Amendment No. 1 to Credit Agreement among RailAmerica, Inc. and Lenders (February 28, 2003)

Summary

This amendment updates the original Credit Agreement dated May 23, 2002, between RailAmerica, Inc. and its affiliates (the Borrowers), various lenders, and financial agents. The amendment allows for certain tax-related restructuring transactions involving the company's Australian and Canadian subsidiaries, modifies specific definitions and provisions, and waives any technical defaults that may have occurred due to these transactions. The parties also agree to cover related costs and confirm that no other terms of the original agreement are changed. The amendment is governed by New York law and becomes effective upon execution by all required parties.

EX-10.86 3 d54676_ex10-86.txt AMENDMENT NO. 1 TO CREDIT AGREEMENT Exhibit 10.86 EXECUTION COPY AMENDMENT NO. 1 TO CREDIT AGREEMENT AMENDMENT NO.1 dated as of February 28, 2003 to the CREDIT AGREEMENT, dated as of May 23, 2002, among RAILAMERICA, INC., PALM BEACH RAIL HOLDING, INC., RAILAMERICA TRANSPORTATION CORP., RAILAMERICA CANADA CORP., RAILINK CANADA LTD., RAILAMERICA AUSTRALIA FINANCE PTY., LTD., FREIGHT VICTORIA LIMITED, RAILAMERICA AUSTRALIA PTY., LTD. (collectively, the "Borrowers"), financial institutions and other Persons from time to time parties thereto, UBS WARBURG LLC, and MORGAN STANLEY SENIOR FUNDING, INC., as Joint Lead Arrangers and Bookrunners, MORGAN STANLEY SENIOR FUNDING, INC., as the Syndication Agent for the Lenders, UBS AG, STAMFORD BRANCH, as Administrative Agent for the Lenders, THE BANK OF NOVA SCOTIA and CREDIT LYONNAIS, NEW YORK BRANCH, as Documentation Agents for the Lenders and THE BANK OF NOVA SCOTIA, as Collateral Agent for the Lenders. W I T N E S S E T H: WHEREAS, the parties hereto are party to the Credit Agreement described above (as in effect immediately prior to the effectiveness hereof, the "Credit Agreement"); WHEREAS, the Company has advised the Lenders that it has undertaken, and intends to undertake, certain tax-related restructurings and related transactions with respect to certain of its Australian and Canadian Subsidiaries, all as further described on Exhibit A hereto (the "Restructuring Transactions"); and WHEREAS, the parties hereto wish to make certain technical amendments to the Credit Agreement to permit the Restructuring Transactions and to waive any technical Defaults which may have arisen prior to the date hereof with respect thereto; NOW, THEREFORE, the parties hereto agree as follows. Section 1. Definitions. Unless otherwise specifically defined in the recitals above, each term used herein which is defined in the Credit Agreement shall have the meaning assigned to such term in the Credit Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference and each reference to "this Agreement" and each other similar reference 1 contained in the Credit Agreement shall, on and after the effectiveness of this Amendment, refer to the Credit Agreement as amended hereby. Section 2. Subordinated Debt. The definition of "Subordinated Debt" in Section 1.1 of the Credit Agreement is amended by inserting after "Senior Subordinated Notes" the words "but excluding any Indebtedness owed to Holdings, Intermediate Holdings, the Company or any Restricted Subsidiary". Section 3. Capital Stock of RAAPL. Section 7.2.11 of the Credit Agreement is amended by inserting at the beginning of clause (d) thereof the letter "(i)" and by inserting, immediately after "Domestic Restricted Subsidiaries" in such clause (d) the following: ", or (ii) the one-time transfer by the Australian Term Borrower of one share of the Capital Stock of RAAPL to an individual who is a Related Party". Section 4. Amendments to Organic Documents. Section 7.2.12 of the Credit Agreement is amended by replacing paragraph (b) thereof to read in its entirety as follows: (b) the Organic Documents, except to the extent that such amendment, supplement, waiver or other modification or forebearance pursuant to such documents could not reasonably be expected to materially adversely affect the rights and remedies of any Secured Party under any Loan Documents or the ability of any Obligor to perform its Obligations under any Loan Document, it being understood that the amendments to the Organic Documents arising out of certain restructuring and tax-related transactions disclosed to the Lenders on or