Document:

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                                                                  EXHIBIT 10(a)

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                              EMPLOYMENT AGREEMENT

                                     BETWEEN

                                BRADLEY D. LEHAN

                                       AND

                       FLORIDA EAST COAST INDUSTRIES, INC.

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                                                        DATED: DECEMBER 11, 2001

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                                TABLE OF CONTENTS

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<S>                                                                                                                      <C>
1.       EMPLOYMENT PERIOD.............................................................................................   1

2.       TERMS OF EMPLOYMENT...........................................................................................   1
         (a)      Position and Duties..................................................................................   1
         (b)      Compensation.........................................................................................   2

3.       TERMINATION OF EMPLOYMENT.....................................................................................   4
         (a)      Death or Disability..................................................................................   4
         (b)      Cause................................................................................................   5
         (c)      Good Reason..........................................................................................   6
         (d)      Termination for Other Reasons........................................................................   6
         (e)      Notice of Termination................................................................................   6
         (f)      Date of Termination..................................................................................   6

4.       OBLIGATIONS OF FECI UPON TERMINATION..........................................................................   7
         (a)      Accelerating Event...................................................................................   7
         (b)      Good Reason; Other than for Cause, Death or Disability...............................................   7
         (c)      Death................................................................................................   7
         (d)      Cause; Other Than for Good Reason....................................................................   8
         (e)      Disability...........................................................................................   8
         (f)      Nondisclosure to Media...............................................................................   8

5.       CHANGE IN CONTROL.............................................................................................   8

6.       NON-EXCLUSIVITY OF EXECUTIVE'S RIGHTS.........................................................................   8

7.       CONFIDENTIAL INFORMATION......................................................................................   8

8.       NON-COMPETITION; NON-SOLICITATION.............................................................................   9

9.       REMEDIES FOR EXECUTIVE'S BREACH...............................................................................  10

10.      DISPUTE.......................................................................................................  10

11.      NO CONFLICTING OBLIGATIONS OF EXECUTIVE.......................................................................  10

12.      INDEMNITY OF EXECUTIVE........................................................................................  10

13.      SUCCESSORS....................................................................................................  11

14.      MISCELLANEOUS.................................................................................................  11
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                              EMPLOYMENT AGREEMENT

                  THIS EMPLOYMENT AGREEMENT (the "Agreement") between BRADLEY D.
LEHAN, an individual (the "Executive") and FLORIDA EAST COAST INDUSTRIES, INC.
("FECI"), a Florida corporation, recites and provides as follows:

                  WHEREAS, the Board of Directors of FECI (the "Board") desires
that FECI retain the services of the Executive, and the Executive desires to be
employed with FECI, all on the terms and subject to the conditions set forth
herein.

                  NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants herein contained, FECI and the Executive agree as follows:

                  1.       EMPLOYMENT PERIOD. FECI hereby agrees to employ the
Executive, and the Executive hereby agrees to accept employment by FECI, in
accordance with the terms and provisions of this Agreement commencing January 2,
2002 (the "Effective Date") and continuing until terminated by either party
hereto (the "Employment Period").

                  2.       TERMS OF EMPLOYMENT.

                           (A)      POSITION AND DUTIES.

                                    (i)      During the Employment Period, the
Executive shall serve as Vice President & Treasurer of FECI and shall have such
authority and perform such executive duties as are commensurate with such
position and as are otherwise assigned by the Board.

                                    (ii)     The Executive's services shall be
performed at the headquarters of FECI or its subsidiaries in St. Augustine,
Florida and as required at other facilities of FECI and subsidiaries.

                                    (iii)    During the Employment Period, and
excluding any periods of vacation and leave to which the Executive is entitled,
the Executive agrees to devote his full business attention and time to the
business and affairs of FECI and, to the extent necessary to discharge the
duties assigned to the Executive hereunder, to use the Executive's reasonable
efforts to perform faithfully such responsibilities. During the Employment
Period it shall not be a violation of this Agreement for the Executive to serve
on corporate, civic, charitable, and professional association boards or
committees, subject to the approval of the President of Employer, in each
instance, which approval shall not be unreasonably withheld, or deliver lectures
or fulfill speaking engagements, so long as such activities do not materially
interfere with the performance of the Executive's responsibilities as an
employee of FECI in accordance with the Agreement.

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                           (B)      COMPENSATION.

                                    (i)      Base Salary. During the Employment
Period, the Executive shall receive a base salary ("Annual Base Salary"), which
shall be paid in equal installments on a semi-monthly basis, at the annual rate
of not less than One Hundred Fifty Five Thousand Dollars ($155,000) per year.
During the Employment Period, the Annual Base Salary shall be reviewed at least
annually by the Board. Any increase in Annual Base Salary shall not serve to
limit or reduce any other obligation to the Executive under this Agreement

                                    (ii)     Short-Term Incentive Bonus. In
addition to the Annual Base Salary, during the Employment Period the Executive
shall participate in an annual incentive compensation plan. Such plan shall
provide the Executive with the opportunity to earn a bonus based on achievement
of performance criteria. The incentive bonus plan shall be structured such that
the Executive may receive up to thirty percent (30%) of Annual Base Salary
("Target") for attainment of certain target performance goals, with a maximum
bonus of two hundred percent (200%) of Target for extraordinary performance or
such other maximum bonus as determined by FECI in accordance with FECI's Annual
Incentive Compensation Plan ("Plan") and prorated in accordance with the Plan.
The Board of Directors of FECI (acting by and through the compensation
committee) and Executive's supervisor will establish the performance criteria
and goals in consultation with the Executive and in accordance with the Plan.

                                    (iii)    Long-Term Incentives: Restricted
Stock. The Executive shall receive a grant of restricted stock for two thousand
five hundred (2,500) shares of Employer's common stock issued under the FECI
Stock Incentive Plan. Such shares shall be subject to restrictions which shall
provide that the Executive shall not transfer such shares during the restriction
period and shall forfeit such shares if during the restriction period he is
discharged by Employer for Cause (as hereinafter defined in Section 3(b)) or
resigns from employment with Employer without Good Reason (as hereinafter
defined in Section 3(c)). The restriction period shall lapse with respect to
such shares in five (5) equal annual installments on each of the first through
fifth anniversaries of the Effective Date. Notwithstanding the foregoing, the
restriction period shall lapse immediately as to all such shares in the event
that an Accelerating Event (as hereinafter defined in Section 4(a)) occurs. The
Executive shall be entitled to receive any dividends or other distributions
payable with respect to such shares of restricted stock beginning on the date of
award of such shares. Such stock award shall be evidenced by a written
restricted stock award agreement between Employer and the Executive, the terms
of which shall be agreed to by the parties in good faith as soon as practical.

                                    (iv)     Long-Term Incentives: Basic Stock
Options. The Executive shall receive a grant of non-statutory stock options on
ten thousand (10,000) shares of FECI Class A ("Class A") common stock issued
under the FECI Stock Incentive Plan. The options shall have a term of ten (10)
years (subject to earlier expiration as hereinafter provided), shall have an
exercise price equal to one hundred percent (100%) of the fair market value, as
of the close of trading on the next preceding business day prior to the date of
this Agreement (being $21.425 per share) of the shares of common stock of
EMPLOYER, and shall vest and become exercisable in five (5) equal annual
installments on the first through fifth anniversaries of the

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Effective Date; provided, however, that such stock options shall vest
immediately and become exercisable in their entirety in the event that an
Accelerating Event (as hereinafter defined in Section 4(a)) occurs. To the
extent not previously exercised, all such stock options shall expire immediately
following the Date of Termination (as hereinafter defined in Section 3(f));
provided, however, that the Executive, or his heirs or legal representatives in
the event of the Executive's death, may exercise all or any part of such stock
options as were exercisable as of the close of business on the Date of
Termination for a period of two (2) years following such Date of Termination in
the event (i) an Accelerating Event (as hereinafter defined in Section 4(a))
occurs; or (ii) the Executive retires at normal retirement age under any
retirement plan of Employer. Such stock options shall include a provision for
adjustment in the option price to reflect an extraordinary distribution made
with respect to the common stock during the term of the options. In the event of
a capital adjustment resulting from a stock dividend, stock split,
reorganization, merger, consolidation, spin off, a combination or exchange of
shares or other transaction having a similar substantive effect, the number
shares of stock subject to the stock options and the option price shall be
equitably adjusted. Such stock options shall be evidenced by a written stock
option award agreement between Employer and the Executive, the terms of which
shall be agreed to by the parties in good faith as soon as practical.

                                    (iii)    Long-Term Incentives: Subsequent
Option Grants. Option grants shall be in accordance with FECI's Stock Incentive
Plan, with the performance criteria for threshold, target and maximum grants as
established pursuant to the Plan.

                                    (iv)     Savings and Retirement Plans.
During the Employment Period, the Executive shall be entitled to participate in
all savings and retirement plans, practices, policies and programs applicable
generally to other peer executives of FECI.

                                    (v)      Welfare Benefit Plans. During the
Employment Period, the Executive and/or the Executive's family and dependents,
as the case may be, shall be eligible for participation in and shall receive all
benefits under all welfare benefit plans, practices, policies and programs
provided by FECI (including, without limitation, medical, prescription, dental,
disability salary continuance, employee group life, accidental death and travel
accident insurance plans and programs) to the extent applicable generally to
other peer executives of FECI.

                                    (vi)     Expenses. The Executive shall be
entitled to receive prompt reimbursement for all employment-related expenses
incurred by the Executive during the Employment Period in accordance with the
most favorable policies, practices and procedures of FECI as in effect generally
from time after the Effective Date with respect to other peer executives of
FECI.

                                    (vii)    Fringe Benefits. During the
Employment Period, the Executive and/or the Executive's family and dependents
shall be entitled to fringe benefits in accordance with the most favorable
plans, practices, programs and policies of FECI as in effect generally from time
to time after the Effective Date with respect to other peer executives of FECI.

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                                    (viii)   Vacation. During the Employment
Period, the Executive shall be entitled to four (4) weeks paid vacation per
annual period.

                                    (ix)     Car Allowance. During the
Employment Period, the Executive shall be entitled to a car allowance in
accordance with FECI's car allowance policy, in lieu of expenses associated with
the operation of his automobile.

                                    (x)      Relocation Expense. Employer shall
make the Executive whole by reimbursing him for all reasonable costs associated
with his relocation from the Chestnut Hill, Massachusetts area to the St.
Augustine, Florida area whether incurred before or after the Effective Date, but
only to the extent that such costs are incurred prior to the first anniversary
of the Effective Date. Such costs shall include, without limitation, closing
costs associated with the sale of the Executive's Massachusetts residence and
closing costs associated with the Executive's purchase and financing of a new
primary residence in the St. Augustine area. For purpose of this Section,
"closing costs" shall mean loan origination fees, appraisal fees, credit report
fees, assumption fees, settlement or closing fees, title examination fees, title
insurance binder, document preparation fees, notary fees, attorneys' fees, real
estate brokers' commissions on sale of Massachusetts home, title insurance fees,
recording fees, tax stamps, transfer taxes, survey fees and costs of pest, radon
and home inspections. Employer shall also arrange for and pay for the move of
the Executive's household goods and personal effects (including packing,
reasonable storage charges and unpacking charges) from his Massachusetts
residence to his new primary residence in Florida. Employer shall pay for the
Executive's reasonable temporary living costs in the St. Augustine area up to 3
months from the Effective Date (or such additional time as may be requested by
the Executive and approved by the Chairman of Employer, which approval shall not
be unreasonably withheld) until Executive is moved into his new residence in
Florida. Employer will pay the costs associated with a reasonable number of
trips to St. Augustine for the Executive and his spouse to look for a new
residence. In addition, at the Executive's request Employer shall provide the
Executive with an interest-free bridge loan for a term of up to twelve (12)
months for an amount up to the asking price of his Massachusetts residence,
which loan shall be repayable upon the earlier of five (5) days following the
closing of the sale of the Massachusetts residence or the first anniversary of
the making of such loan. In addition, Employer shall pay the Executive an amount
determined by its accountants equal to the Executive's federal, state and local
taxes on the foregoing reimbursement and imputed interest under the aforesaid
loan (the "Tax Gross-up") and the federal, state and local taxes on the Tax
Gross-up, all to the end that the Executive be held harmless, on an after-tax
basis, from the tax impact thereof.

                                    (xi)     Right to Change Plans. Executive
shall not be obligated to institute, maintain or refrain from changing, amending
or discontinuing any benefit plan, program, or perquisite referred to in Section
2(b), so long as such changes are similarly applicable to other executives of
FECI.

                  3.       TERMINATION OF EMPLOYMENT.

                           (A)      DEATH OR DISABILITY. The Executive's
employment shall terminate automatically upon the Executive's death during the
Employment Period. If FECI determines in

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good faith that the Disability of the Executive has occurred (pursuant to the
definition of disability set forth below), it may give to the Executive notice
of its intention to terminate the Executive's employment. In such event, the
Executive's employment with FECI shall terminate upon a date selected by FECI
and set forth in such notice (the "Disability Effective Date"), provided that,
prior to such date, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the Executive's duties
with FECI on a full-time basis for one hundred eighty (180) consecutive business
days as a result of incapacity due to mental or physical illness which is
determined to be total and permanent by a physician selected by FECI or its
insurers and acceptable to the Executive or the Executive's legal representative
(such agreement as to acceptability not to be withheld unreasonably).

                           (B)      CAUSE. FECI may terminate the Executive for
cause. "Cause" means any of the following:

         (i)      (a) a material breach by the Executive of the obligations
                  under this agreement or any other written agreement with the
                  Company, or (b) a failure to attempt in good faith to perform
                  the Executive's duties and responsibilities (other than as a
                  result of incapacity due to physical or mental illness), which
                  is demonstrably willful and deliberate on the Executive's part
                  provided that such breach or failure is not remedied within
                  ten (10) days after receipt of notice from the Company
                  specifying such breach or failure;

         (ii)     the Executive `s conviction for committing a felony or the
                  guilty or nolo contendere plea by the executive to a felony
                  (other than as a result of vicarious liability where the
                  Executive was not involved in and had no material knowledge of
                  the action or inactions leading to the charges or had such
                  involvement or knowledge but acted upon advise of the
                  Company's counsel as to its legality);

         (iii)    the (a) insubordination or the willful engaging by the
                  Executive in misconduct or (b) the Executive's gross
                  negligence, in either case, with regard to the Employer or the
                  Executive's duties, which have, or is likely to have, a
                  material adverse impact on the Employer; or

         (iv)     a material act of dishonesty or breach of trust on the
                  Executive's part resulting or intending to result, directly or
                  indirectly, in material personal or family gain or enrichment
                  at the expense of the Employer.

         For purposes of this paragraph, no act, or failure to act, on the
         Executive's part shall be considered "willful" unless done or omitted
         to be done, by the Executive not in good faith and without reasonable
         belief that the Executive's action or omission was in the best
         interests of the Company. In the event that the Executive alleges that
         the failure to attempt to perform the Executive's duties and
         responsibilities is due to a physical or mental illness, and thus not
         "Cause" under (i) above, the Executive shall be required to furnish the
         Company with a written statement from a licensed physician who is

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         reasonably acceptable to the Company which confirms the Executive's
         inability to attempt to perform due to such physical or mental illness.

                           (C)      GOOD REASON. The Executive may terminate his
employment for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean, in the absence of the consent of the Executive, a reasonable determination
by the Executive that any of the following has occurred:

         (i)      FECI materially reduces the Executive's position (including
                  titles), authority, duties or responsibilities as contemplated
                  by Section 2(a) of this Agreement, excluding for this purpose
                  (a) any isolated and insubstantial action not taken in bad
                  faith and which is remedied by FECI promptly after receipt of
                  notice thereof given by the Executive and (b) any action by
                  FECI to decentralize to its subsidiaries financial management
                  functions relevant to these subsidiaries; or

         (v)      any failure by FECI to comply with any of the provisions of
                  this Agreement applicable to it, other than any isolated and
                  insubstantial failure not occurring in bad faith and which is
                  remedied promptly after notice thereof from the Executive.

                           (D)      TERMINATION FOR OTHER REASONS. FECI may
terminate the employment of the Executive without Cause by giving notice to the
Executive, which notice shall set forth the Date of Termination. The Executive
may resign from his employment without Good Reason hereunder by giving notice to
FECI at least thirty (30) days prior to the Date of Termination.

