Document:

<PAGE>   1

                                                                   Exhibit 10.72

                                                                [EXECUTION COPY]

                         SECURITIES PURCHASE AGREEMENT,

                                   dated as of

                                February 4, 2000,

                                      among

                        RAILAMERICA TRANSPORTATION CORP.

                               RAILAMERICA, INC.,
                         PALM BEACH RAIL HOLDING, INC.,
                                       and
                          THE GUARANTORS PARTY HERETO,

                                       and

                          THE PURCHASERS PARTY HERETO.

<PAGE>   2

                               PURCHASE AGREEMENT
                                TABLE OF CONTENTS

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                                    ARTICLE I

                                   DEFINITIONS

Section 1.1   Definitions.........................................................................   1
Section 1.2   Incorporated Definition.............................................................  10

                                   ARTICLE II

              PURCHASE AND SALE OF SECURITIES; TERMS OF SECURITIES

Section 2.1   Commitment to Purchase..............................................................  10
Section 2.2   Takedown Procedures.................................................................  11
Section 2.3   Fees................................................................................  11
Section 2.4   Mandatory Termination of Commitments................................................  12
Section 2.5   Interest............................................................................  12
Section 2.6   Maturity of Notes; Prepayment of Notes..............................................  13
Section 2.7   Taxes...............................................................................  16

                                   ARTICLE III

                        REPRESENTATIONS AND WARRANTIES OF
                 HOLDINGS, INTERMEDIATE HOLDINGS AND THE COMPANY

Section 3.1   Incorporation of Representations and Warranties in Incorporated
                  Agreement.......................................................................  19
Section 3.2   Authorization, Execution and Enforceability.........................................  20
Section 3.3   Capitalization......................................................................  20
Section 3.4   Solicitation........................................................................  20
Section 3.5   Non-fungibility.....................................................................  21

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                                   ARTICLE IV

                  REPRESENTATIONS AND WARRANTIES OF PURCHASERS

Section 4.1   Purchase for Investment; Authority; Binding Agreement...............................  21

                                    ARTICLE V

                        CONDITIONS PRECEDENT TO PURCHASE

Section 5.1   Conditions to Purchasers' Obligation at Takedown....................................  22
Section 5.2   Conditions to the Company's Obligations.............................................  27

                                   ARTICLE VI

                                    COVENANTS

Section 6.1   Incorporation of Affirmative Covenants from the Incorporated
                  Agreement.......................................................................  28
Section 6.2   Incorporation of Negative Covenants from the Incorporated
                  Agreement.......................................................................  28
Section 6.3   Investment Company Act..............................................................  29
Section 6.4   Use of Proceeds.....................................................................  29
Section 6.5   Restrictions on Certain Amendments..................................................  29
Section 6.6   No Senior Subordinated Debt.........................................................  29
Section 6.7   Permanent Financing.................................................................  30
Section 6.8   Additional Guarantors...............................................................  30
Section 6.9   Syndication Efforts.................................................................  30

                                   ARTICLE VII

                                EVENTS OF DEFAULT

Section 7.1   Events of Default Defined; Acceleration of Maturity; Waiver of
                  Default.........................................................................  31

                                  ARTICLE VIII

                             LIMITATION ON TRANSFERS

Section 8.1   Restrictions on Transfer............................................................  33
Section 8.2   Restrictive Legends.................................................................  33
Section 8.3   Notice of Proposed Transfers........................................................  34
Section 8.4   Right to Sell, Transfer or Assign Notes.............................................  34
Section 8.5   Replacement Notes...................................................................  35

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                                   ARTICLE IX

                                  SUBORDINATION

Section 9.1    Notes Subordinated to Designated Senior Debt........................................  35
Section 9.2    No Payment on Notes in Certain Circumstances........................................  35
Section 9.3    Notes Subordinated to Prior Payment of all Designated Senior Debt
                   on Dissolution, Liquidation or Reorganization...................................  36
Section 9.4    Holders to be Subrogated to Rights of Holders of Designated Senior
                   Debt............................................................................  38
Section 9.5    Obligations of the Company Unconditional............................................  38
Section 9.6    Subordination Rights not Impaired by Acts or Omissions of the
                   Company or Holders of Designated Senior Debt....................................  38
Section 9.7    Not to Prevent Events of Default....................................................  39
Section 9.8    Miscellaneous.......................................................................  39

                                    ARTICLE X

                                   GUARANTEES

Section 10.1   Guarantees..........................................................................  39
Section 10.2   Subordination of Guarantees.........................................................  41
Section 10.3   Limitation on Guarantor Liability...................................................  41
Section 10.4   Consolidation or Merger of Guarantors...............................................  41
Section 10.5   Release of Guarantors...............................................................  42

                                   ARTICLE XI

                                  MISCELLANEOUS

Section 11.1   Notices.............................................................................  42
Section 11.2   No Waivers; Amendments..............................................................  42
Section 11.3   Indemnification.....................................................................  42
Section 11.4   Expenses............................................................................  45
Section 11.5   Payment.............................................................................  45
Section 11.6   Successors and Assigns..............................................................  45
Section 11.7   Brokers.............................................................................  45
Section 11.8   New York Law; Submission to Jurisdiction; Waiver of Jury Trial......................  45
Section 11.9   Severability........................................................................  46
Section 11.10  Counterparts........................................................................  46
Section 11.11  Confidentiality.....................................................................  46

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Section 11.12  Survival of Representations and Warranties..........................................  47
Section 11.13  Construction........................................................................  47
Section 11.14  Integration.........................................................................  47
Section 11.15  Replacement Notes...................................................................  47
Section 11.16  Headings............................................................................  47

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                 SCHEDULES

Schedule 3.3     Capitalization of Holdings

                 ANNEX

Annex I          Corporate and Capital Structure

                 EXHIBITS

Exhibit A        Form of Escrow Agreement
Exhibit B        Form of Note
Exhibit C        Form of Debt Registration Rights Agreement
Exhibit D        Form of Warrant Agreement
Exhibit E        Form of Equity Registration Rights Agreement
Exhibit F        Form of Issuance Date Certificate
Exhibit G        Form of Solvency Certificate

                                      -iv-

<PAGE>   6

                          SECURITIES PURCHASE AGREEMENT

         THIS AGREEMENT, dated as of February 4, 2000, is made by and among
RAILAMERICA TRANSPORTATION CORP., a Delaware corporation (the "COMPANY"),
RAILAMERICA, INC., a Delaware corporation ("HOLDINGS"), PALM BEACH RAIL HOLDING,
INC., a Delaware corporation ("INTERMEDIATE HOLDINGS"), each Restricted
Subsidiary of the Company that is a party hereto as a "Guarantor" (each such
Restricted Subsidiary, together with Holdings and Intermediate Holdings, the
"GUARANTORS") and the Persons parties hereto as "Purchasers" (collectively, the
"PURCHASERS").

         The parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         Section 1.1 DEFINITIONS. The following terms, as used herein (including
as used in any provision of the Incorporated Agreement that has been
incorporated by reference herein), have the following meanings:

         "ADDITIONAL NOTES" means Notes issued in satisfaction of the Company's
obligations to pay interest on the outstanding Notes in accordance with the
terms hereof.

         "ADMINISTRATIVE AGENT" is defined in the definition of the term "Credit
Agreement".

         "AGREEMENT" means this Agreement, as amended, supplemented or otherwise
modified from time to time in accordance with its terms.

         "BONA FIDE PROPOSAL" has the meaning set forth in SECTION 2.6(d).

         "BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close.

         "COMMISSION" means the Securities and Exchange Commission.

         "COMMITMENT" means, with respect to any Purchaser, the amount set forth
opposite its name on the signature pages hereto or the obligation of such
Purchaser to purchase Notes hereunder in an aggregate principal amount at any
time outstanding not to exceed such amount.

         "COMMON STOCK" means the authorized common stock, par value $.001 per
share, of Holdings.

<PAGE>   7

         "COMPANY" is defined in the PREAMBLE.

         "CREDIT AGREEMENT" means the Credit Agreement, dated as of February 4,
2000, among the Company, Intermediate Holdings, Holdings, Railink, Ltd., a
corporation organized and existing under the laws of the Province of Alberta,
Canada, Freight Victoria Limited, a corporation organized and existing under the
laws of Australia, the lenders party thereto, DLJ Capital Funding, Inc., as
syndication agent for the lenders, the lead arranger and the sole book running
manager, The Bank of Nova Scotia, as administrative agent (in such capacity, the
"ADMINISTRATIVE AGENT") for the lenders, and ING (U.S.) Capital LLC and Fleet
National Bank, as documentation agent for the lenders, as amended, modified,
amended and restated, renewed, refunded, replaced or refinanced from time to
time, PROVIDED that (i) such refinancing or refunding has a final maturity date
that is the same as or later than the final maturity date of the Indebtedness
being amended, modified, amended and restated, renewed, refunded, replaced or
refinanced, and (ii) the principal amount thereof does not exceed $380,000,000,
plus the amount of reasonable expenses incurred in connection therewith (other
than as a result of currency fluctuations) less the amount of all principal
repayments actually made from time to time hereafter of term Indebtedness and
permanent reductions of revolving Indebtedness thereunder.

         "DEBT INCURRENCE" means any incurrence by Holdings, Intermediate
Holdings, the Company or any of its Restricted Subsidiaries of any Indebtedness,
other than Indebtedness permitted under CLAUSE (b) of SECTION 6.2.

         "DEBT REGISTRATION RIGHTS AGREEMENT" means the Debt Registration Rights
Agreement, dated as of February 4, 2000, between the Company, the Purchasers and
the Guarantors, in the form attached as Exhibit C to this Agreement, as amended,
supplemented or otherwise modified from time to time.

         "DEFAULT" means any Event of Default or any event or condition which,
with the giving of notice or lapse of time or both, would, unless cured or
waived, become an Event of Default.

         "DESIGNATED SENIOR DEBT" means any Senior Debt outstanding under the
Loan Documents or otherwise described in CLAUSE (i) of the definition of Senior
Debt.

         "DLJ HIGH YIELD INDEX RATE" means the index of high yield securities
most recently published by DLJSC in THE WEEK IN LEVERAGED FINANCE.

         "DLJSC" means Donaldson, Lufkin & Jenrette Securities Corporation, a
Delaware corporation, and its successors.

         "DOLLARS" or "$" mean lawful currency of the United States of America.

                                       -2-

<PAGE>   8

         "ENGAGEMENT LETTER" means the Engagement Letter, dated as of February
4, 2000, between Holdings and DLJSC, as amended, supplemented or otherwise
modified from time to time.

         "EQUITY ISSUANCE" means the issuance of any equity securities by
Holdings (including without limitation any equity securities issued pursuant to
the exercise of stock options or warrants or the Permanent Financing), but
excluding (i) any stock option agreement, subscription agreement, incentive plan
or similar arrangement with any officer, employee or director of Holdings,
Intermediate Holdings, the Company or any of their respective Restricted
Subsidiaries, (ii) the issuance of any Capital Stock of Holdings to any officer,
director or employee of Holdings, Intermediate Holdings, the Company or any of
their respective Restricted Subsidiaries, (iii) the issuance of equity
securities pursuant to the Transaction or (iv) the issuance of equity securities
to Holdings, Intermediate Holdings, the Company or any Guarantor.

         "EQUITY REGISTRATION RIGHTS AGREEMENT" means the Equity Registration
Rights Agreement, dated as of February 4, 2000, among Holdings and the
Purchasers, in the form attached as Exhibit E to this Agreement, as amended,
supplemented or otherwise modified from time to time.

         "ESCROW AGENT" means Snoga, Inc., a Delaware corporation.

         "ESCROW AGREEMENT" means the Escrow Agreement, dated as of February 4,
2000, among Holdings, the Purchasers and the Escrow Agent, in the form attached
as Exhibit A to this Agreement, as amended, supplemented or otherwise modified
from time to time.

         "EVENT OF DEFAULT" has the meaning set forth in SECTION 7.1.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

         "EXPIRATION DATE" has the meaning set forth in SECTION 2.1(b).

         "FEE LETTER" means the letter agreement with respect to fees dated
February 1, 2000 made by DLJ Bridge Finance, Inc. and DLJ Capital Funding, Inc
and accepted by Holdings on February 2, 2000.

         "FINANCING DOCUMENTS" means this Agreement, the Notes, the Debt
Registration Rights Agreement, the Equity Registration Rights Agreement, the
Warrant Agreement, the Warrants and the Escrow Agreement.

         "FIRST ANNIVERSARY DATE" means the first anniversary of the Issuance
Date (or if such date is not a Business Day, the next preceding Business Day).

                                       -3-

<PAGE>   9

         "FIXED RATE HOLDER" means a Holder of a Note which is designated as a
Fixed Rate Holder by notice to the Company and to such Holder by a Purchaser or
any of its Affiliates substantially contemporaneously with the transfer by such
Purchaser or such Affiliate of such Note to such subsequent Holder with a fixed
rate of interest in accordance with Section 8.4(b).

         "FIXED RATE NOTE" means a Note which has been transferred to a Fixed
Rate Holder (including any Note issued upon any subsequent exchange or transfer
thereof and any Additional Note issued in respect thereof).

         "FIXED RATE SALE DATE" means the earlier of (i) the first anniversary
of the Issuance Date and (ii) the date of any refusal by the Company to execute
a Bona Fide Proposal.

         "GUARANTEE" means the subordinated guarantee by the Guarantors of the
Notes pursuant to Article X.

         "GUARANTEE OBLIGATION" means as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counter indemnity or similar obligation, in either case guaranteeing or in
effect guaranteeing any Indebtedness (the "primary obligations") of any other
third Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of the guaranteeing
person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor or (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation against loss in
respect thereof; PROVIDED, HOWEVER, that the term Guarantee Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined in
good faith by the guaranteeing Person.

         "GUARANTORS" is defined in the preamble.

         "HOLDER" means any holder of any Note.

                                       -4-

<PAGE>   10

         "HOLDINGS" is defined in the preamble.

         "INCORPORATED AGREEMENT" means the Credit Agreement; PROVIDED that any
amendment, supplement or waiver thereto or thereunder shall be effective for
purposes of this definition if and only if consented to in writing by the
Majority Holders. Each reference herein to the Incorporated Agreement shall by
such reference incorporate the provisions of the Incorporated Agreement to which
such reference is made as though fully set forth in such place, together with
related definitions and ancillary provisions, PROVIDED that for purposes of such
incorporation by reference, except as the context may otherwise require:

                  (i) references therein to "this Agreement", the "Notes", the
         "Loan Documents" and the like shall be deemed to refer to and include
         this Agreement, the Notes and the Financing Documents, respectively;

                  (ii) references therein to the "Administrative Agent" shall be
         deemed to refer to the Purchasers;

                  (iii) references therein to the "Lenders" shall be deemed to
         refer to (x) prior to the issuance of the Notes, the Purchasers and (y)
         from and after the issuance of the Notes, the Holders from time to time
         of the Notes;

                  (iv) references therein to the "Required Lenders" or the like
         shall be deemed to refer to the Majority Holders;

                  (v) references therein to the "Obligors" shall be deemed to
         refer to Holdings, the Company and the Guarantors;

                  (vi) references in Article VI thereof to the "Credit
         Extensions" shall be deemed to refer to the Indebtedness evidenced by
         the Notes; and

                  (vii) provisions within the Incorporated Agreement shall be
         deemed for all purposes hereof to be modified as set forth in ARTICLES
         III, VI and VII hereof.

         "INITIAL RATE" has the meaning set forth in SECTION 2.5(b).

         "INTEREST PAYMENT DATE" means each May 4, August 4, November 4 and
February 4 (or, if any such date is not a Business Day, the next succeeding
Business Day).

         "INTERMEDIATE HOLDINGS" is defined in the preamble.

         "ISSUANCE DATE" means the date the Notes are issued by the Company and
purchased by the Purchasers.

                                       -5-

<PAGE>   11

         "ISSUANCE DATE CERTIFICATE" means a certificate of an Authorized
Officer of Holdings, Intermediate Holdings and the Company substantially in the
form of EXHIBIT F hereto, delivered pursuant to CLAUSE (d) of SECTION 5.1.

         "LENDERS" means the banks and other financial institutions from time to
time party to the Credit Agreement.

         "LOAN DOCUMENTS" means the Credit Agreement, together with all notes,
collateral and security documents, guaranties, interest rate hedge or similar
arrangements to which the counterparty at the time such interest rate hedge or
similar arrangement was entered into was a lender under the Credit Agreement or
any of its Affiliates, agreements and other documents delivered at any time in
connection therewith, all as amended, supplemented or otherwise modified from
time to time in accordance with their respective terms.

         "MAJORITY HOLDERS" means (i) at any time prior to the issuance of the
Notes, the Purchasers and (ii) at any time thereafter, the holders of voting
rights with respect to waivers, amendments and other actions permitted or
required to be taken by Holders under the terms of the Notes constituting a
majority of such voting rights attributable to the aggregate outstanding amount
of Notes at such time.

         "MAKE-WHOLE AMOUNT" means, with respect to any Fixed Rate Note, an
amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Fixed Rate Note
over the amount of such Called Principal, PROVIDED that the Make-Whole Amount
may in no event be less than zero. For the purposes of determining the
Make-Whole Amount, the following terms have the following meanings:

                  "CALLED PRINCIPAL" means, with respect to any Fixed Rate Note,
         the principal of such Fixed Rate Note that is to be prepaid pursuant to
         SECTION 2.6(b) or has become or is declared to be immediately due and
         payable pursuant to SECTION 7.1, as the context requires.

                  "DISCOUNTED VALUE" means, with respect to the Called Principal
         of any Fixed Rate Note, the amount obtained by discounting all
         Remaining Scheduled Payments with respect to such Called Principal
         from their respective scheduled due dates to the Settlement Date with
         respect to such Called Principal, in accordance with accepted financial
         practice and at a discount factor (applied on the same periodic basis
         as that on which interest on the Fixed Rate Notes is payable) equal to
         the Reinvestment Yield with respect to such Called Principal.

                  "REINVESTMENT YIELD" means, with respect to the Called
         Principal of any Fixed Rate Note, 0.50% over the yield to maturity
         implied by (i) the yields reported, as of 10:00 a.m. (New York City
         time) on the second Business Day preceding the Settlement

                                       -6-

<PAGE>   12

         Date with respect to such Called Principal, on the display designated
         as "Page USD" on the Bloomberg Financial Markets System (or such other
         display as may replace Page USD on the Bloomberg Financial Markets
         System) for actively traded U.S. Treasury securities having a maturity
         equal to the Remaining Average Life of such Called Principal as of
         such Settlement Date, or (ii) if such yields are not reported as of
         such time or the yields reported as of such time are not ascertainable,
         the Treasury Constant Maturity Series Yields reported, for the latest
         day for which such yields have been so reported as of the second
         Business Day preceding the Settlement Date with respect to such Called
         Principal, in Federal Reserve Statistical Release H.15 (519) (or any
         comparable successor publication) for actively traded U.S. Treasury
         securities having a constant maturity equal to the Remaining Average
         Life of such Called Principal as of such Settlement Date. Such implied
         yield will be determined, if necessary, by (a) converting U.S. Treasury
         bill quotations to bond-equivalent yields in accordance with accepted
         financial practice and (b) interpolating linearly between (1) the
         actively traded U.S. Treasury security with the maturity closest to and
         greater than the Remaining Average Life and (2) the actively traded
         U.S. Treasury security with the maturity closest to and less than the
         Remaining Average Life.

                  "REMAINING AVERAGE LIFE" means, with respect to any Called
         Principal, the number of years (calculated to the nearest one-twelfth
         year) obtained by dividing (i) such Called Principal into (ii) the sum
         of the products obtained by multiplying (a) the principal component of
         each Remaining Scheduled Payment with respect to such Called Principal
         by (b) the number of years (calculated to the nearest one-twelfth year)
         that will elapse between the Settlement Date with respect to such
         Called Principal and the scheduled due date of such Remaining Scheduled
         Payment.

                  "REMAINING SCHEDULED PAYMENTS" means, with respect to the
         Called Principal of any Fixed Rate Note, all payments of such Called
         Principal and interest thereon that would be due after the Settlement
         Date with respect to such Called Principal if no payment of such
         Called Principal were made prior to its scheduled due date, PROVIDED
         that if such Settlement Date is not a date on which interest payments
         are due to be made under the terms of the Fixed Rate Notes, then the
         amount of the next succeeding scheduled interest payment will be
         reduced by the amount of interest accrued to such Settlement Date and
         required to be paid on such Settlement Date pursuant to SECTION 2.6(b)
         or SECTION 7.1; and PROVIDED FURTHER that any such determination shall
         assume the extension of the maturity of such Fixed Rate Note pursuant
         to SECTION 2.6(a), whether or not such maturity has in fact been so
         extended.

                  "SETTLEMENT DATE" means, with respect to the Called Principal
         of any Fixed Rate Note, the date on which such Called Principal is to
         be prepaid pursuant to SECTION 2.6(b) or has become or is declared to
         be immediately due and payable pursuant to SECTION 7.1, as the context
         requires.

                                       -7-

<PAGE>   13

         "MATERIAL ACQUISITION DOCUMENTS" means the Merger Agreement, the Credit
Agreement, the Engagement Letter and all other material instruments, agreements
and documents relating to the Acquisition, the RailAmerica Refinancing, the
RailTex Refinancing, the Intermediate Holdings Asset Bridge Note Issuance, the
Equity Issuance (as defined in the Incorporated Agreement), the Asset Transfer
and the transactions contemplated hereby or thereby, in each case as amended
from time to time in accordance with CLAUSE (j) of SECTIONS 6.2 and 6.5.

         "MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon the
business, assets, condition (financial or otherwise), operations, performance,
properties or prospects of Holdings, Intermediate Holdings, the Company and the
Restricted Subsidiaries taken as a whole, (ii) the material impairment of the
ability of Holdings, Intermediate Holdings, the Company or any Guarantor to
perform their respective obligations under the Financing Documents, or (iii) a
material adverse effect on the rights and remedies of any Holder under any
Financing Document.

         "NET DEBT PROCEEDS" means with respect to the sale or issuance by
Holdings, Intermediate Holdings, the Company or the Restricted Subsidiaries to
any Person of any of its Indebtedness not permitted pursuant to Section 7.2.2 of
the Incorporated Agreement as incorporated by reference in CLAUSE (b) of SECTION
6.2, the EXCESS of:

                  (a) the gross cash proceeds received by such Person from such
         sale or issuance,

OVER

                  (b) all underwriting commissions and legal, investment
         banking, brokerage and accounting and other professional fees, sales
         commissions and disbursements actually incurred in connection with such
         sale or issuance which have not been paid to Affiliates of Holdings in
         connection therewith.

         "NET EQUITY PROCEEDS" means with respect to any sale or issuance by
Holdings, Intermediate Holdings, the Company or the Restricted Subsidiaries to
any Person of any of their respective Capital Stock or, warrants or options for
such Capital Stock or the exercise of any such warrants or options, the excess
of:

                  (a) the gross cash proceeds received by Holdings, Intermediate
         Holdings, the Company or any such Restricted Subsidiary from such sale,
         exercise or issuance; PROVIDED, HOWEVER, that the Company may exclude
         up to $100,000 in aggregate of such gross proceeds in each Fiscal Year,

OVER

                  (b) the sum of all underwriting commissions and legal,
         investment banking, brokerage, accounting and other professional fees,
         sales commissions and disbursements

                                       -8-

<PAGE>   14

         actually incurred in connection with such sale or issuance which have
         not been paid to Affiliates of Holdings, Intermediate Holdings, or the
         Company in connection therewith.

         "NOTES" means the Company's Senior Subordinated Increasing Rate Bridge
Notes substantially in the form set forth as EXHIBIT B hereto.

         "OBLIGATIONS" means all obligations (monetary or otherwise, whether
absolute or contingent, matured or unmatured) of Holdings, Intermediate
Holdings, the Company and each other Obligor arising under or in connection with
a Financing Document, including the principal of and premium, if any, and
interest (including interest accruing during the pendency of any proceeding of
the type described in Section 8.1.9 of the Incorporated Agreement as
incorporated by reference in CLAUSE (i) of SECTION 7.1, whether or not allowed
in such proceeding) on the Notes.

         "OTHER TAXES" has the meaning set forth in SECTION 2.7(a).

         "PERMANENT FINANCING" means any Debt Incurrence or Equity Issuance
following the date hereof for the purpose of refinancing the Notes.

         "PERSON" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
government (or any agency or political subdivision thereof) or other entity of
any kind.

         "PRIME RATE" means, as of any date, the rate of interest then most
recently announced by The Bank of New York as its prime or reference rate for
dollars loaned in the United States.

         "PROJECTIONS" is defined in CLAUSE (h)(i)(b) of SECTION 5.1.

         "PURCHASERS" is defined in the PREAMBLE.

         "REGISTRATION RIGHTS" means the registration rights applicable to the
Notes on the terms set forth in the Debt Registration Rights Agreement.

         "RELEVANT FIXED INTEREST RATE" is defined in SECTION 8.4(b).

         "SECURITIES ACT" means the Securities Act of 1933, as amended.

         "SENIOR DEBT" means (i) all Indebtedness outstanding under the Loan
Documents, including, without limitation, in each case, principal, premium,
interest (including interest accruing subsequent to the filing of, or which
would have accrued but for the filing of, a petition for bankruptcy, whether or
not such interest is an allowable claim in such bankruptcy proceeding),
indemnifications, fees and expenses relating thereto, (ii) any interest rate

                                       -9-

<PAGE>   15

agreements entered into in connection with any Indebtedness referred to in
clause (i), (iii) any other Indebtedness permitted to be incurred by the Company
under the terms of this Agreement which the Holders agree will be senior in
right of payment to the Notes and (iv) all obligations with respect to the
foregoing. Notwithstanding anything to the contrary in the foregoing, Senior
Debt will not include (w) any liability for federal, state, local or other taxes
owed or owing by the Company, (x) any Indebtedness of the Company to any of its
Restricted Subsidiaries or other Affiliates, (y) any trade payables or (z) any
Indebtedness that is incurred in violation of this Agreement.

         "SHELF REGISTRATION" means a "shelf" registration statement on any
appropriate form pursuant to Rule 415 (or similar rule that may be adopted by
the Commission) under the Securities Act.

         "SUBORDINATED DEBT" means unsecured Indebtedness of Holdings,
Intermediate Holdings, the Company or any their Restricted Subsidiaries
subordinated in right of payment to the Obligations pursuant to documentation
containing redemption and other prepayment events, maturities, amortization
schedules, covenants, events of default, remedies, acceleration rights,
subordination provisions and other material terms satisfactory to the Majority
Holders.

         "SUBORDINATED OBLIGATIONS" has the meaning set forth in SECTION 9.1.

         "TAXES" has the meaning set forth in SECTION 2.7(a).

         "TRANSFER" means any disposition of Notes that would constitute a sale
thereof under the Securities Act.

         "TREASURY RATE" means, as of any date, the yield to maturity as of such
date of United States Treasury securities with a constant maturity (as compiled
and published in the most recent Federal Reserve Statistical Release H.15 (519)
that has become publicly available at least two Business Days prior to such date
(or, if such Statistical Release is no longer published, any publicly available
source of similar market data)) most nearly equal to (but not less than) the
remaining term to maturity of the Notes; PROVIDED, HOWEVER, that if such term to
maturity is less than one year, the weekly average yield on actually traded
United States Treasury securities adjusted to a constant maturity of one year
shall be used.

         "VARIABLE RATE NOTE" means any Note other than a Fixed Rate Note.

         "VARIABLE RATE HOLDER" means any Holder of a Variable Rate Note.

         "WARRANT AGREEMENT" means the Warrant Agreement, dated as of February
4, 2000, among Holdings and the Purchasers in the form attached as Exhibit D to
this Agreement, as amended, supplemented or otherwise modified from time to
time.

                                      -10-

<PAGE>   16

         "WARRANT SHARES" has the meaning set forth in CLAUSE (u) of SECTION
5.1.

         "WARRANTS" means the warrants to purchase common stock of Holdings to
be issued pursuant to the Warrant Agreement.

         Section 1.2 INCORPORATED DEFINITION. Unless the context otherwise
requires, capitalized terms defined in the Incorporated Agreement and not
otherwise defined herein shall have the meanings assigned thereto in the
Incorporated Agreement.

                                   ARTICLE II

              PURCHASE AND SALE OF SECURITIES; TERMS OF SECURITIES

         Section 2.1 COMMITMENT TO PURCHASE. (a) Subject to the terms and
conditions set forth herein and in reliance on the representations and
warranties of the Company contained herein and in the other Financing Documents,
the Company may at its option issue and sell to the Purchasers on the Issuance
Date, and each Purchaser agrees to purchase on the Issuance Date, Notes in an
aggregate outstanding principal amount equaling such Purchaser's Commitment. The
purchase price for the Notes shall be 100% of the principal amount thereof.

         (b) The Commitment will terminate (the "EXPIRATION DATE") on the
earliest of (i) the termination of the Merger Agreement in accordance with the
terms thereof prior to the consummation of the Acquisition, (ii) the
consummation of the Transaction without the issuance of the Notes (if such date
occurs prior to the Issuance Date), (iii) the date on which Holdings,
Intermediate Holdings, the Company or any of their respective Restricted
Subsidiaries commences the marketing of any proposed Permanent Financing with
respect to which DLJSC or any of its Affiliates is not (unless otherwise agreed
to by DLJSC in its sole and absolute discretion) the sole and exclusive manager,
agent, purchaser, underwriter or lead arranger (if such date occurs prior to the
Issuance Date) and (iv) 5:00 P.M. (New York City time) on April 15, 2000 (if
such date occurs prior to the Issuance Date); PROVIDED, that if at any time on
or after the date hereof an Event of Default shall have occurred and be
continuing, a Purchaser may at its option terminate its Commitment by notice to
the Company, such termination to be effective upon the giving of such notice;
and PROVIDED, FURTHER, that the Commitments shall automatically terminate,
without notice to the Company or any other action on the part of the Purchasers,
upon the occurrence of any Default described in clauses (b), (c) or (d) of
Section 8.1.9 of the Incorporated Agreement as incorporated by reference in
CLAUSE (i) of SECTION 7.1 with respect to any Obligor.

         (c) The Commitments are not revolving in nature, and principal amounts
of Notes prepaid in accordance with SECTION 2.6 may not be resold to the
Purchasers hereunder.

                                      -11-

<PAGE>   17

         Section 2.2 TAKEDOWN PROCEDURES. (a) The Company shall give the
Purchasers notice not later than 3:00 P.M. (New York City time) one Business Day
before the date of the proposed purchase and sale of Notes, which notice shall
specify the principal amount of Notes to be purchased and sold and the proposed
Issuance Date (which shall be a Business Day).

         (b) On the Issuance Date, the Purchasers, severally and not jointly,
shall deliver by wire transfer, to the account number of the Company specified
by the Company in writing no later than 1:00 P.M. (New York City time) on the
Issuance Date, immediately available funds in an amount equal to the aggregate
purchase price of the Notes to be purchased by the Purchasers hereunder on such
Issuance Date, less the aggregate amount of fees payable by the Company to the
Purchasers on such date pursuant to SECTION 2.3(a) and expenses (if any) payable
to the Purchasers on such date pursuant to SECTION 11.4.

         (c) On the Issuance Date, against payment as set forth in CLAUSE (b)
above, the Company shall deliver to each Purchaser a single Note representing
the aggregate principal amount of Notes to be purchased by such Purchaser
registered in the name of such Purchaser, or, if requested by such Purchaser,
separate Notes in such other denominations representing in total such aggregate
principal amount and registered in such name or names as shall be designated by
such Purchaser by notice to the Company at least one Business Day prior to the
Issuance Date.

         Section 2.3 FEES. (a) The Company shall pay to the Purchasers the fees
that are set forth in the Fee Letter at such times and in such amounts as agreed
to therein.

         (b) On the Fixed Rate Sale Date, the Company shall pay to each Holder a
cash duration fee (the "EXTENSION FEE") in an amount equal to three percent
(3.00%) of the principal amount of the Notes held by such Holder that are
outstanding on such date immediately prior to such payment.

