretofore or
contemporaneously furnished by RailAmerica, any of the Subsidiaries or any of their respective
authorized representatives in writing to the Administrative Agent, the Collateral Agent and/or any
Lender on or before the Closing Date (including all information contained in the Credit Documents)
for purposes of or in connection with this Agreement or any transaction contemplated herein
contained any untrue statement or omitted to state any material fact necessary to make such
information and data (taken as a whole) not misleading at such time in light of the circumstances
under which such information or data was furnished, it being understood and agreed that for
purposes of this Section 8.8(a), such factual information and data shall not include projections
and pro forma financial information.




          (b) The projections and pro forma financial information contained in the information and data
referred to in paragraph (a) above were based on good faith estimates and assumptions believed by
such Persons to be reasonable at the time made, it being recognized by the Lenders that such
projections as to future events are not to be viewed as facts and that actual results during the
period or periods covered by any such projections may differ from the projected results.




          8.9. Financial Condition; Financial Statements. The (a) unaudited historical consolidated financial information of RailAmerica and (b) the
Historical Financial Statements, in each case present or will, when provided, present fairly in all
material respects the combined financial position of RailAmerica at the respective dates of said
information, statements and results of operations for the respective periods covered thereby. The
financial statements referred to in clause (b) of this Section 8.9 have been prepared in accordance
with GAAP consistently applied except to the extent provided in the notes to said financial
statements. There has not occurred any change, event, development or circumstance since December
31, 2008, that has had or could reasonably be expected to have a Material Adverse Effect.




          8.10. Tax Returns and Payments. Except for any failures that could not reasonably be expected to, individually or in the
aggregate, have a Material Adverse Effect, RailAmerica and each of its Subsidiaries: (a) has
timely filed all Tax returns, domestic and foreign, required to be filed by it; (b) has paid all
Taxes payable by it that have become due (including in the capacity of a withholding agent), other
than those being contested in good faith by the appropriate proceedings and for which adequate
reserves have been provided in accordance with GAAP (provided that such contest suspends
the enforcement or collection of such Taxes); (c) has provided adequate reserves in accordance with
GAAP for the payment of all Taxes not yet due and payable; and (d) has not ever been a party to any
understanding or arrangement constituting a “listed transaction” within the meaning of Treasury
Regulation Section 1.6011-4(b)(2) or “tax shelter” within the meaning of Section 6662(d)(2)(C)(ii)
of the Code and Section 6111(c) or Section 6111(d) of the Code as in effect immediately prior to
the enactment of the American Jobs Creation Act of 2004.




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          8.11. Compliance with ERISA. Each Plan is in compliance with ERISA, the Code and any applicable Requirement of Law; no
Reportable Event has occurred (or is reasonably likely to occur) with respect to any Plan; no Plan
is insolvent or in reorganization (or is reasonably likely to be insolvent or in reorganization),
and no written notice of any such insolvency or reorganization has been given to any Borrower, any
Subsidiary or any ERISA Affiliate; no Plan (other than a multiemployer plan) has an accumulated or
waived funding deficiency (or is reasonably likely to have such a deficiency); no Borrower,
Subsidiary or ERISA Affiliate has incurred (or is reasonably likely expected to incur) any
liability to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063,
4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code or has been notified in
writing that it will incur any liability under any of the foregoing Sections with respect to any
Plan; no proceedings have been instituted (or are reasonably likely to be instituted) to terminate
or to reorganize any Plan or to appoint a trustee to administer any Plan, and no written notice of
any such proceedings has been given to any Borrower, any Subsidiary or any ERISA Affiliate; and no
lien imposed under the Code or ERISA on the assets of any Borrower or any Subsidiary or any ERISA
Affiliate exists (or is reasonably likely to exist) nor has any Borrower, any Subsidiary or any
ERISA Affiliate been notified in writing that such a lien will be imposed on the assets of any
Borrower, any Subsidiary or any ERISA Affiliate on account of any Plan, except to the extent that a
breach of any of the representations, warranties or agreements in this Section 8.11 would not
result, individually or in the aggregate, in an amount of liability that would be reasonably likely
to have a Material Adverse Effect or relates to any matter disclosed in the financial statements of
the Borrowers. No Plan (other than a multiemployer plan) has an Unfunded Current Liability that
would, individually or when taken together with any other liabilities referenced in this Section
8.11, be reasonably likely to have a Material Adverse Effect. With respect to Plans that are
multiemployer plans (as defined in Section 3(37) of ERISA), the representations and warranties in
this Section 8.11, other than any made with respect to (a) liability under Section 4201 or 4204 of
ERISA or (b) liability for termination or reorganization of such Plans under ERISA, are made to the
best knowledge of such Borrower.




          8.12. Subsidiaries and Investments.




          (a) Subsidiaries. Set forth in Schedule 8.12 is a complete and correct list
of all of the Subsidiaries of each Borrower as of the Closing Date, together with, for each such
Subsidiary, (i) the jurisdiction of organization of such Subsidiary, (ii) each Person holding
ownership interests in such Subsidiary and (iii) the nature of the ownership interests held by each
such Person and the percentage of ownership of such Subsidiary represented by such ownership
interests. Except as disclosed in Schedule 8.12, on the Closing Date: (x) each such
Borrower and the other Subsidiaries will own, free and clear of Liens (other than Liens created
pursuant to the Security Documents), and have the unencumbered right to vote, all outstanding
ownership interests in each Person shown to be held by it in Schedule 8.12, (y) all of the
issued and outstanding capital stock of each such Person organized as a corporation is validly
issued, fully paid and nonassessable and (z) there will be no outstanding Equity Rights with
respect to such Person.




          (b) Investments. Set forth in Schedule 10.5 is a complete and correct list of
all Investments that are held by each Borrower or any of the other Subsidiaries in any Person on




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the Closing Date and, for each such Investment, (x) the identity of the Person or Persons
holding such Investment and (y) the nature of such Investment. Except as disclosed in Schedule
10.5, on the Closing Date each Borrower and the other Subsidiaries will own, free and clear of
all Liens (other than Liens created pursuant to the Security Documents), all such Investments.




          (c) Restrictions on Subsidiaries. On the Closing Date, to each Borrower’s knowledge,
neither the Borrowers nor any of the other Subsidiaries will be subject to any indenture,
agreement, instrument or other arrangement of the type described in Section 10.11.




          8.13. Intellectual Property. Each Borrower and each of the Restricted Subsidiaries have obtained all patents,
trademarks, servicemarks, trade names, copyrights, licenses and other rights, free from burdensome
restrictions, that are necessary for the operation of their respective businesses as currently
conducted and as proposed to be conducted, except where the failure to obtain any such rights could
not reasonably be expected to have a Material Adverse Effect.




          8.14. Environmental Laws.




          (a) Except as set forth on Schedule 8.14 or as could not reasonably be expected to have a
Material Adverse Effect: (i) RailAmerica and each of its Subsidiaries are in compliance with all
Environmental Laws in all jurisdictions in which RailAmerica and each of its Subsidiaries are
currently doing business (including having obtained all material permits required under
Environmental Laws); (ii) RailAmerica will comply and cause each of its Subsidiaries to comply with
all such Environmental Laws (including all permits required under Environmental Laws); and (iii)
none of RailAmerica or its Subsidiaries has become subject to any Environmental Claim or any other
liability under any Environmental Law.




          (b) Neither RailAmerica nor any of its Subsidiaries has treated, stored, transported or
disposed of, or arranged for disposal or treatment of, Hazardous Materials at or from any current
or, to the knowledge of RailAmerica and any of its Subsidiaries, former Real Estate or facility
relating to its business in a manner that could reasonably be expected to have a Material Adverse
Effect, and there has been no Release or threatened Release of Hazardous Materials by RailAmerica
or any of its Subsidiaries on, at, under or from any Real Property or facility presently or, to the
knowledge of RailAmerica or any of its Subsidiaries formerly, owned, leased or operated by any of
them which could reasonably be expected to result in a Material Adverse Effect.




          (c) No person with an indemnity or contribution obligation to RailAmerica or any of its
Subsidiaries relating to compliance with or liability under any Environmental Law is in default
with respect to any such obligation in each case which could reasonably be expected to result in a
Material Adverse Effect.




          (d) Neither RailAmerica nor any of its Subsidiaries is obligated to perform any action or
otherwise incur any expense under any Environmental Law pursuant to any order, decree, judgment or
agreement by which it is bound, and neither RailAmerica nor any of its Subsidiaries is conducting
or financing, in whole or in part, any investigation, remedial or corrective




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action pursuant to any Environmental Law at any location, in each case which could reasonably
be expected to result in a Material Adverse Effect.




          8.15. Properties. RailAmerica and each of its Subsidiaries have good and marketable title to, leasehold
interest in or easement, rights of way, rights to operate or other similar estates in all
properties that are necessary for the operation of their respective businesses as currently
conducted and as proposed to be conducted, free and clear of all Liens (other than any Liens
permitted by this Agreement) and except for minor defects in title that do not interfere with their
ability to conduct business as currently conducted or to utilize such properties for their intended
purposes or where the failure to have such good title could not reasonably be expected to have a
Material Adverse Effect.




          8.16. Solvency. On the Closing Date immediately after the consummation of the Transactions to occur on the
Closing Date, and immediately following each Credit Event, RailAmerica and its Restricted
Subsidiaries, on a consolidated basis, are Solvent.




          8.17. Compliance with Laws and Agreements. RailAmerica and each of its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where the failure to do
so, individually or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.




          8.18. Canadian Pension Plans. The Canadian Pension Plans are duly registered under the Income Tax Act (Canada) and any
other applicable laws which require registration, have been administered in accordance with the
Income Tax Act (Canada) and such other applicable laws and no event has occurred which could
reasonably be expected to cause the loss of such registered status, except to the extent that any
failure to do so or event could not reasonably be expected to have a Material Adverse effect. All
material obligations of any Credit Party (including fiduciary, funding, investment and
administration obligations) required to be performed in connection with the Canadian Pension Plans
and the funding agreements therefore have been performed on a timely basis, except to the extent
that any failure to do so could not reasonably be expected to have a Material Adverse Effect. No
written promises of benefit improvements under the Canadian Pension Plans have been made except
where such improvements could not reasonably be expected to have a Material Adverse Effect. All
contributions or premiums required to be made or paid by the Credit Parties to the Canadian Pension
Plans have been made on a timely basis in accordance with the terms of such plans and all
applicable laws, except as could not reasonably be expected to result in a Material Adverse Effect.
There have been no improper withdrawals or applications of the assets of the Canadian Pension
Plans. As of the Closing Date, each of the Canadian Pension Plans are fully funded on a solvency
basis and going concern basis (using actuarial methods and assumptions which are consistent with
GAAP), except as could not reasonably be expected to result in a Material Adverse Effect. None of
the Credit Parties or any of their respective Subsidiaries is subject to the United States Employee
Retirement Income Security Act of 1974, as amended.




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          8.19. Labor Matters. There are no strikes pending or, to the knowledge of RailAmerica, threatened against
RailAmerica or any of its Subsidiaries that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. The hours worked and payments made to employees of
RailAmerica and its Subsidiaries are not in violation in any material respect of the Fair Labor
Standards Act or any other applicable law dealing with such matters. All material payments due
from RailAmerica and any of its Subsidiaries or for which any claim may be made against RailAmerica
or any of its Subsidiaries, on account of wages and employee health and welfare insurance and other
benefits have been paid or accrued as a liability on the books of RailAmerica or such Subsidiary to
the extent required by GAAP. Except as set forth on Schedule 8.19, consummation of the
Transactions will not give rise to a right of termination or right of renegotiation on the part of
any union under any collective bargaining agreement to which RailAmerica or any of its Subsidiaries
(or any predecessor) is a party or by which RailAmerica or any of its Subsidiaries (or any
predecessor) is bound, other than collective bargaining agreements that, individually or in the
aggregate, are not material to RailAmerica and its Subsidiaries, taken as a whole.




          8.20. Security Documents.




          (a) Security Agreement. The Security Agreement is effective to create in favor of the
Collateral Agent for the benefit Secured Parties, legal, valid and enforceable Liens on, and
security interests in, the Collateral (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether enforcement is sought by
proceedings in equity or law)) and, when (i) financing statements are filed in the offices
specified on Schedule 6 to the Perfection Certificate and (ii) upon the taking of possession or
control by the Collateral Agent of the Collateral with respect to which a security interest may be
perfected only by possession or control (which possession or control shall be given to the
Collateral Agent to the extent possession or control by the Collateral Agent is required by each
Security Agreement), the Liens created by the Security Agreement shall constitute fully perfected
Liens on, and security interests in, all right, title and interest of the grantors in the
Collateral (other than such Collateral in which a security interest cannot be perfected under the
UCC as in effect at the relevant time in the relevant jurisdiction), in each case subject to no
Liens other than Permitted Liens.




          (b) Valid Liens. Each Security Document delivered pursuant to Section 9.10 will, upon
execution and delivery thereof, be effective to create in favor of the Collateral Agent, for the
benefit of the Secured Parties, legal, valid and enforceable Liens on, and security interests in,
all of the Credit Parties’ right, title and interest in and to the Collateral thereunder (except as
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors’ rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or law)), and (i) when all
appropriate filings or recordings are made in the appropriate offices as may be required under
applicable law and (ii) upon the taking of possession or control by the Collateral Agent of such
Collateral with respect to which a security interest may be perfected only by possession or control
(which possession or control shall be given to the Collateral Agent to the extent required by




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any Security Document), such Security Document will constitute fully perfected Liens on, and
security interests in, all right, title and interest of the Credit Parties in such Collateral, in
each case subject to no Liens other than the applicable Permitted Liens.




          8.21. Anti-Terrorism Law.




          (a) No Credit Party and, to the knowledge of RailAmerica, none of their respective Affiliates
is in violation of any laws relating to terrorism or money laundering (“Anti-Terrorism
Laws”), including Executive Order No. 13224 on Terrorist Financing, effective September 24,
2001 (the “Executive Order”), and the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56.




          (b) No Credit Party and, to the knowledge of RailAmerica, no Affiliate or broker or other
agent of any Credit Party acting or benefiting in any capacity in connection with the Loans is any
of the following:





     (1) a person that is listed in the annex to, or is otherwise subject to the provisions
of, the Executive Order;




     (2) a person owned or controlled by, or acting for or on behalf of, any person that is
listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;




     (3) a person with which any Lender is prohibited from dealing or otherwise engaging in
any transaction by any Anti-Terrorism Law;




     (4) a person that commits, threatens or conspires to commit or supports “terrorism” as
defined in the Executive Order; or




     (5) a person that is named as a “specially designated national and blocked person” on
the most current list published by the U.S. Treasury Department Office of Foreign Assets
Control (“OFAC”) at its official website or any replacement website or other
replacement official publication of such list.



          (c) No Credit Party and, to the knowledge of RailAmerica, no broker or other agent of any
Credit Party acting in any capacity in connection with the Loans (i) conducts any business or
engages in making or receiving any contribution of funds, goods or services to or for the benefit
of any person described in Section 8.21(b), (ii) deals in, or otherwise engages in any transaction
relating to, any property or interests in property blocked pursuant to the Executive Order, or
(iii) engages in or conspires to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law.




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          SECTION 9. Affirmative Covenants




          Each Borrower hereby covenants and agrees that from the Closing Date and thereafter, until the
Final Date:




          9.1. Information Covenants. RailAmerica will furnish to each Lender and the Administrative Agent:




          (a) Annual Financial Statements. As soon as available and in any event on or before
the date on which such financial statements are required to be filed with the SEC (or, if such
financial statements are not required to be filed with the SEC, on or before the date that is 90
days after the end of each such fiscal year), the consolidated balance sheet of (i) RailAmerica and
its consolidated Subsidiaries and (ii) RailAmerica and the Restricted Subsidiaries, in each case as
at the end of such fiscal year, and the related consolidated statement of operations and cash flows
for such fiscal year, setting forth comparative consolidated figures for the preceding fiscal year,
and certified by independent certified public accountants of recognized national standing whose
opinion shall not be qualified as to the scope of audit or as to the status of RailAmerica or any
of the Subsidiaries as a going concern, together in any event with a certificate of such accounting
firm stating that in the course of its regular audit of the business of RailAmerica and the
Subsidiaries, which audit was conducted in accordance with generally accepted auditing standards,
such accounting firm has obtained no knowledge of any Event of Default relating to Section 10.9
that has occurred and is continuing or, if in the opinion of such accounting firm such an Event of
Default has occurred and is continuing, a statement as to the nature thereof.