                           (E)      NOTICE OF TERMINATION. Any termination shall
be communicated by Notice of Termination to the other party. For purposes of
this Agreement, a "Notice of Termination" means a notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) in the case
of a termination under Section 3(b) or 3(c), to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated (the failure by the Executive or FECI to set forth in the Notice of
Termination any fact or circumstance shall not waive any right of the Executive
or FECI hereunder or preclude the Executive or FECI from asserting such fact or
circumstance in enforcing the Executive's or FECI's rights hereunder), 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 not be more
than fifteen (15) days after the giving of such notice, unless otherwise
required by Section 3(f)).

                           (F)      DATE OF TERMINATION. "Date of Termination"
shall mean (i) if the Executive's employment is terminated by FECI due to the
Executive's Disability, the Date of Termination shall be the Disability
Effective Date, (ii) if the Executive's employment is terminated by reason of
the Executive's death, the Date of Termination shall be the date of death of the
Executive, and (iii) in all other case, the date of receipt of the Notice of
Termination or any permitted later date specified therein, as the case may be.

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                  4.       OBLIGATIONS OF FECI UPON TERMINATION.

                           (A)      ACCELERATING EVENT. As used in this
Agreement and in the Restricted Stock Agreement of even date herewith, the term
"Accelerating Event" shall mean any of the following: (i) the Executive is
discharged without Cause, or (ii) the Executive resigns with Good Reason.

                           (B)      GOOD REASON; OTHER THAN FOR CAUSE, DEATH OR
DISABILITY. If, during the Employment Period, FECI shall terminate the
Executive's employment other than for Cause, death or Disability or the
Executive shall terminate employment for Good Reason:

                                    (i)      FECI shall pay to the Executive in
a lump sum in cash within thirty (30) days after the Date of Termination the sum
of (A) the Executive's Annual Base Salary through the Date of Termination to the
extent not theretofore paid; (B) to the extent not theretofore paid, any annual
bonus payable to the Executive for any prior completed fiscal year if payable or
otherwise earned by the Executive in accordance with the Plan; (C) any
compensation previously deferred by the Executive (together with any accrued
interest or earnings thereon) to the extent not theretofore paid; and (D) any
accrued vacation pay, expenses reimbursement and any other entitlements accrued
by the Executive under Section 2(b) to the extent not theretofore paid (the sum
of the amount described in clauses (A), (B), (C) and (D) shall be hereinafter
referred to as the "Accrued Obligations"); and

                                    (ii)     FECI shall pay to the Executive in
twelve (12) monthly installments beginning thirty (30) days following the Date
of Termination an amount equal to the sum of one hundred percent (100%) of the
Executive's Annual Base Salary; and

                                    (iii)    For twelve (12) months following
the Date of Termination, or such longer period as any plan, program, practice or
policy may provide, FECI shall continue health benefits (medical, prescription,
dental and vision) to the Executive and/or the Executive's family and dependents
at least equal to those which would have been provided to them in accordance
with the plans, programs, practices and policies described in Section 2(b)(v) if
the Executive's employment had not been terminated, in accordance with the most
favorable plans, practices, programs or policies of FECI as in effect generally
at any time thereafter with respect to other peer executives of FECI and their
families ("Welfare Benefit Continuation"). If the Executive becomes reemployed
with another employer and is eligible to receive medical or other welfare
benefits under any other employer-provided plan, the medical and other welfare
benefits herein shall be secondary to those provided under such other plan
during such applicable period of eligibility.

                           (C)      DEATH. If the Executive's employment is
terminated by reason of the Executive's death, this Agreement shall terminate
without further obligation to the Executive's legal representatives under this
Agreement, other than for payment of Accrued Obligations (which shall be paid to
the Executive's estate or beneficiary, as applicable, in a lump sum in cash
within thirty (30) days of the Date of Termination).

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                           (D)      CAUSE: OTHER THAN FOR GOOD REASON. If the
Executive's employment shall be terminated for Cause or the Executive terminates
his employment without Good Reason, this Agreement shall terminate without
further obligation to the Executive other than the obligation to pay to the
Executive the Accrued Obligations (which shall be paid in cash within thirty
(30) days of the Date of Termination).

                           (E)      DISABILITY. If the Executive's employment
shall be terminated by reason of the Executive's Disability, this Agreement
shall terminate without further obligation to the Executive, other than for
payment of Accrued Obligations and the timely payment or provision of the
Welfare Benefit Continuation. Accrued Obligations shall be paid to the Executive
in a lump sum in cash within thirty (30) days of the Date of Termination. The
Executive shall be entitled after the Disability Effective Date to receive
disability and other benefits as in effect at the Disability Effective Date with
respect to other peer executives of FECI and their families.

                           (F)      NONDISCLOSURE TO MEDIA. After the Date of
Termination, the Executive and FECI agree that they will not discuss the
Executive's employment and resignation or termination (including the terms of
this Agreement) with any representatives of the media, either directly or
indirectly, without the consent of the other party hereto.

                  5.       CHANGE IN CONTROL. Notwithstanding anything to the
contrary contained in this agreement, in the event there is a change in control
of FECI, all of the rights and obligations of FECI and Executive as respects
termination of Executive's employment as a result of the change in control shall
be governed in all respects by the change in control agreement by and between
Executive and FECI.

                  6.       NON-EXCLUSIVITY OF EXECUTIVE'S RIGHTS. Amounts which
are vested benefits or which the Executive is otherwise entitled to receive
under any plan, policy, practice or program of or any contract or agreement with
FECI at or subsequent to the Date of Termination shall be payable in accordance
with such plan, policy, practice or program or contract or agreement except as
explicitly modified by this Agreement.

                  7.       CONFIDENTIAL INFORMATION.

                           (a)      The Executive shall hold in a fiduciary
capacity for the benefit of FECI all secret or confidential information,
knowledge or data relating to FECI or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the Executive during
the Executive's employment by FECI or any of its affiliated companies and which
shall not be or become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement). After
termination of the Executive's employment with FECI, the Executive shall not,
without the prior written consent of FECI or except as may otherwise be required
by law or legal process, communicate or divulge any such information, knowledge
or data to anyone other than FECI and those designated by it.

                           (b)      All records, files, memoranda, reports,
price lists, customer lists, drawings, designs, proposals, plans, sketches,
documents, computer programs, CAD systems,

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CAM systems, disks, computer printouts and the like (together with all copies
thereof) relating to the business of FECI, which Executive shall use or prepare
or otherwise have in his possession in the course of, or as a result of, his
employment hereunder shall, as between the parties hereto, remain the sole
property of FECI. Executive shall use such materials solely for the benefit of
FECI and shall not divulge any such materials other than in furtherance of
FECI's interests. Executive hereby agrees that he will return all such
materials, including copies, to FECI upon demand, or upon the cessation of his
employment.

                           (c)      Any termination of the Executive's
employment hereunder or of this Agreement shall have no effect on the continuing
operation of this Section 7.

                  8.       NON-COMPETITION; NON-SOLICITATION.

                           (a)      In consideration of FECI undertaking to
employ the Executive under the terms provided for herein and to protect the
FECI's valuable trade secrets and other business and professional information
and its relationships with existing and prospective customers and suppliers, the
Executive agrees that, except as is set forth below, for a period commencing on
the Effective Date hereof and ending on the first anniversary of the date the
Executive ceases to be employed by FECI (the "Non-Competition Period"), the
Executive shall not, directly or indirectly, either for himself or any other
person, own, manage, control, materially participate in, invest in, permit his
name to be used by, act as consultant or advisor to, render material services
for (alone or in association with any person, firm, corporation or other
business organization) or otherwise assist in any manner, any business which is
a competitor of a substantial portion of the FECI's business at the date the
Executive ceases to be employed by the FECI (a "Competitor"). Notwithstanding
the foregoing, the restrictions set forth above shall immediately terminate and
shall be of no further force or effect in the event of a default by FECI of the
performance of any of the obligations hereunder, which default is not cured
within ten (10) days after notice thereof. Nothing herein shall prohibit the
Executive from being a passive owner of not more than five percent (5%) of the
equity securities of an enterprise engaged in such business which is publicly
traded, so long as he has no active participation in the business of such
enterprise.

                           (b)      During the Non-Competition Period, the
Executive shall not, directly or indirectly, (i) induce, solicit, recruit or
hire or attempt to induce, solicit, recruit or hire or aid others in inducing,
soliciting, recruiting or hiring any employee of FECI or its subsidiaries to
leave the employ of FECI, or in any way interfere with the relationship between
FECI (including its subsidiaries) and an employee thereof except in the proper
exercise of the Executive's authority, or (ii) in any way interfere with the
relationship between FECI (including its subsidiaries) and any customer,
supplier, licensee or other business relation thereof.

                           (c)      If, at the time of enforcement of this
Section 7, a court shall hold that the duration, scope, area or other
restrictions stated herein are unreasonable under circumstances then existing,
the parties agree that the maximum duration, scope, area or other restrictions
reasonable under such circumstances shall be substituted for the stated
duration, scope, area or other restrictions.

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                           (d)      The covenants made in this Section 7 shall
be construed as an agreement independent of any other provisions of this
Agreement, and shall survive the termination of this Agreement. Moreover, the
existence of any claim or cause of action of the Executive against FECI or any
of its affiliates, whether or not predicted upon the terms of this Agreement,
shall not constitute a defense to the enforcement of these covenants.

                  9.       REMEDIES FOR EXECUTIVE'S BREACH. In the event
Executive violates any provisions of Section 7 or 8 and such violation continues
after notice thereof to the Executive and the expiration of a reasonable
opportunity to cure, then FECI may thereafter terminate the payment of any
post-termination benefits hereunder, and FECI will have no further obligation to
Executive under this Agreement. The parties acknowledge that any violation of
Section 7 or 8 can cause substantial and irreparable harm to FECI. Therefore,
FECI shall be entitled to pursue any and all legal and equitable remedies,
including but not limited to any injunctions.

                  10.      DISPUTE. Any dispute or controversy arising under or
in connection with this Agreement shall be settled by binding arbitration, which
shall be the sole and exclusive method of resolving any questions, claims or
other matters arising under this Agreement or any claim that FECI has in any way
violated the non-discrimination and/or other provisions of Title VII or the
Civil Rights Act of 1964, as amended; the Age Discrimination in Employment Act
of 1967, as amended; the American with Disabilities Act; the Family and Medical
Leave Act; the Employee Retirement Income Security Act of 1974, as amended; and,
in general, any federal law or the law of the State of Florida. Such proceeding
shall be conducted by final and binding arbitration before a panel of one or
more arbitrators under the administration of the American Arbitration
Association, and in a location mutually agreed to by the Executive and FECI. The
Federal and State courts located in the United States of America are hereby
given jurisdiction to render judgment upon, and to enforce, each arbitration
award, and the parties hereby expressly consent and submit to the jurisdiction
of such courts. Notwithstanding the foregoing, in the event that a violation of
the Agreement would cause irreparable injury, FECI and the Executive agree that
in addition to the other rights and remedies provided in this Agreement (and
without waiving their rights to have all other matters arbitrated as provided
above) the other party may immediately take judicial action to obtain injunctive
relief.

                  11.      NO CONFLICTING OBLIGATIONS OF EXECUTIVE. Executive
represents and warrants that he is not subject to any duties or restrictions
under any prior agreement with any previous employer or any other person, and
that he has no rights or obligations except as previously disclosed to FECI
which may conflict with the interests of FECI or with the performance of the
Executive's duties and obligations under this Agreement. Executive agrees to
notify FECI immediately if any such conflicts occur in the future.

                  12.      INDEMNITY OF EXECUTIVE. FECI shall indemnify and
defend the Executive against all claims relating to the performance of his
duties hereunder to the fullest extent permitted by FECI's Articles of
Incorporation and Bylaws, the relevant provisions of which shall not be amended
in their application to the Executive to be any less favorable to him than as at
present, except as required by law.

                                       10
<PAGE>

                  13.      SUCCESSORS.

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

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

                           (c)      FECI 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 FECI to assume expressly and
agree to perform this Agreement in the same manner and to the same extent that
FECI would be required to perform it if no such succession had taken place. As
used in this Agreement, "FECI" shall mean FECI as herein before 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.

                  14.      MISCELLANEOUS.

                           (a)      This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida, 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, or by telecopier, or by courier, addressed as follows:

        If to Executive to:            If to FECI to:

        Bradley D. Lehan               Florida East Coast Industries, Inc.
        124 Wolcott Road               Chief Financial Officer
        Chestnut Hill, MA  02167       One Malaga Street
                                       St. Augustine, FL 32084

                                       With copy to:
                                       Corporate Secretary
                                       Florida East Coast Industries, Inc.
                                       One Malaga Street
                                       St. Augustine, FL 32084

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.

                                       11
<PAGE>

                           (c)      This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all prior understandings with respect thereto.

                           (d)      In the event of a dispute arising out of
this Agreement, any party receiving any monetary or injunctive remedy, whether
at law or in equity, which is final and not subject to appeal shall be entitled
to its reasonable attorneys' fees and costs incurred with respect to obtaining
such remedy from the other party.

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

                           (f)      FECI 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.

                           (g)      The Executive's or FECI's failure to insist
upon strict compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right the Executive or FECI may have
hereunder, shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement.

         IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, FECI has caused
these presents to be executed in its name on its behalf, all as of the day and
year first above written.

                                       COMPANY:

                                       FLORIDA EAST COAST INDUSTRIES, INC.

                                       By  /s/ Robert W. Anestis
                                          -------------------------------------
                                          Robert W. Anestis,
                                          Chairman, President and CEO

                                       EXECUTIVE:

                                       By  /s/ Bradley D. Lehan
                                          -------------------------------------
                                          Bradley D. Lehan

                                       12
<PAGE>

                           CHANGE IN CONTROL AGREEMENT

         This Agreement (the "Agreement") made as of the 2nd day of January,
2002, by and between, Florida East Coast Industries, Inc., a Florida
corporation, with its principal office at One Malaga Street, St. Augustine,
Florida 32084 (the "Company") and Bradley D. Lehan (the "Executive").

                               W I T N E S S E T H

         WHEREAS, the Company believes that the establishment and maintenance of
sound and vital management of the Company is essential to the protection and
enhancement of the interests of the Company and the stockholders of the Company;

         WHEREAS, the Company also recognizes that the possibility of a Change
in Control (as defined herein), with the attendant uncertainties and risks,
might result in the departure or distraction of key employees of the Company to
the detriment of the Company;

         WHEREAS, the Board has determined that it is appropriate to take steps
to induce key employees to remain with the Company, and to reinforce and
encourage their continued attention and dedication, when faced with the
possibility of a Change in Control of the Company; and

         WHEREAS, the Board has determined that it is in the best interests of
the Company and the stockholders of the Company to improve upon the provisions
relating to a Change in Control contained in any written agreement with the
Company, including the Executive's Employment Agreement, and to include those
provisions in this Agreement, with certain modifications as set forth herein.

         NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

         1.       DEFINITIONS.

                  (a)      "Base Salary" means the Executive's annual base
         compensation rate for services paid by the Company to the Executive at
         the time immediately prior to the Executive's termination of
         employment, as reflected in the Company's payroll records or, if
         higher, the Executive's annual base compensation rate immediately prior
         to a Change in Control. Base Salary shall not include commissions,
         bonuses, overtime pay, incentive compensation, benefits paid under any
         qualified plan, any group medical, dental or other welfare benefit
         plan, noncash compensation or any other additional compensation but
         shall include amounts reduced pursuant to the Executive's salary
         reduction agreement under Sections 125 or 401(k) of the Code, if any,
         or a nonqualified elective deferred compensation arrangement, if any,
         to the extent that in each such case the reduction is to base salary.

                  (b)      "Board" means the board of directors of the Company.

<PAGE>

                  (c)      "Bonus" means the Executive's target performance
         bonus for the fiscal year in which the Executive's termination of
         employment occurs or, if higher, the Executive's target performance
         bonus for the fiscal year in which a Change in Control occurs.

