Exhibit 10.103

CHANGE IN CONTROL SEVERANCE AGREEMENT

THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (“Agreement”) is made and entered
into as of the 26th day of May 2005 by and between RAILAMERICA, INC., a Delaware
corporation (the “Company”), and ROBERT J. RABIN (the “Officer”).

RECITALS

The Board of Directors of the Company (the “Board”), has determined that it is
in the best interests of the Company and its shareholders to assure that the
Company will have the continued dedication of the Officer, notwithstanding the
possibility, threat, or occurrence of a Change of Control (as defined below) of
the Company.

The Board believes it is imperative to diminish the inevitable distraction of
the Officer by virtue of the personal uncertainties and risks created by a
pending or threatened Change of Control, to encourage the Officer’s full
attention and dedication to the Company currently and in the event of any
threatened or pending Change of Control, and to provide the Officer with
compensation arrangements upon a Change of Control which provide the Officer
with individual financial security and which are competitive with those of other
corporations and, in order to accomplish these objectives, the Board has caused
the Company to enter into this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and mutual covenants set forth
herein, IT IS HEREBY AGREED AS FOLLOWS:

1. Certain Definitions

(a) The “Effective Date” shall be the first date during the “Change of Control
Period” (as defined in Section 1(b)) on which a Change of Control occurs.
Anything in this Agreement to the contrary notwithstanding, if the Officer’s
employment with the Company is terminated prior to the date on which a Change of
Control occurs, and it is reasonably demonstrated that such termination (1) was
at the request of a third party who has taken steps reasonably calculated to
effect a Change of Control, or (ii) otherwise arose in connection with or
anticipation of a Change of Control, then for all purposes of this Agreement the
“Effective Date” shall mean the date immediately prior to the date of such
termination; provided that if the Officer’s employment with the Company is
terminated within the six months immediately preceding the date on which a
Change in Control occurs, then the termination of employment shall be presumed
to have arisen in anticipation of a Change of Control unless shown to the
contrary by clear and convincing evidence.

(b) The “Change of Control Period” is the period commencing on the date hereof
and ending on the earlier to occur of (i) the third anniversary of such date,
and (ii) the first day of the month next following the Officer’s normal
retirement date at age 65 (“Normal Retirement Date”); provided, however, that
commencing on the date one year after the date hereof; and on each annual
anniversary of such date (such date and each annual anniversary thereof is
hereinafter referred to as the “Renewal Date”), the Change of Control Period
shall be automatically extended so as to terminate on the earlier of (x) three
years from such Renewal Date, or (y) the first day of the month coinciding with
or next following the Officer’s Normal Retirement Date, unless at least sixty
(60) days prior to the Renewal Date the Company shall give written notice to the
Officer that the Change of Control Period shall not be so extended.

2. Change of Control

For the purpose of this Agreement, a “Change of Control” shall mean:

(i) The acquisition (other than from the Company), by any person, entity or
“group”, within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 (the “Exchange Act”), of beneficial ownership (within the
meaning of Rule 1 3d-3 promulgated under the Exchange Act) of 33 1/3% or more of
either the then outstanding shares of common stock or the combined voting power
of the Company’s then outstanding voting securities entitled to vote generally
in the election of directors (hereafter referred to as the ownership of a
“Controlling Interest”), excluding, for this purpose, any acquisitions by
(1) the Company or any of its subsidiaries, (2) any person, entity or “group”
that as of the date hereof owns beneficial ownership (within the meaning of
Rule 1 3d-3 promulgated under the Exchange Act) of a Controlling Interest; or
(3) any employee benefit plan of the Company or any of its subsidiaries.

(ii) The nine (9) individuals who, as of the date hereof; constitute the Board
of Directors (as of the date hereof the “Incumbent Board”) cease for any reason
to constitute at least a majority of the Board, provided that any person
becoming a director subsequent to the date hereof whose election, or nomination
for election by the Company’s stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board (other than an
election or nomination of an individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of the directors of the Company) shall be, for purposes of this
Agreement, considered as though such person were a member of the Incumbent
Board; or

(iii) Approval by the stockholders of the Company of (1) a reorganization,
merger or consolidation with respect to which persons who were the stockholders
of the Company immediately prior to such reorganization, merger or consolidation
do not, immediately thereafter, own more than 66 2/3% of the combined voting
power entitled to vote generally in the election of directors of the
reorganized, merged or consolidated company’s (or entity’s) then outstanding
voting securities in substantially the same proportions as their ownership
immediately prior to such reorganization, merger, or consolidation, (2) a
liquidation or dissolution of the Company, or (3) the sale of all or
substantially all of the assets of the Company, unless the approved
reorganization, merger, consolidation, liquidation, dissolution or sale is
subsequently abandoned.

