Service Agreement - Topps Co. Inc. and National Football League Players Inc.
SERVICE AGREEMENT
THIS AGREEMENT is executed by and between The Topps Company, Incorporated
with offices at One Whitehall Street, New York, NY 10004-2109 (hereinafter
"Company"), and National Football League Players Incorporated ("Players Inc"), a
for-profit corporation organized under the laws of the Commonwealth of Virginia,
having its principal place of business at 2021 L Street, N.W., Suite 500,
Washington, D.C., 20036. This Agreement shall be effective as of March 1, 2000.
1. REPRESENTATIONS.
(A) Players Inc represents that the National Football League Players
Association ("NFLPA") has entered into certain contracts with Company
wherein NFLPA has authorized and will authorize Company to utilize the
Group Licensing Rights (as defined in the Licensing Agreement between NFLPA
and Company, effective March 1, 2000 (hereinafter "Licensing Agreement"))
and the names and trademarks of the NFLPA and Players Inc.
(B) Players Inc represents that it has entered into an agreement with
NFLPA, effective March 1, 2000 (hereinafter "NFLPA Agreement"), to provide
various services with respect to the use of certain Group Licensing Rights
pursuant to the Licensing Agreement.
2. DESCRIPTION OF SERVICES.
Players Inc shall perform, as described herein, such services required
to implement and enforce this Licensing Agreement and the NFLPA Agreement.
Such services shall include, but are not limited to, the following:
(A) NEGOTIATIONS AND APPROVALS.
(i) With respect to rights licensed under the Licensing Agreement
(also described therein as Licensed Rights), Company agrees and
acknowledges that Players Inc shall review and approve or
disapprove in writing the specific manner in which such rights
are to be used on the licensed products in question under such
Licensing Agreement.
(ii) In the event Company is interested in seeking an individual
player's personal endorsement, Company agrees and acknowledges
that Players Inc shall review and approve or disapprove in
writing such endorsement, provided the individual player
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personally approves such endorsement. Company acknowledges that
all contact between Company and such player or player's agent
shall be made by Players Inc. Company further agrees and
acknowledges that any player who is committed individually by
contract for products or services competitive with those of
Company may be required to cease from further inclusion in this
Agreement and the Licensing Agreement; provided, however, that
the use of such player for such products and services shall be on
an individual basis and shall not be combined with the use of
five or more other NFL players.
(iii)With respect to the promotion by Company of the sale of licensed
products under the Licensing Agreement, Company agrees and
acknowledges that Players Inc agrees to review and approve or
disapprove in writing such promotions. Company further agrees and
acknowledges that any promotions using the licensed products
covered by the Licensing Agreement as premium items shall require
a separate agreement, to be negotiated by Players lnc, between
NFLPA and Company or other sponsor of the promotion, with
separate terms and conditions, and nothing contained herein shall
obligate NFLPA, Players Inc, or Company to enter into such an
agreement.
(iv) Company agrees to notify Players Inc of any infringement by
others of the rights covered by the Licensing Agreement. Company
also agrees and acknowledges that Players Inc shall completely
investigate whether or not any action shall be taken on account
of any such infringement. Further, in the event Company requests
Players Inc's approval of any suit or action by Company on
account of any such infringement, Company further agrees and
acknowledges that Players Inc shall completely investigate
Company's request.
(v) Company agrees and acknowledges that Players Inc shall compile
and update an Attachment "B" to the Licensing Agreement.
Attachment "B" to the Licensing Agreement shall be established
and modified in the following manner:
a. Upon effective date of the Licensing Agreement, and
thereafter annually on March 1 of each calendar year covered
by this Agreement, Company shall submit to Players Inc a
proposed list of players' names for inclusion in Attachment
"B" for the upcoming football season.
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b. Players Inc shall respond to such submission in writing to
Company, signifying approval or disapproval in the case of
each player's name so requested.
c. Company may submit requests in writing to Players Inc for
additions, deletions, or substitutions of players' names
contained in Attachment "B" to the Licensing Agreement and
Players Inc shall respond to such requests within a
reasonable period of time.
(vi) Company agrees and acknowledges that Players Inc shall review and
approve or disapprove in writing the quality and style of samples
of artwork, plans, photographs, and any other representations of
licensed products produced by or for Company (hereinafter
collectively "artwork") and samples of each of the licensed
products, together with their packaging, hangtags, and wrapping
material. Company further agrees and acknowledges that review and
approval shall be before the manufacture, sale, or distribution
of such artwork, whichever occurs first, and no licensed products
shall be manufactured, sold, or distributed by Company without
such prior written approval of such artwork and such sample
licensed products. Any request by Company for such approval that
is received by Players Inc and is not responded to within 15
business days shall be deemed approved by Players Inc. Subsequent
to final approval, Company will send periodically a reasonable
number of production samples of licensed products to Players Inc
to ensure quality control, and should Players Inc require
additional samples for any reason, Players Inc may purchase such
at Company's cost.
