EXHIBIT 10.21
OPERATING AGREEMENT
by and between
FIRST AMERICAN RAILWAYS, INC.
AND
FUN TRAIN, INC.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
and
FLORIDA DEPARTMENT OF TRANSPORTATION
0000 X. Xxxxxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, XX 00000
TABLE OF CONTENTS
Page
1. FFT/SCET CONSIST.......................................................2
2. EQUIPMENT SPECIFICATIONS...............................................2
3. SUBSTITUTION OF EQUIPMENT..............................................2
4. UNAVAILABILITY OF EQUIPMENT............................................2
5. ACCIDENTS OR EMERGENCIES...............................................2
6. FDOT SERVICES..........................................................3
7. DISPATCHING AND CONTROL................................................3
8. LABOR PROTECTION.......................................................4
9. EQUIPMENT..............................................................4
10. EQUIPMENT INSPECTION, MAINTENANCE AND REPAIR...........................4
11. FAR EMPLOYEES..........................................................4
12. RESERVATIONS AND TICKET SALES..........................................5
13. TAXES, PENALTIES, FINES AND CHARGES....................................5
14. TERMS OF COMPENSATION..................................................5
15. INDEMNIFICATION........................................................6
16. WAIVER.................................................................6
17. INSURANCE..............................................................7
18. CERTIFICATION BY FAR...................................................7
19. TERM OF AGREEMENT......................................................8
20. COMPLIANCE WITH LAWS, REGULATIONS AND RULES............................8
21. RELATIONSHIP OF PARTIES................................................9
22. FORCE MAJEURE..........................................................9
23. WAIVER AND MODIFICATION................................................9
24. ASSIGNMENT RESTRICTED..................................................9
25. NOTICES................................................................9
26. GOVERNING LAW.........................................................10
27. SEVERABILITY..........................................................10
28. PREREQUISITE CONSENT..................................................10
29. FURTHER AGREEMENTS....................................................10
EXHIBITS
Exhibit No. 1 Proposed Schedule for the Florida Fun Train
Exhibit No. 2 Proposed Schedule for the Space Center Excursion Train
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AGREEMENT
THIS AGREEMENT dated Jan 6th, 1997, is entered into between FIRST
AMERICAN RAILWAYS, INC., a corporation incorporated in the State of Nevada, and
FUN TRAINS, INC., a corporation incorporated in the State of Florida
(hereinafter referred to collectively as "FAR"),with offices at 0000 Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxx, XX 00000 and the STATE OF FLORIDA DEPARTMENT OF
TRANSPORTATION (hereinafter referred to as "FDOT"), an agency of the State of
Florida which owns the South Florida Rail Corridor, with offices at 0000 X.
Xxxxxxxxxx Xxxxxxxxx, Xxxx Xxxxxxxxxx, XX 00000.
FAR is desirous of obtaining the right to provide entertainment type
rail passenger service over FDOT's rail lines and FAR is willing to compensate
FDOT for such rights on a mutually agreed upon basis.
FAR desires to operate rail passenger service over FDOT rail lines
including sidings, passing track, and spur lines from the Mile Marker 1034 in
Hialeah, FL to the northern most point of the South Florida Rail Corridor
located approximately at Mile Marker 965 in West Palm Beach, FL (hereinafter
referred to as the "FLORIDA FUN" and "SPACE COAST EXCURSION TRAINS"). For
purposes of this Agreement, the Service operated by FAR will be referred to
collectively as "FFT/SCET".
Subject to the terms and conditions set forth herein, FDOT grants to FAR
trackage rights on and over and continued access to and use of FDOT tracks
required to provide FFT/SCET service from Mile Marker 1034 to the northern most
point of the South Florida Rail Corridor located approximately at Mile Marker
965 (hereinafter referred to as "Route"). It is the intent of the parties that
FAR shall have access to and use of the Hialeah Yard and the Broward Boulevard
Station, or other station(s) agreed upon by the parties subject to the timely
completion of the provisions of Paragraph 28, below. FAR, its agents, servants,
employees, consultants and contractors, shall also have the right to enter upon
the Route and operate equipment in accordance with the terms of this Agreement,
and subject to the provisions of Section 11, below.
