EXHIBIT 10.7


                  NON-COMPETITION AND NON-DISCLOSURE AGREEMENT

         Agreement made this _____ day of _________, 1996, among Thomas G. Rader
("Rader") of 30786 Snowbird Lane, Evergreen Colorado, Rader Railcar, Inc., a
Colorado corporation ("RRI") and First American Railways, Inc., a Nevada
corporation (the "Company").

         WHEREAS, Rader is a director and shareholder of the Company;

         WHEREAS, Rader's principal employment is RRI, of which he is the sole
         shareholder and which, among other things, designs, manufactures,
         markets and sells/leases customized passenger railcars;

         WHEREAS, the Company has agreed to purchase approximately $9 million
         worth of customized railcars from RRI pursuant to an agreement of even
         date (the "Purchase Agreement"); and

         WHEREAS, the Company is desirous of fostering and continuing a close
         relationship with RRI.

         NOW, THEREFORE, in consideration of the Company's entering into the
         Purchase Agreement, the parties agree as follows:

         1. Rader and RRI shall not at any time, without the prior written
consent of the Board of Directors of the Company, disclose to any person, firm,
corporation or other entity, for any reason or for any purpose whatsoever, any
confidential or proprietary knowledge or information pertaining to the Company.

         2. During the Non-competition Period (defined below), Rader and RRI
shall not, directly or indirectly, engage in or have any interest in any sole
proprietorship, partnership, corporation, joint venture or business or any other
person or entity other than the Company (whether as an employee, officer,
director, partner, agent, security holder, creditor, consultant or otherwise)
that






directly or indirectly engage in, the design, marketing, sale or lease of
passenger railcars for the purpose of operating a passenger entertainment,
tourism or excursion train(s) in the state of Florida.

         3. For purposes of this Agreement, the term "Non-competition Period"
shall mean the four-year period commencing on the date first set forth above.

         4. It is recognized and hereby acknowledged by the parties hereto that
a breach by Rader or RRI of any of the covenants contained in this Agreement
will cause irreparable harm and damage to the Company, the monetary amount of
which may be virtually impossible to ascertain. As a result, Rader and RRI
recognize and acknowledge that the Company shall be entitled to an injunction
from any court of competent jurisdiction enjoining and restraining any violation
of any or all of the covenants contained in this Agreement by Rader or RRI or
any of their affiliates, associates, partners or agents, either directly or
indirectly, and that such right to injunction shall be cumulative and in
addition to whatever other remedies the Company may possess.

         5. Any provisions of this Agreement which is invalid or unenforceable
in any jurisdiction shall be ineffective to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
provisions thereof, and any such invalidity or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

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         6. In the event of litigation arising hereunder, the prevailing party
shall be entitled to recover from the non-prevailing party its reasonable
attorneys' fees and expenses in connection with such litigation at all levels.

         7. This Agreement shall be governed by and interpreted and enforced in
accordance with the substantive laws of Florida.


FIRST AMERICAN RAILWAYS, INC.               RADER RAILCAR, INC.

By:___________________________              By:___________________________
   Allen C. Harper, Chairman                   Thomas G. Rader
      and Chief Executive Officer

                                               ___________________________
                                               Thomas G. Rader




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