Document:

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                                                                   EXHIBIT 10.52
                                    AGREEMENT

This Agreement is entered into as of this 20th day of June 2001, by and between
W.T. Byler Co., LP, a Texas Limited Partnership (the "Buyer"), William Troy
Byler, Jr., ("Bill Byler") a limited partner of W. T. Byler Co., LP and the
president of its corporate general partner, W. T. Byler Co. - GP, Inc., a Texas
corporation, RailWorks W. T. Byler, L. P., a Texas Limited Partnership (Seller),
RailWorks Corporation ("RWKS"), a Delaware corporation and owner, directly or
indirectly, of all of the outstanding Capital Stock of the partners of Seller,
and William Troy Byler, ("Troy Byler") an individual shareholder of RWKS.

                                    RECITALS

WHEREAS, Seller is willing to sell, and Buyer is willing to buy all the assets
(inclusive of all real and personal property, equipment, rights and good will,
contracts and receivables) of CMC Work and Seller's Civil and Maintenance
Divisions (all three of which are defined below), and assume the debts and
current liabilities associated therewith (hereinafter collectively the
"Business") on the terms and conditions hereinafter set forth.

NOW THEREFORE, in consideration of the mutual promises and covenants contained
herein, the parties agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

1.1 Definitions. As used in this Agreement and in the related Schedules and
Exhibits, the following terms have the meanings assigned to them below in this
Section 1. 1. Capitalized terms used in this Agreement and not defined below in
this Section 1.1 have the meanings assigned to them in the Recitals or elsewhere
in this Agreement, as the case may be.

         "Assumed Liabilities" shall mean only those liabilities set forth in
Section 2.3 of this Agreement.

         "Buyer" shall mean W. T. Byler, Co., LP, a Texas Limited Partnership
acting by and through its general partner, W. T. Byler, Co.- GP, Inc., a Texas
corporation.

         "Buyer's Core Business" shall mean the Business as defined herein.

         "Civil Division" shall mean that part of Seller's business, work and/or
contracts requiring any clearing and grubbing, grading, digging, filling and
backfill, ground stabilization, underground utilities, and asphalt or concrete
paving.

         "Closing" shall mean the consummation of the transaction contemplated
by this Agreement pursuant to Section 2.6 herein in Houston, Texas on June 20,
2001.

         "Closing Date" shall mean June 20, 2001.

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         "CMC Work" shall mean any and all business, contracts and/or
receivables due from, attributable to or in any way connected with Bill
Sjolander and his companies, CMC Industries, Inc., its subsidiaries and
affiliates, CMC Railroad, Inc. and any other company now or hereafter acquired
by Bill Sjolander regardless of whether such work and/or contract are considered
Civil Division, Maintenance Division, Track Construction or Track Maintenance.

         "Effective Date" shall mean May 31, 2001.

         "Maintenance Division" shall mean that part of Seller's business, work
and/or contracts that requires furnishing labor and equipment to maintain and
assist Class I and Short Line railroads with Right of Way maintenance; special
gangs for railroad ties, crossing and switches; and derailment grading and
surface corrections, limited to the nature and extent of the W. T. Byler Co.
maintenance division prior to its acquisition by RailWorks Corporation.

         "Notes Payable (long and/or short) shall mean only those notes listed
on Schedule 2.3(b)(v) for which the total amount due on April 30, 2001 was
$3,045,949.00.

         "Purchased Assets" shall mean all of the assets, business, properties
and rights of Seller pertaining to the Business, including the goodwill
associated therewith, including but not limited to the items listed in
paragraphs (a) through (k) of Section 2.1

         "Seller" shall mean RailWorks W. T. Byler, L. P., a Texas Limited
Partnership, acting by and through its general partner, RailWorks Track Systems,
Inc., a Nevada corporation.

         "Seller's Core Business" shall mean Track Construction and/or Track
Maintenance as defined herein.

         "Solicitation to Bid" shall mean the process by which a party may bid
on any construction or construction preparation, except that it specifically
excludes Transit Bid Solicitation.

         "Track Construction" shall mean that part of Seller's business, work
and/or contracts that are for original, track construction of rail, ties and
ballast, said construction all and only above the subgrade level.

         "Track Maintenance" shall mean that part of Seller's business, work
and/or contracts for the repair and rebuild of existing track, including
replacing rail, ties and ballast, said maintenance all and only above the
subgrade level, except when below subgrade level work is an integral part of the
work or contract.

         "Trade Payables," "Current Liabilities" and/or "accrued Current
Liabilities" shall mean only those liabilities and/or payables incurred on
behalf of or in connection with customary operation of the Business.

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         "Transit Rail Bid Solicitation" shall mean any bid solicitation
involving mass rail transit, and/or commuter rail transit in and/or out of a
city and specifically excludes Class I and/or Short Line Railroad bids as well
as any bids involving mass and/or commuter traffic through means other than
rail.

                  "RWKS" shall mean RailWorks Corporation, a Delaware
corporation, its currently owned subsidiaries and affiliates and any future
parent, subsidiary, division or affiliate.

                                   ARTICLE 2.
                           PURCHASE AND SALE OF ASSETS

2.1 Purchased Assets. On the terms and conditions contained in this Agreement
and subject to the warranties contained herein, at the Closing and on the
Closing Date Seller shall sell, convey, transfer, assign and deliver to Buyer
and Buyer shall purchase and acquire from the Seller all of the assets,
business, properties and rights of Seller exclusively pertaining to the
Business, including the goodwill associated therewith (collectively, the
"Purchased Assets"), in such condition as they exist on the Closing Date, except
as otherwise expressly provided herein. The Purchased Assets shall include:

The real property known as 15203 Lillja Road, Houston, Texas 77060-5299, and all
         buildings and improvements thereon;

All of the property, plant, equipment, fixtures and leasehold improvements
         described in Schedule 2.1b;

Seller's interest in the real property lease for 946 Quintana, San Antonio,
         Texas 78211;

Seller's interest in all personal property leases identified in Schedule 2.1.d;

All of Seller's inventories of supplies, raw materials, parts, finished goods,
         work-in-process, product labels and packaging materials related
         exclusively to the Business and Seller's interest in all orders or
         contracts for the purchase of the same;

The customer contracts identified on Schedule 2.1f and any and all other
         partially or totally executory contracts, agreements and commitments
         (if any), pertaining to the Business, subject in each case to the
         terms, covenants, conditions and provisions of such contracts,
         agreements, and commitments;

Any licenses, permits, approvals and qualifications pertaining to the Business;

The tradename "W. T. Byler" and any and all related trademarks (if any);

All accounts or notes receivable owing to Seller and arising out of the
         operation of the Business;

All prepaid expenses and deposits made by Seller for the benefit of the
         Business; and any excise,

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         sales and use tax credits or receivables related to the Business for
         the period January 1, 2001 to the Effective Date; and

All of Seller's books, records and other documents and information relating to
         the Purchased Assets, including, without limitation, all customer,
         prospect, dealer and distributor lists, sales literature, inventory
         records, purchase orders and invoices, sales orders and sales order log
         books, customer information, commission records, correspondence,
         employee payroll and personnel records, product data, material safety
         data sheets, price lists, product demonstrations, quotes and bids and
         all product catalogs and brochures.

2.2 Excluded Assets. Notwithstanding Paragraph 2.1 hereof, the following assets
(the "Excluded Assets) shall be retained by Seller and shall not be sold,
transferred or assigned to Buyer in connection with the purchase of the
Purchased Assets:

(a)      All cash and income tax refunds (if any) of the Business, and any
         excise, sales and use tax credits or receivables related to the
         Business for the period prior to January 1, 2001;

(b)      All bank accounts in the name of Seller;

(c)      Such licenses, permits or other certificates of authority which, by
         their terms, are nonassignable;

(d)      Seller's Track Construction and Track Maintenance divisions and any and
         all assets and liabilities related thereto including those contracts
         listed on Schedule 2.2(d); and

(e)      All of Seller's rights under this Agreement and in the consideration to
         be received pursuant to this Agreement.

                  Other than as set forth above in Paragraph 2.1 hereof, Seller
shall retain, and Buyer shall not assume, and nothing contained in this
Agreement shall be construed as a transfer to Buyer of, any assets other than
those used in the conduct of the Business.

2.3. Consideration for Purchased Assets

                  (a) Purchase Price. Subject to adjustment as provided in
Paragraph 2.3 below, the price to be paid by Buyer to Seller shall be Thirteen
Million Dollars ($13,000,000) (the "Cash Consideration") and assumed debt in the
amount of Three Million Forty Five Thousand Nine Hundred Forty Nine Dollars
($3,045,949) (the "Assumed Debt")(collectively the "Purchase Price"). At Closing
the Cash Consideration shall be paid by federal funds wire transfer in
immediately available funds to an account specified in writing by Seller.

                  (b) Assumed Liabilities. As additional consideration for the
purchase of the Purchased Assets, Buyer shall assume the following liabilities
(the "Assumed Liabilities"):

                           (i)      Seller's obligations under the real property
                  lease for 946 Quintana, San Antonio, TX 78211;

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                           (ii)     Seller's obligations under the terms of the
                  executory customer contracts listed in Schedule 2.1f, and such
                  other contracts, agreements and commitments as are referenced
                  in Paragraph 2.1f hereof;

                           (iii)    Except as limited by Section 2.7 herein, any
                  and all liability of Seller or RWKS arising out of any surety
                  or bonding obligations related to any of the customer
                  contracts listed on Schedule 2.1f;

                           (iv)     Trade Payables and accrued Current
                  Liabilities of Seller incurred by Seller in connection with
                  the customary operation of the Business as set forth in
                  Schedule 2.3(b)(iv).

                           (v)      Notes Payable (short and long term) of
                  Seller as identified on Schedule 2.3(b)(v).

                           (vi)     Except as limited by section 2.4 below, any
                  claims, demands, causes of action, relating exclusively to the
                  Business where the Seller is a claimant.

2.4 Excluded Liabilities. Notwithstanding section 2.3 hereof, the following
liabilities (the "Excluded Liabilities") shall be retained by Seller and shall
not be transferred, assumed or assigned to or by Buyer in connection with the
purchase of the Purchased Assets.

         (a)      Any income, sales, use or ad valorem tax deficiencies and/ or
                  the penalties and interest associated therewith for any period
                  or any portion thereof prior to the Closing Date.

         (b)      Any employment taxes and any penalties or interest associated
                  therewith for any period or any portion thereof prior to the
                  Closing Date.

         (c)      Any claims, demands, or causes of action of any kind, relating
                  to the Track Construction and Track Maintenance divisions.