GENERAL
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter contained, the parties do hereby mutually
agree as follows:
1. FFT/SCET CONSIST: FAR proposes to operate the FFT/SCET with the following
equipment
(hereinafter referred to as "Consist"):
a. Two leased diesel locomotives, with one unit positioned on each
end of the train,
b. Five full length dome passenger cars each with an 80-passenger
capacity and food service
facilities,
c. one bilevel adult cocktail lounge car with live entertainment,
d. one bilevel lounge car with entertainment,
e. one bilevel space station video game car with virtual reality
games,
f. one bilevel education-oriented video game car with a gift shop,
and
g. one power and baggage car to provide electricity needed for
operation of the train's facilities and storage space for passenger baggage.
2. EQUIPMENT SPECIFICATIONS: All locomotives and equipment utilized by FAR in
connection with its operation of the FFT/SCET shall be designed and constructed
in conformity with standards prescribed by the Federal Railroad Administration
(hereinafter referred to as "FRA") and shall meet all requirements of FDOT and
CSX for operation over the rail lines. FAR will equip all of its locomotives in
service over FDOT's trackage with Automatic Train Control devices.
3. SUBSTITUTION OF EQUIPMENT: FAR reserves the right to substitute such other
combination of locomotives, passenger and service cars as it deems necessary for
the efficient operation of its business, provided the equipment meets the
requirements of Section 2 of this Agreement and does not exceed the approved
FFT/SCET Consist length.
4. UNAVAILABILITY OF EQUIPMENT: In the event locomotives or equipment utilized
by FAR is temporarily out of service or unavailable for any reason, FAR may
operate FFT/SCET without such equipment for such period of time as it is
unavailable for service. However, FAR shall always operate with two locomotives
unless it obtains prior FDOT approval.
5. ACCIDENTS OR EMERGENCIES: If an accident or emergency occurs while the
FFT/SCET Train is in transit over the Route, FDOT or its designee will
immediately notify FAR of the situation who will make its own arrangements for
FFT/SCET to continue to its final destination in an expeditious manner to allow
the
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use of the Route by other traffic. In the event of a breakdown or accident
involving an FFT/SCET train, FAR will make whatever arrangements are necessary
to move and/or remove its train to allow the use of the Route by other traffic.
SERVICES TO BE PROVIDED BY FDOT
6. FDOT SERVICES: FDOT or designee shall undertake reasonable actions reasonably
necessary to insure the on time operation of the FFT/SCET Consist over the Route
consistent with a schedule agreed to by FAR and FDOT and in conformity with the
following terms:
a. TRIPS: A "Trip" in the case of a FAR/FFT Train over FDOT's lines
shall be a complete transit from approximately Mile Marker 1012.2 at Broward
Station, approximately to Mile Marker 965 in the West Palm Beach, FL area
regardless of direction. Incidental movements relating to a particular trip to
maintain facilities or storage shall not be separately charged. The number of
FFT/SCET Trips shall be in accordance with the schedule agreed upon between FAR
and FDOT as set forth in Exhibits No. 1 and 2 to this Agreement. FAR may, by
providing FDOT thirty (30) days' advance written notice, request additional
trains be added. FDOT, has the sole discretion to consent to such additional
trains.
b. SCHEDULES: A proposed schedule for the FLORIDA FUN TRAIN is
attached hereto as Exhibit No. 1 and the proposed schedule for the SPACE CENTER
EXCURSION TRAIN is attached hereto as Exhibit No. 2. Requests for a change in
FAR rail passenger service over the Route shall take into account Tri-County
Commuter Rail Authority (hereinafter referred to as "TCRA") commuter service,
National Railroad Passenger Corporation (hereinafter referred to as "Amtrak")
intercity passenger service and CSX freight service as well as high speed rail
operations. The operation of the FFT/SCET Consist over the Route shall be
subordinate to the existing users. FDOT has the sole discretion to approve
schedules and changes.