3. Employment Period

If and only in the event that the Officer is an officer, elected or otherwise
designated by the Board, of the Company or one of its subsidiaries as of the
Effective Date, the Company hereby agrees to continue the Officer in its employ,
and the Officer hereby agrees to remain in the employ of the Company, for the
period commencing on the Effective Date and ending on the earlier to occur of
(i) the third anniversary of such date, or (ii) the first day of the month
coinciding with or next following the Officer’s Normal Retirement Date (the
“Employment Period”). In the event that the Officer is not an officer, elected
or otherwise designated by the Board, of the Company or one of its subsidiaries
as of the Effective Date, then this Agreement shall immediately terminate and no
longer have any force or effect. Notwithstanding anything to the contrary
herein, in the event that the Officer ceases to be an officer, elected or
otherwise designated by the Board, within the six (6) months immediately
preceding the Effective Date, then the Officer shall be deemed to be an officer,
elected or otherwise designated by the Board, of the Company or one of its
subsidiaries as of the Effective Date unless the Company demonstrates by clear
and convincing evidence that such cessation was not in connection with or in
anticipation of a Change in Control.

4. Terms of Employment

(a) Position and Duties.

(i) During the Employment Period, (1) the Officer’s position (including status,
offices, titles and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all material respects with
the most significant of those held, exercised and assigned at any time during
the 180-day period immediately preceding the Effective Date, and (2) the
Officer’s services shall be performed at the location where the Officer was
employed immediately preceding the Effective Date or any office or location less
than 50 miles from such location.

(ii) During the Employment Period, and excluding any periods of vacation and
sick leave to which the Officer is entitled, the Officer agrees to devote
reasonable attention and time during normal business hours to the business and
affairs of the Company and, to the extent necessary to discharge the
responsibilities assigned to the Officer hereunder, to use the Officer’s
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Officer to (1) serve on corporate, civic or charitable
boards or committees, (2) deliver lectures, fulfill speaking engagements or
teach at educational institutions, and (3) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Officer’s responsibilities as an employee of the Company in accordance with this
Agreement. It is expressly understood and agreed that to the extent that any
such activities have been conducted by the Officer prior to the Effective Date,
the continued conduct of such activities (or the conduct of activities similar
in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Officer’s
responsibilities to the Company.

(b) Compensation.

(i) Base Salary. During the Employment Period, the Officer shall receive a base
salary (“Base Salary”) at a monthly rate at least equal to the highest monthly
base salary paid or payable to the Officer by the Company during the
twelve-month period immediately preceding the month in which the Effective Date
occurs. During the Employment Period, the Base Salary shall be reviewed at least
annually and shall be increased at any time and from time to time as shall be
substantially consistent with increases in base salary awarded in the ordinary
course of business to other key Officers of the Company and its subsidiaries.
Any increase in Base Salary shall not serve to limit or reduce any other
obligation to the Officer under this Agreement. Base Salary shall not be reduced
after any such increase.

(ii) Annual Bonus. In addition to Base Salary, the Officer shall be awarded, for
each fiscal year during the Employment Period, an annual bonus (an “Annual
Bonus”) (either pursuant to any then-established incentive compensation plan(s)
of the Company or otherwise) in cash at least equal to the greater of (x) the
average of the bonuses payable to the Officer from the Company and its
subsidiaries in the three fiscal years immediately preceding the fiscal year in
which the Effective Date occurs, or (y) the bonus that would be payable for the
fiscal year if such bonus was determined based upon the same formula, terms, and
conditions as was used to determine the Officer’s bonus for the fiscal year
immediately preceding the fiscal year in which the Effective Date occurs.
Nothing in this Agreement shall require the payment of an Annual Bonus prior to
the Effective Date.

