Document:

xtrn10k20110331ex10-13.htm

 

EXHIBIT #10.13

MEMORANDUM OF UNDERSTANDING

THIS MEMORANDUM OF UNDERSTANDING ("Memorandum"), made and entered into this 13 day of January, 2011, is by and between Las Vegas Railway Express, Inc., a Delaware corporation duly incorporated and organized under the laws of the State of Delaware, with principal offices located at 6650 Via Austi Parkway Suite 170 Las Vegas, Nevada 89119 ("LVRE"), and the National Railroad Passenger Corporation, duly incorporated and organized under the laws of the District of Columbia, and having its main office at 60 Massachusetts Avenue, NE, Washington, DC 20002 ("Amtrak").

WHEREAS, beginning in late 2011, LVRE intends to operate daily intercity passenger rail service between Los Angeles, CA and Las Vegas, NV, Thursday through Monday of each week, 52 weeks per year, to include federal and state holidays ("Las Vegas Service"); and

WHEREAS, LVRE has obtained the services of several companies or individuals to provide ancillary services in conjunction with providing Las Vegas Service, including but not limited to, food and beverage service, ground transportation, and lodging services; and

WHEREAS, LVRE has obtained nearly $2,000,000 in mezzanine financing and is in discussions with numerous individuals and financial institutions in order to finance the acquisition and development of locomotives and railcars, and development of train stations to support Las Vegas Service; and

WHEREAS, LVRE has entered into contingent agreements to procure all railcars to support an initial operation of two (2) separate 13-car train consists, as well as diesel locomotives for such consists, for operation in Las Vegas Service ("LVRE Equipment"); and

  

WHEREAS, LVRE has entered into discussions and/or agreements with the Union Pacific Railroad, BNSF Railway Company, Inc., and the Southern California Regional Rail Authority ("Host Railroads") in order to obtain access to their rail lines for operation of the Las Vegas Service; and

  

WHEREAS, LVRE represents that it has obtained all necessary insurance to support Las Vegas Service, subject to Amtrak and Host Railroads' review and approval; and

WHEREAS, LVRE has entered into a memorandum of understanding with a Las Vegas-based hospitality company to develop and construct a Las Vegas train station to support Las Vegas Service; and

  

  

  

WHEREAS, LVRE requests certain services to be provided by Amtrak to support LVRE's mobilization and operation of the Las Vegas Service, as further described below ("Amtrak Services"), and LVRE is prepared to compensate Amtrak for such services; and

WHEREAS, Amtrak operates intercity and commuter services throughout the United States and has considerable experience in the operations and maintenance of rail vehicles, infrastructure; and systems; and

WHEREAS, LVRE and Amtrak entered into a Non-Disclosure Agreement dated July 20,2010 (the "Non-Disclosure Agreement"), under which the Parties agreed to keep confidential certain information of each Party shared in connection with exploring potential business opportunities with respect to the Las Vegas Service; and

WHEREAS, LVRE and Amtrak wish to enter into more detailed discussions regarding the potential operating agreement between the Parties under which Amtrak would perform the Amtrak Services in support of the Las Vegas Service.

With that background and understanding, the Parties are entering into this Memorandum of Understanding:

  

1.            Definitions

"Amtrak Services" means certain services to be provided by Amtrak to support LVRE's mobilization and operation of the Las Vegas Service, as further described in Section 3 below.

"Effective Date" means the effective date of this Memorandum, as set forth in the first paragraph of this Memorandum.

"Facility Improvements" shall have the meaning described in Section 3(c) below.

"Host Railroads" means the Union Pacific Railroad, BNSF Railway Company, Inc., and the Southern California Regional Rail Authority.

"Las Vegas Service" means daily intercity passenger rail service between Los Angeles, CA and Las Vegas, NV, Thursday through Monday of each week, 52 weeks per year, to include federal and state holidays, anticipated to begin late 2011.

"LVRE Equipment*' means all railcars owned or leased by LVRE to support two (2) separate 13-car train consists, as well as diesel locomotives for such consists, for operation in Las Vegas Service.

"Memorandum" means this Memorandum of Understanding.

  

  

  

"Party" or "Parties" means National Railroad Passenger Corporation and/or Las Vegas Railway Express, Inc.

2.             Purpose

The purpose of this Memorandum is to outline the Parties' intent to cooperate and work together in good faith to secure a potential operating agreement for Amtrak Services in support of the mobilization and operation of Las Vegas Service.