7. DISPATCHING AND CONTROL: The following terms and conditions will apply with
regard to the dispatching and control of FFT/SCET Trains on the Route: the
movement of FFT/SCET Consists over the Route shall be under the direction and
control of CSX's dispatching headquarters in Jacksonville, FL. or FDOT's
designee.
8. LABOR PROTECTION: FAR shall be responsible for labor protection payments or
benefits in the event FDOT becomes obligated for such payments as a direct
result of FAR's operations over FDOT rail lines.
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TO BE PROVIDED BY FAR
9. EQUIPMENT: It shall be the responsibility of FAR to provide the equipment
specified in Section 1 of this Agreement at it its own expense in connection
with its operation of FFT/SCET service over the Route.
10. EQUIPMENT INSPECTION, MAINTENANCE AND REPAIR: FAR shall be responsible for
all mechanical repairs that may be required for safe and timely operations.
11. FAR EMPLOYEES: Except as otherwise provided herein, FAR or its designated
representatives shall provide sufficient employees to perform the following
duties required for the efficient operation of FFT/SCET Trains over the Route:
a. locomotive engineers;
b. conductors;
c. locomotive, inspection, repair and maintenance;
d. passenger coach repair, inspection and maintenance;
e. on-board mechanical repairs;
f. customer service;
g. ticketing and reservations;
h. baggage handling;
i. security.
The employees who are designated by FAR to perform the services
identified in this Section shall be employed under the control of by FAR,
whether employed directly by FAR or provided by an independent contractor. FDOT
shall be notified by FAR of all consultants or contractors who shall have access
to the Route. All consultants or contractors having access to the Route shall
have insurance coverages acceptable to FDOT. FAR employees, consultants or
contractors will be required to meet all FDOT, FRA, CSX and regulatory agency
requirements as to certification and qualifications, where applicable, before
being allowed to perform service. FDOT shall have the right for cause to direct
or to remove any FAR employees, consultants or contractors from the Route.
12. RESERVATIONS AND TICKET SALES: All reservations and sales of tickets for
passage on FFT/SCET Trains shall be entirely FAR's responsibility.
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13. TAXES, PENALTIES, FINES AND CHARGES: FAR shall during the term of this
Agreement be responsible for the prompt payment of all taxes, permit fees,
assessments, penalties or fines and similar charges assessed or levied by any
government or governmental agency upon any interest in equipment or facilities
owned or leased by FAR and used in connection with operating the FFT/SCET or
incurred as a result of FAR activities on or use of the Route. This shall not
include taxes, assessments and similar charges assessed or levied by any
governmental agency on the tracks, bridges, buildings or appurtenances
comprising the Route which are owned or leased by FDOT, nor shall this include
any penalties, fines or permit fees for which FDOT is responsible.
14. TERMS OF COMPENSATION: Pursuant to the terms of this Agreement, and in
consideration for permitting FAR's operation of FFT/SCET on the rail lines
comprising the Route, FAR shall compensate FDOT at the rate of $500.00 per Trip
for each one-way FFT/SCET trip generated by FFT/SCET over the Route (hereinafter
referred to as the "Trip Rate"). The Trip Rate shall be increased by $50.00 per
trip for each year this contract is in effect. For the second year of operation,
the cost will increase to $550.00 per one way trip. Then in the third, forth and
fifth years, the trip rate shall increase to $600.00, $650.00 and $700.00,
respectively.
The parties shall negotiate a separate agreement specifying the terms,
conditions and compensation relative to FAR's use of Broward Station and Hialeah
Yard.
In the event FAR secures authorization from FDOT to operate special,
nonscheduled promotional trains in addition to those regularly-scheduled trains
reflected in Exhibit Nos. 1 and 2, as amended from time to time, FAR shall
compensate FDOT at the rate of $4.00 per train mile traveled over the Route. FAR
shall be limited to three (3) additional nonscheduled promotional trains prior
to commencement of operations pursuant to this Agreement, although the parties
may agree to operate more nonscheduled promotional trains after commencement of
operations.
