Document:

<PAGE>

                                                                    EXHIBIT 10.2

                   PROPERTY PURCHASE AND TERMINATION AGREEMENT

      This PROPERTY PURCHASE AND TERMINATION AGREEMENT is entered into as of the
25th day of August, 2004 (the "Termination Agreement") by and among CATALINA
MARKETING MANUFACTURER SERVICES, INC. (formerly Catalina Marketing Sales
Corporation), a Delaware corporation (the "Lessee"), CATALINA MARKETING
CORPORATION, a Delaware corporation (the "Guarantor"), WELLS FARGO BANK
NORTHWEST, NATIONAL ASSOCIATION (as successor to First Security Bank, National
Association), a national banking association, not individually but solely as the
Owner Trustee under the Dolphin Realty Trust 1999-1 (the "Owner Trustee" or the
"Lessor"); the various banks and other lending institutions listed on the
signature pages hereto (subject to the definition of Lenders in Appendix A to
the Participation Agreement referenced below, individually, a "Lender" and
collectively, the "Lenders"); WACHOVIA BANK, NATIONAL ASSOCIATION (as successor
to First Union National Bank), a national banking association, as the agent for
the Lenders and respecting the Security Documents, as the agent for the Lenders
and the Holders, to the extent of their interests (in such capacity, the
"Agent"); and the various banks and other lending institutions listed on the
signature pages hereto as holders of certificates issued with respect to the
Dolphin Realty Trust 1999-1 (subject to the definition of Holders in Appendix A
to the Participation Agreement referenced below, individually, a "Holder" and
collectively, the "Holders").

                                   WITNESSETH:

      WHEREAS, this Termination Agreement refers to the Operative Agreements as
such term is defined in Appendix A to that certain Participation Agreement dated
as of October 21, 1999 (as amended, modified, extended, supplemented, restated
and/or replaced from time to time, the "Participation Agreement") by and among
the parties to this Termination Agreement;

      WHEREAS, the Lessee has delivered (or pursuant to the terms and conditions
hereof shall be deemed to have delivered) an Election Notice to the Agent
electing to purchase the Property for the Termination Value on the Payoff Date
(as defined herein), and (ii) except as expressly provided or contemplated
herein, requesting that the parties hereto terminate the Operative Agreements
and the Lease Facility on the date specified herein;

      WHEREAS, the Lessee has requested that upon receipt of all amounts
required to be paid by the Lessee hereunder on the Payoff Date (as defined
herein), that the applicable Financing Parties (i) release the Liens in favor of
the Financing Parties created pursuant to the Operative Agreements, (ii) direct
the Owner Trustee to convey its right, title and interest in and to the Property
to Lessee's designee, Catalina Marketing International, Inc., and (iii) along
with the other parties hereto, terminate the Operative Agreements, except with
respect to certain provisions set forth herein or in the Operative Agreements;
and

<PAGE>

      WHEREAS, the Financing Parties which are signatories hereto have agreed to
the requests above on the terms and conditions set forth herein.

      NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is acknowledged,
the parties hereto agree as follows:

                                   AGREEMENTS:

      1.    DEFINITIONS. Capitalized terms used herein and not otherwise defined
shall have the meaning given to such terms in Appendix A to the Participation
Agreement and the Rules of Usage set forth therein shall apply herein. The term
"Lease Facility" shall refer to the transactions contemplated by the Operative
Agreements.

      2.    WAIVER OF CERTAIN PROVISIONS.

      By execution of this Termination Agreement, the undersigned Financing
Parties (and the other parties hereto, to the extent required) waive the
requirement of Section 20.1 of the Lease that an Election Notice be delivered at
least sixty (60) days prior to the Payment Date specified in such Election
Notice and agree that this Termination Agreement shall be deemed to constitute
an Election Notice, which Election Notice shall be deemed to be irrevocable and
otherwise acceptable as an Election Notice as required by Section 20.1 of the
Lease. Furthermore, the Financing Parties (A) agree to permit the exercise of
the Purchase Option to occur on the date set forth herein as the "Payoff Date"
regardless of whether such date is a Payment Date, provided the payments made on
such date include without limitation all amounts that have accrued but would
have been paid on the next Payment Date and applicable breakage costs, and (B)
at the request of and as an accommodation to the Lessee (but only upon
satisfaction of the conditions precedent set forth herein), hereby instruct the
Agent and Owner Trustee to convey, subject to the terms and conditions hereof
and set forth in the Operative Agreements, the Property to Catalina Marketing
International, Inc.

      3.    PAYMENT OF TERMINATION VALUE.

      The Lessee shall pay to the Agent, on behalf of the Lenders, the Holders
and the Owner Trustee on August 25, 2004 (the "Payoff Date") the sum of
$30,518,326.54 (the "Payoff Amount"), which sum includes without limitation (i)
the principal amount of the Tranche A Loans, together with all accrued but
unpaid interest thereon, (ii) the remaining principal amount of the Tranche B
Loans, together with all accrued but unpaid interest thereon, (iii) the
remaining aggregate Holder Amount, together with all accrued but unpaid Holder
Yield thereon, (iv) the Lender Unused Fee, (v) the Holder Unused Fee, (vi)
breakage fees, if charged by the Lenders or Holders, if the Payoff Date is not
on a Payment Date, (vii) the fees of the Owner Trustee, and (viii) any other
fees and other amounts associated with the Lease Facility, (ix) any other costs
and expenses due and owing in connection with the Lease Facility, including
without limitation Supplemental Rent. Such amounts shall be allocated by the
Agent to the parties as set forth more specifically in Exhibit A and otherwise
in accordance with the Operative Agreements.

