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HomeMy WebLinkAboutContract 1938 Retailer Number 106732 Chain Number 0 MINNESOTA STATE LOTTERY RETAILER CONTRACT THIS AGREEMENT is entered into this 15th day of July, 2006, by and between the MINNESOTA STATE LOTTERY (hereinafter referred to as the "LOTTERY"), and TOP VALU, a CORPORATION, whose business address is 4340 CENTRAL AVE NE, COLUMBIA HEIGHTS, MN, 55421 (hereinafter referred to as the "RETAILER"). The terms of this agreement are contained in paragraphs I through XXI of the Contract Terms and Conditions attached hereto. In signing this agreement, the parties acknowledge that they have read and understood the terms of the agreement and agree to be bound thereby. THE MINN SO!A TP;Tf- L~TTERY By: ~ By: Title: Lottery Director Title: City Manager Date: July 15, 2006 Date: \O\ad-)Olo I. SCOPE OF CONTRACT 1. This Contract authorizes the RETAILER to sell Minnesota State Lottery tickets (hereinafter referred to as "lottery tickets"), as defined in game procedures adopted by the Director of the LOTTERY (hereinafter referred to as the "DIRECTOR") 2. This Contract between the LOTTERY and the RETAILER incorporates all conditions and terms contained herein, as well as all provisions of Minnesota Statutes, chapter 349A (hereinafter referred to as the "Lottery law"), and all rules, game procedures, instructions and directives hereinafter adopted or published by the DIRECTOR. II. TERM OF CONTRACT This Contract shall begin on the date it is finally executed by the parties hereto, and shall remain in effect for one year, from July 15, 2006 until midnight on July 14, 2007 unless canceled, suspended or renewed as provided herein. JULY FY2007 Page 1 of 5 III. COMPLIANCE WITH LAW The RETAILER agrees to comply with and be bound by the Lottery law, and all rules, game procedures, instructions and directives issued by the DIRECTOR. IV. SALE OF LOTTERY TICKETS 1. The RETAILER agrees to sell tickets for a minimum number of Lottery Games, as designated by the LOTTERY. 2. The RETAILER agrees that it will sell lottery tickets in the manner prescribed by this Contract and the Lottery law, and rules and game procedures adopted by the DIRECTOR. 3. The RETAILER agrees that it will not sell lottery tickets to anyone under the age of eighteen (18) years. 4. The RETAILER agrees that it will not sell lottery tickets except at the prices established by the DIRECTOR. 5. The RETAILER agrees that it will make valid lottery tickets available for sale to the public during all hours and days that the RETAILER is open for business except as authorized by the LOTTERY. 6. The RETAILER agrees to make the purchase of lottery tickets convenient and readily accessible to the public. 7. The RETAILER agrees to sell lottery tickets only on the premises specified in this Contract and any amendment thereto. 8. The RETAILER agrees to sell lottery tickets only for coin, currency, money orders, debit / check cards and checks. 9. The RETAILER agrees not to condition the sale of lottery tickets upon the purchase of any other item or service, or impose any unauthorized restriction upon the sale of a lottery ticket. 10. The RETAILER agrees that Scratch Game tickets may not be sold after the date the LOTTERY states that sales for that game must cease, or the last date to claim a prize for that game and to provide notice to players of approaching last date to claim. V. COOPERATION WITH LOTTERY AND PLAYERS 1. The RETAILER agrees to prominently display the Online Games odds poster, the most current Scratch Games odds poster, and the compulsive gambling hotline sticker at or near the point where lottery tickets are sold. 2. The RETAILER agrees to post on all Scratch Games ticket dispensers and On or near each Online Games terminal, a sticker, furnished by the LOTTERY that notifies custorners that customers must be eighteen (18) years of age or older to redeem or buy a lottery ticket. 3. The RETAILER agrees to prominently display the certificate to sell issued by the DIRECTOR in an area visible to the general public, and to mount a decal provided by the LOTTERY in a prominent place on the window or entrance to the business. 4. The RETAILER agrees to prominently display signage and merchandising materials supplied by the LOTTERY in accordance with instructions issued by the LOTTERY. 5. The RETAILER agrees to fully cooperate with the LOTTERY in the investigation of lost, stolen, previously cashed, altered or counterfeit lottery tickets or any other LOTTERY-related unlawful activity or impropriety and may be required to contact local law enforcement to report unlawful activity. 