(iii) Incentive, Savings and Retirement Plans. In addition to Base Salary and
Annual Bonus payable as hereinabove provided, the Officer shall be entitled to
participate during the Employment Period in all incentive, savings and
retirement plans, practices, policies and programs applicable to similar key
Officers of the Company (including its successors or assigns) and its
affiliates, in each case comparable to those in effect on the Effective Date or
as subsequently amended. Such plans, practices, policies and programs, in the
aggregate, shall provide the Officer with compensation, benefits and reward
opportunities at least as favorable as the most favorable of such compensation,
benefits and reward opportunities provided by the Company for the Officer under
such plans, practices, policies and programs as applicable to the Officer at any
time during the 180-day period immediately preceding the Effective Date or, if
more favorable to the Officer, as provided at any time thereafter.

(iv) Welfare Benefit Plans. During the Employment Period, the Officer and/or the
Officer’s family, as the case may be, shall be eligible for participation in and
shall receive all benefits under welfare benefit plans, practices, policies and
programs provided by the Company and its subsidiaries (including, without
limitation, medical, prescription, dental, disability, salary continuance,
employee life, group life, accidental death and travel accident insurance plans
and programs), at least as favorable as the most favorable benefits applicable
to the Officer under such plans, practices, policies and programs in effect at
any time during the 180-day period immediately preceding the Effective Date or,
if more favorable to the Officer and/or the Officer’s family, as in effect at
any time thereafter.

(v) Expenses. During the Employment Period, the Officer shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred by the Officer
in connection with the business of the Company in accordance with the most
favorable policies, practices and procedures of the Company and its subsidiaries
in effect at any time during the 180-day period immediately preceding the
Effective Date or, if more favorable to the Officer, as in effect at any time
thereafter with respect to other key Officers.

(vi) Fringe Benefits. During the Employment Period, the Officer shall be
entitled to fringe benefits, in accordance with the benefits applicable to the
Officer under the most favorable plans, practices, programs and policies of the
Company and its subsidiaries in effect at any time during the 180-day period
immediately preceding the Effective Date or, if more favorable to the Officer,
as in effect at any time thereafter with respect to other key Officers.

(vii) Office and Support Staff. During the Employment Period, the Officer shall
be entitled to an office or offices of a size and with furnishings and other
appointments, and to secretarial and other assistance, at least equal to the
most favorable of the foregoing provided to the Officer by the Company and its
subsidiaries at any time during the 180-day period immediately preceding the
Effective Date or, if more favorable to the Officer, as provided at any time
thereafter with respect to other key Officers of the Company and its
subsidiaries.

(viii) Vacation. During the Employment Period, the Officer shall be entitled to
paid vacation in accordance with the benefits applicable to the Officer under
the most favorable plans, policies, programs and practices of the Company and
its subsidiaries as in effect at any time during the 180-day period immediately
preceding the Effective Date or, if more favorable to the Officer, as in effect
at any time thereafter.

5. Termination

(a) Death or Disability. This Agreement shall terminate automatically upon the
Officer’s death. If the Company determines in good faith that the Disability of
the Officer has occurred (pursuant to the definition of “Disability” set forth
below), it may give to the Officer written notice of its intention to terminate
the Officer’s employment. In such event, the Officer’s employment with the
Company shall terminate effective on the later of (i) the 30th day after receipt
of such notice by the Officer, provided that, within the 30 days after such
receipt, the Officer shall not have returned to full-time performance of the
Officer’s duties, or (ii) if the Officer is eligible to receive disability
benefits under the Company’s long-term disability plan (if any) then in effect,
then the date on which the Officer begins receiving such disability benefits
(the “Disability Effective Date”). For purposes of this Agreement, “Disability”
means a mental or physical incapacity, illness or disability which renders the
Officer unable to perform his duties and responsibilities for the Company and
which, at least 26 weeks after its commencement, is determined to be total and
permanent by a physician selected by the Company or its insurers and acceptable
to the Officer or the Officer’s legal representative (such agreement as to
acceptability not to be withheld unreasonably).