          (b) Quarterly Financial Statements. As soon as available and in any event on or
before the date on which such financial statements are required to be filed with the SEC with
respect to each of the first three quarterly accounting periods in each fiscal year of RailAmerica
(or, if such financial statements are not required to be filed with the SEC, on or before the date
that is 45 days after the end of each such quarterly accounting period), the consolidated balance
sheet of (i) RailAmerica and its consolidated Subsidiaries and (ii) RailAmerica and the Restricted
Subsidiaries, in each case as at the end of such quarterly period and the related consolidated
statement of operations for such quarterly accounting period and for the elapsed portion of the
fiscal year ended with the last day of such quarterly period, and the related consolidated
statement of cash flows for the elapsed portion of the fiscal year ended with the last day of such
quarterly period, and setting forth comparative consolidated figures for the related periods in the
prior fiscal year or, in the case of such consolidated balance sheet, for the last day of the prior
fiscal year, all of which shall be certified by an Authorized Officer of RailAmerica, subject to
changes resulting from audit and normal year-end audit adjustments.




          (c) Budgets. Within 30 days after the commencement of each fiscal year of
RailAmerica, budgets of RailAmerica and its Restricted Subsidiaries, collectively, in reasonable
detail for the fiscal year (including for each fiscal quarter in such fiscal year) as are
customarily prepared by management of RailAmerica for its internal use consistent in scope with the
financial statements provided pursuant to Section 9.1(a), setting forth the principal assumptions
upon which such budgets are based.




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          (d) Officer’s Certificates. At the time of the delivery of the financial statements
provided for in Sections 9.1(a) and (b), (1) a reasonably detailed narrative discussion of the
changes in the financial condition and results of operations of RailAmerica and its Restricted
Subsidiaries compared with the budget for such period, and (2) a certificate of an Authorized
Officer of RailAmerica to the effect that no Default or Event of Default exists or, if any Default
or Event of Default does exist, specifying the nature and extent thereof, which certificate shall
set forth (i) reasonably detailed calculations required to establish the Fixed Charge Coverage
Ratio and, during any Minimum Availability Period, demonstrating compliance with the provisions of
Section 10.9 as of the end of such fiscal year or period, as the case may be, (ii) the then
applicable Status, (iii) the amount of any Pro Forma Adjustment not previously set forth in a Pro
Forma Adjustment Certificate or any change in the amount of a Pro Forma Adjustment set forth in any
Pro Forma Adjustment Certificate previously provided and, in either case, in reasonable detail, the
calculations and basis therefor and (iv) a specification of any change in the identity of the
Restricted Subsidiaries, Unrestricted Subsidiaries and Foreign Subsidiaries as at the end of such
fiscal year or period, as the case may be, from the Restricted Subsidiaries, Unrestricted
Subsidiaries and Foreign Subsidiaries, respectively, provided to the Lenders on the Closing Date or
the most recent fiscal year or period, as the case may be.




          (e) Borrowing Base Certificate.





     (i) As soon as available, but in any event on or prior to the 12th Business Day of each
calendar month, a Borrowing Base Certificate in the form of Exhibit A which calculates the
Borrowing Base as of the last day of the calendar month then last ended and updated
information thereto as required by Schedule A to Exhibit A, together with supporting
information in connection therewith and any additional reports with respect to the Borrowing
Base as the Administrative Agent may reasonably request.




     (ii) Within five calendar days, or if the fifth calendar day is not a Business Day, the
immediately preceding Business Day of the end of each calendar week during any Weekly
Reporting Period, a Borrowing Base Certificate in the form of Exhibit A calculating the
Borrowing Base as of the end of the last day of the immediately preceding calendar week and
updated information thereto as required by Schedule A to Exhibit A (provided
that if the Borrowers are unable to calculate all or a portion of the Borrowing Base under
this clause (ii) as of the end of the last day of the immediately preceding calendar week,
the Administrative Agent may, in its sole discretion, agree to permit all or a portion of
the Borrowing Base to be calculated as of the end of a different date on or after the last
day of the calendar month then last ended, taking into account the Borrowers’ existing
financial reporting systems and subject to any Reserves implemented by the Administrative
Agent in connection therewith) in each case, together with supporting information in
connection therewith and any additional reports with respect to the Borrowing Base as the
Administrative Agent may reasonably request.




     (iii) as soon as practicable and in any event within three Business Days after any
disposition outside the ordinary course of business (including by way of casualty or
condemnation) of Collateral having a book value exceeding $5.0 million, an updated



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Borrowing Base Certificate calculating (on a pro forma basis, after giving effect to such
disposition and reflecting only the changes to the affected component(s) from such
disposition of the Borrowing Base) and certifying such pro forma Borrowing Base as of the
end of the most recent calendar week or month, as applicable, for which a Borrowing Base
Certificate was delivered pursuant to clause (i) or (ii) above together with supporting
information in connection therewith and any additional reports with respect to the Borrowing
Base as the Administrative Agent may reasonably request. The Borrowing Base set forth in
each Borrowing Base Certificate delivered with respect to each calendar month occurring
after the calendar week covered by the updated Borrowing Base Certificate described in the
preceding sentence and ending prior to any such disposition shall be calculated on a pro
forma basis, after giving effect to such disposition.



          (f) Notice of Material Events. Promptly after an Authorized Officer of RailAmerica or
any of its Subsidiaries obtains knowledge thereof, notice of (i) the occurrence of any event that
constitutes a Default or Event of Default, which notice shall specify the nature thereof, the
period of existence thereof and what action RailAmerica proposes to take with respect thereto, (ii)
any litigation or governmental proceeding pending against RailAmerica or any of its Subsidiaries
that could reasonably be expected to result in a Material Adverse Effect, (iii) any Lien (other
than Liens permitted by Section 10.02) or material claim made or asserted in writing against any
material portion of the Collateral, (iv) any loss, damage or destruction to a material portion of
the Collateral in the amount of $2.0 million or more, whether or not covered by insurance and (v)
any sale, transfer or other disposition of any material portion of the Accounts outside of the
ordinary course of business.




          (g) Environmental Matters. RailAmerica will promptly advise the Lenders in writing
after obtaining knowledge of any one or more of the following environmental matters, unless such
environmental matters would not, individually or when aggregated with all other such matters, be
reasonably expected to result in a Material Adverse Effect:





        (i)
Any pending or threatened Environmental Claim against RailAmerica or any of
its Subsidiaries or any Real Estate;




        (ii)
Any condition or occurrence on any Real Estate that (x) results in
noncompliance by RailAmerica or any of its Subsidiaries with any applicable
Environmental Law or (y) could reasonably be anticipated to form the basis of an
Environmental Claim against RailAmerica, any of its Subsidiaries or any Real Estate;




        (iii)
Any condition or occurrence on any Real Estate that could reasonably be
anticipated to cause such Real Estate to be subject to any restrictions on the
ownership, occupancy, use or transferability of such Real Estate under any
Environmental Law; and




        (iv)
The taking of any removal or remedial action in response to the actual or
alleged presence of any Hazardous Material on any Real Estate.



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All such notices shall describe in reasonable detail the nature of the claim, investigation,
condition, occurrence or removal or remedial action and the response thereto. The term
“Real Estate” shall mean land, buildings and improvements owned or leased by
RailAmerica or any of its Subsidiaries, but excluding all operating fixtures and equipment,
whether or not incorporated into improvements.



               (h) Other Information. Promptly upon filing thereof, copies of any filings (including
on Form 10-K, 10-Q or 8-K) or registration statements with, and reports to, the SEC or any
analogous Governmental Authority in any relevant jurisdiction by RailAmerica or any of its
Subsidiaries (other than amendments to any registration statement (to the extent such registration
statement, in the form it becomes effective, is delivered to the Lenders), exhibits to any
registration statement and, if applicable, any registration statements on Form S-8) and copies of
all financial statements, proxy statements, notices and reports that RailAmerica or any of its
Subsidiaries shall send to the holders of any publicly issued debt of RailAmerica and/or any of its
Subsidiaries (including the Initial Secured Notes, whether publicly issued or not) in their
capacity as such holders (in each case to the extent not theretofore delivered to the Lenders
pursuant to this Agreement) and, with reasonable promptness, such other information (financial or
otherwise) as the Administrative Agent or the Collateral Agent on its own behalf or on behalf of
any Lender may reasonably request in writing from time to time.




               (i) Pro Forma Adjustment Certificate. Not later than the consummation of the
acquisition or disposition by RailAmerica or any Restricted Subsidiary for which there shall be a
Pro Forma Adjustment or not later than any date on which financial statements are delivered with
respect to any four-quarter period in which a Pro Forma Adjustment is made as a result of the
consummation of the acquisition or disposition by RailAmerica or any Restricted Subsidiary for
which there shall be a Pro Forma Adjustment, a certificate of an Authorized Officer of RailAmerica
setting forth the amount of such Pro Forma Adjustment and, in reasonable detail, the calculations
and basis therefor.




               (j) Perfection Certificate Supplement. RailAmerica shall concurrently with the
delivery of financial statements pursuant to Section 9.1(a), deliver to the Administrative Agent
and the Collateral Agent a Perfection Certificate Supplement and a certificate of a Authorized
Officer and the chief legal officer of RailAmerica certifying that all UCC financing statements
(including fixture filings, as applicable) or other appropriate filings, recordings or
registrations, including all refilings, rerecordings and reregistrations, containing a description
of the Collateral have been filed of record in each governmental, municipal or other appropriate
office in each jurisdiction necessary to protect and perfect the security interests and Liens under
the Security Documents for a period of not less than 18 months after the date of such certificate
(except as noted therein with respect to any continuation statements to be filed within such
period).




               9.2. Books, Records and Inspections. RailAmerica will, and will cause each of the Subsidiaries to, permit officers and
designated representatives of the Administrative Agent, the Collateral Agent or one or more Lenders
to visit and inspect any of the properties or assets of RailAmerica and any such Subsidiary in
whomsoever’s possession to the extent that it is within such party’s control to permit such
inspection, and to examine the books of account of




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RailAmerica and any such Subsidiary and discuss the affairs, finances and accounts of
RailAmerica and of any such Subsidiary with, and be advised as to the same by, its and their
officers and independent accountants; provided, however, the Administrative Agent,
the Collateral Agent and the Lenders shall be limited to two such examinations per calendar year,
which shall be at the sole expense of the Credit Parties; provided further,
however, (i) if an Event of Default has occurred and is continuing there shall be no
limitation as to the number and frequency of such examinations at the sole expense of the Credit
Parties and (ii) any examinations made pursuant to clause (i) of this proviso shall not count
against the number of examinations permitted under the first proviso of this sentence.




          9.3. Maintenance of Insurance. RailAmerica will, and will cause each of the Subsidiaries to, at all times maintain in full
force and effect, by financially sound and reputable insurers in such amounts as shall be customary
for similar businesses and maintain such other reasonable insurance (including, to the extent
consistent with past practices, self-insurance) of such types, to such extent and against such
risks, as are usually insured against by companies engaged in the same or a similar business; and
will furnish to the Lenders, upon written request from the Administrative Agent or the Collateral
Agent, information presented in reasonable detail as to the insurance so carried.




          9.4. Payment of Taxes. Except for any failures that could not reasonably be expected to, individually or in the
aggregate, have a Material Adverse Effect, RailAmerica and each of its Subsidiaries will timely pay
and discharge, all Taxes imposed upon it or upon its income or profits, or upon any properties
belonging to it, and all lawful claims that, if unpaid, could reasonably be expected to become a
Lien upon any properties of RailAmerica or any of the Subsidiaries, provided that neither
RailAmerica nor any of the Subsidiaries shall be required to pay any such Tax, if (x) such Taxes is
being contested in good faith and by proper proceedings, (y) if it has maintained adequate reserves
with respect thereto in accordance with GAAP and (z) such proceedings will suspend the enforcement
or collection of such Taxes.




          9.5. Existence. RailAmerica will do, and will cause each Subsidiary to do, or cause to be done, all things
necessary to preserve and keep in full force and effect its existence, corporate rights and
authority, except to the extent that the failure to do so could not reasonably be expected to have
a Material Adverse Effect; provided, however, that RailAmerica and its Subsidiaries
may consummate any transaction permitted under Section 10.3, 10.4 or 10.5.




          9.6. Compliance with Statutes, Obligations, etc. RailAmerica will, and will cause each Subsidiary to, comply with all applicable laws, rules,
regulations and orders, including Environmental Laws, except to the extent the failure to do so
could not reasonably be expected to have a Material Adverse Effect.




          9.7. ERISA. Promptly after RailAmerica or any Subsidiary or any ERISA Affiliate knows or has reason to
know of the occurrence of any of the following events that, individually or in the aggregate
(including in the aggregate such events previously disclosed or exempt from disclosure hereunder,
to the extent the liability therefor remains outstanding), would be reasonably likely to have a
Material Adverse Effect, RailAmerica will deliver to each of the Lenders a certificate of an
Authorized Officer or any other senior officer of RailAmerica setting




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forth details as to such occurrence and the action, if any, that RailAmerica, such Subsidiary
or such ERISA Affiliate is required or proposes to take, together with any notices (required,
proposed or otherwise) given to or filed with or by RailAmerica, such Subsidiary, such ERISA
Affiliate, the PBGC, a Plan participant (other than notices relating to an individual participant’s
benefits) or the Plan administrator with respect thereto: that a Reportable Event has occurred;
that an accumulated funding deficiency has been incurred or an application is to be made to the
Secretary of the Treasury for a waiver or modification of the minimum funding standard (including
any required installment payments) or an extension of any amortization period under Section 412 of
the Code with respect to a Plan; that a Plan having an Unfunded Current Liability has been or is to
be terminated, reorganized, partitioned or declared insolvent under Title IV of ERISA (including
the giving of written notice thereof); that a Plan has an Unfunded Current Liability that has or
will result in a lien under ERISA or the Code; that proceedings will be or have been instituted to
terminate a Plan having an Unfunded Current Liability (including the giving of written notice
thereof); that a proceeding has been instituted against RailAmerica, a Subsidiary or an ERISA
Affiliate pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan; that the
PBGC has notified RailAmerica, any Subsidiary or any ERISA Affiliate of its intention to appoint a
trustee to administer any Plan; that RailAmerica, any Subsidiary or any ERISA Affiliate has failed
to make a required installment or other payment pursuant to Section 412 of the Code with respect to
a Plan; or that RailAmerica, any Subsidiary or any ERISA Affiliate has incurred or will incur (or
has been notified in writing that it will incur) any liability (including any contingent or
secondary liability) to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062,
4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code.




          9.8. Good Repair. RailAmerica will, and will cause each of the Restricted Subsidiaries to, ensure that its
properties and equipment used or useful in its business in whomsoever’s possession they may be to
the extent that it is within the control of such party to cause same, are kept in good repair,
working order and condition, normal wear and tear excepted, and that from time to time there are
made in such properties and equipment all needful and proper repairs, renewals, replacements,
extensions, additions, betterments and improvements thereto, to the extent and in the manner
customary for companies in similar businesses and consistent with third party leases, except in
each case to the extent the failure to do so could not be reasonably expected to have a Material
Adverse Effect.




          9.9. End of Fiscal Years; Fiscal Quarters. Neither RailAmerica nor any of its Subsidiaries will change its fiscal year or fiscal
quarters.




          9.10. Additional Subsidiary Guarantors and Grantors. Each Borrower will cause any direct or indirect Restricted Domestic Subsidiary formed or
otherwise purchased or acquired after the Closing Date (including pursuant to a Permitted
Acquisition) to execute a supplement to each of the Guarantee and the Security Agreement,
substantially in the form of Annex B or Annex 1, as applicable, to the respective agreement in
order to become a Guarantor under the Guarantee and a grantor under the Security Agreement and to
cause such Subsidiary to take all such actions required under the Security Agreement, to perfect
the security interest in the Collateral of such Restricted Domestic Subsidiary. Notwithstanding
the foregoing, the Borrowers





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shall not be required to, nor shall any Borrower be required to cause any Restricted
Subsidiary to, grant any security in any new direct or indirect Restricted Domestic Subsidiary or
to require any new direct or indirect Restricted Domestic Subsidiary to become a Guarantor under
the Guarantee and a grantor under the Security Agreement to the extent that such new Restricted
Domestic Subsidiary shall be restricted therefrom by any valid and enforceable contractual
obligation; provided that (i) the Total Assets of each such new Restricted Subsidiary are
less than $25.0 million and the Total Assets of all such Persons that become Restricted
Subsidiaries are less than $75.0 million in the aggregate and (ii) such restriction was not
incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary.