(vii)Company may choose to use player names and/or likenesses to
promote licensed products on or in any material pertaining to
packaging, hangtags, wrapping material, print ads, flyers,
point-of-purchase displays, press releases, catalogues, trade
show booths and exhibits, or any other written material or
medium, including but not limited to, electronic, interactive or
Internet us; provided however, that Company agrees and
acknowledges that Players Inc shall review and approve or
disapprove in writing such use by Company. Company further agrees
and acknowledges that the number of players included in any such
use, if approved, shall be a minimum of six, and shall be
selected from Attachment "B" to the Licensing Agreement. Player
names, likenesses, or both so used shall be written or displayed
with equal prominence.
(viii) Company may choose to use player names and/or likenesses
(including, without limitation, action footage) in radio or
television commercials to promote licensed product(s); provided
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however, that Company agrees and acknowledges that Players Inc
shall review and approve or disapprove in writing such use.
Company further agrees and acknowledges that the number of
players included in such commercials, if approved, shall be a
minimum of six and shall be selected from Attachment "B" to the
Licensing Agreement. The players used in such commercials shall
be shown with equal prominence. Company further agrees and
acknowledges that Players Inc shall review all scripts and story
boards before any commercials shall be made or shall be
contracted for by Company.
(ix) Company agrees and acknowledges that Players Inc will negotiate
with Company regarding the amount of required additional payments
to Players Inc separate from and in addition to the guarantees or
royalty payments included in the Licensing Agreement, if Company
requests to use player names, likenesses, or both in accordance
with this subsection 2(C), in any radio or television
commercials, print ads, point-of-purchase displays, packaging,
hangtags, wrapping material, press releases, catalogues, flyers,
trade show booths and exhibits, or any other written material or
medium, including but not limited to electronic, interactive or
Internet use, to promote licensed products. Company further
agrees and acknowledges that all contacts with such players or
their agents shall be made by Players Inc.
(x) In the event Company wishes to secure an individual player or
players to make appearances to promote licensed products or to
autograph licensed products, Company agrees and acknowledges that
the selection of such player and the separate fee to Players Inc
for such player services shall be subject to mutual agreement
between Licensee and Players Inc. Company further agrees and
acknowledges that all contact with the requested player or his
agents shall be made by Players Inc. Once the player has made the
appearance or performed the autograph service, payment shall be
made immediately to Players Inc. Any such payments shall be
separate from and in addition to any royalties or payments paid
by Company under the Licensing Agreement or this Service
Agreement. Once the selection of such player and such separate
fee have been agreed upon by Company and Players Inc, in the
event of cancellation of such appearance or autographing (other
than by player or Players Inc), Company shall nevertheless be
obligated to make such fee payment to Company immediately upon
such cancellation.
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(xi) Notwithstanding anything to the contrary herein, Licensee shall
be permitted to show on counter card boxes, without additional
separate payment to Players Inc or players: (1) six or more
examples of the football trading cards licensed herein, and/or
(2) a list of six or more players' names whose images or
likenesses are used on the football trading cards licensed
herein; provided, however, that such cards are shown with equal
prominence, and provided further, however, that Players Inc shall
retain all rights to prior written approval contained herein.
(xii)Annually by May 1 of each calendar year covered by this
Agreement, Company shall submit to Players Inc for approval, a
preliminary marketing plan for all licensed products for the
upcoming license period. Players Inc shall respond in writing
signifying approval or disapproval of such marketing plan within
fifteen (15) business days. Such marketing plan shall include
without limitation: a complete listing and description of all
products to be produced, quantities, pricing and advertising and
promotion schedules.
(xiii) For licensed product to be produced under each brand or
sub-brand covered by this Agreement, Company shall submit
annually to Players Inc for approval a product outline. Such
product outline shall include without limitation a complete
listing and description of all products to be produced, pricing,
quantities, and advertising and promotion schedules. Players Inc
shall respond in writing signifying approval or disapproval of
such product outlines within fifteen (15) business days.
(B) PERIODIC STATEMENTS.