         Section 2.4 MANDATORY TERMINATION OF COMMITMENTS. The Commitment shall
terminate on the Expiration Date.

         Section 2.5 INTEREST. (a) Interest on each Note shall be payable
quarterly in arrears, on each Interest Payment Date of each year in which such
Note remains outstanding, commencing with the first Interest Payment Date after
the date of issuance thereof, on the principal amount of such Note outstanding.
Interest on each Variable Rate Note shall be calculated at the rates per annum
set forth below and interest on each Fixed Rate Note shall be calculated at the
Relevant Fixed Interest Rate, and in each case shall accrue from and including
the most recent Interest Payment Date to which interest has been paid on such
Note (or if no interest has been paid on such Note, (x) from the date of
issuance thereof in the case of each Variable Rate Note and (y) from the Fixed
Rate Sale Date in the case of each Fixed Rate Note) to but excluding the date on
which payment in full of the principal sum of such Note has been made.

                                      -12-

<PAGE>   18

         (b) The interest rate applicable to each Note from and including the
Issuance Date shall be 13.0% (the "INITIAL RATE") until the Interest Payment
Date falling on May 4, 2000. Interest on each Note will be calculated on the
basis of a 360-day year and paid for the actual number of days elapsed.

         (c) The interest rate applicable to each Note from and including the
Interest Payment Date falling on May 4, 2000, shall be a floating rate per annum
equal to the greatest of (i) the sum of (A) the Prime Rate in effect from time
to time plus (B) 4.50%, (ii) the sum of (A) the Treasury Rate plus (B) 6.36%,
(iii) the sum of (A) the DLJ High Yield Index Rate plus (B) 0.80%, and (iv) the
sum of (A) the Initial Rate plus (B) .50%, and in the case of CLAUSES (c)(i)
through (iv), increasing by .50% on each Interest Payment Date thereafter until
the date the principal amount of, and accrued and unpaid interest on, if any,
such Note is paid in full or such Note becomes a Fixed Rate Note.

         (d) In addition to any adjustments to the Interest Rate set forth in
CLAUSE (c) above, if, pursuant to the terms of the Debt Registration Rights
Agreement, a Shelf Registration with respect to the Notes either (i) has not
been filed with the Commission on or prior to the 30th day following the Fixed
Rate Sale Date or (ii) has not been declared effective by the Commission on or
prior to the 90th day following the Fixed Rate Sale Date, then the interest rate
then in effect (including the interest rate in effect with respect to Fixed Rate
Notes) shall be increased by an additional 1.00% per annum until such time as
such Shelf Registration has been declared effective by the Commission. Following
the effectiveness of the Shelf Registration, the interest rate then in effect
shall (including the interest rate in effect with respect to Fixed Rate Notes)
be increased by an additional 1.00% beginning on the first date on which such
Shelf Registration ceases to remain effective and shall continue at such
increased interest rate until such Shelf Registration or another Shelf
Registration with respect to the Notes is declared effective by the Commission.

         (e) Overdue principal and interest on the Notes shall bear interest
from the date so due to the date paid at a rate which is 2.0% per annum in
excess of the rate then borne by the Notes.

         (f) Notwithstanding anything to the contrary set forth above, at no
time shall the per annum interest rate on the Notes exceed seventeen percent
(17.00%), nor shall the per annum interest rate on the Notes be lower than ten
percent (10.00%). In addition, if and to the extent that the amount of interest
payable on any Interest Payment Date is greater than the amount of interest on
the Notes that would have been payable on such Interest Payment Date if the
interest rate in effect at all times during the three-month period then ended
had been fifteen percent (15.00%) per annum (the amount of such excess being
hereinafter referred to as the "PIK Amount" for such period), then the Company
may, at its option, in lieu of payment in cash of the PIK Amount, pay interest
on such Interest Payment Date through the issuance of Additional Notes. Such
Additional Notes issued on any Interest Payment Date shall, subject to the
remaining provisions of this paragraph, be in an aggregate principal amount
equal to the PIK

                                      -13-

<PAGE>   19

Amount for such Interest Payment Date, shall otherwise be identical to the
outstanding Notes and shall be issued to the Holders of the outstanding Notes in
proportions such that each Holder shall receive the same ratio of cash interest
to Additional Notes on such Interest Payment Date. Such Additional Notes shall
be issued only in denominations of $1,000 and multiples thereof. Any interest
otherwise payable in Additional Notes which cannot be so paid because an
Additional Note would have a denomination less than $1,000 (or not be a multiple
thereof) shall be paid in cash.

         Section 2.6 MATURITY OF NOTES; PREPAYMENT OF NOTES. (a) The Notes shall
mature on the First Anniversary Date; PROVIDED, however that, unless the Company
shall have notified the Purchasers in writing not less than 5 Business Days
prior to the First Anniversary Date of its intention to repay the Notes in full
on or prior to the First Anniversary Date, the maturity date will be
automatically extended to the date which is six (6) months after the Stated
Maturity Date for Term B Loans if, on the First Anniversary Date, (i) no Default
under this Agreement shall have occurred and be continuing; (ii) no event of
default or event which with the giving of notice or the lapse of time, or both,
would become an event of default under the Loan Documents or any Indebtedness of
Holdings, Intermediate Holdings, the Company or any of its Restricted
Subsidiaries relating to more than $5,500,000 in aggregate principal amount
shall have occurred and be continuing; and (iii) all fees and expenses payable
as of such date to the Purchasers, Holders or DLJSC hereunder or under the
Engagement Letter shall have been paid in full.

         (b) (i) For so long as any Variable Rate Notes are outstanding, the
Company at its option may, upon 5 Business Days' written notice to the Holders
thereof, at any time, prepay all or any part of the principal amount of the
Variable Rate Notes at a redemption price equal to 100.00% of the outstanding
principal amount of the Notes so prepaid, together with accrued and unpaid
interest through the date of prepayment, subject to SECTION 2.6(d), and (ii) for
so long as any Fixed Rate Notes are outstanding, the Company at its option may,
upon 10 Business Days' written notice to the Holders thereof, prepay all or any
part of the principal amount of the Fixed Rate Notes at a redemption price equal
to 100.00% of the outstanding principal amount of the Notes so prepaid, together
with accrued and unpaid interest through the date of prepayment and a premium
equal to the Make-Whole Amount in respect thereof, subject to SECTION 2.6(d).

         (c) (i) The Company shall, following the receipt by the Company or any
Restricted Subsidiary of any Casualty Proceeds in excess of $500,000
(individually or in the aggregate (when taken together with all other Casualty
Proceeds and all Net Disposition Proceeds) over the course of a Fiscal Year),
deliver to the Holders a calculation of the amount of such Casualty Proceeds and
make a mandatory redemption of the Notes at a redemption price of 100.00% of the
principal amount so redeemed in an amount equal to 100% of such Casualty
Proceeds within 30 days of the receipt thereof; PROVIDED, HOWEVER, that no
mandatory prepayment or redemption on account of Casualty Proceeds shall be
required under this clause if the Company informs the Holders in writing no
later than 30 days following the occurrence of the Casualty Event resulting in
such Casualty Proceeds of the Company's or the Restricted Subsidiary's good
faith intention

                                      -14-

<PAGE>   20

to apply such Casualty Proceeds to the rebuilding or replacement of the damaged,
destroyed or condemned assets or property or the acquisition or construction of
other long-term capital assets useful in the Company's or such Restricted
Subsidiary's business and the Company or the Restricted Subsidiary in fact uses
such Casualty Proceeds to rebuild or replace such damaged, destroyed or
condemned assets or property or acquire or construct such other long-term
capital assets within 360 days following the receipt of such Casualty Proceeds,
with the amount of such Casualty Proceeds unused after such 360-day period being
applied to make a mandatory redemption of the Notes at a redemption price of
100.00% of the principal amount so redeemed in an amount equal to such unused
amount of such Casualty Proceeds; PROVIDED, HOWEVER, that if such Casualty
Proceeds related to assets or property held by (x) a Canadian Subsidiary any
such reinvestments must be made by a Canadian Restricted Subsidiary, (y) an
Australian Subsidiary any such reinvestment must be made by an Australian
Restricted Subsidiary and (z) the Company or a Domestic Subsidiary any such
reinvestment must be made by the Company or a Domestic Restricted Subsidiary.

         (ii) The Company shall, following the receipt by the Company or any
Restricted Subsidiary of any Net Disposition Proceeds in excess of $500,000
(individually or in the aggregate (when taken together with all other Net
Disposition Proceeds and all Casualty Proceeds) over the course of a Fiscal
Year), deliver to the Holders a calculation of the amount of such Net
Disposition Proceeds and make a mandatory redemption of the Notes at a
redemption price of 100.00% of the principal amount so redeemed in an amount
equal to 100% of such Net Disposition Proceeds within one Business Day of the
receipt thereof; PROVIDED, HOWEVER, that no mandatory prepayment or redemption
on account of Net Disposition Proceeds shall be required under this clause if
the Company informs the Holders in writing no later than one Business Day
following the receipt of such Net Disposition Proceeds of the Company's or a
Restricted Subsidiary's good faith intention to apply such Net Disposition
Proceeds to (i) the replacement of the assets or property that was the subject
of the Disposition or the acquisition or construction of other long-term capital
assets useful in the Company's or such Restricted Subsidiary's business and/or
(ii) acquire the Capital Stock of a Person in a transaction permitted under
CLAUSE (g) of Section 7.2.5 of the Incorporated Agreement as incorporated by
reference in CLAUSE (d) of SECTION 6.2 so long as (x) the Disposition giving
rise to such Net Disposition Proceeds complies with clause (f) of Section 7.2.11
of the Incorporated Agreement as incorporated by reference in CLAUSE (i) of
SECTION 6.2, (y) the aggregate amount of Net Disposition Proceeds used for such
acquisitions shall not exceed $10,000,000 in the aggregate in any Fiscal Year
and $20,000,000 in the aggregate for the term of this Agreement and (z) as a
result of such Acquisition, such Person becomes a Restricted Subsidiary and to
the extent such Person becomes a Domestic Subsidiary complies with SECTION 6.8
and the Company or the Restricted Subsidiary in fact uses such Net Disposition
Proceeds to replace, acquire or construct such assets or property or to make
such acquisition of Capital Stock within 360 days following the receipt of such
Net Disposition Proceeds, with the amount of such Net Disposition Proceeds
unused after such 360-day period being applied to make a mandatory redemption of
the Notes at a redemption price of 100.00% of the principal amount so redeemed
in an amount equal to such

                                      -15-

<PAGE>   21

unused amount of such Net Disposition Proceeds; PROVIDED, HOWEVER, that if such
Net Disposition Proceeds related to assets or property held by (x) a Canadian
Subsidiary any such reinvestments must be made by a Restricted Subsidiary, (y)
an Australian Subsidiary any such reinvestment must be made by an Australian
Restricted Subsidiary and (z) the Company or a Domestic Subsidiary any such
reinvestment must be made by the Company or a Domestic Restricted Subsidiary
that is a Restricted Subsidiary.

         (iii) Concurrently with the receipt by Holdings, Intermediate Holdings,
the Company or any of the Restricted Subsidiaries of any Net Equity Proceeds or
Net Debt Proceeds, Holdings shall deliver to the Holders a calculation of the
amount of such Net Equity Proceeds or Net Debt Proceeds, as the case may be, and
the Company shall make a mandatory redemption of the Notes at a redemption price
of 100% of the principal amount so redeemed in an amount equal to 100% of such
Net Equity Proceeds or Net Debt Proceeds, as the case may be.

         (iv) Notwithstanding anything contained in this Agreement to the
contrary, the Company shall not be obligated to prepay or redeem the principal
amount of Notes with (i) any Net Debt Proceeds of any Debt Incurrence if such
prepayment is prohibited by the lenders with respect to such Debt Incurrence or
(ii) (A) any Net Debt Proceeds, Net Equity Proceeds (other than in respect of a
Permanent Financing) or (B) any Casualty Proceeds or Net Disposition Proceeds,
to the extent any portion of such Net Debt Proceeds, Net Equity Proceeds,
Casualty Proceeds or Net Disposition Proceeds is required under the Incorporated
Agreement to be paid to the holders of any Designated Senior Debt thereunder.

         (d) If the Company, at any time or from time to time, (i) redeems the
Notes at their scheduled maturity (whether or not extended pursuant to SECTION
2.6), (ii) exercises its right to redeem any Notes under SECTION 2.6(b) or (iii)
redeems any Notes pursuant to SECTION 2.6(c), in any such case with or in
anticipation of funds raised directly or indirectly by any means other than a
transaction in which DLJSC or one or more of its Affiliates acted (unless
otherwise agreed to by DLJSC in its sole and absolute discretion) as sole book
running manager, lead initial purchaser, sole underwriter, sole lead agent or
sole lead arranger, as the case may be, to Holdings, Intermediate Holdings, the
Company or any of its Restricted Subsidiaries the redemption price shall be
equal to 103.00% of the principal amount of the Notes so prepaid, together with
accrued interest through the date of prepayment and, in the case of prepayment
of Fixed Rate Notes, a premium equal to the Make-Whole Amount in respect
thereof; PROVIDED, HOWEVER, that on or after the First Anniversary Date, the
Notes may be redeemed with or in anticipation of funds raised by any means other
than a transaction in which DLJSC or any Affiliate thereof has acted as sole and
exclusive lead manager, lead initial purchaser, lead underwriter, lead agent or
lead arranger as the case may be, to Holdings, Intermediate Holdings, the
Company or any of its Restricted Subsidiaries at a redemption price equal to
100.00% of the principal amount of the Notes, together with accrued interest to
the date of prepayment and, in the case of prepayment of Fixed Rate Notes, a
premium equal to the Make-Whole Amount in respect thereof unless (i) (A) prior
to the First Anniversary Date DLJSC delivered to the

                                      -16-

<PAGE>   22

Company a proposal to market securities of Holdings, Intermediate Holdings, the
Company or any of its Restricted Subsidiaries to one or more financially
responsible institutional investors (or a commitment from DLJSC to underwrite
the public sale of such securities, on a firm commitment basis), on financial
and other terms and conditions no less favorable to the issuer than those
generally available in the United States capital markets to issuers of
securities having a creditworthiness comparable to that of the issuer, in an
amount sufficient to redeem all the Notes (a "BONA FIDE PROPOSAL"), and (B) such
issuer did not authorize DLJSC to execute such Bona Fide Proposal; it being
understood that no such proposal shall be deemed to be a Bona Fide Proposal if
DLJSC fails to execute such proposal on substantially the terms proposed, or
(ii) the Company and DLJSC have agreed in their reasonable judgment that no such
Bona Fide Proposal could be made.

         (e) Any prepayment of the Notes pursuant to SECTION 2.6(b) shall be in
a minimum amount of at least $500,000, unless less than $500,000 of the Variable
Rate Notes or the Fixed Rate Notes, as the case may be, remain outstanding, in
which case all of the Notes must be prepaid. Any prepayment of the Notes
pursuant to SECTION 2.6(c) shall be in a minimum amount which is a multiple of
$1,000 times the number of Holders at the time of such prepayment.

         (f) Any partial prepayment of the Notes pursuant to SECTION 2.6(b)
shall be made so that the Variable Rate Notes or the Fixed Rate Notes, as the
case may be, held by each Holder shall be prepaid in a principal amount which
shall bear the same ratio, as nearly as may be, to the total principal amount of
such Notes being prepaid as the principal amount of such Notes held by such
Holder shall bear to the aggregate principal amount of all such Notes then
outstanding. Any partial prepayment of the Notes pursuant to SECTION 2.6(c)
shall be applied first to the Variable Rate Notes until all such Notes shall
have been prepaid in full, and then to the Fixed Rate Notes, and within such
categories shall be made so that such Notes then held by each Holder shall be
prepaid in a principal amount which shall bear the same ratio, as nearly as may
be, to the total principal amount of such Notes being prepaid as the principal
amount of such Notes held by such Holder shall bear to the aggregate principal
amount of all such Notes then outstanding; PROVIDED that any Holder of a Fixed
Rate Note may elect in its discretion by written notice to the Company (given
within five Business Days of its receipt of written notice of such prepayment)
not to participate in a prepayment pursuant to SECTION 2.6(c), in which case the
amount that would otherwise have been paid to such Holder may be retained by the
Company. In the event of a partial prepayment of any Note, upon presentation and
surrender of such Note the Company shall execute and deliver to or on the order
of the Holder, at the expense of the Company, a new Note in principal amount
equal to the remaining outstanding portion of such Note.

         Section 2.7 TAXES. (a) For the purposes of this Section, the following
terms have the following meanings:

         "Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by the
Company pursuant to this

                                      -17-

<PAGE>   23

Agreement or under any Note or any other Financing Document, and all liabilities
with respect thereto, excluding (i) United States federal withholding taxes
payable under laws in effect on the date hereof and (ii) in the case of any
Purchaser or Holder, taxes imposed on the net income of such Purchaser or Holder
and franchise or similar taxes imposed on the net income of such Purchaser or
Holder, by a jurisdiction under the laws of which such Purchaser or such Holder
is organized or in which its principal executive office or the office holding
any Notes or any Financing Document is located.

         "Other Taxes" means any present or future stamp or documentary taxes
and any other excise or property taxes, or similar charges or levies, which
arise from any payment made pursuant to this Agreement or under any Note or any
other Financing Document or from the execution, delivery, registration,
recordation or enforcement of, or otherwise with respect to, this Agreement or
any Note or any other Financing Document.

         (b) All payments by the Company to or for the account of any Purchaser
or Holder under any Financing Document shall be made without deduction for any
Taxes or Other Taxes; PROVIDED that, if the Company shall be required by law to
deduct any Taxes or Other Taxes from any such payment, the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section), such
Purchaser or Holder (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, the Company shall make
such deductions, the Company shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law and the
Company shall promptly furnish to such Purchaser or Holder (as the case may be)
the original or a certified copy of a receipt or other documentation available
to the Company evidencing payment thereof.

         (c) The Company agrees to indemnify each Purchaser and Holder for the
full amount of Taxes and Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed or asserted (whether or not correctly) by any
jurisdiction on amounts payable under this Section) paid by such Purchaser or
Holder (as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto; PROVIDED, HOWEVER, that the
Company shall not be obligated to make any payment pursuant to this SECTION
2.7(c) in respect of penalties or interest attributable to any Taxes or Other
Taxes, if written demand therefor has not been made by such Purchaser or Holder
(as the case may be) within 60 days from the date on which any Purchaser or
Holder received written notice of the imposition of Taxes or Other Taxes by the
relevant taxing authority, or for any additional imposition which may arise from
the failure of any Purchaser or Holder (as the case may be) to apply payments in
accordance with the applicable tax law after the Company has made the payments
required hereunder. After any Purchaser or Holder (as the case may be) receives
written notice of the imposition of Taxes, such Purchaser or Holder will act in
good faith to notify the Company of its obligations thereunder as soon as
reasonably possible.

                                      -18-

<PAGE>   24

         (d) The Company shall have no obligation for Taxes under SECTION 2.7(b)
or SECTION 2.7(c) for or on account of:

                  (i) any Taxes (other than Other Taxes) that would not have
         been so imposed but for the existence of any present or former
         connection between any Purchaser, Holder or beneficial owner (or
         between a fiduciary, settlor, beneficiary, member, or shareholder of,
         or possessor of a power over, such Purchaser, Holder or beneficial
         owner, if such Purchaser, Holder or beneficial owner is an estate, a
         trust, a partnership or corporation) and the jurisdiction imposing the
         Tax other than merely holding such Note or any Financing Document, or
         the receipt of payments in respect thereof, including, without
         limitation, such Purchaser, Holder or beneficial owner (or such
         fiduciary, settlor, beneficiary, member, shareholder, or possessor)
         being or having been a citizen or resident thereof, or being or having
         been engaged in a trade or business or having a permanent establishment
         or other fixed base therein, or making or having made an election the
         effect of which is to subject such Purchaser, Holder or beneficial
         owner (or such fiduciary, settlor, beneficiary, member, shareholder, or
         possessor) to such Tax;

                  (ii) any Taxes in the nature of estate, inheritance or gift
         taxes;

                  (iii) any Tax that is imposed or withheld by reason of the
         failure of such Purchaser, Holder or beneficial owner of a Note to
         comply with a written request by the Company, addressed to such
         Purchaser, Holder or beneficial owner, to provide information
         concerning the nationality, residence or identity of such Purchaser,
         Holder or beneficial owner, if providing such information under a
         statute, treaty, regulation or administrative practice of the
         jurisdiction imposing such Tax would result in a complete exemption
         from such Tax;

                  (iv) any Taxes imposed on any payment on a Note to any
         Purchaser or Holder that is a fiduciary or partnership or other than
         sole beneficial owner of such payment to the extent a beneficiary or
         settlor with respect to such fiduciary or a member of such partnership
         or a beneficial owner would not have been entitled to the payment of
         taxes had such beneficiary, settlor, member or beneficial owner
         directly received its beneficial or distributive share of such payment;
         and

                  (v) any combination of items (i) through (iv) above.

         (e) If the Company determines in good faith that a reasonable basis
exists for contesting the imposition of a Tax or Other Tax with respect to any
Purchaser or Holder, such Purchaser or Holder shall cooperate with the Company
in challenging such Tax or Other Tax at the Company's expense (including,
without limitation, any additional costs, expenses or Taxes incurred by any
Purchaser or Holder, as the case may be, as a result of such contesting of such
Taxes) if requested by the Company; PROVIDED, HOWEVER, that nothing in this
SECTION 2.7(e) shall

                                      -19-

<PAGE>   25

require any Purchaser or Holder to submit to the Company any tax returns or any
part thereof, or to prepare or file any tax returns other than as such Purchaser
or Holder in its sole discretion shall determine.

         (f) Each Purchaser and Holder agrees, to the extent reasonable and
without material cost to it, to cooperate with the Company to minimize any
amounts payable by the Company under this SECTION 2.7.

                                   ARTICLE III

                        REPRESENTATIONS AND WARRANTIES OF
                 HOLDINGS, INTERMEDIATE HOLDINGS AND THE COMPANY

         Each of Holdings, Intermediate Holdings and the Company represents and
warrants to the Purchasers (both before and after giving effect to the
Transaction) as set forth below:

         Section 3.1 INCORPORATION OF REPRESENTATIONS AND WARRANTIES IN
INCORPORATED AGREEMENT. Each of Holdings, Intermediate Holdings and the Company
hereby makes, for the benefit of the Purchasers and the Holders from time to
time of the Notes, the representations and warranties contained in the following
Sections of the Incorporated Agreement:

                  (a)  6.1 (Organization, etc.);

                  (b)  6.2 (Due Authorization, Non-Contravention, etc.);

                  (c)  6.3 (Government Approval, Regulation, etc.);

                  (d)  6.5 (Financial Information);

                  (e)  6.6 (No Material Adverse Change);

                  (f)  6.7 (Litigation, Labor Controversies, etc.);

                  (g)  6.8 (Subsidiaries);

                  (h)  6.9 (Ownership of Properties);

                  (i)  6.10 (Taxes);

                  (j)  6.11 (Pension and Welfare Plans);

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<PAGE>   26

                  (k)  6.12 (Environmental Warranties);

                  (l)  6.13 (Accuracy of Information);

                  (m)  6.14 (Regulations U and X);

                  (n)  6.15 (Year 2000); and

                  (o) 6.17 (Solvency).

         Section 3.2 AUTHORIZATION, EXECUTION AND ENFORCEABILITY. (a) Each of
the Financing Documents (other than the Notes) and the Material Acquisition
Documents to which any of Holdings, Intermediate Holdings or the Company is a
party constitutes the valid and binding agreement of such Obligor enforceable in
accordance with its terms (except, in any case, as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally and by principles of equity). When
executed and delivered by the Company against payment therefor in accordance
with the terms hereof, the Notes will constitute valid and binding obligations
of the Company, enforceable in accordance with their terms (except, in any case,
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally and by
principles of equity).

         (b) The Warrants have been duly authorized by Holdings. When executed
pursuant to the terms of the Warrant Agreement and delivered to the Escrow Agent
pursuant to the provisions of this Agreement, the Warrants will be the valid and
binding obligations of Holdings, enforceable against it in accordance with their
terms (except, in any case, as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally and by principles of equity).

         (c) The Warrant Shares to be issued upon exercise of the Warrants have
been duly authorized and reserved for issuance by Holdings and will be issued at
the times and in the manner required by the Warrant Agreement and, upon due
exercise of a Warrant, the Warrant Shares issued will be validly issued, fully
paid and nonassessable.

         Section 3.3 CAPITALIZATION. At the Issuance Date, after giving effect
to the consummation of the Transaction, the capitalization of Holdings will be
as set forth on SCHEDULE 3.3. All of the issued and outstanding shares of Common
Stock of Holdings are, and, upon consummation of the Transaction, will be,
validly issued, fully paid and nonassessable and the holders thereof are not
entitled to any preemptive or other similar rights. Except for the Material
Acquisition Documents or as set forth on SCHEDULE 3.3, there are no
subscriptions, options, warrants, rights, convertible securities, exchangeable
securities or other agreements or

                                      -21-

<PAGE>   27

commitments of any character pursuant to which Holdings is required to issue any
shares of its capital stock.

         Section 3.4 SOLICITATION. No form of general solicitation or general
advertising was used by the Company or, to the best of its knowledge, any other
Person acting on behalf of the Company, in connection with the offer and sale of
the Notes. Neither the Company nor, to the best of its knowledge, any Person
acting on behalf of the Company has, either directly or indirectly, sold or
offered for sale to any Person any of the Notes or any other similar security of
the Company except as contemplated by this Agreement, and the Company represents
that neither the Company nor any person acting on its behalf other than the
Purchasers and its Affiliates will sell or offer for sale to any Person any such
security to, or solicit any offers to buy any such security from, or otherwise
approach or negotiate in respect thereof with, any Person or Persons so as
thereby to bring the issuance or sale of any of the Notes within the provisions
of Section 5 of the Securities Act.

         Section 3.5 NON-FUNGIBILITY. When the Notes are issued and delivered
pursuant to this Agreement, the Notes will not be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities which are (i)
listed on a national securities exchange registered under Section 6 of the
Exchange Act or (ii) quoted in a U.S. automated inter-dealer quotation system.

                                   ARTICLE IV

                  REPRESENTATIONS AND WARRANTIES OF PURCHASERS

         Section 4.1 PURCHASE FOR INVESTMENT; AUTHORITY; BINDING AGREEMENT. Each
of the Purchasers represents and warrants, severally and not jointly, as to
itself only, to Holdings and the Company that:

                  (a) such Purchaser is an Accredited Investor within the
         meaning of Rule 501(a) under the Securities Act and the Notes to be
         acquired by it pursuant to this Agreement are being acquired for its
         own account without a view toward distribution and the Purchaser will
         not offer, sell, transfer, pledge, hypothecate or otherwise dispose of
         the Notes unless pursuant to a transaction either registered under, or
         exempt from registration under, the Securities Act;

                  (b) the execution, delivery and performance of this Agreement
         and the purchase of the Notes pursuant hereto are within such
         Purchaser's corporate powers and have been duly and validly authorized
         by all requisite corporate action;

                  (c) this Agreement has been duly executed and delivered by
         such Purchaser;

                                      -22-

<PAGE>   28

                  (d) this Agreement constitutes a valid and binding agreement
         of such Purchaser enforceable in accordance with its terms;

                  (e) such Purchaser has such knowledge and experience in
         financial and business matters so as to be capable of evaluating the
         merits and risks of its investment in the Notes and such Purchaser is
         capable of bearing the economic risks of such investment; and

                  (f) such Purchaser has had the opportunity to ask questions of
         and receive answers from representatives of Holdings concerning
         Holdings and its Subsidiaries and the terms and conditions of this
         Agreement and the Notes, and has been granted access to all books,
         records and documents of Holdings and its Subsidiaries as it has
         requested.

                                    ARTICLE V

                        CONDITIONS PRECEDENT TO PURCHASE

         Section 5.1 CONDITIONS TO PURCHASERS' OBLIGATION AT TAKEDOWN. The
obligation of the Purchasers (which is several and not joint) to purchase the
Notes to be issued and sold by the Company on the Issuance Date is subject to
the satisfaction of the following conditions contemporaneously with such
purchase:

                  (a) RESOLUTIONS, ETC. The Purchasers shall have received from
         each Obligor, as applicable, (i) a copy of a good standing certificate,
         dated a date reasonably close to the Issuance Date, for each such
         Person and (ii) a certificate, dated the Issuance Date, duly executed
         and delivered by such Person's Secretary or Assistant Secretary,
         managing member or general partner, as applicable, as to

                           (i) resolutions of each such Person's Board of
                  Directors (or other managing body, in the case of other than a
                  corporation) then in full force and effect authorizing, to the
                  extent relevant, all aspects of the Transaction applicable to
                  such Person and the execution, delivery and performance of
                  each Financing Document to be executed by such Person and the
                  transactions contemplated hereby and thereby;

                           (ii) the incumbency and signatures of those of its
                  officers, managing member or general partner, as applicable,
                  authorized to act with respect to each Financing Document to
                  be executed by such Person; and

                           (iii) the full force and validity of each Organic
                  Document of such Person and copies thereof;

                                      -23-

<PAGE>   29

         upon which certificates each Secured Party may conclusively rely until
         it shall have received a further certificate of the Secretary,
         Assistant Secretary, managing member or general partner, as applicable,
         of any such Person canceling or amending the prior certificate of such
         Person.

                  (b) TRANSACTION CONSUMMATED. (i) The Asset Transfer shall have
         been consummated on terms and conditions reasonably satisfactory to the
         Purchasers.

                           (ii) The Acquisition shall have been consummated (or
                  shall be consummated contemporaneously with the application by
                  the Company of the proceeds of the Notes) and in connection
                  therewith, the Company shall have acquired 100% of the issued
                  and outstanding stock of RailTex pursuant to the Merger
                  Agreement for a merger consideration comprised of (i) an
                  aggregate cash purchase price of no more than $139,000,000 and
                  (ii) the Equity Issuance (as defined in the Incorporated
                  Agreement) which shall have been consummated on terms
                  (including documentation in respect thereof in form and
                  substance) satisfactory in all respects to the Purchasers.

                           (iii) In connection with the Acquisition, the Rail
                  America Refinancing and the RailTex Refinancing shall have
                  been consummated (or shall be consummated contemporaneously
                  with the application by the Company of the proceeds of the
                  Notes) on terms and conditions satisfactory in all respects to
                  the Purchasers and except for capital leases and senior
                  secured indebtedness totaling $17,900,000 and convertible
                  subordinated indebtedness of $24,600,000, Holdings and its
                  Subsidiaries shall have no indebtedness for borrowed money
                  other than that incurred in connection with the Transaction.

                           (iv) The Company shall have received proceeds of not
                  less than $330,000,000 of Term Loans under the Credit
                  Agreement and the Revolving Loans shall be available
                  thereunder (but undrawn) on the Issuance Date.

                           (v) The Intermediate Holdings Asset Bridge Note
                  Issuance shall have been consummated on terms (including
                  documentation in respect thereof in form and substance)
                  satisfactory in all respects to the Purchasers and resulted in
                  gross cash proceeds of at least $55,000,000. All of the net
                  proceeds of the Intermediate Holdings Asset Bridge Note
                  Issuance shall have been contributed by Intermediate Holdings
                  to the Company as a common equity contribution for use in
                  partially financing the Transaction.

                           (vi) RailTex shall have received net cash proceeds
                  from the exercise of RailTex stock options of at least
                  $11,100,000 (subject to adjustment due to cashless exercise of
                  such options and termination of such options not exercised).

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<PAGE>   30

                           (vii) The Company shall have at least $10,300,000
                  cash on hand immediately prior to the consummation of the
                  Transaction.

                           (viii) RailTex shall have received net cash proceeds
                  from the sale of RailTex Brazil of at least $9,000,000.

                           (ix) The fees and expenses paid or to be paid in
                  connection with the Transaction shall not exceed $36,000,000.