                  (d)      "Cause" means any of the following:

                           (i)      (A) a material breach by the Executive of
         the obligations under any written agreement with the Company, including
         the Employment Agreement or (B) a failure to attempt in good faith to
         perform the Executive's duties and responsibilities (other than as a
         result of incapacity due to physical or mental illness), which is
         demonstrably willful and deliberate on the Executive's part; provided
         that such breach or failure is not remedied within ten (10) days after
         receipt of notice from the Company specifying such breach or failure;

                           (ii)     the Executive's conviction for committing a
         felony or the guilty or nolo contendere plea by the Executive to a
         felony (other than as a result of vicarious liability where the
         Executive was not involved in and had no material knowledge of the
         action or inactions leading to the charges or had such involvement or
         knowledge but acted upon advice of the Company's counsel as to its
         legality);

                           (iii)    the (A) willful engaging by the Executive in
         misconduct or (B) the Executive's gross negligence, in either case,
         with regard to, the Employer or the Executive's duties, which have, or
         is likely to have, a material adverse impact on the Employer; or

                           (iv)     a material act of dishonesty or breach of
         trust on the Executive's part resulting or intending to result,
         directly or indirectly, in material personal or family gain or
         enrichment at the expense of the Employer.

         For purposes of this paragraph, no act, or failure to act, on the
Executive's part shall be considered "willful" unless done or omitted to be
done, by the Executive not in good faith and without reasonable belief that the
Executive's action or omission was in the best interests of the Company. In the
event that the Executive alleges that the failure to attempt to perform the
Executive's duties and responsibilities is due to a physical or mental illness,
and thus not "Cause" under (i) above, the Executive shall be required to furnish
the Company with a written statement from a licensed physician who is reasonably
acceptable to the Company which confirms the Executive's inability to attempt to
perform due to such physical or mental illness. A termination for Cause after a
Change in Control shall be based only on events occurring after such Change in
Control; provided, however, the foregoing limitation shall not apply to an event
constituting Cause which was not discovered by the Company prior to a Change in
Control.

                  (e)      "Change in Control" means the occurrence of any of
         the following:

                           (i)      any "person" or group of affiliated
         "persons" (as such term is used in Sections 13(d) and 14(d) of the
         Exchange Act) becomes the "beneficial owner" (as de-

                                       2
<PAGE>

         fined in Rule 13d-3 under the Exchange Act) directly or indirectly, of
         securities representing more than 50% of the total voting power
         represented by the Company's then outstanding voting securities;

                           (ii)     a change in the composition of the Board, as
         a result of which fewer than a majority of the Directors are Incumbent
         Directors. "Incumbent Directors" shall mean Directors who either (A)
         are Directors of the Company as of the date hereof or (B) are elected
         or nominated for election, to the Board with the affirmative votes of
         at least a majority of the Incumbent Directors at the time of such
         election or nomination (but shall not include an individual whose
         election or nomination is in connection with an actual or threatened
         proxy contest relating to the election of Directors of the Company); or

                           (iii)    the Company adopts, and the stockholders
         approve, if necessary, a plan of complete liquidation of the Company,
         or the Company sells or disposes of substantially all of its assets to
         any "person" or group of affiliated "persons" (as such term is used in
         Sections 13(d) and 14(d) of the Exchange Act), other than a spin-off or
         similar disposition to the stockholders of the Company; or

                           (iv)     the Company is a party to a merger or
         consolidation in which the shareholders of the Company immediately
         prior to such transaction hold less than 50% of the total voting power
         of the resulting or surviving entity immediately after such transaction
         in approximately the same proportion as prior to such transaction.

                  Only one Change in Control may occur under this Agreement.

                  (f)      "COBRA" means the Consolidated Omnibus Budget
         Reconciliation Act of 1985, as amended.

                  (g)      "Code" means the Internal Revenue Code of 1986, as
         amended.

                  (h)      "Company" has the meaning ascribed to it in the
         preamble and in paragraph 14 hereof.

                  (i)      "Effective Date" means January 2, 2002.

                  (j)      "Employer" means the Company and its affiliates.

                  (k)      "Employment Agreement" means the employment agreement
         between the Executive and the Company in effect on the Effective Date.

                  (l)      "Exchange Act" means the Securities Exchange Act of
         1934, as amended.

                  (m)      "Good Reason" means the occurrence or failure to
         cause the occurrence of any of the following events without the
         Executive's express written consent:

                                       3
<PAGE>

                           (i)      any (A) diminution in the Executive's title
         from that which exists immediately prior to a Change in Control or (B)
         any material diminution in the Executive's duties, responsibilities, or
         authority from that which exists immediately prior to a Change in
         Control (except in each case in connection with the termination of the
         Executive's employment for Cause or as a result of the Executive's
         death, or temporarily as a result of the Executive's illness or other
         absence), or (C) the assignment to the Executive of duties and
         responsibilities materially inconsistent with the position held by the
         Executive immediately prior to the Change in Control, excluding in the
         case of (B) or (C) an isolated, insubstantial and inadvertent action
         not taken in bad faith and which is remedied promptly after receipt of
         notice thereof given by the Executive;

                           (ii)     a relocation of the Executive's principal
         business location to an area outside a 35 mile radius of the
         Executive's principal business location at the time of the Change in
         Control, or a material increase in the amount of travel required of
         Executive beyond that required prior to the Change in Control;

                           (iii)    a reduction in the Executive's annual Base
         Salary;

                           (iv)     a failure by the Company after a Change in
         Control to continue any annual bonus plan, program or arrangement in
         which the Executive is then entitled to participate (the "Bonus
         Plans"), provided that any such plan(s) may be modified at the
         Company's discretion from time to time but shall be deemed terminated
         if (A) any such plan does not remain substantially in the form in
         effect prior to such modification and (B) plans providing the Executive
         with substantially similar benefits are not substituted therefor
         ("Substitute Plans"), or a failure by the Company to continue the
         Executive as a participant in the Bonus Plans and Substitute Plans on
         at least the same basis as to the potential amount of the bonus and the
         achievability thereof as the Executive participated immediately prior
         to any change in such plans or awards, in accordance with the Bonus
         Plans and the Substitute Plans, provided that such action is not cured
         within 10 days after written notice thereof from the Executive to the
         Company;

                           (v)      a failure to permit the Executive after the
         Change in Control to participate in cash or equity based incentive
         plans and programs (other than Bonus Plans) on a basis providing the
         Executive in the aggregate with an annualized award value in each
         fiscal year after the Change in Control at least equal to the aggregate
         annualized award value being provided by the Company to the Executive
         under such incentive plans and programs immediately prior to the Change
         in Control (with any awards intended not to be repeated on an annual
         basis allocated over the years the awards are intended to cover),
         provided that such action is not cured within 10 days after written
         notice thereof from the Executive to the Company;

                           (vi)     the failure by the Company to continue to
         provide Executive with benefits substantially similar to those enjoyed
         by Executive under any of the Company's life insurance, medical,
         dental, accident, disability or pension plans or perquisites in which
         the Executive was participating at the time of the Change in Control,
         the taking of any action by the Company which would directly or
         indirectly materially reduce any of

                                       4
<PAGE>

         such benefits, or the failure by the Company to provide Executive with
         the number of paid vacation days to which he is entitled on the basis
         of years of service with the Company in accordance with the Company's
         normal vacation policy in effect at the time of the Change in Control;

                           (vii)    a material breach by the Company of any
         other written agreement with the Executive or failure to timely pay any
         compensation obligation to the Executive that in either case remains
         uncured for 10 days after written notice of such breach is given by the
         Executive to the Company;

                           (viii)   failure of any successor to assume in a
         writing delivered to Executive and reasonably satisfactory to Executive
         the obligations hereunder within 10 days after written notice by the
         Executive to the Company; or

                           (ix)     any purported termination of Executive's
         employment that is not effected pursuant to a Notice of Termination
         satisfying the requirements of Sections 5 and 6 hereof, which purported
         termination shall not be effective for purposes of this Agreement.

                  (n)      "Term" has the meaning ascribed to it in Section 2
         hereof.

         2.       TERM. The term of this Agreement shall commence on the
Effective Date and end on the earlier of (a) the termination of the Executive's
employment with the Company or (b) the third anniversary of the Effective Date
(the "Term," as it may be extended or terminated); provided, however, that the
Term shall be automatically extended for successive additional one (1) year
periods (the "Additional Terms"), unless, at least 180 days prior to the end of
the original Term or the then Additional Term, the Company has notified the
Executive in writing that the Term shall not be extended and further provided,
if a Change in Control occurs prior to the end of the aforesaid period, the
duration of this Agreement shall be extended, if it would otherwise end prior
thereto, until the second anniversary of the date of such Change in Control,
whether such two-year period ends before or after the end of such aforesaid
period. Notwithstanding anything in this Agreement to the contrary, if the
Company becomes obligated to make any payment to the Executive pursuant to the
terms hereof, then this Agreement shall remain in effect for such purposes until
all of the Company's obligations hereunder are fulfilled.

         3.       TERMINATION FOLLOWING CHANGE IN CONTROL. If a Change in
Control occurs during the Term and the Executive's employment by the Company is
terminated (a) by the Company without Cause or by the Executive for Good Reason
at any time during the period commencing on the date of the Change in Control
and ending on the second anniversary of the Change in Control or (b) by the
Company without Cause or by the Executive for Good Reason (based on Section
1(m)(i), (ii), (iii) and (iv) and without reference to the Change in Control
measurement date) at any time during the period commencing three months prior to
a Change in Control and ending immediately prior to the Change in Control and
the Executive demonstrates that such termination was requested by the party
taking control or was otherwise in anticipation of the Change in Control, then
the Company shall pay or provide the Executive with the payments and benefits
provided under Section 4 hereof.

                                       5
<PAGE>

         4.       COMPENSATION UPON TERMINATION. Subject to Section 9, in the
event that the Executive becomes entitled to payments or benefits pursuant to
Section 3, then the Company shall pay or provide the Executive with the
following payments and benefits in lieu of any other termination, change in
control, separation, severance or similar benefits under the Employment
Agreement or under any other compensation arrangement with the Employer. The
amounts hereunder shall reduce and be in full satisfaction of any statutory
entitlement (including notice of termination, termination pay and/or severance
pay) of the Executive upon a termination of employment.

                  (a)      Within 10 business days after the Date of Termination
         (or within 10 business days after the date of the Change in Control if
         the termination occurred within three months prior to the Change in
         Control and such amount was not previously paid): (i) any unpaid Base
         Salary through the Date of Termination and any accrued vacation; (ii)
         any unpaid bonus accrued with respect to the fiscal year ending on or
         preceding the date of termination; (iii) reimbursement for any
         unreimbursed expenses incurred through the Date of Termination; and
         (iv) all other payments, benefits or fringe benefits to which the
         Executive may be entitled subject to, and in accordance with, the terms
         of any applicable compensation arrangement or benefit (other than
         severance arrangements), equity or fringe benefit plan or program or
         grant.

                  (b)      Within 10 business days after the Date of Termination
         (or within 10 business days after the date of the Change in Control if
         the termination occurred within three months prior to the Change in
         Control and such amount was not previously paid), a lump sum cash
         payment equal to two times the sum of the Executive's Base Salary and
         Bonus in effect on the date immediately preceding the Change in
         Control.

                  (c)      Within 10 business days after the Date of Termination
         (or within 10 business days after the date of the Change in Control, if
         the termination occurred within three months prior to the Change in
         Control and such amount was not previously paid), payment of a pro-rata
         portion of the Bonus for the fiscal year to which the Bonus relates
         (determined by multiplying such amount by a fraction, the numerator of
         which is the number of days during the fiscal year of termination that
         the Executive is employed by the Company and the denominator of which
         is 365).

                  (d)      Repayment obligations for any sign-on bonuses or
         relocation payments, if any, conditioned upon a termination of
         employment shall be forgiven on a termination for Good Reason or
         without Cause following a Change in Control.

                  (e)      Subject to the Executive's continued co-payment of
         premiums which shall not exceed the level of co-payment made by the
         Executive immediately prior to the date of the Change in Control,
         continued participation in all health plans which cover the Executive
         (and eligible dependents), including, without limitation, medical,
         dental and prescription drug coverage upon the same terms and
         conditions (except for the requirements of the Executive's continued
         employment) in effect on the date of termination until two years after
         the Date of Termination; provided, however, that in the event that the
         Execu-

                                       6
<PAGE>

         tive obtains other employment that offers substantially similar or
         improved benefits, as to any particular health plan, the continuation
         of coverage by the Company for such similar or improved benefit under
         such plan shall immediately cease. To the extent, in the good faith
         judgment of the Company, such coverage cannot be provided under the
         Company's health plans without jeopardizing the tax status of such
         plans, for underwriting reasons or because of the tax impact on the
         Executive, the Company shall pay the Executive an amount equal to the
         cost to the Company for a similarly situated active employee fully
         grossed-up to cover taxes on such amount and the gross-up payment. Such
         period of medical coverage shall reduce and count against the
         Executive's rights to COBRA continuation coverage.

                  (f)      Unless otherwise provided in any stock option grant
         agreements made after the Effective Date, all stock options to purchase
         shares of FECI common stock held by or for the benefit of the Executive
         shall become immediately fully vested and exercisable as of the Date of
         Termination for the Exercise Period set forth in such stock option
         grant agreements.

         5.       NOTICE OF TERMINATION. After a Change in Control, any
purported termination of the Executive's employment pursuant to Section 3 shall
be communicated by written Notice of Termination from one party hereto to the
other party hereto in accordance with Section 17. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment.

         6.       DATE OF TERMINATION. "Date of Termination", with respect to
any purported termination of the Executive's employment after a Change in
Control, shall mean the date specified in the Notice of Termination (which, in
the case of a termination by the Executive for Good Reason, shall not be less
than five days nor more than 60 days, from the date such Notice of Termination
is given). In the event of Notice of Termination by the Company, the Executive
may treat such notice as having a Date of Termination at any date between the
date of the receipt of such notice and the Date of Termination indicated in the
Notice of Termination by the Company; provided, that the Executive must give the
Company written notice of the Date of Termination if the Executive deems it to
have occurred prior to the Date of Termination indicated in the notice.

         7.       EXCISE TAX. In the event that the Executive becomes entitled
to payments and/or benefits which would constitute "parachute payments" within
the meaning of Section 280G(b)(2) of the Code, the provisions of Exhibit A shall
apply.

         8.       NO DUTY TO MITIGATE/SET-OFF. In the event of any termination
of the Executive's employment, the Executive shall not be required to seek other
employment or to attempt in any way to reduce any amounts payable to the
Executive by the Company pursuant to this Agreement. Further, the amount of any
payment or benefit provided for in this Agreement shall not be reduced by any
compensation earned by the Executive or benefit provided to the Executive as the
result of employment by another employer or otherwise. The amounts payable
hereunder shall not be subject to set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Executive.

                                       7
<PAGE>

         9.       NON-COMPETITION; CONFIDENTIALITY. (a) The Executive
acknowledges that the restrictive covenants (including, without limitation,
confidentiality and non-competition) in any other agreement with the Company
previously signed by the Executive (including the Employment Agreement) shall
not be affected by this Agreement and that the restrictive covenants therein
shall continue to apply after a Change in Control or a termination of employment
after a Change in Control in accordance with the terms of such restrictive
covenants.

                  (b)      Furthermore, during the two-year period after the
         Termination Date, the Executive shall not, directly or indirectly, (i)
         induce, solicit, recruit or hire or attempt to induce, solicit, recruit
         or hire or aid others in inducing, soliciting, recruiting or hiring any
         employee of the Company, or in any way interfere with the relationship
         between the Company and an employee thereof, or (ii) in any way
         interfere with the relationship between the Company and any customer,
         supplier, licensee or other business relation thereof.

         10.      RELEASE REQUIRED. Any amounts payable pursuant to this
Agreement (beyond amounts payable pursuant to Section 4(a)) shall only be
payable if the Executive delivers to the Company (and does not revoke) a release
of all claims of any kind whatsoever that the Executive has or may have against
the Employer and its officers, directors and employees, known or unknown, as of
the Date of Termination (other than claims to payments specifically payable
hereunder, claims under COBRA, claims to vested accrued benefits under the
Employer's employee benefit plans, claims relating to any rights of
indemnification under the Company's organizational documents or otherwise or
claims relating to any outstanding stock options or other equity-based award on
the Date of Termination) occurring up to the release date in such form as
reasonably required by the Company (but without ancillary provisions not
directly related to the release).

         11.      LITIGATION SUPPORT. Subject to the Executive's other
commitments, following the Executive's receipt of any payments or benefits under
this Agreement, the Executive shall be reasonably available to cooperate with
the Company and provide information as to matters which the Executive was
personally involved, or has information on, during the Executive's employment
with the Company and which are or become the subject of litigation or other
dispute.

