REGISTRATION RIGHTS AND PRICE GUARANTY AGREEMENT

         AGREEMENT dated as of March 13, 1997, between CHARLES E. BRADSHAW,
JR., (the "Shareholder"), and FIRST AMERICAN RAILWAYS, INC., a Nevada
corporation (the "Company").

                              W I T N E S S E T H:

         WHEREAS, upon consummation of the transactions contemplated in a
certain Share Purchase Agreement dated as of December, 1996 (the "Share Purchase
Agreement"), the Shareholder will become the owner of 200,000 shares of the
Company's common stock, par value $.001 (the "Initial Shares") and a six-year
warrant (the "Warrant") to purchase 1,610,000 shares of the Company's common
stock at an exercise price of $3.50 per share (the Initial Shares and the common
stock underlying the Warrant shall hereafter collectively be referred to as the
"Common Stock"); and

         WHEREAS, it is a condition of the Share Purchase Agreement that the
Company enter into a registration rights agreement with the Shareholder; and

         WHEREAS, the Company wishes to grant to the Shareholder certain
registration rights with respect to the Common Stock upon the terms and
conditions set forth herein; and

         WHEREAS, the parties have agreed that during the period beginning two
years after the date hereof and ending three years after the date hereof the
Company shall be obligated to guaranty, pursuant to the terms hereof, that the
Shareholder will receive a minimum of $5.00 per share for each of the Initial
Shares sold.

         NOW THEREFORE, in consideration of the premises and covenants
hereinafter contained, the parties hereto agree as follows:

        1.      REGISTRATION.

               1.1 DEFINITIONS. As used in this Agreement, unless the context
otherwise requires, the following terms have the following respective meanings:

                      COMMISSION:  the Securities and Exchange Commission or any
other governmental authority at the time administering the Securities Act.

                      REGISTRATION EXPENSES: all expenses incident to the
Company's performance of or compliance with this Agreement, including without
limitation, all registration and filing fees, all fees and expenses of complying
with securities or blue sky laws, all printing expenses, the fees and
disbursements of counsel for the Company and of independent public accountants,
the reasonable fees


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and disbursements of counsel retained by Shareholder (which shall not exceed
$15,000), and the expense of any special audits required by or incident to such
performance and compliance (but excluding underwriting discounts and
commissions, underwriter expense allowance (or reimbursement therefor) and
transfer taxes, if any).

                SECURITIES:

                (a)   the Common Stock acquired by the Shareholder pursuant to 
                      the Share Purchase Agreement; and

                (b)   any securities issued as a dividend or other distribution
                      with respect to, or in exchange for or in replacement of,
                      such Common Stock.

                SECURITIES ACT: the Securities Act of 1933, as amended
("Securities Act"), or any similar federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time or shall have been issued in exchange for or in replacement thereof.

                SHAREHOLDER: Charles E. Bradshaw, Jr., and his successors to
whom the Common Stock is transferred by way of gift, bequest, devise and/or
pledge.

                TRANSFER: any sale, assignment, pledge or other disposition of
any security or of any interest therein, whether or not such disposition would
constitute a sale as that term is defined in section 2(3) of the Securities Act.

               1.2    REGISTRATION.

                      (a) The Company will use its best efforts to register for
         resale: (i) within 24 months after the date hereof with respect to the
         Initial Shares and (ii) within 24 months after the exercise by the
         Shareholder of the Warrant, with the Securities and Exchange Commission
         the Common Stock on Form SB-2 or any similar long-form registration (a
         "Long-Form Registration"), or, if the Company qualifies for use of Form
         S-3 under the Securities Act, or any similar short-form registration,
         on such short form registration statement (a "Short Form Registration,"
         which, together with a Long Form Registration is sometimes collectively
         referred to as a "Registration").

                      (b) The Company will pay all Registration Expenses in
         connection with the registration.

                      (c) Subject to the approval of the Company, which consent
         shall not be unreasonably withheld, the Shareholder will select the
         investment banker(s) and manager(s) to administer the offering.

                      (d) Notwithstanding anything contained in this Agreement
         to the contrary, the Company shall not be required to effect a
         registration to the extent that, in the unqualified


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         opinion of counsel for the Company and issued in favor of the
         Shareholder, the Shareholder may sell the Common Stock under the
         provisions of the Act without registration under the Act.