          9.11. Use of Proceeds. The Letters of Credit and the proceeds of all Loans will be used for working capital needs
and general corporate purposes.



          9.12. Further Assurances. RailAmerica will, and will cause each other Credit Party to, execute any and all further
documents, financing statements, agreements and instruments, and take all such further actions
(including the filing and recording of financing statements, fixture filings, mortgages, deeds of
trust and other documents), which may be required under any applicable law, or which the
Administrative Agent, the Collateral Agent or the Required Lenders may reasonably request, in order
to grant, preserve, protect and perfect the validity and priority of the security interests created
or intended to be created by the Security Agreement, all at the expense of RailAmerica and the
Restricted Subsidiaries.



          9.13. Field Examinations. At any time that the Administrative Agent or the Collateral Agent reasonably requests,
RailAmerica and the Subsidiaries will permit upon reasonable notice the Administrative Agent or the
Collateral Agent to conduct field examinations or updates thereof during normal business hours to
ensure the adequacy of Collateral included in the Borrowing Base and related reporting and control
systems; provided, however, the Administrative Agent and the Collateral Agent shall
be limited to (a) two such field examinations per calendar year, which shall be at the sole expense
of the Credit Parties and (b) four such field examinations per calendar year, which shall be at the
sole expense of the Credit Parties, if a Weekly Reporting Period has occurred during such calendar
year, provided further, however, (i) if an Event of Default has occurred
and is continuing there shall be no limitation as to the number and frequency of such field
examinations at the sole expense of the Credit Parties and (ii) any field examinations made
pursuant to clause (i) of this proviso shall not count against the number of examinations permitted
under the first proviso of this sentence. For purposes of this Section 9.13, it is understood and
agreed that a single field examination may consist of examinations conducted at multiple relevant
sites and involve one or more relevant Credit Parties and their assets.



          9.14. [Reserved].



          9.15. Information Regarding Collateral. No Credit Party will effect any change (i) in such Credit Party’s legal name, (ii) in the
location of such Credit Party’s chief executive office, (iii) in such Credit Party’s identity or
organizational structure, (iv) in such Credit Party’s Federal Taxpayer Identification Number or
organizational identification number, if any, or (v) in such Credit Party’s jurisdiction of
organization (in each case, including by merging with



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or into any other entity, reorganizing, dissolving, liquidating, reorganizing or organizing in
any other jurisdiction), until (A) it shall have given the Collateral Agent and the Administrative
Agent not less than 30 days’ prior written notice (in the form of an Officers’ Certificate), or
such lesser notice period agreed to by the Collateral Agent, of its intention so to do, clearly
describing such change and providing such other information in connection therewith as the
Collateral Agent or the Administrative Agent may reasonably request and (B) it shall have taken all
action reasonably satisfactory to the Collateral Agent to maintain the perfection and priority of
the security interest of the Collateral Agent for the benefit of the Secured Parties in the
Collateral, if applicable. Each Credit Party agrees to promptly provide the Collateral Agent with
certified Organizational Documents reflecting any of the changes described in the preceding
sentence. Each Credit Party also agrees to promptly notify the Collateral Agent of any change in
the location of any office in which it maintains books or records relating to Collateral owned by
it.




          9.16. Cash Management.



          (a) Approved Accounts.



          (i) Within thirty (30) days after the Closing Date (or such longer period as the
Administrative Agent may agree in its sole discretion), RailAmerica shall and shall cause each
Credit Party to (i) establish and maintain cash management services of a type and on terms
satisfactory to the Collateral Agent, (ii) enter into a Control Agreement, reasonably satisfactory
to the Collateral Agent, with respect to each Deposit Account and Securities Account, other than
any Excluded Account, and deliver a legal opinion with respect thereto in form and substance
reasonably satisfactory to the Collateral Agent and (iii) request in writing and otherwise take
such reasonable steps to ensure that all of the Credit Parties’ Account Debtors (including, without
limitation, any clearinghouse) forward payment of the amounts owed by them directly to a Control
Account; provided that if the Credit Parties shall be unable to establish cash management
services with their existing banks of a type and on terms reasonably satisfactory to the Collateral
Agent within such thirty (30) day period (as the same may be extended by the Administrative Agent
in its sole discretion), then RailAmerica shall and shall cause each Credit Party to (a) within
five (5) Business Days (i) establish with Citibank, N.A. accounts with cash management services of
a type and terms satisfactory to the Collateral Agent and (ii) enter into a Control Agreement,
reasonably satisfactory to the Collateral Agent, with respect to each Deposit Account and
Securities Account, other than any Excluded Account, and deliver a legal opinion with respect
thereto in form and substance reasonably satisfactory to the Collateral Agent , (b) within five (5)
Business Days instruct each bank where a Deposit Account or Securities Account (other than any
Excluded Account) is held to effect the ACH or wire transfer on each Business Day of all available
cash receipts from such Deposit Account or Securities Account to such accounts established with
Citibank, N.A. and (c) within thirty (30) days request in writing and otherwise take such
reasonable steps to ensure that all of the Credit Parties’ Account Debtors(including, without
limitation, any clearinghouse) forward payment of the amounts owed by them directly solely to such
Control Account with Citibank, N.A.



          (ii) The Credit Parties may not establish or maintain any Deposit Account or Securities
Account, other than a Control Account or an Excluded Account.



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          (iii) The Credit Parties shall furnish the Collateral Agent with prior written notice of its
intention to open or close an Control Account. In the event (i) any Credit Party or any account
bank or intermediary shall, after the date hereof, terminate an agreement with respect to the
maintenance of a Control Account for any reason, (ii) the Collateral Agent shall demand such
termination as a result of the failure of an account bank or intermediary to comply with the terms
of the applicable Control Agreement or (iii) the Collateral Agent determines in its sole discretion
that the financial condition of an account bank or an intermediary has materially deteriorated,
each Credit Party shall notify all of its respective obligors that were making payments to such
terminated Control Account to make all future payments to another Control Account.



          (b) Concentration Account; Cash Dominion Period.



          (i) So long as no Cash Dominion Period has occurred and is continuing, the Credit Parties
shall have the right to direct the manner of disposition of funds in the Control Accounts in
accordance with the terms of this Agreement and the other Credit Documents. Each Control Agreement
entered into by a Credit Party shall require, after the occurrence and during the continuance of a
Cash Dominion Period (and delivery of a Blockage Notice thereof from the Collateral Agent), the ACH
or wire transfer on each Business Day of all available cash receipts to the concentration account
maintained by the Collateral Agent at Citibank, N.A. (the “Concentration Account”) and such
amounts in the Concentration Account shall be applied pursuant to Section 5.2(d).



          (ii) The Concentration Account shall at all times be under the sole dominion and control of
the Collateral Agent. Each Credit Party hereby acknowledges and agrees that (i) such Credit Party
has no right of withdrawal from the Concentration Account, (ii) the funds on deposit in the
Concentration Account shall at all times continue to be Collateral for all of the Obligations, and
(iii) the funds on deposit in the Concentration Account shall be applied as provided in Section
5.2(d). In the event that, notwithstanding the provisions of this Section 9.16, during the
continuation of a Cash Dominion Period, any Credit Party receives or otherwise has dominion and
control of any such proceeds or collections, such proceeds and collections shall be held in trust
by such Credit Party for the Collateral Agent, shall not be commingled with any of such Credit
Party’s other funds or deposited in any account of such Credit Party and shall promptly be
deposited into the Concentration Account or dealt with in such other fashion as such Credit Party
may be instructed by the Collateral Agent.



          SECTION 10. Negative Covenants



          Each Borrower hereby covenants and agrees that on the Closing Date and thereafter until the
Final Date:



          10.1. Limitation on Indebtedness.



          (A) RailAmerica will not, and will not permit any of the Restricted Subsidiaries to, create,
incur, assume or suffer to exist any Indebtedness, except:



          (a) Indebtedness arising under the Credit Documents;



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          (b) subject to compliance with Section 10.5, Indebtedness of (i) RailAmerica to any Restricted
Subsidiary, (ii) RATC or any Subsidiary Guarantor to RailAmerica or any Restricted Subsidiary,
(iii) any Restricted Subsidiary of RailAmerica which is not RATC or a Subsidiary Guarantor to any
other Restricted Subsidiary of RailAmerica which is not RATC or a Subsidiary Guarantor and (iv)
subject to compliance with the requirements of Section 10.5, RailAmerica, RATC or any Subsidiary
Guarantor to any Restricted Subsidiary of RailAmerica which is not RATC or a Subsidiary Guarantor;
provided that any Indebtedness of any Borrower or any Subsidiary Guarantor that is owed to
any Restricted Subsidiary which is not RATC or a Subsidiary Guarantor shall be subordinated in
right of payment to the Obligations following an Event of Default;



          (c) Indebtedness in respect of any bankers’ acceptance, letter of credit, warehouse receipt or
similar facilities entered into in the ordinary course of business;



          (d) Guarantee Obligations incurred by (i) Restricted Subsidiaries which are not Subsidiary
Guarantors or RATC in respect of Indebtedness of RailAmerica or other Restricted Subsidiaries that
is permitted to be incurred under this Agreement, (ii) RailAmerica, RATC or Subsidiary Guarantors
in respect of Indebtedness of RailAmerica, RATC or Restricted Subsidiaries that are Subsidiary
Guarantors that is permitted to be incurred under this Agreement and (iii) subject to compliance
with the requirements of Section 10.5, RailAmerica or RATC or Subsidiary Guarantors in respect of
Indebtedness of Restricted Subsidiaries that are not RATC or Subsidiary Guarantors that is
permitted to be incurred under this Agreement, provided that there shall be no Guarantee
(a) by a Restricted Foreign Subsidiary of any Indebtedness of RailAmerica, RATC or a Subsidiary
Guarantor and (b) in respect of Indebtedness that is subordinated to the Obligations, unless such
Guarantee is made by a Guarantor and such Guarantee is unsecured and subordinated to the
Obligations to the same extent as the Indebtedness so Guaranteed;



          (e) (i) Indebtedness (including Indebtedness arising under Capital Leases) (A) incurred within
180 days of the acquisition, construction or improvement of fixed or capital assets to finance the
acquisition, construction or improvement of such fixed or capital assets or otherwise incurred in
respect of Capital Expenditures and (B) arising under Capital Leases, other than Capital Leases in
effect on the date hereof and Capital Leases entered into pursuant to subclause (ii) below,
provided that the aggregate amount of Indebtedness incurred pursuant to this subclause (i)
(when aggregated with the amount of refinancing Indebtedness in respect thereof outstanding
pursuant to subclause (iii) below) shall not exceed the greater of (x) $80.0 million and (y) 5.0%
of Total Assets at any time outstanding, (ii) Indebtedness arising under Capital Leases entered
into in connection with Permitted Sale Leasebacks and (iii) any refinancing, refunding, renewal or
extension of any Indebtedness specified in subclause (i) or (ii) above, provided that the
principal amount thereof is not increased above the principal amount thereof outstanding
immediately prior to such refinancing, refunding, renewal or extension;



          (f) Indebtedness outstanding on the Closing Date and listed on Schedule 10.1 and any
refinancing, refunding, renewal or extension thereof, provided that (i) the principal
amount thereof is not increased above the principal amount thereof outstanding immediately
prior to such refinancing, refunding, renewal or extension, except to the extent otherwise




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permitted hereunder and (ii) the direct and contingent obligors with respect to such Indebtedness
are not changed;




          (g) Indebtedness in respect of Hedge Agreements entered into in the ordinary course of
business (and not for speculative purposes) in order to protect RailAmerica or any of the
Restricted Subsidiaries against fluctuations in interest rates, currency exchange rates or
commodity prices;



          (h) (i) Indebtedness of a Person or Indebtedness attaching to assets of a Person that, in
either case, becomes a Restricted Subsidiary or Indebtedness attaching to assets that are acquired
by RailAmerica or any Restricted Subsidiary, in each case after the Closing Date as the result of
an Investment permitted by Section 10.5, provided that (x) such Indebtedness existed at the
time such Person became a Restricted Subsidiary or at the time such assets were acquired and, in
each case, was not created in anticipation thereof and (y) such Indebtedness is not guaranteed in
any respect by RailAmerica or any Restricted Subsidiary (other than any such person that so becomes
a Restricted Subsidiary) and (ii) any refinancing, refunding, renewal or extension of any
Indebtedness specified in subclause (i) above, provided that except to the extent otherwise
permitted hereunder, (x) the principal amount of any such Indebtedness is not increased above the
principal amount thereof outstanding immediately prior to such refinancing, refunding, renewal or
extension and (y) the direct and contingent obligors with respect to such Indebtednesses are not
changed in respect thereof; provided that the aggregate principal amount of Indebtedness
outstanding pursuant to this clause (h) shall not exceed $40.0 million at any time;



          (i) (i) the Initial Secured Notes, (ii) Permitted Additional Secured Debt, (iii) Permitted
Unsecured Debt and (iv) Permitted Refinancing Indebtedness in respect of Indebtedness set forth in
subclauses (i) through (iii) of this clause (i);



          (j) Indebtedness of Foreign Subsidiaries in an aggregate amount at any time outstanding not to
exceed the greater of (x) $25.0 million and (y) 15% of Total Assets of Restricted Foreign
Subsidiaries;



          (k) additional Indebtedness, provided that the aggregate amount of Indebtedness
outstanding at any time pursuant to this clause (k) shall not
exceed $100.0 million; provided
 further that the aggregate amount of Indebtedness incurred by Subsidiaries that are not RATC or
Subsidiary Guarantors pursuant to this clause (k) shall not exceed $25.0 million; and



          (l) Indebtedness arising from agreements of RailAmerica or a Restricted Subsidiary providing
for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or
assumed in connection with the disposition of any business, assets or a Subsidiary, other than
guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business,
assets or a Subsidiary for the purpose of financing such acquisition.



          (B) RailAmerica will not, nor will it permit any Restricted Subsidiary to, issue any
Disqualified Capital Stock.



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          10.2. Limitation on Liens. RailAmerica will not, and will not permit any of the Restricted Subsidiaries to, create,
incur, assume or suffer to exist any Lien upon any property or assets of any kind (real or
personal, tangible or intangible) of RailAmerica or any Restricted Subsidiary, whether now owned or
hereafter acquired, except:



          (a) Liens arising under the Credit Documents;



          (b) Permitted Liens;



          (c) Liens securing Indebtedness permitted pursuant to Section 10.1(A)(e), provided
that such Liens attach at all times only to the assets so financed, and Liens on the assets of
Foreign Subsidiaries securing Indebtedness permitted pursuant to Section 10.1(A)(j);



          (d) Liens existing on the Closing Date and listed on Schedule 10.2;



          (e) the replacement, extension or renewal of any Lien permitted by clause (c), (d) or (f) of
this Section 10.2 in each case upon or in the same assets theretofore subject to such Lien or the
replacement, extension or renewal (without any increase in the amount of Indebtedness secured
thereby);



          (f) Liens existing on the assets of any Person that becomes a Subsidiary, or existing on
assets acquired, pursuant to an Investment permitted pursuant to Section 10.5 to the extent the
Liens on such assets secure Indebtedness permitted by Section 10.1(A)(h), provided that
such Liens attach at all times only to the same assets that such Liens attached to, and secure only
the same Indebtedness that such Liens secured, immediately prior to such Investment and were not
created in contemplation thereof;



          (g) additional Liens on assets that do not constitute Collateral so long as the aggregate
principal amount of the obligations so secured does not exceed the greater of (x) $10.0 million and
(y) 0.75% of Total Assets;



          (h) Liens on assets that do not constitute Collateral securing Indebtedness and the Note
Obligations (as defined in the Intercreditor Agreement) permitted by Section 10.1(A)(i);



          (i) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to
RailAmerica or another Restricted Subsidiary permitted to be incurred under Section 10.1(A)(b); and



          Notwithstanding the foregoing, none of the Liens permitted pursuant to this Section 10.2 may
at any time attach to any Credit Party’s Accounts, other than involuntary Permitted Liens and those
permitted under clause (a) above.