6. The RETAILER agrees to immediately report to the LOTTERY any knowledge of unlawful activities or other improprieties that concern LOTTERY operations. 7. The RETAILER agrees to immediately report to the LOTTERY any lost, misplaced or stolen lottery tickets or Online Games ticket stock. 8. The RETAILER agrees to make game brochures supplied by the LOTTERY available to potential LOTTERY customers and to explain game rules when requested. 9. The RETAILER agrees to participate in lottery promotions and abide by promotional guidelines distributed by the LOTTERY. 10. The RETAILER agrees to attend training sessions as requested by the LOTTERY. 11. The RETAILER agrees to provide sufficient staffing to assure prompt services to LOTTERY customers during all business hours. 12. The RETAILER agrees to report to the LOTTERY any information concerning bulk purchase requests of Online Games, as required by the official game procedures for that game. 13. The RETAILER agrees that equipment provided by the LOTTERY is the property of the LOTTERY and the RETAILER further agrees not to make any modifications to the LOTTERY provided equipment nor to dispose of said equipment. 14. The RETAILER agrees to settle each pack of Scratch Game tickets according to LOTTERY procedures. VI. SCRATCH GAMES TICKET DISPENSERS 1. The RETAILER agrees to utilize Scratch Games ticket dispensers and such other LOTTERY-related devices or equipment as may be provided by the LOTTERY. 2. The LOTTERY agrees to pay the RETAILER up to a maximum of $100 for the installation of each in-counter Scratch Games ticket dispenser installed at an agreed upon location. This one-time installation allowance will be credited to the RETAILER'S electronic funds transfer (EFT) account upon receipt of a paid invoice and LOTTERY verification of installation. 3. The RETAILER agrees to keep the top glass of the in-counter Scratch Games ticket dispenser clear of any unauthorized materials at all times. Only approved Lottery materials may be placed on, affixed to, or placed in the in-counter Scratch Games ticket dispenser. VII. ONLINE GAMES TERMINAL 1. The RETAILER agrees to be responsible for payment of all electrical utility charges incurred in the operation of the Online Games terminal. 2. The RETAILER agrees to provide sufficient counter space for the components of an Online Games terminal, and a clear viewing space for the message display component. 3. The RETAILER agrees that the Online Games terminal must be located on the RETAILER'S premises at a point of purchase approved by the LOTTERY, and the terminal may not be moved without written approval of the LOTTERY. If approved to relocate the terminal, the RETAILER may be liable for any costs associated with the move of an Online Games terminal. JULY FY2007 Paae 2 of 5 4. The RETAILER agrees to provide a telephone near the location of the Online Games terminal in order to make and receive telephone calls for maintenance assistance or administrative needs. 5. The RETAILER agrees to exercise diligence in the operation of the Online Games terminal and in storage of Online Games ticket stock (and to provide physical security and control for the terminal and Online Games ticket stock). Ticket stock is store specific. The RETAILER may not borrow or lend ticket stock to or from another retailer location. 6. The RETAILER agrees to refrain from performing any mechanical or electrical repairs to the Online Games terminal. 7. The RETAILER agrees to immediately notify the LOTTERY or its authorized representative(s) of any communication or Online Games terminal malfunction, or any "out of order" condition of the terminal. 8. The RETAILER agrees to permit the LOTTERY, or authorized representatives of the LOTTERY, to install all equipment necessary for operation of the Online Games Terminal. 9. The RETAILER agrees not to move or alter any of the necessary equipment without the written approval of the LOTTERY. VIII. MINIMUM SALES The LOTTERY may require a RETAILER to maintain a minimum level of sales. If the RETAILER'S sales are below the minimum level set by the LOTTERY, the LOTTERY may exercise its discretion to suspend and/or terminate the RETAILER'S contract under Section XVIII, paragraph 3, clause g of this Contract. IX. RESPONSIBILITY OF LOTTERY 1. The LOTTERY agrees to pay the RETAILER a commission of 5 and 1/2% of the value of lottery tickets sold by the RETAILER. 