         12.      ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
conducted in Jacksonville, Florida under the Commercial Arbitration Rules then
prevailing of the American Arbitration Association and such submission shall
request the American Arbitration Association to: (a) appoint an arbitrator
experienced and knowledgeable concerning the matter then in dispute; (b) require
the testimony to be transcribed; (c) require the award to be accompanied by
findings of fact and the statement for reasons for the decision; and (d) request
the matter to be handled by and in accordance with the expedited procedures
provided for in the Commercial Arbitration Rules. The determination of the
arbitrators, which shall be based upon a de novo interpretation of this
Agreement, shall be final and binding and judgment may be entered on the
arbitrators' award in any court having jurisdiction.

                                       8
<PAGE>

         13.      ATTORNEY'S FEES. In the event that a claim for payment or
benefits under this Agreement is disputed or the Executive is otherwise
enforcing rights under this Agreement and the arbitrator determines that the
Executive has prevailed on the material issues in the arbitration, the Company
shall, upon presentment of appropriate documentation, promptly pay, or reimburse
the Executive, for all reasonable legal and other professional fees, costs of
arbitration and other expenses incurred in connection therewith by the
Executive.

         14.      NO ASSIGNMENT. This Agreement shall not be assignable by the
Executive. This Agreement shall be assignable by the Company only by merger or
with all or a substantial portion of the assets of the Company. This Agreement
shall inure to the benefit and be binding upon the personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, legatees and permitted assignees of the parties hereto. If the Company
is acquired, consolidates or merges into or with, or transfers all or
substantially all of its assets to, another entity, the term "Company" as used
herein shall mean such other entity and this Agreement shall continue in full
force and effect. In the case of any transaction in which a successor would not
by the foregoing provision or operation of law be bound by this Agreement, the
Company shall require such successor expressly and unconditionally to assume and
agree to perform the Company's obligations under this Agreement, in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place.

         15.      MISCELLANEOUS. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officer as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. This
Agreement constitutes the entire Agreement between the parties hereto pertaining
to the subject matter hereof and supersedes all existing agreements between them
concerning such subject matter (including, without limitation, the Employment
Agreement as it may apply with regard to a termination after a Change in Control
or with regard to a termination in anticipation of a Change in Control but not
any stock option or other equity agreement nor any plan or programs, except as
provided herein); provided, however, that in the event the Term ends before the
Company becomes obligated to make any payment to the Executive pursuant to the
terms hereof, the effect of this sentence regarding superceding existing
agreements as they apply to a termination of employment in connection with a
Change in Control shall be of no further force or effect. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. All references to any law shall be deemed also to refer
to any successor provisions to such laws.

         16.      COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

         17.      NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally, or
sent by registered mail, postage prepaid as follows:

                                       9
<PAGE>

         If to the Company, to:

                  Florida East Coast Industries, Inc.
                  One Malaga Street
                  St. Augustine, Florida 32084
                  Attention: General Counsel

         If to the Executive, to the Executive's last shown address on the books
of the Company.

         Any such notice shall be deemed given when so delivered personally, or,
if mailed, five days after the date of deposit in the United States mail. Any
party may by notice given in accordance with this Section to the other parties,
designate another address or person for receipt of notices hereunder.

         18.      SEPARABILITY. If any provisions of this Agreement shall be
declared to be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect.

         19.      NON-EXCLUSIVITY OF RIGHTS. Except as otherwise specifically
provided therein, (a) nothing in this Agreement shall prevent or limit the
Executive's continuing or future participation in any benefit, bonus, incentive,
equity or other plan or program provided by the Company and for which the
Executive may qualify, nor (b) shall anything herein limit or otherwise
prejudice such rights as the Executive may have under any other currently
existing plan, agreement as to employment or severance from employment with the
Company or statutory entitlements, provided, that to the extent such amounts are
paid under Section 4(a) hereof or otherwise, they shall not be due under any
such program, plan, agreement, or statute. Amounts that are vested benefits or
which the Executive is otherwise entitled to receive under any plan or program
of the Company, at or subsequent to the Date of Termination shall be payable in
accordance with such plan or program, except as otherwise specifically provided
herein.

         20.      NOT AN AGREEMENT OF EMPLOYMENT. This is not an agreement
assuring employment and the Company reserves the right to terminate the
Executive's employment at any time with or without Cause, subject to the payment
provisions hereof if such termination is after, or within three months prior to,
a Change in Control. The Executive acknowledges that the Executive is aware that
the Executive shall have no claim against the Company hereunder or for
deprivation of the right to receive the amounts hereunder as a result of any
termination that does not specifically satisfy the requirements hereof. Except
as provided herein, the foregoing shall not affect the Executive's rights under
any other agreement with the Company.

         21.      WITHHOLDING TAXES. The Company may withhold from all payments
due hereunder such federal, state and local taxes as may be required to be
withheld pursuant to any applicable law or regulation.

                                       10
<PAGE>

         22.      GOVERNING LAW. This Agreement shall be construed, interpreted,
and governed in accordance with the laws of the State of Florida, without
reference to rules relating to conflicts of law.

         IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and the Executive has hereunto set the Executive's hand as of the date
first set forth above.

                                       FLORIDA EAST COAST INDUSTRIES, INC.

                                       By: /s/ Robert W. Anestis
                                          -------------------------------------
                                       Name:  Robert W. Anestis
                                       Title: Chairman

                                       EXECUTIVE

                                       By: /s/ Bradley D. Lehan
                                          -------------------------------------
                                       Name:  Bradley D. Lehan
                                       Title: Vice President and Treasurer

                                       11
<PAGE>

                                    EXHIBIT A

                           GOLDEN PARACHUTE PROVISION

         (a)      In the event that the Executive shall become entitled to
payments and/or benefits provided by this Agreement or any other amounts in the
"nature of compensation" (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Company, any person whose actions
result in a change of ownership or effective control covered by Section
280G(b)(2) of the Code or any person affiliated with the Company or such person)
as a result of such change in ownership or effective control (collectively, the
"Company Payments"), and such Company Payments will be subject to the tax (the
"Excise Tax") imposed by Section 4999 of the Code (and any similar tax that may
hereafter be imposed by any taxing authority), the amounts of any Company
Payments shall be automatically reduced to an amount one dollar less than the
amount that would subject the Executive to the Excise Tax. The dollar amount of
the reduction, if any, to be made with respect to any Company Payments shall be
determined by the Company's Accountants (as such term is defined in paragraph
(b) below) on or before the date such Company Payments are due and payable to
the Executive. Company Payments shall be reduced as mutually agreed between the
Company and the Executive or, in the event the parties cannot agree, in the
following order (1) any lump sum severance based on a multiple of Base Salary or
Bonus, (2) any other cash amounts payable to the Executive, (3) any benefits
valued as parachute payments; and (4) acceleration of vesting of any equity.

         (b)      For purposes of determining whether any of the Company
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(x) the Company Payments shall be treated as "parachute payments" within the
meaning of Section 280G(b)(2) of the Code, and all "parachute payments" in
excess of the "base amount" (as defined under Section 280G(b)(3) of the Code)
shall be treated as subject to the Excise Tax, unless and except to the extent
that, in the opinion of the Company's independent certified public accountants
appointed prior to any change in ownership (as defined under Section 280G(b)(2)
of the Code) or tax counsel selected by such accountants or the Company (the
"Accountants") such Company Payments (in whole or in part) either do not
constitute "parachute payments," represent reasonable compensation for services
actually rendered within the meaning of Section 280G(b)(4) of the Code in excess
of the "base amount" or are otherwise not subject to the Excise Tax, and (y) the
value of any non-cash benefits or any deferred payment or benefit shall be
determined by the Accountants in accordance with the principles of Section 280G
of the Code. In the event that the Accountants are serving as accountant or
auditor for the individual, entity or group effecting the Change in Control, the
Executive may appoint another nationally recognized accounting firm to make the
determinations hereunder (which accounting firm shall then be referred to as the
"Accountants" hereunder). All determinations hereunder shall be made by the
Accountants which shall provide detailed supporting calculations both to the
Company and the Executive at such time as it is requested by the Company or the
Executive. If the Accountants determine that payments under this Agreement must
be reduced pursuant to this paragraph, they shall furnish the Executive with a
written opinion to such effect. The determination of the Accountants shall be
final and binding upon the Company and the Executive.

                                       12
<PAGE>

         (c)      In the event of any controversy with the Internal Revenue
Service (or other taxing authority) with regard to the Excise Tax, the Executive
shall permit the Company to control issues related to the Excise Tax (at its
expense), provided that such issues do not potentially materially adversely
affect the Executive, but the Executive shall control any other issues. In the
event the issues are interrelated, the Executive and the Company shall in good
faith cooperate so as not to jeopardize resolution of either issue, but if the
parties cannot agree the Executive shall make the final determination with
regard to the issues. In the event of any conference with any taxing authority
as to the Excise Tax or associated income taxes, the Executive shall permit the
representative of the Company to accompany the Executive, and the Executive and
the Executive's representative shall cooperate with the Company and its
representative.

         (d)      The Company shall be responsible for all charges of the
Accountant.

         (e)      The Company and the Executive shall promptly deliver to each
other copies of any written communications, and summaries of any verbal
communications, with any taxing authority regarding the Excise Tax covered by
this Exhibit A.

                                       13
<PAGE>

                          BASIC STOCK OPTION AGREEMENT

                                     Between

                       FLORIDA EAST COAST INDUSTRIES, INC.

                                       and

                                BRADLEY D. LEHAN

                                                        Dated: December 11, 2001

<PAGE>

         THIS AGREEMENT, dated December 11, 2001 between Florida East Coast
Industries, Inc. ("FECI") ("Company"), and Bradley D. Lehan (the "Employee") is
made pursuant to the provisions of Section 2(b)(iv) of that certain Employment
Agreement of even date herewith between the Company and the Employee (the
"Employment Agreement").

         In fulfillment of the aforesaid provisions of the Employment Agreement,
the parties agree as follows:

                  1.       Non-Statutory Option. Under the Company's Stock
         Incentive Plan, as amended (the "Plan"), the Company hereby grants the
         Employee a non-statutory option ("NSO") to purchase from the Company
         ten thousand (10,000) shares of the Company's Class A Common Stock
         ("Common Stock"). The exercise price of the NSO is $21.425 per share,
         being the fair market value of the Company's Common Stock on the next
         preceding business day prior to the date of this Agreement.

                  2.       Entitlement to Exercise the NSO. The grant of the NSO
         is subject to the following terms and conditions:

                           (a)      Vesting. One-fifth of the NSO, 10,000
                  shares, shall vest on and may be exercised at any time on or
                  after December 11, 2002. Another one-fifth of the NSO, 2,000
                  shares, shall vest on and may be exercised at any time on or
                  after December 11, 2003. Another one-fifth of the NSO, 2,000
                  shares, shall vest and may be exercised at any time on or
                  after December 11, 2004. Another one-fifth of the NSO, 2,000
                  shares, shall vest on and may be exercised at any time on or
                  after December 11, 2005. The remaining one-fifth of the NSO,
                  2,000 shares

                                       2
<PAGE>

                  shall, vest on and may be exercised at any time on or after
                  December 11, 2006. In addition, all of the NSO shall vest on
                  and may be exercised at any time on or after an Accelerating
                  Event (as defined in Section 4(a) of the Employment
                  Agreement). The vesting of any portion of the NSO is
                  conditioned on the Employee's continued employment by the
                  Company or a parent or subsidiary of the Company as of the
                  relevant vesting date.

                           (b)      Exercise Period. Except as otherwise stated
                  in this Agreement, the vested portion of the NSO may be
                  exercised, in whole or in part, from the dates described in
                  subsections (a) above until the earliest of (i) December 11,
                  2011, (ii) two years following the effective date that the
                  Employee's employment terminates by reason of an Accelerating
                  Event (as defined in Section 4(a) of the Employment Agreement)
                  or normal retirement (as determined under any retirement plan
                  of the Company), or (iii) the effective date that the Employee
                  terminates employment for any other reason (but in no event
                  earlier than two years following the accrual of Change in
                  Control Entitlement (as defined in Section 5(b) of the
                  Employment Agreement).

                           (c)      Exercise Following Death. If the Employee
                  dies while employed by the Company or a parent or subsidiary
                  corporation, then the person to whom the Employee's rights
                  under the NSO shall have passed by will or by the laws of
                  distribution may exercise any of the NSO within two years
                  after the Employee's death.

                                       3
<PAGE>

                  3.       Payment Under NSO. Payment of the NSO price may be
         made in cash, in shares of the Company's Common Stock, or in any
         combination thereof. If shares of the Company's Common Stock are
         delivered to make any such payment, the shares shall be valued at the
         fair market value (as defined below) thereof on the date of exercise of
         the NSO. For purposes of this Agreement, "fair market value" means, as
         of any given date, the closing price of the Company's Common Stock on
         such date as quoted in the NYSE Composite Transactions Reporting the
         Wall Street Journal. If there were no sales reported as of a particular
         date, fair market value will be computed as of the last date preceding
         such date on which a sale was reported.

                  4.       Limited Transferability of NSO. The NSO is not
         transferable (other than by will or by the laws of descent and
         distribution) and, except as otherwise stated in this Agreement, may be
         exercised during the Employee's lifetime only by the Employee.

                  5.       Adjustments. The NSO shall be equitably adjusted with
         respect to the exercise price to reflect any extraordinary distribution
         made with respect to the Company's Common Stock during the term of the
         options. In the event of a capital adjustment resulting from a stock
         dividend, stock split, reorganization, merger, consolidation, spinoff,
         a combination or exchange of shares or other transaction having a
         similar substantive effect, the number of shares of stock subject to
         the NSO and the exercise price shall be equitably adjusted.

                  6.       Exercise. The vested portion of the NSO may be
         exercised in whole or in part, but only with respect to whole shares of
         the Company's Common Stock, and may be exercised more than once until
         all shares which are subject to the NSO have been

                                       4
<PAGE>

         purchased. An NSO may be exercised by deliver to the Company of written
         notice stating the number of shares elected to be purchased, and by
         payment to the Company as described in paragraph 3.

                  7.       Withholding. By signing this Agreement, the Employee
         agrees to make arrangements satisfactory to the Company to comply with
         any income tax withholding requirements that may apply upon the
         exercise of the NSO or the disposition of the Company's Common Stock
         received upon the exercise of the NSO. The Employee will be entitled to
         elect to satisfy his tax withholding obligation by the withholding by
         the Company, at the appropriate time, of shares of the Company's Common
         Stock otherwise issuable to the Employee under this Agreement in a
         number sufficient, based upon the fair market value (as defined above)
         of such Common Stock on the relevant date, to satisfy such tax
         withholding requirements.

                  8.       Delivery of Certificates. The Company may delay
         delivery of the certificate for shares purchased pursuant to the
         exercise of an NSO until (i) the admission of such shares to listing on
         any stock exchange on which the Company's Common Stock may then be
         listed, (ii) completion of any registration or other qualification of
         such shares under any state or federal law regulation that the
         Company's counsel shall determine as necessary or advisable, and (iii)
         receipt by the Company of advice by counsel that all applicable legal
         requirements have been complied with.

                  9.       Dispute Resolution. Any dispute or controversy
         arising under on in connection with this Agreement shall be settled by
         binding arbitration, which shall be the sole and exclusive method of
         resolving any questions, claims or other matters arising

                                       5
<PAGE>

         under this Agreement. Such proceeding shall be conducted by final and
         binding arbitration before a panel of one or more arbitrators under the
         administration of the American Arbitration Association, and in a
         location mutually agreed to by the Employee and the Company. The
         Federal and State courts located in the United States of America are
         hereby given jurisdiction to render judgment upon, and to enforce, each
         arbitration award, and the parties hereby expressly consent and submit
         to the jurisdiction of such courts.

                  10.      Miscellaneous.

                           (a)      This Agreement shall be governed by and
         construed in accordance with the laws of the State of Florida, 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)      This Agreement and Section 2(b)(iv)
         constitutes the entire agreement between the parties with respect to
         the subject matter hereof. In the event of any inconsistency between
         the provision of this Agreement and the provisions of the Plan, the
         provisions of this Agreement shall govern.

                           (c)      All notice and other communications
         hereunder shall be in writing and shall be given by hand deliver to the
         other party or by registered or certified mail, return receipt
         requested, postage prepaid, or by telecopier, or by courier, addressed
         as follows:

                                       6
<PAGE>

                           If to the Employee to:    If to the Company to:

                           Bradley D. Lehan          Florida East Coast
                           124 Wolcott Road          Industries, Inc.
                           Chestnut Hill, MA 02167   One Malaga Street
                                                     St. Augustine, FL  32084
                                                     Facsimile: 904/826-2379

         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.