         (d)      Any payable, trade or otherwise and whether or not accrued
                  that does not meet the definition of Trade Payable and Current
                  Liability in Article 1 hereof.

         (f)      Any employee claim whatsoever, including but not limited to
                  wages, unemployment benefits, severance and disability,
                  ("Employee Claims"), for all Seller's employees identified on
                  Schedule 5.1(a) regardless of the date an Employee Claim
                  arises and for all other Seller employees, [not identified on
                  Schedule 5.1(a)], as to any claim arising before 5:00 p.m.
                  EST, June 15, 2001 on the Closing Date.

         (g)      Any and all claims and/or liabilities set forth on Schedule
                  2.4(g) regardless of whether they are associated with the
                  Business.

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2.5 Purchase Price Adjustment. The Cash Consideration portion of the Purchase
Price shall be subject to adjustment as of the Closing Date on a
dollar-for-dollar basis to reflect the following:

         (a)      Any increase or decrease in the total of the "Notes payable
                  (short term)" and "Notes payable (long term)" as identified in
                  Schedule 2.3(b)(v) between April 30, 2001 and the Closing
                  Date;

         (b)      Reduction by an amount equal to the excise tax credit that
                  will be available to Seller for the period January 1, 2001 to
                  the Closing Date;

         (c)      The amount of Seller's balance sheet account entitled "Due
                  to/Due from" [if the amount is positive (Due to RWKS), the
                  Cash Consideration will be increased; if the amount is
                  negative (Due from RWKS), the Cash Consideration will be
                  reduced]; and

         (d)      Reduction by an amount equal to the non-Business portion of
                  the Notes Payable.

2.6 Funding/Closing.

         (a)      Subject to the constrains set forth in Section 2.7 herein,
                  Seller's transfer of the Purchased Assets to Buyer and Buyer's
                  assumption of the Assumed Liabilities, and subject to the
                  constraints set forth in paragraph 2.6(b)(iv) herein, payment
                  of the Cash Consideration, (the "Closing") shall take place in
                  Houston, Texas on June 18, 2001 or such other date as may be
                  agreed upon by the parties.

         (b)      At Closing, the following actions will be taken by the parties
                  and the completion of each action shall be a further condition
                  to the Closing:

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         Seller shall deliver to Buyer a Bill of Sale and Assignment and a
                  Contract Assignment and Assumption, in the forms attached
                  hereto as Exhibits A and B respectively, and such other deeds,
                  bills of sale, endorsements, consents, assignments, receipts
                  and other instruments as shall be Assignment and Assumption,
                  in the forms attached hereto as Exhibits A and B respectively,
                  and such other deeds, bills of sale, endorsements, consents,
                  assignments, receipts and other instruments as shall be
                  sufficient to vest in Buyer good and marketable title to the
                  Purchased Assets free and clear of all liens, except as
                  otherwise permitted by this Agreement;

         Seller shall deliver proof sufficient to Buyer that Seller has ceased
                  using the Byler name and all appropriate name changes have
                  been accomplished;

         Seller shall deliver to Buyer any and all lien releases required for
                  this transaction including, but not limited to the Bank of
                  America Release substantially in the form attached hereto as
                  Exhibit F.

         Seller shall deliver to Buyer a limited Power of Attorney substantially
                  in the form attached hereto as Exhibit G to allow Buyer to
                  negotiate checks payable to Seller and received by Buyer as
                  payment for receivables and under contracts acquired pursuant
                  to the terms of this Agreement.

                                    (v)      Buyer shall pay the Cash
                           Consideration, subject to adjustment as provided in
                           Section 2.5 hereof; and

                                    (vi)     Buyer shall deliver to Seller
                           instruments in the forms attached hereto as Exhibit C
                           which instruments as shall be sufficient to effect
                           the assumption by Buyer of the Assumed Liabilities.

2.7      Third Party Consents to Assignments, Agreements and Other
         Considerations. Seller will use all necessary diligence to obtain or to
         cause to be obtained said consents and such other consents as may be
         necessary to assign to Buyer ownership or beneficial ownership to all
         the licenses, permits, contracts and other agreements included in the
         Purchased Assets as well as any other consents which may be required in
         order to consummate the transactions contemplated by this Agreement and
         to satisfy the conditions specified herein. Buyer agrees that it will
         diligently cooperate with Seller in obtaining the same, and will take
         such steps as are reasonably requested by Seller with respect thereto.
         If any consent required for the assignment of, or transfer of
         beneficial ownership in, any contract or instrument required to be
         transferred hereunder (individually an "Instrument") is not obtained
         prior to Closing, such Instrument shall not be deemed assigned or
         beneficially transferred. Seller shall continue to hold its interest in
         such Instrument in trust for the benefit of Buyer; shall receive in
         trust and remit to Buyer any monies paid thereunder as promptly as
         possible; and shall otherwise cooperate in any reasonable arrangement
         designed to secure for Buyer all of the benefits of such Instrument.
         Such cooperation shall include the enforcement for the benefit of Buyer
         of all rights previously enjoyed by Seller under such Instrument,
         including defense of any attempt by a third party to cancel such
         Instrument as a result of the transactions contemplated

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         in this Agreement. Buyer shall on behalf of Seller complete, discharge
         and fulfill all obligations of Seller under such Instrument.

         (a) Government Filings. The parties will make, as soon as practicable
following the execution hereof, all filings required by any governmental agency
in connection with the transactions contemplated by this Agreement. All
information provided by the parties in connection with such filings will be
true, accurate and complete and will comply with all applicable laws and
regulations.

         (b) Beneficial Ownership.To the extent that the conveyance, transfer or
assignment of any of the Purchased Assets or Assumed Liabilities as contemplated
by this Agreement shall require the consent of any governmental authority or
other party thereto, then notwithstanding the provisions of Paragraph 2.1, 2.3
and 3.1, this Agreement shall not constitute a contract to convey, transfer or
assign the same nor shall any such Purchased Asset or Assumed Liability be
transferred or conveyed to Buyer, if the attempt to do so would constitute a
breach thereof. Buyer and Seller shall cooperate to procure all such consents,
and each party shall bear its own expenses in connection therewith; except that
if any payment in consideration for such conveyance, transfer or assignment is
required, the parties will share equally the cost/value thereof (up to $10,000)
or agree to mutually acceptable alternative arrangements for handling the
situation. The parties shall execute a Limited Power of Attorney substantially
in the form the form attached hereto as Exhibit G to allow Buyer to negotiate
checks payable to Seller and received by Buyer as payment for receivables and
under contracts acquired pursuant to the terms of this Agreement.

                                    ARTICLE 3
                         REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of Buyer, Seller and RWKS. Each of Buyer,
Seller and RWKS represents, warrants and covenants with respect to itself and to
each other that :

(a)      Organization; Power. Such party has been duly organized and is validly
         existing in good standing under the laws of its jurisdiction of
         incorporation or organization and is duly qualified to do business in
         those jurisdictions in which such qualification is required for the
         operation of its business. Such party has the power and authority to
         enter into and perform this Agreement and the transactions herein
         contemplated.

(b)      Authorization. The execution, delivery and performance by such party of
         this Agreement have been duly authorized by all requisite corporate or
         other action on the part of such party. This Agreement has been duly
         executed and delivered by such party, and constitutes a binding
         obligation of such party enforceable in accordance with its terms,
         except as enforcement may be limited by bankruptcy or similar laws
         affecting creditors' rights generally.

(c)      No Conflicts. The execution, delivery and performance of this Agreement
         by such party will not conflict with or result in a violation of any
         governmental law, rule or regulation or a

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         violation of or default under (i) the certificate of incorporation and
         by-laws (or comparable organization documents) of such party, (ii)
         contracts and/or loan or debt covenants, and (iii) any judicial or
         administrative order, judgment or decree or arbitration award to which
         such party is a party or is subject.

3.2      Representations and Warranties of Seller and/or RWKS. Seller and/or
         RWKS represents and warrants to Buyer as follows:

(a)      Purchased Assets. Seller has good and marketable title to, or a valid
         leasehold interest in, all of the Purchased Assets. Included in the
         Purchased Assets is all tangible and intangible personal property of
         Seller used exclusively in the Business. Seller will at Closing have
         the right to sell, convey and transfer the same to Buyer free and clear
         of all mortgages, options, liens, charges, security interests, leases,
         tenancies, covenants, conditions, agreements, claims, restrictions and
         other encumbrances of every kind (except purchase money liens and
         without restriction on the use or transfer of such property.

(b)      Litigation. Except as disclosed in Schedule 2.4(g), there is no suit,
         claim, action, proceeding or investigation now pending or, to the best
         of Seller's knowledge, threatened before any court, grand jury,
         administrative or regulatory body, governmental agency, arbitration or
         mediation panel or similar body, to which Seller is or would be a party
         or which may result in any judgment, order, decree, liability, award or
         other determination which will, or could, have any adverse effect upon
         (i) the Purchased Assets, (ii) Buyer's ability to utilize and enjoy the
         Purchased Assets and/or (iii) the Assumed Liabilities. No such
         judgment, order, decree or award has been issued or entered against
         Seller which has, or could have, such effect.

(c)      Licenses and Permits. All licenses and permits required for the conduct
         of the Business have been obtained, are valid and in full force and
         effect and will be so upon Closing. To Seller's knowledge, Seller is
         not in violation of or default under existing laws, rules, regulations,
         ordinances, orders, judgments or decrees relating to the Business.

(d)      Employees. To the knowledge of Seller and RWKS, (i) Seller has complied
         with all laws and governmental requirements relating to the employment
         of labor, including provisions thereof relating to wages, hours,
         benefits, equal opportunity, collective bargaining and the payment of
         social security and other taxes; (ii) Seller has no material labor
         relations problem relating to the Business; (iii) there are no workers'
         compensation claims material to the Business pending against Seller nor
         is Seller or RWKS aware of any facts that would give rise to such a
         claim; (iv) no employee of Seller engaged in the operation of the
         Business is subject to any secrecy or non-competition agreement or any
         other agreement or restriction of any kind that would impede in any way
         the ability of such employee to carry out fully all activities of such
         employee in furtherance of the Business; (v) no citation has been
         issued by the Occupational Health and Safety Administration against
         Seller that would be material to the operation of the Business and no
         notice of contest or OSHA administrative enforcement proceeding
         involving Seller has been filed or is pending; (vi) no citation of
         Seller has occurred and no enforcement proceeding has been initiated or
         is pending under federal or foreign immigration law; and/or (vii)
         Seller

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         has not taken any action nor does Seller believe the impact to its
         current employees of Buyer's Covenants in Section 5.1 hereof will
         constitute a "Mass Layoff" or "Plant Closing" within the meaning of the
         Worker Adjustment and Retraining Notification Act or otherwise trigger
         notice requirements or liability under any local or state plant closing
         notice law.