               1.3 REGISTRATION PROCEDURES. The Company will use its best
efforts to cause the Common Stock to be registered for sale with the Securities
and Exchange Commission in accordance with the intended method of disposition
thereof and pursuant thereto the Company will promptly:

                      (a) Prepare and file with the Commission a registration
         statement with respect to such Common Stock and use its best efforts to
         cause such registration statement to become effective;

                      (b) Prepare and file with the Commission such amendments
         and supplements to such registration statement and the prospectus used
         in connection therewith as may be necessary to keep such registration
         statement effective for a period of not less than 12 months and to
         comply with the provisions of the Securities Act with respect to the
         disposition of all Common Stock covered by such registration statement
         during such period in accordance with the intended methods of
         disposition by the Shareholder thereof set forth in such registration
         statement; provided, however, that, notwithstanding any other provision
         of this Agreement to the contrary, in the event of changes in
         circumstances after the effectiveness of such registration statement
         such that, in the opinion of the Company, the registration statement
         may not be used without supplementary disclosure which would not be
         appropriate or would be inopportune in the good faith business judgment
         of the Company, then the Company may by notice to the Shareholder
         suspend use of the registration statement until such time as the
         necessary disclosure can be made, in which case the foregoing 12-month
         period shall be extended for a period equal to the length of the period
         in which use of the registration statement was so suspended;

                      (c) Furnish to the Shareholder and underwriter, if any, of
         the Common Stock such number of copies of such registration statement
         and of each such amendment and supplement thereto (in each case
         including all exhibits), such number of copies of the prospectus
         included in such registration statement (including each preliminary
         prospectus), in conformity with the requirements of the Securities Act,
         and such other documents, as the Shareholder may reasonably request in
         order to facilitate the disposition of the Common Stock;

                      (d) Use its best efforts to register or qualify the Common
         Stock covered by such registration statement under the securities laws
         and/or blue sky laws of the State of Florida, and such other
         jurisdictions within the United States (including territories and
         commonwealths thereof) as the Shareholder shall reasonably request;
         PROVIDED, HOWEVER, that the Company shall not be required to (i)
         qualify to do business in any jurisdiction where it would not otherwise
         be required to qualify but


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         for this clause (d), (ii) subject itself to taxation in any such
         jurisdiction, or (iii) consent to general service of process in any
         such jurisdiction;

                      (e) Notify Shareholder with respect to Common Stock
         covered by such registration statement, at any time when a prospectus
         relating thereto is required to be delivered under the Securities Act
         of the happening of any event as a result of which the prospectus
         included in such registration statement, as then in effect, includes an
         untrue statement of a material fact or omits to state any material fact
         required to be stated therein or necessary to make the statements
         therein not misleading in the light of the circumstances then existing
         (and upon receipt of such notice and until a supplemented or amended
         prospectus as set forth below is available, Shareholder will not offer
         or sell any of the Common Stock covered by the registration statement
         and will return all copies of the prospectus to the Company if
         requested to do so by it), and at the request of the Shareholder
         prepare and furnish to the Shareholder a reasonable number of copies of
         a supplement to or an amendment of such prospectus as may be necessary
         so that, as thereafter delivered to the purchasers of such Common
         Stock, such prospectus shall not include an untrue statement of a
         material fact or omit to state a material fact required to be stated
         therein or necessary to make the statements therein not misleading in
         the light of the circumstances then existing;

                (f) Use its best efforts to cause all such Common Stock to be
         listed on any securities exchange or quotation system on which any of
         the common stock of the Company is then listed or otherwise traded;

                (g) Furnish to the Shareholder and underwriter, if any, upon
         their reasonable request, all information and documentation necessary
         to enable the Shareholder to determine whether the registration
         statement and any prospectus relating thereto includes an untrue
         statement of a material fact or may omit to state any material fact
         required to be stated therein or necessary to make statements therein
         not misleading in the light of the circumstances then existing; and

                (h) Furnish to the Shareholder and underwriter, if any, an
         opinion of counsel in a form reasonably satisfactory to the Shareholder
         of the scope reasonably required in connection with similar
         transactions, including opinions concerning due execution and
         authorization of all documents delivered in connection with the
         registration, the effectiveness of the registration statement,
         compliance of the registration statement and any prospectus relating
         thereto with the requirements of the Securities Act, and absence of
         information that would lead such attorneys to believe that the
         prospectus may include an untrue statement of a material fact or may
         omit to state any material fact required to be stated therein or
         necessary to make the statements therein not misleading in the light of
         the circumstances then existing.