          10.3. Limitation on Fundamental Changes. RailAmerica will not, and will not permit any of the Restricted Subsidiaries to, enter into
any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey,



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sell, lease, assign, transfer or otherwise dispose of, all or substantially all its business
units, assets or other properties, except that:




          (a) any Subsidiary of RailAmerica or any other Person may be merged or consolidated with or
into any Borrower, provided that (i) such Borrower shall be the continuing or surviving
corporation, or the Person formed by or surviving any such merger or consolidation (if other than
such Borrower) shall be an entity organized or existing under the laws of the United States, any
state thereof or the District of Columbia (such Person ,other than a Borrower, being herein
referred to as the “Successor Credit Party”), (ii) the Successor Credit Party shall
expressly assume all the obligations of such Borrower under this Agreement and the other Credit
Documents pursuant to a supplement hereto or thereto in form reasonably satisfactory to the
Administrative Agent, (iii) no Default or Event of Default would result from the consummation of
such merger or consolidation, and (iv) RailAmerica shall have delivered to the Administrative Agent
and the Collateral Agent an Officer’s Certificate and an opinion of counsel, each stating that such
merger or consolidation and such supplement to this Agreement or any Security Document comply with
this Agreement; provided further that if the foregoing are satisfied, the Successor Credit Party
will succeed to, and be substituted for, such Borrower under this Agreement;



          (b) any Subsidiary of RailAmerica (other than RATC) or any other Person may be merged,
amalgamated or consolidated with or into any one or more Subsidiaries of RailAmerica,
provided that (i) in the case of any merger or consolidation involving one or more
Restricted Subsidiaries, (A) a Restricted Subsidiary shall be the continuing or surviving
corporation or (B) RailAmerica shall take all steps necessary to cause the Person formed by or
surviving any such merger or consolidation (if other than a Restricted Subsidiary) to become a
Restricted Subsidiary, (ii) in the case of any merger, amalgamation or consolidation involving one
or more Subsidiary Guarantors, a Subsidiary Guarantor shall be the continuing or surviving
corporation or the Person formed by or surviving any such merger, amalgamation or consolidation (if
other than a Subsidiary Guarantor), (A) shall be an entity organized under the laws of the United
States, any state thereof or the District of Columbia and (B) shall execute a supplement to the
Guarantee Agreement and the Security Agreement, in form and substance reasonably satisfactory to
the Collateral Agent in order to become a Subsidiary Guarantor and pledgor and grantor of
Collateral for the benefit of the Secured Parties, (iii) no Default or Event of Default would
result from the consummation of such merger, amalgamation or consolidation and (iv) RailAmerica
shall have delivered to the Administrative Agent and the Collateral Agent an Officers’ Certificate
and opinion of counsel each stating that such merger, amalgamation or consolidation and such
supplements to any Security Document comply with this Agreement;



          (c) any Restricted Subsidiary that is not a Subsidiary Guarantor may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary liquidation or otherwise) to a
Borrower or any other Restricted Subsidiary;



          (d) any Subsidiary Guarantor may sell, lease, transfer or otherwise dispose of any or all of
its assets (upon voluntary liquidation or otherwise) to a Borrower or any Subsidiary Guarantor;



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          (e) any Restricted Subsidiary (other than RATC) may liquidate or dissolve if (x) RailAmerica
determines in good faith that such liquidation or dissolution is in the best interests of
RailAmerica and is not materially disadvantageous to the Lenders and (y) to the extent such
Restricted Subsidiary is a Credit Party, any assets or business not otherwise disposed of or
transferred in accordance with Section 10.4 or 10.5, or, in the case of any such business,
discontinued without being disposed of or transferred, shall be transferred to, or otherwise owned
or conducted by, another Credit Party after giving effect to such liquidation or dissolution; and



          (f) any merger, dissolution, liquidation, consolidation or disposition of a Subsidiary, the
purpose of which is to effect (i) a disposition permitted by Section 10.4 (other that Section
10.4(d)) shall be permitted or (ii) any Investment permitted by Section 10.5 shall be permitted.



          10.4. Limitation on Sale of Assets. RailAmerica will not, and will not permit any of the Restricted Subsidiaries to, (i)
convey, sell, lease, assign, transfer or otherwise dispose of any of its property, business or
assets (including receivables and leasehold interests), whether now owned or hereafter acquired or
(ii) sell to any Person any shares owned by it of any Restricted Subsidiary’s capital stock, except
that:



          (a) RailAmerica and the Restricted Subsidiaries may sell, transfer or otherwise dispose of
used or surplus equipment, vehicles, inventory and other assets in the ordinary course of business;



          (b) RailAmerica and the Restricted Subsidiaries may sell, transfer or otherwise dispose of
other assets (other than Accounts) for fair value, provided that (i) the aggregate amount
of such sales, transfers and disposals by RailAmerica and the Restricted Subsidiaries, taken as a
whole, pursuant to this clause (b) shall not exceed in the aggregate the greater of (x) $250.0
million and (y) 15% of Total Assets; provided that if the net cash proceeds of such sale, transfer
or disposition of assets are within 365 days after receipt of such net cash proceeds reinvested in
useful assets in one or more business or Capital Expenditures (or a binding commitment to reinvest
such net cash proceeds in useful assets in one or more business or Capital Expenditures is entered
into within 365 days after receipt of such net cash proceeds and such reinvestment is consummated
within 545 days after receipt of such net cash proceeds), then effective upon consummation of such
reinvestment, such net cash proceeds shall no longer count against the cap in this clause (b)(i),
(ii) the consideration received for any such sales, transfers and disposals shall consist of not
less than 75% cash consideration; provided that for the purposes of this clause (ii) the
following shall be deemed to be cash: (A) any liabilities (as shown on RailAmerica’s or such
Restricted Subsidiary’s most recent balance sheet provided hereunder or in the footnotes thereto)
of RailAmerica or such Restricted Subsidiary assumed by the transferee with respect to the
applicable sale, transfer or disposal, as to which RailAmerica and all of the Restricted
Subsidiaries shall have been released by all applicable creditors in writing, other than
liabilities that are by their terms (1) subordinated to the payment in cash of the Obligations or
(2) in the case of a sale by a Borrower or a Subsidiary Guarantor, not secured by the assets that
are the subject of such sale, transfer or disposal and (B) any securities received by the Person
making such sale, transfer or disposal from the transferee that are converted by such Person into
cash



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(to the extent of the cash received) within 180 days following the closing of the applicable
sale, transfer or disposal and (iii) after giving effect to any such sale, transfer or disposition,
no Default or Event of Default shall have occurred and be continuing;




          (c) RailAmerica and the Restricted Subsidiaries may make sales of assets to RailAmerica or to
any Restricted Subsidiary, provided that no sale of any assets by any Borrower or any
Subsidiary Guarantor to any Restricted Subsidiary that is not RATC or a Subsidiary Guarantor shall
be permitted pursuant to this clause (c);



          (d) (i) mergers, liquidations and transfers of all or substantially all assets permitted by
Section 10.3, (ii) Investments permitted by Section 10.5 and (iii) Restricted Payments permitted by
Section 10.6, in each case, shall be permitted;



          (e) RailAmerica and the Restricted Subsidiaries may sell without recourse Accounts arising in
the ordinary course of business in connection with the compromise, settlement, collection thereof
or conversion of Accounts to notes receivable;



          (f) sales, transfers, assignments or other dispositions resulting from any casualty or
condemnation of any assets of RailAmerica or any of its Subsidiaries; and



          (g) RailAmerica and the Restricted Subsidiaries may effect the unwinding of any Hedge
Agreement.



          10.5. Limitation on Investments. RailAmerica will not, and will not permit any of the Restricted Subsidiaries to, make any
advance, loan, extensions of credit or capital contribution to, or purchase any stock, bonds,
notes, debentures or other securities of or any assets of, or make any other investment (including
pursuant to any Guarantee Obligation with respect to the obligations of another Person)
(“Investments”) in, any Person, except:



          (a) extensions of trade credit and asset purchases in the ordinary course of business;



          (b) Permitted Investments;



          (c) loans and advances to officers, directors and employees of RailAmerica or any of its
Subsidiaries (i) to finance the purchase of capital stock of RailAmerica (or a parent company
thereof) (provided that the amount of such loans and advances used to acquire such capital
stock shall be contributed by such parent company to RailAmerica in cash as common equity) and (ii)
for additional purposes not contemplated by subclause (i) above in an aggregate principal amount at
any time outstanding with respect to this clause (ii) not exceeding $5.0 million;



          (d) Investments existing on the Closing Date and listed on Schedule 10.5 and any
extensions, renewals or reinvestments with respect to any return therefrom (including through a
repayment, return of capital, interest or dividends) (but without any increase in the



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amount thereof and in the case of any reinvestment, only if such reinvestment is made within
60 days after the date of receipt of any such returned amount);




          (e) Hedge Agreements permitted by Section 10.1(A)(g);



          (f) Investments received in connection with the bankruptcy or reorganization of suppliers or
customers and in settlement of delinquent obligations of, and other disputes with, customers
arising in the ordinary course of business;



          (g) Investments to the extent that payment for such investments is made solely with capital
stock (other than Disqualified Capital Stock) of RailAmerica or with the net cash proceeds from a
sale of capital stock (other than Disqualified Capital Stock) of RailAmerica (other than to a
Subsidiary or to a management equity plan or stock option-plan or any other management or employee
benefit plan or agreement) or with contributions to the common equity capital of RailAmerica;



          (h) Investments constituting non-cash proceeds of sales, transfers and other dispositions of
assets to the extent permitted by Section 10.4;



          (i) (i) Investments in RailAmerica, RATC or any Subsidiary Guarantor, (ii) Investments by any
Restricted Subsidiary that is not RATC or a Subsidiary Guarantor in any other Restricted Subsidiary
that is not RATC or a Subsidiary Guarantor and (iii) Investments by RailAmerica, RATC or any
Subsidiary Guarantor in any Restricted Subsidiary that is not RATC or a Subsidiary Guarantor in an
aggregate principal amount not to exceed $10.0 million at any time outstanding;



          (j) Permitted Acquisitions, provided that (i) no Event of Default shall have occurred
and be continuing or would result therefrom and (ii) on a Pro Forma Basis after giving effect to
such Permitted Acquisition either (A) (x) no Loans or Unpaid Drawings shall be outstanding or were
outstanding for the period of sixty (60) consecutive days (or, if less, the number of days from and
including the Closing Date to and including the date of determination) immediately preceding
consummation of such Permitted Acquisition and (y) no Loans are projected to be outstanding for the
period of sixty (60) consecutive days immediately following consummation of such Permitted
Acquisition or (B) (x) the Fixed Charge Coverage Ratio for the most recently ended Test Period for
which Section 9.1 Financials have been delivered would be at least (I) for any Test Period ended on
or before June 30, 2010, 1.15 to 1.00 and (II) for any Test Period ended after June 30, 2010, 1.25
to 1.00, (y) average daily Availability for the period of sixty (60) consecutive days (or, if less,
the number of days from and including the Closing Date to and including the date of determination)
immediately preceding consummation of such Permitted Acquisition has been, and for the period of
sixty (60) consecutive days immediately following consummation of such Permitted Acquisition is
projected by RailAmerica to be, not less than $20.0 million on the date of consummation of such
Permitted Acquisition and (iii) at the time of making such Permitted Acquisition, RailAmerica shall
have delivered to the Administrative Agent an officer’s certificate of an Authorized Officer
certifying satisfaction with the conditions set forth in clauses (i) and (ii) above;



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          (k) other Investments, provided that, at the time each such Investment is made or
otherwise acquired and after giving effect thereto (i) no Event of Default shall have occurred and
be continuing or would result therefrom, (ii) on a Pro Forma Basis after giving effect to such
Investment either (A) (x) no Loans or Unpaid Drawings shall be outstanding or were outstanding for
the period of sixty (60) consecutive days (or, if less, the number of days from and including the
Closing Date to and including the date of determination) immediately preceding such Investment and
(y) no Loans are projected to be outstanding for the period of sixty (60) consecutive days
immediately following such Investment or (B) on a Pro Forma Basis, (x) the Fixed Charge Coverage
Ratio for the most recently ended Test Period is at least (I) for any Test Period ended on or
before June 30, 2010, 1.15 to 1.00 and (II) for any Test Period ended after June 30, 2010, 1.25 to
1.00, and (y) average daily Availability for the period of sixty (60) consecutive days (or, if
less, the number of days from and including the Closing Date to and including the date of
determination) immediately preceding such Investment has been and for the period of sixty (60)
consecutive days immediately following such Investment is projected by RailAmerica to be not less
than $20.0 million on the date of such Investment and (iii) at the time of making such Investment,
RailAmerica shall have delivered to the Administrative Agent an officer’s certificate of an
Authorized Officer certifying satisfaction with the conditions set forth in clauses (i) and (ii)
above;



          (l) other Investments in an amount not to exceed $5.0 million;



          (m) Investments constituting Restricted Payments permitted by Section 10.6; and



          10.6. Limitation on Restricted Payments. RailAmerica will not, and will not permit any of the Restricted Subsidiaries to make any
Restricted Payment, provided that, (a) so long as no Default or Event of Default exists or
would exist after giving effect thereto, RailAmerica may redeem in whole or in part any of its
capital stock for another class of its capital stock (other than Disqualified Capital Stock) or
rights to acquire its capital stock (other than Disqualified Capital Stock) or with proceeds from
substantially concurrent equity contributions or issuances of new shares of its capital stock
(other than Disqualified Capital Stock), provided that such other class of capital stock
contains terms and provisions at least as advantageous to the Lenders in all respects material to
their interests as those contained in the capital stock redeemed thereby, (b) RailAmerica may
declare and pay dividends and/or make distributions on its capital stock, as applicable the
proceeds of which will be used by Holdings solely to pay (i) franchise taxes and other fees, taxes
and expenses required to maintain their corporate existence, (ii) customary salary, bonus and other
benefits payable to officers and employees of any direct or indirect parent of RailAmerica to the
extent such salaries, bonuses and other benefits are attributable to the ownership or operation of
RailAmerica and the Restricted Subsidiaries, (iii) general corporate overhead expenses of any
direct or indirect parent of RailAmerica to the extent such expenses are attributable to the
ownership or operation of RailAmerica and the Restricted Subsidiaries; and (iv) any amounts
required for any direct or indirect parent of RailAmerica to pay fees and expenses, other than to
Affiliates of RailAmerica, related to any equity or debt offering of such parent, in an aggregate
amount not to exceed $1.0 million in any fiscal year and $3.0 million from the Closing Date, (c)
RailAmerica may make other Restricted Payments; provided that



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(A) both immediately before and immediately after giving effect to such Restricted Payment, no
Default or Event of Default shall have occurred and be continuing, (B) at the time any Restricted
Payment is made on a Pro Forma Basis, (x) the Fixed Charge Coverage Ratio for the most recently
ended Test Period for which Section 9.1 Financials have been delivered shall not be less than (I)
for any Test Period ended on or before June 30, 2010, 1.15 to 1.00 and (II) for any Test Period
ended after June 30, 2010, 1.25 to 1.00 and (y) average daily Availability for the period of sixty
(60) consecutive days (or, if less, the number of days from and including the Closing Date to and
including the date of determination) immediately preceding such Restricted Payment has been and for
the period of sixty (60) consecutive days immediately following such Restricted Payment is
projected to be not less than $20.0 million and (C) at the time of making such payment, RailAmerica
shall have delivered to the Administrative Agent an officer’s certificate of an Authorized Officer
certifying satisfaction with the conditions set forth in clauses (A) and (B) above, (d) Restricted
Payments by RailAmerica to repurchase or settle shares of capital stock of RailAmerica or Holdings
(or options, warrants or stock appreciation rights with respect to such capital stock or any other
equity-based award) from present or former employees or directors of RailAmerica, its Subsidiaries
or Holdings pursuant to any management equity plan or stock option plan in an aggregate amount not
to exceed $5.0 million in any calendar year (with unused amounts in any calendar year being carried
over to succeeding calendar years subject to a maximum of $10.0 million in any calendar year) and
(e) RailAmerica may make other Restricted Payments in an amount not exceed $25.0 million since the
Closing Date; provided that (A) both immediately before and immediately after giving effect to such
Restricted Payment, no Default or Event of Default shall have occurred and be continuing, (B) at
the time any Restricted Payment is made on a Pro Forma Basis (i) (x) no Loans or Unpaid Drawings
shall be outstanding or were outstanding for the period of sixty (60) consecutive days (or, if
less, the number of days from and including the Closing Date to and including the date of
determination) immediately preceding such Restricted Payment and (y) no Loans are projected to be
outstanding for the period of sixty (60) consecutive days immediately following such Restricted
Payment, (ii) the Interest Coverage Ratio for the most recently ended Test Period for which Section
9.1 Financials have been delivered shall be at least 2.00 to 1.00 and (iii) cash and Permitted
Investments of RailAmerica and its Restricted Subsidiaries that is free and clear of all Liens,
other than non-consensual Permitted Liens, and is otherwise generally available for use by the
RailAmerica or such Restricted Subsidiary at such time is at least $10.0 million and (C) at the
time of making such Restricted Payment, RailAmerica shall have delivered to the Administrative
Agent an officer’s certificate of an Authorized Officer certifying satisfaction with the
conditions set forth in clauses (A) and (B) above.