(e)      Leased or Subleased Property. To the knowledge of Seller and RWKS,
         there are no defaults by any party to the leased property at 946
         Quintana, San Antonio, Texas 78211.

(f)      Taxes and Tax Returns. Seller has duly filed all federal, state, local
         and other tax returns required by law to be filed with respect to the
         Business and the Purchased Assets, all of which are true and correct in
         all respects, and has paid all taxes, interest, penalties and
         assessments which are due and payable thereon. Seller has not received
         any notice of any assessed or proposed claim or deficiency against it
         in respect of the Business or the Purchased Assets, and there is no
         present dispute between Seller and any governmental department,
         commission, board, bureau, agency or instrumentality concerning any tax
         (including penalties and interest thereon) of any nature with respect
         to the Business or the Purchased Assets. With respect to Sellers
         preparation of its 2001 returns, Buyer shall allow Seller's
         representative reasonable access during customary business hours to
         relevant records retained by Buyer.

                                   ARTICLE 4.
                              CONDITIONS TO CLOSING

4.1 Conditions to Obligations of the Parties. A party shall not be obligated to
consummate the transactions contemplated by this Agreement if any action or
proceeding is pending on the Closing Date before any court or other governmental
body or by any person or public authority seeking to restrain, prohibit or to
obtain damages or other relief in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby or if
any government agency shall have threatened or taken action with respect to the
consummation of the transactions contemplated hereby and such action or threat
of action is outstanding on the Closing Date.

4.2 Conditions to Obligations of Buyer. All obligations of Buyer under this
Agreement are subject to and shall be conditioned upon the satisfaction of each
of the following conditions at or prior to the Closing, any of which may be
waived in writing by Buyer:

(a)      Accuracy of Representations and Warranties. All representations,
         covenants and warranties of Seller set forth in this Agreement shall
         have been complied with and shall be true when made and as of the
         Closing Date with the same force and effect as though made again at
         Closing.

(b)      Performance of Agreements. Seller shall have performed all obligations
         and agreements, and shall have complied with all covenants and
         conditions, contained in this Agreement to be performed or complied
         with by it at or prior to Closing.

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(c)      Delivery of Transfer Documents and Purchased Assets by Seller. Seller
         shall have delivered to Buyer the following documents: (i) a bill of
         sale and assignment, substantially in the form attached hereto as
         Exhibit A (the "Bill of Sale and Assignment"), conveying the Purchased
         Assets sold, transferred and assigned pursuant to this Agreement; (ii)
         an assignment and assumption agreement substantially in the form
         attached hereto as Exhibit B (the "Contract Assignment and Assumption
         Agreement"), assigning the executory contracts of Seller to be assigned
         as identified in Schedule 2.1(f) and pursuant to which Buyer shall
         assume the obligations of Seller thereunder.

(d)      Opinion of Counsel. Seller shall have delivered to Buyer an opinion of
         Seller's independent counsel, (holding professional liability
         insurance) substantially in the form attached as Exhibit C hereto.

(e)      Lien Releases. Cause and/or effectuate any and all lien releases
         necessary to fulfill representations in Section 3.1(d), including a
         Release from Bank of America, N.A. substantially in the form attached
         as Exhibit G hereto.

(f)      During the period from May 31, 2001 to Closing, the Seller shall have
         conducted and funded the Business in a manner acceptable to Buyer and
         Seller shall not during that period done any of the following in
         respect of the Business without the written approval of Buyer:

                  (i) sell or otherwise dispose of or contract to sell or
                  otherwise dispose of any of the Purchased Assets, excluding
                  "consumables", or encumber or contract to encumber any
                  thereof; and

                  (ii) modify or cancel any of the executory agreements included
                  in the Purchased Assets or enter into any commitments,
                  agreements or understandings that in any way modify the
                  Business or any assets and liabilities thereof.

(g)      Seller shall have, at its own expense, maintained insurance as is
         currently in effect on the Purchased Assets against the risk of loss or
         damage attributable to storm, fire, water, theft, burglary, shipping,
         handling or riot, and shall have the risk of loss or damage to the
         Purchased Assets from all causes from the date hereof until the
         Closing.

(h)      Removal of Property, Equipment & Personnel. Seller shall have removed
         from the 15203 Lillja Road, Houston, Texas 77060-5299 property and
         premises all property, equipment and business not purchased by Buyer
         including the property listed on Schedule 4.2 (i) as well as all
         personnel listed on Schedule 5.1(a) (ii), their personal effects and
         employment information.

4.3. Conditions to Obligations of Seller. All obligations of Seller under this
Agreement are subject to and shall be conditioned upon the satisfaction of each
of the following conditions at or prior to the date of Closing, any of which may
be waived in writing by Seller:

(a)      Accuracy of Covenants. All representations and covenants of Buyer set
         forth in this Agreement shall have been complied with and shall be true
         when made and as of the Closing Date with the same force and effect as
         though made again at Closing.

<PAGE>   12

(b)      Performance of Agreements. Buyer shall have performed all obligations
         and agreements, and shall have complied with all covenants and
         conditions, contained in this Agreement to be performed or complied
         with by it at or prior to Closing.

(c)      Delivery of Documents By Buyer, Troy and Bill Byler. Buyer and/or Troy
         and Bill Byler shall have delivered to Seller the following: (i) the
         Cash Consideration, as both limited and provided for in Paragraph 2.6;
         (ii) an assumption agreement, substantially in the form attached hereto
         as Exhibit C (the "Assumption Agreement"), pursuant to which Buyer will
         assume the Assumed Liabilities; (iii) a counterpart of the Contract
         Assignment and Assumption Agreement; (iv) Troy and Bill Byler's stock
         certificate or certificates, properly endorsed to RWKS, representing
         300,000 shares of RWKS stock; (v) RailWorks Corporation Incentive Stock
         Option Certificate numbers 40, 118 and 125, representing options to
         purchase respectively 11,449, 20,000 and 58,443 shares of RWKS common
         stock (the "Option Certificates"); and (vi) Reliance Insurance Company
         Bond No. B2961940.

(d)      Opinion of Counsel. Buyer shall have delivered to Seller an opinion of
         Buyer's counsel substantially in the form attached as Exhibit E hereto.

                                    ARTICLE 5
                     COVENANTS AT AND FOLLOWING THE CLOSING

5.1       Employees.

(a)      As of the Closing Date, employment with Seller of all employees of the
         Business (including those, if any, on disability, sick leave, layoff or
         leave of absence who, in accordance with Seller's applicable policies,
         would be eligible to return to active status) will terminate for all
         purposes. As of Closing, Buyer shall offer employment to all active
         Business employees as identified on Schedule 5.1(a)(i) at the same
         salaries and wages as provided by Seller immediately prior to the
         Closing Date. Seller's employees who will not be offered employment by
         Buyer and who the parties agree are not employees of the Business are
         identified on Schedule 5.1(a) (ii). Such employment will "carry-over"
         said employee's years of service, accumulated vacation and leave.
         Employment with Buyer will also include a health insurance option for
         the employee.

(b)      The Seller shall remain liable for (i) the long-term disability
         benefits to the employees of the Business who are receiving such
         benefits as of the Closing Date, (ii) the premiums for employees of the
         Business who as of the Closing Date, were on a "waiver of premium" for
         life insurance due to disability incurred prior to the Closing Date,
         and (iii) disability payments to employees who became disabled prior to
         the Closing Date, but who at such time are in the waiting period,
         provided that they remain disabled and receive benefits after the
         Closing Date.

(c)      Buyer shall have sole responsibility for accrued and unpaid vacation
         and holidays of the employees of the Business to which they are
         entitled through the Closing Date under the Seller's policy and
         practice in effect on the Closing Date and shall discharge its
         liability with respect

<PAGE>   13
         thereto for all employees of the Business either by providing such
         employees with their eligible vacation or holiday time or a payment
         in lieu thereof.

(d)      Nothing contained in this Agreement, express or implied, is intended to
         confer on any person other than the parties hereto or their respective
         successors and assigns, any rights, remedies, obligations or
         liabilities under or by reason of this Agreement.

5.2 Non-competition.

(a)      The general intent of the parties is that from Closing until
         December 31, 2003, the Seller pursue the Seller's Core Business free
         from competition of Troy and Bill Byler and the Buyer. Therefore:

                           (i) For the period beginning on the Closing Date and
                  ending on December 31, 2003, Buyer, Troy and Bill Byler and/or
                  any company in which any of them may have an interest, and
                  their respective successors and assigns, will not self perform
                  nor engage in, (other than through sub-contracting such work
                  to an unrelated third party), have any interest in, directly
                  or indirectly, in any other person, firm, corporation or other
                  entity engaged in any business activities competitive with
                  Seller's or RWKS' Track Construction and Track Maintenance;
                  save and except for such work and/or services performed by the
                  portion of Seller's Maintenance Division acquired by Buyer as
                  part of the Business and any CMC Work. Ownership of stock for
                  investment purposes of less than 10% of the issued and
                  outstanding stock of a company will not violate this
                  provision; provided that such stock is publicly traded on a
                  national securities exchange or in the over-the-counter
                  market.

                           (ii) Furthermore, for the period beginning on the
                  Closing Date and ending on December 31, 2003, Buyer, Troy and
                  Bill Byler and/or any company in which any of them may have an
                  interest, shall not as a General Contractor tender a bid or
                  perform on a bid for any (1) Transit Bid Solicitation, or (2)
                  any other Solicitation to Bid in which at least thirty percent
                  (30%) of the proposed work does not involve the Business, save
                  and except when the Solicitation to Bid is directed solely to
                  the Buyer, Troy or Bill Byler, or Seller declines to issue a
                  bid to such Solicitation to Bid. Nothing in this Section
                  5.2(a)(ii) shall be interpreted to in any way limit Buyer,
                  Troy and Bill Byler from performing work as a subcontractor,
                  (unless such work is prohibited by Section 5.2(a)(i) above).

(b)      The general intent of the parties is that from Closing until
         December 31, 2003, the Buyer pursue the Buyer's Core Business free from
         competition of Seller and RWKS. Therefore:

                           (i) For the period beginning on the Closing Date and
                  ending on December 31, 2003, Seller and RWKS and any company
                  in which either may have an interest, and their respective
                  successors and assigns, shall not self perform, nor engage in
                  (other than through sub-contracting such work to an unrelated
                  third party), or have any interest in, directly or indirectly,
                  any other person, firm, corporation or other entity engaged in
                  any business activities competitive with the Business except
                  for that part of Track Maintenance which the definition
                  thereof refers to as, "an integral part of the contract
                  /work." Ownership of stock for investment purposes of less

<PAGE>   14

                  than 10% of the issued and outstanding stock of a company will
                  not violate this provision; provided that such stock is
                  publicly traded on a national securities exchange or in the
                  over-the-counter market.

