Memorandum of Agreement - Topps Co. Inc. and Major League Baseball Players Association
MEMORANDUM OF AGREEMENT
1. Form of Player Contracts. Attached as Exhibit A is Topps' present form
of agreement with Baseball Personnel (Player Contract"). Topps agrees in the
future, until January 31, 2006, to use only Exhibit A as the form of its
licensing contracts with Baseball Personnel, and Exhibit B (attached) as its
form of Extension Agreement, except to the extent it is signing Non-Major
Leaguers pursuant to that certain Agreement between Topps and the MLBPA dated
November 19, 1992.
2. Term of Agreement. This term of this Agreement shall extend through
January 31, 2006.
3. Standstill Agreement. The Major League Baseball Players Association
agrees that it will not interfere with Topps's contracts with Baseball
Personnel, its procurement of such contracts, or its extensions or renewals of
such contracts at any time prior to the end of the Term hereof, provided that
Topps does not enter into, extend or renew contracts other than in the form of
Exhibit A and Exhibit B, and does not seek to extend or renew contracts so as to
place players under contract for more than four (4) future baseball seasons.
4. Duration of Player Contracts. The Player Contracts, as well as the
Extension Agreements and this Agreement, refer at various places to a
prohibition on Topps placing players under contract for more than four (4)
future baseball seasons. The parties anticipate that, in accordance with past
practice, Topps will be signing contracts and extension agreements with players
at various times during the year. It is the parties' mutual understanding that,
if such a document is signed during a baseball season, the baseball season then
in progress will not be counted as one of the four "future" years for purpose of
interpreting this language. The effect of this interpretation will be to permit
Topps to sign contracts and extension agreements with players during the season
for one year longer than if, in accordance with Topps's normal practice, they
had signed during the immediately preceding spring training. For players signed
in season, four "future" baseball seasons will be interpreted to mean the season
currently in progress plus four seasons into the future.
As an example, a player's original Topps contract expires at the end of
2004 season. During the 2002 season, he signs an extension agreement with Topps.
The extension agreement can permissibly extend the player's contract for two
additional future seasons (2005 and 2006), whereas if he had signed the
extension in spring training it would be for only one season (2005).
5. Posters and Similar Items. Paragraph 1 of the Player Contract grants to
Topps the right to use multiple players' pictures in sheets which contain groups
of images. What is contemplated here is that Topps shall have the right to
publish proof sheets of its picture card items, and products similar in format,
but not posters, team photographs or other products which have been designed
specifically to take advantage of this grant of rights. In other words, the
language is designed as a convenient adjunct to the grant of rights for picture
cards, not as an entirely separate grant of rights.
6. Paragraph 2(d) of the Player Contract. This paragraph contains various
restrictions upon Topps' ability to use the rights granted in paragraph 1. It is
understood between the parties that paragraph 2(d) is not in itself a vehicle
for the grant of any rights whatsoever to Topps and does not expand Topps's
rights granted in paragraph 1 by virtue of any negative implication.
7. Unsigned Players. There are at present in the Major Leagues a handful of
players who have never signed agreements with Topps, and there may in the future
be similar players. This letter will confirm that the MLBPA does not and will
not contend, while its agreement with Topps is in force, that its Commercial
Authorization Agreements prevent Topps from attempting to enter into contractual
arrangements with such players. By the same token, of course, the MLBPA does not
in any regard warrant that those players will sign contracts with Topps (but, as
provided in Section 3 above, it will nor interfere with Topps's efforts to sign
them).
8. Coaches and Managers. It is the intention of both parties to continue
past practice with regard to coaches and managers. There are some such
individuals who are not members of the MLBPA and do not participate in the
MLBPA's group licensing program. As in the past, upon request, the MLBPA will
identify those individuals to Topps, and Topps will make separate arrangements
with them, if it desires, concerning the use of their pictures and any payments
to be made to them therefor.