                                       2
<PAGE>

      4.    PAYMENT PROCEDURE. Payment of the Payoff Amount in full shall be
transferred by wire, in federal funds, in accordance with the following
instructions:

            Bank Name:         Wachovia Bank National Association, Charlotte, NC
            ABA No.:           053000219
            Account No.:       5000000023095
            Account Name:      Dolphin Real Estate Trust
            Ref:               Deana Adams, 704-383-5398

      5.    RELEASE OF LIENS. Upon receipt by the Agent of the Payoff Amount, in
good and immediately available Dollars, the Liens on the Property created
pursuant to the Operative Agreements are hereby released.

      6.    DELIVERY OF RELEASE DOCUMENTS. The Agent is delivering to Holland &
Knight LLP, as escrow agent (the "Escrow Agent"), in escrow, such UCC-3
termination statements, satisfaction of mortgages or deeds of trust and
terminations of memoranda of lease and security interest executed and notarized
by the Agent or Owner Trustee (as necessary), as applicable, to evidence the
termination and release of the Security Documents regarding the Lien granted to
the Agent in connection with the Lease Facility and documents to convey the
Owner Trustee's right, title and interest, if any, in and to the Property,
including without limitation quitclaim deeds, or terminations or assignments of
Ground Leases, as applicable, limited warranty bills of sale and FIRPTA
affidavits, executed and notarized by the Owner Trustee (as necessary), to the
Lessee or its designee, as applicable, each of the foregoing pursuant to
documentation as specified in the Operative Agreements (including without
limitation Section 20.2 of the Lease) and otherwise in form and substance
acceptable to the Agent (collectively such documents referenced in this
paragraph may be referred to herein as, the "Release Documents"). The Release
Documents are to be held in escrow by the Escrow Agent and released from escrow
and delivered to the Lessee or its designee for recordation, as necessary, only
upon authorization from the Agent following (a) receipt by the Agent of payment
in full of the Payoff Amount in accordance with the terms and conditions herein
and in the Operative Agreements and provided none of such amounts has been
disgorged or reclaimed, and (b) satisfaction of the conditions precedent set
forth herein. Additional information necessary to complete any Release Documents
shall be provided by the Agent, at the Lessee's sole cost and expense, to the
Lessee upon Lessee's reasonable request therefor if, and to the extent, the
Agent has such information in its possession.

      7.    CONDITIONS PRECEDENT. Notwithstanding anything contained herein to
the contrary, this Termination Agreement shall not become effective until (a)
completion and delivery to the Agent of: (i) executed counterpart signature
pages to this Termination Agreement from each Credit Party, the Owner Trustee
and the Majority Secured Parties and (ii) all additional documentation and
information as the Agent or its legal counsel may request; (b) all proceedings
taken in connection with the transactions contemplated by this Termination
Agreement and all documentation and other legal matters incident thereto shall
be satisfactory to the Agent and its legal counsel; and (c) receipt by the Agent
of the Payoff Amount. The date on

                                       3
<PAGE>

which all of the foregoing have been satisfied or expressly waived by the
parties hereto in writing may be referred to herein as the "Effective Date".

      8.    [RESERVED].

      9.    RESIGNATION OF THE AGENT. After (a) the delivery of and recording of
the Release Documents and (b) the Agent completes its other obligations
hereunder and under the Operative Agreements, but in no event more than ninety
(90) days after the Payoff Date, unless extended by the Agent by delivering
written notice to the Owner Trustee and the Lessee of such extension, then the
Agent shall be deemed to have resigned its capacity as "Agent" pursuant to the
Operative Agreements, and all parties to this Termination Agreement hereby agree
that such resignation shall be automatically effective at such time with no
further action and notwithstanding any further or additional requirement in the
Operative Agreements to the contrary, including without limitation, the notice
requirement in Section 7.9 of the Credit Agreement; provided, the Agent shall
automatically be reinstated without any further action in the event such entity
is necessary for the functioning or interpretation of Section 11 of the
Participation Agreement or any other Continuing Obligation (as defined below).

      10.   RESIGNATION OF THE OWNER TRUSTEE. After (a) the delivery of and
recording of the Release Documents and (b) the Owner Trustee completes its other
obligations hereunder and under the Operative Agreements, but in no event more
than ninety (90) days after the Payoff Date, unless extended by the Owner
Trustee by delivering written notice to the Agent and the Lessee of such
extension, then the Owner Trustee shall be deemed to have resigned its capacity
as "Owner Trustee" pursuant to the Operative Agreements, and all parties to this
Termination Agreement hereby agree that such resignation shall be automatically
effective at such time with no further action and notwithstanding any further or
additional requirement in the Operative Agreements to the contrary, including
without limitation, the notice requirement in Section 9.1 of the Trust
Agreement. Pursuant to Section 8.1 of the Trust Agreement, the Majority Holders,
by their execution of this Termination Agreement, consent to and direct that
immediately prior to the resignation of the Owner Trustee and provided all
amounts owed to any Financing Party shall have been paid in full, the Trust
shall automatically and without further action be deemed to be terminated;
provided, the Owner Trustee and the Trust shall automatically be reinstated
without any further action in the event either entity is necessary for the
functioning or interpretation of Section 11 of the Participation Agreement or
any other Continuing Obligation.