3.           Scope of Amtrak Services

The Parties hereby agree to enter into detailed discussions of the Amtrak Services and the terms and conditions of an operating agreement between LVRB and Amtrak, consistent with the terms and conditions contained in this Memorandum.

Amtrak Services to be discussed by the Parties are as follows:

	
  

	
a)        Train and Engine Crews. Amtrak shall provide trained and certified train and engine crews for operation of the Las Vegas Service:

	 	
1)

	
LVRE's proposed Las Vegas Service would require one engineer and one conductor for each consist provided that the scheduled operating time does not exceed six hours. In the event that the scheduled operating time exceeds six hours, a second engineer will be required. The engineers) and conductor will be located in the locomotive cab, as LVRE would be responsible for on-board staffing.

	 	
2)

	
Amtrak's train and engine crews would be based out of Los Angeles and/or Las Vegas. LVRE agrees to pay Amtrak all relevant employee costs including but not limited to all federal, state, county and city payroll taxes, health benefits, lodging costs, retirement contributions, other associated human resources costs, Amtrak's then current overhead rates and a management fee. A refined estimate of crew costs is contingent upon finalization of the Las Vegas Service schedule.

	 	
3)

	
Amtrak estimates it would need approximately three months to complete the hiring and qualification process, prior to operating Las Vegas Service.

  

  

  

 

b)        Facility Improvements

If Amtrak agrees to maintain LVRE Equipment, modifications to 8th Street Yard are necessary, and would be funded by LVRE with the understanding that such investments could be used by Amtrak to support its own intercity services when not necessary to accommodate LVRE Equipment ("Facility Improvements"). Amtrak shall own the Facility Improvements. Amtrak is being considered to perform the following related to the Facility Improvements:

	 	
1)

	
Amtrak to supervise and manage the design and construction of Facility Improvements;

	 	
2)

	
Consideration of financial reduction in maintenance payments for a specified period of time to be agreed upon by the Parties in exchange for Facility improvements;

	 	
3)

	
Until Facility Improvements are completed, Amtrak will arrange for and accommodate all agreed upon services requested by LVRE so long as it does not interfere with Amtrak intercity service obligations;

	 	
c)

	
Maintenance of LVRE Equipment at the Los Angeles 8th Street Yard.

Amtrak will provide inspection and maintenance of LVRE Equipment, including daily, weekly, monthly, annually and two-year inspections, repair and servicing of LVRE Equipment, using properly trained and certified personnel, and will include:

	 	
1)

	
All routine servicing and maintenance activities for LVRE Equipment will be performed in accordance with FRA regulatory standards;

2)           LVRE Equipment cleaning services;

 

3)           Parts and materials procurement;

 

4)           Inventory management;

	 	
5)

	
Overnight and possible long-term storage of LVRE Equipment at 8* Street Yard.

d)        Engineering review of a new station facility at Las Vegas;

e)        Assistance with securing access rights from the host railroads; and

	 	
f)

	
Rolling Stock Engineering review and approval of LVRE Equipment, along with guidance in developing overhaul specifications designed to maximize the degree of mechanical compatibility with Amtrak's fleet.

  

  

  

4.            LVRE Responsibilities

It is assumed that LVRE will be responsible for all remaining elements of scope necessary to develop the Las Vegas Service, including, but not limited to:

	 	
a)

	
LVRE will provide FRA compliant locomotives and railcars to support two 13-car consists;

	 	
1)

	
LVRE will be solely responsible for obtaining any required FRA approvals of the LVRE Equipment to be used in Las Vegas Service;

	 	
2)

	
LVRE Equipment shall be in compliance with all applicable federal, state and local laws, rules and regulations, including but not limited to, the Americans with Disabilities Act.

	 	
b)

	
LVRE will be solely responsible for the provision of food and beverage (alcoholic and non-alcoholic) service on the Las Vegas Service, along with the maintenance of all food service equipment which LVRE will subcontract to firms in Las Vegas.