                           (d)      In the event of a dispute arising out of
         this Agreement, any party receiving any monetary or injunctive remedy,
         whether at law or in equity, which is final and not subject to appeal
         shall be entitled to its reasonable attorneys' fees and costs incurred
         with respect to obtaining such remedy from the other party.

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

                           (f)      The Employee's or the Company's failure to
         insist upon strict compliance with any provision hereof or any other
         provision of this Agreement or the failure to asset any right the
         Employee or the Company may have hereunder, shall not be deemed to be a
         waiver of such provision or right or any other provision or right of
         this Agreement.

                                       7
<PAGE>

                                       FLORIDA EAST COAST INDUSTRIES, INC.

                                       By /s/ Robert W. Anestis
                                          -------------------------------------
                                          Chairman and Chief Executive Officer

Agreed and Accepted:

/s/ Bradley D. Lehan
-------------------------------------
Bradley D. Lehan

<PAGE>

                           RESTRICTED STOCK AGREEMENT

                              (Long Term Incentive)

                                     between

                       FLORIDA EAST COAST INDUSTRIES, INC.

                                       and

                                Bradley D. Lehan

                                                        Dated: December 11, 2001

<PAGE>

         THIS AGREEMENT, dated December 11, 2001, between Florida East Coast
Industries, Inc.("FECI") (the "Company"), and Bradley D. Lehan (the "Employee")
is made pursuant to the provisions of Section 2(b)(iii) of that certain
Employment Agreement of even date herewith between the Company and the Employee
(the "Employment Agreement").

         In fulfillment of the aforesaid provisions of the Employment Agreement,
the parties agree as follows:

         1.       Grant of Restricted Stock. Under the Company's Stock Incentive
         Plan, as amended (the "Plan"), the Company hereby grants to the
         Employee, subject to the terms and conditions herein set forth, Two
         Thousand Five hundred (2,500) shares of the Company's Class A Common
         Stock (the "Restricted Stock").

         2.       Terms and Conditions. The Restricted Stock is subject to the
         following terms and conditions:

                  (a)      Limited Nontransferability. This Restricted Stock
         shall be nontransferable during the term of the Restrictions (as
         hereinafter set forth) except by will or by the laws of descent and
         distribution.

                                       2
<PAGE>

                  (b)      Restrictions and Lapse of Restrictions. The
         Restricted Stock shall be subject to the Employee's continued
         employment by the Company or a parent or subsidiary corporation (the
         "Restrictions"), which shall lapse according to the following schedule
         as of the stated yearly anniversaries of the date hereof (each an
         "Anniversary Date"):

<TABLE>
<CAPTION>
                  ANNIVERSARY                UNRESTRICTED
                     DATE                    PERCENTAGE
                  -----------                ------------
                  <S>                        <C>
                  First                       20%

                  Second                      40%

                  Third                       60%

                  Fourth                      80%

                  Fifth                      100%
</TABLE>

         Notwithstanding the foregoing, upon the occurrence of an Accelerating
         Event (as defined in Section 4(a) of the Employment Agreement), all
         Restrictions shall lapse upon the date of such Accelerating Event.

         3.       Forfeiture of Restricted Stock Upon Termination of Employment.
         The rights of the Employee and his successors in interest in Restricted
         Stock on which the Restrictions have not lapsed pursuant to paragraph
         2(b) shall terminate in full when the Employee's employment with the
         Company or a parent or subsidiary corporation is terminated by the
         Company for Cause (as defined in Section 3(b) of the Employment
         Agreement) or by the Employee without Good Reason (as defined in
         Section 3(c) of the Employment Agreement).

                                       3
<PAGE>

         4.       Dividends/Distributions. The Company shall pay to the Employee
         any dividends or other distributions payable with respect to the
         Restricted Stock, notwithstanding the Restrictions, beginning on the
         date hereof but not beyond the date of any forfeiture thereof pursuant
         to the provisions of paragraph 3.

         5.       Withholding. The Employee agrees to make arrangements
         satisfactory to the Company to comply with any income tax withholding
         requirements that may apply upon the lapse of the Restrictions on the
         Restricted Stock. The Employee will be entitled to elect to satisfy his
         tax withholding obligation by the withholding by the Company, at the
         appropriate time, of shares of the Company's Common Stock from the
         Restricted Stock in a number sufficient, based upon the fair market
         value (as defined below) of such Common Stock on the relevant date, to
         satisfy such tax withholding requirements. For purposes of this
         Agreement, "fair market value" means, as of any given date, the closing
         price of the Company's Common Stock on such date as quoted in the NYSE
         Composite Transactions Report in the Wall Street Journal. If there were
         no sales reported as of a particular date, fair market value will be
         computed as of the last date preceding such date on which a sale was
         reported.

         6.       Delivery of Certificates. The Company may delay delivery of
         the certificate for shares granted hereunder until (i) the admission of
         such shares to listing on any stock exchange on which the Company's
         Common Stock may then be listed, (ii) completion of any registration or
         other qualification of such shares under any state or federal law
         regulation that the Company's counsel shall determine as necessary or
         advisable, and (iii)

                                       4
<PAGE>

         receipt by the Company of advice by counsel that all applicable legal
         requirements have been complied with.

         7.       Dispute Resolution. Any dispute or controversy arising under
         or in connection with this Agreement shall be settled by binding
         arbitration, which shall be the sole and exclusive method of resolving
         any questions, claims or other matters arising under this Agreement.
         Such proceeding shall be conducted by final and binding arbitration
         before a panel of one or more arbitrators under the administration of
         the American Arbitration Association, and in a location mutually agreed
         to by the Employee and the Company. The Federal and State courts
         located in the United States of America are hereby given jurisdiction
         to render judgement upon, and to enforce, each arbitration award, and
         the parties hereby expressly consent and submit to the jurisdiction of
         such courts.

         8.       Miscellaneous.

                  (a)      This Agreement shall be governed by and construed in
         accordance with the laws of the State of Florida, 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)      This Agreement and Section 12 of the Employment
         Agreement constitute the entire agreement between the parties with
         respect to the subject matter hereof. In the

                                       5
<PAGE>

         event of any inconsistency between the provisions of this Agreement and
         the provisions of the Plan, the provisions of this Agreement shall
         govern.

                  (c)      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, or by telecopier, or by courier, address as follows:

                                If to the Employee to:   If to the Company to:

                                Bradley D. Lehan         Florida East Coast
                                124 Wolcott Road         Industries, Inc.
                                Chestnut Hill, MA 02167  One Malaga Street
                                                         St. Augustine, FL 32084
                                                         Facsimile: 904/826-2379

         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.

                  (d)      In the event of a dispute arising out of this
         Agreement, any party receiving any monetary or injunctive remedy,
         whether at law or in equity, which is final and not subject to appeal
         shall be entitled to its reasonable attorneys' fees and costs incurred
         with respect to obtaining such remedy from the other party.

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

                  (f)      The Employee's or the Company's failure to insist
         upon strict compliance with any provision hereof or any other provision
         of this Agreement or the failure to assert any right the Employee or
         the Company may have hereunder, shall not be deemed to be a waiver of
         such provision or right or any other provision or right of this
         Agreement.

                                       6
<PAGE>

                                       FLORIDA EAST COAST INDUSTRIES, INC.

                                       By: /s/ Robert W. Anestis
                                          -------------------------------------
                                          Chairman and Chief Executive Officer

Agreed and Accepted:

/s/ Bradley D. Lehan
-------------------------------------
Bradley D. Lehan

                                       7<PAGE>

                                                                  EXHIBIT 10.(b)

            FIRST AMENDMENT TO CREDIT AGREEMENT AND PLEDGE AGREEMENT

         THIS FIRST AMENDMENT TO CREDIT AGREEMENT AND PLEDGE AGREEMENT (this
"Agreement") is made and entered into as of this 9th day of November, 2001,
among FLORIDA EAST COAST INDUSTRIES, INC., a Florida corporation (the
"Borrower"), the Banks set forth on the signature pages hereto (the "Banks"),
BANK OF AMERICA, N.A., a national banking association, as administrative agent
for the Banks under this Agreement (in such capacity, the "Administrative
Agent") and as Swingline Bank and Letter of Credit Issuing Bank, FIRST UNION
NATIONAL BANK, a national banking association, as syndication agent, and
SUNTRUST BANK, a Georgia banking corporation, as documentation agent for the
Banks under this Agreement.

                                    RECITALS

         A. The Borrower and the Banks are parties to that certain Credit
Agreement dated as of March 22, 2001 (as amended from time to time, the "Credit
Agreement"), pursuant to which the Banks agreed to make Loans from time to time
in an aggregate principal amount of up to $375,000,000. Capitalized terms not
otherwise defined herein shall have the meanings given such terms in the Credit
Agreement.

         B. To secure its obligations to the Banks under the Credit Agreement,
the Borrower granted to the Banks a security interest in the Collateral. The
Collateral includes all of the assets described in Section 2.01 of the Credit
Agreement.

         C. To induce the Banks to make the loans to the Borrower under the
Credit Agreement, Florida East Coast Railway, LLC, Flagler Development Company,
Gran Central - Deerwood North, L.L.C., Florida Express Carriers, Inc., Florida
Express Logistics, Inc., Florida East Coast Deliveries, Inc. and Railroad Track
Construction Corporation (collectively, the "Guarantors") have delivered to the
Administrative Agent for the benefit of the Banks a Guaranty Agreement, dated as
of March 22, 2001, as amended (the "Guaranty"), guaranteeing payment and
performance by the Borrower of its Obligations under the Credit Agreement.

         D. To further induce the Banks to make the loans to the Borrower under
the Credit Agreement, the Borrower delivered to the Administrative Agent for the
benefit of the Banks a Pledge Agreement, dated as of March 22, 2001, as amended
(the "Existing Pledge Agreement"), pledging all of the Capital Securities of
Florida East Coast Railway, LLC as security for the prompt and complete payment
and performance by the Borrower of its Obligations under the Credit Agreement.

         E. The Banks are willing to make certain amendments to the Credit
Agreement and the Existing Pledge Agreement on the terms and conditions set
forth herein, including but not limited to (i) permanently reducing the
aggregate Commitments, (ii) providing for an increase in the Letter of Credit
Commitment, (iii) amending certain loan pricing provisions, (iv) modifying

<PAGE>

certain affirmative, negative and financial covenants and (v) providing for the
pledge of additional Collateral.

                                    AGREEMENT

         In consideration of the Recitals and of the mutual promises and
covenants contained herein, the Banks and the Borrower agree as follows:

         1. Amendments to Credit Agreement. The Borrower, the Administrative
Agent, the Issuing Bank and the Banks agree to the following amendments to the
Credit Agreement:

                  (a) Pursuant to Sections 1.05(e) and (f) of the Credit
Agreement, the amount of each Bank's Commitment is hereby reduced to the amount
set forth opposite such Bank's name on the signature pages hereof such that the
aggregate amount of the Commitments shall be $300,000,000.

                  (b) Section 1.01(c) of the Credit Agreement is hereby amended
by deleting such section in its entirety and replacing it with the following:

                  Letter of Credit Commitment. The Issuing Bank shall issue,
                  until the Commitment Termination Date, and the Banks shall
                  participate in, such standby and commercial Letters of Credit
                  in U.S. Dollars as the Borrower may request for its own
                  account or for the account of other Group Members, in a form
                  acceptable to the Issuing Bank, for the purposes hereinafter
                  set forth; provided that (i) prior to the satisfaction by the
                  Borrower of the Flagler Bond Conditions, the aggregate stated
                  amount of Letters of Credit outstanding shall not exceed
                  Twenty-Five Million Dollars ($25,000,000) at any time, (ii)
                  upon the Administrative Agent's determination, in its sole
                  discretion, that the Flagler Bond Conditions have been
                  satisfied, the aggregate stated amount of the Letters of
                  Credit outstanding shall not exceed an amount equal to
                  Twenty-Five Million Dollars ($25,000,000) plus the amount
                  available to be drawn at any time under the Flagler Letter of
                  Credit and (iii) the aggregate principal amount of Revolving
                  Loans and Swingline Loans plus the aggregate stated amount of
                  Letters of Credit outstanding at any time shall not exceed the
                  aggregate Commitments. Except for the Flagler Letter of
                  Credit, Letters of Credit issued hereunder shall not have an
                  original expiry date more than one year from the date of
                  issuance or extension. No Letter of Credit issued hereunder
                  shall have an expiry date, whether as originally issued or by
                  extension, later than one week prior to the Commitment
                  Termination Date. Each Letter of Credit shall comply with the
                  related LOC Documents and such additional terms and conditions
                  as the Issuing Bank may reasonably require. The issuance date
                  of each Letter of Credit shall be a Business Day. Letters of
                  Credit

                                      -2-
<PAGE>

                  shall be subject to the additional terms and conditions set
                  forth in Section 1.20 below.

                  (c) Section 2.01 of the Credit Agreement is hereby amended by
deleting such section in its entirety and replacing it with the following:

                  SECTION 2.01. Collateral.

                  The Loans and all other Obligations shall be:

                           (a) secured by a first priority, perfected security
                  interest in all of the issued and outstanding Capital
                  Securities of FECR, Florida Express Carriers, Inc. and Florida
                  Express Logistics, Inc. and all of the issued and outstanding
                  shares of Class A Common Stock of EPIK (the "Collateral")
                  pursuant to Pledge Agreements substantially in the form
                  attached hereto as Exhibit C (collectively, the "Pledge
                  Agreements"). Notwithstanding the foregoing, such pledge shall
                  be released on the later of (i) the second anniversary of the
                  Closing Date and (ii) the last day of the second consecutive
                  quarter in which the Leverage Ratio has been less than 2.25x,
                  provided that the Global Leverage Ratio is less than 3.50x at
                  the time of such release. If the Leverage Ratio is greater
                  than or equal to 2.25x at any time after such pledge has been
                  released, the Borrower shall re-pledge the Collateral to the
                  Banks and take all actions necessary to effect such pledge;
                  and provided further that the pledge of the Capital Securities
                  of EPIK shall be released as necessary to complete a partial
                  or complete sale, transfer or other disposition of such
                  Capital Securities to a Person other than an Affiliate
                  (including by merger or otherwise) made in compliance with the
                  provisions of this Agreement, provided that (i) both before
                  and after giving effect to such sale no Default or Event of
                  Default has occurred and is continuing and (ii) if the
                  proceeds of such Capital Securities of EPIK are Capital
                  Securities, then such proceeds shall be pledged as Collateral
                  to the Banks to the extent that such pledge would not result
                  in a violation of any agreement relating to such sale,
                  transfer or other disposition; and

                           (b) subject to a negative pledge pursuant to Section
                  6.01 below.

                  (d) Section 5.06 of the Credit Agreement is hereby amended by
deleting the word "and" from paragraph (j), renumbering paragraph (k) as
paragraph (l) and adding the following new paragraph (k):

                           (k) EPIK Restructuring. Promptly after the close of
                  trading on the New York Stock Exchange on the Business Day

                                      -3-
<PAGE>

                  prior to the occurrence of the earlier of (i) the announcement
                  of the EPIK Restructuring or (ii) the Borrower's earnings
                  announcement for the fiscal quarter ending on March 31, 2002,
                  a written report describing in reasonable detail the progress
                  of the EPIK Restructuring; and

                  (e) Section 6.02 of the Credit Agreement is hereby amended by
deleting such section in its entirety and replacing it with the following:

                  SECTION 6.02.  Debt.

                           The Borrower shall not, and shall not cause, permit
                  or suffer any other Group Member, directly or indirectly, to
                  create, incur, assume or suffer to exist any Debt, except (a)
                  Debt hereunder and under the Loan Documents in respect of the
                  Notes and the Letters of Credit, (b) Debt between and among
                  Group Members, (c) equipment acquisition financing, the
                  aggregate amount of which shall not exceed $10,000,000, (d)
                  with respect to Flagler, Non-recourse Debt, the aggregate
                  amount of which shall not exceed the sum of $250,000,000 and
                  (e) Debt in respect of the Bond Issuance to the extent that
                  such Debt is secured by the Flagler Letter of Credit.

