FIRST AMERICAN
RAILWAYS, INC.
June 24, 1997
Xx. X. Xxxxxx Xxxx
Dunsfold Ryse Estate
Chiddingfold Surrey
United Kingdom GU84YA
Dear Xxxxxx,
This letter serves as First American Railway, Inc.'s (FAR's) understanding as
to our agreement concerning your participation in the growth of our Company.
1. Equity Investment:
You will invest $200,000 (U.S.) directly into FAR, receiving common stock
which will be registered within 90 days. This investment will not require
any acquisition brokerage fees since you are purchasing the stock directly
from the Company. The price will be the current market price of the stock
on the date of your execution of this agreement less 15%. It is required
that you remit your funds to FAR within 7 days of the execution date to
ensure compliance with these favorable terms (price, etc.).
In addition, you will be granted, as of the execution date, non-qualified
five-year stock options to purchase 10,000 shares of common stock (subject
to the standard anti-dilution protections) at an exercise price which
is equal to the then current market price. These options will vest over 3
years in one-third increments (3,333 shares) annually--the first year
anniversary occurring one year after the execution date of this agreement.
II. Consulting Services:
A) Sponsorship Program - To solicit, negotiate, and maintain relationships
with associations or corporate sponsors in Europe. In this capacity, you
will utilize leads or suggestions from the President and the Vice
President of Sales and Marketing. You are also expected to generate your
own candidate sponsor targets.
B) Scenic Railroad Acquisition Program - To research, negotiate, and
participate in completion of target acquisition companies in Europe. In
this capacity you will utilize leads or suggestions from the President.
You are also expected to identify your own target companies.
-----------------------------
3700 North 00 Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxx 00000
954/000-0000 * Fax: 954/000-0000
X. Xxxxxx Xxxx Page 2 June 24, 1997
C) Fun-Train Development Program - To research, identify, and participate
in completion [including negotiation] of new Fun-Train projects in
Europe. In this capacity you will utilize leads or suggestions from the
President. You are also expected to identify your own potential
locations for development.
III. Office, Telephones & Travel/Entertainment Expenses:
You will be reimbursed for all reasonable expenses of this type on a pre-
approved basis. Xxxxxx Xxxxxxx will work out an appropriate methodology
after execution of this agreement.
IV. Consulting Compensation:
Your compensation, in addition to the stock options, will be:
A) A stipend paid quarterly of $7,500.00 (U.S) [$30,000 per year]
beginning July 1, 1997.
B) 4% of gross margin on collected sponsorship program income.
C) A to-be-determined amount, on a case by case basis, for all
acquisitions or new Fun-Train development activities after FAR
agrees to pursue a transaction.
D) The discounted equity investment opportunity described in (I) above.
E) Stock options described in (I) above will be granted annually.
If this meets with your approval, please execute and date below. We believe you
will rapidly become an important part of our team.
Sincerely,
/s/ Xxxxxxx Xxxxxxxxxx
----------------------
Xxxxxxx Xxxxxxxxxx
President
RM/pl
Agreed by:
/s/ X. Xxxxxx Xxxx
------------------
X. Xxxxxx Xxxx
Date: 6-26-97
