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PROPOSED LEASE TERMS
 

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MEMORANDUM OF UNDERSTANDING

This Memorandum of Understanding ("MOU") is between T-UPR, LLC ("Landlord") and
Las Vegas Railway Express, Inc. a Delaware company ("Tenant")- For the purposes
of this MOU, Landlord and Tenant shall sometimes collectively be referred to as
the "Parties". This MOU sets forth the principal terms and conditions upon which
the Parties would be willing to entertain entering into a lease (the "Lease"),
as more particularly hereinafter described. Except with respect to the
provisions of confidentiality contained herein, the execution of this MOU shall
not be deemed a binding offer in any manner on either Party nor shall the
execution of this MOU impose upon any of the Parties any legal obligations
whatsoever in connection with the proposed Lease, unless and until the Parties
enter into the final Lease containing, among other things, the terms of this
MOU. Notwithstanding the foregoing, this MOU shall expire, without the need for
any action by either party, on December 31,2010.
 

BUILDING/COMPLEX:
The Plaza Hotel and Casino (the "Hotel")
   
BUILDING ADDRESS:
1 Main Street, Las Vegas, Nevada 89101
   
 LANDLORD:
T-UPR LLC
     
The Plaza Hotel & Casino is owned by T-UPR LLC, a subsidiary of Tamares Real
Estate Holdings, Inc.
   
TENANT:
Las Vegas Railway Express, Inc. a Delaware company (OTC:BB - XTRN)
   
SECURITY DEPOSIT:
Security deposit to be determined based Landlord's review of Tenant's financial
position. In no event shall security deposit be less than the cost to remove
tenant's improvement to the land ("Restoration Deposit").
   
PERMITTED USE:
First Class Operation of intercity passenger rail terminal for LVRE service
between Los Angeles and Las Vegas, souvenir shop, train ticket sales, travel and
entertainment booking services, and service operations related to the operation
to "X" Train but excluding, among other uses, and repairs or maintenance of
trains and train parts and systems (the "Service").

 
 

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PROPOSED LEASE TERMS
 

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PREMISES;
 

Terminal Area
An area inside the Hotel of approximately 3,100 SF to be used for train terminal
operations subject to measurement by Landlord's architect, see Exhibit "A".
   
Food Preparation Area
A food preparation kitchen area of approximately 1,900 SF. The exact location
and size of the food preparation area shall be determined and agreed upon
between the parties prior to completion of ongoing hotel renovations.
   
Platform and Sidings Area
A rail siding and platform area [and railroad track will be constructed by
Tenant, at Tenant's expense, along the Union Pacific main line, on Landlord's
property, encroaching not more than twenty-five (25) feet into the existing
parking area along the edge of the Tamares property that fronts the railroad
tracks, Exhibit "B". All plans and specifications for construction of the siding
and platform area shall be subject to Landlord and Union Pacific approval and
all applicable laws and regulations.
   
LEASE COMMENCEMENT DATE:
Upon full execution of the Lease.
   
RENT COMMENCEMENT DATE:
Tenant shall commence paying Rent upon opening for business, but in no event
later than December 31,2011
       
ADDITIONAL RENTAL RATE:
Tenant shall lease the Premises on a NNN basis, wherein Tenant shall pay Base
Rent as hereinafter set forth and shall, as Additional Rent, furnish and pay for
(i) its own janitorial service, (ii) HVAC, (iii) security and trash removal
service, (iv)its usage of electric power, water and sewer usage based on
separate meters or sub-meters to be installed by Tenant at Tenant's sole cost,
and (v) its prorata share of Landlord's real estate taxes, insurance, building
maintenance and reserves and property management.

 
 
 

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PROPOSED LEASE TERMS
 

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BASE RENTAL RATE:  
The Base Rent to be paid by Tenant shall be determined and agreed upon following
receipt and agreement of the Parties of and concerning the exact scope and cost
of the Tenant and Landlord work to performed in accordance herewith, but shall
not, in any case, be less than the following:

   
Annual Rent
Annual Rent
   
Rate/RSF
Rate/SF
 
# of
Terminal & Food
Platform and
Month
Months
Prep Area
Sidings Area
1-6
6
S0.00/SF
TBD*
7-24
18
S12.00/SF
TBD*
25-60
36
S15.00/SF
TBD*
61-120
60
S18.00/SF
TBD* *-
 
 
 
Tobe determined based on review by Landlord's architect of impact to Master
Plan.
 