                  (f) Section 7.04 of the Credit Agreement is hereby amended by
deleting such section in its entirety and replacing it with the following:

                  SECTION 7.04.  Maximum Global Leverage Ratio.

                  The Consolidated Group shall maintain during the following
                  fiscal quarters a Global Leverage Ratio not to exceed the
                  following:

                 ---------------------------------------------------------------
                           Quarters Ending                          Ratio
                           ---------------                          -----
                 ---------------------------------------------------------------
                          December 31, 2001                      4.00 to 1.00
                 ---------------------------------------------------------------
                  March 31, 2002 and June 30, 2002               4.75 to 1.00
                 ---------------------------------------------------------------
                         September 30, 2002                      4.25 to 1.00
                 ---------------------------------------------------------------
                          December 31, 2002                      3.75 to 1.00
                 ---------------------------------------------------------------
                   March 31, 2003 and all quarters               3.50 to 1.00
                             thereafter
                 ---------------------------------------------------------------

                                      -4-

<PAGE>

                  (g) The following definitions set forth in Exhibit A to the
Credit Agreement are hereby amended by deleting the existing definitions in
their entirety and replacing them with the following:

                           "Applicable Commitment Fee Percentage" means the
                  percentage per annum to be used to calculate the Commitment
                  Fee payable to the Banks in respect of the unused portion of
                  the Commitments. The Applicable Commitment Fee Percentage
                  shall be determined based upon the Leverage Ratio and the
                  Global Leverage Ratio as of the last day of the fiscal quarter
                  most recently ended as follows:

                             Leverage                     Applicable Commitment
                              Ratio                           Fee Percentage
                              -----                           --------------

                  Less than 1.25x                                 0.200%

                  Less than 1.75x but greater than or             0.225%
                  equal to 1.25x

                  Less than 2.25x but greater than or             0.275%
                  equal to 1.75x

                  Less than 2.75x but greater than or             0.325%
                  equal to 2.25x

                  Greater than or equal to 2.75x                  0.375%

                  provided that in the event that the Global Leverage Ratio is
                  greater than 3.50x as of the last day of the fiscal quarter
                  most recently ended, then the Applicable Commitment Fee
                  Percentage set forth above shall be increased by 0.125%.

                           The ratio upon which a determination of "Applicable
                  Commitment Fee Percentage" is based shall be computed on the
                  basis of the quarterly financial statements and Compliance
                  Certificate delivered by Borrower pursuant to Sections 5.06(a)
                  and (g). Changes in the Applicable Commitment Fee Percentage
                  shall be effective as of third Business Day after receipt by
                  the Administrative Agent of such financial statements and
                  Compliance Certificate, provided that if such financial
                  statements and Compliance Certificate are not delivered on a
                  timely basis, the Applicable Commitment Fee Percentage shall
                  be 0.50% until such financial statements and Compliance
                  Certificate are delivered. In the event that any financial
                  information provided by Borrower is subsequently determined to
                  be inaccurate and accurate information would have resulted in
                  a higher Applicable Commitment Fee Percentage, such higher
                  Applicable Commitment Fee Percentage

                                      -5-
<PAGE>

                  shall be given effect retroactively and Borrower shall
                  promptly pay to the Administrative Agent for the benefit of
                  the Banks such amount as is necessary to give effect to such
                  change.

                           "Applicable Margin" means the annual rate of interest
                  to be added to the Base Rate, Floating LIBOR Rate and the
                  Adjusted Eurodollar Rate, as applicable, in calculating
                  interest payable on the Notes. The Applicable Margin shall be
                  determined based upon the Leverage Ratio and the Global
                  Leverage Ratio as of the last day of the fiscal quarter most
                  recently ended as follows:

                                   Applicable      Applicable     Applicable
                                   Margin for      Margin for     Margin for
         Leverage                  Eurodollar      Base Rate      Swingline
         Ratio                        Loans          Loans           Loans
         -----                     -----------     ----------     ----------

Less than 1.25x                      0.750%          0.000%         0.750%

Less than 1.75x but greater          0.875%          0.000%         0.875%
than or equal to 1.25x

Less than 2.25x but greater          1.125%          0.000%         1.125%
than or equal to 1.75x

Less than 2.75x but greater          1.375%          0.000%         1.375%
than or equal to 2.25x

Greater than or equal to 2.75x       1.625%          0.125%         1.625%

                  provided that (i) in the event that the Global Leverage Ratio
                  is less than 4.00x but greater than 3.50x as of the last day
                  of the fiscal quarter most recently ended, then the Applicable
                  Margin set forth above shall be increased by 0.25% and (ii) in
                  the event that the Global Leverage Ratio is greater than or
                  equal to 4.00x as of the last day of the fiscal quarter most
                  recently ended then the Applicable Margin set forth above
                  shall be increased by 0.50%.

                           The ratio upon which a determination of "Applicable
                  Margin" is based shall be computed on the basis of the
                  quarterly financial statements and Compliance Certificate
                  delivered by Borrower pursuant to Sections 5.06(a) and (g).
                  Changes in the Applicable Margin shall be effective as of
                  third Business Day after receipt by the Administrative Agent
                  of such financial statements and Compliance Certificate,
                  provided that if such financial statements and Compliance
                  Certificate are not delivered on a timely basis, the
                  Applicable Margin shall be 0.625% on Base Rate Loans, 2.125%
                  on Eurodollar Rate Loans and 2.125% on Swingline Loans until
                  such financial statements and Compliance

                                      -6-
<PAGE>

                  Certificate are delivered. In the event that any financial
                  information provided by Borrower is subsequently determined to
                  be inaccurate and accurate information would have resulted in
                  a higher Applicable Margin, such higher Applicable Margin
                  shall be given effect retroactively and Borrower shall
                  promptly pay to the Administrative Agent for the benefit of
                  the Banks such amount as is necessary to give effect to such
                  change.

                           "Global EBITDA" means, for any fiscal period of the
                  Borrower, the sum of Group EBITDA, plus EBITDA of EPIK for
                  such period, plus Allowed EPIK Charges for such period.

                           "Loan Documents" means this Agreement, the Notes, the
                  Guaranty Agreements, the Pledge Agreements and any other
                  document now or hereafter executed or delivered in connection
                  with this Agreement or the Obligations, including, without
                  limitation, any life insurance assignment, pledge agreement,
                  security agreement, financing statement, deed of trust,
                  mortgage, promissory note, Rate Hedging Agreement or
                  subordination agreement (including any renewals, extensions
                  and refundings thereof and any modifications, supplements and
                  amendments thereto and substitutes therefor), each of which
                  shall be in form and substance satisfactory to the Banks.

                  (h) The following definitions are added to Exhibit A, in
alphabetical order:

                           "Allowed EPIK Charges" means all cash EPIK
                  Restructuring Charges, in an aggregate amount not to exceed
                  $15,000,000, and all non-cash EPIK Restructuring Charges, in
                  each case that are (i) actually incurred or accrued prior to
                  December 31, 2002 and (ii) determined in accordance with
                  Generally Accepted Accounting Principles.

                           "Bond Issuance" means the issuance by (i) the City of
                  Jacksonville, Florida, (ii) a community development district
                  established by Flagler pursuant to Chapter 190, Florida
                  Statutes, or (iii) any other authorized governmental entity,
                  of "low-floater" tax-exempt municipal bonds or other type of
                  bond authorized by Chapter 190, Florida Statutes, to finance
                  the construction of the following improvements in
                  Jacksonville, Duval County, Florida: (x) interstate
                  interchange improvements at US I-95 and Old St. Augustine
                  Road, (y) road improvements to widen Old St. Augustine Road
                  from I-95 east to US 1 and (z) infrastructure improvements in
                  Gran Park at Jacksonville.

                                      -7-
<PAGE>

                           "EPIK Restructuring" means the efforts by the
                  Borrower and EPIK to restructure EPIK's business and improve
                  EPIK's profitability, including but not limited to identifying
                  a strategic partner, attempting to gain economies of scale and
                  scope, shifting and improving marketing focus, developing the
                  "Wavelength" product offering, reducing capital spending and
                  reducing fixed costs and overhead.

                           "EPIK Restructuring Charges" means all cash and
                  noncash charges and expenses that are (i) restructuring
                  charges specifically related to the EPIK Restructuring and
                  identified as such in accordance with Generally Accepted
                  Accounting Principles or (ii) specifically related to the EPIK
                  Restructuring and scheduled in reasonable detail in an
                  attachment, note or schedule rendered in connection with the
                  financial statements required to be delivered pursuant to
                  Section 5.06(a).

                           "Flagler Bond Conditions" means each of the following
                  conditions: (i) there shall have been delivered to the
                  Administrative Agent and the Issuing Bank, in form and
                  substance reasonably satisfactory to the Administrative Agent
                  and the Issuing Bank, executed originals of a reimbursement
                  agreement (if required by the Administrative Agent or the
                  Issuing Bank) and such other agreements, documents,
                  certificates or opinions pertaining to the Flagler Letter of
                  Credit and the Bond Issuance as the Administrative Agent or
                  the Issuing Bank may reasonably require; (ii) as of the date
                  of issuance of the Flagler Letter of Credit, no Default or
                  Event of Default shall have occurred and be continuing; and
                  (iii) the Borrower shall have complied in all respects with
                  Sections 1.01(c), 1.17 and 1.20 of this Agreement.

                           "Flagler Letter of Credit" means that certain Letter
                  of Credit to be issued by the Issuing Bank upon satisfaction
                  of the Flagler Bond Conditions for the account of the Borrower
                  or Flagler in respect of the Bond Issuance, which Letter of
                  Credit (i) shall be issued in the stated amount required in
                  connection with the Bond Issuance not to exceed $30,000,000,
                  (ii) shall contain such other terms and conditions as the
                  Administrative Agent and the Issuing Bank may reasonably
                  require and (iii) shall comply in all respects with Section
                  1.01(c) of this Agreement.

                           "Pledge Agreements" shall have the meaning assigned
                  to such term in Section 2.01 hereof.

                                      -8-

<PAGE>

         2. Amendments to Existing Pledge Agreement. The Borrower and the
Administrative Agent, for the benefit of the Banks, agree as follows:

                  (a) As collateral security for the prompt and complete payment
and performance when due of all of the Obligations, the Borrower hereby pledges
to the Administrative Agent for the ratable benefit of the Banks, in addition to
the Pledged Assets described in the Existing Pledge Agreement, all of the
Capital Securities of Florida Express Carriers, Inc., all of the shares of Class
A Common Stock of EPIK and all Pledged Assets (as defined in the Existing Pledge
Agreement) related thereto and grants to the Administrative Agent for the
ratable benefit of the Banks a lien on and security interest therein. Such
pledge and security interest shall be subject to the terms of the Existing
Pledge Agreement, as amended hereby.

                  (b) Section 4 of the Existing Pledge Agreement is hereby
amended by deleting paragraph (c) in its entirety and replacing it with the
following:

                           (c) Except as set forth in Section 4(j) below, the
                  Pledged Securities constitute all of the issued and
                  outstanding Capital Securities of each issuer thereof.

                  (c) Section 4 of the Existing Pledge Agreement is further
amended by adding a new paragraph (j) as follows:

                           (j) The authorized Capital Securities of EPIK consist
                  of (i) 9,500,000 shares of Class A Common Stock, $.10 par
                  value, of which all such shares are issued and outstanding,
                  (ii) 500,000 shares of Class B Common Stock, $.10 par value,
                  of which no such shares are issued and outstanding, and (iii)
                  1,000,000 shares of Preferred Stock of which 50,000 such
                  shares are issued and outstanding. The Pledged Securities
                  related to EPIK are all of the authorized, issued and
                  outstanding shares of EPIK's Class A Common Stock and
                  constitute 99.5% of the voting rights of the holders of the
                  Common Stock of EPIK, on a fully diluted basis. Florida East
                  Coast Railway, LLC is the legal and beneficial owner, free and
                  clear of any encumbrances, of all of the outstanding shares of
                  the Preferred Stock of EPIK, owning 50,000 shares of Series A
                  Preferred Stock.

                  (d) Section 5(a) of the Existing Pledge Agreement is hereby
amended by replacing the period at the end of subparagraph (iv) with a
semicolon, adding the word "or" immediately thereafter and adding a new
subparagraph (v) as follows:

                           (v) Permit Florida East Coast Railway, LLC to
                  transfer, pledge, sell, convey or encumber any of the Capital
                  Securities of EPIK that Florida East Coast Railway, LLC
                  legally or beneficially owns in EPIK.

                                      -9-

<PAGE>

                  (e) Section 9 of the Existing Pledge Agreement is hereby
amended by deleting such Section in its entirety and replacing it with the
following:

                           9. Termination. This Pledge Agreement shall terminate
                  on the later of (i) the second anniversary of the Closing Date
                  and (ii) the last day of the second consecutive quarter in
                  which the Leverage Ratio has been less than 2.25x, provided
                  that at the time of such termination, the Global Leverage
                  Ratio is less than 3.50x. If the Leverage Ratio is greater
                  than or equal to 2.25x at any time after such pledge has been
                  released, the Borrower shall re-pledge the Collateral to the
                  Banks and take all actions necessary to effect such pledge.
                  Upon termination of this Pledge Agreement, the Agent shall
                  deliver to the Pledgor, or register a release for the benefit
                  of the Pledgor, at the Pledgor's expense, such of the Pledged
                  Assets as shall not have been sold or otherwise applied
                  pursuant to this Pledge Agreement.

                  (f) Schedule 1 to the Existing Pledge Agreement is hereby
amended by deleting such schedule in its entirety and replacing it with the
following:

                                   Schedule 1
                               CAPITAL SECURITIES

--------------------------------------------------------------------------------
Issuer, including exact name,     Certificate     No. of        Exact Name of
   the type of entity and              No.        Shares/     Registered Holder
jurisdiction of organization          (if         Units &
                                  applicable)   ownership %
--------------------------------------------------------------------------------
Florida East Coast Railway, LLC,       1        100 Units     Florida East Coast
a Florida limited liability                        100%       Industries, Inc.
company
--------------------------------------------------------------------------------
EPIK Communications Incorporated,     A1    9,500,000 shares  Florida East Coast
a Delaware corporation                         of Class A     Industries, Inc.
                                              Common Stock
                                               95% of all
                                              Common Stock,
                                              fully diluted
--------------------------------------------------------------------------------
Florida Express Carriers, Inc.,        1       100 shares     Florida East Coast
a Florida corporation                             100%        Industries, Inc.
--------------------------------------------------------------------------------

         3. Representations and Warranties. The Borrower hereby represents and
warrants to the Administrative Agent, the Issuing Bank and each of the Banks as
follows:

                  (a) Recitals. The Recitals in this Agreement are true and
correct in all respects.

                                      -10-
<PAGE>

                  (b) Incorporation of Representations. All representations and
warranties of the Borrower in the Credit Agreement and the Existing Pledge
Agreement are incorporated herein in full by this reference and are true and
correct as of the date hereof.

                  (c) No Defaults. No Default or Event of Default has occurred
and is continuing under the Credit Agreement.

                  (d) Corporate Power; Authorization. The Borrower has the
corporate power, and has been duly authorized by all requisite corporate action,
to execute and deliver this Agreement and to perform its obligations hereunder.
This Agreement has been duly executed and delivered by the Borrower.

                  (e) Enforceability. This Agreement is the legal, valid and
binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms.

                  (f) No Violation. The Borrower's execution, delivery and
performance of this Agreement do not and will not (i) violate any law, rule,
regulation or court order to which the Borrower or any other Group Member is
subject; (ii) conflict with or result in a breach of the Borrower's or any Group
Member's Articles of Incorporation or Bylaws or any agreement or instrument to
which the Borrower or any Group Member is party or by which it or its properties
are bound, or (iii) result in the creation or imposition of any lien, security
interest or encumbrance on any property of the Borrower or any Group Member,
whether now owned or hereafter acquired, other than liens in favor of the Banks.

                  (g) Obligations Absolute. The obligation of the Borrower to
repay the Loans, together with all interest accrued thereon, is absolute and
unconditional, and there exists no right of set off or recoupment, counterclaim
or defense of any nature whatsoever to payment of the Obligations.

         4. Conditions Precedent to Effectiveness of Agreement. This Agreement
shall not be effective unless and until each of the following conditions shall
have been satisfied in the Administrative Agent's sole discretion or waived by
the Administrative Agent:

                  (a) Execution of Agreement and Guarantors' Consent. The
Administrative Agent, Issuing Bank, the Banks and the Borrower shall have
executed and delivered this Agreement, and the Guarantors shall have executed
the Consent of Guarantors at the end of this Agreement.