                  (c) TRANSACTION DOCUMENTS. The Purchasers shall have received
         copies of fully executed versions of the Transaction Documents
         (including the Material Acquisition Documents and the Loan Documents),
         certified to be true and complete copies thereof by an Authorized
         Officer of Holdings, Intermediate Holdings and the Company. Each
         Transaction Document (including the Merger Agreement) shall be in full
         force and effect and shall not have been modified or waived in any
         material respect, nor shall there have been any forbearance to exercise
         any material rights with respect to any of the terms or provisions
         relating to the conditions to the consummation of the Acquisition set
         forth in the Merger Agreement unless otherwise agreed to by the
         Purchasers. The covenants and the other terms and conditions contained
         in the Credit Agreement shall be reasonably satisfactory to the
         Purchasers in all respects.

                  (d) ISSUANCE DATE CERTIFICATE. The Purchasers shall have
         received the Issuance Date Certificate, dated the Issuance Date and
         duly executed and delivered by an Authorized Officer, of each of
         Holdings, Intermediate Holdings and the Company, in which certificate
         each of Holdings, Intermediate Holdings and the Company shall agree and
         acknowledge that the statements made therein shall be deemed to be true
         and correct representations and warranties of each of Holdings,
         Intermediate Holdings and the Company as of such date, and, at the time
         each such certificate is delivered, such statements shall in fact be
         true and correct. All documents and agreements required to be appended
         to the Issuance Date Certificate shall be in form and substance
         reasonably satisfactory to the Purchasers.

                  (e) DELIVERY OF NOTES. The Purchasers shall have received the
         Notes to be issued on the Issuance Date, duly executed by the Company
         in the denominations and registered in the names specified in or
         pursuant to SECTION 2.2.

                  (f) PAYMENT OF OUTSTANDING INDEBTEDNESS, ETC. All Indebtedness
         identified in ITEM 7.2.2(b) of the Disclosure Schedule (Indebtedness to
         Be Paid) to the Incorporated Agreement, together with all interest, all
         prepayment premiums and other amounts due and payable with respect
         thereto, shall have been paid in full in part from the proceeds
         received by the Company in consideration for the Notes and the proceeds
         of the Credit Extensions (as defined in the Credit Agreement) and the
         Intermediate Holdings Asset

                                      -25-

<PAGE>   31

         Bridge Note Issuance (that were contributed by Intermediate Holdings to
         and) received by the Company and the commitments in respect of such
         Indebtedness shall have been terminated, and all Liens securing payment
         of any such Indebtedness have been released.

                  (g) FEES, EXPENSES, ETC. The Purchasers shall have received
         for their respective accounts all fees, costs and expenses (other than
         amounts to be netted against the purchase price of the Notes pursuant
         to SECTION 2.2(b)) due and payable pursuant to SECTIONS 2.3(a) and
         11.4.

                  (h) FINANCIAL INFORMATION, MATERIAL ADVERSE CHANGE. (i) The
         Purchasers shall have received

                                    (A) a consolidating PRO FORMA income
                           statement of Holdings and its Subsidiaries for each
                           of the twelve month periods ended December 31, 1998,
                           September 30, 1999 and December 31, 1999 and a
                           consolidated balance sheet of Holdings and its
                           Subsidiaries, as of the most recent date practicable
                           near to the Closing Date (but no earlier than the
                           close of the Fiscal Quarter ending immediately prior
                           to the Closing Date) certified by the treasurer,
                           chief financial or accounting Authorized Officer of
                           Holdings, in each case, giving effect to the
                           consummation of the Transaction and all the
                           transactions contemplated by this agreement and
                           reflecting estimated transaction related accounting
                           adjustments, prepared by the Company in accordance
                           with Regulation S-X; and

                                    (B) projected financial statements
                           (including balance sheets and statements of income,
                           stockholders' equity and cash flows) of Holdings and
                           its Subsidiaries for the eight-year period following
                           the Issuance Date (the "PROJECTIONS") satisfactory in
                           form and substance to the Purchasers.

                           (ii) Since December 31, 1998, there shall not have
                  been any material adverse change in the business, assets,
                  condition (financial or otherwise), operations, performance,
                  properties, Projections or prospects of Holdings, Intermediate
                  Holdings, the Company and the Restricted Subsidiaries, taken
                  as a whole.

                  (i) OPINIONS OF COUNSEL. The Purchasers shall have received
         opinions, dated the Issuance Date and addressed to the Purchasers, from

                           (i) Greenberg Traurig, P.A., counsel to the Obligors,
                  in form and substance satisfactory to the Purchasers; and

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<PAGE>   32

                           (ii) Shutts & Bowen, counsel to the Obligors, in form
                  and substance satisfactory to the Purchasers.

                  (j) SOLVENCY CERTIFICATE. The Purchasers shall have received a
         certificate duly executed and delivered by the treasurer, chief
         financial or accounting Authorized Officer of each of Holdings,
         Intermediate Holdings and the Company, dated the date of the Issuance
         Date, in the form of EXHIBIT G attached hereto.

                  (k) INSURANCE. The Purchasers shall have received certified
         copies of the insurance policies (or binders in respect thereof), from
         one or more insurance companies reasonably satisfactory to the
         Purchasers, evidencing coverage required to be maintained pursuant to
         each Loan Document.

                  (l) LITIGATION. There shall exist no pending or threatened
         action, suit, investigation, litigation or proceeding in any court or
         before any arbitrator or governmental instrumentality which (x)
         purports to affect the consummation of the Transaction or the legality
         or validity of this Agreement, any Note, any other Financing Document
         or any Material Acquisition Document or (y) could reasonably be
         expected to have a Material Adverse Effect.

                  (m) MINIMUM EBITDA. The Company's EBITDA for the consecutive
         twelve month period ended September 30, 1999 shall be at least
         $93,900,000, including (i) EBITDA as reported of $62,800,000, (ii)
         transaction related accounting adjustments, prepared by the Company
         which are in accordance with Regulation S-X for Form S-1 Registration
         Statements of no less than $26,700,000 and (iii) other pro forma cost
         savings of no less than $4,400,000 which are reasonably satisfactory in
         form and substance to the Purchasers.

                  (n) CORPORATE, TAX AND CAPITAL STRUCTURE. The tax structure
         (including Organic Documents), the Tax-Sharing Agreement, the
         shareholders agreements and the management of Holdings, Intermediate
         Holdings, the Company and their respective Subsidiaries both before and
         after the Transaction shall be reasonably satisfactory to the
         Purchasers in all respects. The corporate and capital structure of
         Holdings, Intermediate Holdings, the Company and such Subsidiaries
         shall be as set forth in ANNEX I hereto.

                  (o) APPROVALS. All governmental, shareholder and third party
         consents (including Surface Transportation Board clearance) and
         approvals necessary or desirable in connection with the consummation of
         the Transaction, and the related financings and other transactions
         contemplated hereby shall have been duly obtained and all applicable
         waiting periods shall have expired, without any action being taken by
         any competent authority that could restrain, prevent or impose any
         materially adverse conditions on the

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<PAGE>   33

         Transaction, and no such law or regulation shall be applicable which in
         the judgment of the Purchasers could have any such effect.

                  (p) ENVIRONMENTAL ASSESSMENT. The Purchasers shall have
         received copies of an environmental assessment of the properties of the
         Company and its Subsidiaries, to be completed by Pilko & Associates,
         Inc. The results of such environmental assessment shall be reasonably
         satisfactory in form, scope and substance to the Purchasers.

                  (q) APPRAISAL OF ASSETS. The Purchasers shall have received
         copies of appraisals of the assets of the Company and its Subsidiaries
         performed by Mainline Management Services, Inc. and Norman W. Seip &
         Associates. The results of such appraisals shall be satisfactory in
         form, scope and substance to the Purchasers.

                  (r) FOREIGN ACQUISITIONS AND TAKEOVERS ACT APPROVAL. If
         Holdings, Intermediate Holdings or the Company is required to obtain an
         approval or an indication of non-objection under the Foreign
         Acquisitions and Takeovers Act 1975 of Australia or any real estate
         policy guidelines of the Commonwealth Government of Australia and/or an
         approval or certification of the Treasurer of Australia under the
         Foreign Acquisitions and Takeovers Regulations of Australia to enter
         into the Merger Agreement, or to give effect to the Transaction, the
         Company shall have provided to the Purchasers, and the Purchasers shall
         have received, copies of the application to obtain the approval or
         certification of the Treasurer of Australia or the statement of
         non-objection and copies of the relevant approval, certification or
         statement.

                  (s) The representations and warranties of the Company
         contained in the Financing Documents shall be true and correct in all
         material respects on and as of the Issuance Date as if made on and as
         of such date (unless stated to relate solely to an earlier date, in
         which case, such representations and warranties shall be true and
         correct in all material respects as of such earlier date) and the
         Company shall have performed and complied with all covenants and
         agreements required by the Financing Documents to be performed by it or
         complied with by it at or prior to the Issuance Date, and the
         Purchasers shall have received a certificate from an authorized officer
         of the Company to such effect.

                  (t) There shall not exist any Default.

                  (u) Pursuant to the terms of the Escrow Agreement, Holdings
         shall have executed and delivered to the Escrow Agent fully
         authenticated Warrants, unregistered or registered in blank,
         representing the right to purchase shares of Common Stock of Holdings
         at any time in an amount equal to 3.5% of the fully-diluted Capital
         Stock of Holdings, calculated after giving effect to the transactions
         occurring on or prior to the Issuance Date (the "WARRANT SHARES"),
         exercisable for a period of seven years at a price

                                      -28-

<PAGE>   34

         equal to the closing price per share of Common Stock of Holdings traded
         on the NASDAQ National Market at the close of trading on the Issuance
         Date.

                  (v) The Engagement Letter shall have been executed and
         delivered.

                  (w) The Purchasers shall have received such additional
         certificates, legal and other opinions and documentation as they shall
         reasonably request.

         Section 5.2 CONDITIONS TO THE COMPANY'S OBLIGATIONS. The obligations of
the Company to issue and sell the Notes pursuant to this Agreement to the
Purchasers are subject to the satisfaction, at or prior to the time of purchase
of the Notes, of the following conditions:

                  (a) The representations and warranties of the Purchasers
         contained herein shall be true and correct in all material respects on
         and as of the Issuance Date as if made on and as of such date.

                  (b) The issuance and sale of the Notes by the Company shall
         not be prohibited by any applicable law, court order or governmental
         regulation.

                  (c) The Transaction shall have been consummated (or shall be
         consummated contemporaneously with the application by the Company of
         the proceeds from the issuance and sale of the Notes hereunder).

                  (d) Contemporaneously therewith, the Company shall have
         received the purchase price for the Notes to be purchased by the
         Purchasers in accordance with SECTION 2.2(b).

                                   ARTICLE VI

                                    COVENANTS

           The Company agrees that, from and after the Issuance Date and so long
as any Notes remain outstanding and unpaid, and for the benefit of the
Purchasers and the Holders:

         Section 6.1 INCORPORATION OF AFFIRMATIVE COVENANTS FROM THE
INCORPORATED AGREEMENT. Each of Holdings, Intermediate Holdings and the Company
shall, and (where and to the extent contemplated by the terms of the
Incorporated Agreement) shall cause each of their Subsidiaries to, comply with
the affirmative covenants set forth in the following Sections of the
Incorporated Agreement:

                  (a) 7.1.1 (Financial Information, Reports, Notices, etc.)
         (excluding clause (l) thereof);

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<PAGE>   35

                  (b) 7.1.2 (Maintenance of Existence; Compliance with Laws,
         etc.);

                  (c)  7.1.3 (Maintenance of Properties);

                  (d)  7.1.4 (Insurance);

                  (e) 7.1.5 (Books and Records) (excluding the last sentence
         thereof);

                  (f)  7.1.6 (Environmental Law Covenant); and

                  (g) 7.1.10 (Use of Proceeds of Holdings Disposition of Capital
         Stock or Assets).

         Section 6.2 INCORPORATION OF NEGATIVE COVENANTS FROM THE INCORPORATED
AGREEMENT. None of Holdings, Intermediate Holdings or the Company shall, nor
shall any such Obligor permit any of its Restricted Subsidiaries to, violate any
of the negative covenants set forth in the following Sections of the
Incorporated Agreement:

                  (a)  7.2.1 (Business Activities);

                  (b) 7.2.2 (Indebtedness) (excluding clause (f)(i) (to the
         extent such clause requires such Indebtedness to be evidenced by a
         promissory note that is pledged to the Administrative Agent pursuant to
         a Loan Document)), PROVIDED that for purposes hereof (i) the aggregate
         principal amount of "Obligations" permitted by clause (a) thereof shall
         not exceed (i) $380,000,000 minus (ii) the aggregate amount of the
         permanent payments or prepayments of Term Loans and permanent
         reductions of the Revolving Loan Commitment Amount;

                  (c)  7.2.3 (Liens);

                  (d)  7.2.5 (Investments);

                  (e)  7.2.6 (Restricted Payments, etc.);

                  (f) 7.2.8 (No Prepayment of Certain Debt) (excluding clauses
         (a) (as such clause relates to the Obligations evidenced hereby) and
         (c)(iii) thereof);

                  (g)  7.2.9 (Capital Stock of Subsidiaries);

                  (h)  7.2.10 (Consolidation, Merger, etc.);

                  (i)  7.2.11 (Permitted Dispositions);

                                      -30-

<PAGE>   36

                  (j) 7.2.12 (Modification of Certain Agreements); PROVIDED that
         for purposes hereof the term "Subordinated Debt Documents" as used
         therein shall not include the Financing Documents;

                  (k)  7.2.13 (Transactions with Affiliates);

                  (l) 7.2.14 (Restrictive Agreements, etc.) (excluding clause
         (a) thereof); PROVIDED that the lead in to such Section shall be
         amended by inserting the words "(other than the Loan Documents)"
         immediately following the words "enter into any agreement" and
         immediately preceding the word "prohibiting" in such lead in; and

                  (m)  7.2.15 (Sale and Leaseback).

         Section 6.3 INVESTMENT COMPANY ACT. None of Holdings, Intermediate
Holdings or the Company will be or become an open-end investment trust, unit
investment trust or face-amount certificate company that is or is required to be
registered under the Investment Company Act of 1940, as amended.

         Section 6.4 USE OF PROCEEDS. The proceeds from the issuance and sale of
the Notes by the Company pursuant to this Agreement shall be used to fund the
Transaction and to pay related fees and expenses.

         Section 6.5 RESTRICTIONS ON CERTAIN AMENDMENTS. None of Holdings,
Intermediate Holdings or the Company will amend, or suffer to be amended, the
Loan Documents in any respect which would impose a limitation upon, or a
requirement of consent in connection with, the Permanent Financing, which
limitation or requirement was not applicable under the Loan Documents as in
effect on the Issuance Date.

         Section 6.6 NO SENIOR SUBORDINATED DEBT. Except for the Indebtedness
that is permitted to be incurred under clauses (a) and (k) of Section 7.2.2 of
the Incorporated Agreement as incorporated by reference in CLAUSE (b) of SECTION
6.2 above, none of Holdings, Intermediate Holdings or the Company will, nor will
either such Obligor permit any of its Restricted Subsidiaries to, create, incur,
assume or suffer to exist any Indebtedness of Holdings, Intermediate Holdings,
the Company or such Restricted Subsidiary that is subordinate in right of
payment to any other Indebtedness of the Company or such Restricted Subsidiary
unless such Indebtedness by its terms or the terms of the instrument creating or
evidencing such Indebtedness, is subordinate in right of payment or PARI PASSU
with the Notes or the Guarantee, as applicable, on terms acceptable to the
Majority Holders.

         Section 6.7 PERMANENT FINANCING. (a) The Company will, and will cause
each of its Restricted Subsidiaries to, take all actions which, in the
reasonable judgment of DLJSC, are necessary or desirable to obtain Permanent
Financing as soon as practicable through issuance of

                                      -31-

<PAGE>   37

subordinated securities at such interest rates and other terms as are, in the
reasonable opinion of DLJSC, prevailing for new issues of securities of
comparable size and credit rating in the United States capital markets at the
time such Permanent Financing is consummated and obtained in comparable
transactions made on an arm's-length basis between unaffiliated parties;
PROVIDED that, if in the reasonable judgment of DLJSC, equity securities of
Holdings need to be provided for the consummation of the Permanent Financing on
the terms set forth above, the terms of the Permanent Financing shall provide
for the issuance of such equity securities (which may include warrants to
purchase such equity securities). The respective amounts to be financed through
the subordinated debentures or through the issuance of other securities shall be
as determined by the Company, but shall be in an amount at least sufficient to
repay or redeem the Notes in full in accordance with their terms. The Company
hereby covenants and agrees that the proceeds from the Permanent Financing shall
be used to the extent required to redeem in full the Notes in accordance with
their terms.

         (b) The Company covenants that it will, and will cause each of its
Restricted Subsidiaries to, enter into such agreements as in the reasonable
judgment of DLJSC are customary in connection with the Permanent Financing, make
such filings under the Securities Act, the Exchange Act, the Trust Indenture Act
of 1939, as amended, and State securities laws (subject to customary exceptions)
as in the reasonable judgment of DLJSC shall be required to permit consummation
of the Permanent Financing and take such steps as in the reasonable judgment of
DLJSC are necessary to cause such filings to become effective or in the
reasonable judgment of DLJSC are otherwise required to consummate the Permanent
Financing in a manner that does not violate the Credit Agreement.

         Section 6.8 ADDITIONAL GUARANTORS. The Company will cause each of its
Domestic Restricted Subsidiaries that enters a Guarantee Obligation with respect
to any Designated Senior Debt to execute and deliver to the Holders a
counterpart hereof as a Guarantor hereunder within 5 Business Days of its
entering such Guarantee Obligation with respect to such Designated Senior Debt.

         Section 6.9 SYNDICATION EFFORTS. (a) The Company acknowledges that the
Purchasers may transfer (such transfers, collectively, the "SYNDICATION") all or
part of the Notes issued to the Purchasers on the Issuance Date to one or more
other Holders. Holdings, Intermediate Holdings and the Company shall, and shall
cause the Guarantors to, actively assist Rail America Funding, Inc. in
completing the syndication in a manner satisfactory to it. Without limiting the
foregoing, upon the request of Rail America Funding, Inc., Holdings,
Intermediate Holdings and the Company shall, and shall cause the Guarantors to
(i) use commercially reasonable efforts to ensure that the syndication efforts
benefit materially from the Purchasers existing lending and other financing
relationships, (ii) provide direct contact between senior management and
advisors of Holdings, Intermediate Holdings, the Company, and the Guarantors and
the proposed Holders, (iii) assist in the preparation of a confidential
information memorandum and other marketing materials to be used in connection
with the syndication and (iv) host, with Rail America Funding,

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<PAGE>   38

Inc. or on one or more of their respective Affiliates, of one or more meetings
of prospective Holders.

                  (b) DLJSC or one of its Affiliates shall manage all aspects of
any syndication, in consultation with the Company including decisions as to the
selection of potential Holders to be approached and when they will be
approached, when their commitments will be accepted, which potential Holders
will participate, and the principal amount of the Notes to be transferred to
each such Holder. In order to assist DLJSC or such Affiliate in any syndication
efforts, Holdings, Intermediate Holdings and the Company shall, and shall cause
each of the Guarantors to, promptly prepare and provide to DLJSC, the Purchasers
or such Affiliate all information with respect to Holdings, Intermediate
Holdings, the Company, the Transaction, the Permanent Financing and the other
transactions contemplated hereby and thereby, including all financial
information and projections, as DLJSC, Rail America Funding, Inc., or such
Affiliate may reasonably request in connection with such syndication.

                                   ARTICLE VII

                                EVENTS OF DEFAULT

         Section 7.1 EVENTS OF DEFAULT DEFINED; ACCELERATION OF MATURITY; WAIVER
OF DEFAULT. In case one or more of the following (each, an "Event of Default"),
whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body, shall have occurred and be continuing:

                  (a) default in the payment of all or any part of the principal
         or premium, if any, on any of the Notes as and when the same shall
         become due and payable either at maturity, upon any redemption, by
         declaration or otherwise; or

                  (b) default in the payment of any installment of interest upon
         any of the Notes or any fees payable under this Agreement or the
         Engagement Letter or any amount payable under SECTION 2.7 as and when
         the same shall become due and payable, and continuance of such default
         for a period of five days; or

                  (c) failure on the part of Holdings, Intermediate Holdings, or
         the Company to observe or perform any of the covenants contained in
         SECTIONS 6.1(g), 6.2, 6.3, 6.4, 6.5 and 6.6 of this Agreement; or

                  (d) failure on the part of Holdings, Intermediate Holdings, or
         the Company to observe or perform any of the other covenants or
         agreements contained in the Financing

                                      -33-

<PAGE>   39

         Documents, if such failure shall continue for a period of 30 days after
         the date on which written notice thereof shall have been given to the
         Company by a Holder; or

                  (e) there shall be a default in respect of any Indebtedness of
         the Company or any of its Restricted Subsidiaries in an aggregate
         principal amount in excess of $5,500,000 whether such Indebtedness now
         exists or shall hereafter be created (excluding the Notes) if such
         default results in acceleration of the maturity of such Indebtedness;
         or the Company or any of its Restricted Subsidiaries shall fail to pay
         at maturity any such Indebtedness whether such Indebtedness now exists
         or shall hereafter be created; or

                  (f) any representation, warranty, certification or statement
         made or deemed made by the Company or any of its Restricted
         Subsidiaries in any Financing Document or which is contained in any
         certificate, document or financial or other statement furnished at any
         time under or in connection with any Financing Document shall prove to
         have been untrue in any material respect when made or deemed made; or

                  (g)  a Change in Control has occurred; or

                  (h) any of the Financing Documents to which the Company or a
         Guarantor is a party shall for any reason fail to constitute the valid
         and binding agreement of the Company or such Guarantor as the case may
         be,; or

                  (i) any Event of Default set forth in Sections 8.1.6
         (Judgments) (PROVIDED that the amount "$5,000,000" therein shall be
         replaced with the amount "$5,500,000") or 8.1.9 (Bankruptcy,
         Insolvency, etc.) of the Incorporated Agreement,

then, and in each and every such case (other than an Event of Default described
in clauses (b), (c) and (d) of Section 8.1.9 of the Incorporated Agreement as
incorporated by reference in CLAUSE (i) above with respect to any Obligor),
unless the principal of all the Notes shall have already become due and payable,
the Majority Holders (or, if at such time the Purchasers no longer hold at least
50% of the aggregate outstanding principal amount of the Notes, Holders of at
least 33 1/3% of the aggregate outstanding principal amount of the Notes), by
notice in writing to the Company and the Administrative Agent, may declare the
entire outstanding principal amount of the Notes together with accrued and
unpaid interest thereon to be immediately due and payable; PROVIDED that for so
long as the Loan Documents are in effect, such acceleration shall not become
effective until the earlier of (i) five Business Days after the notice of
acceleration is given to the Administrative Agent or (ii) the date on which the
Indebtedness under the Loan Documents is accelerated. If an Event of Default
described in clauses (b), (c) or (d) of Section 8.1.9 of the Incorporated
Agreement as incorporated by reference in CLAUSE (i) above with respect to any
Obligor occurs, the outstanding principal of and accrued and unpaid interest on
the Notes will be immediately due and payable without any notice, declaration or
other act on the part of the Holders. The Majority Holders may annul any notice
of acceleration or past Defaults (other than

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<PAGE>   40

monetary Defaults not yet cured) by delivering a notice of annulment to the
Company and the Administrative Agent. If an Event of Default shall occur and be
continuing, the Purchasers shall have the right to appoint one (1)
representative to serve as a member of the Board of Directors of Holdings;
PROVIDED, HOWEVER, that such right shall terminate if the Purchasers no longer
hold at least 50% of the aggregate outstanding principal amount of the Notes.

                                  ARTICLE VIII

                             LIMITATION ON TRANSFERS

         Section 8.1 RESTRICTIONS ON TRANSFER. From and after the Issuance Date,
none of the Notes shall be transferable except upon the conditions specified in
SECTIONS 8.2 and 8.3, which conditions are intended to ensure compliance with
the provisions of the Securities Act in respect of the Transfer of any of such
Notes or any interest therein and SECTION 8.4; PROVIDED, HOWEVER, that the
Purchasers shall not Transfer any Notes to any Person that is not its Affiliate
prior to the Fixed Rate Sale Date without the consent of the Company (which
consent shall not be unreasonably delayed or denied). The Purchasers will cause
any proposed transferee of any Notes (or any interest therein) held by it to
agree to take and hold such Notes (or any interest therein) subject to the
provisions and upon the conditions specified in this SECTION 8.1 and in SECTIONS
8.2 and 8.3.

         Section 8.2 RESTRICTIVE LEGENDS. (a) Each Note issued to the Purchasers
or to a subsequent transferee shall (unless otherwise permitted by the
provisions of SECTION 8.2(b) or SECTION 8.3) include a legend in substantially
the following form:

                  THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
                  OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT
                  BE OFFERED OR SOLD, UNLESS IT HAS BEEN REGISTERED UNDER SUCH
                  ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS AN
                  EXEMPTION FROM REGISTRATION IS AVAILABLE AND THEN ONLY IN
                  COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE
                  SECURITIES PURCHASE AGREEMENT, DATED AS OF FEBRUARY 4, 2000, A
                  COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER OF THIS SECURITY
                  AT ITS PRINCIPAL EXECUTIVE OFFICE.

         (b) Any Holders of Notes registered pursuant to the Securities Act and
qualified under applicable state securities laws may exchange such Notes on
transfer for new securities that shall not bear the legend set forth in CLAUSE
(a) of this SECTION 8.2.

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<PAGE>   41

         Section 8.3 NOTICE OF PROPOSED TRANSFERS. (a) Ten days prior to any
proposed Transfer (other than Transfers of Notes (i) registered under the
Securities Act, (ii) to an Affiliate of DLJSC or a general partnership in which
DLJSC, or any of its Affiliates is one of the general partners or (iii) to be
made in reliance on Rule 144A under the Securities Act) of any Notes, the holder
thereof shall give written notice to the Company of such holder's intention to
effect such Transfer, setting forth the manner and circumstances of the proposed
Transfer, and which notice shall be accompanied by (A) an opinion of the
proposed transferee's counsel (reasonably satisfactory to the Company) addressed
to the Company to the effect that the proposed Transfer of such Notes may be
effected without registration under the Securities Act, (B) such representation
letters in form and substance reasonably satisfactory to the Company to ensure
compliance with the provisions of the Securities Act and (C) such letters in
form and substance reasonably satisfactory to the Company from each such
transferee stating such transferee's agreement to be bound by the terms of this
Agreement. Such proposed Transfer may be effected only if the Company shall have
received such notice of transfer, opinion of counsel, representation letters and
other letters referred to in the immediately preceding sentence, whereupon the
holder of such Notes shall be entitled to Transfer such Notes in accordance with
the terms of the notice delivered by the holder to the Company. Each Note
transferred as above provided shall bear the legend set forth in SECTION 8.2(a)
except that such Note shall not bear such legend if the opinion of counsel
referred to above is to the further effect that neither such legend nor the
restrictions on Transfer in SECTIONS 8.1 through 8.3 are required in order to
ensure compliance with the provisions of the Securities Act.

         (b) Ten days prior to any proposed Transfer of any Notes to be made in
reliance on Rule 144A under the Securities Act ("RULE 144A"), the holder thereof
shall give written notice to the Company of such holder's intention to effect
such Transfer, setting forth the manner and circumstances of the proposed
Transfer and certifying that such Transfer will be made (i) in full compliance
with Rule 144A and (ii) to a transferee that (A) such holder reasonably believes
to be a "qualified institutional buyer" within the meaning of Rule 144A and (B)
is aware that such Transfer will be made in reliance on Rule 144A. Such proposed
Transfer may be effected only if the Company shall have received such notice of
transfer, whereupon the holder of such Notes shall be entitled to Transfer such
Notes in accordance with the terms of the notice delivered by the holder to the
Company. Each Note transferred as above provided shall bear the legend set forth
in SECTION 8.2(a).

         Section 8.4 RIGHT TO SELL, TRANSFER OR ASSIGN NOTES. (a) Subject to
SECTIONS 8.1 through 8.3, the Purchasers shall have the absolute and
unconditional right to Transfer Notes in compliance with applicable law to any
third party at any time.

         (b) Commencing on the Fixed Rate Sale Date, any Note then outstanding
may be sold by the Purchaser that is the holder of such Note to any Person
(other than any Affiliate of such Purchaser) on a fixed rate basis with the
interest rate per annum fixed at a market rate to be determined by such
Purchaser (such interest rate with respect to such Note, the "RELEVANT FIXED

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<PAGE>   42

INTEREST RATE"); PROVIDED that (i) such rate shall in no event exceed 17.00% per
annum and (ii) such Purchaser shall give the Company ten days written notice
prior to any such sale.

         Section 8.5 REPLACEMENT NOTES. Within five Business Days after any
Transfer made pursuant to SECTION 8.3(a) or 8.3(b), upon surrender to the
Company of the Notes subject to such Transfer, the Company, at its own expense,
shall execute and deliver to the Purchaser in exchange for the Note or Notes
that are subject of such Transfer a new Note or Notes registered in the name of
the transferee of such Note or Notes (or in such name or names as shall be
designated by such transferee) in an amount equal to the aggregate principal
amount of the Note or Notes so transferred, and if the transferring Holder has
not transferred all of the Notes held by such transferor a new Note or Notes
registered in the name of the transferring holder (or such name or names as
shall be designated by such transferring holder) equal to the aggregate
principal amount of the Notes surrendered in connection with such Transfer less
the aggregate principal amount of the Note or Notes that are the subject of such
Transfer, which shall be dated the effective date of such Transfer and shall
otherwise be in substantially the form of EXHIBIT B attached hereto. Holdings
shall not be required to pay any documentary stamp tax which may be payable in
respect of any Transfer of any Note from a Holder to any transferee; PROVIDED
that Holdings shall take all such actions as may be reasonably requested by such
Holder or such transferee to minimize or eliminate any such tax.

                                   ARTICLE IX

                                  SUBORDINATION

         Section 9.1 NOTES SUBORDINATED TO DESIGNATED SENIOR DEBT. The Company
for itself and its successors, and each Holder, by its acceptance of the Notes,
agrees that the payment of the principal amount of the Notes and interest
thereon, and any claim for rescission or damages in respect thereof under any
applicable law (the "Subordinated Obligations") by the Company is subordinated,
to the extent and in the manner provided in this ARTICLE IX, to the prior
payment of Designated Senior Debt (whether outstanding on the date hereof or
hereafter created, incurred, assumed or guaranteed); PROVIDED, that the
provisions of this ARTICLE IX do not apply to, and the Notes are not
subordinated in respect of, the proceeds of the Permanent Financing. This
ARTICLE IX will constitute a continuing offer to all persons who, in reliance
upon its provisions, become holders of, or continue to hold, Designated Senior
Debt, and such provisions are made for the benefit of the holders of Designated
Senior Debt, and such holders are made obligees under this ARTICLE IX and they
and/or each of them may enforce its provisions.

         Section 9.2 NO PAYMENT ON NOTES IN CERTAIN CIRCUMSTANCES. (a) No
payment will be made on account of the Subordinated Obligations, or to acquire
any of the Notes for cash, property or securities, or on account of the
redemption provisions of the Notes (x) upon the maturity of any Designated
Senior Debt by lapse of time, acceleration or otherwise, unless and

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<PAGE>   43

until all such Designated Senior Debt shall first be paid in full in cash or
cash equivalents or provision for the payment in full in cash or cash
equivalents have been made with respect thereto, in each case, in a manner
satisfactory to the holders of Designated Senior Debt or (y) in the event that
the Company defaults in the payment of any principal of or interest on or any
other amounts payable on or due in connection with any Designated Senior Debt
when it becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration or otherwise, unless and until such default has
been cured or waived in writing.