 
 
LANDLORD'S WORK:
Landlord agrees to extend all commercially necessary electrical and plumbing, to
either a centralized location or to stubs within Premises. In addition, the
Landlord will make Premises compliant with all applicable environmental laws,
including the removal of all asbestos.

 
 

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PROPOSED LEASE TERMS
 

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TENANT'S WORK:
Tenant shall make substantial improvements to the Leased Premises at its expense
(the "Tenant's Work"). The interior and exterior improvements will be subject to
design approval by Landlord, not to be unreasonably withheld. Tenant's initial
estimate of interior and exterior improvements is approximately $2MM The
construction period for the improvements is estimated at eight months including
design, construction drawings, permits, and construction. Landlord shall provide
the Premises in "as-is" condition, excluding extension of utilities to the space
and mitigation of existing environmental hazards or removal of hazardous
building materials which shall be the responsibility and expense of Landlord as
above set forth.
   
 
Tenant, at Tenant's expense will be responsible for all Tenant's Work, with
Tenant's general contractor and subcontractors subject to Landlord's approval
not to be unreasonably withheld, related to the Leased Premises, including, but
not limited to:

 

 
• Tenant store front and signage (both interior and exterior
 
• Partitions, ceilings, finish flooring, signage
 
• Fire-rated rear service doors and associated security systems
 
• Plumbing distributions/fixtures, if needed
 
• Sprinkler drops and heads
 
• Transformers to appropriate volt power
 
• Telephone and cable wires from central distribution and control systems,
including air handler, duct work, thermostats, registers, etc.
 
• Water source heat pumps and related distribution and control systems,
including air handler, duct work, thermostats, etc.
 
• Emergency power, if needed
 
• Construction trash removal
 
• Cost of structural and other Tenant plan reviews, if required.
 
• Installation of railroad sidings [including tracks?], and more
 
• AH Tenant's Work must be done, in accordance with Landlord's design criteria
and specifications and coordinated through Landlord's Tenant
construction director. Tenant's construction must be performed in compliance
with all local governing codes and requirements

 
 
 

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PROPOSED LEASE TERMS
 

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OPTION TO RENEW:
Provided (i) no Event of Default exists or would but for the passage of time
exist, (ii) Tenant has been continuously operating the "X" Train in accordance
with the Lease, (iii) Tenant has provided Landlord not less than nine months
prior written notice of its election to renew, and (iv) Tenant is occupying the
entire Leased Premises at the time of such election, Landlord will provide
Tenant with one (I) option to renew the term for ten (10) years at the Base Rent
in place at the time of renewal, plus annual CPI escalations, not less however
than three (3%) per cent per annum.
   
TENANT TERMINATION RIGHT:
Provided and on condition that (i) Tenant has not constructed a second siding
and platform west of the current Union Pacific tracks for the Service, and/or
(ii) less than 1,000,000 passengers utilized the Service in the prior 12 month
period, Tenant shall have the one time right to terminate the Lease after the
36th month following the Rent Commencement Date (the "Tenant Termination").
Tenant shall provide twelve months prior written notice to Landlord of its
election to exercise the Tenant Termination right and shall forfeit the
Restoration Deposit to allow Landlord to remove tenant improvements to the land.
   
LANDLORD TERMINATION RIGHT:
Landlord shall have a right to terminate the Lease upon three (3) years prior
written notice to the Tenant and payment of Tenant's unamortized initial
construction costs of the Tenant Work as of the actual lease termination date.
   
BUILDING AND LOBBY SIGNAGE:
Landlord shall reasonably provide Tenant signage, at Tenant's sole cost, on the
building's exterior and within its lobby to assist in direction of passengers.
   
PARKING:
Up to 35 Tenant employees shall be provided on site parking at no expense in
areas to be designated by Landlord south of the Hotel either in the south lot or
parking garage as shall be determined by Landlord. Up to 20 additional parking
spaces shall be made available to Tenant employees by Landlord, if available, at
standard rates then in effect less 20%.

 
 

 

 
 

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PROPOSED LEASE TERMS
 

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LIMOUSINE SERVICE, SHUTTLE BUS STAGING AREA:
Landlord shall provide an area mutually agreeable to the parties for off-site
staging and loading of taxi cabs, transfer cars, limousines and shuttle buses
within reasonably close proximity to the Hotel (for approximately 120 cabs, 115
limousines and private cars, 10 shuttle buses and S full size buses) which shall
be determined following completion of the master planning study. The Rent for
such staging area shall be a pass-thru of Landlords costs plus an X% return on
such land's value.
   
