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PUBLIC PROJECT REIMBURSEMENT AGREEMENT

THIS AGREEMENT FOR INITIAL FEASIBILITY STUDY SERVICES ("Agreement"') is made
effective December 1,2010 (the "Effective Date") by and between Las Vegas
Railway Express, Inc ("Client") and Union Pacific Railroad Company, a Delaware
corporation("UPRR").

WHEREAS, Client has expressed an interest in proceeding with an initial
feasibility study for establishing passenger rail operations between the
interchange with the Burlington Northern Railway at Daggett. California to the
former Amtrak station in Las Vegas, Nevada: and

WHEREAS, Client desires to engage UPRR to provide certain services to permit
Client to conduct a preliminary evaluation of the feasibility of the Project;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, hereby covenant and agree as follows:

1.          Scope of Services. Client has engaged UPRR to perform services in
connection with the Project, which may include provision of preliminary
engineering services, developing cost estimates and reviewing preliminary
layouts, any or all of the services set forth on Exhibit A, or such other
related services as are agreed upon by the parties (the "Services"). The
Services may be performed directly by UPRR or by a UPRR contractor.

2.           Fees and Payments.   Client shall reimburse UPRR for all Costs (as
defined below), in an amount not to exceed [$115.000] (One Hundred Fifteen
Thousand Dollars) (the "Maximum Cost") related to UPRR's performance of the
Services. On the date of execution of this Agreement, UPRR may require that
Client provide a refundable deposit to UPRR (the "Deposit").  If a Deposit is
required, the amount of the Deposit will be set forth on Exhibit A hereto. To
the extent that Services are performed by UPRR, the Deposit will be applied
against the total Cost of such Services plus Taxes (as defined below).
Notwithstanding the foregoing, if the total Cost of the Services plus Taxes is
less than the Deposit amount, the parties agree that UPRR shall refund the
difference to Client. If UPRR is required to pay or collect any federal, state,
local, sales and use, value-added, goods and services, or any other similar
taxes and/or duties imposed on the Services provided as a result of this
Agreement including, but not limited to, faxes and/or duties imposed on the
Services or on tangible/intangible property consumed in, or acquired for, the
provisioning of the Services, then such taxes and/or duties shall be invoiced to
and paid by Client pursuant to the terms herein; provided, however, that Client
shall not be required to pay any taxes based on UPRR's net income. For purposes
of this agreement, "Taxes" shall mean all amounts reimbursable pursuant to the
preceding sentence. In addition, Taxes are separate and apart from Cost and are
an addition to the Maximum Cost. Except in relation to Taxes, (the Maximum Cost
may only be increased with Client's written consent.
 
Any amount not paid within thirty (30) days following delivery of an invoice by
UPRR shall accrue interest at a rate of one percent (1%) per month or the
maximum lawful rate, whichever is less. For purposes of this Agreement, "Cost"
shall mean all costs and expenses paid to a UPRR Contractor for the performance
of any of the Services, and all costs and expenses of tabor, travel, lodging,
meals, supplies and material incurred for or in connection with UPRR's provision
of the Services, including, without limitation, delivery charges, and UPRR's
additives (includes direct and indirect labor additives and overhead) as set
forth in Exhibit A. Notwithstanding the foregoing, additives are subject to
periodic adjustments by UPRR in its sole discretion.

 
 

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3.           Further Engagement. If Client elects to move forward with the
Project after the Services are performed, the parties, may, but are not required
to, negotiate a separate agreement for the design and/or construction of the
Project and other activities.
 
4.           Ownership.    Any and all work product, ideas, inventions,
innovations, or intellectual property produced by UPRR for Client during the
provision of Services, including, but not limited to die specific items
identified as deliverables on Exhibit A ("UPRR Proprietary Information") shall
at all times remain solely with, and be the exclusive property of, UPRR. Subject
to the terms and conditions of this Agreement, UPRR hereby grants to Client a
non­ exclusive, non-transferable, limited license and right to use any UPRR
Proprietary Information solely tit conned ion with the Project With respect to
use of any UPRR Proprietary information by a Client that is deemed a government
entity, including a State or federal entity, all UPRR Proprietary Information
shall be deemed confidential and propriety to the extent allowed by applicable
law and any use, reproduction, release or disclosure of the UPRR Proprietary
Information shaft be governed solely by the terms of this Agreement and shall be
prohibited except to the extent expressly permitted by the terms of this
Agreement.
 
5.           Confidential and Proprietary Information ("CP&I"). Client agrees to
treat as confidential all information, in whatever form or medium, furnished or
disclosed by UPRR, or any of its agents, to Client C&PI excludes information
already known or developed by Client other man through a breach by Client of any
of its obligations hereunder or from a third party known by Client, to be
breaching a confidentiality duty to UPRR. With respect to use of any CP&I by a
Client that is deemed a government entity, including a State or federal entity,
all UPRR Proprietary Information shall be deemed confidential and propriety to
the extent allowed by applicable law and any use, reproduction, release or
disclosure of any CP&I shall be governed solely by the terms of this Agreement
and shall be prohibited except to the extent expressly permitted by the terms of
this Agreement In the event Client is required by law, regulation or legal
process to disclose any of CP&I, Client agrees to (i) give UPRR advance notice
prior to disclosure so UPRR may contest the disclosure or seek a protective
order, and (ii) limit the disclosure to minimum amount that is legally required
to be disclosed. Further, the deliverables noted on Exhibit A may be disclosed
to other governmental entities that have a need-to-know in connection with the
development of the Project.
 