	 	
1)

	
LVRE agrees to comply with all applicable federal, state and local laws, rules or regulations relating to the provision of food and beverage service on the Las Vegas Service.

	 	
c)

	
LVRE will be solely responsible for providing qualified on board customer services personnel necessary for Las Vegas Service, other than the train and engine crews.

	 	
d)

	
LVRE will be responsible for providing ground transportation and lodging.

	 	e)	
LVRE shall be responsible for providing and operating any alternate transportation services (e.g., buses) in the event that the Las Vegas Seivice does not, for any reason, operate.

	 	
f)

	
LVRE will be solely responsible for baggage handling, ticket sales and collection, passenger announcements, passenger boarding and detraining, and deployment of ADA ramps or other equipment as may be required.

	 	
g)

	
LVRE agrees to secure access rights with the host railroads and station owners; LVRE is not seeking to use Amtrak's host railroad access rights. LVRE shall be responsible for assuring station facilities are compliant with all applicable federal, state and local laws, rules and regulations, including but not limited to, the Americans with Disabilities Act

  

  

  

	 	
h)

	
Risk of Liability. The Parties acknowledge that they have not yet addressed liability provisions to be included in the operating agreement, but acceptable liability provisions must be included in the operating agreement in order for Amtrak to provide Amtrak Services.

5.           Compensation

LVRB agrees to reimburse Amtrak for its full costs plus a management fee, for the performance of the Amtrak Services, under payment provisions to be agreed upon by the Parties.

6.           Relationship of the Parties

Nothing in this Memorandum shall be deemed to constitute, create, give effect to, or otherwise recognize a joint venture, partnership, or formal business entity of any kind, and the rights and obligations of the Parties with respect to the subject matter of this Memorandum shall be limited to those rights and obligations expressly set forth herein. Nothing provided herein shall be construed as providing for the sharing of profits or losses arising out of the effoils of either or both of the Parties. The cooperation of the Parties is for the sole purpose of continuing their discussions regarding an operating agreement between the Parties to mobilize and perform the Amtrak Services and/or other activities agreed upon by the Parties as may be required for Las Vegas Service.

7.           Exclusivity

Amtrak agrees it will not enter into any agreement with any other privately funded entity providing scheduled, conventional intercity rail service on existing infrastructure between the greater Los Angeles area and Las Vegas for the duration of this Memorandum while LVRB is in good standing. This in no way limits Amtrak's statutory rights or restricts it from performing its legislatively mandated business activities.

8.           Confidential Information

The existence of this Memorandum, the Parties' discussions contemplated herein, and the documents and information disclosed by or on behalf of either Party to the other Party in connection with this Memorandum shall constitute "Confidential Information," as defined in, and subject to the terms and conditions of, the Non-Disclosure Agreement.

9.           Cooperation

LVRE and Amtrak shall, from time to time and upon the reasonable request of the other Party, execute and deliver such further instruments or other documents and take such further action(s) as may be reasonably required to give effect to the purposes of this Memorandum.

  

  

  

 

10.         Expenses

LVRE agrees to reimburse Amtrak for all reasonable expenses incurred in the performance of its obligations under this Memorandum, under payment provisions to be agreed upon by the Parties and agreed upon in the Final Operating and Service Agreements.

11.          Assignment

This Memorandum may not be assigned by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld.

12.          Publicity/Marketing

The Parties agree that neither shall issue any news releases, public announcements, or advertising material related to this Memorandum, provided that each Party shall be allowed, after coordination with the other Party, to make such public disclosures of its own corporate affairs related to this Memorandum as may be required of publicly traded companies by applicable laws or regulations.

13.          Limitation of Liability

Neither Party shall have any liability to the other (including liability for any indirect, incidental, special or consequential damages), however caused and whether as a result of the negligence of one Party or otherwise, on account of the Parties' failure to execute an operating agreement with respect to Amtrak Services.

14.          Status

This Memorandum represents the good faith intentions of the Parties to enter into discussions regarding an operating agreement but is not legally binding and creates no legal obligations on either Party to enter into an operating agreement or take any other action, except with respect to Clauses 7 (Exclusivity), 8 (Confidentiality), 10 (Expenses), 11 (Assignment), 13 (Limitation of Liability), 14 (Status), 16 (Termination), 18 (Disputes) and 23 (Governing Law).

15.          Severability

If any portion of this Memorandum is held to be unenforceable, the remaining portions of this Memorandum shall not be affected by such unenfbrceability.

  

  

  

16.          Termination

This Memorandum is entered into as of the Effective Date and shall terminate upon the earlier to occur of the following:

	 	
a)

	
the effective date for such termination, as agreed upon in writing by both of the Parties;

	 	
b)

	
a Party's delivery of notice of a termination to a defaulting Party pursuant to Article 17;

	 	
c)

	
the replacement of this Memorandum by a fully-executed operating agreement setting forth the terms and conditions governing Amtrak Services in support of the mobilization and operation of Las Vegas Service;

	 	
d)

	
within one (1) year of the Effective Date, in the event the Parties have not executed a definitive operating agreement for Amtrak Services;

e)      Any Host Railroad's denial of access for operation of Las Vegas Service.