15. INDEMNIFICATION: FAR agrees to assume all risks of, and to indemnify FDOT,
CSX and Amtrak against and save them harmless from all loss, cost, expense,
reasonable attorneys' fees, claims, suits and judgements whatsoever incurred,
made, instituted or sought to be enforced by any party or parties other than FAR
incident to the operation of FFT/SCET service pursuant hereto, including, but
not limited to,
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environmental claims, injury to, or death of, any person or persons, including
employees of FAR and of FDOT, CSX or Amtrak, or any loss of, or damage to,
property, including property of FDOT, CSX and Amtrak caused by, or in any way
connected with, the operation of FAR's equipment or the performance of FAR's
services, regardless of whether such injury, death, loss or damage results from
any cause whatsoever or whether such injury, death, loss or damage results from
the negligent acts or omissions of FDOT, CSX or Amtrak, their agents, servants
or employees.
16. WAIVER: FAR waives any and all claims that it may have against FDOT for any
loss, cost, expense, attorneys' fees, claims, suits or judgements whatsoever
incurred by it incident to the operation of FFT/SCET service pursuant hereto,
including, but not limited to, any such claims relating to injury to, or death
of, any person or persons, including employees of FAR and FDOT, or any loss of,
or damage to, property, including property of FAR, caused by, or in any way
connected with, the operation of FAR's equipment or the performance of FAR's
services, regardless of whether such injury, death, loss or damage results from
any cause whatsoever or whether such injury, death, loss or damage results from
the negligent acts or omissions of FDOT, its agents, servants or employees. It
is understood and agreed, however, that by the foregoing provisions of this
Section FAR neither waives any claim or claims that it may have, whether
embodied in an arbitrators' award otherwise, based upon its right to have FDOT
perform the terms and conditions of this Agreement on their part to be
performed, nor does it waive any claim or claims that it may have for any
conversion or other misappropriation by FDOT, whether temporary or otherwise, of
any FAR Consist, locomotive or passenger coach.
17. INSURANCE: FAR shall procure and maintain at its expense no less than $125
Million in comprehensive general liability insurance coverage to protect FDOT
and Tri-Rail under any and all conditions relating to its use of the Route and
Corridor facilities. Said insurance coverage shall contain a maximum deductible
not in excess of $100,000.00, unless modified by agreement of the parties. The
terms and form of the policy, the carrier providing the coverage, the amounts of
such coverage, and proof of the continuous availability of cash or security to
cover the insurance policy deductible shall be subject to the prior approval of
FDOT. FAR shall also procure and maintain, at its expense, insurance coverage
for CSX and Amtrak in
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form and substance satisfactory to CSX and Amtrak. FAR shall afford the same
limits of coverage afforded to others relating to its use of the route and
Corridor Facilities.
A Certificate of Insurance specifying such coverage and proof of the
continuous availability of cash or security to cover the insurance policy
deductible will be furnished to FDOT and kept in force at the cost and expense
of FAR until such time as this Agreement is terminated, or FAR shall have been
specifically released therefrom by a written instrument signed and sealed by an
authorized officer of FDOT.
The insurance coverage shall provide that the insurance company will
give FDOT and FAR 30 days' advance written notice of any change in coverage
under said liability policy together with certificate of such revised coverage,
which shall be subject to FDOT's approval. The insurance shall also provide that
the insurance company will give FDOT and FAR 30 days' written notice in advance
of cancellation of such policy. All of these notices shall be stated on the
Certificate of Insurance. FAR trains will not be permitted to operate on the
Corridor should the insurance provided for in this Agreement lapse.