         (b) Upon the occurrence of any event of default (or if an event of
default would result upon any payment with respect to the Subordinated
Obligations) with respect to any Designated Senior Debt, as such event of
default is defined in the instruments evidencing such Designated Senior Debt or
under which it is outstanding, permitting the holders to accelerate its maturity
(if the default is other than default in payment of the principal of or interest
on or any other amount due in connection with such Designated Senior Debt), upon
written notice of the event of default given to the Company by the holders of
such Designated Senior Debt (or their agent or representative), then, unless and
until such event of default has been cured or waived in writing, no payment will
be made by the Company with respect to the Subordinated Obligations or to
acquire any of the Notes for cash, property or securities or with regard to
redemption of Notes; PROVIDED, that the foregoing will not prevent the making of
any payment for a period of more than 179 days after the date the written notice
of the default is given unless such Designated Senior Debt in respect of which
such event of default exists has been declared due and payable in its entirety
within that period, and that declaration has not been rescinded. If such
Designated Senior Debt is not declared due and payable within 179 days after the
written notice of the default is given, promptly after the end of the 179-day
period the Company will pay all sums not paid during the 179-day period because
of this CLAUSE (b) unless CLAUSE (a) above is then applicable. During any period
of 360 consecutive days only one such period during which payment of principal
of, or interest on, the Notes may not be made may commence and the duration of
such period may not exceed 179 days.

         (c) If any payment or distribution of assets of the Company is received
by any Holder in respect of the Subordinated Obligations at a time when that
payment or distribution should not have been made because of CLAUSE (a) or (b)
above, such payment or distribution will be received and held in trust for and
will be paid over to the holders of Designated Senior Debt which is due and
payable and remains unpaid or unprovided for (pro rata as to each of such
holders on the basis of the respective amounts of such Designated Senior Debt
which is due and payable) until all such Designated Senior Debt has been paid in
full in cash or cash equivalents or provided for in cash or cash equivalents in
a manner satisfactory to the holders of Designated Senior Debt, after giving
effect to any concurrent payment or distribution or provision therefor to the
holders of such Designated Senior Debt.

         Section 9.3 NOTES SUBORDINATED TO PRIOR PAYMENT OF ALL DESIGNATED
SENIOR DEBT ON DISSOLUTION, LIQUIDATION OR REORGANIZATION. (a) Upon any
distribution of assets of the Company

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<PAGE>   44

upon any dissolution, winding up, liquidation or reorganization of the Company
(whether in bankruptcy, insolvency, receivership or similar proceeding related
to the Company or its property or upon an assignment for the benefit of
creditors, any marshaling of the Company's assets or liabilities, or otherwise):

                  (i) the holders of all Designated Senior Debt will first be
         entitled to receive payment in full in cash or cash equivalents or
         provision for payment in full in cash or cash equivalents in a manner
         satisfactory to the holders of Designated Senior Debt of the principal
         of and interest on Designated Senior Debt and other amounts due in
         connection with Designated Senior Debt (including interest accruing
         subsequent to an event described in Section 8.1.9 of the Incorporated
         Agreement) (or which would have accrued but for the occurrence of such
         event) at the rate provided for in the documents governing such
         Designated Senior Debt, whether or not such interest is an allowed
         claim enforceable against the debtor in a bankruptcy case under Title
         11 of the United States Code), before the Holders are entitled to
         receive any payment on account of the principal of or interest on the
         Notes;

                  (ii) any payment or distribution of assets of the Company of
         any kind or character, whether in cash, property or securities, to
         which the Holders would be entitled except for the provisions of this
         Section will be paid by the liquidating trustee or agent or other
         person making such a payment or distribution directly to the holders of
         Designated Senior Debt or their representatives to the extent necessary
         to make payment in full in cash or cash equivalents or provision for
         payment in full in cash or cash equivalents in a manner satisfactory to
         the holders of Designated Senior Debt of all Designated Senior Debt
         remaining unpaid, after giving effect to any concurrent payment or
         distribution or provision therefor to the holders of such Designated
         Senior Debt; and

                  (iii) if, notwithstanding the foregoing, any payment or
         distribution of assets of the Company of any kind or character, whether
         in cash, property or securities is received by the Holders on account
         of the Subordinated Obligations before all Designated Senior Debt is
         paid in full in cash or cash equivalents or provided for in cash or
         cash equivalents in a manner satisfactory to the holders of Designated
         Senior Debt, such payment or distribution will be received and held in
         trust for and will be paid over to the holders of the Designated Senior
         Debt remaining so unpaid or unprovided for or their representatives for
         application to the payment of such Designated Senior Debt until all
         such Designated Senior Debt has been paid in full in cash or cash
         equivalents or provided for in cash or cash equivalents in a manner
         satisfactory to the holders of Designated Senior Debt, after giving
         effect to any concurrent payment or distribution or provision therefor
         to the holders of such Designated Senior Debt.

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<PAGE>   45

         (b) The Company will give prompt written notice to the Holders of any
dissolution, winding up, liquidation or reorganization of it or any assignment
for the benefit of its creditors and of any event of default in respect of
Designated Senior Debt.

         (c) For purposes of this SECTION 9.3, the words "cash, property or
securities" shall not be deemed to include (x) shares of common stock of the
Company as reorganized or readjusted, (y) securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment which are
subordinated, to at least the same extent as the Notes, to the payment of all
Designated Senior Debt then outstanding or (z) any payment or distribution of
securities of the Company or any other corporation authorized by an order or
decree giving effect, and stating in such order or decree that effect has been
given, to subordination of the Notes to Designated Senior Debt and made by a
court of competent jurisdiction in a reorganization proceeding under any
applicable bankruptcy, insolvency or similar law. For purposes of this ARTICLE
IX, (i) "distribution" and "payment" with respect to the Company or its assets
include payments, distributions and other transfers of assets by or on behalf of
the Company from any source, of any kind or character, whether direct or
indirect, by set-off or otherwise, whether in cash, property or securities, (ii)
"payment on the account of the Subordinated Obligations" shall not include the
Warrants, any shares issued upon exercise of the Warrants or any sale or
transfer of any of the foregoing and (iii) "cash equivalents" means Cash
Equivalents described in clause (i) of the definition thereof to the extent such
Cash Equivalents mature within nine months.

         Section 9.4 HOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF DESIGNATED
SENIOR DEBT. Following the payment in full in cash or cash equivalents or
provision for payment in full in cash or cash equivalents in a manner
satisfactory to the holders of Designated Senior Debt of all Designated Senior
Debt, the Holders will be subrogated to the rights of the holders of Designated
Senior Debt to receive payments or distributions of assets of the Company
applicable to the Designated Senior Debt until all amounts owing on the Notes
have been paid in full, and for the purpose of such subrogation no such payments
or distributions to the holders of Designated Senior Debt by or on behalf of the
Company or by or on behalf of the Holders by virtue of this ARTICLE IX which
otherwise would have been made to the Holders will, as between the Company and
the Holders, be deemed to be payment by the Company to or on account of the
Designated Senior Debt, it being understood that the provisions of this ARTICLE
IX are and are intended solely for the purpose of defining the relative rights
of the Holders, on the one hand, and the holders of Designated Senior Debt, on
the other hand.

         Section 9.5 OBLIGATIONS OF THE COMPANY UNCONDITIONAL. Nothing contained
in this ARTICLE IX or elsewhere in the Notes is intended to or will impair, as
between the Company and the Holders, the obligations of the Company, which are
absolute and unconditional, to pay to the Holders the Subordinated Obligations
as and when they become due and payable in accordance with their terms, or is
intended to or will affect the relative rights of the Holders and creditors of
the Company other than the holders of the Designated Senior Debt, nor will
anything herein or therein prevent any Holder from exercising all remedies
otherwise permitted by applicable law

                                      -40-

<PAGE>   46

upon default under the Notes, subject to the rights if any, under this ARTICLE
IX of the holders of Designated Senior Debt.

         Section 9.6 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF
THE COMPANY OR HOLDERS OF DESIGNATED SENIOR DEBT. No right of any present or
future holders of any Designated Senior Debt to enforce subordination as
provided herein will at any time or in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to act
by any such holder, or by any noncompliance by the Company with the terms of
this ARTICLE IX, regardless of any knowledge thereof which any such holder may
have or otherwise be charged with. The holders of Designated Senior Debt may
extend, renew, modify or amend the terms of the Designated Senior Debt or any
security or guarantee therefor or thereof, release, sell or exchange such
security, exercise or refrain from exercising any rights against the Company,
any of its Subsidiaries or any other Person and otherwise deal freely with the
Company, all without affecting the liabilities and obligations of the parties to
the document or the Holders. No amendment to these provisions will be effective
against the holders of the Designated Senior Debt who have not consented thereto
in writing.

         Section 9.7 NOT TO PREVENT EVENTS OF DEFAULT. The failure to make a
payment on account of the Subordinated Obligations by reason of any provision of
this ARTICLE IX will not be construed as preventing the occurrence of an Event
of Default.

         Section 9.8 MISCELLANEOUS. If, upon any proceeding referred to in
SECTION 9.3, a Holder does not file a claim in such proceeding prior to fifteen
days before the expiration of the time to file such claim, the holders of the
Designated Senior Debt or their agent or representative, at the expense of the
holders of Designated Senior Debt, may file such claim on behalf of such Holder.

                                    ARTICLE X

                                   GUARANTEES

         Section 10.1 GUARANTEES. (a) Subject to SECTIONS 10.2 and 10.3, each of
the Guarantors jointly and severally unconditionally guarantees to each Holder,
irrespective of the validity and enforceability of the other provisions of this
Agreement, or of the Financing Documents, the Notes and the obligations of the
Company hereunder or thereunder, that: (i) the principal of, premium, if any,
and interest, if any, on the Notes shall be promptly paid in full when due,
whether at maturity, by acceleration, redemption or otherwise, and (to the
extent permitted by law) interest on the overdue principal of, premium, if any,
and interest, if any, on the Notes (including all reasonable costs of collection
and enforcement thereof and interest thereon which would be owing by the Company
but for the effect of any bankruptcy law, if any), and all other obligations of
the Company to the Holders under this Agreement, the Financing Documents and the
Notes shall be promptly paid in full when due or performed, all in accordance
with the terms

                                      -41-

<PAGE>   47

of this Agreement, the Financing Documents and the Notes; and (ii) in case of
any extension of time of payment or renewal of any Notes, or the issuance of any
of such other obligations, that the same shall be promptly paid in full when due
or performed in accordance with their terms whether at stated maturity, by
acceleration, redemption or otherwise. Failing payment when due of any amount so
guaranteed for whatever reason, the Guarantors shall be jointly and severally
and unconditionally obligated to pay the same immediately whether or not such
failure to pay has become an Event of Default which could cause acceleration
pursuant to SECTION 7.1. Each Guarantor agrees that this is a continuing
guarantee of payment and not merely a guarantee of collection.

         (b) The Guarantors hereby agree that, subject to SECTIONS 10.2 AND
10.3, their obligations hereunder shall be unconditional and absolute and,
without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:

                  (i) any extension, renewal, settlement, compromise, waiver or
         release in respect of any obligation of the Company under this
         Agreement, the Financing Documents or the Notes, by operation of law or
         otherwise;

                  (ii) any modification or amendment of or supplement to any
         other provisions of this Agreement, or to the Financing Documents or
         the Notes with the consent of the Guarantors, which consent shall not
         be unreasonably withheld;

                  (iii) any release, non-perfection or invalidity of any direct
         or indirect security for, or any other guarantee of, any of the
         obligations guaranteed by this ARTICLE X;

                  (iv) any change in the corporate existence, structure or
         ownership of the Company, or any insolvency, bankruptcy, reorganization
         or other similar proceeding affecting the Company or its assets or any
         resulting release or discharge of any obligation of the Company
         contained in this Agreement, the Financing Documents or the Notes;

                  (v) the existence of any claim, set-off or other rights which
         any Guarantor may have at any time against the Company or any other
         Person, whether in connection herewith or with an unrelated
         transactions, PROVIDED that nothing herein shall prevent the assertion
         of any such claim by separate suit or compulsory counterclaim;

                  (vi) any invalidity or unenforceability relating to or against
         the Company for any reason of this Agreement, the Financing Documents
         or the Notes, or any provision of applicable law or regulation
         purporting to prohibit the payment by the Company of the principal of
         or interest on the Notes or any other amount payable by it under this
         Agreement, the Financing Documents or the Notes;

                                      -42-

<PAGE>   48

                  (vii) any other act or omission to act or delay of any kind by
         the Company or any other Person or any other circumstance whatsoever
         which might, but for the provisions of this paragraph, constitute a
         legal or equitable discharge of any Guarantor's obligations hereunder;
         or

                  (viii) any issuance of additional Notes pursuant to SECTION
2.5(f).

         (c) Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that, subject to this
Article X, this Guarantee shall not be discharged except by complete performance
of all obligations on and with respect to the Notes, this Agreement and the
Financing Documents.

         (d) If any Holder is required by any court or otherwise to return to
the Company or any of the Guarantors, or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or any of the
Guarantors, any amount paid to such Holder, this Guarantee, to the extent of the
amount so returned, shall be reinstated in full force and effect.

         (e) Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in SECTION 7.1 notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby and (y) in the event of any declaration of
acceleration of such obligations as provided in SECTION 7.1, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Guarantee. The Guarantors shall have the
right to seek contribution from any non-paying Guarantor so long as the exercise
of such right does not impair the rights of the Holders under this Guarantee.

         Section 10.2 SUBORDINATION OF GUARANTEES. The obligations of each
Guarantor under its Guarantee pursuant to this Article X are junior and
subordinated to any guarantees by such Guarantor of any Designated Senior Debt
on the same basis as the Notes are junior and subordinate to such Designated
Senior Debt under ARTICLE IX (it being understood that delivery of any notice to
the Company pursuant to SECTION 9.2(b) shall constitute notice to each Guarantor
hereunder).

         Section 10.3 LIMITATION ON GUARANTOR LIABILITY. Each Guarantor, and by
its acceptance of Notes, each Holder, hereby confirms that it is the intention
of all such parties that this Guarantee not constitute a fraudulent transfer or
conveyance for purposes of any bankruptcy law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar

                                      -43-

<PAGE>   49

federal or state law to the extent applicable to this Guarantee. To effectuate
the foregoing intention, the Holders and the Guarantors hereby irrevocably agree
that the obligations of each Guarantor under this Guarantee shall be limited to
the maximum amount as will, after giving effect to such maximum amount and all
other contingent and fixed liabilities of such Guarantor that are relevant under
such laws, and after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under this Guarantee, result
in the obligations of such Guarantor under the Guarantee not constituting a
fraudulent transfer or conveyance.

         Section 10.4 CONSOLIDATION OR MERGER OF GUARANTORS. Subject to SECTION
10.5, without limiting the provisions of CLAUSE (h) of SECTION 6.2, no Guarantor
may consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another corporation, Person or entity whether or not
affiliated with such Guarantor unless such corporation, person or entity is a
Guarantor.

         Section 10.5 RELEASE OF GUARANTORS. If at any time any Guarantor shall
be released from all of its obligations under all guarantees of, and all grants
of Liens on any of its assets or property securing, Designated Senior Debt, the
obligations of such Guarantor under this Agreement and the other Financing
Documents shall be automatically released.

                                   ARTICLE XI

                                  MISCELLANEOUS

         Section 11.1 NOTICES. All notices, demands and other communications to
any party hereunder shall be in writing (including facsimile or similar writing)
and shall be given to such party at its address set forth on the signature pages
hereof, or such other address as such party may hereinafter specify for the
purpose. Each such notice, demand or other communication shall be effective (i)
if given by facsimile, when such facsimile is transmitted to the facsimile
number specified on the signature page hereof, or (ii) if given by overnight
courier, addressed as aforesaid or by any other means, when delivered at the
address specified in this Section.

         Section 11.2 NO WAIVERS; AMENDMENTS. (a) No failure or delay on the
part of any party in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. The remedies provided for
herein are cumulative and are not exclusive of any remedies that may be
available to any party at law or in equity or otherwise.

         (b) Any provision of this Agreement may be amended, supplemented or
waived if, but only if, such amendment, supplement or waiver is in writing and
is signed by the Company and

                                      -44-

<PAGE>   50

the Majority Holders; PROVIDED, that without the consent of each Holder of any
Note affected thereby, an amendment, supplement or waiver may not (a) reduce the
aggregate principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver, (b) reduce the rate or extend the time for payment of
interest on any Note, (c) reduce the principal amount of or extend the stated
maturity of any Note or (d) make any Note payable in money or property other
than as stated in the Notes. In determining whether the Holders of the requisite
principal amount of Notes have concurred in any direction, consent, or waiver as
provided in this Agreement or in the Notes, Notes which are owned by the Company
or any other obligor on or guarantor of the Notes, or, except for DLJSC and its
Affiliates by any Person controlling, controlled by, or under common control
with any of the foregoing, shall be disregarded and deemed not to be outstanding
for the purpose of any such determination; and PROVIDED, FURTHER, that no such
amendment, supplement or waiver which affects the rights of the Purchasers and
its Affiliates otherwise than solely in their capacities as Holders of Notes
shall be effective with respect to them without their prior written consent.

         Section 11.3 INDEMNIFICATION. (a) The Company (the "INDEMNIFYING
PARTY") agrees to indemnify and hold harmless each Purchaser, its respective
Affiliates, and each Person, if any, who controls such Purchaser, or any of its
Affiliates, within the meaning of the Securities Act or the Exchange Act (a
"CONTROLLING PERSON"), and the respective partners, agents, employees, officers
and directors of such Purchaser, its Affiliates and any such Controlling Person
(each an "INDEMNIFIED PARTY," and collectively, the "INDEMNIFIED PARTIES"), from
and against any and all losses, claims, damages, liabilities and expenses
(including, without limitation and as incurred, reasonable costs of
investigating, preparing or defending any such claim or action, whether or not
such Indemnified Party is a party thereto) arising out of, or in connection with
any activities contemplated by this Agreement or any other services rendered in
connection herewith, including, but not limited to, losses, claims, damages,
liabilities or expenses arising out of or based upon any untrue statement or any
alleged untrue statement of a material fact or any omission or any alleged
omission to state a material fact in any of the disclosure or offering or
confidential information documents (the "DISCLOSURE DOCUMENTS") pertaining to
any of the transactions or proposed transactions contemplated herein, including
any eventual refinancing or resale of the Notes, PROVIDED, that the Indemnifying
Party will not be responsible for any claims, liabilities, losses, damages or
expenses that are determined by final judgment of a court of competent
jurisdiction to result from such Indemnified Party's gross negligence, willful
misconduct or bad faith. The Indemnifying Party also agrees that (i) no
Purchaser shall have liability (except for breach of provisions of this
Agreement) for claims, liabilities, damages, losses or expenses, including legal
fees, incurred by the Indemnifying Party in connection with this Agreement,
unless they are determined by final judgment of a court of competent
jurisdiction to result from such Purchaser's gross negligence, willful
misconduct or bad faith and (ii) no Purchaser shall in any event have any
liability to the Company on any theory of liability for special or punitive
damages (as opposed to direct or actual damages) arising out of, or in
connection with, or as a result of this Agreement.

                                      -45-

<PAGE>   51

         (b) If any action shall be brought against an Indemnified Party with
respect to which indemnity may be sought against the Indemnifying Party under
this Agreement, such Indemnified Party shall promptly notify the Indemnifying
Party in writing and the Indemnifying Party shall, if requested by such
Indemnified Party or if the Indemnifying Party desires to do so, assume the
defense thereof, including the employment of counsel reasonably satisfactory to
such Indemnified Party and payment of all reasonable fees and expenses. The
failure to so notify the Indemnifying Party shall not affect any obligations the
Indemnifying Party may have to such Indemnified Party under this Agreement or
otherwise unless the Indemnifying Party is materially adversely affected by such
failure. Such Indemnified Party shall have the right to employ separate counsel
in such action and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party, unless: (i)
the Indemnifying Party has failed to assume the defense and employ counsel
reasonably satisfactory to such Indemnified Party or (ii) the named parties to
any such action (including any impleaded parties) include such Indemnified Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that there may be one or more legal defenses available to it which
are different from or additional to those available to the Indemnifying Party,
in which case, if such Indemnified Party notifies the Indemnifying Party in
writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense of such action or proceeding on behalf of such Indemnified Party,
PROVIDED, HOWEVER, that the Indemnifying Party shall not, in connection with any
one such action or proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be responsible hereunder for the reasonable fees
and expenses of more than one such firm of separate counsel, in addition to any
local counsel, which counsel shall be designated by the Purchasers. The
Indemnifying Party shall not be liable for any settlement of any such action
effected without the written consent of the Indemnifying Party (which shall not
be unreasonably withheld) and the Indemnifying Party agrees to indemnify and
hold harmless each Indemnified Party from and against any loss or liability by
reasons of settlement of any action effected with the consent of the
Indemnifying Party. In addition, the Indemnifying Party will not, without the
prior written consent of the Indemnified Party, settle or compromise or consent
to the entry of any judgment in or otherwise seek to terminate any pending or
threatened action, claim, suit or proceeding in respect of which indemnification
or contribution may be sought hereunder (whether or not any Indemnified Party is
a party thereto) unless such settlement, compromise, consent or termination
includes an express unconditional release of the Purchasers and the other
Indemnified Parties, reasonably satisfactory in form and substance to the
Purchasers, from all liability arising out of such action, claim, suit or
proceeding.

         (c) If for any reason the foregoing indemnity is unavailable (otherwise
than pursuant to the express terms of such indemnity) to an Indemnified Party or
insufficient to hold an Indemnified Party harmless, then in lieu of indemnifying
such Indemnified Party, the Indemnifying Party shall contribute to the amount
paid or payable by such Indemnified Party as a result of such claims,
liabilities, losses, damages, or expenses (i) in such proportion as is

                                      -46-

<PAGE>   52

appropriate to reflect the relative benefits received by the Indemnifying Party
on the one hand and by a Purchaser on the other from the transactions
contemplated by this Agreement or (ii) if the allocation provided by clause (i)
above is not permitted under applicable law, in such proportion as is
appropriate to reflect not only the relative benefits received by the
Indemnifying Party on the one hand and such Purchaser on the other, but also the
relative fault of the Indemnifying Party and such Purchaser as well as any other
relevant equitable considerations. Notwithstanding the provisions of this
SECTION 11.3, the aggregate contribution of all Indemnified Parties shall not
exceed the amount of fees actually received by the Purchasers pursuant to this
Agreement. It is hereby further agreed that the relative benefits to the
Indemnifying Party on the one hand and a Purchaser on the other with respect to
the transactions contemplated hereby shall be deemed to be in the same
proportion as (i) the aggregate principal amount of Notes issued by the Company
bears to (ii) the fees actually received by such Purchaser pursuant to this
Agreement. The relative fault of the Indemnifying Party on the one hand and a
Purchaser on the other with respect to the transactions contemplated hereby
shall be determined by reference to, among other things, whether any untrue or
alleged untrue statement of material fact or the omission or alleged omission to
state a material fact related to information supplied by the Indemnifying Party
or by such Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.

         (d) The indemnification, contribution and expense reimbursement
obligations set forth in this SECTION 11.3 (i) shall be in addition to any
liability the Indemnifying Party may have to any Indemnified Party at common law
or otherwise, (ii) shall survive the termination of this Agreement and the
payment in full of the Notes and (iii) shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of the
Purchasers or any other Indemnified Party.

         Section 11.4 EXPENSES. The Company agrees to pay all reasonable
out-of-pocket costs, expenses and other payments of the Purchasers in connection
with the purchase and sale of the Notes as contemplated by this Agreement
including without limitation (i) reasonable fees and disbursements of special
counsel and any local counsel for the Purchasers incurred in connection with the
preparation of this Agreement, (ii) all reasonable out-of-pocket expenses of the
Purchasers, including reasonable fees and disbursements of counsel, in
connection with any waiver or consent hereunder or any amendment hereof or any
Default or alleged Default hereunder and (iii) if an Event of Default occurs,
all reasonable out-of-pocket expenses incurred by the Purchasers and each Holder
of Notes, including reasonable fees and disbursements of a single counsel (which
counsel shall be selected by the Purchasers if the Purchaser is a Holder of
Notes when such Event of Default occurs), in connection with such Event of
Default and collection, bankruptcy, insolvency and other enforcement proceedings
resulting therefrom.

                                      -47-

<PAGE>   53

         Section 11.5 PAYMENT. The Company agrees that, so long as a Purchaser
shall own any Notes purchased by it from the Company hereunder, the Company will
make payments to such Purchaser of all amounts due thereon by wire transfer by
1:00 P.M. (New York City time) on the date of payment to such account as is
specified beneath such Purchaser's name on the signature page hereof or to such
other account or in such other similar manner as such Purchaser may designate to
the Company in writing.

         Section 11.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of the Company, the Purchasers, the
Guarantors, the holders of the Designated Senior Debt and their respective
successors and assigns; PROVIDED that neither the Company nor any Guarantor may
assign or otherwise transfer its rights or obligations under this Agreement to
any other Person without the prior written consent of the Majority Holders. All
provisions hereunder purporting to give rights to the Purchasers and its
Affiliates, or to Holders are for the express benefit of such Persons.

         Section 11.7 BROKERS. The Company represents and warrants that, except
for DLJSC and Barclays Capital, it has not employed any broker, finder,
financial advisor or investment banker who might be entitled to any brokerage,
finder's or other fee or commission in connection with the Transaction or the
sale of the Notes.

         Section 11.8 NEW YORK LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY
FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

         Section 11.9 SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.

                                      -48-

<PAGE>   54

         Section 11.10 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original with the same effect
as if the signatures thereto and hereto were upon the same instrument.

         Section 11.11 CONFIDENTIALITY. (a) The Company acknowledges and agrees
that: (i) the Purchasers and certain of their respective Affiliates are a full
service financial firm and as such may from time to time effect transactions for
their own account or the account of customers, and hold positions in loans or
options on loans of Persons that may be the subject of this arrangement; (ii)
the Purchasers may employ the services of DLJSC and its Affiliates in providing
certain services hereunder and may, subject to CLAUSE (b) below, exchange with
such entities information concerning Holdings, Intermediate Holdings, the
Company and the Guarantors, and such Affiliates will be entitled to the benefits
afforded the Purchasers hereunder, and (iii) the Purchasers or their respective
Affiliates may be providing financing or other services to Persons whose
interests may conflict with the interest of Holdings, Intermediate Holdings, the
Company and the Guarantors.

         (b) The Purchasers and each other Holder agrees to keep confidential
any Confidential Information; PROVIDED that nothing herein shall prevent the
Purchasers or such other Holder from disclosing any such information (i) to the
extent permitted under the Engagement Letter, (ii) to any Person which receives
such information having been made aware of, and which agrees to maintain, the
confidential nature thereof in order to facilitate or enable the Purchasers or
such other Holder to syndicate, sell transfer (including, without limitation,
the transfer of a participation in the Notes) or assign any portion of its
notes, (iii) to any Holder, (iv) to its employees, directors, agents, attorneys,
accountants and other professional advisors which receive such information
having been made aware of the confidential nature thereof, (v) upon the request
or demand of any Governmental Authority having jurisdiction over either
Purchaser, (vi) in response to any order of any court or other Governmental
Authority or as may otherwise be required pursuant to any Requirement of Law,
(vii) which has been publicly disclosed other than in breach of this Agreement,
or (viii) in connection with the exercise of any remedy hereunder.

         Section 11.12 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder 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 issuance of the Notes.

         Section 11.13 CONSTRUCTION. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.

                                      -49-

<PAGE>   55

         Section 11.14 INTEGRATION. This Agreement represents the agreement of
the parties hereto with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by Holdings, the Company
or the Purchasers relative to the subject matter hereof not expressly set forth
herein or in the other Financing Documents.

         Section 11.15 REPLACEMENT NOTES. If any mutilated Note is surrendered
to the Company or the Company receives reasonably satisfactory evidence of the
destruction, loss or theft of any Note (which evidence shall be, in the case of
an institutional investor, notice from such institutional investor of such
ownership and such destruction, loss or theft), the Company shall, at the
expense of the holder of such Note, execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.

         Section 11.16 HEADINGS. Section headings used herein and in the table
of contents are for convenience only and are not to effect the construction of,
or be taken into consideration in interpreting this Agreement and the other
Financing Documents.

                                      -50-

<PAGE>   56

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers, as of the date first
above written.

                                      RAILAMERICA TRANSPORTATION
                                          CORP.

                                      By:  /s/ Joseph B. Doherty
                                         ------------------------------------
                                           Name: Joseph B. Doherty
                                           Title: Treasurer

                                      Address for Notices:
                                          5300 Broken Sound Blvd. N.W.
                                          Boca Raton, FL 33487
                                          Telecopier:  (561) 994-3929
                                          Attention:  Joseph B. Doherty

                                      GUARANTORS:
                                      RAILAMERICA, INC.

                                      By:  /s/ Joseph B. Doherty
                                         ------------------------------------
                                           Name: Joseph B. Doherty
                                           Title: Treasurer

                                      Address for Notices:
                                          5300 Broken Sound Blvd. N.W.
                                          Boca Raton, FL 33487
                                          Telecopier:  (561) 994-3929
                                          Attention:  Joseph B. Doherty

<PAGE>   57

                                        PALM BEACH RAIL HOLDING, INC.

                                        By:  /s/ Joseph B. Doherty
                                           ------------------------------------
                                             Name: Joseph B. Doherty
                                             Title: Treasurer

                                        Address for Notices:
                                            5300 Broken Sound Blvd. N.W.
                                            Boca Raton, FL 33487
                                            Telecopier:  (561) 994-3929
                                            Attention:  Joseph B. Doherty

                                        CASCADE AND COLUMBIA RIVER
                                            RAILROAD COMPANY, INC., a
                                            Delaware corporation

                                        DAKOTA RAIL, INC., a South Dakota
                                            corporation

                                        DELAWARE VALLEY RAILWAY
                                            COMPANY, INC., a Delaware
                                            corporation

                                        FLORIDA RAIL LINES, INC., a Delaware
                                            corporation

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

                                        KS BOCA, INC., a Florida corporation

                                        KALYN/SIEBERT INCORPORATED, a
                                            Texas corporation

                                        MARKSMAN CORP., a Delaware
                                            corporation

<PAGE>   58

                                        MINNESOTA NORTHERN RAILROAD,
                                            INC., a Delaware corporation

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

                                        PLAINVIEW TERMINAL COMPANY, a
                                            Texas corporation

                                        PRAIRIE HOLDING CORPORATION, a
                                            Florida corporation

                                        RAILAMERICA AUSTRALIA, INC., a
                                            Delaware corporation

                                        RAILAMERICA EQUIPMENT
                                            CORPORATION, a Delaware
                                            corporation

                                        RAILAMERICA INTERMODAL
                                            SERVICES, INC., a Delaware
                                            corporation

                                        RAIL OPERATING SUPPORT GROUP,
                                            INC., a Delaware corporation

                                        SAGINAW VALLEY RAILWAY
                                            COMPANY, INC., a Delaware
                                            corporation

                                        SOUTH CENTRAL TENNESSEE
                                            RAILROAD CORP., a Delaware
                                            corporation

                                        ST. CROIX VALLEY RAILROAD
                                            COMPANY, a Delaware corporation

                                        TOLEDO, PEORIA & WESTERN
                                            RAILWAY CORPORATION, a New
                                            Jersey corporation

<PAGE>   59

                                        THE TOLEDO, PEORIA & WESTERN
                                            RAILROAD CORPORATION, a New
                                            York corporation

                                        VENTURA COUNTY RAILROAD CO.,
                                            INC., a Delaware corporation

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

                                        INDIANA SOUTHERN RAILROAD, INC.,
                                            a Delaware corporation

                                        CENTRAL RAILROAD COMPANY OF
                                            INDIANAPOLIS, an Indiana
                                            corporation

                                        CENTRAL RAILROAD COMPANY OF
                                            INDIANA, an Indiana corporation

                                        DALLAS, GARLAND &
                                            NORTHEASTERN RAILROAD, INC.,
                                            a Texas corporation

                                        DALLAS, GARLAND &
                                            NORTHEASTERN RAILROAD, INC.,
                                            a Delaware corporation

                                        GEORGIA SOUTHWESTERN
                                            RAILROAD, INC., a Texas corporation

                                        INDIANA AND OHIO RAIL CORP., a
                                            Delaware corporation

                                        INDIANA AND OHIO RAILWAY
                                            COMPANY., a Delaware corporation

                                        INDIANA AND OHIO CENTRAL
                                            RAILROAD INC., a Delaware
                                            corporation

<PAGE>   60

                                        CONNECTICUT SOUTHERN
                                            RAILROAD, INC., a Delaware
                                            corporation

                                        CENTRAL OREGON & PACIFIC
                                            RAILROAD, INC., a Delaware
                                            corporation

                                        BOSTON CENTRAL FREIGHT
                                            RAILROAD, INC., a Delaware
                                            corporation

                                        AUSTIN & NORTHWESTERN
                                            RAILROAD COMPANY., INC., a
                                            Texas corporation

                                        SOUTH CAROLINA CENTRAL
                                            RAILROAD COMPANY, INC., a South
                                            Carolina corporation

                                        SAN DIEGO & IMPERIAL VALLEY
                                            RAILROAD COMPANY, INC., a
                                            California corporation

                                        RAILTEX LOGISTICS, INC., a Delaware
                                            corporation

                                        MID-MICHIGAN RAILROAD, INC., a
                                            Michigan corporation

                                        MISSOURI & NORTHERN ARKANSAS
                                            RAILROAD COMPANY, INC., a
                                            Kansas corporation

                                        RAILTEX DISTRIBUTION SERVICES,
                                            INC., a Texas corporation

                                        RAILTEX INTERNATIONAL
                                            HOLDINGS, INC., a Delaware
                                            corporation

<PAGE>   61

                                        NORTH CAROLINA AND VIRGINIA
                                            RAILROAD COMPANY, INC., a
                                            Delaware corporation

                                        NEW ENGLAND CENTRAL RAILROAD,
                                            INC., a Delaware corporation

                                        NEW ORLEANS LOWER COAST
                                            RAILROAD COMPANY, INC., a
                                            Louisiana corporation

                                        PITTSBURGH INDUSTRIAL
                                            RAILROAD, INC., a Delaware
                                            corporation

                                        RAILTEX ACQUISITION CORP., a
                                            Delaware corporation

                                        RAILTEX SERVICE CO., INC., a
                                            Delaware corporation

                                        By:  /s/ Joseph B. Doherty
                                           ------------------------------------
                                             Name: Joseph B. Doherty
                                             Title: Treasurer

<PAGE>   62

COMMITMENT:                             PURCHASERS:
-----------                             RAIL AMERICA FUNDING, INC.
$95,000,000

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

                                        Address for Notices:
                                            277 Park Avenue
                                            New York, NY 10172
                                            Telecopier: 212-892-7542
                                            Attention: Joe Adipietro

                                        Wiring Instructions:

                                            ABA#
                                            A/C#
===========                             Attention:
$95,000,000<PAGE>   1
                                                                [EXECUTION COPY]

                                                                   Exhibit 10.73

                   ASSET BRIDGE SECURITIES PURCHASE AGREEMENT,

                                   dated as of

                                February 4, 2000,

                                      among

                         PALM BEACH RAIL HOLDING, INC.,

                               RAILAMERICA, INC.,
                                       and
                          THE GUARANTORS PARTY HERETO,

                                       and

                          THE PURCHASERS PARTY HERETO.