Upon a termination of this Memorandum, this Memorandum shall become null and void, and neither Party shall have any further obligation or liability to the other Party pursuant to this Memorandum; provided, however, that Articles 8,10, 12, and 13 shall survive a termination of this Memorandum and shall remain effective and enforceable thereafter; provided further, however, that in the event this Memorandum is terminated by a Party pursuant to Article 16(b).

17.          Default/Breach

If either LVRE or Amtrak materially fails to perform or observe any of its material obligations under this Memorandum and fails to cure such default within ten (10) days after having been given written notice of such default by the other Party, or in the event of the insolvency, bankruptcy, receivership, liquidation, or dissolution of one Party, then such Patty shall be considered to be in default and the other Party may terminate this Memorandum, effective immediately upon notice to the defaulting Party.

18.          Disputes

If the Parties are unable to resolve a dispute relating to this Memorandum, the Parties first will submit the dispute to the Vice President Policy and Development (for Amtrak) and the legal representative (for LVRE). If the Parties are unable to resolve the dispute within 15 business days thereafter, the Parties will submit the dispute to the President and Chief Executive Officer (for Amtrak) and the President (for LVRE) to discuss resolution of the dispute.  If the Chief Executive

  

  

  

Officers are unable to resolve the dispute within IS business days thereafter, either Party may bring an action in the United States District Court for the District of Columbia, which court shall have exclusive jurisdiction to resolve any such dispute. Both Parties agree to submit to the jurisdiction of such court.

19.           No Waiver

The failure of either Party to enforce any of the provisions of this Memorandum shall not be construed to be a waiver of the right of such Party thereafter to enforce each and every provision of this Memorandum.

20.           Separate Property of Participants

By this Memorandum or the performance of the transactions contemplated hereby, neither LVRE nor Amtrak shall acquire any ownership or interest in any property whatsoever of the other Party.

21.           Notices

Any notices, requests, consents and other communications to be given by either Party to the other Party under this Memorandum shall be validly given if personally delivered to the other Parly or if sent by registered, prepaid mail or by facsimile:

If to LVRE, to:

Mike Barron

Chief Executive Officer

Las Vegas Railway Express

6650 Via Austi Parkway, Suite 170

Las Vegas, NV 89119-3550

702-628-9237

If to Amtrak, to:

Stephen Gardner

Vice President, Policy and Development

Amtrak

60 Massachusetts Ave, NE, Suite 4E-301

Washington, DC 20002

202-906-2162

  

  

  

22.           Entire Agreement

This Memorandum, sets forth all of the promises, covenants, agreements, conditions and undertakings between the Parties hereto with respect to the subject matter hereof, and supersede ail prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written.

23.           Governing Law

This Memorandum shall be governed by and interpreted in accordance with the laws of the District of Columbia, without regard to its choice of law rules.

24.           Counterparts

This Memorandum may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

[Signature page follows]

  

  

  

IN WITNESS WHEREOF, the Parties have caused this Memorandum to be executed on the day and year first above written.

 

	
Las Vegas Railway Express, Inc.

	
National Railroad Passenger Corporation

	  	 
	
Signature: /s/ Michael Barron

	  
	
 Name: Michael Barron

	  
	
 Title: CEO

	
Signature: /s/ Stephen Gardner

	
Date: Jan 31, 2011

	
Name: Stephen Gardner

	  	
Title: Vice President. Policy & Development

	  	
Date:   January 24,2011xtrn10k20110331ex10-14.htm

QPPENHEIMER,

 

 

May 3, 2011

PERSONAL AND CONFIDENTIAL

Las Vegas Railway Express, Inc.

6650 Via Austi Parkway, Suite 170

Las Vegas, NV 89119-3550

Attention: Mr. Michael A. Barron, Chairman and Chief Executive Officer

Dear Mike:

This letter will confirm the understanding and agreement (the "Agreement") between Oppenheimer & Co. Inc. ("Oppenheimer") and Las Vegas Railway Express, Inc. (together with its affiliates and subsidiaries, the "Company") as follows:

	
1.

	
Engagement:    The Company hereby engages Oppenheimer as its exclusive agent (except as otherwise contemplated herein) in the proposed private placement of one or more classes or series of securities of the Company, to a limited number of sophisticated investors (the "Investors").  Such securities (the "Securities") may take the form of debt, common stock or other equity-linked securities.   Such placement shall be referred to as the "Transaction."