(b) Cause. The Company may terminate the Officer’s employment for “Cause.” For
purposes of this Agreement, “Cause” shall mean (i) an act or acts of personal
dishonesty taken by the Officer and intended to result in substantial personal
enrichment of the Officer at the expense of the Company, (ii) repeated
violations by the Officer of the Officer’s obligations under Section 4(a) of
this Agreement which are demonstrably willful and deliberate on the Officer’s
part and which are materially harmful to the Company, and which are not remedied
in a reasonable period of time after receipt of written notice from the Company
to the Officer, or (iii) the conviction of the Officer of a felony crime. Any
determination of Cause pursuant to this Section 5(b) shall be made by the Board
at a duly called meeting, and the Officer shall be given at least five (5) days
notice (the “Notice”), in writing, of such meeting, as well as a detailed
description of all acts or omissions upon which the Company is relying for such
termination. The Officer shall have the right to appear before such meeting of
the Board with or without legal counsel of his or her choosing to refute any
determination of Cause specified in such Notice, and any termination of the
Officer’s employment by reason of such Cause determination shall not be
effective until the Officer is afforded such opportunity to appear. Nothing
herein shall limit the right of the Officer or his beneficiaries to contest the
validity or propriety of any such determination.

(c) Good Reason. The Officer’s employment may be terminated by the Officer for
“Good Reason”. For purposes of this Agreement, “Good Reason” means:

(i) the assignment to the Officer of any duties inconsistent in any respect with
the Officer’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Section
4(a) of this Agreement, or any other action by the Company which results in a
diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Officer;

(ii) any failure by the Company to comply with any of the provisions of Section
4(b) of this Agreement, other than an isolated, insubstantial and inadvertent
failure not occurring in bad faith and which is remedied by the Company promptly
after receipt of notice thereof given by the Officer;

(iii) the Company’s requiring the Officer to be based at any office or location
other than that described in Section 4(a)(i)(2) hereof; except for travel
reasonably required in the performance of the Officer’s responsibilities
consistent with practices in effect prior to the Effective Date;

(iv) any purported termination by the Company of the Officer’s employment
otherwise than as expressly permitted by this Agreement; or

(v) any failure by the Company to comply with and satisfy Section 9(c) of this
Agreement.

Anything in this Agreement to the contrary notwithstanding, a termination by the
Officer for any reason during the 30-day period immediately following the first
anniversary of the Effective Date shall be deemed to be a termination for Good
Reason for all purposes of this Agreement.

(d) Notice of Termination. Any termination by the Company for Cause or by the
Officer for Good Reason shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 10(b) of this Agreement. For
purposes of this Agreement, a “Notice of Termination” means a written notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Officer’s employment under the
provision so indicated, and (iii) if the Date of Termination (as defined below)
is other than the date of receipt of such notice, specifies the termination date
(which date shall be not more than fifteen (15) days after the giving of such
notice). The failure by the Officer to set forth in the Notice of Termination
any fact or circumstance which contributes to a showing of Good Reason shall not
waive any right of the Officer hereunder or preclude the Officer from asserting
such fact or circumstance in enforcing his rights hereunder.

(e) Date of Termination. “Date of Termination” means the date of receipt of the
Notice of Termination or any later date specified therein, as the case may be;
provided, however, that (i) if the Officer’s employment is terminated by the
Company other than for Cause or Disability, the Date of Termination shall be the
date on which the Officer receives the Company’s notice of such termination, and
(ii) if the Officer’s employment is terminated by reason of death or Disability,
the Date of Termination shall be the date of death of the Officer or the
Disability Effective Date, as the case may be.

