EXHIBIT 10.13
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of the 12th day of March 1999, between
Rite Aid Corporation, a Delaware corporation ("Licensor"), and Cardivan
Company, a Nevada corporation ("Licensee"). Licensee and Licensor are
collectively referred to as "the Parties".
1. Purpose. This Agreement sets forth the terms and conditions under
which the Licensee shall have the exclusive right to operate certain gaming
devices (the "Devices") (i) within each of the stores operated by Licensor in
the State of Nevada which are designated on Exhibit "A" attached hereto and
incorporated herein by reference (the "Existing Locations"), and (ii) in any
additional stores other than stores deemed replacement stores under the
License Agreement between Rite Aid Corporation and Corral Coin, Inc. dated
March 12, 1999, opened or acquired by Licensor or an affiliate of Licensor
for business to the public in the state of Nevada during the term of this
Agreement which becomes subject to this Agreement pursuant to Section 4(c)
hereof (the "New Locations", together with the Existing Locations, the
"Licensed Locations"). Notwithstanding the foregoing, an off-site
replacement of a Licensed Location which constitutes a "replacement store" in
accordance with Licensor's internal policies, which opens concurrently with
the closing of the Licensed Location it is replacing, and which is located
not more than two miles from the Licensed Location it is replacing, shall not
constitute a New Location for purposes of this Agreement.
2. License. Licensor hereby grants to Licensee the use of such amount
of space (the "Gaming Space") as is reasonably required to set up the number
of Devices currently permitted at such Licensed Location. The Gaming Space
shall be located as close to the entrance and checkstand of the Licensed
Location as is reasonably practicable with the exact location and square
footage of the Gaming Space to be determined by mutual agreement of the
parties. Upon agreement of the Gaming Space, Licensor will not change
location of, or reduce the Gaming Space without Licensee's written consent.
Licensee is also hereby granted an exclusive right to operate up to the
maximum number of Devices currently allowed by the State of Nevada in each of
the Licensed Locations. However, Licensee may not operate fewer than RCT
Devices at any Licensed Location in Xxxxx County or the city limits of either
Reno or Xxxxxx City.
3. Term. The term of the license for each Licensed Location shall
begin on RCT and shall expire at midnight on RCT. Licensee shall have first
right of refusal as against any other licensed operator to operate the
Devices on the premises of the Licensed Locations upon the expiration of this
Agreement. On or before the expiration of this Agreement, and upon
Licensor's disclosure to Licensee of the terms of another licensed operator's
firm offer, Licensee shall have thirty days to notify Licensor of its
intention to match such offer.
4. Fees.
a. During the initial term of this License Agreement, Licensee
agrees to pay Licensor the following amount per Licensed Location per month:
Licensed Location Monthly Fee Per Licensed Location
___________________ ___________________________________
RCT RCT RCT RCT
Rite Aid #6114 RCT RCT RCT RCT (1)
Rite Aid #6115 RCT RCT RCT RCT
Rite Aid #6116 RCT RCT RCT RCT (1)
Rite Aid #6121 RCT RCT RCT RCT
Rite Aid #6217 RCT RCT RCT (1) RCT (1)
(1) Subject to RCT or more Licensed Locations in operation, including the
Licensed Locations in operation under the License Agreement between Rite Aid
Corporation and Corral Coin, Inc. dated March 12, 1999. If less than RCT
Licensed Locations in operation, monthly fee is the amount listed above for
the period RCT through RCT.
b. During the term of this Agreement, Licensee agrees to pay Licensor
the following amount per month for New Locations.
Location (2) Period Monthly Fee Per New Location
_________________ ______ ____________________________
Xxxxx County RCT RCT
RCT RCT
RCT RCT (1)
RCT RCT (1)
Reno/Xxxxxx City RCT RCT
(city limits) RCT RCT
RCT RCT
RCT RCT
(1) Subject to RCT or more Licensed Locations in operation, including the
Licensed Locations in operation under the License Agreement between Rite Aid
Corporation and Corral Coin, Inc. dated March 12, 1999. If less than RCT
locations in operation, monthly fee for New Locations is the amount listed
above for the period RCT through RCT.
(2) For New Locations outside of Xxxxx County or the city limits of either
Reno or Xxxxxx City, the monthly fee will be mutually agreed upon by the
Parties based on factors associated with each New Location.
c. During the term of this Agreement, if Licensor opens or acquires
any New Location and Licensor determines to include Devices at such New
Location, Exhibit A hereto shall be amended to include such New Location.