          10.7. Limitations on Debt Payments and Certain Amendments.



          (a) RailAmerica will not, and will not permit any of the Restricted Subsidiaries to, make
directly or indirectly, any payment or other distribution (whether in cash, securities or other
property) of or in respect of principal of or interest on any Indebtedness for borrowed money, or
any payment or other distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any Indebtedness for borrowed money, except:



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     (A) payments of Indebtedness created under the Credit Documents;




     (B) payments of regularly scheduled interest and principal payments as and when due in
respect of any Indebtedness, other than payments in respect of any Indebtedness that is
subordinated to the Obligations prohibited by the subordination provisions thereof;




     (C) refinancings, replacements and renewals of Indebtedness to the extent made with (or
in exchange for) Permitted Refinancing Indebtedness (or, in the case of Indebtedness
outstanding pursuant to clause (e), (f) or (h) of Section 10.1(A), with the proceeds of
refinancing Indebtedness incurred pursuant to such clauses);




     (D) payments of secured Indebtedness that becomes due as a result of the voluntary sale
or transfer of the property or assets securing such Indebtedness;




     (E) payments with respect to Indebtedness owed to any Borrower or any Subsidiary
Guarantor;




     (F) payments by Restricted Subsidiaries that are not Subsidiary Guarantors with respect
to Indebtedness of such Restricted Subsidiaries;




     (G) payments with respect to the Initial Secured Notes and any Permitted Additional
Secured Debt made solely from the proceeds of Notes Collateral to the extent required by the
Secured Notes Indenture or any indenture governing any Permitted Additional Secured Debt;




     (H) other payments with respect to Permitted Unsecured Debt; provided that (A)
both immediately before and immediately after giving effect to such payment, no Default or
Event of Defalt shall have occurred and be continuing, (B) at the time any payment is made
on a Pro Forma Basis, (x) the Fixed Charge Coverage Ratio for the most recently ended Test
Period for which Section 9.1 Financials have been delivered shall not be less than (I) for
any Test Period ended on or before June 30, 2010, 1.15 to 1.00 and (II) for any Test Period
ended after June 30, 2010, 1.25 to 1.00 and (y) average daily Availability for the period of
sixty (60) consecutive days (or, if less, the number of days from and including the Closing
Date to and including the date of determination) immediately preceding such payment has been
and for the period of sixty (60) consecutive days immediately following such payment is
projected by RailAmerica to be not less than $20.0 million (C) at the time of making such
payment, RailAmerica shall have delivered to the Administrative Agent an officer’s
certificate of an Authorized Officer certifying satisfaction with the conditions set forth
in clauses (A) and (B) above.




     (I) other payments with respect to Initial Secured Notes and Permitted Additional
Secured Debt; provided that (A) both immediately before and immediately after giving
effect to such payment, no Default or Event of Default shall have occurred and be
continuing, (B) at the time of making such payment on a Pro Forma Basis, either (i) (x) no
Loans or Unpaid Drawings shall be outstanding or were outstanding for the period of



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sixty (60) consecutive days (or, if less, the number of days from and including the
Closing Date to and including the date of determination) immediately preceding such payment
and (y) no Loans are projected to be outstanding for the period of sixty (60) consecutive
days immediately following such payment or (ii) (x) the Fixed Charge Coverage Ratio for the
most recently ended Test Period for which Section 9.1 Financials have been delivered shall
not be less than (I) for any Test Period ended on or before June 30, 2010, 1.15 to 1.00 and
(II) for any Test Period ended after June 30, 2010, 1.25 to 1.00 and (y) average daily
Availability for the period of sixty (60) consecutive days (or, if less, the number of days
from and including the Closing Date to and including the date of determination) immediately
preceding such payment has been and for the period of sixty (60) consecutive days
immediately following such payment is projected by RailAmerica to be not less than $20.0
million and (C) at the time of making such payment, RailAmerica shall have delivered to the
Administrative Agent an officer’s certificate of an Authorized Officer certifying
satisfaction with the conditions set forth in clauses (A) and (B) above.




     (J) payments with respect to Indebtedness made from the proceeds of a substantially
concurrent contribution to the common equity of RailAmerica (other than Disqualified Capital
Stock); and




     (K) payments or distributions made with common stock of RailAmerica or warrants or
options to purchase such common stock of RailAmerica.



          (b) RailAmerica will not, and will not permit any Restricted Subsidiary, to amend, modify or
waive any of its rights under any agreement governing or relating to any Indebtedness which is
subordinated to the Obligations to the extent any such amendment, modification or waiver would be
materially adverse to the Lenders. RailAmerica will not amend the terms of the Initial Secured
Notes, any Permitted Additional Secured Debt or any Permitted Unsecured Debt in a manner that would
accelerate the date on which RailAmerica is required to make any payment of principal or interest
or any other amount thereon.



          10.8. Limitations on Sale Leasebacks. RailAmerica will not, and will not permit any of the Restricted Subsidiaries to, enter into
or effect any Sale Leasebacks, other than Permitted Sale Leasebacks.



          10.9. Fixed Charge Coverage Ratio. During any Minimum Availability Period, RailAmerica will not permit the Fixed Charge
Coverage Ratio for the most recently ended Test Period prior to the commencement of such Minimum
Availability Period or for any Test Period ending during such Minimum Availability Period to be
less than 1.1 to 1.0.



          10.10. Transactions with Affiliates. (a) RailAmerica will not, and will not permit any of its Restricted Subsidiaries to, sell,
lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any of its Affiliates
involving aggregate payments or consideration in excess of $5.0 million (provided that any
such transaction involving aggregate payments or consideration in an amount less than $5.0 million
shall not involve the sale, lease or transfer of any property or assets constituting Collateral),
unless (i) such transactions are at prices and on terms



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and conditions not less favorable to RailAmerica or such Restricted Subsidiary than could be
obtained on an arm’s-length basis from unrelated third parties and (ii) RailAmerica delivers to the
Administrative Agent with respect to any such transaction or series of related transactions
involving aggregate payments or consideration in excess of $10.0 million, a resolution adopted by
the majority of the Board of Directors of RailAmerica approving such transaction and a certificate
of an Authorized Officer of RailAmerica certifying that such transaction complies with clause (a)
hereof.




          (b) The provisions of paragraph (a) will not apply to (i) transactions between or among
RailAmerica and Restricted Subsidiaries not involving any other Affiliate, (ii) any Restricted
Payment permitted by Section 10.6 and (iii) the payment of management, consulting, monitoring and
advisory fees and related expenses to Sponsor and its Affiliates in an aggregate amount in any
fiscal year not to exceed an amount per annum equal to $2.0 million.



          10.11. Restrictive Agreements. RailAmerica will not, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly, enter into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of RailAmerica or any Restricted
Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (b)
the ability of any Restricted Subsidiary to pay dividends or other distributions with respect to
any shares of its capital stock or to make or repay loans or advances to RailAmerica or any other
Restricted Subsidiary or to Guarantee Indebtedness of RailAmerica or any other Restricted
Subsidiary; provided that:



          (a) the foregoing shall not apply to (i) restrictions and conditions imposed by law or by this
Agreement, (ii) restrictions and conditions existing on the Closing Date, (iii) restrictions and
conditions imposed on a Person by any indenture, agreement or other contractual arrangement that
was in effect at the time such Person became a Restricted Subsidiary, or imposed on any property
that was in effect at the time such property was acquired, and in each case not entered into in
contemplation of such Person becoming such a Restricted Subsidiary or such property being acquired,
(iv) customary restrictions and conditions contained in agreements relating to the sale of a
Restricted Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Restricted Subsidiary that is to be sold and such sale is permitted hereunder and (v)
restrictions and conditions imposed upon RailAmerica or any of its Subsidiaries pursuant to
Permitted Additional Secured Debt or Permitted Unsecured Debt that are nor materially more
burdensome taken as a whole than that in the Initial Secured Notes Indenture as in effect on the
Closing Date; and



          (b) clause (a) of the foregoing shall not apply to (x) restrictions or conditions imposed by
any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Indebtedness and (y) customary
provisions in leases and other contracts restricting the assignment thereof.



          10.12. Changes in Business. RailAmerica and the Subsidiaries, taken as a whole, will not fundamentally and
substantively alter the character of their business, taken as a whole, from the business conducted
by RailAmerica and the Subsidiaries, taken as a whole, on the Closing Date and other business
activities incidental or related to any of the foregoing.



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          10.13. Limitation on Issuance of Capital Stock. RailAmerica will not permit any of the Restricted Subsidiaries to issue any Equity Interest
(including by way of sales of treasury stock) or any options or warrants to purchase, or securities
convertible into, any Equity Interest, except (a) for stock splits, stock dividends and additional
issuances of Equity Interests which do not decrease the percentage ownership of RailAmerica or any
Restricted Subsidiaries in any class of the Equity Interest of such Restricted Subsidiary; and (b)
Restricted Subsidiaries of RailAmerica formed after the Closing Date may issue Equity Interests to
RailAmerica or the Restricted Subsidiary of RailAmerica which is to own such Equity Interests.



          SECTION 11. Events of Default



          Upon the occurrence of any of the following specified events (each an “Event of
Default”):



          11.1. Payments. Each Borrower shall (a) default in the payment when due of any principal of the Loans or
(b) default, and such default shall continue for five or more days, in the payment when due of any
interest on the Loans or any Fees or any Unpaid Drawings or of any other amounts owing hereunder or
under any other Credit Document; or



          11.2. Representations, etc.
Any representation, warranty or statement made or deemed made by any Credit Party herein or in
any Credit Document or any certificate delivered or required to be delivered pursuant hereto or
thereto shall prove to be untrue in any material respect on the date as of which made or deemed
made; or



          11.3. Covenants. Any Credit Party shall (a) (x) default in the due performance or observance by it of any
term, covenant or agreement contained in Section 9.1(f)(i), Section 9.13, Section 2.14(b) or
Section 10 or (y) default in the due performance or observance by it of any term, covenant or
agreement contained in Section 9.1(e) and such default shall continue unremedied for a period of at
least 5 days after receipt of written notice by RailAmerica from the Administrative Agent, the
Collateral Agent or the Required Lenders or (b) default in the due performance or observance by it
of any term, covenant or agreement (other than those referred to in Section 11.1 or 11.2 or clause
(a) of this Section 11.3) contained in this Agreement or any Credit Document and such default shall
continue unremedied for a period of at least 30 days after receipt of written notice by RailAmerica
from the Administrative Agent or the Required Lenders; or



          11.4. Default Under Other Agreements. (a) RailAmerica or any of the Restricted Subsidiaries shall (i) default in any payment with
respect to any Indebtedness (other than the Obligations) having a principal amount in excess of
$10.0 million individually or in the aggregate for RailAmerica and such Subsidiaries, beyond the
period of grace, if any, provided in the instrument or agreement under which such Indebtedness was
created or (ii) default in the observance or performance of any agreement or condition relating to
any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such Indebtedness (or a
trustee or agent on behalf of such holder or holders) to cause, any such Indebtedness to become due
(or to cause RailAmerica or



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any of its Restricted Subsidiaries to purchase any such Indebtedness) prior to its stated
maturity; or (b) without limiting the provisions of clause (a) above, any such Indebtedness shall
be declared to be due and payable, or required to be prepaid other than by a regularly scheduled
required prepayment or as a mandatory prepayment, prior to the stated maturity thereof; or




          11.5. Bankruptcy, etc.
Either Borrower or any Specified Subsidiary shall commence a voluntary case, proceeding or
action concerning itself under (a) Title 11 of the United States Code entitled “Bankruptcy,” or (b)
in the case of any Foreign Subsidiary that is a Specified Subsidiary, any domestic or foreign law
relating to bankruptcy, insolvency reorganization or relief of debtors legislation of its
jurisdiction of incorporation, in each case as now or hereafter in effect, or any successor thereto
(collectively, the “Bankruptcy Code”); or an involuntary case, proceeding or action is
commenced against either Borrower or any Specified Subsidiary and the petition is not controverted
within 10 days after commencement of the case, proceeding or action; or an involuntary case,
proceeding or action is commenced against either Borrower or any Specified Subsidiary and the
petition is not dismissed within 60 days after commencement of the case, proceeding or action; or a
custodian (as defined in the Bankruptcy Code) receiver, receiver manager, trustee or similar person
is appointed for, or takes charge of, all or substantially all of the property of either Borrower
or any Specified Subsidiary; or either Borrower or any Specified Subsidiary commences any other
proceeding or action under any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter
in effect relating to either Borrower or any Specified Subsidiary; or there is commenced against
either Borrower or any Specified Subsidiary any such proceeding or action that remains undismissed
for a period of 60 days; or either Borrower or any Specified Subsidiary is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or proceeding or action is
entered; or either Borrower or any Specified Subsidiary suffers any appointment of any custodian
receiver, receiver manager, trustee or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 days; or either Borrower or any Specified
Subsidiary makes a general assignment for the benefit of creditors; or any corporate action is
taken by either Borrower or any Specified Subsidiary for the purpose of effecting any of the
foregoing; or



          11.6. ERISA. (a) Any Plan shall fail to satisfy the minimum funding standard required for any plan year
or part thereof or a waiver of such standard or extension of any amortization period is sought or
granted under Section 412 of the Code; any Plan is or shall have been terminated or is the subject
of termination proceedings under ERISA (including the giving of written notice thereof); an event
shall have occurred or a condition shall exist in either case entitling the PBGC to terminate any
Plan or to appoint a trustee to administer any Plan (including the giving of written notice
thereof); any Plan shall have an accumulated funding deficiency (whether or not waived); either
Borrower or any Subsidiary or any ERISA Affiliate has incurred or is likely to incur a liability to
or on account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or
4204 of ERISA or Section 4971 or 4975 of the Code (including the giving of written notice thereof);
(b) there could result from any event or events set forth in clause (a) of this Section 11.6 the
imposition of a lien, the granting of a security interest, or a liability, or the reasonable
likelihood of incurring a lien, security interest or liability; and (c) such



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lien, security interest or liability will or would be reasonably likely to have a Material
Adverse Effect; or




          11.7. Guarantee. The Guarantees or any material provision thereof shall cease to be in full force or effect
or any Guarantor thereunder or any Credit Party shall deny or disaffirm in writing any Guarantor’s
obligations under the Guarantee; or



          11.8. Security Agreement. The Security Agreements or any material provision thereof shall cease to be in full force
or effect (other than pursuant to the terms hereof or thereof or as a result of acts or omissions
of the Administrative Agent or any Lender) or any grantor thereunder or any Credit Party shall deny
or disaffirm in writing any grantor’s obligations under the Security Agreement; or



          11.9. Judgments. One or more judgments or decrees shall be entered against RailAmerica or any of the
Restricted Subsidiaries involving a liability of $10.0 million or more individually or in the
aggregate for all such judgments and decrees for RailAmerica and the Restricted Subsidiaries (to
the extent not paid or fully covered by insurance provided by a carrier not disputing coverage) and
any such judgments or decrees shall not have been satisfied, vacated, discharged or stayed or
bonded pending appeal within 60 days from the entry thereof; or



          11.10. Change of Control. A Change of Control shall occur;


then, and in any such event, and at any time thereafter, if any Event of Default shall then be
continuing, the Administrative Agent shall, upon the written request of the Required Lenders, by
written notice to RailAmerica, take any or all of the following actions, without prejudice to the
rights of the Administrative Agent or any Lender to enforce its claims against the Borrowers,
except as otherwise specifically provided for in this Agreement (provided that, if an Event
of Default specified in Section 11.5 shall occur with respect to either Borrower, the result that
would occur upon the giving of written notice by the Administrative Agent as specified in clauses
(i), (ii) and (iv) below shall occur automatically without the giving of any such notice): (i)
declare the Total Commitment terminated, whereupon the Commitments and Swingline Commitment, if
any, of each Lender or the Swingline Lender, as the case may be, shall forthwith terminate
immediately and any Fees theretofore accrued shall forthwith become due and payable without any
other notice of any kind; (ii) declare the principal of and any accrued interest and fees in
respect of all Loans and all Obligations owing hereunder and thereunder to be, whereupon the same
shall become, forthwith due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by each Borrower; (iii) terminate any Letter of Credit that
may be terminated in accordance with its terms; (iv) exercise rights and remedies under the Credit
Documents, at law or in equity; and/or (iv) direct each Borrower to pay (and each Borrower agrees
that upon receipt of such notice, or upon the occurrence of an Event of Default specified in
Section 11.5 with respect to such Borrower, it will pay) to the Administrative Agent, at its
Administrative Agent’s Office, such additional amounts of cash, to be held as security for the
Borrowers’ reimbursement obligations for Drawings that may subsequently occur thereunder, equal to
the aggregate Stated Amount of all Letters of Credit issued and then outstanding.