<PAGE>   2

                               PURCHASE AGREEMENT
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                   Page
                                                                                                   ----
<S>                                                                                                 <C>
                                    ARTICLE I

                                   DEFINITIONS

Section 1.1    Definitions..........................................................................1
Section 1.2    Incorporated Definition..............................................................9

                                   ARTICLE II

              PURCHASE AND SALE OF SECURITIES; TERMS OF SECURITIES

Section 2.1    Commitment to Purchase...............................................................9
Section 2.2    Takedown Procedures..................................................................9
Section 2.3    Fees................................................................................10
Section 2.4    Mandatory Termination of Commitments................................................10
Section 2.5    Interest............................................................................10
Section 2.6    Maturity of Asset Bridge Notes; Prepayment of Asset Bridge Notes....................11
Section 2.7    Taxes...............................................................................13

                                   ARTICLE III

                        REPRESENTATIONS AND WARRANTIES OF
                 HOLDINGS, INTERMEDIATE HOLDINGS AND THE COMPANY

Section 3.1    Incorporation of Representations and Warranties in Incorporated
                   Agreement.......................................................................16
Section 3.2    Authorization, Execution and Enforceability.........................................17
Section 3.3    Capitalization......................................................................17
Section 3.4    Solicitation........................................................................17
Section 3.5    Non-fungibility.....................................................................18

</TABLE>

                                       -i-

<PAGE>   3

<TABLE>
<S>                                                                                                 <C>
                                   ARTICLE IV

                  REPRESENTATIONS AND WARRANTIES OF PURCHASERS

Section 4.1    Purchase for Investment; Authority; Binding Agreement...............................18

                                    ARTICLE V

                        CONDITIONS PRECEDENT TO PURCHASE

Section 5.1    Conditions to Purchasers' Obligation at Takedown....................................19
Section 5.2    Conditions to the Intermediate Holdings Obligations.................................26

                                   ARTICLE VI

                                    COVENANTS

Section 6.1    Incorporation of Affirmative Covenants from the Incorporated
                   Agreement.......................................................................27
Section 6.2    Incorporation of Negative Covenants from the Incorporated
                   Agreement.......................................................................27
Section 6.3    Investment Company Act..............................................................29
Section 6.4    Use of Proceeds.....................................................................29
Section 6.5    Copies of Documents and Notices.....................................................29
Section 6.6    Syndication Efforts.................................................................30

                                   ARTICLE VII

                                EVENTS OF DEFAULT

Section 7.1    Events of Default Defined; Acceleration of Maturity; Waiver of
                   Default.........................................................................30

                                  ARTICLE VIII

                             LIMITATION ON TRANSFERS

Section 8.1    Restrictions on Transfer............................................................32
Section 8.2    Restrictive Legends.................................................................32
Section 8.3    Notice of Proposed Transfers........................................................33
Section 8.4    Right to Sell, Transfer or Assign Asset Bridge Notes................................34
Section 8.5    Replacement Asset Bridge Notes......................................................34

</TABLE>

                                      -ii-
<PAGE>   4

<TABLE>
<S>                                                                                                 <C>
                                   ARTICLE IX

                                COLLATERAL AGENT

Section 9.1    Actions.............................................................................34
Section 9.2    Exculpation.........................................................................35
Section 9.3    Successor...........................................................................35
Section 9.4    Asset Bridge Notes held by the Collateral Agent.....................................36
Section 9.5    Credit Decisions....................................................................36
Section 9.6    Reliance by the Collateral Agent....................................................36
Section 9.7    Defaults............................................................................36
Section 9.8    Payment of Costs and Expenses.......................................................37
Section 9.9    Indemnification.....................................................................37

                                    ARTICLE X

                                   GUARANTEES

Section 10.1   Guarantees..........................................................................39
Section 10.2   Limitation on Guarantor Liability...................................................41
Section 10.3   Consolidation or Merger of Guarantors...............................................41

                                   ARTICLE XI

                                  MISCELLANEOUS

Section 11.1   Notices.............................................................................41
Section 11.2   No Waivers; Amendments..............................................................41
Section 11.3   Indemnification.....................................................................42
Section 11.4   Expenses............................................................................44
Section 11.5   Payment.............................................................................44
Section 11.6   Successors and Assigns..............................................................45
Section 11.7   Brokers.............................................................................45
Section 11.8   New York Law; Submission to Jurisdiction; Waiver of Jury Trial......................45
Section 11.9   Severability........................................................................45
Section 11.10  Counterparts........................................................................45
Section 11.11  Confidentiality.....................................................................46
Section 11.12  Survival of Representations and Warranties..........................................46
Section 11.13  Construction........................................................................46
Section 11.14  Integration.........................................................................46
Section 11.15  Replacement Asset Bridge Notes......................................................47
Section 11.16  Headings............................................................................47

</TABLE>

                                      -iii-

<PAGE>   5

                SCHEDULES

Schedule 3.3    Capitalization of Holdings

                ANNEX

Annex I         Corporate and Capital Structure

                EXHIBITS

Exhibit A       Form of Asset Bridge Escrow Agreement
Exhibit B       Form of Asset Bridge Note
Exhibit C       Form of Asset Bridge Equity Registration Rights Agreement
Exhibit D       Form of Asset Bridge Warrant Agreement
Exhibit E       Form of Asset Bridge Pledge and Security Agreement
Exhibit F       Form of Issuance Date Certificate
Exhibit G       Form of Solvency Certificate

                                      -iv-

<PAGE>   6

                          SECURITIES PURCHASE AGREEMENT

         THIS AGREEMENT, dated as of February 4, 2000, is made by and among PALM
BEACH RAIL HOLDING, INC., a Delaware corporation ("INTERMEDIATE HOLDINGS"),
RAILAMERICA, INC., a Delaware corporation ("HOLDINGS"), each Designated
Restricted Subsidiary of Intermediate Holdings that is a party hereto as a
"Guarantor" (collectively, the "GUARANTORS"), the Persons parties hereto as
"Purchasers" (collectively, the "PURCHASERS").

         The parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         Section 1.1 DEFINITIONS. The following terms, as used herein (including
as used in any provision of the Incorporated Agreement that has been
incorporated by reference herein), have the following meanings:

         "ADDITIONAL ASSET BRIDGE NOTES" means Asset Bridge Notes issued in
satisfaction of Intermediate Holdings' obligations to pay interest on the
outstanding Asset Bridge Notes in accordance with the terms hereof.

         "ADMINISTRATIVE AGENT" is defined in the definition of the term "Credit
Agreement".

         "AGREEMENT" means this Agreement, as amended, supplemented or otherwise
modified from time to time in accordance with its terms.

         "ASSET BRIDGE EQUITY REGISTRATION RIGHTS AGREEMENT" means the Asset
Bridge Equity Registration Rights Agreement, dated as of February 4, 2000, among
Holdings and the Purchasers, in the form attached as Exhibit C to this
Agreement, as amended, supplemented or otherwise modified from time to time.

         "ASSET BRIDGE ESCROW AGREEMENT" means the Asset Bridge Escrow
Agreement, dated as of February 4, 2000, among Holdings, the Purchasers and the
Escrow Agent, in the form attached as Exhibit A to this Agreement, as amended,
supplemented or otherwise modified from time to time.

         "ASSET BRIDGE NOTES" means Intermediate Holdings' Asset Bridge Senior
Secured Increasing Rate Bridge Notes substantially in the form set forth as
EXHIBIT B hereto.

<PAGE>   7

         "ASSET BRIDGE PLEDGE AND SECURITY AGREEMENT" means the Asset Bridge
Pledge and Security Agreement executed and delivered by an Authorized Officer of
Intermediate Holdings and each Guarantor pursuant to CLAUSE (W) of SECTION 5.1,
substantially in the form of EXHIBIT E hereto, as amended, supplemented, amended
and restated or otherwise modified from time to time.

         "ASSET BRIDGE WARRANT AGREEMENT" means the Asset Bridge Warrant
Agreement, dated as of February 4, 2000, among Holdings and the Purchasers in
the form attached as Exhibit D to this Agreement, as amended, supplemented or
otherwise modified from time to time.

         "AUTHORIZED OFFICER" means, relative to any Obligor, those of its
officers, general parties or managing members (as applicable) whose signatures
and incumbency shall have been certified to the Purchasers and the Holders
pursuant to CLAUSE (A) of SECTION 5.1.

         "BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close.

         "COLLATERAL AGENT" means Rail America Funding, Inc., in its capacity as
collateral agent for the Secured Parties and includes each other Person
appointed as the successor Collateral Agent pursuant to SECTION 9.3.

         "COMMISSION" means the Securities and Exchange Commission.

         "COMMITMENT" means, with respect to any Purchaser, the amount set forth
opposite its name on the signature pages hereto or the obligation of such
Purchaser to purchase Asset Bridge Notes hereunder in an aggregate principal
amount at any time outstanding not to exceed such amount.

         "COMMON STOCK" means the authorized common stock, par value $.001 per
share, of Holdings.

         "COMPANY" is defined in the definition of the term "Credit Agreement".

         "CREDIT AGREEMENT" means the Credit Agreement, dated as of February 4,
2000, among RailAmerica Transportation Corp. (the "COMPANY"), Intermediate
Holdings, Holdings, Railink, Ltd., a corporation organized and existing under
the laws of the Province of Alberta, Canada, Freight Victoria Limited, a
corporation organized and existing under the laws of Australia, the lenders
party thereto, DLJ Capital Funding, Inc., as syndication agent for the lenders,
the lead arranger and the sole book running manager, The Bank of Nova Scotia, as
administrative agent (in such capacity, the "ADMINISTRATIVE AGENT") for the
lenders, and ING (U.S.) Capital LLC and Fleet National Bank, as documentation
agent for the lenders, as amended, modified, amended and restated, renewed,
refunded, replaced or refinanced from time to time, PROVIDED that (i) such

                                       -2-

<PAGE>   8

refinancing or refunding has a final maturity date that is the same as or later
than the final maturity date of the Indebtedness being amended, modified,
amended and restated, renewed, refunded, replaced or refinanced, and (ii) the
principal amount thereof does not exceed $380,000,000, plus the amount of
reasonable expenses incurred in connection therewith (other than as a result of
currency fluctuations) less the amount of all principal repayments actually made
from time to time hereafter of term Indebtedness and permanent reductions of
revolving Indebtedness thereunder.

         "DEBT INCURRENCE" means any incurrence by Holdings, Intermediate
Holdings or any of its Designated Restricted Subsidiaries of any Indebtedness,
other than Indebtedness permitted under CLAUSE (B) of SECTION 6.2.

         "DEFAULT" means any Event of Default or any event or condition which,
with the giving of notice or lapse of time or both, would, unless cured or
waived, become an Event of Default.

         "DESIGNATED RESTRICTED SUBSIDIARY" means Kalyn/Siebert.

         "DOLLARS" or "$" mean lawful currency of the United States of America.

         "ESCROW AGENT" means Snoga, Inc., a Delaware corporation.

         "EVENT OF DEFAULT" has the meaning set forth in SECTION 7.1.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

         "EXPIRATION DATE" has the meaning set forth in SECTION 2.1(B).

         "FEE LETTER" means the letter agreement with respect to fees dated
February 1, 2000 made by DLJ Bridge Finance, Inc. and DLJ Capital Funding, Inc
and accepted by Holdings on February 2, 2000.

         "FINANCING DOCUMENTS" means this Agreement, the Asset Bridge Notes, the
Asset Bridge Equity Registration Rights Agreement, the Asset Bridge Warrant
Agreement, the Warrants and the Asset Bridge Escrow Agreement.

         "FIRST ANNIVERSARY DATE" means the first anniversary of the Issuance
Date (or if such date is not a Business Day, the next preceding Business Day).

         "GUARANTEE" means the guarantee by the Guarantors of the Asset Bridge
Notes pursuant to Article X.

                                       -3-

<PAGE>   9

         "GUARANTEE OBLIGATION" means as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counter indemnity or similar obligation, in either case guaranteeing or in
effect guaranteeing any Indebtedness (the "primary obligations") of any other
third Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of the guaranteeing
person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor or (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation against loss in
respect thereof; PROVIDED, HOWEVER, that the term Guarantee Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined in
good faith by the guaranteeing Person.

         "GUARANTORS" is defined in the preamble.

         "HOLDER" means any holder of any Asset Bridge Note.

         "HOLDINGS" is defined in the preamble.

         "INCORPORATED AGREEMENT" means the Credit Agreement; PROVIDED that any
amendment, supplement or waiver thereto or thereunder shall be effective for
purposes of this definition if and only if consented to in writing by the
Majority Holders. Each reference herein to the Incorporated Agreement shall by
such reference incorporate the provisions of the Incorporated Agreement to which
such reference is made as though fully set forth in such place, together with
related definitions and ancillary provisions, PROVIDED that for purposes of such
incorporation by reference, except as the context may otherwise require:

                  (i) references therein to "this Agreement", the "Notes", the
         "Loan Documents" and the like shall be deemed to refer to and include
         this Agreement, the Asset Bridge Notes and the Financing Documents,
         respectively;

                                      -4-

<PAGE>   10

                  (ii) references therein to the "Administrative Agent" shall be
         deemed to refer to the Purchasers;

                  (iii) references therein to the "Lenders" shall be deemed to
         refer to (x) prior to the issuance of the Asset Bridge Notes, the
         Purchasers and (y) from and after the issuance of the Asset Bridge
         Notes, the Holders from time to time of the Asset Bridge Notes;

                  (iv) references therein to the "Required Lenders" or the like
         shall be deemed to refer to the Majority Holders;

                  (v) references therein to the "Obligors" shall be deemed to
         refer to Holdings, Intermediate Holdings and the Guarantors;

                  (vi) references in Article VI thereof to the "Credit
         Extensions" shall be deemed to refer to the Indebtedness evidenced by
         the Asset Bridge Notes; and

                  (vii) provisions within the Incorporated Agreement shall be
         deemed for all purposes hereof to be modified as set forth in ARTICLES
         III, VI and VII hereof.

         "INITIAL RATE" has the meaning set forth in SECTION 2.5(B).

         "INTEREST PAYMENT DATE" means each May 4, August 4, November 4 and
February 4 (or, if any such date is not a Business Day, the next succeeding
Business Day).

         "INTERMEDIATE HOLDINGS" is defined in the preamble.

         "ISSUANCE DATE" means the date the Asset Bridge Notes are issued by
Intermediate Holdings and purchased by the Purchasers.

         "ISSUANCE DATE CERTIFICATE" means a certificate of an Authorized
Officer of Holdings and Intermediate Holdings substantially in the form of
EXHIBIT F hereto, delivered pursuant to CLAUSE (D) of SECTION 5.1.

         "LENDERS" means the banks and other financial institutions from time to
time party to the Credit Agreement.

         "LOAN DOCUMENTS" means the Credit Agreement, together with all notes,
collateral and security documents, guaranties, interest rate hedge or similar
arrangements to which the counterparty at the time such interest rate hedge or
similar arrangement was entered into was a lender under the Credit Agreement or
any of its Affiliates, agreements and other documents delivered at any time in
connection therewith, all as amended, supplemented or otherwise modified from
time to time in accordance with their respective terms.

                                       -5-

<PAGE>   11

         "MAJORITY HOLDERS" means (i) at any time prior to the issuance of the
Asset Bridge Notes, the Purchasers and (ii) at any time thereafter, the holders
of voting rights with respect to waivers, amendments and other actions permitted
or required to be taken by Holders under the terms of the Asset Bridge Notes
constituting a majority of such voting rights attributable to the aggregate
outstanding amount of Asset Bridge Notes at such time.

         "MATERIAL ACQUISITION DOCUMENTS" means the Merger Agreement, the Credit
Agreement and all other material instruments, agreements and documents relating
to the Acquisition, the RailAmerica Refinancing, the RailTex Refinancing, the
Intermediate Holdings Asset Bridge Note Issuance, the Equity Issuance, the Asset
Transfer and the transactions contemplated hereby or thereby, in each case as
amended from time to time in accordance with CLAUSE (J) of SECTION 6.2.

         "MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon the
business, assets, condition (financial or otherwise), operations, performance,
properties or prospects of Holdings, Intermediate Holdings and the Designated
Restricted Subsidiaries taken as a whole, (ii) the material impairment of the
ability of Holdings, Intermediate Holdings or any Guarantor to perform their
respective obligations under the Financing Documents, or (iii) a material
adverse effect on the rights and remedies of any Holder under any Financing
Document.

         "MORTGAGE" means each mortgage, deed of trust or agreement executed and
delivered by any Designated Restricted Subsidiary in favor of the Collateral
Agent for the benefit of the Secured Parties pursuant to the requirements of
this Agreement in form and substance satisfactory to the Collateral Agent, under
which a Lien is granted on the real property and fixtures described therein, as
amended, supplemented, amended and restated or otherwise modified from time to
time.

         "NET DEBT PROCEEDS" means with respect to the sale or issuance by
Holdings, Intermediate Holdings or the Designated Restricted Subsidiaries to any
Person of any of its Indebtedness not permitted pursuant to Section 7.2.2 of the
Incorporated Agreement as incorporated by reference in CLAUSE (B) of SECTION
6.2, the EXCESS of:

                  (a) the gross cash proceeds received by such Person from such
         sale or issuance,

OVER

                  (b) all underwriting commissions and legal, investment
         banking, brokerage and accounting and other professional fees, sales
         commissions and disbursements actually incurred in connection with such
         sale or issuance which have not been paid to Affiliates of Holdings in
         connection therewith.

                                       -6-

<PAGE>   12

         "NET EQUITY PROCEEDS" means with respect to any sale or issuance by
Holdings, Intermediate Holdings or the Designated Restricted Subsidiaries to any
Person of any of their respective Capital Stock or, warrants or options for such
Capital Stock or the exercise of any such warrants or options, the excess of:

                  (a) the gross cash proceeds received by Holdings, Intermediate
         Holdings or any such Designated Restricted Subsidiary from such sale,
         exercise or issuance; PROVIDED, HOWEVER, that Intermediate Holdings may
         exclude up to $100,000 in aggregate of such gross proceeds received in
         each Fiscal Year as a result of any sale or issuance by Holdings or
         Intermediate Holdings to any Person of any of their respective Capital
         Stock or, warrants or options for such Capital Stock or the exercise of
         any such warrants or options,

OVER

                  (b) the sum of all underwriting commissions and legal,
         investment banking, brokerage, accounting and other professional fees,
         sales commissions and disbursements actually incurred in connection
         with such sale or issuance which have not been paid to Affiliates of
         Holdings or Intermediate Holdings in connection therewith.

         "OBLIGATIONS" means all obligations (monetary or otherwise, whether
absolute or contingent, matured or unmatured) of Holdings, Intermediate Holdings
and each other Obligor arising under or in connection with a Financing Document,
including the principal of and premium, if any, and interest (including interest
accruing during the pendency of any proceeding of the type described in Section
8.1.9 of the Incorporated Agreement as incorporated by reference in CLAUSE (I)
of SECTION 7.1, whether or not allowed in such proceeding) on the Asset Bridge
Notes.

         "OTHER TAXES" has the meaning set forth in SECTION 2.7(A).

         "PERSON" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
government (or any agency or political subdivision thereof) or other entity of
any kind.

         "PRIME RATE" means, as of any date, the rate of interest then most
recently announced by The Bank of New York as its prime or reference rate for
dollars loaned in the United States.

         "PROJECTIONS" is defined in CLAUSE (H)(I)(B) of SECTION 5.1.

         "PURCHASERS" is defined in the PREAMBLE.

                                       -7-

<PAGE>   13

         "RESTRICTED SUBSIDIARY" means any Subsidiary of Intermediate Holdings
other than Ferronor.

         "SECURED PARTIES" means the Collateral Agent and each of the Holders.

         "SECURED PARTY'S ENVIRONMENTAL LIABILITY" means any and all losses,
liabilities, obligations, penalties, claims, litigation, demands, defenses,
costs, judgments, suits, proceedings, damages (including consequential damages),
disbursements or expenses of any kind or nature whatsoever (including reasonable
attorneys' fees at trial and appellate levels and experts' fees and
disbursements and expenses incurred in investigating, defending against or
prosecuting any litigation, claim or proceeding) which may at any time be
imposed upon, incurred by or asserted or awarded against any Secured Party or
any of such Person's Affiliates, shareholders, directors, officers, employees,
and agents in connection with or arising from:

                  (a) any Hazardous Material on, in, under or affecting all or
         any portion of any property owned, leased or operated upon (including
         rights of way easements) of Holdings, Intermediate Holdings or any of
         its Designated Restricted Subsidiaries, the groundwater thereunder, or
         any surrounding areas thereof to the extent caused by Releases from
         Holdings', Intermediate Holdings' or any of its Designated Restricted
         Subsidiaries' or any of their respective predecessors' properties
         owned, leased or operated upon (including right of way easements);

                  (b) any misrepresentation, inaccuracy or breach of any
         warranty contained in Section 6.12 of the Incorporated Agreement as
         incorporated by reference in CLAUSE (K) of Section 3.1;

                  (c) any violation or claim of violation by Holdings,
         Intermediate Holdings or any of its Designated Restricted Subsidiaries
         of any Environmental Laws; or

                  (d) the imposition of any lien for damages caused by or the
         recovery of any costs for the cleanup, release or threatened release of
         Hazardous Material by Holdings, Intermediate Holdings or any of its
         Designated Restricted Subsidiaries, or in connection with any property
         owned, leased or operated upon (including right of way easements) or
         formerly owned, leased or operated upon (including rights of way
         easements) by Holdings, Intermediate Holdings or any of its Designated
         Restricted Subsidiaries.

         "SECURITIES ACT" means the Securities Act of 1933, as amended.

         "SECURITY DOCUMENTS" means, collectively, the Asset Bridge Pledge and
Security Agreement, the Foreign Pledge Agreements, if any, and the Mortgage(s).

                                       -8-

<PAGE>   14

         "SHELF REGISTRATION" means a "shelf" registration statement on any
appropriate form pursuant to Rule 415 (or similar rule that may be adopted by
the Commission) under the Securities Act.

         "SUBORDINATED DEBT" means unsecured Indebtedness of Holdings,
Intermediate Holdings or any their Restricted Subsidiaries subordinated in right
of payment to the Obligations pursuant to documentation containing redemption
and other prepayment events, maturities, amortization schedules, covenants,
events of default, remedies, acceleration rights, subordination provisions and
other material terms satisfactory to the Majority Holders.

         "TAXES" has the meaning set forth in SECTION 2.7(A).

         "TRANSFER" means any disposition of Asset Bridge Notes that would
constitute a sale thereof under the Securities Act.

         "TREASURY RATE" means, as of any date, the yield to maturity as of such
date of United States Treasury securities with a constant maturity (as compiled
and published in the most recent Federal Reserve Statistical Release H.15 (519)
that has become publicly available at least two Business Days prior to such date
(or, if such Statistical Release is no longer published, any publicly available
source of similar market data)) most nearly equal to (but not less than) the
remaining term to maturity of the Asset Bridge Notes; PROVIDED, HOWEVER, that if
such term to maturity is less than one year, the weekly average yield on
actually traded United States Treasury securities adjusted to a constant
maturity of one year shall be used.

         "WARRANT SHARES" has the meaning set forth in CLAUSE (U) of SECTION
5.1.

         "WARRANTS" means the warrants to purchase common stock of Holdings to
be issued pursuant to the Asset Bridge Warrant Agreement.

         Section 1.2 INCORPORATED DEFINITION. Unless the context otherwise
requires, capitalized terms defined in the Incorporated Agreement and not
otherwise defined herein shall have the meanings assigned thereto in the
Incorporated Agreement.

                                   ARTICLE II

              PURCHASE AND SALE OF SECURITIES; TERMS OF SECURITIES

         Section 2.1 COMMITMENT TO PURCHASE. (a) Subject to the terms and
conditions set forth herein and in reliance on the representations and
warranties of Intermediate Holdings contained herein and in the other Financing
Documents, Intermediate Holdings may at its option issue and sell to the
Purchasers on the Issuance Date, and each Purchaser agrees to purchase on the

                                       -9-

<PAGE>   15

Issuance Date, Asset Bridge Notes in an aggregate outstanding principal amount
equaling such Purchaser's Commitment. The purchase price for the Asset Bridge
Notes shall be 100% of the principal amount thereof.

         (b) The Commitment will terminate (the "EXPIRATION DATE") on the
earliest of (i) the termination of the Merger Agreement in accordance with the
terms thereof prior to the consummation of the Acquisition, (ii) the
consummation of the Transaction without the issuance of the Asset Bridge Notes
(if such date occurs prior to the Issuance Date) and (iii) 5:00 P.M. (New York
City time) on April 15, 2000 (if such date occurs prior to the Issuance Date);
PROVIDED, that if at any time on or after the date hereof an Event of Default
shall have occurred and be continuing, a Purchaser may at its option terminate
its Commitment by notice to Intermediate Holdings, such termination to be
effective upon the giving of such notice; and PROVIDED, FURTHER, that the
Commitments shall automatically terminate, without notice to Intermediate
Holdings or any other action on the part of the Purchasers, upon the occurrence
of any Default described in clauses (b), (c) or (d) of Section 8.1.9 of the
Incorporated Agreement as incorporated by reference in CLAUSE (I) of SECTION 7.1
with respect to any Obligor.

         (c) The Commitments are not revolving in nature, and principal amounts
of Asset Bridge Notes prepaid in accordance with SECTION 2.6 may not be resold
to the Purchasers hereunder.

         Section 2.2 TAKEDOWN PROCEDURES. (a) Intermediate Holdings shall give
the Purchasers notice not later than 3:00 P.M. (New York City time) one Business
Day before the date of the proposed purchase and sale of Asset Bridge Notes,
which notice shall specify the principal amount of Asset Bridge Notes to be
purchased and sold and the proposed Issuance Date (which shall be a Business
Day).

         (b) On the Issuance Date, the Purchasers, severally and not jointly,
shall deliver by wire transfer, to the account number of Intermediate Holdings
specified by Intermediate Holdings in writing no later than 1:00 P.M. (New York
City time) on the Issuance Date, immediately available funds in an amount equal
to the aggregate purchase price of the Asset Bridge Notes to be purchased by the
Purchasers hereunder on such Issuance Date, less the aggregate amount of fees
payable by Intermediate Holdings to the Purchasers on such date pursuant to
SECTION 2.3 and expenses (if any) payable to the Purchasers on such date
pursuant to SECTIONS 9.8 and 11.4.

         (c) On the Issuance Date, against payment as set forth in CLAUSE (B)
above, Intermediate Holdings shall deliver to each Purchaser a single Asset
Bridge Note representing the aggregate principal amount of Asset Bridge Notes to
be purchased by such Purchaser registered in the name of such Purchaser, or, if
requested by such Purchaser, separate Asset Bridge Notes in such other
denominations representing in total such aggregate principal amount and
registered in such name or names as shall be designated by such Purchaser by
notice to Intermediate Holdings at least one Business Day prior to the Issuance
Date.

                                      -10-

<PAGE>   16

         Section 2.3 FEES. Intermediate Holdings shall pay to the Purchasers the
fees that are set forth in the Fee Letter at such times and in such amounts as
agreed to therein.

         Section 2.4 MANDATORY TERMINATION OF COMMITMENTS. The Commitment shall
terminate on the Expiration Date.

         Section 2.5 INTEREST. (a) Interest on each Asset Bridge Note shall be
payable quarterly in arrears, on each Interest Payment Date of each year in
which such Asset Bridge Note remains outstanding, commencing with the first
Interest Payment Date after the date of issuance thereof, on the principal
amount of such Asset Bridge Note outstanding. Interest on each Asset Bridge Note
shall be calculated at the rates per annum set forth below and shall accrue from
and including the most recent Interest Payment Date to which interest has been
paid on such Asset Bridge Note (or if no interest has been paid on such Asset
Bridge Note, from the date of issuance thereof in the case of each Asset Bridge
Note) to but excluding the date on which payment in full of the principal sum of
such Asset Bridge Note has been made.

         (b) The interest rate applicable to each Asset Bridge Note (i) from and
including the Issuance Date to but excluding the day that is 180 days following
the Issuance Date shall be 15.00%, (ii) from and including the day that is 180
days following the Issuance Date to but excluding the day that is 270 days
following the Issuance Date shall be 15.50% and (iii) from and including the day
that is 270 days following the Issuance Date to but excluding the date that each
such Asset Bridge Note shall have been paid in full in cash shall be 15.75%.
Interest on each Asset Bridge Note will be calculated on the basis of a 360-day
year and paid for the actual number of days elapsed.

         (c) Overdue principal and interest on the Asset Bridge Notes shall bear
interest from the date so due to the date paid at a rate which is 2.0% per annum
in excess of the rate then borne by the Asset Bridge Notes.

         (d) Notwithstanding anything to the contrary set forth above,
Intermediate Holdings may, at its option, in lieu of making payments of interest
in cash on any Interest Payment Date (other than the Interest Payment Date
occuring on or about the date that the Asset Bridge Notes shall be paid in
full), pay interest on such Interest Payment Date through the issuance of
Additional Asset Bridge Notes. Such Additional Asset Bridge Notes issued on any
Interest Payment Date shall, subject to the remaining provisions of this
paragraph, be in an aggregate principal amount equal to the interest then due
for such Interest Payment Date, shall otherwise be identical to the outstanding
Asset Bridge Notes and shall be issued to the Holders of the outstanding Asset
Bridge Notes in proportions such that each Holder shall receive the same ratio
of cash interest, if any, to Additional Asset Bridge Notes on such Interest
Payment Date.