Currently, the Company plans to sell up to $30 million of common stock. The selection of each of the Investors from a list of potential Investors and the number of Securities sold to each of such Investors shall be mutually agreed by the Company and Oppenheimer. The number and price of the Securities the Company shall ultimately agree to sell, pursuant to the Purchase Agreements (defined below), are entirely within its discretion.

	
2.

	
Oppenheimer's Role:   Oppenheimer hereby accepts the engagement described herein and, in that connection, agrees to:

	 	
(a)

	
assist  the  Company in preparing  a private placement memorandum  (the "Memorandum") describing the Company and the Securities;

	 	
(b)

	
review with the Company a list of the Investors to whom the Memorandum will be provided; and

  

  

  

	 	
(c)

	
assist and advise the Company with respect to the negotiation of the sale of the Securities to the Investors.

	
3.

	
Due Diligence:   It is understood that Oppenheimer's assistance in the Transaction will be subject to the satisfactory completion of such investigation and inquiry into the affairs of the Company as Oppenheimer deems appropriate under the circumstances (such investigation hereinafter to be referred to as "Due Diligence") and the approval of Oppenheimer's internal committees.    It is understood that (without limitation of the rights expressed in the Section hereof entitled 'Term; Exclusivity") Oppenheimer shall have the right in its sole discretion to terminate this Agreement if the outcome of the Due Diligence is not satisfactory to Oppenheimer or if approval of its committees is not obtained.

 

	
4.

	
Term; Exclusivity:   This engagement will commence on the date hereof and terminate on the earlier to occur of (i) 12 months from the date of this letter, (ii) the consummation of the Transaction, or (iii) the date on which a party receives written notice from the other party of termination of this engagement.    Upon the termination of this letter agreement, the Company shall pay to Oppenheimer all fees earned and reimburse Oppenheimer for all reasonable expenses incurred, in accordance with Paragraphs 8 and 9 hereof, respectively.   It is understood that, notwithstanding the termination of this agreement, sections 5, 9, 10, 11, 12, 13, 16 and 17 shall survive the termination hereof.

During Oppenheimer's engagement hereunder: (i) the Company will not, and will not permit its representatives to, other than in coordination with Oppenheimer, contact or solicit institutions, corporations or other entities as potential purchasers of the Securities and (ii) the Company will not pursue any financing transaction which would be in lieu of a Transaction. Furthermore, the Company agrees that during Oppenheimer's engagement hereunder, all inquiries, whether direct or indirect, from prospective Investors will be referred to Oppenheimer and will be deemed to have been contacted by Oppenheimer in connection with the Transaction. The Company may reject any potential Investor if, in its discretion, the Company believes that the inclusion of such Investor in the Company would be incompatible with the best interests of the Company. The Company shall not be obligated to sell the Securities or to accept any offer thereof, and the terms of such Securities and the final decision to issue the same shall be subject to the discretionary approval of the Company.

No offers or sales of any securities of the same or similar class as the Securities will be made by the Company or any affiliate during the six-month period after the completion of the offering of the Securities in each case except in compliance with the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), or an exemption therefrom.

	
5.

	
Right of First Refusal.    If, during this engagement or 12 months after termination thereof, the Company decides to pursue an offering of securities or other financing of the Company (in addition to the Transaction), then Oppenheimer will have a right of first refusal to act as lead underwriter, placement agent or arranger, as the case may be, for such financing.    Oppenheimer's participation in such offering or financing will be subject to the approval of the appropriate internal Oppenheimer committees and other conditions customary for such an undertaking.

  

  

  

	
6.

	
Reasonable Best Efforts:    It is understood that Oppenheimer's involvement in the Transaction is strictly on a reasonable best efforts basis and that the consummation of the Transaction will be subject to, among other things, market conditions.   The Company acknowledges and agrees that Oppenheimer's engagement hereunder is not an agreement by Oppenheimer or any of its affiliates to underwrite or purchase any securities, or otherwise provide any financing to the Company.

	
7.

	
Information: The Company shall furnish, or cause to be furnished, to Oppenheimer all information requested by Oppenheimer for the purpose of rendering services hereunder (all such information being the "Information"). In addition, the Company agrees to make available to Oppenheimer upon request from time to time the officers, directors, accountants, counsel and other advisors of the Company.  The Company recognizes and confirms that Oppenheimer (a) will use and rely on the Information, including the Memorandum, and on information available from generally recognized public sources in performing the services contemplated by this Agreement without having independently verified the same; (b) does not assume responsibility for the accuracy or completeness of the Memorandum or the Information and such other information; and (c) will not make an appraisal of any of the assets or liabilities of the Company.