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          SECTION 12. The Agents



          12.1. Appointment and Authority. Each Lender hereby irrevocably appoints Citicorp North America, Inc. to act on its behalf
as the Administrative Agent and as the Collateral Agent hereunder and under the other Credit
Documents and authorizes the Agents to take such actions on its behalf and to exercise such powers
as are delegated to the Agents by the terms hereof or thereof, together with such actions and
powers as are reasonably incidental thereto. The provisions of this Article are solely for the
benefit of the Agents and the Lenders, and neither the Borrowers nor any other Credit Party shall
have rights as a third party beneficiary of any of such provisions.



          12.2. Agents Individually.



          (a) Each Person serving as an Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it were not an Agent
and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the
context otherwise requires, include each Person serving as an Agent hereunder in its individual
capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in any kind of
business with any Borrower or any Subsidiary or other Affiliate thereof as if such Person were not
an Agent hereunder and without any duty to account therefor to the Lenders.



          (b) Each Lender understands that each Person serving an Agent, acting in its individual
capacity, and its Affiliates (collectively, the “Agent’s Group”) are engaged in a wide
range of financial services and businesses (including investment management, financing, securities
trading, corporate and investment banking and research) (such services and businesses are
collectively referred to in this Section 12 as “Activities”) and may engage in the
Activities with or on behalf of one or more of the Credit Parties or their respective Affiliates.
Furthermore, the Agent’s Group may, in undertaking the Activities, engage in trading in financial
products or undertake other investment businesses for its own account or on behalf of others
(including the Credit Parties and their Affiliates and including holding, for its own account or on
behalf of others, equity, debt and similar positions in any Borrower, another Credit Party or their
respective Affiliates), including trading in or holding long, short or derivative positions in
securities, loans or other financial products of one or more of the Credit Parties or their
Affiliates. Each Lender understands and agrees that in engaging in the Activities, the Agent’s
Group may receive or otherwise obtain information concerning the Credit Parties or their Affiliates
(including information concerning the ability of the Credit Parties to perform their respective
Obligations hereunder and under the other Credit Documents) which information may not be available
to any of the Lenders that are not members of the Agent’s Group. No Agent nor any member of the
Agent’s Group shall have any duty to disclose to any Lender or use on behalf of the Lenders, and
shall not be liable for the failure to so disclose or use, any information whatsoever about or
derived from the Activities or otherwise (including any information concerning the business,
prospects, operations, property, financial and other condition or creditworthiness of any Credit
Party or any Affiliate of any Credit Party) or to account for any revenue or profits obtained in
connection with the Activities, except that each Agent shall deliver or otherwise make available to
each Lender such



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documents as are expressly required by any Credit Document to be transmitted by such
Agent to the Lenders.




          (c) Each Lender further understands that there may be situations where members of the Agent’s
Group or their respective customers (including the Credit Parties and their Affiliates) either now
have or may in the future have interests or take actions that may conflict with the interests of
any one or more of the Lenders (including the interests of the Lenders hereunder and under the
other Credit Documents). Each Lender agrees that no member of the Agent’s Group is or shall be
required to restrict its activities as a result of each Person serving as an Agent being a member
of the Agent’s Group, and that each member of the Agent’s Group may undertake any Activities
without further consultation with or notification to any Lender. None of (i) this Agreement nor
any other Credit Document, (ii) the receipt by the Agent’s Group of information (including
Information) concerning the Credit Parties or their Affiliates (including information concerning
the ability of the Credit Parties to perform their respective Obligations hereunder and under the
other Credit Documents) nor (iii) any other matter shall give rise to any fiduciary, equitable or
contractual duties (including without limitation any duty of trust or confidence) owing by the any
Agent or any member of the Agent’s Group to any Lender including any such duty that would prevent
or restrict the Agent’s Group from acting on behalf of customers (including the Credit Parties or
their Affiliates) or for its own account.



          12.3. Duties of the Agents; Exculpatory Provisions.



          (a) Each Agent’s duties hereunder and under the other Credit Documents are solely ministerial
and administrative in nature and no Agent shall have any duties or obligations except those
expressly set forth herein and in the other Credit Documents. Without limiting the generality of
the foregoing, no Agent shall have any duty to take any discretionary action or exercise any
discretionary powers, but shall be required to act or refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the written direction of the Required
Lenders (or such other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Credit Documents), provided that no Agent shall be required to take
any action that, in its opinion or the opinion of its counsel, may expose such Agent or any of its
Affiliates to liability or that is contrary to any Credit Document or applicable law.



          (b) No Agent shall be liable for any action taken or not taken by it (i) with the consent or
at the request of the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary, or as such Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Section 13.1 or 11) or (ii) in the absence of its own gross negligence
or willful misconduct. Each Agent shall be deemed not to have knowledge of any Default or Event of
Default or the event or events that give or may give rise to any Default or Event of Default unless
and until the Borrowers or any Lender shall have given notice to such Agent describing such Default
or Event of Default and such event or events.



          (c) No Agent nor any member of the Agent’s Group shall be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty, representation or other information made or
supplied in or in connection with this Agreement or any other Credit Document, (ii) the contents of
any certificate, report or other document delivered hereunder or



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thereunder or in connection herewith or therewith or the adequacy, accuracy and/or
completeness of the information contained therein, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Credit Document or any other agreement, instrument or
document or the perfection or priority of any Lien or security interest created or purported to be
created by the Collateral Documents or (v) the satisfaction of any condition set forth in Sections
6 and 7 or elsewhere herein, other than (but subject to the foregoing clause (ii)) to confirm
receipt of items expressly required to be delivered to such Agent.




          (d) Nothing in this Agreement or any other Credit Document shall require any Agent or any of
its Related Parties to carry out any “know your customer” or other checks in relation to any person
on behalf of any Lender and each Lender confirms to each Agent that it is solely responsible for
any such checks it is required to carry out and that it may not rely on any statement in relation
to such checks made by such Agent or any of its Related Parties.



          12.4. Reliance by Agents. Each Agent shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or other distribution)
believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper
Person. Each Agent also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability for relying
thereon. In determining compliance with any condition hereunder to the making of a Loan, or the
issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a
Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender
unless an officer of the Administrative Agent responsible for the transactions contemplated hereby
shall have received notice to the contrary from such Lender prior to the making of such Loan or the
issuance of such Letter of Credit, and in the case of a Borrowing, such Lender shall not have made
available to the Administrative Agent such Lender’s ratable portion of such Borrowing. Each Agent
may consult with legal counsel (who may be counsel for the Borrowers or any other Credit Party),
independent accountants and other experts selected by it, and shall not be liable for any action
taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
No Agent shall be deemed to have knowledge of any Secured Cash Management Agreement or any Secured
Hedge Agreement unless and until it has received written notice thereof from the applicable Hedge
Bank or Cash Management Bank.



          12.5. Delegation of Duties. Each Agent may perform any and all of its duties and exercise its rights and powers
hereunder or under any other Credit Document by or through any one or more sub-agents appointed by
such Agent. Each Agent and any such sub-agent may perform any and all of its duties and exercise
its rights and powers by or through their respective Related Parties. Each such sub-agent and the
Related Parties of such Agent and each such sub-agent shall be entitled to the benefits of all
provisions of this Section 12 and Section 13.5 (as though such sub-agents were the “Administrative
Agent” or “Collateral Agent” under the Credit Documents) as if set forth in full herein with
respect thereto.



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          12.6. Resignation of Agents.



          (a) Each Agent may at any time give notice of its resignation to the Lenders and RailAmerica.
Upon receipt of any such notice of resignation, the Required Lenders shall have the right to
appoint a successor, which shall be a bank with an office in New York City, or an Affiliate of any
such bank with an office in New York City and which successor shall be subject to the approval of
RailAmerica (not to be unreasonably withheld or delayed) unless an Event of Default has occurred
and is continuing. If no such successor shall have been so appointed by the Required Lenders in
accordance with the foregoing sentence and shall have accepted such appointment within 30 days
after the retiring Agent gives notice of its resignation (such 30-day period, the “Lender
Appointment Period”), then the retiring Agent may on behalf of the Lenders, appoint a successor
Agent meeting the qualifications set forth above. In addition and without any obligation on the
part of the retiring Agent to appoint, on behalf of the Lenders, a successor Agent, the retiring
Agent may at any time upon or after the end of the Lender Appointment Period notify the Borrowers
and the Lenders that no qualifying Person has accepted appointment as successor Agent and the
effective date of such retiring Agent’s resignation which effective date shall be no earlier than
three business days after the date of such notice. Upon the resignation effective date established
in such notice and regardless of whether a successor Agent has been appointed and accepted such
appointment, the retiring Agent’s resignation shall nonetheless become effective and (i) the
retiring Agent shall be discharged from its duties and obligations as Agent hereunder and under the
other Credit Documents and (ii) all payments, communications and determinations provided to be made
by, to or through an Agent shall instead be made by or to each Lender directly, until such time as
the Required Lenders appoint a successor Agent as provided for above in this paragraph. Upon the
acceptance of a successor’s appointment as Agent hereunder, such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties as Agent of the retiring (or
retired) Agent, and the retiring Agent shall be discharged from all of its duties and obligations
as Agent hereunder or under the other Credit Documents (if not already discharged therefrom as
provided above in this paragraph). The fees payable by the Borrowers to a successor Agent shall be
the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such
successor. After the retiring Agent’s resignation hereunder and under the other Credit Documents,
the provisions of this Article and Section 13.5 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while the retiring Agent was acting as Agent.



          (b) Any resignation pursuant to this Section by a Person acting as Administrative Agent shall,
unless such Person shall notify the Borrowers and the Lenders otherwise, also act to relieve such
Person and its Affiliates of any obligation to advance or issue new, or extend existing, Swingline
Loans or Letters of Credit where such advance, issuance or extension is to occur on or after the
effective date of such resignation. Upon the acceptance of a successor’s appointment as
Administrative Agent hereunder, (i) such successor shall succeed to and become vested with all of
the rights, powers, privileges and duties of the retiring Letter of Credit Issuer and Swingline
Lender, (ii) the retiring Letter of Credit Issuer and Swingline Lender shall be discharged from all
of their respective duties and obligations hereunder or under the other Credit Documents, (iii) the
successor Swingline Lender shall enter into an Assignment and Assumption



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and acquire from the retiring Swingline Lender each outstanding Swingline Loan of such
retiring Swingline Lender for a purchase price equal to par plus accrued interest and (iv) the
successor Letter of Credit Issuer shall issue letters of credit in substitution for the Letters of
Credit, if any, outstanding at the time of such succession or make other arrangement satisfactory
to the retiring Letter of Credit Issuer to effectively assume the obligations of the retiring
Letter of Credit Issuer with respect to such Letters of Credit.




          In addition to the foregoing, if a Lender becomes, and during the period it remains, a
Defaulting Lender or a Potential Defaulting Lender, the Letter of Credit Issuer and/or the
Swingline Lender may, upon prior written notice to RailAmerica and the Administrative Agent, resign
as Letter of Credit Issuer or Swingline Lender, respectively, effective at the close of business
New York time on a date specified in such notice (which date may not be less than five (5) Business
Days after the date of such notice); provided that such resignation by the Letter of Credit
Issuer will have no effect on the validity or enforceability of any Letter of Credit then
outstanding or on the obligations of the Borrowers or any Lender under this Agreement with respect
to any such outstanding Letter of Credit or otherwise to the Letter of Credit Issuer; and
provided, further, that such resignation by the Swingline Lender will have no
effect on its rights in respect of any outstanding Swingline Loans or on the obligations of the
Borrowers or any Lender under this Agreement with respect to any such outstanding Swingline Loan.



          Anything herein to the contrary notwithstanding, if at any time the Required Lenders determine
that the Person serving as Administrative Agent is (without taking into account any provision in
the definition of “Defaulting Lender” or “Potential Defaulting Lender” requiring notice from the
Administrative Agent or any other party) a Defaulting Lender or a Potential Defaulting Lender,
subject to the prior approval of RailAmerica (not to be unreasonably withheld or delayed) with
respect to the appointment of the replacement Administrative Agent if no Event of Default has
occurred and is continuing, the Required Lenders (determined after giving effect to Section
13.1(c), may by notice to such Person remove such Person as Administrative Agent and appoint a
replacement Administrative Agent hereunder. Such removal will, to the fullest extent permitted by
applicable law, be effective on the earlier of (i) the date a replacement Administrative Agent is
appointed and (ii) the date 30 Business Days after the giving of such notice by the Required
Lenders (regardless of whether a replacement Administrative Agent has been appointed). Unless
otherwise agreed by the Required Lenders (and, if no Event of Default has occurred and is
continuing, with the approval of RailAmerica (not to be unreasonably withheld or delayed)), upon
the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall
succeed to and become vested with all of the rights, powers, privileges and duties of the retiring
Letter of Credit Issuer and Swingline Lender.



          12.7. Non-Reliance on Agent and Other Lenders.



          (a) Each Lender confirms to each Agent, each other Lender and each of their respective Related
Parties that it (i) possesses (individually or through its Related Parties) such knowledge and
experience in financial and business matters that it is capable, without reliance on any Agent, any
other Lender or any of their respective Related Parties, of evaluating the merits and risks
(including tax, legal, regulatory, credit, accounting and other financial matters) of (x)



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entering into this Agreement, (y) making Loans and other extensions of credit hereunder and
under the other Credit Documents and (z) in taking or not taking actions hereunder and thereunder,
(ii) is financially able to bear such risks and (iii) has determined that entering into this
Agreement and making Loans and other extensions of credit hereunder and under the other Credit
Documents is suitable and appropriate for it.




          (b) Each Lender acknowledges that (i) it is solely responsible for making its own independent
appraisal and investigation of all risks arising under or in connection with this Agreement and the
other Credit Documents, (ii) that it has, independently and without reliance upon any Agent, any
other Lender or any of their respective Related Parties, made its own appraisal and investigation
of all risks associated with, and its own credit analysis and decision to enter into, this
Agreement based on such documents and information, as it has deemed appropriate and (iii) it will,
independently and without reliance upon any Agent, any other Lender or any of their respective
Related Parties, continue to be solely responsible for making its own appraisal and investigation
of all risks arising under or in connection with, and its own credit analysis and decision to take
or not take action under, this Agreement and the other Credit Documents based on such documents and
information as it shall from time to time deem appropriate, which may include, in each case:




     (i) the financial condition, status and capitalization of the Borrowers and each other
Credit Party;




     (ii) the legality, validity, effectiveness, adequacy or enforceability of this
Agreement and each other Credit Document and any other agreement, arrangement or document
entered into, made or executed in anticipation of, under or in connection with any Credit
Document;




     (iii) determining compliance or non-compliance with any condition hereunder to the
making of a Loan, or the issuance of a Letter of Credit and the form and substance of all
evidence delivered in connection with establishing the satisfaction of each such condition;




     (iv) the adequacy, accuracy and/or completeness of any information delivered by any
Agent, any other Lender or by any of their respective Related Parties under or in connection
with this Agreement or any other Credit Document, the transactions contemplated hereby and
thereby or any other agreement, arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Credit Document.