(i) Company shall furnish to Players Inc, no later than fifteen (15)
days following the last day of each May, August, November, and
February of this Agreement. a complete and accurate statement
certified to be accurate by an officer of Company, showing the
number, description, and gross purchase price, of the licensed
products distributed by Company during the preceding quarterly
reporting period, as described in Section 6 (C) of the License
Agreement, together with any returns made during such reporting
period. Once in every twelve-month period, Company shall furnish
Players Inc with a detailed statement certified by an officer of
Company, showing the number of gross sales of the licensed
products covered by the Licensing Agreement.
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(ii) Such statements shall be furnished to Players Inc whether or not
any of the licensed products have been purchased during the
reporting period for which such statement is due. The payment
made hereunder or under the License Agreement (or the cashing of
any check paid hereunder or under the License Agreement) shall
not preclude Players Inc from questioning the correctness thereof
at any time and, in the event any inconsistencies or mistakes are
discovered in connection therewith, they shall immediately be
rectified and the appropriate payment made by Company.
(C) BOOKS AND RECORDS.
(i) For a period of two (2) years following the termination or
expiration of this Agreement, Company shall maintain accurate
books and records for itself and any subsidiary or affiliated
entity with respect to its sale of licensed products under this
Agreement and the Licensing Agreement. Said books and records
shall be subject to inspection and audit by Players Inc or its
duly authorized representative at reasonable times upon
reasonable notice from Players Inc to Company. In addition,
Company shall cause any entity with which it contracts for
services or production of product to cause its books and records
to be available for audit and inspection by Players Inc to the
extent necessary to confirm the audit of Company. Company shall
not interfere with such inspections and audits in any way.
(ii) The cost of such inspections and audits shall be paid by Company
if the result of such inspections and audits indicates a
difference of 3% or more, when compared to the statement
certified to be accurate by an officer of Company for the twelve
month period covered by such statement as described in Section
(B) (ii) hereof, or the cost of such inspections and audits as
the result of an inspection or audit performed by Players Inc
shall be paid by Players Inc if such difference is less than 3%.
(iii)In the event any inconsistencies or mistakes are discovered as a
result of such inspections and audits, they shall be rectified
immediately and the appropriate payment shall be made immediately
by Company.
3. TRADING CARDS.
Company shall provide to Players Inc free of charge the following:
(A) Prior to each December 1 of this Agreement, for each player
included in Attachment "B," 100 of each individual common card, 6
of each card other than common cards, and one complete set of all
player cards produced for that annual period; and
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(B) Prior to each December 1 of this Agreement, six cases of count
goods and six dozen complete sets of all player cards produced
for that annual period.
4. TERM.
(A) The term of this Agreement shall extend from March 1, 2000 to
February 28, 2003 (hereinafter referred to as the Original
Service Period) unless terminated in accordance with the
provisions hereof. Company may renew this Agreement for an
Additional Service Period from March 1, 2003 to February 29,
2004, provided Company has faithfully fulfilled its obligations
hereunder in the Original Service Period. Notice of desire to
renew shall be given by Company no later than January 1, 2003 in
the Original Service Period.
(B) Company acknowledges and agrees that Company has and shall have
no right to extend or renew this Agreement beyond the term and
renewal options, if any, stated herein. No conduct by either
Players Inc or Company shall create, imply, or infer a new
license agreement, service agreement, or extension of the stated
term and renewal options, if any, of this Agreement or the
Licensing Agreement, unless same is specifically set forth in a
written agreement signed by both Players Inc and Company.
Company's agreement that this Agreement is subject to the term
and renewal options, if any, stated herein, in all events
whatsoever, is a material inducement for Players Inc to enter
into this Agreement.
(C) Notwithstanding anything to the contrary, this Agreement is
coextensive with the Licensing Agreement, and termination of the
Licensing Agreement shall result in termination of this
Agreement. As provided in the Licensing Agreement, termination of
this Agreement shall result in termination of the Licensing
Agreement.
5. COMPENSATION.
(A) In consideration of the payment of one dollar, and other good and
valuable consideration hereby acknowledged as received, Players
Inc agrees to provide Company with the services listed in this
Agreement.
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(B) Company agrees to spend the following total amounts on activities
that stimulate and promote the market for licensed product(s)
(hereinafter "marketing payments"), subject to prior written
approval by Players Inc of such activities:
1 % of sales, during each annual period of the
Original Service Period, and
1 % of sales, during the Additional Service Period, if
applicable, and
Such activities shall include, but are not limited to,
sponsorships, promotions, player appearances, and special events.
Company shall provide documentation that such approved
expenditures have been made. The expenditure documentation shall
be provided on a quarterly basis and shall be certified by an
officer of Company. Such documentation shall be subject to
inspection and audit by Players Inc on the same basis as
Company's books and records.