The Company represents and warrants to Oppenheimer that: (i) all such Information, including the Memorandum, any documents attached as exhibits thereto and/or incorporated by reference therein, and any communications prepared in connection with the Transaction, are and will be true and accurate in all material respects and do not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and (ii) any projected financial information or other forward-looking information which the Company provides to Oppenheimer will be made by the Company in good faith, based on management's best estimates then available and based on facts and assumptions which the Company believes to be reasonable. Upon reasonable request, the Company will meet with Oppenheimer or its representatives to discuss all information relevant for disclosure in the Memorandum and will cooperate in any investigation undertaken by Oppenheimer thereof, including any document included or incorporated by reference therein.

8.           Company's Responsibilities., Representations and Warranties:

	 	
(a)

	
The sale of Securities to any Investor will be evidenced by a purchase agreement ("Purchase Agreement") between the Company and such Investor in a form reasonably satisfactory to the Company and Oppenheimer.  Prior to the signing of any Purchase Agreement, officers of the Company with responsibility for financial affairs will be available to answer inquiries from prospective Investors.

	 	
(b)

	
The selling price of the Securities to be issued and sold by the Company pursuant   to   the   Purchase   Agreements   will   be   specified   in   writing   by Oppenheimer on behalf of the Company to the prospective Investors prior to the execution of the Purchase Agreements, subject to the Company's approval.

	 	
(c)

	
The Company will perform the covenants set forth in the Purchase Agreements. The Purchase Agreements will require the Company to file, promptly after it has signed and delivered such Purchase Agreements, a registration statement with the Securities and Exchange Commission (the "SEC") for the resale from time to time of the Securities to be issued pursuant to such Purchase Agreements (the "Registration Statement"). The closing of the sale of the Securities contemplated by the Purchase Agreements (the "Closing") shall be held promptly following the satisfaction of the other conditions set forth in such Purchase Agreements.

  

  

  

	 	
(d)

	
The Company (i) represents and warrants that the representations and warranties contained in the Purchase Agreements will be true and correct in all respects on the date of such Purchase Agreements and on the Closing Date and (ii) agrees that  Oppenheimer   shall  be  entitled  to  rely  on  such  representations   and warranties, and the representation and warranties of the Investors, as if they were made directly to Oppenheimer.

	 	
(e)

	
The Company agrees that the Company shall have  sole responsibility for ensuring that the sale of Securities contemplated by this Agreement and the Purchase Agreements shall be exempt from the registration requirements of the Securities Act, and will otherwise comply with the securities laws of any applicable country or other jurisdiction. The Company shall not take any action or permit to be taken any action on its behalf that would cause such sale of Securities to fail to (i) qualify for such an exemption, or (ii) otherwise comply with such securities laws.     The Company hereby represents, warrants and covenants that the Company has not, and agrees that it will not, directly or indirectly, engage in any form of general solicitation, general advertising or directed selling efforts in connection with the Transaction.

(f)           [Reserved]

	 	
(g)

	
At the Closing, the Company will cause its counsel to address and deliver to the Investors and Oppenheimer an opinion satisfactory to Oppenheimer and the Investors dated as of the Closing with respect to such matters as Oppenheimer and its counsel and the Investors shall reasonably request, including a legal opinion that the offering and sale of the Securities are not required to be registered under the Securities Act as well as a 1 Ob-5 statement (for the benefit of Oppenheimer exclusively) in form and substance satisfactory to Oppenheimer. hi rendering such opinion and statement, such counsel may rely upon the representations and warranties of the purchasers contained in the Purchase Agreements and upon certificates from officers of the Company as to factual matters.

(h)          [Reserved]

	
  

	(i)	
The Company acknowledges that the Purchase Agreements may require the Company's counsel to deliver one or more additional opinions to the Investors. The Company agrees that Oppenheimer shall be entitled to rely on any such opinions delivered to the Investors in connection with the Transaction.

	
  

	(j)	
For a period of ninety (90) days from the effective date of the Registration Statement, the Company, as well as any member of executive management or the board of directors, will not, without the prior written consent of Oppenheimer, sell, contract to sell or otherwise dispose of or issue any securities of the Company,   except  pursuant   to  previously   issued  options,   any  agreements providing for anti-dilution or other stock purchase or share issuance rights in existence on the date hereof, or any employee benefit or similar plan of the Company in existence on the date hereof.