prior to February 28, 2003 shall not be considered to have had such a materially adverse affect. Section 5. Transactions With Affiliates. Section 7.2.13 of the Credit Agreement is amended by adding immediately after "Affiliates" the words "(other than the transaction permitted by Section 7.2.11(d)(ii))". Section 6. Waiver of Defaults. The Lenders hereby waive any Default or Event of Default solely to the extent that such Default or Event of Default is a result of any noncompliance by the Company with Section 7.2.12 arising prior to the date of effectiveness hereof as a result of any of the Restructuring Transactions. Other than as specifically provided herein, this Amendment shall not operate as a waiver or amendment of any right, power or privilege of the Lenders under the Credit Agreement or of any other term or condition of the Credit Agreement, nor shall the entering into of this Amendment preclude the Lenders from refusing to enter into any further waivers or amendments with respect to the Credit Agreement. Section 7. Representations and Warranties. The Company represents and warrants that (i) the representations and warranties set forth in Article VI of the Credit Agreement will be true and correct as of the effective date of this 2 Amendment and (ii) after giving effect to Section 5 hereof, no Default will have occurred and be continuing on such date. Section 8. Fees and expenses. Each of Holdings, Intermediate Holdings and the Borrower agrees that it will comply with its obligations under Section 11.3 of the Credit Agreement with respect to costs and expenses arising in connection with this Amendment. Section 9. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York. Section 10. Counterparts; Effectiveness. (a) This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. (b) This Amendment shall become effective upon receipt by the Administrative Agent of duly executed counterparts hereof signed by Holdings, Intermediate Holdings, the Borrowers and the Required Lenders (or, in the case of any such party as to which an executed counterpart or consent shall not have been received, the Administrative Agent shall have received telegraphic, telex or other written confirmation from such party of execution of a counterpart hereof or consent hereto by such party). 3 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the day and year first above written. RAILAMERICA, INC. By: /s/ Larry W. Bush ------------------------------------ Name: Larry Bush Title: Vice-President & Treasurer 4 PALM BEACH RAIL HOLDING, INC. By: /s/ Larry W. Bush ------------------------------------ Name: Larry Bush Title: Vice-President 5 RAILAMERICA TRANSPORTATION CORP. By: /s/ Larry W. Bush ------------------------------------ Name: Larry Bush Title: Vice-President 6 RAILAMERICA CANADA CORP. By: /s/ Larry W. Bush ------------------------------------ Name: Larry Bush Title: Vice-President 7 RAILINK CANADA LTD. By: /s/ Larry W. Bush ------------------------------------ Name: Larry Bush Title: Vice-President 8 RAILAMERICA AUSTRALIA FINANCE PTY. LTD. By: /s/ Gary O. Marino ------------------------------------ Name: Gary O. Marino Title: Chief Executive Officer 9 FREIGHT VICTORIA LIMITED By: /s/ Gary O. Marino ------------------------------------ Name: Gary O. Marino Title: Chief Executive Officer 10 RAILAMERICA AUSTRALIA PTY. LTD. By: /s/ Gary O. Marino ------------------------------------ Name: Gary O. Marino Title: Chief Executive Officer 11 UBS AG, STAMFORD BRANCH By: /s/ Robert Reuter ------------------------------------ Name: Robert Reuter Title: Executive Director By: /s/ Lynne B. Alfarone ------------------------------------ Name: Lynne B. Alfarone Title: Associate Director, Banking Products Services, US 12 HANOVER SQUARE CLO LTD. By: Blackstone Debt Advisors L.P., as Collateral Manager By: /s/ Dean Criares ------------------------------------ Name: Dean Criares Title: Managing Director 13 CITIGROUP INVESTMENTS CORPORATE LOAN FUND INC. By: Travelers Asset Management International Company LLC By: /s/ Denise T. Duffee ------------------------------------ Name: Denise T. Duffee Title: Investment Officer 14 COLUMBUS LOAN FUNDING LTD. By: Travelers Asset Management International Company LLC By: /s/ Denise T. Duffee ------------------------------------ Name: Denise T. Duffee Title: Investment Officer 15 PROMETHEUS INVESTMENT FUNDING NO. 1 LTD. By: HVB Credit Advisors