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The Shareholder will furnish to the Company such information as the Company may
reasonably require from the Shareholder in connection with the registration
statement (and the prospectus included therein).

         The Shareholder will not (until further notice) effect sales of Common
Stock included in the registration statement after receipt of telegraphic or
written notice from the Company to suspend sales to permit the Company to
correct or update a registration statement or prospectus; but the obligations of
the Company with respect to maintaining any registration statement current and
effective shall be extended by a period of days equal to the period such
suspension is in effect unless (i) such extension would result in the Company's
inability to use the financial statements in the registration statement
initially filed pursuant to the holders' request and (ii) such correction or
update did not result from the Company's act or failure to act. At the end of
the period during which the Company is obligated to keep the registration
statement current and effective (and any extensions thereof), the Shareholder
shall discontinue sales of Common Stock pursuant to such registration statement
upon receipt of notice from the Company of its intention to remove from
registration the Common Stock covered by such registration statement which
remain unsold, and the Shareholder shall notify the Company of the number of
shares of the Common Stock included in the registration statement which remain
unsold immediately upon receipt of such notice from the Company.

               1.4    INDEMNIFICATION.

                      (a) In the event of any registration of any Common Stock
         under the Securities Act pursuant to paragraph 1.2, the Company will
         indemnify and hold harmless the Shareholder and each underwriter of the
         Common Stock, against any losses, claims, damages or liabilities, joint
         or several, to which the Shareholder or underwriter may become subject
         under the Securities Act or otherwise, insofar as such losses, claims,
         damages or liabilities (or actions in respect thereof) arise out of or
         are based upon (i) any untrue statement or alleged untrue statement of
         any material fact contained in any registration statement under which
         such Common Stock is registered under the Securities Act, any
         preliminary prospectus or final prospectus contained therein, or any
         amendment or supplement thereto, or (ii) any omission or alleged
         omission to state therein a material fact required to be stated therein
         or necessary to make the statements therein not misleading; and the
         Company will reimburse the Shareholder and each such underwriter for
         any legal or any other expenses reasonably incurred by them in
         connection with investigating or defending any such loss, claim damage,
         liability or action, provided that the Company shall not be liable in
         any such case to the extent that any such loss, claim, damage or
         liability arises out of or is based upon an untrue statement or
         omission made in such registration statement, any such preliminary
         prospectus, final prospectus, amendment or supplement in reliance upon
         and in conformity with written information furnished to the Company
         through an instrument executed by the Shareholder, or underwriter
         specifically for use in the preparation thereof.

                      (b) The Company may require, as a condition to including
         any of the Common Stock in any registration statement filed pursuant to
         paragraph 1.2, that the Company shall have received an undertaking
         satisfactory to it from the Shareholder or underwriter of the


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         Common Stock, to indemnify and hold harmless (in the same manner and to
         the same extent as set forth in subdivision (a) of this paragraph 1.4)
         the Company, each director of the Company, each officer of the Company
         who shall sign such registration statement, any person who controls the
         Company within the meaning of the Securities Act and any underwriter
         designated by the Company (or the Shareholder) to manage the sale of
         the Common Stock, with respect to any statement in or omission from
         such registration statement, any preliminary prospectus or final
         prospectus contained therein, or any amendment or supplement thereto,
         if such statement or omission was made in reliance upon and in
         conformity with written information furnished to the Company through an
         instrument executed by the Shareholder or underwriter specifically for
         use in the preparation of such registration statement, preliminary
         prospectus, final prospectus, amendment or supplement.