      11.   RETURN OF THE NOTES AND CERTIFICATES. Each Lender and each Holder
hereby agrees and covenants to deliver to the Agent, within fifteen (15) days
after the Payoff Date, each of the original Notes and/or Certificates which was
issued to such Financing Party with respect to the Lease Facility or an executed
and notarized Affidavit of Lost Note or Certificate in the form requested by the
Agent, including changes in form and substance acceptable to the Agent.
Thereafter, the Agent shall return the original Notes to Lessee, marked "paid".

                                       4
<PAGE>

      12.   CONTINUED EFFECTIVENESS OF OPERATIVE AGREEMENTS; FOURTH WAIVER,
AMENDMENT AND CONSENT UNDER CERTAIN OPERATIVE AGREEMENTS; TERMINATION.

            (a)   The Credit Parties and the Owner Trustee (and to the extent
      terms and conditions in the Operative Agreements are expressly stated to
      continue with respect to other Persons party to any Operative Agreements,
      such party, but solely with respect to those expressly stated terms and
      conditions) shall remain obligated for each and every (and are not
      released from any) term, condition, covenant, indemnity, representation,
      obligation or other provision similar to any of the foregoing, in any
      Operative Agreement, which is expressly stated to continue with respect to
      such party or which by their terms survive beyond the termination or
      expiration of one or more of the Operative Agreements or payment in full
      of the Notes and Certificates for observance or compliance by such party,
      including without limitation, all obligations pursuant to Section 11 of
      the Participation Agreement (collectively referred to herein as the
      "Continuing Obligations"). Notwithstanding any other provision herein,
      Lessee hereby reaffirms its obligations pursuant to Section 11 of the
      Participation Agreement and each other Continuing Obligation. Except with
      respect to the Continuing Obligations and except as expressly provided in
      subsection (b) of this Section 12 with respect to that certain Fourth
      Waiver, Amendment and Consent Under Certain Operative Agreements dated as
      of November 24, 2003 (the "Fourth Waiver") among the parties hereto, upon
      satisfaction of the conditions to effectiveness of this Termination
      Agreement, all of the Operative Agreements shall be terminated without
      further action by any of the parties hereto.

            (b)   Notwithstanding any provision herein to the contrary, the
      parties hereto agree that the obligations of the Credit Parties and the
      Agent under Sections 2 and 3 of the Fourth Waiver shall not be terminated
      as of the Effective Date.

      13.   DIRECTION TO OWNER TRUSTEE. The Agent, the Lenders and the Holders
hereby instruct the Owner Trustee to enter into this Termination Agreement and
such other documents necessary to effectuate the intent of this Termination
Agreement, including without limitation executing and delivering the Release
Documents contemplated herein.

      14.   MISCELLANEOUS.

            (a)   SEVERABILITY. Any provision of this Termination Agreement that
      is prohibited or unenforceable in any jurisdiction shall, as to such
      jurisdiction, be ineffective to the extent of such prohibition or
      unenforceability without invalidating the remaining provisions hereof, and
      any such prohibition or unenforceability in any jurisdiction shall not
      invalidate or render unenforceable such provision in any other
      jurisdiction.

            (b)   COUNTERPARTS. This Termination Agreement may be executed in
      any number of counterparts, each of which when executed and delivered
      shall be deemed to be an original and it shall not be necessary in making
      proof of this Termination Agreement to produce or account for more than
      one such counterpart. Delivery of an executed counterpart by telecopy
      shall be as effective as delivery of a manually executed

                                       5
<PAGE>

      counterpart hereto and shall constitute a representation that an original
      executed counterpart will be provided.

            (c)   HEADINGS. The headings of the various articles and sections of
      this Termination Agreement are for convenience of reference only and shall
      not modify, define, expand or limit any of the terms or provisions hereof.
      Unless otherwise stated, references to Sections made in this Termination
      Agreement shall be interpreted as references to the applicable Section
      herein.

            (d)   FEES AND EXPENSES. The Lessees agree to pay or reimburse all
      reasonable costs and expenses of the Agent and the Owner Trustee in
      connection with the preparation, execution and delivery of this
      Termination Agreement and any documents related hereto, including, without
      limitation, the reasonable fees and expenses of legal counsel for the
      Agent.

            (e)   GOVERNING LAW. THIS TERMINATION AGREEMENT SHALL BE GOVERNED
      BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH
      CAROLINA EXCEPT (A) WITH RESPECT TO THE TRUST AGREEMENT WHICH SHALL BE
      GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
      UTAH AND (B) TO THE EXTENT THE LAWS OF A STATE WHERE A PARTICULAR PROPERTY
      IS LOCATED ARE REQUIRED TO APPLY.

            (f)   JURISDICTION, VENUE AND ARBITRATION. THE PROVISIONS OF THE
      PARTICIPATION AGREEMENT RELATING TO ACTIONS AND PROCEEDINGS ARE HEREBY
      INCORPORATED BY REFERENCE HEREIN, MUTATIS MUTANDIS.