                           (ii) Furthermore, for the period beginning on the
                  Closing Date and ending on December 31, 2003, neither Seller
                  nor RWKS and/or any company in which either of them may have
                  an interest, shall not as a General Contractor tender a bid or
                  perform on a bid in which at least thirty percent (30%) of the
                  proposed work does not involve Track Maintenance and/or Track
                  Construction, save and except when the Solicitation to Bid is
                  directed solely to the Seller or RWKS, or Buyer declines to
                  issue a bid to such Solicitation to Bid. Nothing in this
                  Section 5.2(b)(ii) shall be interpreted to in any way limit
                  Seller or RWKS from performing work as a subcontractor,
                  (unless such work is prohibited by Section 5.2(b)(i) above).

5.3 Non-solicitation. For the period beginning on the Closing Date and ending on
December 31, 2003, each party hereto, any company in which any party may have an
interest , and their respective successors and assigns shall not, either
directly or indirectly, alone or in conjunction with any other party, solicit or
attempt to solicit any officer, director, employee, consultant, contractor,
agent, lessor, lessee, licensor, licensee, supplier or any shareholder or to the
personnel of the other party or any of its affiliates to terminate, alter, or
lessen that party's affiliation with said party or such affiliate or to violate
the terms of any agreement or understanding between such employee, consultant,
contractor or other person and his or her employer. Ownership of stock for
investment purposes of less than 10% of the issued and outstanding stock of a
company will not violate this provision; provided that such stock is publicly
traded on a national securities exchange or in the over-the-counter market.

5.4 Sales and Other Taxes. Buyer shall be responsible for any and all taxes,
fees and governmental charges attributable to the purchase/sale of the Business,
the Purchased Assets or the Assumed Liabilities; except that Seller will be
responsible for any such taxes, fees or charges in the nature of a tax on income
or capital gains.

5.5 Right of First Refusal.

         (a) In the event that Seller and/or RWKS receives a bona fide offer to
purchase the business and assets of Seller's Track Construction and/or Track
Maintenance division, which Seller and/or RWKS intends to accept, RWKS shall
provide to Buyer, Troy and Bill Byler written notice of the terms and conditions
of such offer and Buyer, Troy and Bill Byler shall have thirty (30) days
thereafter in which to provide written notice to RWKS that Buyer, Troy or Bill
Byler will purchase said Track Construction and/or Track Maintenance division in
accordance with such terms and conditions. If Buyer, Troy or Bill Byler provides
such notice to RWKS, the parties shall consummate the transaction within ninety
(90) after the date of said notice. If Buyer, Troy or Bill Byler fails to
provide such notice as specified herein, RWKS shall have the unrestricted right
to sell the railroad division of Seller in response to said offer.

<PAGE>   15

(b)      In consideration for the grant of the right set forth in paragraph (a)
         above, each of Troy and Bill Byler shall and does hereby sell, assign
         and transfer to RWKS such common stock of RWKS and options to acquire
         common stock of RWKS as held by them as of the date of this Agreement,
         as follows:

<TABLE>
                  <S>                                          <C>
                  RWKS Common Stock                            300,000 shares
                  Options to acquire RWKS Common Stock          89,892 shares
</TABLE>

         (c) Solely for the purposes of this Section 5.5 provision, Track
Construction and Track Maintenance divisions of Seller" shall mean and include
only the business and assets of Seller which were formerly operated as the Track
Construction and Track Maintenance divisions of W. T. Byler Co., Inc. Said term
specifically excludes any business and assets of Seller which were formerly
operated as or by Earl Campbell Construction Company, Inc. and/or Wm. A. Smith
Construction Company, Inc.

5.6 Release by Seller and RWKS. Seller and RWKS, for themselves, their
affiliates and their respective shareholders, directors, officers, successors
and assigns hereby knowingly and voluntarily waive, release and forever
discharge Buyer Troy and Bill Byler, their spouses, heirs, devisees, legatees,
personal representatives, affiliates, companies and their respective directors,
officers, employees, representatives, shareholders, attorneys, successors and
assigns (the "Buyer Releasees") from and against any and all claims, actions,
suits, debts, demands, judgments, liabilities or other remedial relief of any
nature, in law or in equity, whether known or unknown (and if unknown,
regardless of whether knowledge of the same may have affected the decision to
enter into this Release), including but not limited to those pertaining to or in
any manner connected with (i) the Stock Purchase Agreement between RailWorks
Corporation, W. T. Byler Co., Inc. and William Troy Byler, dated October 1,
1999, as amended (the "Stock Purchase Agreement"), (ii) the transaction
contemplated and undertaken pursuant to the Stock Purchase Agreement, (iii) the
Employment Agreements between W. T. Byler Co., Inc. and William Troy Byler and
between W. T. Byler Co., Inc. and William Troy Byler, Jr., both dated October
22, 1999 (the "Employment Agreements"), (v) the employment of William Troy Byler
and/or William Troy Byler, Jr. by Seller, and (vi) all acts or omissions by
Buyers prior to the Closing Date; except for the Buyer Releasees liabilities and
obligations arising (a) under this Asset Purchase Agreement, including the
attached Exhibits hereto, and (b) as a result of a breach of Section 4.15, 4.26,
4.27, 4.28 or 8.01(a) of the Stock Purchase Agreement.

5.7 Release by Buyer, Troy and Bill Byler. Buyer Troy and Bill Byler, for
themselves and their spouses, heirs, devisees, legatees, personal
representatives, affiliates, companies and their respective directors, officers,
employees, representatives, shareholders, attorneys, successors and assigns,
hereby knowingly and voluntarily waive, release and forever discharge Seller and
RWKS and their respective affiliates, directors, officers, successors and
assigns (the "RWKS Releasees"), from and against any and all claims, actions,
suits, debts, demands, judgments, liabilities or other remedial relief of any
nature, in law or in equity, whether known or unknown (and if unknown,
regardless of whether knowledge of the same may have affected the decision to
enter into this Release), including but not limited to those pertaining to or in
any manner connected with (i) the Stock Purchase Agreement, including but not
limited to any amounts due and owing pursuant to Exhibit D thereto, (ii) the
transaction contemplated and undertaken pursuant to the Stock Purchase
Agreement, (iii) the Installment Note by and among RailWorks

<PAGE>   16

Corporation, W. T. Byler Co., Inc. and William T. Byler, dated October 22, 1999,
including Reliance Insurance Company Bond #B2961940 and any and all claims
related thereto, (iv) the Employment Agreements, (v) the Bylers employment by
Seller and/or RWKS, (vi) the Option Certificates, and (vii) the actions and
omissions of Seller or RWKS prior to the Closing Date; except for the RWKS
Releasees liabilities and obligations arising (a) under this Asset Purchase
Agreement, including the attached Exhibits hereto, and (b) as a result of a
breach of Section 8.01(b) of the Stock Purchase Agreement.

5.8 Payment and Performance Bonds. As of the Closing Date or as soon thereafter
as reasonably possible, but in no event later than one-hundred and twenty (120)
days after the Closing Date, Buyer shall cause the replacement and return of the
payment and performance bonds listed on Schedule 5.8, (the "Bonds") or the
substitution of the Surety or Sureties underwriting such Bonds. In any event,
Buyer shall indemnify, defend and hold Seller and RWKS harmless from and against
any and all claims, actions, suits, debts, demands, judgments, liabilities or
other remedial relief of any nature, in law or in equity, arising out of or
related to the Bonds related to the Business and identified on Schedule 5.8.

5.9 Press Releases. Prior to the Closing Date, Seller and Buyer shall each
approve any press release or public statement with respect to the transactions
contemplated hereby and any filing with any governmental or regulatory agency
with respect thereto.

5.10 Bulk Sales Compliance. Buyer hereby waives compliance with the provisions
of the bulk sales or similar laws of any state or jurisdiction if applicable to
the sale of the Purchased Assets.

5.11 Tradename. As of the Closing Date Seller and RWKS shall cease using "W. T.
Byler" or any derivation thereof in its name or continuing business activities.

                                    ARTICLE 6
                                 INDEMNIFICATION

6.1 Survival of Representations and Warranties. The respective representations
and warranties of the parties herein contained shall survive the Closing for a
period of eighteen (18) months following the Closing Date; provided that if
there shall then be pending any claim for indemnification as provided by this
Agreement that has been previously asserted by a party to this Agreement, such
claim shall continue to be subject to the indemnification provisions of this
Agreement in accordance therewith.

6.2 Indemnification By Buyer. In addition to the indemnification provided in
Paragraph 6.4, Buyer ("Indemnitor" for the purposes of this paragraph 6.2) shall
indemnify, defend and hold the Seller and RWKS ("Indemnitees" for the purposes
of this paragraph 6.2) harmless from and against any loss, claim, damage, cost
and expense (including reasonable legal fees) that Indemnitees may incur or
suffer resulting from:

(a)      the inaccuracy or breach of any representation or warranty herein, or
         the breach or non-performance of any of the covenants or agreements
         made by Indemnitor hereunder;

<PAGE>   17
(b)      any income, sales or use taxes, and interest and penalties related
         thereto, with respect to or arising from use or operation of the
         Business, the Purchased Assets or the Assumed Liabilities, and which
         cover taxable years or portions thereof after the Closing Date;

(c)      any and all claims for personal injury or death or property damage,
         direct or consequential, resulting from or connected with (i) goods
         manufactured or sold or services performed by Buyer after the Closing
         Date or (ii) any other aspect of the ownership or operation of the
         Business, the Purchased Assets or the Assumed Liabilities after the
         Closing Date;

(d)      any and all claims arising out of or connected with any of the Assumed
         Liabilities; and

         Indemnitees shall not be entitled to make any claim hereunder until the
aggregate amount of all damages, losses, liabilities, and expenses claimed by
Indemnitees as a result of all all damages, losses, liabilities, and expenses
claimed by Indemnitees as a result of all misrepresentations and breaches of
warranties contained in this Agreement or contained in any document or
certificate given in order to carry out the transactions contemplated hereby is
equal to U.S. $50,000.00. After the aggregate amount of such damages, losses,
liabilities and expenses claimed exceeds U.S. $50,000.00, Indemnitees shall be
entitled to make such claims against Indemnitors for the full amount thereof.