                      (c) Promptly after receipt by an indemnified party of
         notice of the commencement of any action involving a claim referred to
         in the preceding subdivisions of this paragraph 1.4, such indemnified
         party will, if a claim in respect thereof is to be made against an
         indemnifying party, give written notice to the latter of the
         commencement of such action, provided that the failure of any
         indemnified party to give notice as provided herein shall not relieve
         the indemnifying party of its obligations under the preceding
         subdivisions of this paragraph 1.4, except to the extent that the
         indemnifying party is actually prejudiced by such failure to give
         notice. In case any such action is brought against an indemnified
         party, the indemnifying party will be entitled to participate in and to
         assume the defense thereof, jointly with any other indemnifying party
         similarly notified to the extent that it may wish and, after notice
         from the indemnifying party to such indemnified party of its election
         to assume the defense thereof, the indemnifying party will not be
         liable to such indemnified party for any legal or other expenses
         subsequently incurred by the latter in connection with the defense
         thereof. No indemnifying party, in the defense of any such claim or
         litigation, shall, except with the consent of each indemnified party,
         consent to entry of any judgment or enter into any settlement which
         does not include as an unconditional term thereof the giving by
         claimant or plaintiff to such indemnified party of a release from all
         liability in respect to such claim or litigation.

         2. PRICE GUARANTY. If during the period beginning two years after the
date hereof and ending three years after the date hereof, the Shareholder sells
all or any portion of the Initial Shares in a bona fide open market transaction,
the Company will pay to the Shareholder for each of the Initial Shares sold the
excess, if any, of $5.00 per share over the net amount (after commissions) the
Shareholder actually received for the Initial Shares (the "Price Guaranty"). The
Price Guaranty shall terminate and be of no further force or effect at the close
of business three years after the date hereof.

         3.     NOTICES.     Any notices, requests, demands and other 
communications required or permitted to be given hereunder or under any
agreement or other document executed in connection herewith must be in writing
and, except as otherwise specified in writing, will be deemed to have been duly
given when personally delivered, or delivered by a


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nationally recognized overnight courier service, e.g. United Parcel Service or
Federal Express, to the address set forth below , as follows:

                If to the Shareholder:

                      Charles E. Bradshaw, Jr.
                      P.O. Box 3508
                      Orlando, Florida  32802

                          -- with a copy to --

                      Zimmerman, Shuffield, Kiser
                        & Sutcliffe, P.A.
                      Suite 600, Landmark Center One
                      315 East Robinson Street
                      Orlando, Florida  32802-3000
                      Attention: Stephen B. Hatcher, Esq.

                If to the Company:

                      First American Railways, Inc.
                      2445 Hollywood Boulevard
                      Hollywood, Florida 33010
                      Attention:  Chief Financial Officer
                      Facsimile:  (954) 920-0602

                          -- with a copy to --

                      Olle, Macaulay & Zorrilla, P.A.
                      1402 Miami Center
                      201 South Biscayne Boulevard
                      Miami, Florida  33131
                      Attention:  Dennis J. Olle, Esq.

or to such other addresses or facsimile numbers as either party hereto may from
time to time give notice of (complying as to delivery with the terms of this
Section 3) to the other.

        4. ENTIRE AGREEMENT. This Agreement represents the entire understanding
and agreement between the parties hereto with respect to the subject matter
hereof and can be amended, supplemented or changed, and any provision hereof can
be waived, only by written instrument making specific reference to this
Agreement signed by the party against whom enforcement of any such amendment,
supplement, modification or waiver is sought.


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        5.      SUCCESSORS.  This Agreement shall be binding upon and shall 
inure to the benefit of the parties hereto and their respective successors and 
assigns.

        6.      APPLICABLE LAW.  This Agreement shall be governed by, construed 
and enforced in accordance with the internal laws of the State of Florida.

        7. SEVERABILITY. If at any time subsequent to the date hereof, any
provision of this Agreement shall be held by any court of competent jurisdiction
to be illegal, void or unenforceable, such provision shall be of no force and
effect, but the illegality or unenforceability of such provision shall have no
effect upon and shall not impair the enforceability of any other provision of
this Agreement.

         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.

WITNESSES:                                        THE SHAREHOLDER:


/s/ STEPHEN  B. HATCHER                           /s/ CHARLES E. BRADSHAW, JR.,
------------------------------                    -------------------------
                                                  Charles E. Bradshaw, Jr.,
STEPHEN  B. HATCHER
------------------------------


                                                  THE COMPANY:

                                                  FIRST AMERICAN RAILWAYS, INC.,

                                                    a Nevada corporation
/s/ SUSAN R. GEIGER
------------------------------                    By: /S/RAYMOND MONTELEONE
                                                      ---------------------
                                                  Name:RAYMOND MONTELEONE
                                                  Title:PRESIDENT
/s/ STEPHEN  B. HATCHER
------------------------------


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