            (g)   FURTHER ASSURANCES. The provisions of the Participation
      Agreement relating to further assurances are hereby incorporated by
      reference herein, mutatis mutandis.

            (h)   SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
      representations and warranties made in this Termination Agreement or any
      other Operative Agreement shall survive the execution and delivery of this
      Termination Agreement and the other Operative Agreements, and no
      investigation by any Financing Party or any closing shall affect the
      representations and warranties or the right of the Financing Parties to
      rely upon them.

            (i)   TERMINATION AGREEMENT. This Termination Agreement shall not be
      terminated, amended, supplemented, waived, modified or discharged except
      by an instrument in writing executed by the party against which
      enforcement is sought and in accordance with Section 12.4 of the
      Participation Agreement.

                  (j)   STRICT CONSTRUCTION. The parties hereto have
      participated jointly in the negotiation and drafting of this Termination
      Agreement. In the event an ambiguity or

                                       6
<PAGE>

      question of intent or interpretation arises, this Termination Agreement
      shall be construed as if drafted jointly by the parties hereto and no
      presumption or burden of proof shall arise favoring or disfavoring any
      party by virtue of the authorship of any provisions of this Termination
      Agreement.

                  [Remainder of page intentionally left blank]

                                       7
<PAGE>

      IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Termination Agreement to be duly executed and delivered as of the date
first above written.

                                  CATALINA MARKETING MANUFACTURER
                                  SERVICES, INC. (formerly Catalina Marketing
                                  Sales Corporation), as the Lessee

                                  By:   /s/ Joanne Freiberger
                                      ------------------------------------------
                                  Name:  Joanne Freiberger
                                  Title: Treasurer

                                  CATALINA MARKETING CORPORATION,
                                  as the Guarantor

                                  By:   /s/ Joanne Freiberger
                                       -----------------------------------------
                                  Name:  Joanne Freiberger
                                  Title: VP Finance

                           [signature pages continue]

<PAGE>

                                  WELLS FARGO BANK NORTHWEST,
                                  NATIONAL ASSOCIATION, solely as the Owner
                                  Trustee under the Dolphin Realty Trust 1999-1

                                  By:   /s/ Jon Croasmun
                                       -----------------------------------------
                                  Name:  Jon Croasmun
                                  Title: Assistance Vice President

                           [signature pages continue]

<PAGE>

                                  WACHOVIA BANK, NATIONAL
                                  ASSOCIATION, as a Holder, as a Lender and as
                                  the Agent

                                  By:   /s/ Evander S. Jones, Jr.
                                       -----------------------------------------
                                  Name:  Evander S. Jones, Jr.
                                  Title: Vice President

                              [signature pages end]

<PAGE>

<TABLE>
<CAPTION>
                                          ACCRUED INTEREST
                          PRINCIPAL         DUE THROUGH           FACILITY FEE                               TOTAL DUE TO LENDERS
LENDER NAME           OUTSTANDING & DUE       8/25/04            THROUGH 8/25/04     BREAKAGE CHARGE             TO TERMINATE
---------------------------------------------------------------------------------------------------------------------------------
<S>                   <C>                 <C>                    <C>                 <C>                     <C>
Wachovia               $30,479,685.30        $27,441.24               $0.00               $0.00                 $30,507,126.54

------------------------------------------------------------------------------------------------------------------------------
Totals                 $30,479,685.30        $27,441.24               $0.00               $0.00                 $30,507,126.54
------------------------------------------------------------------------------------------------------------------------------

                                                                                          Moore & Van Allen:    $     9,750.00
PAYOFF AMOUNTS:
Principal              $30,479,685.30                                                      Wells Fargo Bank:    $     1,450.00
Interest               $    27,441.24
                                                                                      Total Due to Terminate
Facility Fee           $         0.00                                                           Transaction:    $30,518,326.54
Breakage               $         0.00
Lender's Legal         $     9,750.00
Trustee Fees           $     1,450.00
                       --------------
Totals                 $30,518,326.54
</TABLE><PAGE>
                                                                   EXHIBIT 10.96

                              EMPLOYMENT AGREEMENT

                  This EMPLOYMENT AGREEMENT ("AGREEMENT") is made and entered
into as of August 1, 2004, by and between RailAmerica, Inc., a Delaware
corporation (the "COMPANY"), and Mr. Charles Swinburn (the "EXECUTIVE").

                              W I T N E S S E T H:

                  WHEREAS, the Executive is employed as Chief Executive Officer
of the Company;

                  WHEREAS, the Company wishes to enter into this Agreement with
the Executive to be assured of his services on the terms and conditions
hereinafter set forth;

                  WHEREAS, the Executive wishes to enter into this Agreement
with the Company and to perform and to serve the Company on the terms and
conditions hereinafter set forth; and

                  WHEREAS, the Compensation Committee (the "COMMITTEE") of the
Board of Directors of the Company (the "BOARD") has approved the terms of this
Agreement as of the date set forth above;

                  NOW THEREFORE, in consideration of the mutual terms,
covenants, agreements and conditions hereinafter set forth, the Company and the
Executive hereby agree as follows:

         1. EMPLOYMENT.

                  (a) The Company hereby employs the Executive to serve as a
full time employee of the Company, and the Executive hereby accepts such
employment with the Company, for the period set forth in SECTION 2 hereof. The
Executive shall be employed as Chief Executive Officer of the Company and shall
faithfully and competently perform such duties in such manner as the Company may
from time to time reasonably direct. The Executive shall report to the Board of
Directors and shall have overall senior executive responsibility for the
Company, and shall perform such other tasks and duties as may be assigned to him
from time to time.