If at the end of each annual period or Service Period(s) covered
by this Agreement Company has not spent the required amount for
such period specified above in this Section 5(B), then Company
shall pay to Players Inc, no later than the last day of such
period, an amount equal to the difference between the amount
specified in this Section 5(B) for such period and the amount
actually spent by Company during such period on approved
activities.
6. PAYMENTS AND NOTICES.
All transactions under this Agreement including, without limitation,
all payments and all notices, reports, statements, approvals, and
other communications, shall be with or made payable in the name of
NATIONAL FOOTBALL LEAGUE PLAYERS INCORPORATED, 2021 L Street NW, Suite
500, Washington, DC 20036, or its assignee, where applicable. All
correspondence, notices, approvals, and other communications to
Company shall be with The Topps Company, One Whitehall Street, New
York, NY 10004-2109, Attention: Scott Silverstein, Executive
Vice-President of Business Affairs.
7. INDEMNIFICATION AND INSURANCE.
(A) Company agrees that it, during the term of this Agreement or
thereafter, will not challenge or in any way infringe upon the
title or any rights of Players Inc or NFLPA in and to any of the
licensed rights described in the Grant of License in Section 2 of
the License Agreement, or challenge or in any way infringe upon
the validity of this Agreement.
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(B) Company further agrees to assist Players Inc or NFLPA to the
extent necessary in the procurement of any protection for the
Licensed Rights or to protect any of the Licensed Rights, and
Players Inc, if it so desires, may commence or prosecute at its
own expense any claims or suits in its own name or in the name of
Company or join Company as a party thereto, with Company's
consent, which shall not be unreasonably withheld. Company shall
notify Players Inc in writing of any infringement or imitations
of which Company becomes aware.
(C) For its own acts, Company hereby indemnifies Players Inc and
undertakes to defend Players Inc from and against any claims,
suits, losses, damages, and expenses (including reasonable
attorneys' fees and expenses) arising out of any acts or
omissions of Company in conjunction with this Agreement,
including but not limited to the marketing, sale, distribution,
or use of the Licensed Rights. Company agrees to obtain, at its
own expense, general liability insurance providing adequate
protection for Company and Players Inc against any such claims or
suits in amounts not less than Three Million Dollars
($3,000,000.00). Within thirty (30) days from the date hereof,
Company shall submit to Players Inc a fully paid policy or
certificate of insurance naming Players Inc as an insured party,
requiring that insurer will not terminate or materially modify
such agreement without written notice to Players Inc at least
twenty (20) days in advance thereof.
8. PARTNERSHIP.
Nothing herein contained shall be construed to place Company and
Players Inc in the relationship of partners or joint venturers, and
Company shall not have the power to obligate or bind Players Inc in
any manner whatsoever.
9. WAIVER OR AMENDMENT.
None of the terms of this Agreement shall be waived or amended except
by an express agreement in writing signed by both parties. With the
exception of the Licensing Agreement, there are no representations,
promises, warranties, covenants, or undertakings other than those
contained in this Agreement. No written waiver shall excuse the
performance of an act other than those specified therein. The failure
of either party hereto to enforce, or delay by either party in
enforcing, any of the Licensed Rights shall not be deemed a continuing
waiver or amendment thereof and either party may commence, within the
time provided by applicable law, appropriate legal proceeding(s) to
enforce any or all of such rights.
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10. NON-ASSIGNABILITY.
Company shall not assign this Agreement without the prior written
consent of Players Inc.
11. SEVERABILITY.
This Agreement is intended to be performed in accordance with, and
only to the extent permitted by, all applicable laws, ordinances,
rules, and regulations. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable, for any reason and to any extent, but the extent of
such invalidity or unenforceability does not destroy the basis of the
bargain between the parties as expressed herein, the remainder of this
Agreement and the application of such provision to other persons or
circumstances shall not be affected thereby, but rather shall be
enforced to the greatest extent permitted by law.
12. CONSTRUCTION.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York of the United States of America,
except that State's conflict-of-laws provisions, to the extent they
are inconsistent with the terms of this Section 12. The parties
consent to the jurisdiction of the State of New York and designate the
courts of the State of New York as the venue for any dispute arising
out of, under, or relating to this Agreement.
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IN WITNESS WHEREOF, Company and Players Inc have caused this Agreement
to be signed by their authorized representatives, all as of the day and
year first above written.
THE TOPPS COMPANY, INCORPORATED
By: /s/ Warren Friss
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Title: Vice President
NATIONAL FOOTBALL LEAGUE
PLAYERS, INCORPORATED
By: (s) Douglas Allen
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Title: Assistant Executive Director