9. Power of Arbitrators. It is expressly understood that the choice of New
York law to govern the Player Contracts means that the parties intend to be
governed by the arbitration provisions of the New York Civil Practice Law and
Rules, Article 75, as they may be in force at the time of arbitration. This law,
among other things, confers subpoena power on an arbitrator.
10. Royalty Reports. Topps shall furnish the MLBPA with interim royalty
reports three (3) times a year (June 15, September 15, December 15) plus a final
report on February 1. Interim report dates coincide with interim payments except
that the June 15 report may be made 15 days after the June 1 payment.
Royalty reports will be in form mutually acceptable to MLBPA and Topps,
which shall generally conform to Exhibit D attached hereto. The June 15 and
February 1 reports will include:
(a) Names of players entitled to payment for the period in question
under paragraphs 4(b)(i) and (ii) of Player Contracts, as extended;
(b) Termination dates of Player Contracts;
(c) Direct payments due to or earned by players under paragraphs 4
(b)(i) and (ii) of Player Contracts;
(d) Gross sales of licensed product broken down by product and country
of sale;
(e) Returns;
(f) Discounts and allowances made to customers;
(g) Net sales;
(h) Net royalties accrued; and
(i) Royalty or guaranty payments made to the MLBPA. The September 15
and December 15 reports may be limited to items 4 through 8.
11. Audits.
(a) Topps expressly agrees that the MLBPA may conduct its audits of
Topp's books and records through its authorized representatives, who shall
not be limited to certified public accounts (provided that representatives
who are not certified public accountants have been previously or are
hereafter approved by Topps to conduct audits under the BPPLA, which
approval shall not unreasonably be withheld) and provided that the audit
results and the auditors shall be subject to the confidentiality provisions
of the BPPLA and this Agreement.
(b) Topps shall make available to the MLBPA's authorized auditor(s)
whatever books and records are reasonably necessary to perform the audit.
The authorized auditor, in turn, will hold confidential all information he
receives except to the extent of reporting to the MLBPA on whether or not,
in his professional judgment, Topps has made the payments it is required to
make and verifying (or not) compliance with the terms of the Player
Contracts and the Agreement.
(c) If the MLBPA's authorized auditor determines that Topps has failed
to make any required payments, and Topps disputes that determination, the
MLBPAs officers and Executive Board will be entitled to have access to
complete audit information, subject to the duty of confidentiality
contained in Paragraph 6 (a) of the Player Contract.
(d) The MLBPA may and shall inform its player-members about the
royalties paid by Topps as that information is provided to the MLBPA by
Topps or in the report of its certified auditors.
12. Promotional Commitment. Although the MLBPA is not obligated to do so,
it is the current intention of MLBPA to develop a national advertising and/or
promotional program featuring the Rights and/or Trademarks and to consult with
Licensee about the development of such program. Licensee agrees that MLBPA shall
have the right, at its discretion and in a manner and style of its choice, to
print catalogues, brochures, advertisements or other promotional materials
wherein representative merchandise from Licensee and other Licensees of MLBPA
shall be displayed. Topps shall spend a minimum of One Hundred Twenty Five
Thousand Dollars ($125,000.00) annually (Topps may, but shall not be required
to, spend more) on marketing Major League baseball player trading cards to the
non-collector youth market (defined as ages 8-14) and/or the promotion of Major
League baseball players. Such expenditures are to be spent against specific
marketing activities mutually agreed upon by the MLBPA and Licensee.
Expenditures may include, but not be limited to, youth oriented advertising or
promotional programs proposed by Topps, or MLB Players Choice marketing programs
such as:
(a) Sponsorship of the Players Choice Awards;
(b) Sponsorship of MLBPA player skills competitions;
(c) Sponsorship of other MLBPA youth-oriented baseball participatory
programs;
(d) Youth-oriented sampling programs;
(e) Advertising in MLB Players Choice programs including, but not limited
to, the Street & Smith's Baseball Annual and other cooperative programs;
(f) Advertising and promotion on the MLBPA website, www.bigleaguers.com;
(g) Cross promotions with other MLBPA licensed youth products or with
licensed youth product categories such as soft drinks, candy, snack foods, etc.;
(h) MLBPA integrated retail programs;
(i) Participation in MLB Players Choice catalogues and brochures created by
MLBPA which feature Topps' products;
(j) Participation and support of MLBPA player merchandising point of sale
materials which support the baseball card category; and
(k) Sponsorship of player appearances at industry functions (ie; Kit Young,
Super Show).