                  (b) New Pledge Agreement. The Borrower shall have delivered
the Pledge Agreement of Florida Express Carriers, Inc., duly executed, pledging
the Capital Securities of Florida Express Logistics, Inc.

                  (c) Pledged Capital Securities. The Borrower shall have
delivered to the Administrative Agent the original stock certificates evidencing
all of the issued and outstanding shares of the Class A Common Stock of EPIK and
all of the Capital Securities of Florida Express Carriers, Inc. and Florida
Express Logistics, Inc., accompanied by corresponding stock powers executed in
blank.

                                      -11-

<PAGE>

                  (d) Opinions of Counsel. The Administrative Agent and the
Banks shall have received favorable opinions of counsel to the Borrower
addressed to the Administrative Agent and the Banks, dated as of the date hereof
and satisfactory in form and substance to the Administrative Agent and the
Banks, as to the due authorization, execution, delivery and enforceability of
this Agreement, the Pledge Agreements, the Consent of Guarantors at the end of
this Agreement and such other matters as the Administrative Agent and the Banks
shall request.

                  (e) Other Deliverables. The Borrower shall have delivered, or
caused to be delivered, to the Administrative Agent:

                           (i) A copy of the Articles of Incorporation of EPIK,
         as amended, certified as of a recent date by a State Official, a copy
         of its most recent bylaws and a certificate of the Secretary or an
         Assistant Secretary of EPIK dated as of the date hereof substantially
         in the form attached as Appendix 2 to Exhibit E of the Credit
         Agreement.

                           (ii) A certificate of a State Official, dated as of a
         recent date, as to the good standing and charter documents of EPIK, on
         file in the office of such State Official.

                           (iii) A certificate of the Secretary or an Assistant
         Secretary of the Borrower and each other Group Member dated as of the
         date hereof substantially in the form attached as Appendix 2 to Exhibit
         E of the Credit Agreement, certifying among other things that the
         Articles of Incorporation and Bylaws of such Group Member have not been
         amended or modified since March 22, 2001.

                           (iv) A certificate substantially in the form attached
         as Appendix 3 to Exhibit E of the Credit Agreement certifying that (i)
         the Borrower is in compliance with all the terms and provisions of the
         Credit Agreement, as amended by this Agreement, and that as of the date
         hereof no Default has occurred or is continuing, and (ii) the
         representations and warranties contained in Article IV of the Credit
         Agreement are true and correct in all material respects.

                  (f) Payment of Amendment Fee. The Borrower shall have paid to
the Administrative Agent for the account of each Bank that has approved the
amendments described herein, in consideration of such approval and the
amendment, a fee in an amount equal to 0.25% of such Bank's Commitment (as
reduced pursuant to this Agreement).

                  (g) Payment of Arrangement Fee. The Borrower shall have paid
to Banc of America Securities LLC ("BAS") the balance of the arrangement fee
provided for in that certain letter agreement dated October 16, 2001 between the
Borrower, BAS and Bank of America, N.A.

                  (h) Payment of Expenses. The Borrower shall have paid the
Administrative Agent all of its reasonable costs and expenses (including the
Administrative Agent's attorneys fees) incurred in connection with the
preparation of this Agreement.

                  (i) Mandatory Payment. The Borrower shall have repaid the
Revolving Loans in an amount sufficient to reduce the outstanding principal
balance of the Revolving

                                      -12-
<PAGE>

Loans to an amount not greater than the aggregate reduced Commitments (as
provided in Section 1(a) above) less the aggregate principal amount of Swingline
Loans outstanding less the aggregate stated amount of Letters of Credit
outstanding. All repayments under this Section shall have been accompanied by
accrued interest on the principal amount being repaid to the date of repayment.

         5. Effect and Construction of Agreement. Except as expressly provided
herein, the Credit Agreement, the Pledge Agreement and the other Loan Documents
shall remain in full force and effect in accordance with their respective terms,
and this Agreement shall not be construed to:

                  (i) impair the validity, perfection or priority of any lien or
         security interest securing the Obligations;

                  (ii) waive or impair any rights, powers or remedies of the
         Administrative Agent, the Issuing Bank and the Banks under the Credit
         Agreement and the Loan Documents; or

                  (iii) constitute an agreement by the Administrative Agent, the
         Issuing Bank and the Banks or require them to make further amendments
         to the Credit Agreement or the Pledge Agreement.

         In the event of any inconsistency between the terms of this Agreement,
the Credit Agreement, the Pledge Agreement or any of the other Loan Documents,
this Agreement shall govern. The Borrower acknowledges that it has consulted
with counsel and with such other experts and advisors as it has deemed necessary
in connection with the negotiation, execution and delivery of this Agreement.
This Agreement shall be construed without regard to any presumption or rule
requiring that it be construed against the party causing this Agreement or any
part hereof to be drafted.

         6. Miscellaneous.

                  (a) Further Assurance. The Borrower agrees to execute such
other and further documents and instruments as the Administrative Agent, the
Issuing Bank and the Banks may request to implement the provisions of this
Agreement.

                  (b) Benefit of Agreement. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto, their
respective successors and assigns. No other person or entity shall be entitled
to claim any right or benefit hereunder, including, without limitation, the
status of a third-party beneficiary of this Agreement.

                  (c) Integration. This Agreement, together with the Credit
Agreement and the Loan Documents, constitutes the entire agreement and
understanding among the parties relating to the subject matter hereof, and
supersedes all prior proposals, negotiations, agreements and understandings
relating to such subject matter. In entering into this Agreement, the Borrower
acknowledges that it is relying on no statement, representation, warranty,
covenant or agreement of any kind made by the Administrative Agent, the Issuing
Bank and the Banks or any employee

                                      -13-
<PAGE>

or agent of the Administrative Agent, the Issuing Bank and the Banks, except for
the agreements of the Administrative Agent, the Issuing Bank and the Banks set
forth herein.

                  (d) Severability. The provisions of this Agreement are
intended to be severable. If any provisions of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction, such provision
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or enforceability without in any manner affecting the validity of enforceability
of such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.

                  (e) Governing Law. This Agreement shall in all respects be
governed by and construed in accordance with the laws of the State of New York
(including, without limitation, Sections 5-1401 and 5-1402 of the New York
General Obligations Law), but excluding, to the fullest extent permitted by
applicable law, all other choice of law and conflict of law rules.

                  (f) Counterparts. This Agreement may be executed in any number
of counterparts and by different parties to this Agreement on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute one and the same agreement.

                  (g) Notices. Any notices with respect to this Agreement shall
be given in the manner provided for in Section 10.04 of the Credit Agreement.

                  (h) Amendment. No amendment, modification, rescission, waiver
or release of any provision of this Agreement shall be effective unless the same
shall be in writing and signed by the parties hereto.

                        [Signatures Appear on Next Page]

                                      -14-

<PAGE>

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

                                  FLORIDA EAST COAST INDUSTRIES, INC.,
                                  as Borrower

                                  By: __________________________
                                      Richard G. Smith
                                      Chief Financial Officer

                                  BANK OF AMERICA, N.A., as Administrative Agent

                                  By: __________________________
                                      Susan J. Ryan
                                      Vice President
                                  Address:
                                           231 South LaSalle
                                           Chicago, Illinois 60697

Amounts
-------
                                  BANK OF AMERICA, N.A.,
                                  as Bank, Swingline Bank and Issuing Bank

$60,000,000                       By: ______________________
                                      John M. Hall
                                      Senior Vice President
                                  Address:
                                           550 West Main Street
                                           Knoxville, Tennessee 37902

                                  FIRST UNION NATIONAL BANK,
                                  as Syndication Agent and Bank

$48,000,000                       By: ______________________
                                      Charles N. Kauffman
                                      Senior Vice President
                                  Address:
                                           225 Water Street, 2nd Floor
                                           Jacksonville, Florida 32202

                                      -15-
<PAGE>

                                  SUNTRUST BANK,
                                  as Documentation Agent and Bank

$48,000,000                       By: ______________________
                                      C. William Buchholz
                                      Director
                                  Address:
                                           200 West Forsyth Street
                                           Jacksonville, Florida  32202

                                  WACHOVIA BANK, N.A.,
                                  as Bank

$40,000,000                       By: ______________________
                                      Kimberly A. Bruce
                                      Vice President
                                  Address:
                                           100 North Tampa Street
                                           Suite 4100
                                           Tampa, Florida  33602

                                  UNION PLANTERS BANK,
                                  as Bank

$24,000,000                       By: ______________________
                                      Edward F. Holden
                                      Executive Vice President
                                  Address:
                                           1489 West Palmetto Park Road
                                           3rd Floor
                                           Boca Raton, Florida  33486

                                  FLEET NATIONAL BANK,
                                  as Bank

$24,000,000                       By: ______________________
                                      David J. Doucette
                                      Vice President
                                  Address:
                                           100 Federal Street
                                           Mailstop MADE10008D
                                           Boston, Massachusetts  02110

                                      -16-
<PAGE>

                                  LASALLE BANK NATIONAL ASSOCIATION,
                                  as Bank

$24,000,000                       By: ______________________
                                      Robert W. Hart
                                      First Vice President
                                  Address:
                                           135 South LaSalle Street
                                           Suite 361
                                           Chicago, Illinois  60603

                                  BNP PARIBAS,
                                  as Bank

$12,000,000                       By: ______________________
                                      Brian F. Hewett
                                      Director

                                  By: ______________________
                                      Richard Sted
                                      Central Region Manager
                                  Address:
                                           209 S. LaSalle Street, Suite 500
                                           Chicago, Illinois  60604
                                           (312) 977-1384

                                  REPUBLIC BANK,
                                  as Bank

$8,000,000                        By: ______________________
                                      Brigitta A. Lawton
                                      Senior Vice President
                                  Address:
                                           28050 U.S. Highway 19 North
                                           Clearwater, Florida  33761

                                      -17-

<PAGE>

                                  COMPASS BANK,
                                  as Bank

$8,000,000                        By: _________________________
                                      C. French Yarbrough, Jr.
                                      Senior Vice President
                                  Address:
                                           10060 Skinner Lake Drive
                                           Jacksonville, Florida  32246

                                  ISRAEL DISCOUNT BANK,
                                  as Bank

$4,000,000                        By: ______________________
                                      Robert K. Munoz
                                      Vice President
                                  Address:
                                           2875 Northeast 191 Street
                                           Suite 200
                                           Aventura, Miami  Florida  33180

                                      -18-

<PAGE>

CONSENT OF GUARANTORS
---------------------

         The undersigned are the Guarantors referred to in the preceding
Agreement. The undersigned do hereby consent to the terms of this Agreement and
do hereby ratify and confirm the Guaranty Agreement in all respects.

                                        FLORIDA EAST COAST RAILWAY, LLC,
                                           a Florida limited liability company

                                        By: /s/ R. W. Anestis
                                            ---------------------------------
                                        Title: Chairman

                                        FLAGLER DEVELOPMENT COMPANY,
                                          a Florida corporation

                                        By: /s/ R. W. Anestis
                                            ---------------------------------
                                        Title: Chairman

                                        GRAN CENTRAL-DEERWOOD NORTH, L.L.C.,
                                          a Delaware limited liability company

                                        By: /s/ R. W. Anestis
                                            ---------------------------------
                                        Title: Chairman

                                        FLORIDA EXPRESS CARRIERS, INC.,
                                          a Florida corporation

                                        By: /s/ R. W. Anestis
                                            ---------------------------------
                                        Title: Chairman

                                        FLORIDA EXPRESS LOGISTICS, INC.,
                                          a Florida corporation

                                        By: /s/ R. W. Anestis
                                            ---------------------------------
                                        Title: Chairman

                                      -19-
<PAGE>

                                        FLORIDA EAST COAST DELIVERIES, INC.,
                                          a Florida corporation

                                        By: /s/ R. W. Anestis
                                            ---------------------------------
                                        Title: Chairman

                                        RAILROAD TRACK CONSTRUCTION CORPORATION,
                                          a Florida corporation

                                        By: /s/ R. W. Anestis
                                            ---------------------------------
                                        Title: Chairman

                                      -20-

<PAGE>
                                PLEDGE AGREEMENT

         THIS PLEDGE AGREEMENT, dated as of November 9, 2001, made by FLORIDA
EXPRESS CARRIERS, INC., a Florida corporation (the "Pledgor"), to BANK OF
AMERICA, N.A., a national banking association, as administrative agent (in such
capacity, the "Agent"), for the banks (the "Banks") under the Credit Agreement
(as defined below), recites and provides:

                                    RECITALS

         WHEREAS, pursuant to the Credit Agreement dated as of March 22, 2001,
among Florida East Coast Industries, Inc., a Florida corporation and owner of
100% of the issued and outstanding capital stock of the Pledgor (the
"Borrower"), the Agent and the Banks named therein, the Banks have agreed to
make Loans to the Borrower for the purposes described in the Credit Agreement,
such Loans to be evidenced by Notes of the Borrower payable to the order of the
respective Banks as provided in the Credit Agreement;

         WHEREAS, the Credit Agreement is being amended pursuant to that certain
First Amendment to Credit Agreement and Pledge Agreement, dated as of the date
hereof (the "Amendment"), among the Borrower, the Agent and the Banks named
therein; and

         WHEREAS, the Banks are willing to enter into the Amendment and make the
Loans under the Credit Agreement as amended by the Amendment (as so amended, the
"Credit Agreement"), but only upon the condition, among others, that the Pledgor
executes and delivers to the Agent for the ratable benefit of the Banks this
Pledge Agreement;

         NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

                                    AGREEMENT

         1. Defined Terms. Unless otherwise defined herein, terms defined in the
Credit Agreement shall have their defined meanings when used herein. For the
purposes of this Pledge Agreement, the following terms shall have the following
meanings:

                  "Obligations" means all indebtedness, liabilities and
         obligations of the Borrower or the Pledgor, including obligations under
         Rate Hedging Agreements to any of the Administrative Agent and the
         Banks, whether now existing or hereafter arising, direct or indirect,
         fixed or contingent, secured or unsecured, matured or unmatured, joint,
         several or joint and several, arising out of or in connection with the
         Credit Agreement, the Notes, the Loans, or any other Loan Document or
         other document executed and delivered in connection with the Credit
         Agreement or the Loans.

                  "Pledged Assets" means the Capital Securities described in
         Schedule 1 hereto, together with all certificates, options, rights,
         dividends, other distributions or intangible rights or assets issued as
         an addition to, in substitution or in

<PAGE>

         exchange for, or on account of, any such Capital Securities, and all
         proceeds of all of the foregoing, now or hereafter owned or acquired by
         the Pledgor.

                  "Pledged Securities" means the Capital Securities described in
         Schedule 1 hereto and all other Capital Securities now or hereafter
         included in the Pledged Assets.

         2. Grant of Security Interest.

         (a) As collateral security for the prompt and complete payment and
performance when due of all of the Obligations and in order to induce the Agent
and the Banks to enter into the Amendment and make the Loans in accordance with
the terms of the Credit Agreement, the Pledgor hereby pledges to the Agent for
the ratable benefit of the Banks the Pledged Assets and grants to the Agent for
the ratable benefit of the Banks a lien on and security interest therein.

         (b) If the Pledgor shall become entitled to receive or shall receive,
in connection with any of the Pledged Securities, any:

                  (i) Certificate or other evidence of ownership, including, but
without limitation, any certificate issued in connection with any increase or
reduction of capital, reclassification, merger, consolidation, sale of assets,
combination, spin-off or split-off;

                  (ii) Option, warrant, or right, whether as an addition to or
in substitution or in exchange for any of the Pledged Securities, or otherwise;

                  (iii) Dividend or distribution payable in property (other than
cash), including Capital Securities issued by an issuer other than the issuer of
any of the Pledged Securities; or

                  (iv) Dividends or distributions of any sort (other than those
permitted to be retained by the Pledgor pursuant to Section 2(d));

         then the Pledgor shall accept the same as the agent of the Agent and
the Banks, in trust for the Agent and the Banks, and shall deliver them
forthwith to the Agent in the exact form received with, as applicable, the
Pledgor's endorsement when necessary, or appropriate stock powers duly executed
in blank, to be held by the Agent, subject to the terms hereof, as part of the
Pledged Assets.