6.3 Indemnification By Seller and RWKS. In addition to the indemnification
provided in Paragraph 6.4, Seller and RWKS ("Indemnitors" for the purposes of
this paragraph 6.3) shall indemnify, defend and hold the Buyer, Troy and Bill
Byler ("Indemnitees" for the purposes of this paragraph 6.3) harmless from and
against any loss, claim, damage, cost and expense (including reasonable legal
fees) that Indemnitees may incur or suffer resulting from:

(a)      the inaccuracy or breach of any representation or warranty herein, or
         non-performance of any of the covenants or agreements made by the
         Indemnitors hereunder.

(b)      any income, sales or use taxes, and interest and penalties related
         thereto, with respect to or arising from use or operation of the
         Business, the Purchased Assets or the Assumed Liabilities, and which
         cover taxable years or portions thereof prior to the Closing Date; and

(c)      any and all claims for personal injury, death or property damage,
         direct or consequential, resulting from or connected with (i) goods
         manufactured or sold or services provided before the Closing Date or
         (ii) any other aspect of the ownership or operation of the Business,
         the Purchased Assets or the Assumed Liabilities prior to the Closing
         Date.

(d)      the termination of employment of, or the termination or alteration of
         the terms of employment or benefits of, any employee of Seller employed
         immediately prior to the Closing Date.

Indemnitees shall not be entitled to make any claim hereunder until the
aggregate amount of all damages, losses, liabilities and expenses claimed by
Indemnitees as a result of all misrepresentations and breaches of warranties
contained in this Agreement or contained in any document or certificate given in
order to carry out the transactions contemplated hereby is equal

<PAGE>   18

to US $50,000. After the aggregate amount of such damages, losses, liabilities
and expenses claimed exceeds US $50,000, Indemnitees shall be entitled to make
such claims against Indemnitors for the full amount thereof.

6.4 Brokers. Each party represents to the other that all negotiations relative
to this Agreement and the transactions contemplated hereby have been carried on
between them directly without the intervention of any other person or
organization in such manner as to give rise to any valid claim against the
Seller, Buyer, RWKS, Troy or Bill Byler for a brokerage commission, finder's
fees, counseling or advisory fees or like payment; and further, each party
hereby agrees to indemnify and hold the other harmless from and against any
liability, cost or expense (including reasonable attorneys' fees) for a
brokerage commission, finder's fees, counseling or advisory fees or like
payment, resulting from any action by that party in breach of the foregoing
representation.

6.5 Provisions Relating to Indemnity Claims. The following provisions will apply
to any claim for indemnification hereunder (an "Indemnity Claim"):

         (a) Promptly after becoming aware of any matter that may give rise to
an Indemnity Claim, the indemnitee will provide to the indemnitor written notice
of the Indemnity Claim specifying (to the extent that information is available)
the factual basis for the Indemnity Claim and the amount of the Indemnity Claim
or, if an amount is not then determinable, an estimate of the amount of the
Indemnity Claim, if an estimate is feasible in the circumstances.

         (b) If an Indemnity Claim relates to an alleged liability to any other
person (hereinafter, in this section, called a "Third Party Liability"),
including without limitation any governmental or regulatory body or any taxing
authority, which is of a nature such that the indemnitee is required by
applicable law to make a payment to a third party before the relevant procedure
for challenging the existence or quantum of the alleged liability can be
implemented or completed, then the indemnitee may, notwithstanding the
provisions of paragraphs (c) and (d) of this section, make such payment from the
indemnitor in accordance with this Agreement; provided that, if the alleged
liability to the third party as finally determined upon completion of settlement
negotiations or related legal proceedings is less than the amount which is paid
by the indemnitor in respect of the related Indemnity Claims, then the
indemnitee shall forthwith following the final determination pay to the
indemnitor the amount by which the amount of the liability as finally determined
is less than the amount which is so paid by the indemnitor.

         (c) The indemnitee shall not negotiate, settle, compromise or pay
(except in the case of payment of a judgment) any Third Party Liability as to
which it proposes to assert an Indemnity Claim, except with the prior consent of
the indemnitor (which consent shall not be unreasonably withheld or delayed).

         (d) With respect to any Third Party Liability, provided the indemnitor
first admits the indemnitee's right to indemnification for the amount of such
Third Party Liability which may at any time be determined or settled, then in
any legal, administrative or other proceedings in connection with the matters
forming the basis of the Third Party Liability, the following procedures will
apply:

<PAGE>   19

                  (i)      except as contemplated by subparagraph (iii) of this
         paragraph, the indemnitor will have the right to assume handling of the
         compromise or settlement of the Third Party Liability and the conduct
         of any related legal, administrative or other proceedings, but the
         indemnitee shall have the right and shall be given the opportunity to
         participate in the defence of the Third Party Liability, to consult
         with the indemnitor in the settlement of the Third Party Liability and
         the conduct of related legal, administrative and other proceedings
         (including consultation with counsel) and to disagree on reasonable
         grounds with the selection and retention of counsel, in which case
         counsel satisfactory to both parties shall be retained by the
         indemnitor;

                  (ii)     the indemnitor will co-operate with the indemnitee in
         relation to the Third Party Liability, will keep it fully advised with
         respect thereto, will provide it with copies of all relevant
         documentation as it becomes available, will provide it with access to
         all records and files relating to the defence of the Third Party
         Liability and will meet with representatives of the indemnitee at all
         reasonable times to discuss the Third Party Liability; and

                  (iii)    notwithstanding subparagraphs (i) and (ii) of this
         paragraph, if the indemnitor is Seller, the indemnitor will not settle
         the Third Party Liability or conduct any legal, administrative or other
         proceedings in any manner which could, in the reasonable opinion of the
         Buyer, have a material adverse effect on the Assets or their use by
         Buyer, except with the prior written consent of Buyer.

         (e) If, with respect to any Third Party Liability, the indemnitor does
not admit the indemnitee's right to indemnification or declines to assume
handling of the settlement or of any legal, administrative or other proceedings
relating to the Third Party Liability, then the following provisions will apply:

                  (i)      the indemnitee, at its discretion, may assume
         carriage of the settlement or of any legal, administrative or other
         proceedings relating to the Third Party Liability and may defend or
         settle the Third Party Liability on such terms as the indemnitee,
         acting in good faith, considers advisable; and

                  (ii)     any cost, loss, damage or expense incurred or
         suffered by the indemnitee in the settlement of such Third Party
         Liability or the conduct of any legal, administrative or other
         proceedings shall be added to the amount of the Indemnity Claim.

                                    ARTICLE 7
                                  MISCELLANEOUS

7.1 Survival and Assignment. This Agreement shall be binding upon the parties
and each of their successors and permitted assigns. No party hereto may assign
its rights, duties or interests hereunder in whole or in part without the prior
written consent of the other party hereto.

<PAGE>   20

7.2 Governing Law and Severability. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas. The provisions
hereof shall to the greatest extent possible be interpreted in such a manner as
to comply with applicable law, but if any provision hereof is, notwithstanding
such interpretation, determined to be invalid, void or unenforceable, the
remaining provisions of this Agreement shall not be affected thereby but shall
remain in full force and effect and be binding upon the parties.

7.3 Notices. All notices, requests or other communications required or permitted
hereunder shall be given in writing by hand delivery, by registered or certified
mail, return receipt requested (or equivalent foreign mail service), postage
prepaid (airmail, if international), by telex with confirmed answer back or by
facsimile transmission to the party to receive the same at its respective
address set forth below, or at such other address as may from time to time be
designated by such party to the others in accordance with this Section, all such
notices being effective on receipt.

If to Seller:         RailWorks W. T. Byler, LP
                      c/o RailWorks Corporation
                      6225 Smith Avenue, Suite 200
                      Baltimore, MD 21209-3613
                      Attn: M. P. Rivera
                      FAX:  410-580-6099

If to Buyer:          W. T. Byler, Co., LP
                      15203 Lillja Road
                      Houston, TX 77060-5299
                      Attn: Bill Byler
                      FAX:  281-445-4356

<PAGE>   21

7.4 Waivers and Amendments. No failure or delay by either party in the exercise
of any right hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any right preclude an additional or further exercise
thereof or the exercise of any other right. To be effective, each waiver of any
right hereunder must be in writing and signed by the party waiving its right,
and such waiver may be made subject to any conditions specified therein. Each
amendment to this Agreement shall be in writing and signed by both parties.

7.5 Entire Agreement. "Agreement" as used herein shall include this Agreement,
all Schedules and Exhibits hereto, and all written agreements, undertakings,
documents and certificates to be delivered pursuant to the terms hereof. This
Agreement (together with its Schedules and Exhibits) represents the entire
agreement between the parties hereto relating to its subject matter and
supersedes any prior commitments, agreements or understandings (written or oral)
among the parties.

7.6 Headings. The headings in this Agreement are inserted for convenience only
and shall be ignored in construing this Agreement.

7.7 Right to Specific Performance. The parties agree that the Assets are unique,
that Buyer cannot be appropriately compensated by money damages in the event of
the breach of this Agreement by Seller, and that Buyer is therefore entitled to
specific performance of this Agreement without limitation upon other remedies to
which Buyer may be entitled.

7.8 TERMINATION OF AGREEMENT. THIS AGREEMENT MAY BE TERMINATED PRIOR TO THE
CLOSING, IN WHICH CASE IT SHALL BECOME NULL AND VOID AND HAVE NO FURTHER FORCE
OR EFFECT, AS FOLLOWS:

(a)      at the election of Seller or Buyer, by giving written notice of such
         termination to the other party, if any one or more of the conditions to
         the obligation of Seller or Buyer, as the case may be, to close the
         transactions contemplated hereby have not been fulfilled as of the
         Closing Date; provided, that the right to terminate this Agreement
         pursuant hereto shall not be available to any party whose failure to
         meet a condition has been the cause of or resulted in the failure of
         the Closing to occur on or before such date;

(b)      at the election of Seller or Buyer, if any legal proceeding is
         commenced or threatened by any governmental agency or other person
         directed against the consummation of the Closing or any other
         transaction contemplated under this Agreement and either Seller or
         Buyer, as the case may be, reasonably and in good faith deems it
         impractical or inadvisable to proceed in view of such legal proceeding
         or threat thereof; or

(c)      at any time on or prior to the Closing Date, by mutual written consent
         of Seller and Buyer.

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

<PAGE>   22

SELLER:
RAILWORKS W. T. BYLER, LP
by its General Partner:
         RailWorks Track Systems, Inc.

         By: /s/ M. Azarela
            ------------------------------
         Name:
         Title:

RWKS:
RAILWORKS CORPORATION

By:            /s/ M. Azarela
   ---------------------------------------
Name:
Title:

BUYER:
W. T. BYLER CO., LP
by its General Partner
         W. T. Byler Co. - GP, Inc.