2. The LOTTERY agrees to pay the RETAILER a commission of 1 % of the value of lottery tickets redeemed by the RETAILER. 3. The LOTTERY agrees to reimburse the RETAILER for all lottery prizes properly paid by the RETAILER according to the procedures established by the LOTTERY. 4. The LOTTERY agrees to provide the RETAILER with an Online Games terminal. The type of terminal provided will be determined at the sole discretion of the LOTTERY. 5. The LOTTERY agrees to install the required communications for the operation of the Online Games terminal and to pay the ongoing costs associated with the communications for the terminal. 6. The LOTTERY agrees to supply the RETAILER with forms, Online Games ticket stock, and other related materials and supplies required by this contract. 7. The LOTTERY agrees to provide the RETAILER with the necessary Scratch Game tickets, point-of-purchase materials, and other forms and materials required to be provided by the LOTTERY under this Contract. 8. The LOTTERY agrees to maintain each Online Games terminal delivered to the RETAILER. 9. The LOTTERY agrees to provide adequate Scratch Games ticket dispensers for the Retailer. The type of devices or dispensers provided will be determined at the sole discretion of the LOTTERY. X. NON-TRANSFERABILITY AND NON-ASSIGNABILITY OF CONTRACT This Contract is not assignable or transferable to any person or entity, nor is it transferable to any location other than that shown on this Contract. XI. RECORDS 1. The RETAILER agrees to maintain and submit financial and accounting records as the LOTTERY requires and the RETAILER may be liable for unreconciled accounts. 2. The RETAILER agrees to make its records available for inspection and review at any time during normal business hours by employees of the LOTTERY. XII. SECURITY DEPOSIT The RETAILER agrees to maintain a security deposit in an amount set by the DIRECTOR if the RETAILER does not have a favorable credit history, has repeated accounting problems and/or NSF's, or has no credit history. The security deposit may be a surety bond, certificate of deposit, letter of credit, or securities and must be filed with the LOTTERY within 30 days of being notified by the DIRECTOR. The bond must be through a company authorized to do business in Minnesota, and be in a form approved by the DIRECTOR. The letter of credit, certificate of deposit, or securities must be in a form as required under Minnesota Statutes, section 349A.06, subdivision 3. XIII. ACCEPTANCE OF LOTTERY TICKETS 1. The RETAILER agrees that all Scratch Game tickets accepted from the LOTTERY or its distributor are deemed to be purchased by the RETAILER at the price established by the DIRECTOR, less appropriate RETAILER commission, unless unsold Scratch Game tickets are returned to the LOTTERY acco(ding to procedures established by the LOTTERY. 2. The RETAILER agrees that they may be liable for lost, missing, or stolen, or loose Scratch Game tickets not returned to the LOTTERY according to the LOTTERY'S procedures. 3. The RETAILER agrees that all Online Game tickets issued by the RETAILER'S Online Games terminal are deemed to be purchased by the RETAILER unless canceled as authorized by LOTTERY'S game procedures. 4. The RETAILER agrees that any Scratch Game tickets not properly accounted for by the RETAILER on the final settlement date are deemed to have been sold to the RETAILER. The RETAILER may thereafter be credited for Scratch Game tickets returned to the LOTTERY according to procedures established by the LOTTERY. 5. The RETAILER agrees not to refuse ticket shipments. JULY FY2007 Page 3 of 5 XIV. DEPOSIT OF FUNDS 1. The RETAILER agrees to maintain a checking or savings account in a designated bank as required by Minnesota Rules 7856.7010. All monies received by the RETAILER from the sale of lottery tickets less the amount retained as compensation for the sale of lottery ticket, or redemption of prizes, or credit for the direct payment of prizes must be deposited into this account prior to the weekly electronic funds transfer (EFT) transaction. Monies in this account must be accessible at all times with a limit of no less than six (6) transactions per month. 2. The RETAILER agrees that if a check or electronic funds transfer of the RETAILER is dishonored, the RETAILER will pay a service charge of up to twenty dollars ($20.00) as set by the LOTTERY, plus interest from the designated day of collection at the rate established by rule. 3. The RETAILER agrees that the account the RETAILER uses for LOTTERY transactions must be subject to electronic funds transfer (EFT) for payment of amounts due to the LOTTERY, unless otherwise authorized by the LOTTERY. 