          12.8. No Other Duties, etc.
Anything herein to the contrary notwithstanding, none of the Persons acting as Sole Lead
Arranger or Sole Bookrunner listed on the cover page hereof shall have any powers, duties or
responsibilities under this Agreement or any of the other Credit Documents, except in its capacity,
as applicable, as the Administrative Agent, the Collateral Agent or as a Lender hereunder.



          12.9. Withholding Tax. To the extent required by any applicable law, the Administrative Agent may withhold from
any payment to any Lender an amount equivalent to



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any applicable withholding tax. If the Internal Revenue Service or any authority of the
United States or other jurisdiction asserts a claim that the Administrative Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the appropriate form
was not delivered, was not properly executed, or because such Lender failed to notify the
Administrative Agent of a change in circumstances which rendered the exemption from, or reduction
of, withholding tax ineffective, or for any other reason), such Lender shall indemnify the
Administrative Agent fully for all amounts paid, directly or indirectly, by the Administrative
Agent as tax or otherwise, including penalties and interest, together with all expenses incurred,
including legal expenses, and any out of pocket expenses. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing to such Lender
under this Agreement or any other Credit Document against any amount due the Administrative Agent
under this Section 12.9. The agreements in this Section 12.9 shall survive the resignation and/or
replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a
Lender, and the repayment, satisfaction or discharge of any Loans and all other amounts payable any
Credit Document.




          12.10. Reports. Each Lender hereby agrees that (a) it has requested a copy of each Report prepared by or on
behalf of any Agent; (b) the Agents (i) make no representation or warranty, express or implied, as
to the completeness or accuracy of any Report or any of the information contained therein or any
inaccuracy or omission contained in or relating to a Report and (ii) shall not be liable for any
information contained in any Report; (c) the Reports are not comprehensive audits or examinations,
and that any Person performing any field examination will inspect only specific information
regarding the Credit Parties and will rely significantly upon the Credit Parties’ books and
records, as well as on representations of the Credit Parties’ personnel and that the Agents
undertake no obligation to update, correct or supplement the Reports; (d) it will keep all Reports
confidential and strictly for its internal use, not share the Report with any other Person except
as otherwise permitted pursuant to this Agreement; and (e) without limiting the generality of any
other indemnification provision contained in this Agreement, it will pay and protect, and
indemnify, defend, and hold each Agent and any such other Person preparing a Report harmless from
and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts
(including reasonable attorney fees) incurred by as the direct or indirect result of any third
parties who might obtain all or part of any Report through the indemnifying Lender.



          12.11. Indemnification. The Lenders agree to indemnify each Agent, in its capacity as such (to the extent not
reimbursed by the Borrowers and without limiting the obligation of the Borrowers to do so), ratably
according to their Applicable Percentage in effect on the date on which indemnification is sought
(or, if indemnification is sought after the date upon which the Commitments shall have terminated
and the Total Credit Exposure shall have been paid in full, ratably in accordance with their
respective portions of the Total Credit Exposure in effect immediately prior to such date), from
and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever that may at any time (including at
any time following the payment of the Loans) be imposed on, incurred by or asserted against any
Agent in any way relating to or arising out of, the Commitments, this Agreement, any of the other
Credit Documents or any documents contemplated by or



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referred to herein or therein or the transactions contemplated hereby or thereby or any action
taken or omitted by any Agent under or in connection with any of the foregoing, provided
that no Lender shall be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements to an Agent
resulting from such Agent’s gross negligence or willful misconduct (as determined in a final
non-appealable judgment by a court of competent jurisdiction). The agreements in this Section
12.11 shall survive the payment of the Loans and all other amounts payable hereunder.




          SECTION 13. Miscellaneous



          13.1. Amendments and Waivers.



          (a) Neither this Agreement nor any other Credit Document, nor any terms hereof or thereof may
be amended, supplemented or modified except in accordance with the provisions of this Section 13.1.
The Required Lenders may, or, with the written consent of the Required Lenders, the Administrative
Agent may, from time to time, (a) enter into with the relevant Credit Party or Credit Parties
written amendments, supplements or modifications hereto and to the other Credit Documents for the
purpose of adding any provisions to this Agreement or the other Credit Documents or changing in any
manner the rights of the Lenders or of the Credit Parties hereunder or thereunder or (b) waive, on
such terms and conditions as the Required Lenders or the Administrative Agent, as the case may be,
may specify in such instrument, any of the requirements of this Agreement or the other Credit
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification shall
directly (i) forgive any portion of any Loan or waive any required prepayment or cash
collateralization pursuant to Section 5.2(a) or extend the final scheduled maturity date of any
Loan or reduce the stated rate, or forgive any portion, or extend the date for the payment, of any
interest or Fee payable hereunder (other than as a result of waiving the applicability of Section
2.8(c)), or extend the final expiration date of any Lender’s Commitment or extend the final
expiration date of any Letter of Credit beyond the L/C Maturity Date, or increase the aggregate
amount of the Commitments of any Lender, or amend or modify any provisions of Section 13.8(a), in
each case without the written consent of each Lender directly and adversely affected thereby, or
(ii) amend, modify or waive any provision of this Section 13.1 or reduce the percentages specified
in the definitions of the terms “Required Lenders,” “Required Supermajority Lenders” or “Applicable
Percentage” or consent to the assignment or transfer by the Borrowers of their rights and
obligations under any Credit Document to which it is a party (except as permitted pursuant to
Section 10.3), in each case without the written consent of each Lender directly and adversely
affected thereby, or (iii) amend, modify or waive any provision of Section 12 as the same applies
to any Agent, or any other provision hereof as the same applies to the rights or obligations of any
Agent, in each case without the written consent of such Agent, or (iv) amend, modify or waive any
provision of Section 2.3 relating to Letters of Credit, Section 2.14 or Section 3 without the
written consent of the Letter of Credit Issuer, or (v) amend, modify or waive any provisions hereof
relating to Swingline Loans (including the applicable provisions of Section 2.14) without the
written consent of the Swingline Lender, (vi) amend, modify or waive any provision of Section
5.2(a), Section 5.2(d), Section 5.3(a) or Section 5.3(c) without the written consent of each Lender
directly and adversely affected thereby or (vii) increase the advance



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rates set forth in the definition of Borrowing Base or add new categories of eligible assets,
without the written consent of the Required Supermajority Lenders, or (viii) release all or
substantially all of the Guarantors under the Guarantee (except as expressly permitted by the
Guarantee) or, except as permitted in Section 13.1(b), release all or substantially all of the
Collateral under the Security Agreement without the prior written consent of each Lender, or (ix)
amend Section 2.9 so as to permit Interest Period intervals greater than six months without regard
to the consent of each Lender, without the written consent of each Lender directly and adversely
affected thereby, or (x) decrease the amount or allocation of any optional or mandatory prepayment
to be received by any Lender holding any Loans without the written consent of such Lender. Any
such waiver and any such amendment, supplement or modification shall apply equally to each of the
affected Lenders and shall be binding upon the Borrowers, such Lenders, the Administrative Agent
and all future holders of the affected Loans. In the case of any waiver, the Borrowers, the
Lenders, the Administrative Agent and the Collateral Agent shall be restored to their former
positions and rights hereunder and under the other Credit Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing, it being understood that no such
waiver shall extend to any subsequent or other Default or Event of Default or impair any right
consequent thereon.




          (b) Any Liens granted to the Administrative Agent by the Credit Parties on any Collateral for
the benefit of the Secured Parties shall automatically be released (i) upon the Final Date and (ii)
if such Collateral constitutes property being sold or disposed of (or property of a Subsidiary
Guarantor whose capital stock is being sold in a transaction that will result in such Subsidiary
Guarantor being released from the Guarantee in accordance with the terms thereof) to the extent
such sale or disposition is in compliance with the terms of this Agreement. Additionally, the
Administrative Agent is hereby authorized in its sole discretion to release any Liens as required
to effect any sale or other disposition of such Collateral in connection with any exercise of
remedies of the Administrative Agent and the Lenders pursuant to Section 11. In connection with
any release of Liens under the Security Documents, the Administrative Agent shall be protected in
relying on a certificate of an Authorized Officer to the effect that such release is permitted by
this Section 13.1(b).



          (c) Anything herein to the contrary notwithstanding, during such period as a Lender is a
Defaulting Lender, to the fullest extent permitted by applicable law, such Lender will not be
entitled to vote in respect of amendments and waivers hereunder and the Commitment and the
outstanding Loans or other extensions of credit of such Lender hereunder will not be taken into
account in determining whether the Required Lenders or all of the Lenders, as required, have
approved any such amendment or waiver (and the definition of “Required Lenders” will automatically
be deemed modified accordingly for the duration of such period); provided, that any such
amendment or waiver that would increase or extend the term of the Commitment of such Defaulting
Lender, extend the date fixed for the payment of principal or interest owing to such Defaulting
Lender hereunder, reduce the principal amount of any obligation owing to such Defaulting Lender,
reduce the amount of or the rate or amount of interest on any amount owing to such Defaulting
Lender or of any fee payable to such Defaulting Lender hereunder, or alter the terms of this
proviso, will require the consent of such Defaulting Lender



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          13.2. Notices. All notices, requests and demands to or upon the respective parties hereto to be effective
shall be in writing (including by facsimile transmission), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered, or three days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when received,
addressed as follows in the case of the Borrowers and the Administrative Agent, and in the case of
the other parties hereto to such other address as may be hereafter notified by the respective
parties hereto:



	 	 	 
	The Borrowers:

	 	RailAmerica, Inc.
	 

	 	7411 Fullerton Street, Suite 300
	 

	 	Jacksonville, FL 32256
	 

	 	Attention: General Counsel
	 

	 	Telephone: (904) 538-6329
	 

	 	Facsimile: (904) 538-6453
	 
	 	 
	 

	 	with a copy to:
	 
	 	 
	 

	 	Fortress Investment Group LLC
	 

	 	1345 Avenue of the Americas
	 

	 	New York, New York 10105
	 

	 	Attention: R. Nardone
	 

	 	Telecopy: (212) 798-6120
	 
	 	 
	 

	 	With a copy to:
	 
	 	 
	 

	 	Martha Feltenstein
	 

	 	Skadden, Arps, Slate, Meagher & Flom LLP
	 

	 	4 Times Square
	 

	 	New York, NY 10036
	 

	 	Direct Dial: (212) 735-2272
	 

	 	Direct Fax: (917) 777-2272
	 

	 	Email: martha.feltenstein@skadden.com
	 
	 	 
	The Administrative Agent 

or the Collateral Agent:

	 	Citicorp North America, Inc.
	 

	 	1615 Brett Road, OPS III
	 

	 	New Castle, Delaware 19720
	 

	 	Attention: Kerine Black
	 
	 	 
	 

	 	with a copy to:
	 
	 	 
	 

	 	Citibank, N.A.
	 

	 	390 Greenwich St.
	 

	 	New York, New York 10013
	 

	 	Attention: Courtney Mills






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provided that any notice, request or demand to or upon the Administrative Agent or the
Lenders pursuant to Sections 2.3, 2.6, 2.9, 4.2 and 5.1 shall not be effective until received.




          13.3. No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Administrative Agent
or any Lender, any right, remedy, power or privilege hereunder or under the other Credit Documents
shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided
by law.



          13.4. Survival of Representations and Warranties. All representations and warranties made hereunder, in the other Credit Documents and in any
document, certificate or statement delivered pursuant hereto or in connection herewith shall
survive the execution and delivery of this Agreement and the making of the Loans hereunder.



          13.5. Payment of Expenses and Taxes. The Borrowers, jointly and severally, agree (a) to pay or reimburse the Agents for all
their reasonable out-of-pocket costs and expenses (other than Taxes) incurred in connection with
the development, preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Credit Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of this Agreement and the
transactions contemplated hereby and thereby, including the reasonable fees, disbursements and
other charges of counsel to the Agents, (b) to pay or reimburse each Lender, the Collateral Agent
and the Administrative Agent for all its reasonable and documented costs and expenses incurred in
connection with the enforcement or preservation of any rights under this Agreement, the other
Credit Documents and any such other documents, including the reasonable fees, disbursements and
other charges of counsel to each Lender and of counsel to the Collateral Agent and the
Administrative Agent and (c) to pay, indemnify, and hold harmless each Lender, the Collateral Agent
and the Administrative Agent and their respective directors, officers, employees, trustees and
agents from and against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever,
excluding any Taxes (other than Taxes representing losses or damages with respect to any non-Tax
claims), including reasonable and documented fees, disbursements and other charges of counsel, with
respect to the execution, delivery, enforcement, performance and, with respect to each Agent and
its directors, officers, employees, trustees and agents, administration of this Agreement, the
other Credit Documents and any such other documents, including any of the foregoing relating to the
violation of, noncompliance with or liability under, any Environmental Law or any actual or alleged
presence of Hazardous Materials applicable to the operations of the Borrowers, any of the
Subsidiaries or any of the Real Estate, including any of the foregoing arising out of or based on
any Environmental Claim related to the Borrowers or any actual or alleged presence, Release, or
threat of Release of Hazardous Materials applicable to the operations of the Borrowers or any of
the Subsidiaries,(all the foregoing in this clause (c), collectively, the “indemnified
liabilities”), provided that the Borrowers shall have no obligation hereunder to the
Administrative Agent, the Collateral Agent or any Lender nor any of their respective directors,
officers, employees and agents with respect to



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indemnified liabilities arising from the gross negligence or willful misconduct of the party to
be indemnified (as determined in a final non-appealable judgment by a court of competent
jurisdiction). The agreements in this Section 13.5 shall survive repayment of the Loans and all
other amounts payable hereunder. Expenses being reimbursed by the Borrowers under this Section
include, without limiting the generality of the foregoing, but in each case subject to the
limitations of the foregoing, reasonable out-of-pocket costs and expenses incurred in connection
with:





     (i) subject to Section 9.13, field examinations and the preparation of Reports based on
the reasonable fees charged by a third party retained by the Administrative Agent or the
Collateral Agent or the internally allocated reasonable fees for each Person employed by the
Administrative Agent or the Collateral Agent with respect to each field examination;




     (ii) taxes, fees and other charges for (A) lien searches and (B) recording the Security
Documents, filing financing statements and continuations, and other actions to perfect,
protect, and continue the Collateral Agent’s Liens;




     (iii) sums paid or incurred to take any action required of any Credit Party under the
Credit Documents that such Credit Party fails to pay or take; and




     (iv) forwarding loan proceeds, collecting checks and other items of payment, and
establishing and maintaining the accounts and lock boxes, and reasonable costs and expenses
of preserving and protecting the Collateral.


All of the foregoing costs and expenses may be charged to the Borrowers as Revolving Credit Loans
or to another deposit account to the extent permitted by Section 5.3(d).




          13.6. Successors and Assigns; Participations and Assignments.



          (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby (including any
Affiliate of the Letter of Credit Issuer that issues any Letter of Credit), except that (i) no
Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender (and any attempted assignment or transfer by any Borrower
without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer
its rights or obligations hereunder except in accordance with this Section. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person (other than the
parties hereto, their respective successors and assigns permitted hereby (including any Affiliate
of the Letter of Credit Issuer that issues any Letter of Credit), Participants (to the extent
provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the
Related Parties of each of the Administrative Agent, the Letter of Credit Issuer and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this Agreement.



          (b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign
to one or more assignees all or a portion of its rights and obligations under



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this Agreement (including all or a portion of its Commitments and the Loans at the time owing
to it) with the prior written consent (such consent not be unreasonably withheld) of:





     (A) RailAmerica, provided that no consent of RailAmerica shall be required for
an assignment to a Lender, an Affiliate of a Lender or, if an Event of Default has occurred
and is continuing, any other assignee;




     (B) the Administrative Agent, the Swingline Lender and the Letter of Credit Issuer; and




     (C) provided however; that notwithstanding the foregoing or any other
provision of this Agreement, in no event shall either Borrower or any of their Subsidiaries
be permitted to be a Lender or a Participant hereunder.