6.           Warranty.    THE SERVICES, INCLUDING WITHOUT LIMIATION THE
INFORMATION PROVIDED TO CLIENT BY UPRR HEREUNDER ARE PROVIDED "AS 1ST.   UPRR
MAKES NO WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, WITH
RESPECT   TO    THE    SERVICES,    INCLUDING    WITHOUT    LIMITATION    THE
WARRANTIES OF MERCHANTABILITY OR WARRANTIES OF FITNESS  FOR A PARTICULAR
PURPOSE.     UPRR DOES  NOT  WARRANT THE  ACCURACY  OR
COMPLETENESS   OF   ANY   INFORMATION   PROVIDED   TO   CLIENT   BY   UPRR
HEREUNDER.

 
 

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7.            Limitation of Liability. UPRR'S AGGREGATE LIABILITY UNDER THIS
AGREEMENT, WHETHER FOR BREACH OR IN TORT OR OTHERWISE, IS LIMITED TO THE FEES
PAID BY CLIENT FOR THE SPECIFIC SERVICE(S) DIRECTLY GIVING RISE TO SUCH
LIABILITY. IN NO EVENT SHALL UPRR BE LIABLE UNDER ANY THEORY OF TORT, CONTRACT,
STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR LOST PROFITS, EXEMPLARY,
PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OR THE LIKE,
EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT REGARDLESS OF WHETHER SUCH DAMAGES
WERE FORESEEABLE OR WHETHER CLIENT HAD BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. THE LIMITATIONS OF LIABILITY REFLECT THE ALLOCATION OF RISK BETWEEN THE
PARTIES. THE LIMITATIONS SPECIFIED IN THIS SECTION WILL SURVIVE AND APPLY EVEN
IF ANY LIMITED REMEDY SPECIFIED IN THIS AGREEMENT IS FOUND TO HAVE FAILED OF ITS
ESSENTIAL PURPOSE.

8.              Term. The term of this Agreement shall commence on the Effective
Date and shall expire upon UPRR's completion of Services ("Term"), unless
earlier terminated by the parties. This Agreement may be terminated immediately
by UPRR at any time if Client breaches any provision herein.

9.             Governing Law. The parties mutually acknowledge and agree that
this Agreement shall be construed and enforced in accordance with the laws of
the State of Nebraska, without regard to any conflict-of-law provisions. The
parties agree that in any dispute exclusive jurisdiction and venue shall be in
the state and federal courts of Nebraska. The parties mutually acknowledge and
agree that they shall not raise in connection therewith, and hereby waive, any
defenses based upon venue, inconvenience of forum or lack of personal
jurisdiction in any action or suit brought in accordance with the foregoing.
 

l0.            Injunctive Relief. Client acknowledges and agrees that if it
breaches any obligations hereunder, UPRR may suffer immediate and irreparable
harm, for which monetary damages atone shall not be a sufficient remedy, and
that, in addition to all other remedies that UPRR may have, UPRR shall be
entitled to seek injunctive relief, specific performance or any other form of
relief in a court of competent jurisdiction, including, but not limited to,
equitable relief, ta remedy a breach or threatened breach hereof by Client and
to enforce this Agreement, and Client hereby waives any and all defenses and
objections it may have on grounds of jurisdiction and venue, including, but not
limited to, lack of personal jurisdiction and improper venue, and waives any
requirement for the securing or posting of any bond in connection with such
remedy.

11.            Appropriations. Client represents to UPRR that Client
appropriated funds sufficient to pay UPRR the Maximum Amount plus Taxes, and
will have appropriated funds to pay UPRR for any increase to the Maximum Amount
plus Taxes subsequently approved by Client

12.            General. Client may not assign this Agreement or any of its
respective rights or obligations hereunder, without the prior written consent of
UPRR. This is the entire agreement between the parties regarding the Services.
Headings are for ease of reference only, and are not part of the Agreement

(Signature Block on Following Page)

 
 

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IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized representatives as of the Effective Date.
 
UNION PACIFIC RAILROAD COMPANY
LAS VEGAS RAILWAY EXPRESS, INC.
       
 By: /s/ John Rebensdorf
By: /s/ Michael Barron
   
 Title: VP Network Planning and Operations
Title: CEO

 

 
 

 
 

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EXHIBIT A
 
SCOPE OF SERVICES/REIMBURSABLE COSTS/DEPOSIT
 

A.
Services.   Client shall reimburse UPRR for the Costs associated with the
following Services relating to LJPRR's evaluation of the Project:
     
•
Conference call participation
       
•
On-site visits (hy-rails)
       
•
Attendance at public meetings
       
•
Attendance at project meetings
       
•
RTC model development
       
•
RTC model application (running the model)
       
•
RTC report preparation
       
•
Preliminary engineering
       
•
Real estate investigation and analysis
       
•
Development of infrastructure requirements and costs
       
•
Relocation option and alternative alignment analysis
           
B.
Deliverables.
     
•
An initial capacity analysis identifying recommended infrastructure requirements
to enable proposed passenger train operation on UPRR-owned corridor, consistent
with UPRR's passenger principles.
       
•
Preliminary cost estimates
       
Note: Infrastructure requirements and preliminary cost estimates are intended
for high level feasibility study and are subject to further analysis and review
as the process continues.
   
C.
Deposit Amount:                    TBD
   
D.
UPRR's Additives                  66.1%

 

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