4. The RETAILER agrees to make prompt settlement of all amounts due and owing the LOTTERY according to procedures established by the LOTTERY. XV. PAYMENT OF PRIZES 1. The RETAILER agrees to validate and pay winning lottery tickets up to amounts specified in the game procedures adopted by the DIRECTOR, consistent with the RETAILER'S normal business hours and cash on hand policies or as specifically authorized by the LOTTERY. 2. The RETAILER agrees not to pay any winning lottery tickets presented by a person under the age of eighteen (18) years. 3. The RETAILER agrees that they may be responsible for redeemed tickets that were not validated prior to payment to players. XVI. LIABILITY AND INDEMNIFICATION 1. The RETAILER agrees that it shall perform as an independent contractor, and not as an agent or employee or officer of the LOTTERY or the State of Minnesota. 2. The RETAILER agrees to hold the LOTTERY and the State of Minnesota harmless from any liability arising in connection with the conduct of the sale of lottery tickets. 3. The RETAILER agrees that any contractual or tortuous liability incurred by the RETAILER in connection with the sale of lottery tickets shall be the sole responsibility of the RETAILER. XVII. OTHER RETAILER OBLIGATIONS 1. The RETAILER agrees to exercise control and supervision over its employees selling lottery tickets, and shall be fully responsible and liable for their conduct. The RETAILER further agrees to provide instructions to its employees concerning the Lottery law, rules, game procedures, and the requirements of this Contract. 2. The RETAILER agrees that it is responsible for all proceeds from the sale of lottery tickets, and that the proceeds shall r.onstitutR ;:J trust funcl in f;:jvor of the LOTTERY until paid to the lOTTERY 3. The RETAILER agrees not to sell any lottery tickets or hold itself out as a LOTTERY Retailer if this Contract is no longer in force by virtue of suspension, cancellation or non-renewal. 4. The RETAILER agrees to return to the LOTTERY or the LOTTERY'S authorized representative(s) all lottery tickets, goods, materials and equipment delivered to the RETAILER pursuant to this Contract upon cancellation, suspension, or non-renewal of this Contract, or upon demand by the DIRECTOR. 5. The RETAILER agrees not to use a LOTTERY insignia, logotype, trademark or name of a LOTTERY game without LOTTERY authorization provided the RETAILER may display and use game logos and ticket art to further the sale of lottery products within guidelines established by the LOTTERY without prior LOTTERY authorization. 6. The RETAILER agrees not to display or publish LOTTERY related materials, which may be considered derogatory or adverse to the operation or dignity of the LOTTERY or the State of Minnesota, and the RETAILER further agrees to remove such on request of the LOTTERY. 7. The RETAILER agrees that the RETAILER and its employees will not request, demand, or accept gratuities or other remuneration in exchange for the performance of any obligation required under this Contract unless specifically authorized by the DIRECTOR. (VIII. CANCELLATION, SUSPENSION, AND NON-RENEWAL 1. This Contract may be canceled by the RETAILER at any time upon notice to the LOTTERY. The RETAILER, may, upon notice to the LOTTERY, cease the sale of lottery tickets. 2. The DIRECTOR shall 'cancel this Contract or prohibit the sale of lottery tickets for any of the following reasons: a. The RETAILER has been convicted of a felony, gross misdemeanor; or a gambling related offense; b. The RETAILER has committed fraud, misrepresentation or deceit; c. The RETAILER has provided false or misleading information to the LOTTERY; d. The RETAILER has acted in a manner prejudicial to the public confidence in the integrity of the LOTTERY; e. The RETAILER is in the business solely to sell lottery tickets; or f. The RETAILER owes $500 or more in delinquent taxes to the State of Minnesota. JULY FY2007 Page 4 of5 3. The DIRECTOR may cancel or non-renew this Contract or prohibit the sale of lottery tickets for any of the following reasons: a. The RETAILER changes its business location; b. The RETAILER fails to account for proceeds from the sale of lottery tickets; c. The RETAILER fails to account for lottery tickets received from the LOTTERY; d. The RETAILER violates a provision of the Lottery law, or a rule, game procedure, order or directive issued by the DIRECTOR; e. The RETAILER fails