6. Obligations of the Company upon Termination

(a) Death. If during the Employment Period the Officer’s employment is
terminated by reason of the Officer’s death, this Agreement shall terminate
without further obligation to the Officer’s legal representatives under this
Agreement, other than those obligations accrued or earned and vested (if
applicable) by the Officer as of the Date of Termination, including, for this
purpose (i) the Officer’s full Base Salary through the Date of Termination at
the rate in effect on the Date of Termination or, if higher, at the highest rate
in effect at any time from the 180-day period preceding the Effective Date
through the Date of Termination (the “Highest Base Salary”), (ii) the product of
the Annual Bonus paid to the Officer for the last full fiscal year and a
fraction, the numerator of which is the number of days in the current fiscal
year through the Date of Termination, and the denominator of which is 365, and
(iii) any compensation previously deferred by the Officer (together with any
accrued interest thereon) and not yet paid by the Company and any accrued
vacation pay not yet paid by the Company (such amounts specified in clauses (i),
(ii) and (iii) are hereinafter referred to as “Accrued Obligations”). All such
Accrued Obligations shall be paid to the Officer’s estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination.
Anything in this Agreement to the contrary notwithstanding, the Officer’s family
shall be entitled to receive benefits at least equal to the most favorable
benefits provided by the Company and any of its subsidiaries to surviving
families of similar Officers of the Company and such subsidiaries under such
plans, programs, practices and policies relating to family death benefits, if
any, in accordance with the most favorable plans, programs, practices and
policies of the Company and its subsidiaries in effect at any time during the
180-day period immediately preceding the Effective Date or, if more favorable to
the Officer and/or the Officer’s family, as in effect on the date of the
Officer’s death with respect to other similar key Officers of the Company and
its subsidiaries and their families.

(b) Disability. If during the Employment Period the Officer’s employment is
terminated by reason of the Officer’s Disability, this Agreement shall terminate
without further obligations to the Officer, other than those obligations accrued
or earned and vested (if applicable) by the Officer as of the Date of
Termination, including for this purpose, all Accrued Obligations. All such
Accrued Obligations shall be paid to the Officer in a lump sum in cash within
30 days of the Date of Termination. Anything in this Agreement to the contrary
notwithstanding, the Officer shall be entitled after the Disability Effective
Date to receive disability and other benefits at least equal to the most
favorable of those provided by the Company and its subsidiaries to similar
disabled employees and/or their families in accordance with such plans,
programs, practices and policies relating to disability, if any, in accordance
with the most favorable plans, programs, practices and policies of the Company
and its subsidiaries in effect at any time during the 180-day period immediately
preceding the Effective Date or, if more favorable to the Officer and/or the
Officer’s family, as in effect at any time thereafter with respect to other
similar key Officers and their families.

(c) Causes Other than for Good Reason. If during the Employment Period, the
Officer terminates his employment other than for Good Reason, or the Officer’s
employment is terminated by the Company for Cause, this Agreement shall
terminate without further obligation to the Officer, other than those
obligations accrued or earned and vested (if applicable) by the Officer through
the Date of Termination, including for this purpose, all Accrued Obligations.
All amounts required to be paid to the Officer pursuant to this Section 6(c)
shall be paid to the Officer in a lump sum in cash within 30 days of the Date of
Termination.

(d) Good Reasons Other Than for Cause or Disability. If, during the Employment
Period, the Company shall terminate the Officer’s employment other than for
Cause, Disability or death, or if the Officer shall terminate his employment for
Good Reason then:

(i) the Company shall pay to the Officer in a lump sum in cash within 30 days
after the Date of Termination the aggregate of the following amounts:

1. to the extent not theretofore paid, the Officer’s Highest Base Salary through
the date of Termination; and

2. the product of (x) the Annual Bonus paid to the Officer for the last full
fiscal year (if any) ending during the Employment Period or, if higher, the
Annual Bonus paid to the Officer for the last full fiscal year prior to the
Effective Date (as applicable, the “Recent Bonus”) and (y) a fraction, the
numerator of which is the number of days in the current fiscal year through the
Date of Termination and the denominator of which is 365; and

3. the product of (x) two (2), and (y) the sum of (i) the Highest Base Salary
and (ii) the Recent Bonus; and

4. in the case of compensation previously deferred by the Officer, all amounts
previously deferred (together with any accrued interest thereon) and not yet
paid by the Company, and any accrued vacation pay not yet paid by the Company;
and

5. all other amounts accrued or earned by the Officer through the Date of
Termination and amounts otherwise owing under the then existing plans and
policies at the Company; and

(ii) for the remainder of the Employment Period, or such longer period as any
plan, program, practice or policy may provide, the Company shall continue
benefits to the Officer and/or the Officer’s family at least equal to those
which would have been provided to them in accordance with the plans, programs,
practices and policies described in Section 4(b)(iv) of this Agreement if the
Officer’s employment had not been terminated, including health, dental,
disability insurance and life insurance, in accordance with the most favorable
plans, practices, programs or policies of the Company and its subsidiaries
during the 180-day period immediately preceding the Effective Date or, if more
favorable to the Officer, as in effect at any time thereafter with respect to
similar Officers and their families and, for purposes of eligibility for retiree
benefits pursuant to such plans, practices, programs and policies, the Officer
shall be considered to have remained employed until the end of the Employment
Period and to have retired on the last day of such period.