         (c) Prior to the occurrence of an Event of Default, the Pledgor shall
retain all voting rights with respect to the Pledged Securities. At any time the
Agent, at its option, may have any or all of the Pledged Securities registered
in its name or that of its nominee on the books of the issuer of the Pledged
Securities, and the Pledgor hereby covenants that, upon the Agent's request, the
Pledgor will cause the issuer of the Pledged Securities to effect such
registration. If such registration is effected prior to the occurrence of an
Event of Default, the Pledgor shall nevertheless retain all voting rights with
respect to the Pledged Securities, and, for that purpose, the Agent shall
execute and deliver to the Pledgor all proxies reasonably requested by the
Pledgor. Immediately upon written notice to the Pledgor following the occurrence
and during the continuation of any Event of Default, whether or not the Pledged
Securities shall have been registered in the name of the Agent or its nominee,
the Agent or its nominee shall have, with

                                      -2-
<PAGE>

respect to the Pledged Securities, the right to exercise all voting rights with
respect thereto and all conversion, exchange, subscription or other rights,
privileges or options as any owner or holder pertaining thereto as if it were
the absolute owner thereof, including, without limitation, the right to exchange
any or all of the Pledged Securities upon the merger, consolidation,
reorganization, recapitalization or other readjustment of the issuer thereof, or
upon the exercise by such issuer of any right, privilege, or option pertaining
to any of the Pledged Securities, and, in connection therewith, to deliver any
of the Pledged Securities to any committee, depository, transfer agent,
registrar or other designated agency upon such terms and conditions as it may
determine, all without liability except to account for property actually
received by it; but the Agent shall have no duty to exercise any of the
aforesaid rights, privileges or options and shall not be responsible for any
failure to do so or any delay in so doing.

         (d) Unless an Event of Default has occurred and is continuing, the
Pledgor shall be entitled, if not prohibited by the Credit Agreement, to receive
for its own use cash dividends or distributions on the Pledged Securities. Upon
the occurrence and during the continuation of an Event of Default, the Agent may
require any such cash dividends or distributions to be delivered to the Agent as
additional security hereunder or applied toward the satisfaction of the
Obligations.

         3. Remedies, Rights Upon Default.

         (a) Upon and after the occurrence and during the continuation of an
Event of Default, the Agent may, without demand of performance or other demand,
advertisement, or notice of any kind (except the notice specified below of time
and place of public or private sale) to or upon the Pledgor or any other person
(all of which are, to the extent permitted by law, hereby expressly waived),
forthwith realize upon the Pledged Assets or any part thereof, and may
forthwith, or agree to, sell or otherwise dispose of and deliver the Pledged
Assets or any part thereof or interest therein, in one or more parcels at public
or private sale or sales, at any exchange, broker's board or at any of the
Agent's offices or elsewhere, at such prices and on such terms (including, but
without limitation, a requirement that any purchaser of all or any part of the
Pledged Securities purchase the shares or other interests constituting the
Pledged Securities for investment and without any intention to make a
distribution thereof) as it may deem best, for cash or on credit, or for future
delivery without assumption of any credit risk, with the right to the Agent or
any purchaser to purchase upon any such sale the whole or any part of the
Pledged Assets free of any right or equity of redemption in the Pledgor, which
right or equity is hereby expressly waived and released.

         (b) The proceeds of any such disposition or other action by the Agent
shall be applied as follows:

                  (i) First, to the costs and expenses incurred in connection
therewith or incidental thereto or to the care or safekeeping of any of the
Pledged Assets or in any way relating to the rights of the Agent hereunder,
including reasonable attorneys' fees and legal expenses;

                  (ii) Second, to the satisfaction of the Obligations;

                                      -3-
<PAGE>

                  (iii) Third, to the payment of any other amounts required by
applicable law (including, without limitation, Section 9-504(1)(c) of the
Uniform Commercial Code as in effect in the State of Florida (the "UCC")); and

                  (iv) Fourth, to the Pledgor to the extent of any surplus
proceeds.

         (c) The Agent need not give more than ten days' notice of the time and
place of any public sale or of the time after which a private sale may take
place, which notice the Pledgor hereby deems reasonable.

         4. Representations and Warranties of Pledgor. The Pledgor represents
and warrants that:

         (a) It has, and has duly exercised, all requisite power and authority
to enter into this Pledge Agreement, to pledge the Pledged Assets for the
purposes described in the recitals to this Pledge Agreement, and to carry out
the transactions contemplated by this Pledge Agreement;

         (b) It is the legal and beneficial owner of all of the Pledged Assets;

         (c) The Pledged Securities constitute all of the issued and outstanding
Capital Securities of each issuer thereof;

         (d) All of the Pledged Securities have been duly and validly issued,
are fully paid and nonassessable, and all of the Pledged Assets are owned by the
Pledgor free of any pledge, mortgage, hypothecation, lien, charge, encumbrance
or security interest in or on such Pledged Assets or the proceeds thereof,
except for that granted hereunder;

         (e) The execution and delivery of this Pledge Agreement, and the
performance of its terms, will not result in any violation of any provision of
the Organizational Documents of the Pledgor or the applicable issuer of the
Pledged Securities or violate or constitute a default under the terms of any
agreement, indenture or other instrument, license, judgment, decree, order, law,
statute, ordinance or other governmental rule or regulation, applicable to the
Pledgor or any of its property; and

         (f) Upon the delivery of all certificates and instruments evidencing
the Pledged Securities to the Agent or its agent and the filing of a financing
statement in the filing office described in Schedule 2 hereto naming the Pledgor
as debtor, the Agent as secured party and describing the Pledged Assets, this
Pledge Agreement will create a valid first lien upon and perfected security
interest in the Pledged Assets and the proceeds thereof, subject to no prior
security interest, lien, charge or encumbrance, or agreement purporting to grant
to any third party a security interest in the property or assets of the Pledgor
which would include the Pledged Assets.

         (g) The Pledgor's chief executive office within the meaning of
ss. 9-103(3)(d) of the UCC, is listed on Schedule 2 hereto.

         (h) None of the Pledged Securities is, nor at any time during the term
of this Pledge Agreement will be, (i) dealt in or traded on securities exchanges
or in securities markets, (ii)

                                      -4-
<PAGE>

expressly governed by Article 8 ("Article 8") of the UCC pursuant to the terms
of the Organizational Documents, (iii) an investment company security (as
defined in UCC ss. 8-103 of Article 8) or (iv) held in a securities account (as
defined in UCC ss. 8-501 of Article 8).

         (i) No authorization, approval, or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any other Person
is required for (1) the pledge by the Pledgor of the Pledged Assets pursuant to
this Pledge Agreement, (2) the creation and perfection of a first priority
security interest in the Pledged Assets in favor of the Banks or for the
execution, delivery or performance of this Pledge Agreement by the Pledgor or
(3) for the exercise by the Agent on behalf of the Banks of the remedies in
respect of the Pledged Assets pursuant to this Pledge Agreement (except as may
be required by the UCC).

         5. Covenants of Pledgor.

         (a) The Pledgor hereby covenants that, until the Repayment Date, it
will not, without the prior written consent of the Agent and the Banks:

                  (i) Sell, convey, or otherwise dispose of any of the Pledged
Assets (other than cash distributions permitted to be retained by the Pledgor
pursuant to Section 2(d)) or any interest therein or create, incur, or permit to
exist any pledge, mortgage, lien, charge, encumbrance or security interest
whatsoever in or with respect to any of the Pledged Assets or the proceeds
thereof, other than that created hereby; or

                  (ii) Consent to or approve the issuance of any additional
Capital Securities in the issuer of the Pledged Securities; or any Capital
Securities convertible voluntarily by the holder thereof or automatically upon
the occurrence or non-occurrence of any event or condition into, or exchangeable
for, any such Capital Securities, or any warrants, options, rights, or other
commitments entitling any person to purchase or otherwise acquire any such
Capital Securities, unless, in each case, such additional Capital Securities,
convertible Capital Securities, warrants, options, rights or other commitments,
are pledged to the Agent pursuant to this Agreement; or

                  (iii) Change its name, identity or organizational structure in
any manner that might make any financing or continuation statement filed
hereunder seriously misleading within the meaning of Section 9-402(7) of the UCC
(or any other then applicable provision of the UCC) unless the Pledgor has given
the Agent at least 90 days' prior written notice thereof or has delivered to the
Agent acknowledgment copies of UCC-3 financing statements duly executed and duly
filed in each jurisdiction in which UCC-l filings were required in order to
perfect the security interest granted by this Pledge Agreement in the Pledged
Assets and have taken all actions (or made arrangements to take such action
substantially simultaneously with such change if it is impossible to take such
action in advance) necessary or reasonably requested by the Agent to amend such
financing statement or continuation statement so that it is not seriously
misleading.

         (b) The Pledgor warrants and will, at its own expense, defend the
Agent's right, title, special property and security interest in and to the
Pledged Assets against the claims of any person, firm, corporation or other
entity.

                                      -5-
<PAGE>

         6. Registration Statement.

         (a) If the Agent elects to exercise its right to sell or otherwise
dispose of all or any part of the Pledged Securities, and if, in the opinion of
counsel for the Agent, it is necessary to have the Pledged Securities or that
portion thereof to be sold registered under the provisions of the Securities Act
of 1933, as amended (the "Securities Act"), the Pledgor shall use its best
efforts to cause:

                  (i) The issuer of such Pledged Securities, its governing body
and responsible officers, to take all action necessary to register such Pledged
Securities or that portion thereof to be disposed of under the provisions of the
Securities Act, at the Pledgor's expense;

                  (ii) The registration statement relating thereto to become
effective and to remain so for not less than one year from the date of the first
public offering of such Pledged Securities or that portion thereof so to be
disposed of, and to make all amendments thereto and to the related prospectus
that, in the opinion of the Agent or its counsel, are necessary or advisable,
all in conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto;

                  (iii) The issuer of such Pledged Securities to comply with the
provisions of the "Blue Sky" law of any jurisdiction designated by the Agent;
and

                  (iv) The issuer of such Pledged Securities to make available
to all holders of its Capital Securities, as soon as practicable, an earnings
statement (which need not be audited) covering a period of at least twelve
months but not more than eighteen months, beginning with the first month after
the effective date of any such registration statement, which earnings statement
will satisfy the provisions of Section 11(a) of the Securities Act.

         (b) The Pledgor acknowledges that a breach of any of the covenants
contained in paragraph 5(a) above may cause irreparable injury to the Banks;
that the Agent and the Banks will have no adequate remedy at law with respect to
such breach; and, as a consequence, that the Pledgor's covenants in paragraph
5(a) shall be specifically enforceable against the Pledgor; and the Pledgor
hereby waives, to the extent such waiver is enforceable under law, and shall not
assert, any defenses against an action for specific performance of such
covenants, except for a defense that no Event of Default has occurred.

         (c) Notwithstanding the foregoing, the Pledgor recognizes that the
Agent may be unable to effect a public sale of all or a part of the Pledged
Securities and may be compelled to resort to one or more private sales to a
restricted group of purchasers who will be obligated to agree, among other
things, to acquire such Capital Securities for their own account, for investment
and not with a view to the distribution or resale thereof. The Pledgor
acknowledges that any such private sales may be at prices and on terms less
favorable to the Agent than those of public sales, and agrees that the sale of
the Pledged Securities does not have to be a public sale in order to be made in
a commercially reasonable manner and that the Agent has no obligation to delay
sale of any such Pledged Securities to permit the issuer thereof to register it
for public sale under the Securities Act.

                                      -6-
<PAGE>

         7. Notices Concerning Pledged Assets. The Pledgor will promptly deliver
to the Agent all written notices, and will promptly give the Agent written
notice of any other notices, received by it with respect to Pledged Assets.

         8. Further Assurances. The Pledgor shall at any time, and from time to
time, upon the written request of the Agent, execute and deliver such further
documents and do such further acts and things as the Agent may reasonably
request to effect the purposes of this Pledge Agreement, including, without
limitation, delivering to the Agent upon the occurrence of an Event of Default
irrevocable proxies with respect to the Pledged Securities in form satisfactory
to the Agent. Until receipt thereof, this Pledge Agreement shall constitute the
Pledgor's proxy to the Agent or its nominee to vote all Pledged Securities then
registered in the Pledgor's name in accordance with Section 2(c).

         9. Termination. This Pledge Agreement shall terminate on the later of
(i) the second anniversary of the Closing Date and (ii) the last day of the
second consecutive quarter in which the Leverage Ratio has been less than 2.25x,
provided that at the time of such termination, the Global Leverage Ratio is less
than 3.50x. If the Leverage Ratio is greater than or equal to 2.25x at any time
after such pledge has been released, the Borrower shall re-pledge the Collateral
to the Banks and take all actions necessary to effect such pledge. Upon
termination of this Pledge Agreement, the Agent shall deliver to the Pledgor, or
register a release for the benefit of the Pledgor, at the Pledgor's expense,
such of the Pledged Assets as shall not have been sold or otherwise applied
pursuant to this Pledge Agreement.

         10. Limitation on Agent's Duty in Respect of Collateral. Beyond the
exercise of reasonable care to assure the safe custody of the Pledged Assets
while held hereunder, the Agent shall have no duty or liability to preserve
rights pertaining thereto and shall be relieved of all responsibility for the
Pledged Assets upon surrendering or tendering surrender of the Pledged Assets to
the Pledgor.

         11. Severability. Any provision of this Pledge 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.

         12. No Waiver; Cumulative Remedies. Neither the Agent nor the Banks
shall, by any act, delay, omission or otherwise, be deemed to have waived any of
its or their rights or remedies hereunder and no waiver shall be valid unless in
writing, signed by the Agent on behalf of the Banks, and then only to the extent
therein set forth. A waiver by the Agent of any right or remedy hereunder on any
one occasion shall not be construed as a bar to any right or remedy which the
Agent or the Banks would otherwise have had on any future occasion. No failure
to exercise nor any delay in exercising on the part of the Agent or the Banks,
any right, power or privilege hereunder, shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude any other or future exercise thereof or the exercise or any other
right, power or privilege. The rights and remedies hereunder provided are
cumulative and may be exercised singly or concurrently, and are not exclusive of
any rights and remedies provided by law. None of the provisions of this Pledge
Agreement may be waived,

                                      -7-
<PAGE>

altered, modified or amended except by an instrument in writing, duly executed
by the Pledgor and the Agent on behalf of the Banks.

         13. Successors and Assigns; Governing Law. This Pledge Agreement and
all obligations of the Pledgor hereunder shall be binding upon the successors
and assigns of the Pledgor, and shall, together with the rights and remedies of
the Agent hereunder, inure to the benefit of the Agent, the Banks and their
respective successors and assigns. This Pledge Agreement shall be governed by,
and be construed and interpreted in accordance with, the laws of the State of
New York.

         14. Further Indemnification. The Pledgor agrees to pay, and to save the
Agent and the Banks harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all excise, sales or other taxes
which may be payable or determined to be payable with respect to any of the
Pledged Assets or in connection with any of the transactions contemplated by
this Pledge Agreement.

         15. Notices. Any notice to the Agent or the Banks or the Pledgor
required or permitted by this Pledge Agreement shall be effective if given in
accordance with Section 10.04 of the Credit Agreement, to the address specified
in Schedule 2 attached hereto, or such other address as the Pledgor may specify
in accordance with Section 10.04 of the Credit Agreement, in the case of notices
to the Pledgor.

         IN WITNESS WHEREOF, the Pledgor has caused this Pledge Agreement to be
duly executed and delivered as of the date and year first above written.

                                              FLORIDA EXPRESS CARRIERS, INC.

                                              By: /s/ R. W. Anestis
                                                 ------------------------------
                                                 Its: Chairman

                                      -8-

<PAGE>

                                   Schedule 1
                               CAPITAL SECURITIES

--------------------------------------------------------------------------------
Issuer, including exact name,      Certificate No.   No. of     Exact Name of
   the type of entity and          (if applicable)   Shares   Registered Holder
jurisdiction of organization
--------------------------------------------------------------------------------
Florida Express Logistics, Inc.,          1           100     Florida Express
a Florida corporation                                         Carriers, Inc.

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

<PAGE>

                                   Schedule 2

                          FILING OFFICE AND INFORMATION

Filing Office:        Secretary of State of the State of Florida

Location of Pledgor:  Florida Express Carriers, Inc.
                      One Malaga Street
                      St. Augustine, Florida  32084
                      Attention:  General Counsel
                      Telecopier Number (904) 826-2379

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