to comply with any term of this Contract; f. The RETAILER fails to maintain the security deposit required by this Contract; g. The RETAILER fails to maintain a minimum level of sales as set by the LOTTERY; h. The RETAILER commits an act, which impairs the RETAILER'S reputation for honesty and integrity; i. The RETAILER fails to properly display LOTTERY point-of purchase material; j. The RETAILER no longer has the financial stability or responsibility to act as a LOTTERY Retailer; k. The RETAILER has acted in a manner such that the DIRECTOR finds that the RETAILER'S participation as a LOTTERY Retailer is inconsistent with the public interest, convenience and necessity; I. The RETAILER sells lottery tickets to a person that the RETAILER knows or has reason to know will re-sell the lottery tickets to other persons; m. The RETAILER has or retains an employee involved in the sale of lottery tickets who has been convicted of a gambling- related offense or a crime involving moral turpitude where, in the DIRECTOR'S judgment, continuation of the Contract would endanger the security or integrity of the LOTTERY; n. The RETAILER has sold, bartered, furnished, or given alcoholic beverages to a person under 21 years of age in violation of Minnesota Statutes, section 340A.503, subdivision 2, clause (1), two or more times within a two year period; o. The ownership in the RETAILER substantially changes. A substantial change means a transfer of more than 50% of the equity of the RETAILER'S business. p. The RETAILER has conducted illegal gambling on the premises or has allowed illegal gambling to be conducted by others on the premises. q. The RETAILER sells lottery tickets to a person or redeems a prize for a person that is under the age of eighteen (18); or r. The RETAILER fails to pay the LOTTERY in a timely manner for the sale of lottery tickets as required by LOTTERY procedures. 4. The DIRECTOR may temporarily suspend this Contract or prohibit the sale of lottery tickets without prior notice to the RETAILER for any reason specified in this Contract. The DIRECTOR is required to conduct a hearing related to the suspension or prohibition within seven (7) days after a request is made for a hearing by the RETAILER. Within 20 days after receiving the administrative law judge's report relating to the hearing, the DIRECTOR will issue an order vacating the temporary suspension or prohibition, or make any other appropriate order. If a hearing is not requested by the RETAILER within 30 days after the temporary suspension or prohibition takes effect, the suspension or prohibition becomes permanent unless the DIRECTOR vacates or modifies the order. XIX, RECOURSE IN THE EVENT OF CANCELLATION, SUSPENSION OR NON-RENEWAL The cancellation, suspension or non-renewal of this Contract, or prohibition of the sale of lottery tickets is a contested case under the Administrative Procedures Act of the State of Minnesota. Subject to subparagraph XV1I1.4. above, the RETAILER may continue to operate as a LOTTERY Retailer until a final decision has been made by the DIRECTOR. The RETAILER agrees that if the RETAILER contests a cancellation, suspension, or non-renewal of this Contract, or prohibition of the sale of lottery tickets, the venue for such action shall be in Ramsey County, Minnesota, and that the parties shall perform in the interim according to the terms of this Contract. XX. NOTICE 1. The RETAILER agrees to notify the DIRECTOR at least 30 days prior to any proposed business or location change or change in the RETAILER'S ownership. 2. The RETAILER agrees to notify the DIRECTOR of any change of an officer or director within 30 days of the change. XXI. MISCELLANEOUS 1. The RETAILER agrees that failure by the RETAILER to comply with any of the terms of this Contract shall constitute a breach of this Contract, and the RETAILER further agrees that in the event of a breach of this Contract the LOTTERY may temporarily stop the delivery of additional Scratch Games and/or Online ticket sales or pursue any other appropriate remedy to protect its interests and property, until the RETAILER complies with the terms of this Contract. 2. The RETAILER agrees that it shall be liable for all costs incurred by the LOTTERY in enforcing this Contract or in collecting any amount due to the LOTTERY from the RETAILER, including attorney fees. 3. The RETAILER represents and warrants that the RETAILER fully satisfies all requirements for a LOTTERY Retailer under the lottery law and rules adopted by the DIRECTOR. JULY FY2007 Page 5 of5