CREDIT AGREEMENT

Exhibit 10.1

CREDIT AGREEMENT

Dated as of June 23, 2009

among

RAILAMERICA, INC.,
as
a Borrower

RAILAMERICA TRANSPORTATION CORP.,
as
a Borrower

The Several Lenders
from Time to Time Parties Hereto

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

CITIGROUP GLOBAL MARKETS INC.,
as Sole Lead Arranger and Sole Bookrunner

TABLE CONTENTS

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

          The parties hereto hereby agree as follows:

          SECTION 1. Definitions

          1.1. Defined Terms .

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

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

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

          “ ABR Margin ” shall mean 3.00% per annum.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          “ Eurodollar Margin ” shall mean 4.00% per annum.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          “ Guarantors ” shall mean the Subsidiary Guarantors.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     (E) any applicable Pro Forma Adjustment.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          “ Required Supermajority Lenders ” shall mean, at any date, Lenders having Commitments representing at least 66 ² / ₃ % of the Total Commitment at such date or, if the Total Commitment has terminated, having at least 66 ² / ₃ % of the Total Credit Exposure at such date.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          “ Sponsor ” shall mean Fortress Investment Group LLC.

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

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

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

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

          “ Swingline Commitment ” shall mean $10.0 million.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          SECTION 2. Amount and Terms of Credit

          2.1. Commitments .

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

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

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

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

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

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

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

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

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

          2.3. Notice of Borrowing .

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

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

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

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

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

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

          2.4. Disbursement of Funds .

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

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

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

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

          2.5. Repayment of Loans; Evidence of Debt .

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

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

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

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

          2.6. Conversions and Continuations .

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

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

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

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

          2.8. Interest .

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

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

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

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

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

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

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

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

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

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

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

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

          2.10. Increased Costs, Illegality, etc .

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

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

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

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

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

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

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

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

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

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

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

          2.14. Defaulting Lenders .

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

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

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

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

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

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

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

          (d) Fees . Anything herein to the contrary notwithstanding, during such period as a Lender is a Defaulting Lender, such Defaulting Lender will not be entitled to any fees accruing during such period pursuant to Section 4.1 (without prejudice to the rights of the Lenders other