18. CERTIFICATION BY FAR: Each payment by FAR to FDOT shall be accompanied by a
statement certified by and officer of FAR showing the calculation of Trip Rate
Charges and other charges covered by the statement. FDOT shall have the right
for a period of three years commencing with the date on which it is provided a
certified statement to inspect FAR's books and records pertaining to such
certified statements at its own expense upon reasonable notice to FAR. Such
records shall be subject to inspection at FAR's headquarters during normal
business hours, unless otherwise agreed to by the parties.
OTHER
19. TERM OF AGREEMENT: This Agreement shall commence on the first day above
written and shall continue, unless terminated sooner, until the end of the 5th
year from the date FAR commences scheduled FFT/SCET service on the Route. FAR
shall commence operations within 2 years from the date of this Agreement. At the
conclusion of said 5-year term, FAR shall have the right to request an extension
of this Agreement for an additional 5-year period which may be granted in FDOT's
sole discretion upon 90 days' advance written notice to FDOT of FAR's intent to
do so. This Agreement shall also terminate, unless the parties agree otherwise;
a. if operation of the FFT does not commence within 2 years of the
date of this Agreement;
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b. if FFT and SCET operations are suspended or cease to operate for
more than ninety (90) days;
c. If there are 10 independent suspensions of FFT and SCET
operations within the term of the Agreement;
d. if, subject to Paragraph 22, below, FFT and SCET operations are
suspended for more than 6 consecutive months;
e. if FDOT determines that FAR's FFT or SCET operations are in
material violation of the terms of this Agreement, and FAR fails to cure any
violation within forty-five (45) days of receiving written notice of the
violation; or
f. if the Route is deemed necessary for high speed rail and FDOT
determines within its sole discretion that the Route cannot be shared with FAR,
and FDOT provides 3-year written notice to FAR of the need for the Route.
With regard to any suspensions in operations, FAR shall inform FDOT of
the reasons for its suspension of Service and when operations are expected to
resume.
20. COMPLIANCE WITH LAWS, REGULATIONS AND RULES: FAR and FDOT shall comply with
all applicable laws and state and federal regulations, CSX Operating Rules,
general orders and timetables in the dispatching, operation, maintenance,
inspection and testing related to the operation of FFT/SCET Trains over the
Route. Where compliance with the foregoing requires FAR to obtain any regulatory
approval for the operation of FFT/SCET or the changing of any equipment,
fixture, or appliance on any FAR equipment, thereby necessitating the
expenditure of funds, such compliance shall be accomplished at FAR's expense.
20. RELATIONSHIP OF PARTIES: Under the terms of this Agreement, the relationship
of FDOT to FAR is that of a licensor. This Agreement shall not be deemed to
create a joint venture or partnership between FAR and FDOT.
21. FORCE MAJEURE: Each party shall be excused from the performance of any of
its obligations hereunder to the other party where such nonperformance is
occasioned by any event beyond its control, which shall include without
limitations, any order, rule or regulations of any federal, state, or local
governmental body, agency, or instrumentality, work stoppage, accident, natural
disaster, or civil disorder,
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provided the party so excused hereunder shall use all reasonable efforts to
minimize its nonperformance and to overcome, remedy, cure, or remove such event
as soon as reasonably practicable. Nonperformance shall be excused only to the
extent that, and for so long as, in any given case the force or circumstance
making performance impossible shall exist. However, in no event shall this
Agreement be extended beyond its Term as defined in Paragraph 19, above.
22. WAIVER AND MODIFICATION: The waiver by any party hereto of a breach of any
provision hereof shall not be construed to operate as a waiver of any subsequent
breach of the same, or any other provision of this Agreement. This instrument
contains the entire agreement of the parties with respect to the subject matter
hereof and said parties have not made any agreements relating to such subject
matter which are not set forth herein. No modification of this Agreement shall
be effective unless in writing and signed by the party against which it is
sought to be enforced.
23. ASSIGNMENT RESTRICTED: Neither this Agreement, nor any right thereunder, may
be assigned by FAR without the written consent of FDOT. FDOT may, in its sole
discretion, withhold its consent to assignment of this Agreement.