For store #6217 and New Locations opened or acquired on or after RCT, the
fees due pursuant to this Section 4 shall be RCT of the then monthly fee
during the RCT period following the date store #6217 and any New Locations
are opened for business by Licensor; provided, that if Licensor has not taken
all steps required to be taken by it to permit Licensee to commence
operations at a New Location, the RCT period shall not commence until all
such actions have been taken.
d. In the event an Existing Location is closed for renovation for a
period of RCT or more, the Fees with respect to such renovated Existing
Location shall be RCT of the then applicable monthly fee due pursuant to this
Section 4 during the RCT period following the date such renovated Existing
Location is reopened for business by Licensor; provided, that if Licensor has
not taken all steps required to be taken by it to permit Licensee to
recommence operations at such Existing Location, the RCT period shall not
commence until all such actions have been taken.
e. The above fee shall be due and payable on the first day of each
month. Fees for any partial month shall be prorated.
f. In the event that (i) Licensor should effect a material reduction
in the hours of operation of the Licensed Locations, from the hours of
operation in effect on the date of this Agreement, or (ii) there should be a
change in the laws or regulations applicable to the operation of gaming
devices in retail food and drug facilities which has the effect of materially
reducing the revenues received by Licensee from its operation of the Devices
hereunder, or (iii) a smoking ban is imposed at a Licensed Location by either
Federal, state or local authorities, or by the terms of a lease agreement
between Licensor and a third party, the parties shall negotiate in good faith
to arrive at an equitable adjustment to the terms of this Agreement.
5. Taxes. Licensee agrees to pay all taxes (other than real estate
taxes) payable in connection with the conduct of its business in the Licensed
Locations, including personal property taxes levied against the Devices,
fixtures, and other personal property of the Licensee in the Licensed
Locations. Licensee will pay all social security, unemployment, and old age
benefit taxes, state, federal, and local, or other similar taxes due with
respect to employees or wages paid to employees of the Licensee in the
Licensed Locations. Licensee will maintain and pay all license fees,
federal, state, county, or city, necessary for its operations in the Licensed
Locations.
6. Security System on Premises. If a Licensed Location is not open
twenty-four (24) hours a day, seven (7) days a week, Licensor agrees to
install and maintain or have maintained, a burglar alarm system at such
Licensed Location that is monitored at a central station over a dedicated
phone line. Said alarm system will cover all apertures in the walls and
ceiling of the Licensed Location and will include a motion detector which
will cover the area occupied by the Devices. Said alarm system will cause a
phone line failure violation at the alarm company's central station anytime
the phone line from the Licensor's premises to the alarm central office is
cut or disrupted.
7. Use and Operation. Licensee agrees to use the Gaming Space within
the Licensed Locations for the sole purpose of operating the Devices in such
space and will at all times conduct its business in a first-class business
like and attractive high-grade and proper manner, including, without
limitation, (1) maintaining the Devices in good condition and repair at its
own expense and at no expense to Licensor; (2) replacing any out of date
Devices at its own expense with modern, up-to-date Devices from time to time;
(3) employing a change cashier or installing money changing devices so that
the store cashiers in the Licensed Location will not be required to make
change for the operation of the Devices; and (4) not employing any person or
persons within the Licensed Locations deemed objectionable by Licensor. Upon
request of Licensor, Licensee agrees to remove any such objectionable
employee as quickly as reasonably possible under existing federal, state, and
local laws. Signs of such type and size as may be mutually agreed upon by
Licensor and Licensee shall be placed by Licensee in a conspicuous place at
each of the Licensed Locations stating that Licensee is the owner and
operator of the Devices. Licensor may not ban smoking in the Gaming Spaces
unless such change is required by law, lease or regulation.
8. Title to Property. All personal property (including, without
limitation, the Devices) placed on the Licensed Locations by Licensee shall
be and remain the personal property of Licensee (except as provided in
Section 13 with respect to default) and, upon the expiration or earlier
termination of this Agreement, Licensee shall within ten (10) days thereafter
and at its sole expense, remove from the Licensed Locations all such personal
property and restore such Licensed Locations to their original conditions,
ordinary wear and tear excepted.
9. General Covenants. Licensee agrees to comply with all applicable
laws, ordinances, and governmental regulations now in force or hereafter
enacted relating to the business operations of the Licensee in the Licensed
Locations; to make any and all alterations, repairs, and changes, at its
expense, required by any such laws, ordinances, or governmental regulations;
to maintain the Gaming Space occupied by Licensee within each of the Licensed
Locations in a clean state and in good condition and repair; not to make any
alterations in such space without the prior written consent of Licensor; and
at the expiration or termination of this Agreement, to surrender peaceable
possession thereof to Licensor in as good condition as it received the same,
loss or damage by fire (except if caused by the act or neglect of Licensee or
its employees) and wear and tear resulting from reasonable use excepted.