ASSIGNMENT AND SUBLETTING:
Tenant may, without the consent of Landlord, sublease the premises or assign the
lease to an Affiliate of Tenant. Tenant will promptly notify Landlord of such
assignment or sublease which notice will include a description of the Affiliate
structure, its most recent financial statements, a copy of the assignment or
sublease and such other reasonable information as requested by Landlord. Tenant
may not sublease the premises or assign the lease to any other party without the
consent of Landlord, which consent shall not be unreasonably withheld or delayed
(subject to certain restrictions to be set forth in the Lease). In the event of
an assignment or subletting, Tenant shall remain liable for the payment of all
Base Rent and Additional Rent and the performance of all of Tenant's obligations
under the Lease. Notwithstanding the foregoing, certain Lease terms may not be
assigned or sublet to a subtenant or assignee and shall be personal only to the
Tenant, including but not limited to renewal option, parking and signage.
   
BUILDING SECURITY AND ACCESS:
Tenant's authorized employees shall have access to the Premises twenty-four (24)
hours per day, seven (7) days per week, or at a minimum during all hours of the
operation the Building/Complex hotel and casino operations.

 
 

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PROPOSED LEASE TERMS
 

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OPERATIONS AND PROMOTION AGREEMENTS:
Tenant and Landlord may enter additional agreements between the parties to
facilitate cross promotion of services to train and hotel casino/customers that
could include the following:
   
 
Bundling of "Union Plaza" accommodations for "X" Train customers. The overnight
accommodations of "X" Train on-board personnel is estimated to be 9,100 room
nights annually.
   
 
Promotional and Marketing partnerships with "X" Train websites and/or corporate
sales in Los Angeles and Las Vegas.
   
INDEMNIFICA TION:
Based on Landlord's Lease terms   subject to review and acceptance by Tenant.
   
FINANCIAL CREDIT:
Tenant agrees to provide Landlord with all reasonable and necessary financial
information required for Landlord to sufficiently evaluate its financial
condition and Landlord conditions this proposal, among other things, upon
satisfactory review of such information.
   
LEASING COMMISSION:
Landlord will pay Tenant's real estate broker, Odyssey Realty, Dave Sundaram, a
leasing commission of $30,000. The commission will be deemed earned only upon
mutual execution of the Lease and shall be paid as follows: I) 50% of the
commission will be paid within 30 days of the Commencement Date, and 2) 50% of
the commission will be paid within 30 days following the Rent Commencement Date.

 
 

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PROPOSED LEASE TERMS
 

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GAMING RESTRICTIONS:
Tenant acknowledges that Landlord's ownership of the Hotel is subject to a
privileged gaming license and overlease with very stringent requirements.
Further, Tenant acknowledges that it may be required to disclose to Landlord
and/or its lender all ownership interests and all lenders or sources of
financing. Should Landlord or Tenant be subject to any investigation, possible
fine or penalty, or possible forfeiture of any privileges or licenses due to
Tenant's operations, the individuals or entities which comprise the Tenant or
any financial arrangements involving Tenant, upon written notice from Landlord,
Tenant must cooperate with the investigation and, if a problem is identified,
correct the problem or disassociate itself from the individual or entities
giving rise to the issue, and if such does not occur to the satisfaction of the
gaining authorities, Landlord shall have the right to immediately terminate the
Lease without penalty.
   
CONFIDENTIALITY:
This proposal and all discussions related thereto shall be held in confidence in
accordance with the attached confidentiality agreement.
       
TRAIN TRACK OVERPASS:
Tenant shall, if requested by Landlord, use its best efforts to assist Landlord
in securing an easement right from Union Pacific Railroad, or such other
applicable property owner(s), for use by Landlord to construct a pedestrian
overpass above the train tracks. The easement shall connect an area adjacent to
the Plaza Hotel and Symphony Park in a location mutually acceptable to Landlord
and the City of Las Vegas.

 
 
 

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PROPOSED LEASE TERMS
 

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 LANDLORD: 
T-UPR, LLC
     
By:     /s/ Kenneth Landfield       
 
Name: Kenneth Landfield
 
Title:   Vice President     
         
Date: 10/4/2010
                   
TENANT:
Las Vegas Railway Express, Inc.
By:  /s/ Michael Barron
 
Title: CEO
 
Date: 10/4/2010

 
 
 
 

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