24. NOTICES: All notices, demands, requests, and other communications under this
Agreement shall be deemed properly served if delivered by hand (personally, by
courier service such as Federal Express, or by other messenger) to the party to
whose attention it is directed, or same shall be deemed to have been properly
served and delivered when deposited in the United States Mails, registered or
certified mail, postage prepaid, return receipt requested, addressed as set
forth below:
If intended for FAR: First American Railways,Inc. and
Fun Train, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
If intended for FDOT: District Secretary
Florida Department of Transportation
0000 X. Xxxxxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, XX 00000
Copy to: Florida Department of Transportation
Manager, South Florida Rail Corridor
0000 X. Xxxxxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, XX 00000
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Each party may designate by notice in writing substitute parties and/or
a new address to which any notice, demand request or communication shall
thereafter be served. Each party shall designate by written notice its
representative for operations matters under this Agreement. With respect to
discussions with such representative on matters of operations under this
Agreement, each party shall be entitled to rely on the responses and decisions
made by the other party's representative so designated.
25. GOVERNING LAW: This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
26. SEVERABILITY: Each provision of this Agreement shall be interpreted so as to
be effective and valid under applicable law to the fullest extent possible. If
any provision contained herein shall for any reason be held invalid, illegal or
unenforceable in any respect, then, in order to effect the purposes of this
Agreement, it shall be construed as if such provision had never been contained
herein.
27. PREREQUISITE CONSENT: As a condition precedent to the commencement of
FFT/SCET service under this Agreement, FAR shall provide FDOT with copies of
TCRA's, CSX's and Amtrak's written consent to FAR's planned operation of
passenger trains over the Route.
28. FURTHER AGREEMENTS: FDOT and FAR shall use their best efforts to
expeditiously enter into such other and further agreements with terms and
conditions agreeable to both parties as may be necessary to implement this
Agreement, including, but not limited to, agreements concerning the use of
stations along the Route, the Hialeah Yard and parking.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed it
as of the day and year first above written.
FLORIDA DEPARTMENT OF FIRST AMERICAN RAILWAYS, INC.
TRANSPORTATION
By: /s/ XXXX XXXXXXX By: /s/ XXXXXX X. XXXXXXX
------------------------ --------------------------
Printed Name: Xxxx Xxxxxxx Printed Name: Xxxxxx X. Xxxxxxx
Title: District Secretary Title: Vice President Operations
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FUN TRAIN, INC,
By: /s/ XXXXXXX X. XXXXXXXX
-----------------------------
Printed Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
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EXHIBIT NO. 1
PROPOSED SCHEDULE
FOR
FLORIDA FUN TRAIN
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Monday through Thursday:
Depart - Miami/Fort Lauderdale
Arrive - Orlando Int'l. Airport
Depart - Orlando Int'l. Airport
Arrive - Miami/Fort Lauderdale
FRIDAY:
Depart - Miami/Fort Lauderdale
Arrive - Orlando Int'l. Airport
Depart - Orlando Int'l Airport
Arrive - Miami/Fort Lauderdale
Depart - Miami/Fort Lauderdale
Arrive - Orlando Int'l. Airport
SATURDAY:
Depart - Orlando Int'l. Airport
Arrive - Miami/Fort Lauderdale
Depart - Miami/Fort Lauderdale
Arrive - Orlando Int'l. Airport
SUNDAY:
Depart - Orlando Int'l. Airport
Arrive - Miami/Fort Lauderdale
Depart - Miami/Fort Lauderdale
Arrive - Orlando Int'. Airport
Depart - Orlando Int'l. Airport
Arrive - Miami/Fort Lauderdale
EXHIBIT NO. 2
PROPOSED SCHEDULE
FOR
SPACE COAST EXCURSION TRAIN
-------------------------------------------------------------------------------
DAILY SERVICE:
Depart - Miami/Fort Lauderdale
Arrive - Space Coast Center
Depart - Space Coast Center
Arrive - Miami/Fort Lauderdale
2