The expenditure of marketing funds is in addition to any royalty payments
paid by Topps pursuant to this Agreement.
13. Memorabilia Products.
(a) During the term of this Agreement, so long as Topps complies with all
its provisions, the MLBPA will not object to the use of memorabilia items in
trading card products on the ground that such use violates or is not authorized
by the BPPLA. Any MLBPA objections to products shipped in 2001 are withdrawn,
and the MLBPA will not authorize or countenance the commencement of an action
against Topps by any MLBPA Licensee to retroactively enforce the rights of any
Player.
(b) Attached as Exhibit D is a copy of the MLBPA's current Trading Card
Guidelines 2002" applicable to all MLBPA trading card licensees Except as
specifically provided below, Topps agrees to follow those `Guidelines." as they
may be amended from time to time during the term of this Agreement, insofar as
they relate to procedures for the approval and use of memorabilia items in
connection with trading card products. It is clearly understood that Topps'
agreement is only to abide by such "Guidelines" as apply uniformly to all the
MLBPA's trading card licensees. MLBPA will, at regular intervals, provide notice
to Topps and all MLBPA trading card licensees of the identity of those Players
who have entered into an exclusive agreement with respect to the provision of
autographs and/or the personal provision and/or authentication of game-used
memorabilia for use in connection with trading card products and/or for the
featured use of their attributes on trading card packaging, advertising or
promotional materials.
(c) Attached as Exhibit E is a list of 70 items of game-used memorabilia
which Topps has acquired "on spec" for future products. Subject to Topps'
compliance with all the provisions of this Agreement, the use of those items is
APPROVED with the exceptions noted in paragraph (d) below.
(d) Included in Exhibit E are memorabilia items purchased "on spec" which
are associated with Derek Jeter and Team USA. Subject to further written notice
from the MLBPA in the event of changed circumstances, the MLBPA DOES NOT APPROVE
the use of any of those items in Topps' future products, owing to the conflicts
such approval would create with one MLBPA trading card licensee's exclusive
Highlight Agreement with Jeter, and with another MLBPA trading card licensee's
exclusive agreement with USA Baseball.
14. Rookie Designations.
(a) Provided that each trading card licensee of the MLBPA shall be subject
to the same or greater restrictions, with respect to Topps' use of the baseball
pictures of non-40-man roster players ("Prospects"), Topps agrees that it will
not use the word or designation "rookie" on or in connection with its
publication of baseball pictures of Prospects. Notwithstanding the foregoing,
Topps may still use (i) with respect to Bowman brand products, its historical
tagline "Home of the Rookie" and the word "rookie" in promotional materials for
Bowman brand products, and (ii) the word "Rookie" in the name of its Topps
Traded and Rookies product and in promotional materials for such product.
(b) Provided that the MLBPA does not authorize any trading card licensee of
MLBPA to include baseball pictures of Prospects in more than one (1) product
release per product year (excluding USA Baseball team products, which MLBPA
shall not permit to utilize the word "rookie"):
(1) No more than ten percent (10%) of the baseball pictures included
in any release of any Topps product (other than Bowman brand products and
Topps Traded and Rookies) will be baseball pictures of Prospects, and
(2) In every product year, at least (i) two Topps product releases, or
(ii) ten percent (10%) of the releases of Topps non-Bowman brand products,
whichever is greater, will contain no baseball pictures of Prospects. For
purposes of clarity, "etopps" shall be considered a "product release."
15. Non-waiver. The provisions of Sections 13 and 14 of this Agreement are
adopted without prejudice to any position either party may take in the future
with respect to the subject matter thereof. They are not intended to diminish or
extend any existing rights or constitute a waiver of any existing rights except
as expressly set forth herein.