           /s/ W. T. Byler, Jr.
------------------------------------------
          William T. Byler, Jr.
          President

TROY BYLER:

              /s/W. T. Byler
------------------------------------------
            William Troy Byler

BILL BYLER:

            /s/W. T. Byler, Jr.
------------------------------------------
           William T. Byler, Jr.

                                       2<PAGE>   1
EXHIBIT 10.1

                          CREDIT AND SECURITY AGREEMENT

THIS CREDIT AND SECURITY AGREEMENT (herein, "Agreement") is made effective this
14_day of August, 2001 between INSURANCE MANAGEMENT SOLUTIONS GROUP, INC.
(herein, "Lender") and BANKERS INSURANCE GROUP, INC. (herein, "Borrower")
(herein Lender and Borrower collectively, "Parties" or individually "Party").

RECITALS:

WHEREAS, Lender is a corporation duly organized under the laws of the State of
Florida.; and

WHEREAS, Borrower is a corporation duly organized under the laws of the State of
Florida; and

WHEREAS, in order to provide Borrower with funds to advance to Bankers
Underwriters, Inc., a wholly owned subsidiary of Borrower (herein, "BUI") as
well as working capital for Borrower, Borrower wishes to borrow the aggregate
sum of up to Five Million and 00/100 ($5,000,000.00) U.S. dollars from Lender
and secured by the Collateral; and

WHEREAS, Lender wishes to lend to Borrower an amount equal to the amount
required for an advance to BUI as well as Borrower's working capital needs; and

         IN CONSIDERATION OF Lender's agreement to loan to Borrower the sum of
up to Five Million and 00/100 ($5,000,000.00) U.S. dollars, all in accordance
with the terms and conditions of this Agreement, as well as for other good and
valuable consideration, the Parties hereto do covenant and agree as follows:

SECTION 1. RECITALS.

         The statements contained in the recitals of fact set forth above (the
         "Recitals") are true and correct, and the Recitals by this reference
         are made a part of this Agreement.

SECTION 2. EXHIBITS.

         The exhibits attached to this Agreement are by this reference made a
         part of this Agreement.

SECTION 3. DEFINITIONS.

         For the purpose of this Agreement, the following terms shall have the
following meanings:

a)      "Affiliate" shall mean any corporation, partnership, association, trust
        or Person which or who directly or indirectly controls or is controlled
        by, or is under common control with the Borrower.

b)      "BUI" shall mean Bankers Underwriters, Inc., a Florida corporation and
        wholly owned subsidiary of Borrower.

c)      "Collateral" shall refer collectively to the following being delivered
        as part of the Loan Documents (i) the 10,898 shares of the common
        capital stock of First Community Insurance Company, $318.00 par value
        being pledged by Borrower to Lender pursuant to the Stock Option
        Agreement, and (ii)

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<PAGE>   2

                     CREDIT AND SECURITY AGREEMENT (cont.)

        the Flood Book being assigned by Bankers Underwriters, Inc. to Lender
        pursuant to the Collateral Assignment of Flood Book.

d)      "Corporate Principal" shall mean any shareholder, director, or officer
        of Borrower.

e)      "Event Of Default" shall mean any of the events or conditions described
        in the subsequent paragraph hereof captioned, "Event Of Default" and
        "Events-Of-Default" shall refer collectively thereto.

f)      "Flood Book" shall have the definition assigned to such term in the
        Collateral Assignment of Flood Book.

g)      "Indebtedness" shall mean and include:

        (i) all obligations which in accordance with generally accepted
        accounting principles would be included in determining total
        liabilities as shown on the liability side of a balance sheet as of the
        date of which Indebtedness is to be determined,
        (ii) obligations secured by any deed of trust, pledge or lien, whether
        or not the Obligation secured thereby shall have been assumed; and
        (iii) guarantees, endorsements (other than endorsements for collection
        in the ordinary course of business) and other contingent obligations in
        respect of, or to purchase or otherwise acquire, Indebtedness of others.

h)      "Loan" shall mean the line of credit established pursuant to Section 4.
        hereof.

i)      "Loan Documents" shall mean each of the following documents all dated of
        even date herewith to establish the Loan - Promissory Note, Collateral
        Assignment of Flood Book, Absolute Assignment of Flood Book, Stock
        Option Agreement, Further Assurance and Compliance Agreement and the
        within Credit and Security Agreement.

j)      "Obligation" or Obligations" shall mean any and all Indebtedness,
        liabilities and obligations of Borrower whatsoever under the Loan
        Documents.

k)      "Permitted Encumbrances" shall mean the first lien security interests on
        the Collateral and which are disclosed in Exhibit A attached hereto.

l)      "Payment Date" shall have the definition assigned thereto in Section
        4 c) hereof.

m)      "Person" shall mean and include any individual, partnership,
        corporation, trust, unincorporated organization or a government or any
        department or agency thereof.

n)      "Promissory Note" shall mean the Master Promissory Note required and
        described in Section 4 c).

o)      "Subsidiary" shall mean any corporation of which a majority, in vote or
        value, of every class of stock, at the time as of which any
        determination is being made, is owned by the Borrower either directly or
        through Subsidiaries.

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<PAGE>   3
                     CREDIT AND SECURITY AGREEMENT (cont.)

SECTION 4. LOAN.

a)      Amount. Upon the execution of this Agreement and in compliance with its
        terms and conditions, Lender agrees to a loan to Borrower a maximum
        principal amount equal to Five Million and 00/100 ($5,000,000.00) U.S.
        dollars.

b)      Purpose. Funds received under the Promissory Note shall be used
        exclusively to advance funds to BUI as well as for various working
        capital requirements related to Borrower's ongoing operation.

c)      Promissory Note. Proceeds to Borrower under the Loan shall be evidenced
        by a master promissory note (herein, "Promissory Note") which shall be
        executed and delivered and which shall be of even date herewith, the
        stated principal amount of which shall be Five Million and 00/100
        ($5,000,000.00) U.S. dollars and for which no more than a collective
        aggregate maximum principal amount outstanding of Five Million and
        00/100 ($5,000,000.00) U.S. dollars may be advanced at any time, which
        Promissory Note shall bear interest from the date hereof at a per annum
        rate of the Prime Rate (as such term is defined in the Promissory Note)
        plus 1.5% until paid in full; provided, however, that in no event shall
        interest accrue at a rate in excess of the maximum rate allowed by law;
        and such Promissory Note shall contain the following payment provisions:

                  Commencing on the first day of September 2001, all accrued and
                  unpaid interest shall be due and payable on the first day of
                  each calendar month of each and every year (herein, " Payment
                  Date"); and all unpaid principal and interest shall be due and
                  payable in full on or before February 28th, 2002 (herein,
                  "Promissory Note").

d)      Grant of Security Interest. BUI joins in the execution of this Agreement
        for the purpose of granting and does hereby grant to Lender a first lien
        security interest in and to the Flood Book as security for the repayment
        of all sums advanced on the Loan and for the performance by Borrower and
        BUI of all covenants and agreements under the Loan Documents in
        accordance with their following terms and conditions.

SECTION 5. TERM OF AGREEMENT.

This Agreement shall be effective upon the execution hereof and shall continue
in full force and effect until February 28th, 2002 unless terminated as
hereafter provided or upon satisfaction of the Promissory Note in full.

SECTION 6. CONDITIONS PRECEDENT.

        Prior to the first advance by Lender to Borrower pursuant to this
        Agreement and as a condition precedent to any of Lender's other
        Obligations under this Agreement, Borrower shall execute and deliver to
        Lender or shall cause to be executed and delivered to Lender each of the
        following:

a)      Promissory Note. Promissory Note which shall include a Waiver of Jury
        Trial provision;

b)      The Loan Documents;

c)      Perfection. Such financing statement(s), security agreements, and other
        documents and instruments as Lender may reasonably require from time to
        time to perfect any and all security interests granted by Borrower to
        Lender pursuant to this Agreement or pursuant to any other security
        agreement(s) executed by Borrower to induce Lender to make the Loan
        herein described;

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<PAGE>   4
                     CREDIT AND SECURITY AGREEMENT (cont.)

d)      Resolutions. The good and sufficient Resolution of the Board of
        Directors of the Borrower authorizing Borrower to enter into the
        transaction contemplated by this Agreement;

e)      Opinion. The opinion of counsel for Borrower including but not limited
        to the following - (i) that Borrower is a corporation in good standing,
        duly qualified under the laws of the State of Florida, (ii) Borrower is
        authorized to enter into the Loan Documents, (iii) the transaction has
        been duly authorized by Borrower, and (iv) the Loan Documents have been
        duly authorized, executed and delivered by the Borrower, (v) the
        execution and delivery of the documents do not contravene nor are
        prohibited by the Charter, By-Laws or outstanding resolutions of
        Borrower or any agreements to which Borrower is a Party and (vi) such
        other matters reasonably requested; and

f)      Board Approval. Lenders Board of Directors and its Audit Committee shall
        have authorized Lender's management to enter into the transaction
        contemplated hereby.

SECTION 7. AFFIRMATIVE COVENANTS.

        Borrower hereby covenants with Lender that for so long as any
        Obligations remain outstanding Borrower shall:

a)      Corporate Existence. Do or cause to be done all things necessary to keep
        in full force and effect its corporate existence and all rights,
        franchises, licenses, authorizations, permits and qualifications to
        carry on business in all jurisdictions where such qualifications may be
        necessary;

b)      Compliance with Law. Remain in compliance with all applicable laws of
        the jurisdictions within which Borrower conducts its business.

c)      Payment of Taxes. Pay all federal, state and local taxes as the same
        become due.

d)      Financial Statements. Deliver to Lender, specifically upon request by
        Lender, the following:

                (i)     Unaudited Financials - Monthly. As soon as practicable,
                        and in any event within fifteen (15) days after the end
                        of each calendar month, furnish to Lender a monthly
                        unaudited financial statement of Borrower, including
                        balance sheets and income statements, for the calendar
                        month just ended, and for the calendar year to date,
                        certified by a duly authorized officer of Borrower;

                (ii)    Unaudited Financials - Annual. As soon as practicable,
                        and in any event within sixty (60) days after the end of
                        each fiscal year, furnish to Lender, the unaudited
                        financial statement for the Borrower, including balance
                        sheets and income statements, prepared in accordance
                        with generally accepted accounting principles and
                        practices applied on a basis consistently maintained
                        throughout the period involved and certified by an
                        authorized officer of Borrower; and

                (iii)   Data. Such financial statements, reports, certificates,
                        lists of customers (showing names, addresses and amounts
                        owing) and other data concerning Accounts, contracts,
                        collections, inventory and other matters as Lender may
                        from time to time request.