                  (b) Except as may otherwise be approved in advance by the
Board, and except during vacation periods and reasonable periods of absence due
to sickness, personal injury or other incapacity, the Executive shall devote his
full time and efforts throughout the Employment Term to the services required of
him hereunder. The Executive shall render his services exclusively to the

<PAGE>

Company during the Employment Term and shall use his best efforts, judgment and
energy to improve and advance the business and interests of the Company in a
manner consistent with the duties of his position. The Executive shall observe
and comply with the Company's rules and regulations regarding the performance of
his duties and shall carry out and perform all orders, directions, and policies
given to him. The Executive shall at all times carry out the duties assigned to
him in a loyal, trustworthy and businesslike manner.

                  (c) The Executive's principal place of employment shall be at
the Company's headquarters in Boca Raton, Florida or at such other location as
shall be mutually acceptable to the Executive and the Company.

                  (d) The Executive shall be covered by Directors' and Officers'
liability insurance, provided that the terms and amounts of such insurance are
approved by the Board. Additionally, the Executive shall be indemnified by the
Company to the fullest extent permitted by law.

        2. TERM.

                  Unless earlier terminated or extended as provided in this
Agreement, the term of the Executive's employment under this Agreement shall be
for a period beginning on the date hereof (the "COMMENCEMENT DATE") and ending
on the second anniversary of the Commencement Date (such period being
hereinafter called the "INITIAL TERM"). At the end of the Initial Term, the term
of employment automatically shall renew for successive one (1) year terms
(subject to earlier termination as provided herein), unless the Company or the
Executive delivers written notice to the other at least three (3) months prior
to the expiration date of its or his election not to renew the term of
employment. References herein to the "EMPLOYMENT TERM" shall refer both to the
Initial Term and each successive one-year term for which this Agreement is
extended.

        3. SALARY, BONUSES AND BENEFITS.

                  (a) SALARY. In consideration of the services of the Executive
rendered to the Company hereunder, the Company shall pay the Executive a base
salary (the "BASE SALARY") at an annual rate of Five hundred thousand dollars
($500,000) during the Employment Term, payable in regular intervals in
accordance with the Company's current payroll practices, as the same may be
changed from time to time.

                  (b) RESTRICTED STOCK. In consideration of the services of the
Executive hereunder, the Company shall issue to Executive restricted shares
("Restricted Stock") of common stock, par value $0.01 per share ("Common
Stock"), of the Company as follows: (i) $100,000 of Restricted Stock on the date
hereof, one third of which shall vest on each of the three succeeding
anniversaries hereof, but none of which may be sold until the third anniversary
hereof except as required by Executive to pay any applicable income taxes; (ii)
$100,000 of Restricted Stock on the first anniversary hereof, one-half of which
shall vest on each of the two succeeding anniversaries thereof, but none of
which may be sold until the third anniversary hereof except as required by
Executive to pay any applicable income taxes; and (iii) provided there has been
no termination of this Agreement by the Company or the Executive, $100,000 of
Restricted Stock on the second anniversary hereof, all of which shall vest and
may be sold by Executive on the third anniversary hereof. For purposes of
determining the amount of Restricted Stock to be issued to Executive under this
SECTION 3(B), the Company shall divide (A) $100,000 by (B) the average closing
sales price for the Company's Common Stock on the New York Stock Exchange on the

                                       2
<PAGE>

last (5) business days immediately prior to the date of issuance. All
restrictions on the Restricted Stock shall lapse immediately upon any
termination of this Agreement.

                  (c) DISCRETIONARY BONUSES. In addition to the Base Salary, the
Company may pay to Executive such bonuses and other incentive compensation, if
any, as the Committee or the Board annually, in their sole discretion, deem
appropriate. This includes but is not limited to participation in the Annual
Incentive Plan with a target payment of 60% of salary subject to the attainment
of defined goals, participation in the Long Term Incentive Compensation Plan as
defined, and participation in the Deferred Compensation Plan, provided that the
Committee or the Board may alter, amend or terminate any of such plans or
Executive's level of participation, as the case may be, at any time, which may
result in a diminution in benefits or no benefits to the Executive.

                  (d) WITHHOLDINGS AND DEDUCTIONS. The payment of any salary,
bonus or other compensation hereunder shall be subject to income tax, social
security and other applicable withholdings, as well as such deductions as may be
required under the Company's employee benefit plans.