16. Use of Non-Major Leaguers. As used in this Agreement, `Major Leaguer"
means a baseball player, coach, manager or trainer who, with respect to any
Baseball Season. has signed a valid BPPLA and (1) has at least one day's service
on an active Major League roster or disabled list, or (ii) otherwise has at
least one day's active service for MLBPA dues purposes. "Non-Major Leaguer"
means, with respect to any Baseball Season, any current or former baseball
player, draft choice, coach, manager or trainer who is not a Major Leaguer.
"Baseball Season" means the Major League Championship Baseball Season, excluding
spring training, exhibition and post-season play. "Baseball Product" means a
product authorized under the BBPLA which uses one or more Major Leaguers.
(a) Subject to paragraphs 16(b) and (d) hereof, Topps will not
hereafter use in any Baseball Product the baseball picture of any Non-Major
Leaguer unless it has a separate contractual arrangement directly with such
player or his duly authorized representative (and not with any baseball
club or league or any entity affiliated with any baseball club or league)
which shall:
(1) be nonexclusive so long as none of Topp's competitors
licensed by the MLBPA has been accorded any more favorable treatment
in connection with products licensed by the MLBPA;
(2) be limited to the use of his baseball picture while he is a
NonMajor Leaguer;
(3) not be in conflict with the terms of the BBPLA;
(4) provide expressly that Topps will make any payment thereunder
directly to him; and
(5) not permit Topps to deduct any such payment from ro~ alties
payable to the MLBPA under the BPPLA.
(b) Notwithstanding the foregoing. this Agreement shall not preclude Topps
from obtaining or attempting to obtain rights to use the baseball picture of a
Non-Major Leaguer in Baseball Products other than from the player or his duly
authorized representative (i) if for reasons beyond Topp's control it becomes
legally impossible or impracticable to obtain such rights from such player or
representative or (ii) if the MLBPA knowingly condones the use by any of Topp's
competitors of the baseball picture of a Non-Major Leaguer on such basis in a
product licensed by the MLBPA.
(c) Topps shall provide the MLBPA on demand with copies of Topp's contracts
with any Non-Major Leaguers used in any Baseball Product.
(d) Nothing in this paragraph 16 limits Topp's rights to use baseball
pictures of Team USA Baseball players in accordance with Topp's contracts with
USA Baseball or any successor organization as amended from time to time.
(e) Subject to the provisions hereof, Topps will pay Non-Major Leaguers
directly for the use of their baseball pictures, without any deduction from the
monies payable to the MLBPA under the BPPLA. The MLBPA will not construe Topp's
entering into contracts with Non-Major Leaguers (so long as those contracts are
not in conflict with the BPPLA or with paragraph 16 hereof) or the inclusion of
Non-Major Leaguers in Baseball Products pursuant to paragraph 16 hereof as a
violation of any agreement Topps has with the MLBPA.
(f) All Baseball Products shall be clearly labeled to indicate a single
Baseball Season unless Topps and the MLBPA agree otherwise in writing. Within 10
days after commencing shipment of any Baseball Product, Topps will furnish to
the MLBPA a list of the baseball players, coaches, managers and trainers whose
baseball pictures it has used in such product. By November 30 in each year.
following the conclusion of the Baseball Season, the MLBPA will inform Topps of
the names of the individuals on such lists who were Non-Major Leaguers for that
Baseball Season according to its records, and Topps will compensate all
Non-Major Leaguers, without deducting any such compensation from royalties
payable to the MLBPA under the BPPLA.
(g) Topps will not assert or rely upon the BPPLA as a source of rights to
use the baseball pictures of Non-Major Leaguers.