(e) Termination Before or After Employment Period. If the Officer’s employment
with the Company terminates or is terminated either before or after the
Employment Period, then the provisions of paragraphs (a) through (d) of this
Agreement shall not apply, and the rights and obligations of the Officer and the
Company relating to such termination of employment shall be determined without
regard thereto.

(f) Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit
the Officer’s continuing or future participation in any benefit, bonus,
incentive or other plans, programs, policies or practices provided by the
Company or any of its subsidiaries and for which the Officer may qualify, nor
shall anything herein limit or otherwise affect such rights as the Officer may
have under any stock option or other agreements with the Company or any of its
subsidiaries. Amounts which are vested benefits or which the Officer is
otherwise entitled to receive under any plan, policy, practice or program of the
Company or any of its subsidiaries at or subsequent to the Date of Termination
shall be payable in accordance with such plan, policy, practice or program.

(g) No Set-off or Mitigation; Payment of Legal Fees and Expenses. The Company’s
obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Officer or others. In no event shall the Officer be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to the Officer under any of the provisions of this
Agreement. The Company agrees to pay, to the full extent permitted by law, all
legal fees and expenses which the Officer may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company (including its
successors, assigns or affiliates) or others of the validity or enforceability
of, or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by the Officer about
the amount of any payment pursuant to Section 7 of this Agreement), plus in each
case interest at the applicable Federal rate provided for in Section 7872(f)(2)
of the Code.

7. Certain Additional Payments by the Company

(a) Anything in this Agreement to the contrary notwithstanding, in the event it
shall be determined that any payment, distribution or other action by the
Company to or for the benefit of the Officer (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, (including any additional payments required under this Section 7) (a
“Payment”) would be subject to an excise tax imposed by Section 4999 (or its
successor or other provision which imposes a similar excise tax) of the Internal
Revenue Code of 1986, as amended (the “Code”), any excise tax that may be
imposed by a state and/or local law, or any interest or penalties incurred by
the Officer with respect to any such excise taxes (such excise taxes, together
with any such interest and penalties, are hereinafter collectively referred to
as the “Excise Tax”), the Company shall make a payment to the Officer (a
“Gross-Up Payment”) in an amount such that after payment by the Officer of all
taxes (including any Excise Tax) imposed upon the Gross-Up Payment, the Officer
retains (or has had paid to the Internal Revenue Service on his behalf) an
amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed
upon the Payments and (y) the product of any deductions disallowed because of
the inclusion of the Gross-Up Payment in the Officer’s adjusted gross income and
the highest applicable marginal rate of federal income taxation for the calendar
year in which the Gross-Up Payment is to be made. For purposes of determining
the amount of the Gross-Up Payment, the Officer shall be deemed to (i) pay
federal income taxes at the highest marginal rates of federal income taxation
for the calendar year in which the Gross-Up Payment is to be made, and (ii) pay
applicable state and local income taxes at the highest marginal rate of taxation
for the calendar year in which the Gross-Up Payment is to be made, net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes.

(b) Subject to the provisions of paragraph (c) of this Section 7, all
determinations required to be made under this Section 7, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by Price Waterhouse Coopers LLP (the “Accounting Firm”) which shall provide
detailed supporting calculations both to the Company and the Officer within 15
business days of the receipt of notice from the Officer that there has been a
Payment, or such earlier time as is requested by the Company. In the event that
the Accounting Firm is serving as accountant or auditor for the individual,
entity or group effecting the Change of Control, the Officer shall appoint
another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Section 7, shall be paid by the Company to the Officer within five days of
the receipt of the Accounting Firm’s determination. If the Accounting Firm
determines that no Excise Tax is payable by the Officer, it shall furnish the
Officer with a written opinion that failure to report the Excise Tax on the
Officer’s applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Company and the Officer. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made (“Underpayment”), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 7 and the Officer thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company to or
for the benefit of the Officer.