     (ii) Assignments shall be subject to the following additional conditions:




     (A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans, the
amount of the Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $5,000,000 and integral
multiples of $1,000,000 in excess thereof, or if less, all of such Lender’s remaining Loans
and Commitments unless RailAmerica and the Administrative Agent otherwise consents,
provided that no such consent of RailAmerica shall be required if an Event of
Default has occurred and is continuing; provided further that
contemporaneous assignments to a single assignee made by Affiliates of a Lender shall be
aggregated for purposes of meeting the minimum assignment amount requirements stated above;




     (B) each partial assignment shall be made as an assignment of a proportionate part of
all the assigning Lender’s rights and obligations under this Agreement;




     (C) the parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Acceptance, together with a processing and recordation fee of
$3,500; and




     (D) the assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire in a form approved by the Administrative Agent (the
“Administrative Questionnaire”).



          (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(v) of this
Section, from and after the effective date specified in each Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and
the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment
and Acceptance, be released from its obligations under this Agreement (and, in the case of an



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Assignment and Acceptance covering all of the assigning Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 2.10, 2.11, 3.5, 5.4 and 13.5). Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does not comply with this Section 13.6
shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (c) of this Section.




          (iv) The Administrative Agent, acting solely for this purpose as an agent of the Borrowers,
shall maintain at the Administrative Agent’s Office a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses of the Lenders, and
the Commitments of, and principal amount (and stated interest) of the Loans and any payment made by
the Letter of Credit Issuer under any Letter of Credit owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be conclusive
absent manifest error, and the Borrowers, the Administrative Agent, the Letter of Credit Issuer and
the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrowers, the Letter of Credit
Issuer and any Lender, at any reasonable time and from time to time upon reasonable prior notice.



          (v) Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning
Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee
shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Acceptance and record the
information contained therein in the Register. No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in this paragraph.



          (c) (i) Any Lender may, without the consent of the Borrowers, the Administrative Agent, the
Letter of Credit Issuer or the Swingline Lender, sell participations to one or more banks or other
entities (each, a “Participant”) in all or a portion of such Lender’s rights and
obligations under this Agreement (including all or a portion of its Commitments and the Loans owing
to it), provided that (A) such Lender’s obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (C) the Borrowers, the Administrative Agent, the Letter of
Credit Issuer and the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement or any other Credit Document, provided that such
agreement or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the first proviso to
Section 13.1(a) that affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Borrowers agree that each Participant shall be entitled to the benefits of Sections 2.10, 2.11, 3.5
and



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5.4 (subject to the requirements of such Sections) to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of Section 13.8(b) as
though it were a Lender, provided such Participant agrees to be subject to Section 13.8(a)
as though it were a Lender.




          (ii) A Participant shall not be entitled to receive any greater payment under Section 2.10 or
5.4 than the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to such Participant is
made with RailAmerica’s prior written consent (not to be unreasonably withheld or delayed);



          (iii) Each Lender that sells a participation shall, acting solely for this purpose as a
non-fiduciary agent of the Borrowers, maintain a register on which it enters the name and address
of each Participant and the principal amounts (and stated interest) of each Participant’s interest
in the Loans or other obligations under this Agreement (the “Participant Register”). The
entries in the Participant Register shall be conclusive absent manifest error, and such Lender
shall treat each person whose name is recorded in the Participant Register as the owner of such
participation for all purposes of this Agreement notwithstanding any notice to the contrary. Any
such Participant Register shall be available for inspection by the Administrative Agent or
RailAmerica (and if required by applicable Requirement of Tax Law or in connection with a Tax audit
or any Borrower, the Borrowers) at any reasonable time and from time to time upon reasonable prior
notice.



          (d) Any Lender may, without the consent of the Borrowers or the Administrative Agent, at any
time pledge or assign a security interest in all or any portion of its rights under this Agreement
to secure obligations of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a
security interest, provided that no such pledge or assignment of a security interest shall
release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee
for such Lender as a party hereto. In order to facilitate such pledge or assignment, the Borrowers
hereby agree that, upon request of any Lender at any time and from time to time after the Borrowers
have made their initial Borrowing hereunder, the Borrowers shall provide to such Lender, at the
Borrowers’ own expense, a promissory note, substantially in the form of Exhibit K, as the
case may be, evidencing the Revolving Credit Loans and Swingline Loans, respectively, owing to such
Lender.



          (e) Subject to compliance with Section 13.16, the Borrowers authorize each Lender to disclose
to any Participant, secured creditor of such Lender or assignee (each, a “Transferee”) and
any prospective Transferee any and all Information (including any and all financial information) in
such Lender’s possession concerning the Borrowers and the Restricted Subsidiaries that has been
delivered to such Lender by or on behalf of the Borrowers and the Restricted Subsidiaries pursuant
to this Agreement or which has been delivered to such Lender by or on behalf of the Borrowers and
the Restricted Subsidiaries in connection with such Lender’s credit evaluation of the Borrowers and
the Restricted Subsidiaries prior to becoming a party to this Agreement.



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          13.7. Replacements of Lenders under Certain Circumstances. The Borrower shall be permitted to replace any Lender that (a) requests reimbursement for
amounts owing pursuant to Section 2.10, 2.12, 3.5 or 5.4, (b) is affected in the manner described
in Section 2.10(a)(iii) and as a result thereof any of the actions described in such Section is
required to be taken, (c) becomes a Defaulting Lender, with a replacement bank or other financial
institution or (d) in connection with any proposed amendment, waiver or consent requiring the
consent of “each Lender” or “each Lender affected thereby” pursuant to Section 13.1(a), does not
consent when the consent of the Required Lenders has been obtained, but the consent of other
remaining Lenders has not been obtained, provided that (i) such replacement does not
conflict with any Requirement of Law, (ii) no Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) the Borrowers shall repay (or the replacement
bank or institution shall purchase, at par) all Loans and other amounts (other than any disputed
amounts), pursuant to Section 2.8, 2.10, 2.11, 2.13, 3.3, 3.5, 4.1, 5.4 or 13.5, as the case may
be, owing to such replaced Lender prior to the date of replacement, (iv) the replacement bank or
institution, if not already a Lender, and the terms and conditions of such replacement, shall be
reasonably satisfactory to the Administrative Agent, (v) the replaced Lender shall be obligated to
make such replacement in accordance with the provisions of Section 13.6 (provided that the
Borrowers shall be obligated to pay the registration and processing fee referred to therein) and
(vi) any such replacement shall not be deemed to be a waiver of any rights that the Borrowers, the
Administrative Agent, the Collateral Agent or any other Lender shall have against the replaced
Lender.



          13.8. Adjustments; Set-off.



          (a) If any Lender (a “Benefited Lender”) shall at any time receive any payment of all
or part of its Loans, or interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred
to in Section 11.5, or otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender’s Loans, or interest thereon,
such benefited Lender shall purchase for cash from the other Lenders a participating interest in
such portion of each such other Lender’s Loan, or shall provide such other Lenders with the
benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such
benefited Lender to share the excess payment or benefits of such collateral or proceeds ratably
with each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but
without interest.



          (b) After the occurrence and during the continuance of an Event of Default, in addition to any
rights and remedies of the Lenders provided by law, each Lender shall have the right, without prior
notice to the Borrowers, any such notice being expressly waived by the Borrowers to the extent
permitted by applicable law, upon any amount becoming due and payable by the Borrowers hereunder
(whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any currency, in each
case whether direct or indirect, absolute or contingent, matured or



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unmatured, at any time held or owing by such Lender or any branch or agency thereof to or for
the credit or the account of the Borrowers. Each Lender agrees promptly to notify the Borrowers
and the Administrative Agent after any such set-off and application made by such Lender,
provided that the failure to give such notice shall not affect the validity of such set-off
and application.




          13.9. Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any
number of separate counterparts (including by facsimile or other electronic transmission), and all
of said counterparts taken together shall be deemed to constitute one and the same instrument. A
set of the copies of this Agreement signed by all the parties shall be lodged with the Borrowers
and the Administrative Agent.



          13.10. Severability. Any provision of any Credit Document that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.



          13.11. Integration. This Agreement and the other Credit Documents represent the agreement of the Borrowers, the
Administrative Agent, the Collateral Agent and the Lenders with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties by the
Administrative Agent, the Collateral Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Credit Documents.



          13.12. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.



          13.13. Submission to Jurisdiction; Waivers. Each Credit Party hereby irrevocably and unconditionally:



          (a) submits for itself and its property in any legal action or proceeding relating to this
Agreement and the other Credit Documents to which it is a party, or for recognition and enforcement
of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the
State of New York located in the State, County and City of New York, the courts of the United
States of America for the Southern District of New York and appellate courts from any thereof;



          (b) consents that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;



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          (c) agrees that service of process in any such action or proceeding may be effected by mailing
a copy thereof by registered or certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrowers at the address set forth in Section 13.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto;



          (d) agrees that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to sue in any other jurisdiction; and



          (e) waives, to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding any special, exemplary, punitive or consequential
damages.



          13.14. Acknowledgments. Each Borrower hereby acknowledges that:



          (a) it has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Credit Documents;



          (b) neither the Administrative Agent, the Collateral Agent nor any Lender has any fiduciary
relationship with or duty to such Borrower arising out of or in connection with this Agreement or
any of the other Credit Documents, and the relationship between the Administrative Agent, the
Collateral Agent and the Lenders, on one hand, and such Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and



          (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by
virtue of the transactions contemplated hereby among the Lenders or among the Borrowers and the
Lenders.



          13.15. WAIVERS OF JURY TRIAL. THE BORROWERS, THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT AND THE LENDERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.



          13.16. Confidentiality. Each of the Administrative Agent, the Collateral Agent and the Lenders agrees to
maintain the confidentiality of the Information (as defined below), except that Information may be
disclosed (a) to its Related Parties (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory authority purporting to
have jurisdiction over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in
connection with the exercise of any remedies hereunder or under any other Credit Document, any
action or proceeding relating to this Agreement or any other Credit Document, the enforcement of
rights hereunder or thereunder or any litigation or proceeding to which the Administrative Agent,
the Collateral Agent or any Lender or any of its respective Affiliates may be a party, (f) subject
to an agreement containing provisions substantially the same as those of



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this Section, to (i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, (ii) any actual or
prospective party (or its managers, administrators, trustees, partners, directors, officers,
employees, agents, advisors and other representatives) surety, reinsurer, guarantor or credit
liquidity enhancer (or their advisors) to or in connection with any swap, derivative or other
similar transaction under which payments are to be made by reference to the Obligations or to the
Borrowers and their obligations or to this Agreement or payments hereunder, (iii) to any rating
agency when required by it, (iv) the CUSIP Service Bureau or any similar organization, (g) with the
consent of the Borrowers or (h) to the extent such Information (i) becomes publicly available other
than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent,
the Collateral Agent any Lender or any of their respective Affiliates on a nonconfidential basis
from a source other than a Credit Party. For purposes of this Section, “Information” means
all information received from a Credit Party or any of its respective Subsidiaries relating to a
Credit Party or any of its respective Subsidiaries or any of their respective businesses, other
than any such information that is available to the Administrative Agent, the Collateral Agent or
any Lender on a nonconfidential basis prior to disclosure by any Obligor or any of its respective
Subsidiaries, provided that, in the case of information received from a Credit Party or any
of its Subsidiaries after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of Information as
provided in this Section shall be considered to have complied with its obligation to do so if such
Person has exercised the same degree of care to maintain the confidentiality of such Information as
such Person would accord to its own confidential information.




          13.17. Citigroup Direct Website Communications.



          (a) Each Credit Party hereby agrees that it will provide to the Administrative Agent all
information, documents and other materials that it is obligated to furnish to the Administrative
Agent pursuant to the Credit Documents, including, without limitation, all notices, requests,
financial statements, financial and other reports, certificates and other information material, but
excluding any such communication that (i) relates to a request for a new, or a conversion of an
existing, Borrowing or other extension of credit (including any election of an interest rate or
interest period relating thereto), (ii) relates to the payment of any principal or other amount due
under this Agreement prior to the scheduled date therefor, (iii) provides notice of any Default or
Event of Default under this Agreement or (iv) is required to be delivered to satisfy any condition
precedent to the effectiveness of this Agreement and/or any borrowing or other extension of credit
hereunder (all such non-excluded communications being referred to herein collectively as
“Communications”), by transmitting the Communications in an electronic/soft medium in a
format acceptable to the Administrative Agent to oploanswebadmin@citigroup.com. In addition, each
Credit Party agrees to continue to provide the Communications to the Administrative Agent in the
manner specified in the Credit Documents but only to the extent requested by the Administrative
Agent.



          (b) Each Credit Party further agrees that the Administrative Agent may make the Communications
available to the Lenders by posting the Communications on Intralinks, Fixed Income Direct or a
substantially similar electronic transmission systems (the “Platform”).



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Each Credit Party acknowledges that the distribution of material through an electronic medium
is not necessarily secure and that there are confidentiality and other risks associated with such
distribution.




          (c) THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW)
DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM
AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD-PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT PARTIES IN CONNECTION WITH THE
COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS
AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR
REPRESENTATIVES (COLLECTIVELY, “AGENT PARTIES”) HAVE ANY LIABILITY TO THE LOAN PARTIES, ANY
LENDER OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, DIRECT
OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT,
CONTRACT OR OTHERWISE) ARISING OUT OF THE LOAN PARTIES’ OR THE ADMINISTRATIVE AGENT’S TRANSMISSION
OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS
FOUND IN A FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED
PRIMARILY FROM SUCH AGENT PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.



          The Administrative Agent agrees that the receipt of the Communications by the Agent at its
e-mail address set forth above shall constitute effective delivery of the Communications to the
Administrative Agent for purposes of the Credit Documents. Each Lender agrees that notice to it
(as provided in the next sentence) specifying that the Communications have been posted to the
Platform shall constitute effective delivery of the Communications to such Lender for purposes of
the Credit Documents. Each Lender agrees (i) to notify the Administrative Agent in writing
(including by electronic communication) from time to time of such Lender’s e-mail address to which
the foregoing notice may be sent by electronic transmission and (ii) that the foregoing notice may
be sent to such e-mail address.



          Nothing herein shall prejudice the right of the Administrative Agent or any Lender to give any
notice or other communication pursuant to any Credit Document in any other manner specified in such
Credit Document.



          13.18. USA PATRIOT Act. Each Lender hereby notifies the Borrowers that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot
Act”), it is required to obtain, verify and record information that identifies the Borrowers,
which information includes the name and address of each Borrower and



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other information that will allow such Lender to identify such Borrower in accordance with the
Patriot Act.




[Signature Pages Follow]




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



	 	 	 	 	 
	 	RAILAMERICA, INC.,

as a Borrower

 	 
	 	By:  	/s/ David Novak
 	 
	 	 	Name:  	David Novak 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	RAILAMERICA TRANSPORTATION CORP.,

as a Borrower

 	 
	 	By:  	/s/ David Novak
 	 
	 	 	Name:  	David Novak 	 
	 	 	Title:  	Vice President 	 



S-1









 






	 	 	 	 	 



	 	 	 	 	 
	 	CITICORP NORTH AMERICA, INC.,
	 
	 	 	
as Administrative Agent, Collateral Agent,

Swingline Lender and as a Lender

 	 
	 	By:  	/s/ Matthew Paquin
 	 
	 	 	Name:  	Matthew Paquin 	 
	 	 	Title:  	Vice President 	 



S-2









 






	 	 	 	 	 



	 	 	 	 	 
	 	CITIBANK, N.A.,	 
	 	 	
as Letter of Credit Issuer

 	 
	 	By:  	/s/ Matthew Paquin
 	 
	 	 	Name:  	Matthew Paquin 	 
	 	 	Title:  	Vice President 	 



S-3









 






	 	 	 	 	 



	 	 	 	 	 
	 	Wachovia Bank, National Association,

as a Lender

 	 
	 	By:  	/s/ Jennifer Avrigian
 	 
	 	 	Name:  	Jennifer Avrigian 	 
	 	 	Title:  	Director 	 



S-4









 







	 	 	 	 	 
	 	Morgan Stanley Bank, N.A.,	 
	 	 	
as a Lender

 	 
	 	By:  	/s/ Melissa James
 	 
	 	 	Name:  	Melissa James 	 
	 	 	Title:  	Authorized Signatory 	 



S-5









 






	 	 	 	 	 



	 	 	 	 	 
	 	JP Morgan Chase Bank, N.A.,	 
	 	 	
as a Lender

 	 
	 	By:  	/s/ Robert P. Kellas
 	 
	 	 	Name:  	Robert P. Kellas 	 
	 	 	Title:  	Executive Director 	 
	 




S-6