         Section 2.6 MATURITY OF ASSET BRIDGE NOTES; PREPAYMENT OF ASSET BRIDGE
NOTES. (a) The Asset Bridge Notes shall mature on the earlier of (x) the First
Anniversary Date (PROVIDED,

                                      -11-

<PAGE>   17

HOWEVER that, unless Intermediate Holdings shall have notified the Purchasers in
writing not less than 5 Business Days prior to the First Anniversary Date of its
intention to repay the Asset Bridge Notes in full on or prior to the First
Anniversary Date, the maturity date for purposes of this CLAUSE (X) will be
automatically extended to the date which is six (6) months after the Stated
Maturity Date for Term B Loans if, on the First Anniversary Date, (i) no Default
under this Agreement shall have occurred and be continuing; (ii) no event of
default or event which with the giving of notice or the lapse of time, or both,
would become an event of default under the Loan Documents or any Indebtedness of
Holdings, Intermediate Holdings or any of its Designated Restricted Subsidiaries
relating to more than $5,500,000 in aggregate principal amount shall have
occurred and be continuing; and (iii) all fees and expenses payable as of such
date to the Purchasers or Holders hereunder shall have been paid in full) and
(y) the date that all or substantially all of the Collateral (as defined in the
Security Documents) shall have been Disposed of by Intermediate Holdings and/or
the relevant Guarantors.

         (b) For so long as any Asset Bridge Notes are outstanding, Intermediate
Holdings at its option may, upon 5 Business Days' written notice to the Holders
thereof, at any time, prepay all or any part of the principal amount of the
Asset Bridge Notes at a redemption price equal to 100.00% of the outstanding
principal amount of the Asset Bridge Notes so prepaid, together with accrued and
unpaid interest through the date of prepayment.

         (c) (i) Intermediate Holdings shall, following the receipt by any
Designated Restricted Subsidiary of any Casualty Proceeds deliver to the Holders
a calculation of the amount of such Casualty Proceeds and make a mandatory
redemption of the Asset Bridge Notes at a redemption price of 100.00% of the
principal amount so redeemed in an amount equal to 100% of such Casualty
Proceeds within 15 Business Days of the receipt thereof; PROVIDED, HOWEVER, that
if

                  (A) Intermediate Holdings informs the Holders in writing no
         later than the earlier of (x) 30 days following the occurrence of the
         Casualty Event resulting in such Casualty Proceeds and (y) 5 Business
         Days following the receipt of such Casualty Proceeds of such Designated
         Restricted Subsidiary's good faith intention to apply such Casualty
         Proceeds to the rebuilding or replacement of the damaged, destroyed or
         condemned assets or property or the acquisition or construction of
         other long-term capital assets useful in the such Designated Restricted
         Subsidiary's business and

                  (B) the Majority Holders give their written consent to such
         application,

then no mandatory redemption on account of Casualty Proceeds shall be required
under this clause so long as such Designated Restricted Subsidiary in fact uses
such Casualty Proceeds to rebuild or replace such damaged, destroyed or
condemned assets or acquire or construct such other long-term assets in
accordance with, among other things, the schedule consented to by the Majority
Holders, with any amount of such Casualty Proceeds not so requested to be so
applied

                                      -12-

<PAGE>   18

in such rebuilding, replacement, acquisition or construction being applied to
redeem the Asset Bridge Notes at a redemption price of 100.00% of the principal
amount so redeemed.

         (ii) Intermediate Holdings shall, following the receipt by Intermediate
Holdings or any Designated Restricted Subsidiary of any Net Disposition Proceeds
in excess of $15,000 (individually or in the aggregate), deliver to the Holders
a calculation of the amount of such Net Disposition Proceeds and make a
mandatory redemption of the Asset Bridge Notes at a redemption price of 100.00%
of the principal amount so redeemed in an amount equal to 100% of such Net
Disposition Proceeds within one Business Day of the receipt thereof; PROVIDED,
HOWEVER, that a Disposition by Intermediate Holdings of any of its assets other
than the Capital Stock of any Designated Restricted Subsidiary shall not
constitute a Disposition for purposes of determining Net Disposition Proceeds
hereunder.

         (iii) Concurrently with the receipt by Holdings, Intermediate Holdings
or any of the Restricted Subsidiaries of any Net Equity Proceeds, Holdings shall
deliver to the Holders a calculation of the amount of such Net Equity Proceeds
and Intermediate Holdings shall make a mandatory redemption of the Asset Bridge
Notes at a redemption price of 100% of the principal amount so redeemed in an
amount equal to 100% of such Net Equity Proceeds.

         (iv) Concurrently with the receipt by Holdings, Intermediate Holdings
or any of the Restricted Subsidiaries of any Net Debt Proceeds, Holdings shall
deliver to the Holders a calculation of the amount of such Net Debt Proceeds and
Intermediate Holdings shall make a mandatory redemption of the Asset Bridge
Notes at a redemption price of 100% of the principal amount so redeemed in an
amount equal to the lesser of (x) 100% of such Net Debt Proceeds and (y)
$10,000,000.

         (v) Concurrently with the Disposition by Holdings, Intermediate
Holdings or any of their respective Restricted Subsidiaries of any Capital Stock
of QRC owned by Holdings, Intermediate Holdings or any such Restricted
Subsidiary to any Person other than Intermediate Holdings or any of its
Designated Restricted Subsidiaries, Intermediate Holdings shall make a mandatory
redemption of the Asset Bridge Notes at a redemption price of 100% of the
principal amount so redeemed in an amount equal to the amount of consideration
received by Holdings, Intermediate Holdings or any such Restricted Subsidiary,
as the case may be.

         (vi) Notwithstanding anything contained in this Agreement to the
contrary, Intermediate Holdings shall not be obligated to prepay or redeem the
principal amount of Asset Bridge Notes (A) with (1) any Net Debt Proceeds of any
Debt Incurrence if such prepayment is prohibited by the lenders with respect to
such Debt Incurrence or (2) any Net Debt Proceeds or Net Equity Proceeds, to the
extent any portion of such Net Debt Proceeds or Net Equity Proceeds are required
under the Credit Agreement to be paid to the holders of the principal amount of
any loans thereunder or (B) with respect to any Excess Cash Flow, to the extent
a mandatory

                                      -13-

<PAGE>   19

prepayment is required under the Credit Agreement to be paid to the holders of
the principal amount of any loans thereunder in respect of any portion of such
Excess Cash Flow.

         (d) Any prepayment of the Asset Bridge Notes pursuant to SECTION 2.6(B)
shall be in a minimum amount of at least $500,000, unless less than $500,000 of
the Asset Bridge Notes remain outstanding, in which case all of the Asset Bridge
Notes must be prepaid. Any prepayment of the Asset Bridge Notes pursuant to
SECTION 2.6(C) shall be in a minimum amount which is a multiple of $1,000 times
the number of Holders at the time of such prepayment.

         (e) Any partial prepayment of the Asset Bridge Notes pursuant to
SECTION 2.6(B) shall be made so that the Asset Bridge Notes held by each Holder
shall be prepaid in a principal amount which shall bear the same ratio, as
nearly as may be, to the total principal amount of such Asset Bridge Notes being
prepaid as the principal amount of such Asset Bridge Notes held by such Holder
shall bear to the aggregate principal amount of all such Asset Bridge Notes then
outstanding. Any partial prepayment of the Asset Bridge Notes pursuant to
SECTION 2.6(C) shall be applied the Asset Bridge Notes until all such Asset
Bridge Notes shall have been prepaid in full, and shall be made so that such
Asset Bridge Notes then held by each Holder shall be prepaid in a principal
amount which shall bear the same ratio, as nearly as may be, to the total
principal amount of such Asset Bridge Notes being prepaid as the principal
amount of such Asset Bridge Notes held by such Holder shall bear to the
aggregate principal amount of all such Asset Bridge Notes then outstanding. In
the event of a partial prepayment of any Asset Bridge Note, upon presentation
and surrender of such Asset Bridge Note Intermediate Holdings shall execute and
deliver to or on the order of the Holder, at the expense of Intermediate
Holdings, a new Asset Bridge Note in principal amount equal to the remaining
outstanding portion of such Asset Bridge Note.

         Section 2.7 TAXES. (a) For the purposes of this Section, the following
terms have the following meanings:

         "Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by
Intermediate Holdings pursuant to this Agreement or under any Asset Bridge Note
or any other Financing Document, and all liabilities with respect thereto,
excluding (i) United States federal withholding taxes payable under laws in
effect on the date hereof and (ii) in the case of the Collateral Agent, any
Purchaser or any other Holder, taxes imposed on the net income of the Collateral
Agent or such Purchaser or Holder and franchise or similar taxes imposed on the
net income of the Collateral Agent or such Purchaser or Holder, by a
jurisdiction under the laws of which the Collateral Agent or such Purchaser or
Holder is organized or in which its principal executive office or the office
holding any Asset Bridge Notes or any Financing Document is located.

         "Other Taxes" means any present or future stamp or documentary taxes
and any other excise or property taxes, or similar charges or levies, which
arise from any payment made

                                      -14-

<PAGE>   20

pursuant to this Agreement or under any Asset Bridge Note or any other Financing
Document or from the execution, delivery, registration, recordation or
enforcement of, or otherwise with respect to, this Agreement or any Asset Bridge
Note or any other Financing Document.

         (b) All payments by Intermediate Holdings to or for the account of the
Collateral Agent or any Purchaser or Holder under any Financing Document shall
be made without deduction for any Taxes or Other Taxes; PROVIDED that, if
Intermediate Holdings shall be required by law to deduct any Taxes or Other
Taxes from any such payment, the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section), the Collateral Agent or such
Purchaser or Holder (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, Intermediate Holdings
shall make such deductions, Intermediate Holdings shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law and Intermediate Holdings shall promptly furnish to the
Collateral Agent or such Purchaser or Holder (as the case may be) the original
or a certified copy of a receipt or other documentation available to
Intermediate Holdings evidencing payment thereof.

         (c) Intermediate Holdings agrees to indemnify the Collateral Agent and
each Purchaser and Holder for the full amount of Taxes and Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed or asserted
(whether or not correctly) by any jurisdiction on amounts payable under this
Section) paid by the Collateral Agent or such Purchaser or Holder (as the case
may be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto; PROVIDED, HOWEVER, that Intermediate Holdings
shall not be obligated to make any payment pursuant to this SECTION 2.7(C) in
respect of penalties or interest attributable to any Taxes or Other Taxes, if
written demand therefor has not been made by the Collateral Agent or such
Purchaser or Holder (as the case may be) within 60 days from the date on which
the Collateral Agent or such Purchaser or Holder received written notice of the
imposition of Taxes or Other Taxes by the relevant taxing authority, or for any
additional imposition which may arise from the failure of the Collateral Agent
or such Purchaser or Holder (as the case may be) to apply payments in accordance
with the applicable tax law after Intermediate Holdings has made the payments
required hereunder. After the Collateral Agent or any Purchaser or Holder (as
the case may be) receives written notice of the imposition of Taxes, the
Collateral Agent or such Purchaser or Holder will act in good faith to notify
Intermediate Holdings of its obligations thereunder as soon as reasonably
possible.

         (d) Intermediate Holdings shall have no obligation for Taxes under
SECTION 2.7(B) or SECTION 2.7(C) for or on account of:

                  (i) any Taxes (other than Other Taxes) that would not have
         been so imposed but for the existence of any present or former
         connection between the Collateral Agent or any Purchaser, Holder or
         beneficial owner of a Asset Bridge Note (or between a fiduciary,

                                      -15-

<PAGE>   21

         settlor, beneficiary, member, or shareholder of, or possessor of a
         power over, the Collateral Agent or such Purchaser, Holder or
         beneficial owner, if the Collateral Agent or such Purchaser, Holder or
         beneficial owner is an estate, a trust, a partnership or corporation)
         and the jurisdiction imposing the Tax other than merely holding such
         Asset Bridge Note or any Financing Document, or the receipt of payments
         in respect thereof, including, without limitation, the Collateral Agent
         or such Purchaser, Holder or beneficial owner (or such fiduciary,
         settlor, beneficiary, member, shareholder, or possessor) being or
         having been a citizen or resident thereof, or being or having been
         engaged in a trade or business or having a permanent establishment or
         other fixed base therein, or making or having made an election the
         effect of which is to subject the Collateral Agent or such Purchaser,
         Holder or beneficial owner (or such fiduciary, settlor, beneficiary,
         member, shareholder, or possessor) to such Tax;

                  (ii) any Taxes in the nature of estate, inheritance or gift
         taxes;

                  (iii) any Tax that is imposed or withheld by reason of the
         failure of the Collateral Agent or such Purchaser, Holder or beneficial
         owner of a Asset Bridge Note to comply with a written request by
         Intermediate Holdings, addressed to the Collateral Agent or such
         Purchaser, Holder or beneficial owner, to provide information
         concerning the nationality, residence or identity of the Collateral
         Agent or such Purchaser, Holder or beneficial owner, if providing such
         information under a statute, treaty, regulation or administrative
         practice of the jurisdiction imposing such Tax would result in a
         complete exemption from such Tax;

                  (iv) any Taxes imposed on any payment on a Asset Bridge Note
         to any Purchaser or Holder that is a fiduciary or partnership or other
         than sole beneficial owner of such payment to the extent a beneficiary
         or settlor with respect to such fiduciary or a member of such
         partnership or a beneficial owner would not have been entitled to the
         payment of taxes had such beneficiary, settlor, member or beneficial
         owner directly received its beneficial or distributive share of such
         payment; and

                  (v) any combination of items (i) through (iv) above.

         (e) If Intermediate Holdings determines in good faith that a reasonable
basis exists for contesting the imposition of a Tax or Other Tax with respect to
the Collateral Agent or any Purchaser or Holder, the Collateral Agent, such
Purchaser or Holder (as the case may be) shall cooperate with Intermediate
Holdings in challenging such Tax or Other Tax at Intermediate Holdings' expense
(including, without limitation, any additional costs, expenses or Taxes incurred
by the Collateral Agent or any Purchaser or Holder, as the case may be, as a
result of such contesting of such Taxes) if requested by Intermediate Holdings;
PROVIDED, HOWEVER, that nothing in this SECTION 2.7(E) shall require the
Collateral Agent or any Purchaser or Holder to submit to Intermediate Holdings
any tax returns or any part thereof, or to prepare or file any tax

                                      -16-

<PAGE>   22

returns other than as the Collateral Agent or such Purchaser or Holder in its
sole discretion shall determine.

         (f) Each of the Collateral Agent and each Purchaser and Holder agrees,
to the extent reasonable and without material cost to it, to cooperate with
Intermediate Holdings to minimize any amounts payable by Intermediate Holdings
under this SECTION 2.7.

                                   ARTICLE III

                        REPRESENTATIONS AND WARRANTIES OF
                 HOLDINGS, INTERMEDIATE HOLDINGS AND THE COMPANY

         Each of Holdings and Intermediate Holdings represents and warrants to
the Purchasers (both before and after giving effect to the Transaction) as set
forth below:

         Section 3.1 INCORPORATION OF REPRESENTATIONS AND WARRANTIES IN
INCORPORATED AGREEMENT. Each of Holdings and Intermediate Holdings hereby makes,
for the benefit of the Purchasers and the Holders from time to time of the Asset
Bridge Notes, the representations and warranties contained in the following
Sections of the Incorporated Agreement:

                  (a)  6.1 (Organization, etc.);

                  (b)  6.2 (Due Authorization, Non-Contravention, etc.);

                  (c)  6.3 (Government Approval, Regulation, etc.);

                  (d)  6.5 (Financial Information);

                  (e)  6.6 (No Material Adverse Change);

                  (f)  6.7 (Litigation, Labor Controversies, etc.);

                  (g)  6.8 (Subsidiaries);

                  (h)  6.9 (Ownership of Properties);

                  (i)  6.10 (Taxes);

                  (j)  6.11 (Pension and Welfare Plans);

                  (k)  6.12 (Environmental Warranties);

                                      -17-

<PAGE>   23

                  (l)  6.13 (Accuracy of Information);

                  (m)  6.14 (Regulations U and X);

                  (n)  6.15 (Year 2000); and

                  (o)  6.17 (Solvency).

         Section 3.2 AUTHORIZATION, EXECUTION AND ENFORCEABILITY. (a) Each of
the Financing Documents (other than the Asset Bridge Notes) and the Material
Acquisition Documents to which any of Holdings or Intermediate Holdings is a
party constitutes the valid and binding agreement of such Obligor enforceable in
accordance with its terms (except, in any case, as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally and by principles of equity). When
executed and delivered by Intermediate Holdings against payment therefor in
accordance with the terms hereof, the Asset Bridge Notes will constitute valid
and binding obligations of Intermediate Holdings, enforceable in accordance with
their terms (except, in any case, as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally and by principles of equity).

         (b) The Warrants have been duly authorized by Holdings. When executed
pursuant to the terms of the Asset Bridge Warrant Agreement and delivered to the
Escrow Agent pursuant to the provisions of this Agreement, the Warrants will be
the valid and binding obligations of Holdings, enforceable against it in
accordance with their terms (except, in any case, as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally and by principles of equity).

         (c) The Warrant Shares to be issued upon exercise of the Warrants have
been duly authorized and reserved for issuance by Holdings and will be issued at
the times and in the manner required by the Asset Bridge Warrant Agreement and,
upon due exercise of a Warrant, the Warrant Shares issued will be validly
issued, fully paid and nonassessable.

         Section 3.3 CAPITALIZATION. At the Issuance Date, after giving effect
to the consummation of the Transaction, the capitalization of Holdings will be
as set forth on SCHEDULE 3.3. All of the issued and outstanding shares of Common
Stock of Holdings are, and, upon consummation of the Transaction, will be,
validly issued, fully paid and nonassessable and the holders thereof are not
entitled to any preemptive or other similar rights. Except for the Material
Acquisition Documents or as set forth on SCHEDULE 3.3, there are no
subscriptions, options, warrants, rights, convertible securities, exchangeable
securities or other agreements or commitments of any character pursuant to which
Holdings is required to issue any shares of its capital stock.

                                      -18-

<PAGE>   24

         Section 3.4 SOLICITATION. No form of general solicitation or general
advertising was used by Intermediate Holdings or, to the best of its knowledge,
any other Person acting on behalf of Intermediate Holdings, in connection with
the offer and sale of the Asset Bridge Notes. Neither Intermediate Holdings nor,
to the best of its knowledge, any Person acting on behalf of Intermediate
Holdings has, either directly or indirectly, sold or offered for sale to any
Person any of the Asset Bridge Notes or any other similar security of
Intermediate Holdings except as contemplated by this Agreement, and Intermediate
Holdings represents that neither Intermediate Holdings nor any person acting on
its behalf other than the Purchasers and its Affiliates will sell or offer for
sale to any Person any such security to, or solicit any offers to buy any such
security from, or otherwise approach or negotiate in respect thereof with, any
Person or Persons so as thereby to bring the issuance or sale of any of the
Asset Bridge Notes within the provisions of Section 5 of the Securities Act.

         Section 3.5 NON-FUNGIBILITY. When the Asset Bridge Notes are issued and
delivered pursuant to this Agreement, the Asset Bridge Notes will not be of the
same class (within the meaning of Rule 144A under the Securities Act) as
securities which are (i) listed on a national securities exchange registered
under Section 6 of the Exchange Act or (ii) quoted in a U.S.
automated inter-dealer quotation system.

                                   ARTICLE IV

                  REPRESENTATIONS AND WARRANTIES OF PURCHASERS

         Section 4.1 PURCHASE FOR INVESTMENT; AUTHORITY; BINDING AGREEMENT. Each
of the Purchasers represents and warrants, severally and not jointly, as to
itself only, to Holdings and Intermediate Holdings that:

                  (a) such Purchaser is an Accredited Investor within the
         meaning of Rule 501(a) under the Securities Act and the Asset Bridge
         Notes to be acquired by it pursuant to this Agreement are being
         acquired for its own account without a view toward distribution and the
         Purchaser will not offer, sell, transfer, pledge, hypothecate or
         otherwise dispose of the Asset Bridge Notes unless pursuant to a
         transaction either registered under, or exempt from registration under,
         the Securities Act;

                  (b) the execution, delivery and performance of this Agreement
         and the purchase of the Asset Bridge Notes pursuant hereto are within
         such Purchaser's corporate powers and have been duly and validly
         authorized by all requisite corporate action;

                  (c) this Agreement has been duly executed and delivered by
         such Purchaser;

                                      -19-

<PAGE>   25

                  (d) this Agreement constitutes a valid and binding agreement
         of such Purchaser enforceable in accordance with its terms;

                  (e) such Purchaser has such knowledge and experience in
         financial and business matters so as to be capable of evaluating the
         merits and risks of its investment in the Asset Bridge Notes and such
         Purchaser is capable of bearing the economic risks of such investment;
         and

                  (f) such Purchaser has had the opportunity to ask questions of
         and receive answers from representatives of Holdings concerning
         Holdings and its Subsidiaries and the terms and conditions of this
         Agreement and the Asset Bridge Notes, and has been granted access to
         all books, records and documents of Holdings and its Subsidiaries as it
         has requested.

                                    ARTICLE V

                        CONDITIONS PRECEDENT TO PURCHASE

         Section 5.1 CONDITIONS TO PURCHASERS' OBLIGATION AT TAKEDOWN. The
obligation of the Purchasers (which is several and not joint) to purchase the
Asset Bridge Notes to be issued and sold by Intermediate Holdings on the
Issuance Date is subject to the satisfaction of the following conditions
contemporaneously with such purchase:

                  (a) RESOLUTIONS, ETC. The Purchasers shall have received from
         each Obligor, as applicable, (i) a copy of a good standing certificate,
         dated a date reasonably close to the Issuance Date, for each such
         Person and (ii) a certificate, dated the Issuance Date, duly executed
         and delivered by such Person's Secretary or Assistant Secretary,
         managing member or general partner, as applicable, as to

                           (i) resolutions of each such Person's Board of
                  Directors (or other managing body, in the case of other than a
                  corporation) then in full force and effect authorizing, to the
                  extent relevant, all aspects of the Transaction applicable to
                  such Person and the execution, delivery and performance of
                  each Financing Document to be executed by such Person and the
                  transactions contemplated hereby and thereby;

                           (ii) the incumbency and signatures of those of its
                  officers, managing member or general partner, as applicable,
                  authorized to act with respect to each Financing Document to
                  be executed by such Person; and

                                      -20-

<PAGE>   26

                           (iii) the full force and validity of each Organic
                  Document of such Person and copies thereof;

         upon which certificates each Secured Party may conclusively rely until
         it shall have received a further certificate of the Secretary,
         Assistant Secretary, managing member or general partner, as applicable,
         of any such Person canceling or amending the prior certificate of such
         Person.

                  (b) TRANSACTION CONSUMMATED. (i) The Asset Transfer shall have
                  been consummated on terms and conditions reasonably
                  satisfactory to the Purchasers.

                           (ii) The Acquisition shall have been consummated (or
                  shall be consummated contemporaneously with the application by
                  the Company of the proceeds of the Asset Bridge Notes that
                  have been contributed to it by Intermediate Holdings) and in
                  connection therewith, the Company shall have acquired 100% of
                  the issued and outstanding stock of RailTex pursuant to the
                  Merger Agreement for a merger consideration comprised of (i)
                  an aggregate cash purchase price of no more than $139,000,000
                  and (ii) the Equity Issuance (as defined in the Incorporated
                  Agreement) which shall have been consummated on terms
                  (including documentation in respect thereof in form and
                  substance) satisfactory in all respects to the Purchasers.

                           (iii) In connection with the Acquisition, the Rail
                  America Refinancing and the RailTex Refinancing shall have
                  been consummated (or shall be consummated contemporaneously
                  with the application by the Company of the proceeds of the
                  Asset Bridge Notes that have been contributed to it by
                  Intermediate Holdings) on terms and conditions satisfactory in
                  all respects to the Purchasers and except for capital leases
                  and senior secured indebtedness totaling $17,900,000 and
                  convertible subordinated indebtedness of $24,600,000, Holdings
                  and its Subsidiaries shall have no indebtedness for borrowed
                  money other than that incurred in connection with the
                  Transaction.

                           (iv) The Company shall have received proceeds of not
                  less than $330,000,000 of Term Loans under the Credit
                  Agreement and the Revolving Loans shall be available
                  thereunder (but undrawn) on the Issuance Date.

                           (v) The Subordinated Bridge Note Issuance shall have
                  been consummated on terms (including documentation in respect
                  thereof in form and substance) satisfactory in all respects to
                  the Purchasers and resulted in gross cash proceeds of at least
                  $95,000,000.

                                      -21-

<PAGE>   27

                           (vi) RailTex shall have received net cash proceeds
                  from the exercise of RailTex stock options of at least
                  $11,100,000 (subject to adjustment due to cashless exercise of
                  such options and termination of such options not exercised).

                           (vii) The Company shall have at least $10,300,000
                  cash on hand immediately prior to the consummation of the
                  Transaction.

                           (viii) RailTex shall have received net cash proceeds
                  from the sale of RailTex Brazil of at least $9,000,000.

                           (ix) The fees and expenses paid or to be paid in
                  connection with the Transaction shall not exceed $36,000,000.

                  (c) TRANSACTION DOCUMENTS. The Purchasers shall have received
         copies of fully executed versions of the Transaction Documents
         (including the Material Acquisition Documents and the Loan Documents),
         certified to be true and complete copies thereof by an Authorized
         Officer of Holdings and Intermediate Holdings. Each Transaction
         Document (including the Merger Agreement) shall be in full force and
         effect and shall not have been modified or waived in any material
         respect, nor shall there have been any forbearance to exercise any
         material rights with respect to any of the terms or provisions relating
         to the conditions to the consummation of the Acquisition set forth in
         the Merger Agreement unless otherwise agreed to by the Purchasers. The
         covenants and the other terms and conditions contained in the Credit
         Agreement shall be reasonably satisfactory to the Purchasers in all
         respects.

                  (d) ISSUANCE DATE CERTIFICATE. The Purchasers shall have
         received the Issuance Date Certificate, dated the Issuance Date and
         duly executed and delivered by an Authorized Officer, of each of
         Holdings and Intermediate Holdings, in which certificate each of
         Holdings and Intermediate Holdings shall agree and acknowledge that the
         statements made therein shall be deemed to be true and correct
         representations and warranties of each of Holdings and Intermediate
         Holdings as of such date, and, at the time each such certificate is
         delivered, such statements shall in fact be true and correct. All
         documents and agreements required to be appended to the Issuance Date
         Certificate shall be in form and substance reasonably satisfactory to
         the Purchasers.

                  (e) DELIVERY OF ASSET BRIDGE NOTES. The Purchasers shall have
         received the Asset Bridge Notes to be issued on the Issuance Date, duly
         executed by Intermediate Holdings in the denominations and registered
         in the names specified in or pursuant to SECTION 2.2.

                  (f) PAYMENT OF OUTSTANDING INDEBTEDNESS, ETC. All Indebtedness
         identified in ITEM 7.2.2(B) of the Disclosure Schedule (Indebtedness to
         Be Paid) to the Incorporated Agreement, together with all interest, all
         prepayment premiums and other amounts due

                                      -22-

<PAGE>   28

         and payable with respect thereto, shall have been paid in full in part
         from the proceeds received by Intermediate Holdings in consideration
         for the Asset Bridge Notes and the proceeds of the Credit Extensions
         (as defined in the Credit Agreement) and the Subordinated Bridge Note
         Issuance received by the Company and the commitments in respect of such
         Indebtedness shall have been terminated, and all Liens securing payment
         of any such Indebtedness have been released.

                  (g) FEES, EXPENSES, ETC. The Purchasers shall have received
         for their respective accounts all fees, costs and expenses (other than
         amounts to be netted against the purchase price of the Asset Bridge
         Notes pursuant to SECTION 2.2(B)) due and payable pursuant to SECTIONS
         2.3, 9.8 and 11.4.

                  (h) FINANCIAL INFORMATION, MATERIAL ADVERSE CHANGE. (i) The
         Purchasers shall have received

                                    (A) a consolidating PRO FORMA income
                           statement of Holdings and its Subsidiaries for each
                           of the twelve month periods ended December 31, 1998,
                           September 30, 1999 and December 31, 1999 and a
                           consolidated balance sheet of Holdings and its
                           Subsidiaries, as of the most recent date practicable
                           near to the Issuance Date (but no earlier than the
                           close of the Fiscal Quarter ending immediately prior
                           to the Issuance Date) certified by the treasurer,
                           chief financial or accounting Authorized Officer of
                           Holdings, in each case, giving effect to the
                           consummation of the Transaction and all the
                           transactions contemplated by this agreement and
                           reflecting estimated transaction related accounting
                           adjustments, prepared by the Company in accordance
                           with Regulation S-X; and

                                    (B) projected financial statements
                           (including balance sheets and statements of income,
                           stockholders' equity and cash flows) of Holdings and
                           its Subsidiaries for the eight-year period following
                           the Issuance Date (the "PROJECTIONS") satisfactory in
                           form and substance to the Purchasers.

                           (ii) Since December 31, 1998, there shall not have
                  been any material adverse change in the business, assets,
                  condition (financial or otherwise), operations, performance,
                  properties, Projections or prospects of Holdings, Intermediate
                  Holdings and the Designated Restricted Subsidiaries, taken as
                  a whole.

                  (i) OPINIONS OF COUNSEL. The Purchasers shall have received
         opinions, dated the Issuance Date and addressed to the Purchasers, from

                                      -23-

<PAGE>   29

                           (i) Greenberg Traurig, P.A., counsel to the Obligors,
                  in form and substance satisfactory to the Purchasers;

                           (ii) Shutts & Bowen, counsel to the Obligors, in form
                  and substance satisfactory to the Purchasers; and

                           (iii) local counsel to the Guarantors in the
                  jurisdictions agreed upon by the Purchasers and Intermediate
                  Holdings, each in form and substance, and from counsel,
                  satisfactory to the Purchasers.

                  (j) SOLVENCY CERTIFICATE. The Purchasers shall have received a
         certificate duly executed and delivered by the treasurer, chief
         financial or accounting Authorized Officer of each of Holdings and
         Intermediate Holdings, dated the date of the Issuance Date, in the form
         of EXHIBIT G attached hereto.

                  (k) INSURANCE. The Purchasers shall have received certified
         copies of the insurance policies (or binders in respect thereof), from
         one or more insurance companies reasonably satisfactory to the
         Purchasers, evidencing coverage required to be maintained pursuant to
         each Loan Document.

                  (l) LITIGATION. There shall exist no pending or threatened
         action, suit, investigation, litigation or proceeding in any court or
         before any arbitrator or governmental instrumentality which (x)
         purports to affect the consummation of the Transaction or the legality
         or validity of this Agreement, any Asset Bridge Note, any other
         Financing Document or any Material Acquisition Document or (y) could
         reasonably be expected to have a Material Adverse Effect.

                  (m) MINIMUM EBITDA. The Company's EBITDA for the consecutive
         twelve month period ended September 30, 1999 shall be at least
         $93,900,000, including (i) EBITDA as reported of $62,800,000, (ii)
         transaction related accounting adjustments, prepared by the Company
         which are in accordance with Regulation S-X for Form S-1 Registration
         Statements of no less than $26,700,000 and (iii) other pro forma cost
         savings of no less than $4,400,000 which are reasonably satisfactory in
         form and substance to the Purchasers.

                  (n) CORPORATE, TAX AND CAPITAL STRUCTURE. The tax structure
         (including Organic Documents), the Tax-Sharing Agreement, the
         shareholders agreements and the management of Holdings, Intermediate
         Holdings and their respective Subsidiaries both before and after the
         Transaction shall be reasonably satisfactory to the Purchasers in all
         respects. The corporate and capital structure of Holdings, Intermediate
         Holdings and such Subsidiaries shall be as set forth in ANNEX I hereto.