17. MLBPA Relationship to Non-Major Leaguers. Under its group licensing
program, the MLBPA does not purport to represent the commercial interests of
Non-Major Leaguers with respect to the use of their baseball pictures while they
are Non-Major Leaguers, although from time to time the MLBPA responds to
inquiries and requests for guidance from Non-Major Leaguers or their agents or
other representatives with respect to commercial matters. Nonetheless, the MLBPA
does not undertake to negotiate the amount of fees or royalties to be paid to
Non-Major Leaguers under Topps contracts with Non-Major Leaguers; it does not
purport to approve the form of such contracts except insofar as it requires they
conform to paragraph 16(a) hereof; and it does not undertake to act as an agent
to collect fees or royalties under such contracts or otherwise to enforce such
contracts on behalf of Non-Major Leaguers.
18. Communication. At all times during the term of this Agreement the MLBPA
and Topps will designate a senior executive with responsibility for the
relationship with the other party and a representative to handle day-to-day
communications with the representative of the other party, and each party shall
notify the other of such designations.
19. Product Samples and Player Lists. For purposes of this Agreement.
"Product Year" means the calendar year of the Baseball Season designated on a
Topps product in accordance with Paragraph 16(f) of this Agreement.
(a) As to every Product Year, Topps will provide written notice to the
MLBPA at least sixty (60) days prior to commencement of production of every
product making any use of any baseball picture of any Major Leaguer in whose
manufacturer, production, advertising, marketing, sale or distribution Topps has
any direct or indirect beneficial interest including (1) a concept description
of the product, (2) to the degree they are known, the name(s) of the individuals
(whether or not Major Leaguers) and any other person, character, name, logo or
symbol which it plans to use in the product or in its packaging or promotional
material, and (3) to the extent practicable, a sample or prototype of each such
product and its packaging and promotion material to permit the MLBPA to inform
Topps whether it believes that the proposed product is in conflict with the
rights granted to Topps under the BPPLA (or pursuant to any agreement between
Topps and the MLBPA). Unless the MLBPA notifies Topps within ten (10) working
days of receipt of such notification that it believes the proposed product does
not fall within those rights, the MLBPA will be deemed to have waived any
objection to the product, but only as described by Topps, and only for the
Product Year to which the notification applies. If the MLBPA notifies Topps that
it believes that a proposed product or any aspect of that product does not fall
within Topp's rights, the MLBPA will inform Topps what its objections are, and
Topps and the MLBPA will consult promptly concerning the product.
(b) Any information provided by Topps under paragraph 1 9(a) will be
treated as confidential by the MLBPA.
(c) Promptly upon the first sale of any Baseball Product for any Product
Year, Topps shall furnish two (2) samples of the product to the MLBPA
20. Cooperative Relationship Both Topps and the MLBPA intend to maintain a
working relationship in which Topps (a) keeps the MLBPA informed in advance with
respect to its use of the baseball pictures of Major Leaguers, (b) discusses
with the MLBPA in advance any questions as to whether a planned product falls
within Topp's rights, and (c) consults with the MLBPA on any questions as to the
appropriate royalty to be paid on any product or combination of products. In
this working relationship it is intended that the MLBPA in a timely fashion will
(a) work together with Topps to solve questions arising under the BPPLA and this
Agreement, (b) cooperate to encourage Topp's sales of Baseball Products, and (c)
discuss with Topps any proposals Topps may make to expand the scope of Topp's
rights under the BPPLA or to license Topps to produce new products.
21. Non-Disparagement. The parties agree that neither will disparage the
commercial practices, business ethics, or character of the other.
22. Topps Magazine. Topps agrees that the BPPLA does not grant it the right
to use the baseball pictures of any Major Leaguer as an insert or separable
commercial product in Topps Magazine or any similar publication.