	
  

	(k) 	
The Company agrees it will not consummate the sale of the Securities unless it delivers or causes to be delivered the terms described in paragraphs (f) through (j) above to Oppenheimer and/or the Investors (as applicable) at the Closing.

  

  

  

	
9.

	
Fees:  As compensation for the services to be rendered by Oppenheimer hereunder, the Company will pay Oppenheimer a retainer in the amount of $25,000 (the "Retainer") payable upon execution of this Agreement.   The Retainer to the extent paid shall be credited against any Transaction Fee (as herein after defined) paid to Oppenheimer.  In addition, the Company agrees to pay Oppenheimer at the closing, from the proceeds of the sale of the Securities, a transaction fee (the "Transaction Fee") equal to 7.0% of the gross proceeds raised from the sale of the Securities.  It is understood that the Company may, with the prior approval of Oppenheimer, engage one additional placement agent in connection with the Transaction (the "Additional Agent'). The Company may pay up to 25% of the Transaction Fee described above to such co-placement agent.

Further, the Company will pay Oppenheimer the Transaction Fee, if within 12 months from the termination of this Agreement, the Company reaches an agreement in principle for the sale of the Securities to any Investors which Oppenheimer previously solicited or sought to solicit on its behalf, or which contacted the Company in connection with a Transaction. Upon the Company's request, at the termination of this Agreement, Oppenheimer will supply the Company with a list of Investors which Oppenheimer has solicited or sought to solicit on its behalf.

In addition, Oppenheimer shall have the right to purchase, for $.01 each, warrants to purchase a number of Securities equal to 7% of the Securities sold and placed with Investors in the Transaction. The warrants will have a term of seven years, will be exercisable after one year at an exercise price equal to the price per share price at which the Investors invested in connection with the Transaction and will be transferable to Oppenheimer's affiliates. Oppenheimer shall also be granted certain registration rights with respect to the common stock underlying such warrants. These rights will include an unlimited number of piggyback registration rights. In addition, Oppenheimer shall also be granted a "cashless exercise" right with respect to the warrants. The warrants shall be issued pursuant to a definitive warrant agreement containing such provisions, as well as other customary provisions, including anti-dilution provisions.

It is expressly understood and acknowledged that Oppenheimer and the Additional Agent shall not be deemed for any purpose to be acting as an agent, joint venturer or partner of one another and that Oppenheimer assumes no responsibility, express or implied, for any actions or omissions of, or the performance of services by, the Additional Agent in connection with the Transaction or otherwise. The obligations of Oppenheimer and the Additional Agent shall be several (and not joint and several) in all respects.

	
10.

	
Expense Reimbursement:   The Company agrees to reimburse Oppenheimer for all of its reasonable out-of-pocket expenses in connection with the performance of its activities under the terms of this Agreement. Reasonable out-of-pocket expenses include, but are not limited to, costs such as printing, telephone, telex, courier service, direct computer expenses, accommodations and travel.   The Company will reimburse Oppenheimer for fees and expenses of legal counsel employed by and for Oppenheimer, if any, in connection with this Agreement. All such fees, expenses and costs will be billed monthly and are payable when invoiced.

  

  

  

To the extent officers and employees of Oppenheimer assist in, or provide testimony in trial or deposition for any action, suit or proceeding relating to a Transaction or our engagement hereunder, the Company will pay Oppenheimer a per diem charge for the services of such officers in an amount to be mutually agreed upon by the Company and Oppenheimer prior to such assistance.

	
11.

	
Indemnity: In addition to the fees and reimbursement of expenses provided for above, the parties agree to the indemnification and contribution provisions set forth as Annex A hereto, which are incorporated herein by reference as if fully set forth below.

	
12.

	
Governing Laws: The validity, interpretation and enforcement of this letter agreement, including Annex A hereto, matters arising out of or related to this letter agreement (or Annex A) or its making, performance or breach, and/or related matters will be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be fully performed therein.

The Company irrevocably submits to the exclusive jurisdiction of any court of the State of New York located in the City and County of New York or in the United States District Court for the Southern District of New York for the purpose of any suit, action or other proceeding concerning the validity, interpretation and enforcement of this letter agreement, including Annex A hereto, matters arising out of or related to this letter agreement (or Annex A) or its making, performance or breach, and/or related matters.