                  (e) BENEFITS. During the Employment Term, the Executive shall
be:

                           (i) eligible to participate in all employee fringe
                  benefits and any pension and/or profit sharing plans,
                  including 401k plan employer contributions, that may be
                  provided by the Company for its management employees generally
                  in accordance with the provisions of any such plans, as the
                  same may be in effect on and after the date hereof, subject to
                  any amendments or changes as shall be determined at any time
                  by the Committee or the Board;

                           (ii) eligible to participate in any medical and
                  health plans or other employee welfare benefit plans that may
                  be provided by the Company for its management employees
                  generally in accordance with the provisions of any such plans,
                  as the same may be in effect on and after the date hereof; and
                  supplemental coverage for any co-payments and deductibles,
                  provided that the annual premiums, fees and other costs paid
                  by the Company do not exceed $10,000 annually for the
                  Executive and his family, and provided further that this
                  supplemental coverage benefit shall terminate on December 31,
                  2004;

                           (iii) entitled to four (4) weeks of annual paid
                  vacation;

                           (iv) entitled to sick leave, sick pay and disability
                  benefits in accordance with any Company policy or plan that
                  may be applicable to employees on and after the date hereof;
                  and additional Long-Term Disability Insurance for the
                  Executive, provided that the annual premiums, fees and other
                  costs paid by the Company do not exceed $10,000;

                           (v) entitled to additional Term Life Insurance for
                  the Executive in the amount of $1,000,000 above and beyond the
                  life insurance provided by the Company in accordance with the
                  Company's policies that may be applicable to employees on and
                  after the date hereof, provided that the annual premiums, fees

                                       3
<PAGE>

                  and other costs paid by the Company do not exceed $10,000 for
                  such insurance; and

                           (vi) entitled to reimbursement for all reasonable and
                  necessary out-of-pocket business expenses incurred by the
                  Executive in the performance of his duties hereunder in
                  accordance with the Company's policies that may be applicable
                  to employees on and after the date hereof.

                  (f) Participation in stock option and restricted stock
programs as approved by the Board from time to time, subject to any alterations,
amendments or termination by the Board of any such programs at any time.

        4. TERMINATION.

                  (a) The Executive's employment hereunder shall be terminated
upon the occurrence of any of the following:

                           (i) the death of the Executive;

                           (ii) termination by the Company because of the
                  Executive's inability to perform his duties because of a
                  Disability (as hereinafter defined);

                           (ii) termination by the Executive at any time for any
                  reason whatsoever (including, without limitation, resignation
                  or retirement) other than for Good Reason (as hereinafter
                  defined);

                           (iv) termination by the Company at any time for Cause
                  (as hereinafter defined), such termination to take effect
                  immediately upon written notice from the Company to the
                  Executive; and

                           (v) termination (A) by the Company without Cause, or
                  (B) by the Executive for Good Reason.

                  (b) The following terms shall have the following meanings:

                           (i) "CAUSE" shall mean the Executive's: (A)
                  indictment, arrest or charge with any felony, (B) commission
                  of any act of dishonesty or moral turpitude, (C) failure to
                  obey the reasonable and lawful orders of the Board or any
                  senior executive officer of the Company or (D) negligence in
                  the performance of, or disregard of, his obligations
                  hereunder.

                           (ii) "DISABILITY" shall mean a physical or mental
                  incapacity that prevents the Executive from performing the
                  essential functions of his position with the Company for a
                  period of ninety (90) or more days, whether or not
                  consecutive, occurring within any period of twelve (12)
                  consecutive months as determined in accordance with any
                  long-term disability plan provided by the Company of which the
                  Executive is a participant or by the Board in its sole
                  discretion.

                                       4
<PAGE>

                           (iii) "GOOD REASON" shall mean: (A) a material
                  diminution of the Executive's responsibilities or authority
                  hereunder, or (B) a material (i.e., greater than ten (10)
                  percent) decrease in the Executive's Base Salary and benefits,
                  taken as a whole, other than a decrease applicable to all
                  other members of senior management.

                  (c) In the event that the Executive's employment is terminated
         during the Employment Term pursuant to clause (v) of paragraph (a)
         above, the Company shall pay to the Executive, as damages, the amount
         of Base Salary and discretionary bonus and incentive plan compensation,
         if any, which the Executive would have otherwise been entitled to
         receive pursuant to Section 3(a) hereof had the Executive's employment
         not been so terminated from the date of termination until twelve (12)
         months after the date of such termination (such amount being herein
         referred to as the "TERMINATION PAYMENTS" and such period being herein
         referred to as the "TERMINATION PERIOD"); PROVIDED, HOWEVER, that no
         Termination Payments shall be made unless and until the Executive
         executes a general release in a form reasonably satisfactory to the
         Company.

                  (d) While receiving salary continuation, Executive will be
         placed on a leave of absence status and entitled to all benefits for
         which Executive is eligible to participate. Stock options will continue
         to vest during the salary continuation period. Vested options will
         expire in accordance with their respective grant letters.

                  (e) Notwithstanding anything to the contrary expressed or
         implied herein, except as required by applicable law and as provided in
         this SECTION 4(C), the Company (and its Affiliates) shall not be
         obligated to make any payments to the Executive or on his behalf of any
         kind or nature by reason of the Executive's cessation of employment
         (including, without limitation, by reason of termination of the
         Executive's employment by the Company for Cause), other than (i) any
         Base Salary payable through the date of termination, and (ii) any
         previously awarded bonus that remains unpaid as of the date of said
         termination.

                  (f) No interest shall accrue on or be paid with respect to any
         portion of any payments hereunder, except as required by law.