e)      Notice. Give prompt written notice to Lender upon becoming aware of the
        occurrence of any Event Of Default or event which, by passage of time or
        the giving of notice or both would constitute an Event Of Default;

                                     4 of 4
<PAGE>   5
                     CREDIT AND SECURITY AGREEMENT (cont.)

f)      Free Collateral. Except for Permitted Encumbrances, keep Collateral free
        from all liens, encumbrances and security interests and pay and
        discharge when due all taxes, levies and other charges upon it and upon
        the goods evidenced by any documents constituting Collateral and defend
        it against all claims of any kind;

g)      Access. Provide access to accounting and business records of Borrower
        which will include, but not be limited to, access and substantive
        dialogue with Borrower's accountants, attorneys, bank or other financial
        institution and any other party or parties with which the Borrower has
        had or may have any dealings. Said dialogue may encompass the affairs,
        finances and accounts of Borrower including but not limited to any
        matter or aspect pertaining to any and all business transactions that
        have taken place or that may be contemplated at some future date.
        Borrower shall hold harmless, indemnify, release and authorize any and
        all such parties that may care to express an opinion regarding the
        business of the Borrower and the transactions engaged therein;

h)      Financial Condition. Notify Lender immediately, but in any event within
        five (5) days after obtaining knowledge of any fact or facts which might
        materially and adversely affect the assets, business operations,
        properties, income or condition (financial or otherwise) of the Borrower
        or the Obligations or authority of Borrower to perform its Obligations
        under any Loan Document;

i)      Notify of Action or Suit. Notify Lender immediately, but in any event
        within five (5) days after obtaining knowledge that Borrower is a party,
        or may be threatened to be made a party, to any threatened, pending or
        completed action, suit or proceeding, whether civil, criminal,
        administrative or investigative;

j)      Pay Debts - Indemnity. Pay when due (or within applicable grace periods)
        all Indebtedness due third Persons, except when the amount thereof is
        being contested in good faith by appropriate proceedings and with
        adequate reserves therefore set aside on the books of Borrower for the
        payment of such indebtedness. If Borrower shall default in the payment
        of any principal (or installment thereof) of, or interest on, any such
        Indebtedness, Lender shall have the right, in its sole discretion, to
        pay such interest or principal on behalf of Borrower; provided, however,
        Borrower shall indemnify Lender in full for any such amount;

k)      New Location. Notify Lender thirty (30) days in advance of any change in
        the jurisdiction of its organization, the location of any of its
        businesses or the establishment of any new, or the discontinuance of any
        existing, place of business; and

l)      Books of Account - Inspections. Maintain books of account in accordance
        with general accounting practices, and for purposes of determining
        Borrower's compliance with this Agreement. If no Event of Default exists
        or is continuing, Lender shall have the right, at Lender's expense, to
        inspect any of the corporate books and financial records at such
        reasonable times as Lender may request. If an Event of Default exists,
        Lender may, at the expense of the Borrower, inspect the corporate books
        and financial records at all such reasonable times and as often as may
        be requested by the Lender.

SECTION 8. NEGATIVE COVENANTS.

        Borrower hereby covenants with Lender that for so long as any
        Obligations remain outstanding and unless Lender notifies Borrower in
        writing it dispenses with any one or more of the following requirements,
        Borrower will not:

a)      Character of Business. Engage in any business substantially apart from
        the services currently being provided by Borrower;

                                     5 of 5
<PAGE>   6
                     CREDIT AND SECURITY AGREEMENT (cont.)

b)      Mergers, Consolidations, Sales. Consolidate with or merge into any other
        Person or permit any other Person other than a Subsidiary to consolidate
        with, or merge into, the Borrower, or to sell, transfer or otherwise
        dispose of all, or substantially all, of its assets to any other Person;

c)      Business Practices. Materially alter or change the principal business in
        which Borrower is engaged or the manner in which Borrower conducts its
        business affairs; and

d)      Untrue Statements. Furnish Lender any certificate or other document that
        will contain any untrue statement of material fact or that will omit to
        state a material fact necessary to make it not misleading in the light
        of circumstances under which it was furnished.

SECTION 9. REPRESENTATIONS AND WARRANTIES.

        Borrower represents and warrants to Lender that:

a)      Absence of Defaults. All agreements to which Borrower and Lender are
        parties are valid and binding agreements enforceable against Borrower in
        accordance with their terms, and no event has occurred and is continuing
        which constitutes an Event of Default by Borrower or a default by
        Borrower or any of its Affiliates under any such agreements;

b)      Ownership. Bankers Financial Corporation owns all of the issued and
        outstanding shares of common stock of Borrower and there are not now nor
        will there be during the term of this Agreement any other shareholders
        of Borrower nor will any one be granted nor has any one been granted any
        options or warrants to acquire any shares of Borrower; provided that
        there is first lien security interest on all of the issued and
        outstanding shares of Borrower to SouthTrust Bank N.A. as otherwise
        disclosed in Exhibit A attached;

c)      Proceeds. Proceeds under this Loan will be used exclusively to advance
        funds to BUI as well as for various working capital requirements related
        to Borrower's ongoing operation;

d)      Correct Financials. Any financial statements heretofore delivered to
        Lender are true and correct in all respects, have been prepared in
        accordance with generally accepted accounting practices and fairly
        represent the financial conditions of the Borrower as of the respective
        dates thereof. No material adverse change has occurred in the financial
        condition of the Borrower reflected in such financial statements since
        the respective dates thereof and no additional borrowings have been made
        by Borrower since the date thereof other than the borrowing contemplated
        hereby.;

e)      No Breach or Violation. The consummation of the transactions
        contemplated hereby or the performance by Borrower of any Obligation
        will not result in any breach of or constitute a default under any
        mortgage, deed of trust, lien, bank loan, or credit agreement, corporate
        charter, by-law, or other instrument to which Borrower is a party, or by
        which it is bound or affected;

f)      Corporate Existence - Good Standing.

                (i)     Borrower is a corporation duly organized, validly
                        existing, and in good standing under the laws of the
                        State of Florida;

                (ii)    Borrower has all lawful corporate power to own its
                        properties and to engage in the business it now
                        conducts, and Borrower is duly qualified and in good
                        standing as a foreign corporation in the jurisdictions
                        wherein the nature of the business transacted by it or
                        property owned by it make such qualification necessary;

                                     6 of 6
<PAGE>   7
                     CREDIT AND SECURITY AGREEMENT (cont.)

                (iii)   Borrower has not changed its name, been the surviving
                        corporation in a merger, acquired any business, or
                        changed its principal executive office since 1994; and

g)      Representations and Warranties Survive. All of the representations and
        warranties set forth in Section 9. hereof encaptioned, "Representations
        and Warranties" shall survive the execution and delivery of this
        Agreement and the other Loan Documents until all Obligations are
        satisfied in full and all outstanding amounts due under the Credit Line
        are paid in full.

SECTION 10. FINANCING STATEMENTS.

a)      At Lender's discretion, Borrower will join with Lender in executing such
        financing statements (including amendments thereto and continuation
        statements thereof) in form satisfactory to Lender; pay or reimburse
        Lender for all costs and taxes of filing and recording the same in such
        public offices as Lender may designate; and take such other steps as
        Lender may direct, including the noticing of Lender's lien on the
        Collateral and on any certificates of title therefore all to perfect
        Lender's interest in the Collateral; and

b)      To the extent lawful, Borrower hereby appoints Lender with full power of
        substitution and revocation, as its Attorney-in-Fact (without requiring
        Lender to act as such) to execute any financing statement in the name of
        Borrower, and to perform all other acts that Lender deem appropriate to
        perfect and continue its security interest in, and to preserve, the
        Collateral.

SECTION 11. EVENTS OF DEFAULT.

        The following occurrences shall constitute Events Of Default hereunder:

a)      Non-Payment. Borrower fails to pay when and as required to be paid
        herein, any principal or interest amount within 10 days after the same
        becomes due;

b)      Breach of Warranty. Any warranty, representation, or statement made or
        furnished to Lender by or on behalf of Borrower proves to have been
        false in any material respect on or as of the date when made or
        furnished or deemed made or furnished;

c)      Breach of Covenant. Any affirmative covenant or negative covenant is
        breached, violated or not complied with if such affirmative covenant or
        negative covenant continues to be breached, violated or not complied
        with after Lender has given notice thereof to Borrower and a 30 day
        opportunity to cure;

d)      Dissolution/Bankruptcy. Dissolution, termination of existence,
        insolvency (failure to pay its debts as they mature or the failure to
        maintain the fair market value of its assets in an amount greater than
        its liabilities on a consolidated basis for purposes herein, whichever
        shall first occur), a business failure, appointment of a receiver,
        assignment for the benefit of creditors or the commencement of any
        proceedings under any bankruptcy or insolvency law by or against
        Borrower or any guarantor or the making by either Borrower or any
        guarantor of any offer or settlement, exchange or composition to their
        respective unsecured creditors generally ;

e)      Attach Liens. The issuance or filing against Borrower of a tax lien or
        the issuance or filing of any attachment, injunction, execution or
        judgment which is not removed within fifteen (15) days after issuance of
        filing;

                                     7 of 7
<PAGE>   8

                     CREDIT AND SECURITY AGREEMENT (cont.)

f)      Waste. Lender shall, upon reasonable basis, at any time deem itself
        insecure or unsafe because of diminution, removal, or waste of
        Collateral;

g)      Third Party Debt. Borrower shall fail to pay any Indebtedness due any
        third persons and such failure shall continue beyond any applicable
        grace period, or Borrower shall suffer to exist any other event of
        default under any agreement binding the Borrower;

h)      Judgment. Borrower shall suffer final judgments for payment of any sums
        due to third parties and shall not discharge the same within a period of
        thirty (30) days (unless, pending further proceedings, execution has not
        been commenced, or if commenced has been effectively stayed) or a
        judgment creditor of Borrower shall obtain possession of any of the
        Collateral by any means, including, without limitation, levy, distraint,
        replevin, or self help; and

i)      Impairment of Security. Any condition or situation, which, in the sole
        determination of the Lender, upon reasonable basis, constitutes a danger
        of impairment of the security of the Loan, and such condition or
        situation is not remedied within two (2) business day's after receipt of
        written notice to the Borrower to remedy such condition or situation.