Each of the Company and Oppenheimer hereby waives any right it may have to a trial by jury in respect of any claim brought by or on behalf of either party based upon, arising out of or in connection with this letter agreement, our engagement hereunder or the transactions contemplated hereby.

	
13.

	
Confidentiality: Except as required by law, this Agreement and the services and advice

	
  

	
to be provided by Oppenheimer hereunder, shall not be disclosed to third parties without

	
  

	
Oppenheimer's prior written permission.

Oppenheimer shall be permitted to advertise the services it provided in connection with the private placement subsequent to the consummation of the private placement. Such expense shall not be reimbursable under paragraph 9 hereof.

	
14.

	
No Brokers: The Company represents and warrants to Oppenheimer that there are no brokers, representatives or other persons which have an interest in compensation due to Oppenheimer from any transaction contemplated herein or which would otherwise be due any fee, commission or remuneration upon consummation of any Transaction.

 

	
15.

	
Authorization: The Company and Oppenheimer represent and warrant that each has all requisite power and authority to enter into and carry out the terms and provisions of this Agreement and the execution, delivery and performance of this Agreement does not breach or conflict with any agreement, document or instrument to which it is a party or bound.

  

  

  

	
16.

	
Independent Contractor: The Company acknowledges that in performing its services, Oppenheimer is acting as an independent contractor, and not as a fiduciary, agent or otherwise, of the Company or any other person.   The Company acknowledges that in performing its services hereunder, Oppenheimer shall act solely pursuant to a contractual relationship on an arm's length basis (including in connection with determining the terms of any Transaction).   Any review by Oppenheimer of the Company, the transactions contemplated hereby or other matters relating to such transactions has been and shall be performed solely for the benefit of Oppenheimer and shall not be on behalf of the Company.    The Company agrees that it shall not claim that Oppenheimer owes a fiduciary duty to the Company in connection with such transaction or the process leading thereto.   No one other than the Company is authorized to rely upon the engagement of Oppenheimer hereunder or any statements, advice, opinions or conduct by Oppenheimer. The Company further acknowledges that Oppenheimer may perform certain of the services described herein through one or more of its affiliates and any such affiliates shall be entitled to the benefit of this Agreement.

	
17.

	
Conflicts. The Company acknowledges that Oppenheimer and its affiliates may have and may continue to have investment banking and other relationships with parties other than the Company pursuant to which Oppenheimer may acquire information of interest to the Company.  Oppenheimer shall have no obligation to disclose such information to the  Company  or  to  use   such  information  in  connection  with  any  contemplated transaction.

	
18.

	
Anti-Money Laundering:   To help the United States government fight the funding of terrorism and money laundering activities, the federal law of the United States requires all financial institutions to obtain, verify and record information that identifies each person with whom they do business. This means we must ask you for certain identifying information, including a government-issued identification number (e.g., a U.S. taxpayer identification number) and such other information or documents that we consider appropriate  to  verify your  identity,  such  as  certified  articles  of incorporation,  a government-issued business license, a partnership agreement or a trust instrument.

	
19.

	
Miscellaneous:    This Agreement constitutes the entire understanding and agreement between the Company and Oppenheimer with respect to the subject matter hereof and supersedes all prior understanding or agreements between the parties with respect thereto, whether oral or written, express or implied.  Any amendments or modifications must  be  executed  in  writing  by both  parties.   It  is  understood  and  agreed  that Oppenheimer's services hereunder will not include providing any tax, accounting, legal or regulatory advice or developing any tax strategies for the Company. This Agreement and all rights, liabilities and obligations hereunder shall be binding upon and inure to the benefit of each party's successors but may not be assigned without the prior written approval of the other party.    This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall,  together,  constitute  only one  instrument.     The  descriptive headings  of the Paragraphs of this Agreement are inserted for convenience only, do not constitute a part of this Agreement and shall not affect in anyway the meaning or interpretation of this Agreement.

  

  

  

Oppenheimer is delighted to accept this engagement and looks forward to working with you. Please confirm that the foregoing correctly sets forth our agreement by signing the enclosed duplicate of this letter in the space provided and returning it, whereupon this letter shall constitute a binding agreement as of the date first above written.

OPPENHEIMER & CO. INC.

 

By: /s/ James Irvine

Name: James Irvine

Title: Managing Director

 

LAS VEGAS RAILWAY EXPRESS, INC

By: /s/ Michael A. Barron

Name: Michael A. Barron

Title: Chairman and Chief Executive Officer

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