23. Premiums and Promotions. Topps agrees that the BPPLA does not grant it
the right to use the baseball picture of any Major Leaguer as a premium in
connection with wholesale or retail sales, or otherwise to advertise or promote
the sale of any service, or any product which is not a Baseball Product,
including its own. However, the MLBPA agrees that the mere inclusion of Baseball
Products along with other products on Topp's order sheets, so long as the
Baseball Products are not promoted, sold or advertised as premiums or as free
goods, is permitted. Similarly, advertising of an institutional nature that
includes Baseball Products along with several other Topps non-sports products
and does not disproportionately feature any such products or promote or
advertise the Baseball Products as premiums or free goods, is permitted. Under
no circumstances will Topps use Baseball Products as premium or otherwise to
promote the sale of other sports products without the express advance written
consent of the MLBPA. In the event that Topps desires to use its Baseball
Products as premiums or otherwise to promote the sale of Topp's own non-sports
products, the MLBPA will negotiate in good faith with Topps for the granting of
such rights on a case-by-case or "pooled" basis under MLBPA's standard form of
promotional license agreement.
24. Prepacks.
(a) A prepack is a collection of Topps products regularly sold by Topps
which are packaged and sold together as a package by Topps in the same wholesale
shipping carton for the convenience of retailers with the expectation that
retailers will break down the wholesale carton in order to sell the products at
retail, and which are not advertised, promoted or intended to be sold together
as a package at the retail level.
(b) The MLBPA agrees that Topps may ship its Baseball Products in prepacks
and pay royalties only on the net sales of the Baseball Products, which net
sales for this purpose shall be computed based on the regular wholesale price of
the Baseball Products contained in the wholesale shipping carton, less
discounts, returns and allowances actually made to customers, provided that (1)
the Baseball Products will not be promoted, sold, or advertised as free goods or
as premiums; (2) the Baseball Products will not be used to promote other
products (it being understood that the mere listing or depiction of Topps
prepackaged products together in a trade advertisement for the prepack does not
in itself constitute a promotion): and (3) the Baseball Products will not be
combined in a prepack with sports products other than Baseball Products.
25. Stadium Club Membership. The MLBPA acknowledges Topps desire to promote
brand loyalty and create a customer mailing list through maintenance of the
Stadium Club and/or other similar "fan club" structures. Topps agrees that in
the context of such membership structures in which Baseball Products are
distributed to club members, (1) the Baseball Products will not be promoted,
sold or advertised as free goods or premiums; (2) the Baseball Products will not
be used to promote other products (it being understood that advertising which
merely describes the various items available to Stadium Club members without
featuring or highlighting any such product does not in itself constitute a
promotion); (3) the Baseball Products will not be combined or marketed with
other sports products in the same package or under a combination price
structure; (4) the Baseball Products distributed to club members must be
separately priced and sold at no less than the price at which Topps sells
similar Stadium Club membership products; and (5) any membership fees received
in any calendar year will be subject to royalty at the prevailing rate in the
same ratio as the net sales of Baseball Products sold to Club members bear to
all Stadium Club membership products sold to Club members pursuant to such
membership in that calendar year.
26. Royalty Calculations and Returns.
(a) Except as expressly set forth in paragraph 24 above, Topps agrees that
the BPPLA requires Topps to pay percentage royalties on all net sales to any
unaffiliated third party by Topps, (including sales by fulfillment houses and
similar consignment agents) of all Baseball Products (whether at wholesale,
retail, direct mail or any other means of distribution) without any deduction
for any other element of an~ package containing baseball pictures of Major
Leaguers. unless the MLBPA and the third party have agreed in advance on
royalties to be paid by the third party to the MLBPA.
(b) For the purposes of computing the dollar amount of net sales of any
Baseball Product for any royalty period, returns of Baseball Products will be
credited at the royalty rate which applied to the Product Year of the product.
(c) Unless otherwise expressly agreed by the parties in a subsequent
writing, royalty rates under the BPPLA shall apply to entire calendar years. All
Baseball Products labeled as to a given Product Year shall bear royalty at the
rate effective as of January 1 in that year even if sold prior to that date.
(d) Based upon the MLBPA's representation that none of Topp's competitors
is accorded any more favorable treatment, Topps agrees that all sales of
Baseball Products, including without limitation Topps sales by its direct market
operations or sales to purchasers made by fulfillment houses or other sales or
consignment agents utilized by Topps, shall be subject to royalty on the net
sales amounts paid by such purchasers without deduction for postage, handling or
fees or commissions incurred in connection with such sales.