                  (g) Notwithstanding anything to the contrary in this
         Agreement, an amount may not be paid under this Agreement to the extent
         that it, when considered along with other amounts paid or provided by
         the Company to Executive, would not be deductible by the Company
         because it would (a) exceed an amount constituting reasonable
         compensation, (b) constitute an excess parachute payment under Section
         280G of the Internal Revenue Code, or (c) exceed the limitations of
         Section 162(m) of the Internal Revenue Code, or if for any other reason
         it would not be allowable as a deduction by the Company under the
         Internal Revenue Code.

        5. DUTY OF LOYALTY.

                  (a) GENERAL. The Executive's employment hereunder creates a
relationship of confidence and trust between the Executive and the Company. The
purpose of the restrictions contained in this SECTION 5 is to protect the
goodwill and other legitimate business interests of the Company, and the Company
would not have entered into this Agreement in the absence of such restrictions.

                                       5
<PAGE>

                  (b) CONFIDENTIAL INFORMATION. The Executive hereby covenants,
agrees and acknowledges as follows:

                           (i) The Executive will have access to and will
                  possess Confidential Information that has been created,
                  discovered or developed by, or otherwise is maintained by the
                  Company and its Affiliates or in which property rights have
                  been or may be assigned or otherwise conveyed to the Company
                  and/or any Affiliate, which information has commercial value
                  in the business in which the Company and/or any Affiliate is
                  engaged and is treated by the Company and its Affiliates as
                  confidential.

                           (ii) The Executive will keep confidential all
                  Confidential Information and will not without the prior
                  written consent of the Board (A) use for his benefit or
                  disclose, except to the extent required by the performance by
                  him of his duties as an employee of the Company, any
                  Confidential Information, or (B) take any Confidential
                  Information with him upon leaving the employ of the Company.

                           (iii) The Executive agrees that upon termination of
                  his employment by the Company for any reason, or at such
                  earlier time as the Company may request, the Executive shall
                  forthwith return to the Company all documents and other
                  property in his possession belonging to the Company or any of
                  its Affiliates.

                  (c) NON-INTERFERENCE WITH BUSINESS RELATIONSHIPS. During the
Restricted Period, the Executive will not directly or indirectly, as a director,
officer, employee, manager, consultant, independent contractor, advisor or
otherwise:

                           (i) make any statements or perform any acts intended
                  or likely to interfere with any interest of the Company or any
                  of its Affiliates in its relationship and dealings with
                  existing or potential customers or clients;

                           (ii) make any statements or do any acts intended to
                  cause or having the effect of causing any customers or clients
                  of the Company or any of its Affiliates to make use of the
                  services of any business in which the Executive has or expects
                  to acquire any interest, if such statements or acts would
                  result or would likely result in such customers or clients
                  ceasing to do business with the Company or any Affiliates; or

                           (iii) engage in competition with, or be connected
                  with any business or organization which operates railroad
                  track within one-hundred fifty (150) miles of, any track
                  operated by the Company or any of its Affiliates (A) as of the
                  Commencement Date or (B) during the Restricted Period;
                  PROVIDED, HOWEVER, that the provisions of this SECTION 5(C)
                  shall not be deemed to prohibit the Executive's ownership of
                  not more than one percent (1%) of the total shares of all
                  classes of stock outstanding of any publicly held company.

                  (d) NON-SOLICITATION. During the Restricted Period, the
Executive will not directly or indirectly, as a director, officer, employee,
manager, consultant, independent contractor, advisor or otherwise:

                                       6
<PAGE>

                           (i) employ or solicit for employment, or advise or
                  recommend to any other person or entity that they employ or
                  solicit for employment, any employee of the Company or any of
                  its Affiliates; or

                           (ii) solicit or encourage any employee of the Company
                  or any of its Affiliates to leave the employ of the Company or
                  the Affiliate or to do any act that is disloyal to, or
                  inconsistent with the interests of, the Company or any of its
                  Affiliates.

                  (e) DEFINITIONS. For the purposes of this SECTION 6, the
following terms shall have the following meanings:

                           (i) "AFFILIATE" or "AFFILIATES" shall mean the
                  Company and any person, corporation or other entity directly
                  or indirectly under the common control of the Company.

                           (ii) "CONFIDENTIAL INFORMATION" shall mean all
                  nonpublic and/or proprietary information respecting the
                  business of the Company or any Affiliate, regardless of
                  whether such information has been reduced to documentary form.
                  Confidential Information also includes information concerning
                  the Company's or any Affiliate's clients, customers and
                  suppliers, including their identity, address and other
                  information kept by the Company or any Affiliate.

                           (iii) "RESTRICTED PERIOD" shall mean the twelve (12)
                  month period after the Executive's employment with the Company
                  ceases, regardless of the reason for the cessation.

                           (v) "COMPETE" shall mean when a person or entity
                  (including, without limitation, the Executive) conducts,
                  operates, carries out or engages in the short-line railroad
                  business.

                  (f) The Executive represents that his experience, capabilities
and circumstances are such that the provisions of this SECTION 5 will not
prevent him from earning a livelihood and further agrees that the limitations
set forth in this SECTION 5 are reasonable in duration, geographic area and
scope and are properly required for the adequate protection of the Company and
its Affiliates.