                                      -24-

<PAGE>   30

                  (o) APPROVALS. All governmental, shareholder and third party
         consents (including Surface Transportation Board clearance) and
         approvals necessary or desirable in connection with the consummation of
         the Transaction, and the related financings and other transactions
         contemplated hereby shall have been duly obtained and all applicable
         waiting periods shall have expired, without any action being taken by
         any competent authority that could restrain, prevent or impose any
         materially adverse conditions on the Transaction, and no such law or
         regulation shall be applicable which in the judgment of the Purchasers
         could have any such effect.

                  (p) ENVIRONMENTAL ASSESSMENT. The Purchasers shall have
         received copies of an environmental assessment of the properties of the
         Company and its Subsidiaries, to be completed by Pilko & Associates,
         Inc. The results of such environmental assessment shall be reasonably
         satisfactory in form, scope and substance to the Purchasers.

                  (q) APPRAISAL OF ASSETS. The Purchasers shall have received
         copies of appraisals of the assets of the Company and its Subsidiaries
         performed by Mainline Management Services, Inc. and Norman W. Seip &
         Associates. The results of such appraisals shall be satisfactory in
         form, scope and substance to the Purchasers.

                  (r) FOREIGN ACQUISITIONS AND TAKEOVERS ACT APPROVAL. If
         Holdings, Intermediate Holdings or the Company is required to obtain an
         approval or an indication of non-objection under the Foreign
         Acquisitions and Takeovers Act 1975 of Australia or any real estate
         policy guidelines of the Commonwealth Government of Australia and/or an
         approval or certification of the Treasurer of Australia under the
         Foreign Acquisitions and Takeovers Regulations of Australia to enter
         into the Merger Agreement, or to give effect to the Transaction,
         Intermediate Holdings shall have provided to the Purchasers, and the
         Purchasers shall have received, copies of the application to obtain the
         approval or certification of the Treasurer of Australia or the
         statement of non-objection and copies of the relevant approval,
         certification or statement.

                  (s) REPRESENTATIONS AND WARRANTIES. The representations and
         warranties of Intermediate Holdings contained in the Financing
         Documents shall be true and correct in all material respects on and as
         of the Issuance Date as if made on and as of such date (unless stated
         to relate solely to an earlier date, in which case, such
         representations and warranties shall be true and correct in all
         material respects as of such earlier date) and Intermediate Holdings
         shall have performed and complied with all covenants and agreements
         required by the Financing Documents to be performed by it or complied
         with by it at or prior to the Issuance Date, and the Purchasers shall
         have received a certificate from an authorized officer of Intermediate
         Holdings to such effect.

                  (t) NO DEFAULT. There shall not exist any Default.

                                      -25-

<PAGE>   31

                  (u) WARRANTS. Pursuant to the terms of the Escrow Agreement,
         Holdings shall have executed and delivered to the Escrow Agent fully
         authenticated Warrants, unregistered or registered in blank,
         representing the right to purchase shares of Common Stock of Holdings
         at any time in an amount equal to 2.0% of the fully-diluted Capital
         Stock of Holdings, calculated after giving effect to the transactions
         occurring on or prior to the Issuance Date (the "WARRANT SHARES"),
         exercisable for a period of seven years at a price equal to the closing
         price per share of Common Stock of Holdings traded on the NASDAQ
         National Market at the close of trading on the Issuance Date.

                  (v) FILING AGENT, ETC. All Uniform Commercial Code financing
         statements and other similar financing statements in other
         jursidictions and Uniform Commercial Code (Form UCC-3) termination
         statements and other similar termination statements in other
         jurisdictions required pursuant to the Financing Documents
         (collectively, the "FILING STATEMENTS") shall have been delivered to CT
         Corporation System or another similar filing service company acceptable
         to the Collateral Agent (the "FILING AGENT") and other arrangements
         acceptable to the Collateral Agent for filing in other jurisdictions
         shall have been made. The Filing Agent shall have acknowledged in a
         writing satisfactory to the Collateral Agent and its counsel (i) the
         Filing Agent's receipt of all Filing Statements, (ii) that the Filing
         Statements have either been submitted for filing in the appropriate
         filing offices or will be submitted for filing in the appropriate
         offices within ten days following the Issuance Date and (iii) that the
         Filing Agent will notify the Collateral Agent and its counsel of the
         results of such submissions within 30 days following the Issuance Date.

                  (w) ASSET BRIDGE PLEDGE AND SECURITY AGREEMENT. The Collateral
         Agent shall have received executed counterparts of the Asset Bridge
         Pledge and Security Agreement, dated as of the Issuance Date, duly
         executed and delivered by an Authorized Officer of Intermediate
         Holdings and each Guarantor, together with

                           (i) the certificates evidencing all of the issued and
                  outstanding shares of Capital Stock pledged pursuant to the
                  Asset Bridge Pledge and Security Agreement, which certificates
                  shall in each case be accompanied by undated powers of
                  transfer duly executed in blank, or, if any such shares of
                  Capital Stock of any Domestic Subsidiary of such Obligor
                  pledged pursuant to the Asset Bridge Pledge and Security
                  Agreement are uncertificated securities or are held through a
                  securities intermediary, the Collateral Agent shall have
                  obtained "control" (as defined in the UCC) over such shares of
                  Capital Stock and such other instruments and documents as the
                  Collateral Agent shall deem necessary or, in the reasonable
                  opinion of the Collateral Agent, desirable under applicable
                  law to perfect the security interest of the Collateral Agent
                  in such shares of Capital Stock;

                           (ii) all promissory notes evidencing intercompany
                  Indebtedness payable to any Guarantor duly endorsed to the
                  order of the Collateral Agent;

                                      -26-

<PAGE>   32

                           (iii) executed UCC financing statements (Form UCC-1)
                  naming such Obligor as the debtor and the Collateral Agent as
                  the secured party, or other similar instruments or documents,
                  suitable for filing under the UCC of all jurisdictions as may
                  be necessary or, in the opinion of the Collateral Agent,
                  desirable to perfect the security interest of the Collateral
                  Agent in the interests of such Obligor in the collateral
                  pledged pursuant to the Asset Bridge Pledge and Security
                  Agreement (PROVIDED that perfection of security interests in
                  motor vehicles shall not be required);

                           (iv) executed copies of proper UCC termination
                  statements (Form UCC-3), if any, necessary to release all
                  Liens and other rights of any Person (other than Liens
                  permitted under Section 7.2.3 of the Incorporated Agreement as
                  incorporated by reference in CLAUSE (C) of SECTION 6.2)

                                    (A) in any collateral described in the
                           applicable Asset Bridge Pledge and Security Agreement
                           previously granted by any Person, and

                                    (B) securing any of the Indebtedness to be
                           repaid in connection with the Transaction on or prior
                           to the Issuance Date,

                  together with such other UCC termination statements (Form
                  UCC-3) as the Collateral Agent may reasonably request from
                  such Obligor; and

                           (v) certified copies of UCC Requests for Information
                  or Copies (Form UCC-11), or a similar search report certified
                  by a party reasonably acceptable to the Collateral Agent,
                  dated a date reasonably near to the Issuance Date, listing all
                  effective financing statements which name such Obligor (under
                  its present names and any previous names) as the debtor and
                  which are filed in the jurisdictions in which filings are to
                  be made pursuant to CLAUSE (III) above, together with copies
                  of such financing statements.

                  (x) FOREIGN PLEDGE AGREEMENTS. All Foreign Pledge Agreements
         shall have been duly executed and delivered by all parties thereto and
         shall remain in full force and effect, and all Liens granted to the
         Collateral Agent thereunder shall be duly perfected to provide the
         Collateral Agent with a security interest in and Lien on all collateral
         granted thereunder free and clear of other Liens, except to the extent
         consented to by the Collateral Agent.

                  (y) MORTGAGE. The Collateral Agent shall have received
         counterparts of each Mortgage, dated as of the date hereof, duly
         executed by each applicable Guarantor, together with

                                      -27-

<PAGE>   33

                           (i) evidence of the completion (or reasonably
                  satisfactory arrangements for the completion) of all
                  recordings and filings of each Mortgage as may be necessary
                  or, in the reasonable opinion of the Collateral Agent,
                  desirable effectively to create a valid, perfected first
                  priority Lien against the properties purported to be covered
                  thereby;

                           (ii) updated mortgage lien searches with respect to
                  certain properties described in CLAUSE (I) or as requested by
                  the Collateral Agent; and

                           (iii) such other approvals, opinions, or documents as
                  the Collateral Agent may request each in form and substance
                  satisfactory to the Collateral Agent.

                  (z) MISCELLANEOUS. The Purchasers shall have received such
         additional certificates, legal and other opinions and documentation as
         they shall reasonably request.

         Section 5.2 CONDITIONS TO THE INTERMEDIATE HOLDINGS OBLIGATIONS. The
obligations of Intermediate Holdings to issue and sell the Asset Bridge Notes
pursuant to this Agreement to the Purchasers are subject to the satisfaction, at
or prior to the time of purchase of the Asset Bridge Notes, of the following
conditions:

                  (a) The representations and warranties of the Purchasers
         contained herein shall be true and correct in all material respects on
         and as of the Issuance Date as if made on and as of such date.

                  (b) The issuance and sale of the Asset Bridge Notes by
         Intermediate Holdings shall not be prohibited by any applicable law,
         court order or governmental regulation.

                  (c) The Transaction shall have been consummated (or shall be
         consummated contemporaneously with the application by Intermediate
         Holdings of the proceeds from the issuance and sale of the Asset Bridge
         Notes hereunder).

                  (d) Contemporaneously therewith, Intermediate Holdings shall
         have received the purchase price for the Asset Bridge Notes to be
         purchased by the Purchasers in accordance with SECTION 2.2(B).

                                      -28-

<PAGE>   34

                                   ARTICLE VI

                                    COVENANTS

          Intermediate Holdings agrees that, from and after the Issuance Date
and so long as any Asset Bridge Notes remain outstanding and unpaid, and for the
benefit of the Purchasers and the Holders:

         Section 6.1 INCORPORATION OF AFFIRMATIVE COVENANTS FROM THE
INCORPORATED AGREEMENT. Each of Holdings and Intermediate Holdings shall, and
(where and to the extent contemplated by the terms of the Incorporated
Agreement) shall cause each of their Subsidiaries to, comply with the
affirmative covenants set forth in the following Sections of the Incorporated
Agreement:

                  (a) 7.1.1 (Financial Information, Reports, Notices, etc.)
         (excluding clause (l) thereof);

                  (b) 7.1.2 (Maintenance of Existence; Compliance with Laws,
         etc.);

                  (c) 7.1.3 (Maintenance of Properties);

                  (d) 7.1.4 (Insurance);

                  (e) 7.1.5 (Books and Records) (excluding the last sentence
         thereof);

                  (f) 7.1.6 (Environmental Law Covenant); and

                  (g) 7.1.10 (Use of Proceeds of Holdings Disposition of Capital
         Stock or Assets).

         Section 6.2 INCORPORATION OF NEGATIVE COVENANTS FROM THE INCORPORATED
AGREEMENT. None of Holdings or Intermediate Holdings shall, nor shall any such
Obligor permit any of its Restricted Subsidiaries to, violate any of the
negative covenants set forth in the following Sections of the Incorporated
Agreement:

                  (a) 7.2.1 (Business Activities);

                  (b) 7.2.2 (Indebtedness) (excluding clauses (a), (b), (c),
         (e), (g), (h), (i), (j), (l) and (m) thereof (in each case, to the
         extent any such clause is applicable to any Designated Restricted
         Subsidiary)); PROVIDED that for purposes hereof (i) the aggregate
         principal amount of "Obligations" permitted by clause (a) thereof shall
         not exceed (A) $380,000,000 minus (B) the aggregate amount of the
         permanent payments or prepayments of Term Loans and permanent
         reductions of the Revolving Loan Commitment Amount and (ii) in the case
         of clause (f) thereof, notwithstanding anything to the contrary
         therein, (A) the Designated Restricted Subsidiaries may not
         (individually or in the aggregate) incur Indebtedness from any
         Restricted Subsidiary in an aggregate outstanding principal amount
         exceeding $2,000,000 other than from any other Designated

                                      -29-

<PAGE>   35

         Restricted Subsidiary and no Designated Restricted Subsidiary that is a
         Foreign Subsidiary may incur Indebtedness from any other Restricted
         Subsidiary other than any other Designated Restricted Subsidiary that
         is also a Foreign Subsidiary and (B) no Restricted Subsidiary that is
         not a Designated Restricted Subsidiary may incur any Indebtedness from
         any Designated Restricted Subsidiary;

                  (c) 7.2.3 (Liens) (excluding clauses (a), (b), (c), (d) and
         (e) thereof (in each case, to the extent any such clause is applicable
         to any Designated Restricted Subsidiary));

                  (d) 7.2.5 (Investments) (excluding clauses (e)(iii), (g), (h)
         and (i) thereof (in each case, to the extent any such clause is
         applicable to any Designated Restricted Subsidiary)); PROVIDED that for
         purposes hereof in the case of clause (e)(ii) thereof, notwithstanding
         anything to the contrary therein, no Designated Restricted Subsidiary
         may make any Investment in any other Restricted Subsidiary other than
         in any other Designated Restricted Subsidiary and no Designated
         Restricted Subsidiary that is not a Foreign Subsidiary may make any
         Investment in any other Restricted Subsidiary other than any other
         Designated Restricted Subsidiary that is also not a Foreign Subsidiary;

                  (e) 7.2.6 (Restricted Payments, etc.); PROVIDED that for
         purposes hereof in the case of clause (a) thereof, notwithstanding
         anything to the contrary therein, no Designated Restricted Subsidiary
         may make a Restricted Payment to any Subsidiary of Holdings other than
         Intermediate Holdings or any other Designated Restricted Subsidiary;

                  (f) 7.2.8 (No Prepayment of Certain Debt) (excluding clause
         (c) thereof (as such clause relates to the Obligations evidenced
         hereby));

                  (g) 7.2.9 (Capital Stock of Subsidiaries) (excluding clauses
         (x), (y) and (z) thereof (in each case, to the extent any such clause
         is applicable to any Designated Restricted Subsidiary));

                  (h) 7.2.10 (Consolidation, Merger, etc.) (excluding clauses
         (a) and (b) thereof (in each case, to the extent any such clause is
         applicable to any Designated Restricted Subsidiary));

                  (i) 7.2.11 (Permitted Dispositions) (excluding clauses (d) and
         (f) thereof (in each case, to the extent any such clause is applicable
         to any Designated Restricted Subsidiary));

                  (j) 7.2.12 (Modification of Certain Agreements) (except as
         such Section may apply to any of the "Intermediate Asset Bridge
         Documents" or the "Intermediate Asset Bridge Note")

                                      -30-

<PAGE>   36

                  (k) 7.2.13 (Transactions with Affiliates); PROVIDED, HOWEVER,
         that for purposes hereof, such Section shall be incorporated by
         reference herein as two separate subclauses: (i) for purposes of this
         SUBCLAUSE (I), the terms "Restricted Subsidiary", "Restricted
         Subsidiaries" and "Domestic Restricted Subsidiaries" as used in such
         Section shall be interpreted so that no such term includes any
         Designated Restricted Subsidiary and (ii) for purposes of this
         SUBCLAUSE (II), (A) the words "Restricted Subsidiary" and "Restricted
         Subsidiaries" as used in such Section shall be replaced with the words
         "Designated Restricted Subsidiary" and "Designated Restricted
         Subsidiaries", (B) the words "or Kalyn/Siebert" and the words "or
         unless such arrangement, transaction, or contract is (i) an Investment
         made in accordance with Section 7.2.5, (ii) is between the Company and
         Domestic Restricted Subsidiaries, between Canadian Restricted
         Subsidiaries, between Australian Restricted Subsidiaries, or between
         Domestic Restricted Subsidiaries or (iii) pursuant to the Ferronor Loan
         Documents" shall be deleted therefrom;

                  (l) 7.2.14 (Restrictive Agreements, etc.); PROVIDED that (i)
         the words "Restricted Subsidiary" and "Restricted Subsidiaries" as used
         in such Section shall be replaced with the words "Designated Restricted
         Subsidiary" and "Designated Restricted Subsidiaries" and (ii) the lead
         in to such Section shall be amended by inserting the words "(other than
         the Loan Documents)" immediately following the words "enter into any
         agreement" and immediately preceding the word "prohibiting" in such
         lead in; and

                  (m) 7.2.15 (Sale and Leaseback); PROVIDED, HOWEVER, that no
         Designated Restricted Subsidiary shall directly or indirectly enter
         into any Sale Leasebacks.

         Section 6.3 INVESTMENT COMPANY ACT. None of Holdings or Intermediate
Holdings will be or become an open-end investment trust, unit investment trust
or face-amount certificate company that is or is required to be registered under
the Investment Company Act of 1940, as amended.

         Section 6.4 USE OF PROCEEDS. The proceeds from the issuance and sale of
the Asset Bridge Notes by Intermediate Holdings pursuant to this Agreement shall
be used to fund the Transaction and to pay related fees and expenses.

         Section 6.5 COPIES OF DOCUMENTS AND NOTICES. Holdings and Intermediate
Holdings will, and will cause each of its Designated Restricted Subsidiaries to,
deliver to each Holder any and all certifications, notices and communications
that Holdings, Intermediate Holdings or such Designated Restricted Subsidiary
delivers to the Collateral Agent.

         Section 6.6 SYNDICATION EFFORTS. (a) Intermediate Holdings acknowledges
that the Purchasers may transfer (such transfers, collectively, the
"SYNDICATION") all or part of the Asset Bridge Notes issued to the Purchasers on
the Issuance Date to one or more other Holders.

                                      -31-

<PAGE>   37

Holdings and Intermediate Holdings shall, and shall cause the Guarantors to,
actively assist Rail America Funding, Inc. in completing the syndication in a
manner satisfactory to it. Without limiting the foregoing, upon the request of
Rail America Funding, Inc., Holdings and Intermediate Holdings shall, and shall
cause the Guarantors to (i) use commercially reasonable efforts to ensure that
the syndication efforts benefit materially from the Purchasers existing lending
and other financing relationships, (ii) provide direct contact between senior
management and advisors of Holdings, Intermediate Holdings and the Guarantors
and the proposed Holders, (iii) assist in the preparation of a confidential
information memorandum and other marketing materials to be used in connection
with the syndication and (iv) host, with Rail America Funding, Inc. or on one or
more of their respective Affiliates, of one or more meetings of prospective
Holders.

         (b) Rail America Funding, Inc. or one of its Affiliates shall manage
all aspects of any syndication, in consultation with Intermediate Holdings
including decisions as to the selection of potential Holders to be approached
and when they will be approached, when their commitments will be accepted, which
potential Holders will participate, and the principal amount of the Asset Bridge
Notes to be transferred to each such Holder. In order to assist Rail America
Funding, Inc. or such Affiliate in any syndication efforts, Holdings and
Intermediate Holdings shall, and shall cause each of the Guarantors to, promptly
prepare and provide to Rail America Funding, Inc., the Purchasers or such
Affiliate all information with respect to Holdings, Intermediate Holdings, the
Transaction and the other transactions contemplated hereby and thereby,
including all financial information and projections, as Rail America Funding,
Inc. or such Affiliate may reasonably request in connection with such
syndication.

                                   ARTICLE VII

                                EVENTS OF DEFAULT

         Section 7.1 EVENTS OF DEFAULT DEFINED; ACCELERATION OF MATURITY; WAIVER
OF DEFAULT. In case one or more of the following (each, an "Event of Default"),
whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body, shall have occurred and be continuing:

                  (a) default in the payment of all or any part of the principal
         or premium, if any, on any of the Asset Bridge Notes as and when the
         same shall become due and payable either at maturity, upon any
         redemption, by declaration or otherwise; or

                  (b) default in the payment of any installment of interest upon
         any of the Asset Bridge Notes or any fees payable under this Agreement
         or any amount payable under

                                      -32-

<PAGE>   38

         SECTION 2.7 as and when the same shall become due and payable, and
         continuance of such default for a period of five days; or

                  (c) failure on the part of Holdings or Intermediate Holdings
         to observe or perform any of the covenants contained in SECTIONS
         6.1(G), 6.2, 6.3, or 6.4 of this Agreement; or

                  (d) failure on the part of Holdings or Intermediate Holdings
         to observe or perform any of the other covenants or agreements
         contained in the Financing Documents, if such failure shall continue
         for a period of 30 days after the date on which written notice thereof
         shall have been given to Intermediate Holdings by a Holder; or

                  (e) there shall be a default in respect of any Indebtedness of
         Intermediate Holdings or any of its Designated Restricted Subsidiaries
         in an aggregate principal amount in excess of $5,500,000 whether such
         Indebtedness now exists or shall hereafter be created (excluding the
         Asset Bridge Notes) if such default results in acceleration of the
         maturity of such Indebtedness; or Intermediate Holdings or any of its
         Designated Restricted Subsidiaries shall fail to pay at maturity any
         such Indebtedness whether such Indebtedness now exists or shall
         hereafter be created; or

                  (f) any representation, warranty, certification or statement
         made or deemed made by Holdings, Intermediate Holdings or any of its
         Designated Restricted Subsidiaries in any Financing Document or which
         is contained in any certificate, document or financial or other
         statement furnished at any time under or in connection with any
         Financing Document shall prove to have been untrue in any material
         respect when made or deemed made; or

                  (g) a Change in Control has occurred; or

                  (h) any of the Financing Documents to which Holdings,
         Intermediate Holdings or a Guarantor is a party shall for any reason
         fail to constitute the valid and binding agreement of Holdings,
         Intermediate Holdings or such Guarantor as the case may be; or

                  (i) any Event of Default set forth in Sections 8.1.6
         (Judgments) (PROVIDED that the amount "$5,000,000" therein shall be
         replaced with the amount "$5,500,000") or 8.1.9 (Bankruptcy,
         Insolvency, etc.) of the Incorporated Agreement, in each case to the
         extent that each such Section relates to Intermediate Holdings and the
         Designated Restricted Subsidiaries,

then, and in each and every such case (other than an Event of Default described
in clauses (b), (c) and (d) of Section 8.1.9 of the Incorporated Agreement as
incorporated by reference in CLAUSE (I) above with respect to any Obligor),
unless the principal of all the Asset Bridge Notes shall have already become due
and payable, the Majority Holders (or, if at such time the Purchasers no

                                      -33-

<PAGE>   39

longer hold at least 50% of the aggregate outstanding principal amount of the
Asset Bridge Notes, Holders of at least 33 1/3% of the aggregate outstanding
principal amount of the Asset Bridge Notes), by notice in writing to
Intermediate Holdings and the Administrative Agent, may declare the entire
outstanding principal amount of the Asset Bridge Notes together with accrued and
unpaid interest thereon to be immediately due and payable; PROVIDED that for so
long as the Loan Documents are in effect, such acceleration shall not become
effective until the earlier of (i) five Business Days after the notice of
acceleration is given to the Administrative Agent or (ii) the date on which the
Indebtedness under the Loan Documents is accelerated. If an Event of Default
described in clauses (b), (c) or (d) of Section 8.1.9 of the Incorporated
Agreement that have been incorporated by reference in CLAUSE (I) above with
respect to any Obligor occurs, the outstanding principal of and accrued and
unpaid interest on the Asset Bridge Notes will be immediately due and payable
without any notice, declaration or other act on the part of the Holders. The
Majority Holders may annul any notice of acceleration or past Defaults (other
than monetary Defaults not yet cured) by delivering a notice of annulment to
Intermediate Holdings and the Administrative Agent. If an Event of Default shall
occur and be continuing, the Purchasers shall have the right to appoint one (1)
representative to serve as a member of the Board of Directors of Holdings;
PROVIDED, HOWEVER, that such right shall terminate if the Purchasers no longer
hold at least 50% of the aggregate outstanding principal amount of the Asset
Bridge Notes.

                                  ARTICLE VIII

                             LIMITATION ON TRANSFERS

         Section 8.1 RESTRICTIONS ON TRANSFER. From and after the Issuance Date,
none of the Asset Bridge Notes shall be transferable except upon the conditions
specified in SECTIONS 8.2 and 8.3, which conditions are intended to ensure
compliance with the provisions of the Securities Act in respect of the Transfer
of any of such Asset Bridge Notes or any interest therein and SECTION 8.4. The
Purchasers will cause any proposed transferee of any Asset Bridge Notes (or any
interest therein) held by it to agree to take and hold such Asset Bridge Notes
(or any interest therein) subject to the provisions and upon the conditions
specified in this SECTION 8.1 and in SECTIONS 8.2 and 8.3.

         Section 8.2 RESTRICTIVE LEGENDS. (a) Each Asset Bridge Note issued to
the Purchasers or to a subsequent transferee shall (unless otherwise permitted
by the provisions of SECTION 8.2(B) or SECTION 8.3) include a legend in
substantially the following form:

                  THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
                  OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT
                  BE OFFERED OR SOLD, UNLESS IT HAS BEEN REGISTERED UNDER SUCH
                  ACT AND APPLICABLE STATE SECURITIES LAWS

                                      -34-

<PAGE>   40

                  OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE AND THEN
                  ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH
                  IN THE SECURITIES PURCHASE AGREEMENT, DATED AS OF FEBRUARY 4,
                  2000, A COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER OF THIS
                  SECURITY AT ITS PRINCIPAL EXECUTIVE OFFICE.

         (b) Any Holders of Asset Bridge Notes registered pursuant to the
Securities Act and qualified under applicable state securities laws may exchange
such Asset Bridge Notes on transfer for new securities that shall not bear the
legend set forth in CLAUSE (A) of this SECTION 8.2.

         Section 8.3 NOTICE OF PROPOSED TRANSFERS. (a) Ten days prior to any
proposed Transfer (other than Transfers of Asset Bridge Notes (i) registered
under the Securities Act, (ii) to an Affiliate of Rail America Funding, Inc. or
a general partnership in which Rail America Funding, Inc., or any of its
Affiliates is one of the general partners or (iii) to be made in reliance on
Rule 144A under the Securities Act) of any Asset Bridge Notes, the holder
thereof shall give written notice to Intermediate Holdings of such holder's
intention to effect such Transfer, setting forth the manner and circumstances of
the proposed Transfer, and which notice shall be accompanied by (A) an opinion
of the proposed transferee's counsel (reasonably satisfactory to Intermediate
Holdings) addressed to Intermediate Holdings to the effect that the proposed
Transfer of such Asset Bridge Notes may be effected without registration under
the Securities Act, (B) such representation letters in form and substance
reasonably satisfactory to Intermediate Holdings to ensure compliance with the
provisions of the Securities Act and (C) such letters in form and substance
reasonably satisfactory to Intermediate Holdings from each such transferee
stating such transferee's agreement to be bound by the terms of this Agreement.
Such proposed Transfer may be effected only if Intermediate Holdings shall have
received such notice of transfer, opinion of counsel, representation letters and
other letters referred to in the immediately preceding sentence, whereupon the
holder of such Asset Bridge Notes shall be entitled to Transfer such Asset
Bridge Notes in accordance with the terms of the notice delivered by the holder
to Intermediate Holdings. Each Asset Bridge Note transferred as above provided
shall bear the legend set forth in SECTION 8.2(A) except that such Asset Bridge
Note shall not bear such legend if the opinion of counsel referred to above is
to the further effect that neither such legend nor the restrictions on Transfer
in SECTIONS 8.1 through 8.3 are required in order to ensure compliance with the
provisions of the Securities Act.

         (b) Ten days prior to any proposed Transfer of any Asset Bridge Notes
to be made in reliance on Rule 144A under the Securities Act ("RULE 144A"), the
holder thereof shall give written notice to Intermediate Holdings of such
holder's intention to effect such Transfer, setting forth the manner and
circumstances of the proposed Transfer and certifying that such Transfer will be
made (i) in full compliance with Rule 144A and (ii) to a transferee that (A)
such holder reasonably believes to be a "qualified institutional buyer" within
the meaning of Rule 144A and

                                      -35-

<PAGE>   41

(B) is aware that such Transfer will be made in reliance on Rule 144A. Such
proposed Transfer may be effected only if Intermediate Holdings shall have
received such notice of transfer, whereupon the holder of such Asset Bridge
Notes shall be entitled to Transfer such Asset Bridge Notes in accordance with
the terms of the notice delivered by the holder to Intermediate Holdings. Each
Asset Bridge Note transferred as above provided shall bear the legend set forth
in SECTION 8.2(A).

         Section 8.4 RIGHT TO SELL, TRANSFER OR ASSIGN ASSET BRIDGE NOTES.
Subject to SECTIONS 8.1 through 8.3, the Purchasers shall have the absolute and
unconditional right to Transfer Asset Bridge Notes in compliance with applicable
law to any third party at any time.

         Section 8.5 REPLACEMENT ASSET BRIDGE NOTES. Within five Business Days
after any Transfer made pursuant to SECTION 8.3(A) or 8.3(B), upon surrender to
Intermediate Holdings of the Asset Bridge Notes subject to such Transfer,
Intermediate Holdings, at its own expense, shall execute and deliver to the
Purchaser in exchange for the Asset Bridge Note or Asset Bridge Notes that are
subject of such Transfer a new Asset Bridge Note or Asset Bridge Notes
registered in the name of the transferee of such Asset Bridge Note or Asset
Bridge Notes (or in such name or names as shall be designated by such
transferee) in an amount equal to the aggregate principal amount of the Asset
Bridge Note or Asset Bridge Notes so transferred, and if the transferring Holder
has not transferred all of the Asset Bridge Notes held by such transferor a new
Asset Bridge Note or Asset Bridge Notes registered in the name of the
transferring holder (or such name or names as shall be designated by such
transferring holder) equal to the aggregate principal amount of the Asset Bridge
Notes surrendered in connection with such Transfer less the aggregate principal
amount of the Asset Bridge Note or Asset Bridge Notes that are the subject of
such Transfer, which shall be dated the effective date of such Transfer and
shall otherwise be in substantially the form of EXHIBIT B attached hereto.
Holdings shall not be required to pay any documentary stamp tax which may be
payable in respect of any Transfer of any Asset Bridge Note from a Holder to any
transferee; PROVIDED that Holdings shall take all such actions as may be
reasonably requested by such Holder or such transferee to minimize or eliminate
any such tax.

                                   ARTICLE IX

                                COLLATERAL AGENT

         Section 9.1 ACTIONS. Each Holder by accepting its Asset Bridge Note and
an interest in the Collateral (as defined in the Security Documents) securing
such Asset Bridge Note hereby appoints Rail America Holdings Funding, Inc. as
its Collateral Agent under and for purposes of each Security Document. Each
Holder authorizes the Collateral Agent to act on behalf of such Holder under
each Security Document and, in the absence of other written instructions from
the Majority Holders received from time to time by the Collateral Agent (with
respect to which the Collateral Agent agrees that it will comply in such
capacity, except as otherwise provided in this

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<PAGE>   42

Section or as otherwise advised by counsel in order to avoid contravention of
applicable law), to exercise such powers thereunder as are specifically
delegated to or required of the Collateral Agent by the terms hereof and
thereof, together with such powers as may be reasonably incidental thereto. Each
Holder hereby indemnifies (which indemnity shall survive any termination of this
Agreement) the Collateral Agent, PRO RATA according to the percentage of the
outstanding aggregate principal amount of such Holder's Asset Bridge Note in
respect of the outstanding aggregate principal amount of all Asset Bridge Notes,
from and against any and all liabilities, obligations, losses, damages, claims,
costs or expenses of any kind or nature whatsoever which may at any time be
imposed on, incurred by, or asserted against, the Collateral Agent in any way
relating to or arising out of any Security Document, including reasonable
attorneys' fees, and as to which the Collateral Agent is not reimbursed by
Holdings or Intermediate Holdings; PROVIDED, HOWEVER, that no Holder shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, claims, costs or expenses which are determined by a court of competent
jurisdiction in a final proceeding to have resulted from the Collateral Agent's
gross negligence or wilful misconduct. The Collateral Agent shall not be
required to take any action under any Security Document, or to prosecute or
defend any suit in respect of any Security Document, unless it is indemnified
hereunder to its satisfaction. If any indemnity in favor of the Collateral Agent
shall be or become, in the Collateral Agent's determination, inadequate, the
Collateral Agent may call for additional indemnification from the Holders and
cease to do the acts indemnified against hereunder until such additional
indemnity is given.