SECTION 12. DEFAULT REMEDIES.

a)      Upon any Event Of Default:

                (i)     Lender shall retain the right to terminate making any
                        further advances of the Loan at any time thereafter,
                        without notice, and until all Obligations are satisfied
                        in full, such termination shall not affect the duties,
                        covenants and liabilities of Borrower hereunder and all
                        the terms, conditions and provisions hereof relating
                        thereto shall continue to be fully operative until all
                        transactions entered into and Obligations have been
                        fully satisfied;

                (ii)    All or any portion of Obligations due or to become due
                        whether under this Agreement or otherwise, shall, at the
                        option of Lender, without notice, demand, presentment or
                        dishonor, all of which Borrower hereby waives, become at
                        once due and payable, and Lender shall thereupon have
                        all the rights and remedies of a secured party under the
                        Uniform Commercial Code as adopted by the State of
                        Florida;

                (iii)   Lender may also, with or without proceeding with sale or
                        foreclosure or demanding payment of a debt owing by
                        Borrower to Lender, without notice, terminate further
                        performance under this Agreement and may declare all
                        outstanding amounts under the Loan Documents due and
                        payable and proceed against the Collateral whether or
                        not in the possession of Lender.; and

                (iv)    To the extent either Borrower or any guarantor makes a
                        payment or payments to Lender which payment or payments
                        or any part thereof are subsequently invalidated,
                        declared to be fraudulent or preferential, set aside or
                        required to be repaid to a trustee, receiver or any
                        other party under any bankruptcy act, state or federal
                        law, common law or equitable cause, then, to the extent
                        of such payment or repayment, the Obligation(s) or part
                        thereof intended to be satisfied shall be revived and
                        continued in full force and effect as if such payment
                        had not been made.

                                     8 of 8
<PAGE>   9
                     CREDIT AND SECURITY AGREEMENT (cont.)

b)      Any failure or delay of Lender to exercise or enforce any rights, liens,
        powers or remedies hereunder or under any of the aforesaid agreements or
        other documents or security or Collateral shall not operate as a waiver
        of such liens, rights, powers and remedies, but all such liens, rights,
        powers and remedies shall continue in full force and effect until all
        loans and advances and all Obligations owing or to become owing from
        Borrower to Lender shall have been fully satisfied and all liens,
        rights, powers and remedies herein provided are cumulative and none is
        exclusive.

c)      Lender may exercise any right or remedy it has under the Promissory Note
        which rights and remedies thereunder are not limited hereby.

SECTION 13. MISCELLANEOUS

a)      Further Assurances. From time to time, Borrower will execute and deliver
        to Lender such additional documents and will provide such additional
        information as Lender may reasonably require to carry out the terms of
        this Agreement and be informed of Borrower's status and affairs.

b)      Payment. The Borrower agrees that as long as the Loan Documents are in
        full force and effect, it will make all payments on each Payment Date,
        when due, by check duly mailed or delivered to Lender at the address
        indicated in the Notice section of this Agreement, or at such other
        place as Lender may designate to the Borrower in writing.

c)      Successors and Assigns. This Agreement shall bind and inure to the
        benefit of the respective successors and assigns of the parties hereto.

d)      Waiver by Lender. Lender shall have the right at all times to enforce
        the provisions of this Agreement and any other Loan Document executed
        pursuant hereto in accordance with the terms hereof and thereof,
        notwithstanding any conduct or custom on the part of Lender in
        refraining from so doing at any time. The failure of Lender at any time
        to enforce its rights under such provisions, in accordance with the same
        shall not be construed as having created a custom in any way or manner
        contrary to specific provisions of this Agreement or as having in any
        way or manner modified or waived the same. All rights and remedies of
        Lender are cumulative and concurrent and the exercise of one right or
        remedy shall not be deemed a waiver or release of any other right or
        remedy.

e)      Costs/Expenses. Pay all reasonable costs and expenses related to the
        transactions contemplated hereby including but not limited to,
        out-of-pocket expenses for payment of documentary stamp taxes,
        intangible taxes, recording and filing fees, surveys, title insurance
        premium, legal fees and expenses of counsel appointed by the Lender, any
        applicable sales tax together with any interest and penalties for the
        late payment thereof, all of which amounts shall be payable at the time
        of the execution of this Agreement or upon demand in the event they are
        hereafter incurred.

f)      Attorney's Fees. If either of the Parties hereto should bring a Court
        action alleging breach of this Agreement or seeking to enforce, rescind,
        renounce, declare void or terminate this Agreement or any provisions
        thereof, the prevailing party shall be entitled to recover all of its
        legal expenses, including reasonable attorney's fees and costs
        (including legal expenses for any appeals taken), and to have the same
        awarded as part of the judgment in the proceeding in which such legal
        expenses and attorney's fees were incurred.

                                     9 of 9
<PAGE>   10

g)      Captions. The Agreement contains captions as to contents of the
        particular paragraphs. The captions set forth herein are inserted only
        for convenience and are in no way to be construed as part of this
        Agreement or as a limitation of the scope of the particular paragraph in
        which they are referred.

h)      Construction of Agreement. Words of a gender used in this Agreement
        shall be held to include any other gender, the words in a singular
        number held to include the plural, when the sentence so requires.

i)      Counterparts. This Agreement may be executed in several counterparts,
        each of which so executed shall be deemed to be an original, and said
        counterparts shall together constitute and be one and the same
        instrument.

j)      Entire Agreement. This Agreement contains all of the oral and/or
        previously written agreements, representations, and arrangements between
        the Parties hereto with respect to the subject matter of this Agreement,
        and all right which the respective Parties may have had under any
        written agreements and/or oral agreements with respect to the subject
        matter of this Agreement are hereby canceled and terminated, and all
        Parties agree that there are no representations or warranties other than
        those set forth herein.

k)      Invalidation. Should any part of this Agreement for any reason be
        declared invalid, such decision shall not effect the validity of any
        remaining portion, which remaining portion shall remain in full force
        and effect as if this Agreement had been executed with the invalid
        portion thereof eliminated. It is, therefore, declared the intention of
        the Parties hereto that each of them will have executed the remaining
        portion of this Agreement without including therein any such part, parts
        or portion which may, for any reason, be hereafter declared void.

l)      Modification. No change or modification of this Agreement shall be valid
        unless the same shall be in writing and signed by each of the Parties
        hereto.

m)      Notices. Any and all notices, designations, consents, offers,
        acceptances, or any other communication provided for herein shall be
        given in writing by hand delivery, by overnight carrier, by registered
        or certified mail or by facsimile transmission and shall be addressed as
        follows:

               As to Borrower:    Bankers Insurance Group, Inc.
                                      360 Central Avenue, 17th Floor
                                      St. Petersburg, Florida 33701
                                      Att: G. Kristin Delano
                                      Telephone: (727) 823-4000
                                      Telefax: (727) 803-4198

               As to Lender:          Insurance Management Solutions Group, Inc.
                                      360 Central Avenue, 16th Floor
                                      St. Petersburg, Florida 33701
                                      Att: David Howard, President
                                      Tel#: (877) 711-4674
                                      Fax: (727) 803-2099

                                    10 of 10
<PAGE>   11
                     CREDIT AND SECURITY AGREEMENT (cont.)

        Notices sent by hand delivery shall be deemed effective on the date of
        hand delivery. Notices being sent by overnight carrier shall be deemed
        effective on the next business day after being placed into the hands of
        the overnight carrier. Notices sent by registered or certified mail
        shall be deemed effective on the third business day after being
        deposited into the post office. Notices sent by facsimile transmission
        shall be deemed to be effective on day when sent if sent prior to 5:00
        p.m. (the time being determined by the time zone of the recipient)
        otherwise they shall be deemed effective on the next business day.

n)      Representation Acknowledged. The Parties acknowledge that each Party and
        its counsel have reviewed and revised this Agreement and that the normal
        rules of construction to the effect that any ambiguities are to be
        resolved against the drafting party shall not be employed in the
        interpretation of this Agreement or any amendments or exhibits hereto.

o)      Applicable Law/ Venue. This Agreement shall be construed in accordance
        with and governed by the laws of the State of Florida, without regard to
        choice of law provisions. Further, the venue for any action brought to
        enforce any of the provisions hereof shall be in a state court of
        competent jurisdiction in Pinellas County, Florida and any action
        commenced in any other forum may be removed to a state court of
        competent jurisdiction in Pinellas County, Florida.

                                    11 of 11
<PAGE>   12

                     CREDIT AND SECURITY AGREEMENT (cont.)

IN WITNESS WHEREOF, the Parties hereto have set their hands and seals, the day
and year first above written.

"Borrower"
BANKERS INSURANCE GROUP, INC.

By:      s/s G. Kristin Delano
    --------------------------------

Name:    G. Kristin Delano
      ------------------------------
Its:     Secretary
     -------------------------------

"Lender"
INSURANCE MANAGEMENT SOLUTIONS GROUP, INC.

By:      s/s Richard G. Torra
    --------------------------------

Name:    Richard Torra
      ------------------------------
Its:     Corporate Secretary
     -------------------------------

                                     JOINDER

Bankers Underwriters, Inc. does hereby ratify and affirm the grant of a security
interest in the Flood Book in Section 4 d) hereof.

Executed this   14 day of  August              ,  2001
              -----        --------------------  ------

BANKERS UNDERWRITERS, INC.

By:      s/s G. Kristin Delano
    --------------------------------

Name:    G. Kristin Delano
      ------------------------------
Its:     Secretary
     -------------------------------

                                    12 of 12
<PAGE>   13

                     CREDIT AND SECURITY AGREEMENT (cont.)

EXHIBIT A
PERMITTED ENCUMBRANCES

Bankers Insurance Group - Western International Insurance Company -
Bonded Builders

                Loan:                $9,000,000.00 / Advanced $8,600,000.00
                Current Balance:     $8,426,940.65
                Lender:              Western International Insurance Company
                Borrower:            Bankers Insurance Group, Inc.
                Re:                  Financing for Bonded Builders acquisition
                Issue Date           April 16, 2000
                Maturity Date:       May 1, 2008
                Collateral
                Stock Pledged:       FCIC 3,023 shares owned by BIG
                                     BSIC 75,000 shares owned by BIG
                                     BHWA 1,000 shares owned by BIG

SouthTrust - Bankers Insurance Group, Inc.

                Loan:                $6,000,000.00
                Current Balance:     $3,372,305.40
                Lender:              SouthTrust
                Borrower:            BIG
                Issue Date           October 1, 1993
                Amended              December 20, 1997
                Maturity Date:       December 30, 2002
                                                  Stock Pledged:   2,008,667
                                     shares of BIG stock owned by BFC
                                                                   7,875 shares
                                     of FCIC shares owned by BIG

BFC means Bankers Financial Corporation, a Florida corporation
BIG means Bankers Insurance Group, Inc.
BHWA means Bankers Home Warranty Association, a Florida corporation
BSIC means Bankers Security Insurance Company, a Florida insurance company
FCIC means First Community Insurance Company, a New York insurance company

                                    13 of 13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00029-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00029-of-00352.parquet"}]]