(c) The Officer shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of
the Gross-Up Payment. Such notification shall be given as soon as practicable
but no later than ten business days after the Officer is informed in writing of
such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. The Officer shall not pay such
claim prior to the expiration of the 30-day period following the date on which
it gives such notice to the Company (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due). If the Company
notifies the Officer in writing prior to the expiration of such period that it
desires to contest such claim, the Officer shall:

(i) give the Company any information reasonably requested by the Company
relating to such claim,

(ii) take such action in connection with contesting such claim as the Company
shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by an
attorney reasonably selected by the Company,

(iii) cooperate with the Company in good faith in order effectively to contest
such claim, and

(iv) permit the Company to participate in any proceedings relating to such
claim; provided, however, that the Company shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Officer harmless,
on an after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 7(c), the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Officer to pay the tax claimed and sue for a refund or contest the claim in
any permissible manner, and the Officer agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Officer to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Officer, on an interest-free basis, and shall indemnify and hold
the Officer harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Officer with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Officer shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

(d) If, after the receipt by the Officer of an amount advanced by the Company
pursuant to Section 7(c), the Officer becomes entitled to receive any refund
with respect to such claim, the Officer shall (subject to the Company’s
complying with the requirements of Section 7(c)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by the Officer of an amount
advanced by the Company pursuant to Section 7(c), a determination is made that
the Officer shall not be entitled to any refund with respect to such claim and
the Company does not notify the Officer in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after such determination,
then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.

8. Confidential Information

The Officer shall hold in a fiduciary capacity for the benefit of the Company
all secret or confidential information, knowledge or data relating to the
Company or any of its subsidiaries, and their respective businesses, which shall
have been obtained by the Officer during the Officer’s employment by the Company
or any of its subsidiaries and which shall not be or become public knowledge
(other than by acts by the Officer or his representatives in violation of this
Agreement). After termination of the Officer’s employment with the Company, the
Officer shall not, without the prior written consent of the Company, communicate
or divulge any such information, knowledge or data to anyone other than the
Company and those designated by it. In no event shall an asserted violation of
the provisions of this Section 8 constitute a basis for deferring or withholding
any amounts otherwise payable to the Officer under this Agreement.

9. Successors

(a) This Agreement is personal to the Officer and without the prior written
consent of the Company shall not be assignable by the Officer otherwise than by
will or the laws of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by the Officer’s legal representatives.

(b) This Agreement shall inure to the benefit of and be binding upon the Company
and its successors and assigns.

(c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, “Company” shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.

10. Miscellaneous

(a) This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Delaware, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.

(b) All notices and other communications hereunder shall be in writing and shall
be given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:

If to the Officer:

Robert J. Rabin
RailAmerica, Inc.
5300 Broken Sound Boulevard, NW
Boca Raton, Florida 33487

If to the Company:

     
RailAmerica, Inc.
 

 
    5300 Broken Sound Boulevard, NW

 
   
Boca Raton, Florida 33487
Attn.:
 
Executive Vice President

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

(c) The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement.

(d) The Company may withhold from any amounts payable under this Agreement such
Federal, state or local taxes as shall be required to be withheld pursuant to
any applicable law or regulation.

(e) The Officer’s failure to insist upon strict compliance with any provision
hereof shall not be deemed to be a waiver of such provision or any other
provision thereof.

(f) This Agreement contains the entire understanding of the Company and the
Officer with respect to the subject matter hereof.

(g) The Officer and the Company acknowledge that, except as set forth in any
written employment agreement between the Officer and the Company and effective
from and after the date hereof, the employment of the Officer by the Company is
“at will,” and, prior to the Effective Date, may be terminated by either the
Officer or the Company at any time. Upon a termination of the Officer’s
employment prior to the Effective Date, there shall be no further rights of the
Officer under this Agreement.

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IN WITNESS WHEREOF, the Officer has hereunto set his hand and, pursuant to the
authorization from its Board of Directors, the Company has caused this agreement
to be executed in its name on its behalf, all as of the day and year first above
written.

/s/ Robert J. Rabin

      Robert J. Rabin

RAILAMERICA, INC.,
a Delaware corporation

     
By:
  /s/ Charles Swinburn
 
   
 
  Charles Swinburn

      Chief Executive Officer

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