         Section 9.2 EXCULPATION. Neither the Collateral Agent nor any of its
directors, officers, employees or agents shall be liable to any Holder for any
action taken or omitted to be taken by it under any Security Document, or in
connection herewith or therewith, except for its own wilful misconduct or gross
negligence, nor responsible for any recitals or warranties herein or therein,
nor for the effectiveness, enforceability, validity or due execution of any
Security Document, nor for the creation, perfection or priority of any Liens
purported to be created by any of the Security Documents, or the validity,
genuineness, enforceability, existence, value or sufficiency of any collateral
security, nor to make any inquiry respecting the performance by any Obligor of
its Obligations. Any such inquiry which may be made by the Collateral Agent
shall not obligate it to make any further inquiry or to take any action. The
Collateral Agent shall be entitled to rely upon advice of counsel concerning
legal matters and upon any notice, consent, certificate, statement or writing
which the Collateral Agent believes to be genuine and to have been presented by
a proper Person.

         Section 9.3 SUCCESSOR. The Collateral Agent may resign as such at any
time upon at least 30 days' prior notice to Holdings and Intermediate Holdings
and all Holders. If the Collateral Agent at any time shall resign, the Majority
Holders may appoint another Holder as a successor Collateral Agent which shall
thereupon become the Collateral Agent under the Security Documents. If no
successor Collateral Agent shall have been so appointed by the Majority Holders,
and shall have accepted such appointment, within 30 days after the retiring
Collateral

                                      -37-

<PAGE>   43

Agent's giving notice of resignation, then the retiring Collateral Agent may, on
behalf of the Holders, appoint a successor Collateral Agent, which shall be one
of the Holders or a commercial banking institution organized under the laws of
the U.S. (or any State thereof) or a U.S. branch or agency of a commercial
banking institution, and having a combined capital and surplus of at least
$250,000,000; PROVIDED, HOWEVER, that if, such retiring Collateral Agent is
unable to find a commercial banking institution which is willing to accept such
appointment and which meets the qualifications set forth above in this SECTION
9.3, the retiring Collateral Agent's resignation shall nevertheless thereupon
become effective and the Holders shall assume and perform all of the duties of
the Collateral Agent under the Security Documents until such time, if any, as
the Majority Holders appoint a successor as provided for above. Upon the
acceptance of any appointment as Collateral Agent hereunder by a successor
Collateral Agent, such successor Collateral Agent shall be entitled to receive
from the retiring Collateral Agent such documents of transfer and assignment as
such successor Collateral Agent may reasonably request, and shall thereupon
succeed to and become vested with all rights, powers, privileges and duties of
the retiring Collateral Agent, and the retiring Collateral Agent shall be
discharged from its duties and obligations under the Security Documents. After
any retiring Collateral Agent's resignation hereunder as the Collateral Agent,
the provisions of this ARTICLE shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Collateral Agent under the
Security Documents.

         Section 9.4 ASSET BRIDGE NOTES HELD BY THE COLLATERAL AGENT. The
Collateral Agent shall have the same rights and powers with respect to the Asset
Bridge Notes held by it or any of its Affiliates as any other Holder and may
exercise the same as if it were not the Collateral Agent. The Collateral Agent
and each of its Affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with Holdings, Intermediate Holdings or
any Subsidiary or Affiliate of Holdings as if the Collateral Agent were not the
Collateral Agent under the Security Documents

         Section 9.5 CREDIT DECISIONS. Each Holder acknowledges that it has,
independently of the Collateral Agent and each other Holder, and based on such
Holder's review of the financial information of Holdings, Intermediate Holdings
and the Restricted Subsidiaries, the Financing Documents (the terms and
provisions of which being satisfactory to such Holder) and such other documents,
information and investigations as such Holder has deemed appropriate, made its
own credit decision to hold its Asset Bridge Note. Each Holder also acknowledges
that it will, independently of the Collateral Agent and each other Holder, and
based on such other documents, information and investigations as it shall deem
appropriate at any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges
available to it under the Financing Documents.

         Section 9.6 RELIANCE BY THE COLLATERAL AGENT. The Collateral Agent
shall be entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telecopy, telegram or cable) believed by it
to be genuine and correct and to have been signed or

                                      -38-

<PAGE>   44

sent by or on behalf of the proper Person, and upon advice and statements of
legal counsel, independent accountants and other experts selected by the
Collateral Agent. As to any matters not expressly provided for by the Security
Documents, the Collateral Agent shall in all cases be fully protected in acting,
or in refraining from acting, hereunder or thereunder in accordance with
instructions given by the Majority Holders or all of the Holders as is required
in such circumstance, and such instructions of such Holders and any action taken
or failure to act pursuant thereto shall be binding on all Secured Parties.

         Section 9.7 DEFAULTS. The Collateral Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default unless the Collateral Agent
has received a written notice from a Holder, Holdings or Intermediate Holdings
specifying such Default and stating that such notice is a "Notice of Default".
In the event that the Collateral Agent receives such a notice of the occurrence
of a Default, the Collateral Agent shall give prompt notice thereof to the
Holders. The Collateral Agent shall (subject to SECTION 11.2) take such action
with respect to such Default as shall be directed by the Majority Holders;
PROVIDED, that unless and until the Collateral Agent shall have received such
directions, the Collateral Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default as it
shall deem advisable in the best interest of the Holders except to the extent
that this Agreement expressly requires that such action be taken, or not be
taken, only with the consent or upon the authorization of the Majority Holders
or all Holders, as applicable.

         Section 9.8 PAYMENT OF COSTS AND EXPENSES. Holdings and Intermediate
Holdings jointly and severally agree to pay on demand all expenses of the
Collateral Agent (including the reasonable fees and out-of-pocket expenses of
Mayer, Brown & Platt, counsel to the Collateral Agent and of local counsel, if
any, who may be retained by or on behalf of the Collateral Agent) in connection
with

                  (i) the negotiation, preparation, execution and delivery of
         each Security Document, including schedules and exhibits, and any
         amendments, waivers, consents, supplements or other modifications to
         any Security Document as may from time to time hereafter be required,
         whether or not the transactions contemplated hereby are consummated;
         and

                  (ii) the filing or recording of any Security Document
         (including the Filing Statements) and all amendments, supplements,
         amendment and restatements and other modifications to any thereof,
         searches made following the Issuance Date in jurisdictions where Filing
         Statements (or other documents evidencing Liens in favor of the Secured
         Parties) have been recorded and any and all other documents or
         instruments of further assurance required to be filed or recorded by
         the terms of any Security Document; and

                  (iii) the preparation and review of the form of any document
         or instrument relevant to any Security Document.

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<PAGE>   45

Holdings and Intermediate Holdings further jointly and severally agree to pay,
and to save each Secured Party harmless from all liability for, any stamp or
other taxes which may be payable in connection with the execution or delivery of
each Security Document. Holdings and Intermediate Holdings also jointly and
severally agree to reimburse each Secured Party upon demand for all reasonable
out-of-pocket expenses (including reasonable attorneys' fees and legal expenses
of counsel to each Secured Party) incurred by such Secured Party in connection
with the enforcement of the Security Documents.

         Section 9.9 INDEMNIFICATION. In consideration of the execution and
delivery of this Agreement by each Purchaser and the continued maintainenance by
the Holders of the Indebtedness evidenced by the Asset Bridge Notes, Holdings
and Intermediate Holdings, jointly and severally, hereby indemnify, exonerate
and hold each Secured Party and each of their respective officers, directors,
employees and agents (collectively, the "INDEMNIFIED SECURED PARTIES") free and
harmless from and against any and all actions, causes of action, suits, losses,
costs, liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Secured Party is a party to the
action for which indemnification hereunder is sought), including reasonable
attorneys' fees and disbursements, whether incurred in connection with actions
between or among the parties hereto or the parties hereto and third parties
(collectively, the "INDEMNIFIED LIABILITIES"), incurred by the Indemnified
Secured Parties or any of them as a result of, or arising out of, or relating to

                  (i) the entering into and performance of any Security Document
         by any of the Indemnified Secured Parties (including any action brought
         by or on behalf of Holdings or Intermediate Holdings in connection with
         the administration thereof, provided that any such action is resolved
         in favor of such Indemnified Secured Party);

                  (ii) any investigation, litigation or proceeding related to
         any environmental cleanup, audit, compliance or other matter relating
         to the protection of the environment on, under or arising from any
         operations or property owned, leased or operated upon (including right
         of way easements) of any Designated Restricted Subsidiary, Intermediate
         Holdings or Holdings or the Release by any Designated Restricted
         Subsidiary, Intermediate Holdings or Holdings of any Hazardous
         Material;

                  (iii) the presence on or under, or the escape, seepage,
         leakage, spillage, discharge, emission, discharging or releases from,
         any operations of any Designated Restricted Subsidiary, Intermediate
         Holdings or Holdings on any real property owned, leased, or operated
         upon (including right of way easements) by any Obligor or any
         Subsidiary thereof of any Hazardous Material (including any losses,
         liabilities, damages, injuries, costs, expenses or claims asserted or
         arising under any Environmental Law), regardless of whether caused by,
         or within the control of, such Obligor or Subsidiary; or

                                      -40-

<PAGE>   46

                  (iv) each Secured Party's Environmental Liability (the
         indemnification herein shall survive repayment of the Obligations and
         any transfer of the property of any Designated Restricted Subsidiary,
         Intermediate Holdings or Holdings by foreclosure or by a deed in lieu
         of foreclosure for any Secured Party's Environmental Liability,
         regardless of whether caused by, or within the control of, such
         Designated Restricted Subsidiary, Intermediate Holdings or Holdings);

except for Indemnified Liabilities arising for the account of a particular
Indemnified Secured Party by reason of the relevant Indemnified Secured Party's
gross negligence or wilful misconduct. Each Designated Restricted Subsidiary,
Intermediate Holdings and Holdings and its successors and assigns hereby waive,
release and agree not to make any claim or bring any cost recovery action
against, any Indemnified Secured Party under CERCLA or any state equivalent, or
any similar law now existing or hereafter enacted. It is expressly understood
and agreed that to the extent that any Indemnified Secured Party is strictly
liable under any Environmental Laws, the obligation of each Designated
Restricted Subsidiary, Intermediate Holdings and Holdings to such Indemnified
Secured Party under this indemnity shall likewise be without regard to fault on
the part of any Designated Restricted Subsidiary, Intermediate Holdings or
Holdings with respect to the violation or condition which results in liability
of an Indemnified Secured Party. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, each Designated Restricted
Subsidiary, Intermediate Holdings and Holdings agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.

                                    ARTICLE X

                                   GUARANTEES

         Section 10.1 GUARANTEES. (a) Subject to SECTION 10.2, each of the
Guarantors jointly and severally unconditionally guarantees to each Holder,
irrespective of the validity and enforceability of the other provisions of this
Agreement, or of the Financing Documents, the Asset Bridge Notes and the
obligations of Intermediate Holdings hereunder or thereunder, that: (i) the
principal of, premium, if any, and interest, if any, on the Asset Bridge Notes
shall be promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and (to the extent permitted by law) interest on the
overdue principal of, premium, if any, and interest, if any, on the Asset Bridge
Notes (including all reasonable costs of collection and enforcement thereof and
interest thereon which would be owing by Intermediate Holdings but for the
effect of any bankruptcy law, if any), and all other obligations of Intermediate
Holdings to the Holders under this Agreement, the Financing Documents and the
Asset Bridge Notes shall be promptly paid in full when due or performed, all in
accordance with the terms of this Agreement, the Financing Documents and the
Asset Bridge Notes; and (ii) in case of any extension of time of payment or
renewal of any Asset Bridge Notes, or the issuance of any of such other
obligations,

                                      -41-

<PAGE>   47

that the same shall be promptly paid in full when due or performed in accordance
with their terms whether at stated maturity, by acceleration, redemption or
otherwise. Failing payment when due of any amount so guaranteed for whatever
reason, the Guarantors shall be jointly and severally and unconditionally
obligated to pay the same immediately whether or not such failure to pay has
become an Event of Default which could cause acceleration pursuant to SECTION
7.1. Each Guarantor agrees that this is a continuing guarantee of payment and
not merely a guarantee of collection.

         (b) The Guarantors hereby agree that, subject to SECTION 10.2, their
obligations hereunder shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected by:

                  (i) any extension, renewal, settlement, compromise, waiver or
         release in respect of any obligation of Intermediate Holdings under
         this Agreement, the Financing Documents or the Asset Bridge Notes, by
         operation of law or otherwise;

                  (ii) any modification or amendment of or supplement to any
         other provisions of this Agreement, or to the Financing Documents or
         the Asset Bridge Notes with the consent of the Guarantors, which
         consent shall not be unreasonably withheld;

                  (iii) any release, non-perfection or invalidity of any direct
         or indirect security for, or any other guarantee of, any of the
         obligations guaranteed by this ARTICLE X;

                  (iv) any change in the corporate existence, structure or
         ownership of Intermediate Holdings, or any insolvency, bankruptcy,
         reorganization or other similar proceeding affecting Intermediate
         Holdings or its assets or any resulting release or discharge of any
         obligation of Intermediate Holdings contained in this Agreement, the
         Financing Documents or the Asset Bridge Notes;

                  (v) the existence of any claim, set-off or other rights which
         any Guarantor may have at any time against Intermediate Holdings or any
         other Person, whether in connection herewith or with an unrelated
         transactions, PROVIDED that nothing herein shall prevent the assertion
         of any such claim by separate suit or compulsory counterclaim;

                  (vi) any invalidity or unenforceability relating to or against
         Intermediate Holdings for any reason of this Agreement, the Financing
         Documents or the Asset Bridge Notes, or any provision of applicable law
         or regulation purporting to prohibit the payment by Intermediate
         Holdings of the principal of or interest on the Asset Bridge Notes or
         any other amount payable by it under this Agreement, the Financing
         Documents or the Asset Bridge Notes;

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<PAGE>   48

                  (vii) any other act or omission to act or delay of any kind by
         Intermediate Holdings or any other Person or any other circumstance
         whatsoever which might, but for the provisions of this paragraph,
         constitute a legal or equitable discharge of any Guarantor's
         obligations hereunder; or

                  (viii) any issuance of Additional Asset Bridge Notes pursuant
         to SECTION 2.5(D).

         (c) Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of Intermediate Holdings, any right to require a proceeding first against
Intermediate Holdings, protest, notice and all demands whatsoever and covenants
that, subject to this Article X, this Guarantee shall not be discharged except
by complete performance of all obligations on and with respect to the Asset
Bridge Notes, this Agreement and the Financing Documents.

         (d) If any Holder is required by any court or otherwise to return to
Intermediate Holdings or any of the Guarantors, or any custodian, trustee,
liquidator or other similar official acting in relation to either Intermediate
Holdings or any of the Guarantors, any amount paid to such Holder, this
Guarantee, to the extent of the amount so returned, shall be reinstated in full
force and effect.

         (e) Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in SECTION 7.1 notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby and (y) in the event of any declaration of
acceleration of such obligations as provided in SECTION 7.1, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Guarantee. The Guarantors shall have the
right to seek contribution from any non-paying Guarantor so long as the exercise
of such right does not impair the rights of the Holders under this Guarantee.

         Section 10.2 LIMITATION ON GUARANTOR LIABILITY. Each Guarantor, and by
its acceptance of Asset Bridge Notes, each Holder, hereby confirms that it is
the intention of all such parties that this Guarantee not constitute a
fraudulent transfer or conveyance for purposes of any bankruptcy law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar federal or state law to the extent applicable to this Guarantee. To
effectuate the foregoing intention, the Holders and the Guarantors hereby
irrevocably agree that the obligations of each Guarantor under this Guarantee
shall be limited to the maximum amount as will, after giving effect to such
maximum amount and all other contingent and fixed liabilities of such Guarantor
that are relevant under such laws, and after giving effect to any collections
from, rights to receive contribution from or payments made by or on behalf of
any other Guarantor in respect

                                      -43-

<PAGE>   49

of the obligations of such other Guarantor under this Guarantee, result in the
obligations of such Guarantor under the Guarantee not constituting a fraudulent
transfer or conveyance.

         Section 10.3 CONSOLIDATION OR MERGER OF GUARANTORS. Without limiting
the provisions of CLAUSE (H) of SECTION 6.2, no Guarantor may consolidate with
or merge with or into (whether or not such Guarantor is the surviving Person)
another corporation, Person or entity whether or not affiliated with such
Guarantor unless such corporation, person or entity is a Guarantor.

                                   ARTICLE XI

                                  MISCELLANEOUS

         Section 11.1 NOTICES. All notices, demands and other communications to
any party hereunder shall be in writing (including facsimile or similar writing)
and shall be given to such party at its address set forth on the signature pages
hereof, or such other address as such party may hereinafter specify for the
purpose. Each such notice, demand or other communication shall be effective (i)
if given by facsimile, when such facsimile is transmitted to the facsimile
number specified on the signature page hereof, or (ii) if given by overnight
courier, addressed as aforesaid or by any other means, when delivered at the
address specified in this Section.

         Section 11.2 NO WAIVERS; AMENDMENTS. (a) No failure or delay on the
part of any party in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. The remedies provided for
herein are cumulative and are not exclusive of any remedies that may be
available to any party at law or in equity or otherwise.

         (b) Any provision of this Agreement may be amended, supplemented or
waived if, but only if, such amendment, supplement or waiver is in writing and
is signed by Intermediate Holdings and the Majority Holders; PROVIDED, that
without the consent of each Holder of any Asset Bridge Note affected thereby, an
amendment, supplement or waiver may not (a) reduce the aggregate principal
amount of Asset Bridge Notes whose Holders must consent to an amendment,
supplement or waiver, (b) reduce the rate or extend the time for payment of
interest on any Asset Bridge Note, (c) reduce the principal amount of or extend
the stated maturity of any Asset Bridge Note or (d) make any Asset Bridge Note
payable in money or property other than as stated in the Asset Bridge Notes. In
determining whether the Holders of the requisite principal amount of Asset
Bridge Notes have concurred in any direction, consent, or waiver as provided in
this Agreement or in the Asset Bridge Notes, Asset Bridge Notes which are owned
by Intermediate Holdings or any other obligor on or guarantor of the Asset
Bridge Notes, or, except for Rail America Funding, Inc. and its Affiliates by
any Person controlling, controlled by, or under common control with any of the
foregoing, shall be disregarded and deemed not to be

                                      -44-

<PAGE>   50

outstanding for the purpose of any such determination; and PROVIDED, FURTHER,
that no such amendment, supplement or waiver which affects (x) the rights of the
Purchasers and its Affiliates otherwise than solely in their capacities as
Holders of Asset Bridge Notes shall be effective with respect to them without
their prior written consent or (y) the interests, rights or obligations of the
Collateral Agent (in its capacity as the Collateral Agent) shall be effective
without the Collateral Agent's prior written consent.

         Section 11.3 INDEMNIFICATION. (a) Intermediate Holdings (the
"INDEMNIFYING PARTY") agrees to indemnify and hold harmless each Purchaser, its
respective Affiliates, and each Person, if any, who controls such Purchaser, or
any of its Affiliates, within the meaning of the Securities Act or the Exchange
Act (a "CONTROLLING PERSON"), and the respective partners, agents, employees,
officers and directors of such Purchaser, its Affiliates and any such
Controlling Person (each an "INDEMNIFIED PARTY," and collectively, the
"INDEMNIFIED PARTIES"), from and against any and all losses, claims, damages,
liabilities and expenses (including, without limitation and as incurred,
reasonable costs of investigating, preparing or defending any such claim or
action, whether or not such Indemnified Party is a party thereto) arising out
of, or in connection with any activities contemplated by this Agreement or any
other services rendered in connection herewith, including, but not limited to,
losses, claims, damages, liabilities or expenses arising out of or based upon
any untrue statement or any alleged untrue statement of a material fact or any
omission or any alleged omission to state a material fact in any of the
disclosure or offering or confidential information documents (the "DISCLOSURE
DOCUMENTS") pertaining to any of the transactions or proposed transactions
contemplated herein, including any eventual refinancing or resale of the Asset
Bridge Notes, PROVIDED, that the Indemnifying Party will not be responsible for
any claims, liabilities, losses, damages or expenses that are determined by
final judgment of a court of competent jurisdiction to result from such
Indemnified Party's gross negligence, willful misconduct or bad faith. The
Indemnifying Party also agrees that (i) no Purchaser shall have liability
(except for breach of provisions of this Agreement) for claims, liabilities,
damages, losses or expenses, including legal fees, incurred by the Indemnifying
Party in connection with this Agreement, unless they are determined by final
judgment of a court of competent jurisdiction to result from such Purchaser's
gross negligence, willful misconduct or bad faith and (ii) no Purchaser shall in
any event have any liability to Intermediate Holdings on any theory of liability
for special or punitive damages (as opposed to direct or actual damages) arising
out of, or in connection with, or as a result of this Agreement.

         (b) If any action shall be brought against an Indemnified Party with
respect to which indemnity may be sought against the Indemnifying Party under
this Agreement, such Indemnified Party shall promptly notify the Indemnifying
Party in writing and the Indemnifying Party shall, if requested by such
Indemnified Party or if the Indemnifying Party desires to do so, assume the
defense thereof, including the employment of counsel reasonably satisfactory to
such Indemnified Party and payment of all reasonable fees and expenses. The
failure to so notify the Indemnifying Party shall not affect any obligations the
Indemnifying Party may have to such Indemnified Party under this Agreement or
otherwise unless the Indemnifying Party is materially

                                      -45-

<PAGE>   51

adversely affected by such failure. Such Indemnified Party shall have the right
to employ separate counsel in such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party, unless: (i) the Indemnifying Party has failed to assume
the defense and employ counsel reasonably satisfactory to such Indemnified Party
or (ii) the named parties to any such action (including any impleaded parties)
include such Indemnified Party and the Indemnifying Party, and such Indemnified
Party shall have been advised by counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the Indemnifying Party, in which case, if such Indemnified Party
notifies the Indemnifying Party in writing that it elects to employ separate
counsel at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense of such action or proceeding on behalf
of such Indemnified Party, PROVIDED, HOWEVER, that the Indemnifying Party shall
not, in connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be responsible
hereunder for the reasonable fees and expenses of more than one such firm of
separate counsel, in addition to any local counsel, which counsel shall be
designated by the Purchasers. The Indemnifying Party shall not be liable for any
settlement of any such action effected without the written consent of the
Indemnifying Party (which shall not be unreasonably withheld) and the
Indemnifying Party agrees to indemnify and hold harmless each Indemnified Party
from and against any loss or liability by reasons of settlement of any action
effected with the consent of the Indemnifying Party. In addition, the
Indemnifying Party will not, without the prior written consent of the
Indemnified Party, settle or compromise or consent to the entry of any judgment
in or otherwise seek to terminate any pending or threatened action, claim, suit
or proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not any Indemnified Party is a party thereto) unless such
settlement, compromise, consent or termination includes an express unconditional
release of the Purchasers and the other Indemnified Parties, reasonably
satisfactory in form and substance to the Purchasers, from all liability arising
out of such action, claim, suit or proceeding.

         (c) If for any reason the foregoing indemnity is unavailable (otherwise
than pursuant to the express terms of such indemnity) to an Indemnified Party or
insufficient to hold an Indemnified Party harmless, then in lieu of indemnifying
such Indemnified Party, the Indemnifying Party shall contribute to the amount
paid or payable by such Indemnified Party as a result of such claims,
liabilities, losses, damages, or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Indemnifying Party
on the one hand and by a Purchaser on the other from the transactions
contemplated by this Agreement or (ii) if the allocation provided by clause (i)
above is not permitted under applicable law, in such proportion as is
appropriate to reflect not only the relative benefits received by the
Indemnifying Party on the one hand and such Purchaser on the other, but also the
relative fault of the Indemnifying Party and such Purchaser as well as any other
relevant equitable considerations. Notwithstanding the provisions of this
SECTION 11.3, the aggregate contribution of all Indemnified Parties shall not
exceed the amount of fees actually received by the Purchasers

                                      -46-

<PAGE>   52

pursuant to this Agreement. It is hereby further agreed that the relative
benefits to the Indemnifying Party on the one hand and a Purchaser on the other
with respect to the transactions contemplated hereby shall be deemed to be in
the same proportion as (i) the aggregate principal amount of Asset Bridge Notes
issued by Intermediate Holdings bears to (ii) the fees actually received by such
Purchaser pursuant to this Agreement. The relative fault of the Indemnifying
Party on the one hand and a Purchaser on the other with respect to the
transactions contemplated hereby shall be determined by reference to, among
other things, whether any untrue or alleged untrue statement of material fact or
the omission or alleged omission to state a material fact related to information
supplied by the Indemnifying Party or by such Purchaser and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.

         (d) The indemnification, contribution and expense reimbursement
obligations set forth in this SECTION 11.3 (i) shall be in addition to any
liability the Indemnifying Party may have to any Indemnified Party at common law
or otherwise, (ii) shall survive the termination of this Agreement and the
payment in full of the Asset Bridge Notes and (iii) shall remain operative and
in full force and effect regardless of any investigation made by or on behalf of
the Purchasers or any other Indemnified Party.

         Section 11.4 EXPENSES. Intermediate Holdings agrees to pay all
reasonable out-of-pocket costs, expenses and other payments of the Purchasers in
connection with the purchase and sale of the Asset Bridge Notes as contemplated
by this Agreement including without limitation (i) reasonable fees and
disbursements of special counsel and any local counsel for the Purchasers
incurred in connection with the preparation of this Agreement, (ii) all
reasonable out-of-pocket expenses of the Purchasers, including reasonable fees
and disbursements of counsel, in connection with any waiver or consent hereunder
or any amendment hereof or any Default or alleged Default hereunder and (iii) if
an Event of Default occurs, all reasonable out-of-pocket expenses incurred by
the Purchasers and each Holder of Asset Bridge Notes, including reasonable fees
and disbursements of a single counsel (which counsel shall be selected by the
Purchasers if the Purchaser is a Holder of Asset Bridge Notes when such Event of
Default occurs), in connection with such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings resulting therefrom.

         Section 11.5 PAYMENT. Intermediate Holdings agrees that, so long as a
Purchaser shall own any Asset Bridge Notes purchased by it from Intermediate
Holdings hereunder, Intermediate Holdings will make payments to such Purchaser
of all amounts due thereon by wire transfer by 1:00 P.M. (New York City time) on
the date of payment to such account as is specified beneath such Purchaser's
name on the signature page hereof or to such other account or in such other
similar manner as such Purchaser may designate to Intermediate Holdings in
writing.

                                      -47-

<PAGE>   53

         Section 11.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of Holdings, Intermediate Holdings, the
Purchasers, the Guarantors and their respective successors and assigns; PROVIDED
that none of Holdings, Intermediate Holdings or any Guarantor may assign or
otherwise transfer its rights or obligations under this Agreement to any other
Person without the prior written consent of the Majority Holders. All provisions
hereunder purporting to give rights to the Purchasers and its Affiliates, or to
Holders are for the express benefit of such Persons.

         Section 11.7 BROKERS. Intermediate Holdings represents and warrants
that, except for Donaldson, Lufkin & Jenrette Securities Corporation and
Barclays Capital, it has not employed any broker, finder, financial advisor or
investment banker who might be entitled to any brokerage, finder's or other fee
or commission in connection with the Transaction or the sale of the Asset Bridge
Notes.

         Section 11.8 NEW YORK LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY
FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

         Section 11.9 SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.

         Section 11.10 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original with the same effect
as if the signatures thereto and hereto were upon the same instrument.

         Section 11.11 CONFIDENTIALITY. (a) Intermediate Holdings acknowledges
and agrees that: (i) the Purchasers and certain of their respective Affiliates
are a full service financial firm and as

                                      -48-

<PAGE>   54

such may from time to time effect transactions for their own account or the
account of customers, and hold positions in loans or options on loans of Persons
that may be the subject of this arrangement; (ii) the Purchasers may employ the
services of Donaldson, Lufkin & Jenrette Securities Corporation and its
Affiliates in providing certain services hereunder and may, subject to CLAUSE
(B) below, exchange with such entities information concerning Holdings,
Intermediate Holdings and the Guarantors, and such Affiliates will be entitled
to the benefits afforded the Purchasers hereunder, and (iii) the Purchasers or
their respective Affiliates may be providing financing or other services to
Persons whose interests may conflict with the interest of Holdings, Intermediate
Holdings and the Guarantors.

         (b) The Purchasers and each other Holder agrees to keep confidential
any confidential information; PROVIDED that nothing herein shall prevent the
Purchasers or such other Holder from disclosing any such information (i) to any
Person which receives such information having been made aware of, and which
agrees to maintain, the confidential nature thereof in order to facilitate or
enable the Purchasers or such other Holder to syndicate, sell transfer
(including, without limitation, the transfer of a participation in the Asset
Bridge Notes) or assign any portion of its notes, (ii) to any Holder, (iii) to
its employees, directors, agents, attorneys, accountants and other professional
advisors which receive such information having been made aware of the
confidential nature thereof, (iv) upon the request or demand of any Governmental
Authority having jurisdiction over either Purchaser or such other Holder, (v) in
response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any legal requirement, (vi) which has been
publicly disclosed other than in breach of this Agreement, or (vii) in
connection with the exercise of any remedy hereunder.

         Section 11.12 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder 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 issuance of the Asset
Bridge Notes.

         Section 11.13 CONSTRUCTION. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.

         Section 11.14 INTEGRATION. This Agreement represents the agreement of
the parties hereto with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by Holdings, Intermediate
Holdings or the Purchasers relative to the subject matter hereof not expressly
set forth herein or in the other Financing Documents.

                                      -49-

<PAGE>   55

         Section 11.15 REPLACEMENT ASSET BRIDGE NOTES. If any mutilated Asset
Bridge Note is surrendered to Intermediate Holdings or Intermediate Holdings
receives reasonably satisfactory evidence of the destruction, loss or theft of
any Asset Bridge Note (which evidence shall be, in the case of an institutional
investor, notice from such institutional investor of such ownership and such
destruction, loss or theft), Intermediate Holdings shall, at the expense of the
holder of such Asset Bridge Note, execute and deliver, in lieu thereof, a new
Asset Bridge Note, dated and bearing interest from the date to which interest
shall have been paid on such lost, stolen, destroyed or mutilated Asset Bridge
Note or dated the date of such lost, stolen, destroyed or mutilated Asset Bridge
Note if no interest shall have been paid thereon.

         Section 11.16 HEADINGS. Section headings used herein and in the table
of contents are for convenience only and are not to effect the construction of,
or be taken into consideration in interpreting this Agreement and the other
Financing Documents.

                                      -50-

<PAGE>   56

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers, as of the date first
above written.

                                    PALM BEACH RAIL HOLDING, INC.

                                    By:  /s/ Joseph B. Doherty
                                       ------------------------------------
                                         Name: Joseph B. Doherty
                                         Title: Treasurer

                                    Address for Notices:
                                        5300 Broken Sound Blvd. N.W.
                                        Boca Raton, FL 33487
                                        Telecopier:  (561) 994-3929
                                        Attention:  Joseph B. Doherty

                                    GUARANTORS:
                                    RAILAMERICA, INC.

                                    By:  /s/ Joseph B. Doherty
                                       ------------------------------------
                                         Name: Joseph B. Doherty
                                         Title: Treasurer

                                    Address for Notices:
                                        5300 Broken Sound Blvd. N.W.
                                        Boca Raton, FL 33487
                                        Telecopier:  (561) 994-3929
                                        Attention:  Joseph B. Doherty

                                    KALYN/SIEBERT I, INCORPORATED

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

<PAGE>   57

                                 KS BOCA, INC.

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

                                 KALYN/SIEBERT, L.P.
                                 By Kalyn/Siebert I, Incorporated, its general
                                        partner

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

<PAGE>   58

COMMITMENT:                         PURCHASERS:
-----------                         RAIL AMERICA HOLDINGS FUNDING,
$55,000,000                           INC.

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

                                    Address for Notices:
                                        277 Park Avenue
                                        New York, NY 10172
                                        Telecopier: 212-892-7542
                                        Attention: Joe Adipietro

                                    Wiring Instructions:

                                        ABA#
                                        A/C#
===========                             Attention:
$55,000,000

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