                  (g) The Executive acknowledges and agrees that any remedy at
law for any breach or threatened breach of the provisions of this SECTION 5
would be inadequate and, therefore, agrees that the Company and any of its
Affiliates shall be entitled to injunctive relief in addition to any other
available rights and remedies in cases of any breach or threatened breach by the
Executive.

        6. NON-ASSIGNABILITY.

                  (a) Neither this Agreement nor any right or interest hereunder
shall be assignable by the Executive, his beneficiaries, or legal
representatives without the Company's prior written consent; PROVIDED, HOWEVER,
that nothing in this SECTION 6(A) shall preclude the Executive from designating
a beneficiary to receive any benefit payable hereunder upon his death or
incapacity.

                                       7
<PAGE>

                  (b) Except as required by law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation or to exclusion,
attachment, levy or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.

         7. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and either delivered in person, sent
by first class certified or registered mail, postage prepaid or sent by
overnight courier, if to the Company, at the Company's principal place of
business, and if to the Executive, at his home address most recently filed with
the Company, or to such other address or addresses as either party shall have
designated in writing to the other party hereto.

         8. SEVERABILITY. The Executive agrees that in the event that any court
of competent jurisdiction shall finally hold that any provision of this
Agreement is invalid, illegal or incapable of being enforced in whole or in part
by reason of any rule of law or public policy, that part shall be deemed to be
reformed to delete the offending language or completely severed from the
remainder of this Agreement for the purpose only of the particular proceedings
in question, and all other covenants and provisions of this Agreement shall in
every other respect continue in full force and effect.

         9. WAIVER. Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition.

         10. ENTIRE AGREEMENT; MODIFICATIONS. This Agreement constitutes the
entire and final expression of the agreement of the parties with respect to the
subject matter hereof and supersedes all prior agreements, oral and written,
between the parties hereto with respect to the subject matter hereof. This
Agreement may be modified or amended only by an instrument in writing signed by
both parties hereto. If any provision of this Agreement conflicts with any other
agreement, policy, plan, practice or other Company document, then the provisions
of this Agreement will control.

         11. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the internal laws of the State of Delaware without regard to the
conflicts of law principles thereof.

         12. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but both of which together shall
constitute one and the same instrument.

         13. INDEMNIFICATION.

                  a. Subject to limitations imposed by law, the Company shall
indemnify and hold harmless the Executive to the fullest extent permitted by law
from and against any and all claims, damages, expenses (including attorneys'
fees), judgments, penalties, fines, settlements, and all other liabilities
incurred or paid by him in connection with the investigation, defense,
prosecution, settlement or appeal of any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative and to which the Executive was or is a party or is threatened to
be made a party by reason of the fact that the Executive is or was an officer,
employee or agent of the Company, or by reason of anything done or not done by
the Executive in any such capacity or capacities, provided that the Executive
acted in good faith, in a manner that was not grossly negligent or constituted

                                       8
<PAGE>

willful misconduct and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The Company also shall pay any and all expenses (including attorneys'
fees) incurred by the Executive as a result of the Executive being called as a
witness in connection with any matter involving the Company and/or any of its
officers or directors.

                  b. The Company shall pay any expenses (including attorneys'
fees), judgments, penalties, fines, settlements, and other liabilities incurred
by the Executive in investigating, defending, settling or appealing any action,
suit or proceedings described in this Section 13 in advance of the final
disposition of such action, suit or proceeding. The Company shall promptly pay
the amount of such expenses to the Executive, but in no event later than ten
(10) days following the Executive's delivery to the Company of a written request
for an advance pursuant to this Section 13, together with a reasonable
accounting of such expenses.

                  c. The Executive hereby undertakes and agrees to repay to the
Company any advances made pursuant to this Section 13 if and to the extent that
it shall ultimately be found that the Executive is not entitled to be
indemnified by the Company for such amounts.

                  d. The Company shall make the advances contemplated by this
Section 13 regardless of the Executive's financial ability to make repayment,
and regardless whether indemnification of the indemnitee by the Company will
ultimately be required. Any advances and undertakings to repay pursuant to this
Section 13 shall be unsecured and interest free.

                  e. The provisions of this Section 13 shall survive the
termination of the Employment Term or expiration of the term of this Agreement.

         14. ACKNOWLEDGEMENT. The Executive represents and acknowledges the
following:

                  (a)      He has carefully read this Agreement in its entirety;

                  (b)      He understands the terms and conditions contained
                           herein;

                  (c)      He has had the opportunity to review this Agreement
                           with legal counsel of his own choosing and has not
                           relied on any statements made by the Company or its
                           legal counsel as to the meaning of any term or
                           condition contained herein or in deciding whether to
                           enter into this Agreement; and

                  (d)      He is entering into this Agreement knowingly and
                           voluntarily.

                                       9
<PAGE>

                  IN WITNESS WHEREOF, the Company and the Executive have duly
executed and delivered this Agreement as of the day and year first above
written.

                                          RAILAMERICA, INC.

                                          By: /s/ FERD C. MEYER, JR.
                                             --------------------------------
                                               Name:  Ferd. C. Meyer, Jr.
                                               Title: Chairman, Compensation
                                                      Committee of the Board

                                          EXECUTIVE

                                          /s/ CHARLES SWINBURN
                                          -----------------------------------
                                          Name: Charles Swinburn

                                       10

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