10. Indemnification and Insurance. Licensee agrees to indemnify and
hold Licensor harmless from all claims, demands, causes of action, losses,
damages, and liability, including costs and expenses and reasonable
attorneys' fees incurred by Licensor in connection with any claim by third
parties, including employees of Licensee, for injury to or death or damage to
property occurring in or on or about the portions of the Licensed Locations
licensed to Licensee or arising out of operations conducted by Licensee.
Licensee, at its own cost and expense, shall maintain commercial general
liability and automobile liability insurance with a limit of not less than
$1,000,000 applicable to any one occurrence. Such insurance shall name
Licensor as an additional insured with respect to operations conducted in
connection with this Agreement. Licensee shall maintain Workers'
Compensation insurance for its employees in the form required by the State of
Nevada or provide Workers' Compensation on a self-insured basis in compliance
with applicable Nevada regulations. Licensee shall, upon request, provide
Licensor with certificate(s) evidencing the foregoing insurance coverages.
Whether or not it elects to insure its personal property at locations covered
by this Agreement, Licensee hereby waives any right of recovery from Licensor
for any loss or damage to such property resulting from any of the perils
insured against in the standard form fire insurance policy with Extended
Coverages and Vandalism and Malicious Mischief Endorsements. To the extent
that any insurance maintained by Licensee includes coverage against
additional perils, this waiver shall apply with respect to loss damage
resulting from such other perils.
11. Termination of License. If Licensor ceases to do business in any
of the Licensed Locations for any reason whatsoever, this License Agreement
shall terminate as to the Licensed Locations where such business is
discontinued, effective at the time of such discontinuance, and thereafter no
license fees shall be payable under this Agreement with respect to the
Licensed Locations at which Licensor ceases to do business. If Licensor
ceases to do business in a location other than at the end of a calendar
month, the license fee for the month in which business ceases shall be
prorated. This License Agreement will continue to apply to all remaining
Licensed Locations.
12. Interruption of Business. If the business of any Licensed
Locations subject to this Agreement is substantially interrupted by reason of
a major remodeling, fire, other casualty, or any other cause not the fault of
Licensee, and such interruption substantially and adversely affects the
business of Licensee in such Licensed Location, then, from and after such
interruption and until the cause thereof has been corrected or eliminated,
the fees due Licensor hereunder for such Licensed Locations shall be
equitably reduced or abated to the extent agreed between the parties.
13. Default. If Licensee defaults in the payment of the fees payable
by it hereunder or fails to perform any other of its obligations under this
Agreement, and Licensee fails to cure such default within a period of fifteen
(15) days after written notice from Licensor and such default is not cured
within the applicable grace period provided therein, then Licensor shall have
all rights and remedies now or hereafter provided by law and, in addition,
may do any one or more of the following:
(a) Terminate this Agreement by giving written notice to Licensee;
resume possession of the space occupied by Licensee in the Licensed
Locations; retain all Devices, fixtures, and other personal property of
Licensee remaining on such space and full right and authority to sell, lease,
or otherwise dispose of the same or to store the same, all at the expense of
Licensee; and to recover from Licensee all fees due under this Agreement had
it not been terminated, less the net amount realized by Licensor from any
such sale, lease, or other disposition.
(b) Without terminating this Agreement, reenter and assume possession
of the space so licensed and of all Devices, fixtures, and other personal
property of Licensee located therein and relet the space and sell, lease, or
otherwise dispose of the Devices, fixtures, and other personal property, all
on such terms and conditions as Licensor deems advisable, and in any such
event, Licensee shall pay promptly upon demand the difference between the
fees due under this Agreement for the period of such reletting (but not
beyond the term of this Agreement) and the net amount received by Licensor
from such reletting and from such sale, lease, or other disposition.
(c) To treat all amounts due and not paid by Licensee to the date of
such default, together with all amounts payable under this Agreement during
the remaining term of this Agreement following such default, as an
indebtedness of Licensee immediately due and payable to Licensor and recover
the same.
In the event of any such default, Licensee shall have no right to remove
any Devices, fixtures, or other personal property of Licensee from the space
licensed, and Licensor shall have a lien thereon as security for the payment
of all amounts due Licensor under the Agreement.
14. Assignment. Licensee may not assign this Agreement without prior
written approval of Licensor, except that Licensee may assign this Agreement
to a wholly-owned subsidiary of Jackpot Enterprises, Inc. without such prior
written approval; provided, that such assignee agrees to be bound by all of
the terms and conditions of this Agreement and Licensee guarantees the
payment and performance by such assignee of its obligations hereunder during
the remaining term hereof. Subject to such provision, this Agreement shall
bind and its benefits shall inure to the parties hereto, their successors,
and assigns.