LLC By: /s/ Irv Roa ------------------------------------ Name: Irv Roa Title: Director By: /s/ Elizabeth Tallmadge ------------------------------------ Name: Elizabeth Tallmadge Title: Managing Director Chief Investment Officer 16 PROMETHEUS INVESTMENT FUNDING NO. 2 LTD. By: HVB Credit Advisors LLC By: /s/ Irv Roa ------------------------------------ Name: Irv Roa Title: Director By: /s/ Elizabeth Tallmadge ------------------------------------ Name: Elizabeth Tallmadge Title: Managing Director Chief Investment Officer 17 DENALI CAPITAL CLO I, LTD. By: Denali Capital LLC As portfolio manager By: /s/ John P. Thacker ------------------------------------ Name: John P Thacker Title: Chief Credit Officer 18 DENALI CAPITAL CLO II, LTD. By: Denali Capital LLC As portfolio manager By: /s/ John P. Thacker ------------------------------------ Name: John P. Thacker Title: Chief Credit Officer 19 DENALI CAPITAL CLO III, LTD. By: Denali Capital LLC As portfolio manager By: /s/ John P. Thacker ------------------------------------ Name: John P. Thacker Title: Chief Credit Officer 20 AMMC CDO II, LIMITED By: American Money Management Corp., as Collateral Manager By: /s/ David P. Meyer ------------------------------------ Name: David P. Meyer Title: Vice President 21 WELLS FARGO BANK TEXAS, NATIONAL ASSOCIATION By: /s/ Anthony C. Frels ------------------------------------ Name: Anthony C. Frels Title: Vice President 22 NATIONWIDE LIFE INSURANCE COMPANY By: /s/ Wayne T. Frisbee ------------------------------------ Name: Wayne T. Frisbee Title: Vice President 23 NATIONWIDE MUTUAL INSURANCE COMPANY By: /s/ Wayne T. Frisbee ------------------------------------ Name: Wayne T. Frisbee Title: Vice President 24 TORONTO DOMINION (NEW YORK), INC. By: /s/ Stacey L. Malek ------------------------------------ Name: Stacey L Malek Title: Vice President 25 THE BANK OF NOVA SCOTIA By: /s/ Patrick J. Hawes ------------------------------------ Name: Patrick J. Hawes Title: Comptroller 26 LCM I LIMITED PARTNERSHIP By: Lyon Capital Management LLC, as Attorney-in-Fact By: /s/ Farboud Tavangar ------------------------------------ Name: Farboud Tavangar Title: Lyon Capital Management LLC, Senior Portfolio Manager 27 RZB FINANCE LLC By: /s/ Astrid Wilke ------------------------------------ Name: Astrid Wilke Title: Vice President By: /s/ John A. Valiska ------------------------------------ Name: John A. Valiska Title: Group Vice President 28 FRANKLIN FLOATING RATE TRUST FRANKLIN FLOATING RATE DAILY ACCESS FUND By: /s/ Richard D'Addario ------------------------------------ Name: Richard D'Addario Title: Vice President 29 FRANKLIN CLO II, LIMITED FRANKLIN CLO III, LIMITED By: /s/ Richard D'Addario ------------------------------------ Name: Richard D'Addario Title: Senior Vice President 30 THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND By: /s/ Tom Hayes, Mary Connolly ------------------------------------ Name: Tom Hayes, Mary Connolly Title: Authorized Signatory 31 SEQUILS - GLACE BAY, LTD. By: The Royal Bank of Canada, as Collateral Manager By: /s/ Melissa Marano ------------------------------------ Name: Melissa Marano Title: Partner 32 KATONAH III, LTD. By: /s/ Ralph Della Rocca ------------------------------------ Name: Ralph Della Rocca Title: Authorized Officer Katonah Capital, L.L.C., as Manager 33 JUPITER FUNDING TRUST By: /s/ Kelly W. Warnement ------------------------------------ Name: Kelly W. Warnement Title: Authorized Agent 34 STANWICH LOAN FUNDING LLC By: /s/ Kelly W. Warnement ------------------------------------ Name: Kelly W. Warnement Title: Vice President 35 WINGED FOOT FUNDING TRUST By: /s/ Kelly W. Warnement ------------------------------------ Name: Kelly W. Warnement Title: Authorized Agent 36 LONGHORN CDO II, LTD. By: Merrill Lynch Investment Managers, L.P., as Investment Advisor By: /s/ Matthew Wallack ------------------------------------ Name: Matthew Wallack Title: Authorized Signatory 37 HARBOUR TOWN FUNDING LLC By: /s/ Ann E. Morris ------------------------------------ Name: Ann E. Morris Title: Asst. Vice President 38 RACE POINT CLO, LIMITED By: Sankaty Advisors, LLC, as Collateral Manager By: /s/ Timothy M. Barns ------------------------------------ Name: Timothy M. Barns Title: Senior Vice President 39 GREAT POINT CLO 1999-1 LTD. By: Sankaty Advisors, LLC, as Collateral Manager By: /s/ Timothy M. Barns ------------------------------------ Name: Timothy Barns Title: Senior Vice President 40 CASTLE HILL II - INGOTS, LTD. By: Sankaty Advisors, LLC, as Collateral Manager By: /s/ Timothy M. Barns ------------------------------------ Name: Timothy Barns Title: Senior Vice President 41 CASTLE HILL I - INGOTS, LTD. By: Sankaty Advisors, LLC, as Collateral Manager By: /s/ Timothy M. Barns ------------------------------------ Name: Timothy M. Barns Title: Senior Vice President 42 BRANT POINT II CBO 2000-1 LTD. By: Sankaty Advisors, LLC, as Collateral Manager By: /s/ Timothy M. Barns ------------------------------------ Name: Timothy M. Barns Title: Senior Vice President 43 SANKATY HIGH YIELD PARTNERS III, L.P. By: /s/ Timothy M. Barns ------------------------------------ Name: Timothy M. Barns Title: Senior Vice President 44 MORGAN STANLEY SENIOR FUNDING, INC. By: /s/ Eric H. Coombs ------------------------------------ Name: Eric H, Coombs Title: Vice President 45 AIMCO CLO SERIES 2001-A By: /s/ Jerry D. Zinkula ------------------------------------ Name: Jerry D. Zinkula Title: Authorized Signatory By: /s/ Chris Goergen ------------------------------------ Name: Chris Goergen Title: Authorized Signatory 46 ALLSTATE LIFE INSURANCE COMPANY By: /s/ Jerry D. Zinkula ------------------------------------ Name: Jerry D. Zinkula Title: Authorized Signatory By: /s/ Chris Goergen ------------------------------------ Name: Chris Goergen Title: Authorized Signatory 47 AIMCO CDO SERIES 2000-A By: /s/ Jerry D. Zinkula ------------------------------------ Name: Jerry D. Zinkula Title: Authorized Signatory By: /s/ Chris Goergen ------------------------------------ Name: Chris Goergen Title: Authorized Signatory 48 NATIONAL BANK OF CANADA By: /s/ Robert Ziger ------------------------------------ Name: Robert Ziger Title: Account Manager 49 CREDIT LYONNAIS NEW YORK BRANCH By: /s/ Attila Koc ------------------------------------ Name: Attila Koc Title: Senior Vice President 50 SUNAMERICA LIFE INSURANCE COMPANY By: /s/ John G. Lapham ------------------------------------ Name: John G. Lapham Title: Authorized Agent 51 CANADIAN IMPERIAL BANK OF COMMERCE By: /s/ William M. Swenson ------------------------------------ Name: William M. Swenson Title: Authorized Signatory 52 GALAXY CLO, 2003-1, LTD. By: CIBC Inc., as Agent By: /s/ William M. Swenson ------------------------------------ Name: William M. Swenson Title: Authorized Signatory 53 NATEXIS BANQUES POPULAIRES By: /s/ William J. Burke ------------------------------------ Name: William J. Burke Title: Vice President By: /s/ Michael J. Storms ------------------------------------ Name: Michael J. Storms Title: Associate 54 KZH SOLEIL LLC By: /s/ Susan Lee ------------------------------------ Name: Susan Lee Title: Authorized Agent 55 KZH SOLEIL-2 LLC By: /s/ Susan Lee ------------------------------------ Name: Susan Lee Title: Authorized Agent 56 NOMURA BOND & LOAN FUND By: UFJ Trust Company of New York, as Trustee By: Nomura Corporate Research and Asset Management Inc., as Attorney-in-Fact By: /s/ Elizabeth MacLean ------------------------------------ Name: Elizabeth MacLean Title: Vice President 57 LONG LANE MASTER TRUST II By: Fleet National Bank, as Trust Administrator, with respect to Series Eclipse By: /s/ Renee Nadler ------------------------------------ Name: Renee Nadler Title: Managing Director 58 ALLIED IRISH BANK PLC By: /s/ Mags Brennen, Anthony O'Reilly ------------------------------------ Name: Mags Brennen, Anthony O'Reilly Title: Vice President, Vice President 59 AIB DEBT MANAGEMENT PLC By: /s/ Mags Brennen, Anthony O'Reilly ------------------------------------ Name: Mags Brennen, Anthony O'Reilly Title: Vice President, Vice President 60 VAN KAMPEN PRIME RATE INCOME TRUST By: Van Kampen Investment Advisory Corp. By: /s/ Howard Tiffen ------------------------------------ Name: Howard Tiffen Title: Managing Director 61 VAN KAMPEN SENIOR INCOME TRUST By: Van Kampen Investment Advisory Corp. By: /s/ Howard Tiffen ------------------------------------ Name: Howard Tiffen Title: Managing Director 62 KZH CNC LLC By: /s/ Susan Lee ------------------------------------ Name: Susan Lee Title: Authorized Agent 63 KZH PONDVIEW LLC By: /s/ Susan Lee ------------------------------------ Name: Susan lee Title: Authorized Agent 64 KZH WATERSIDE LLC By: /s/ Susan Lee ------------------------------------ Name: Susan Lee Title: Authorized Agent 65