15. Notices and Demands. All notices and demands made pursuant to this
Agreement shall be sufficient if made in writing and delivered by fax or
overnight delivery service______________________________________, or to
Licensee at 0000 Xxxxx Xxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxx 00000. All notices
mailed shall be deemed given when mailed.
16. Relationship Between the Parties. The relationship of Licensor and
Licensee shall be solely that of licensor and licensee and nothing herein
contained shall be construed to constitute Licensor and Licensee as landlord
and tenant, sublandlord and subtenant, partners, joint venturers or any other
relationship whatsoever.
17. Confidentiality. This Agreement and the information contained
herein, including but not limited to the fees payable to Licensor by
Licensee, is confidential and shall not be disclosed to any person except the
gaming licensing authorities of the State of Nevada upon proper request,
unless and to the extent required by laws or regulations applicable to the
parties.
18. Existing Agreement. The Parties heretofore entered into a License
Agreement dated June 19, 1990 as amended on April 24, 1997 (the "Existing
Agreement") for Licensee's operation of Devices in Licensor's Locations.
Upon entering into this License Agreement, the Existing Agreement is
terminated.
19. Additional Remedies. In addition to the remedies set forth in this
Agreement, Licensor and Licensee shall have all other remedies provided by
law to the same extent as if fully set forth herein. No remedy herein
conferred upon, or reserved to Licensor or Licensee, shall exclude any other
remedy herein or by law provided, but each shall be cumulative.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.
RITE AID CORPORATION
By /s/ Xxxxxx Xxxxxx
___________________________
Exec. V.P.
CARDIVAN COMPANY
By /s/ Xxxxxx Xxxxxxx
____________________________
President
Exhibit A to License Agreement Between
Rite Aid Corporation and Cardivan Company
Dated March 12, 1999
Location No. of Machines Store Hours
__________________________ _______________ ________________________
Rite Aid #6114 10 24 hours
0000 X. Xxxxxxxx
Xxx Xxxxx, XX 00000
Rite Aid #6115 15 24 hours
0000 X. Xxxxxxxx Xxxxxxx
Xxx Xxxxx, XX 00000
Rite Aid #6116 10 Mon.-Sat. 7 a.m.-9 p.m.
0000 X. Xxxxxx Inn Sun. 7 a.m.-6 p.m.
Xxx Xxxxx, XX 00000
Rite Aid #6121 6 Mon.-Sat. 8 a.m.-9 p.m.
0000 Xxxxxxx 000 Xxxxx Sun. 9 a.m. - 7 p.m.
Xxxxxxxxxxxx, XX 00000
Rite Aid #6193 15 24 hours
0000 X. Xxxxx Xxxx
Xxxxx Xxx Xxxxx, XX 00000
Rite Aid #6217 10 Mon.-Sat. 7 a.m.-9 p.m.
525 E. Windmill Sun. 7 a.m.-6 p.m.
Xxx Xxxxx, XX 00000
Rite Aid #6220 10 24 hours
0000 Xxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Rite Aid #6221 15 24 hours
0000 X. Xxxx Xxxx Xxxx.
X. Xxx Xxxxx, XX 00000
Rite Aid #6222 10 Mon.-Sat. 7 a.m.-9 p.m.
8500 South Eastern Sun. 7 a.m.-6 p.m.
Xxxxxxxxx, XX 00000
Rite Aid #6240 10 24 hours
00 Xxxxx Xxxxxxx
Xxx Xxxxx, XX 00000
Rite Aid #6245 10 Mon.-Sat. 7 a.m.-9 p.m.
0000 X. Xxxxx Xxxxx Sun. 7 a.m.-6 p.m.
Xxx Xxxxx, XX 00000
Rite Aid #6247 10 Mon.-Fri. 7:30 a.m.-9:00 p.m.
0000 Xxx Xxxxxx Xxxx. Sat. 7:30 a.m.-8 p.m.
Xxx Xxxxxx, XX 00000 Sun. 9 a.m.-7 p.m.
Rite Aid #6260 10 Mon.-Sat. 7 a.m.-9 p.m.
0000 Xxxxxx Xxxxxxxx Xxxx Sun. 7 a.m.-6 p.m.
Xxx Xxxxx, XX 00000
Rite Aid #6261 10 Mon.-Sat. 7 a.m.-9 p.m.
0000 Xxx Xxxxx Xxxx. Sun. 7 a.m.-6 p.m.
Xxx Xxxxx, XX 00000
Rite Aid #6271 10 24 hours
0000 Xxxx Xxxxxx
Xxx Xxxxx, XX 00000
Rite Aid #6279 10 24 hours
0000 X. Xxxxxx Xxx
Xxxxxx, XX 00000