27. Interest. Interest in the New York statutory rate for prejudgment
interest will accrue on any amount due under the BPPLA from and after the date
due until the date of receipt of payment, provided that the MLBPA's failure to
exercise its right to audit Topp's books and records and to complete such audit
within one (1) year after receipt of payment from Topps shall preclude the MLBPA
from making any claim for payment of interest for more than one year with
respect to any deficiency in such payment revealed after the expiration of that
year, and provided further that the one (1) year period will be extended by any
time that Topps unreasonably delays completion of such audit.
28. Sublicenses.
(a) Topps agrees that the BPPLA does not confer any right for a Topps
sublicensee to sell Baseball Products inside the continental United States
(including Alaska and Hawaii) without the express advance written approval of
Topps and the MLBPA. Accordingly, Topps agrees to take any such steps as may be
necessary (including but not limited to cancellation of any such sublicense
agreement) to ensure that Topp's sublicensees publish, distribute and sell
Baseball Products only outside the continental United States (including Alaska
and Hawaii).
(b) Topps agrees to require, as a condition of any sublicense of rights
granted under the BPPLA, that each Topps sublicensee (1) keeps detailed records
of its sales of Baseball Products, and (2) agree that the MLBPA and its
authorized representatives shall have the right, during normal business hours
and upon reasonable notice, to inspect and audit such sublicensee's books of
account and records with respect to such sales in order to verify the amount of
payment due to the MLBPA as a result thereof and to collect such payments. Topps
will promptly use its best efforts to cause any existing sublicenses to be
amended to conform with this subparagraph if they do not already do so. Topps
shall supply the MLBPA on an ongoing confidential basis with copies of all
current sublicense agreements with respect to Baseball Products, and any
amendments or extensions thereto.
(c) The MLBPA and Topps each agree promptly following the audit of any
sublicensee to inform the other in detail of the findings of that audit with
respect to Baseball Products.
29. Arbitration.
(a) Any dispute or disagreement between the parties hereto arising out of
or relating to this Agreement or any dispute or disagreement arbitrable under
the BPPLA shall be settled by final and binding arbitration in New York City.
The arbitrators shall be selected in accordance with the procedures set forth in
the BPPLA The parties hereto expressly stipulate that the arbitrators shall have
full subpoena power and full powers to fashion appropriate remedies, including
without limitation the power to grant preliminary or final equitable, monetary,
injunctive, or declaratory relief. Judgment upon the award may be entered in any
court having jurisdiction.
(b) With the agreement of the parties, arbitration of any issue involving
whether a particular product falls within the scope of Topp's rights under the
BPPLA may be submitted for expedited arbitration before a single arbitrator
designated by lot from among a mutually-selected list of arbitrators. If the
first arbitrator chosen by lot is unable or unwilling to serve, the second shall
be designated, and so forth until an arbitrator can be finally selected. The
single arbitrator shall have all the powers of the arbitrators under Paragraph
29(a) of this Agreement and shall be directed to render an award within 30 days
of acceptance of the assignment, and to hold such hearings and require such
submissions from the parties as shall be consistent with that direction.
30. Captions
The captions used in this Agreement are inserted for purpose of reference.
Such captions shall not be deemed to govern, limit, modify or in any manner
affect the scope, meaning or intent of this Agreement or any part thereof.
31. Integration
This Agreement represents the entire understanding between the parties
hereto with respect to the subject matters hereof and supersedes all previous
representations. understandings or agreements. oral or written, between the
parties ~ ith respect to such subjects. It is the mutual intention of the
parties that this Agreement interpret the BPPLA
32. Governing Law
This Agreement shall be governed by the law of the State of New York.
By their execution below, the parties hereto have agreed to all of the terms and
conditions of this Memorandum of Understanding.
MAJOR LEAGUE BASEBALL PLAYERS ASSOCIATION
By: /Judy Heeter/
---------------------
Name: Judy Heeter
Date: 1/6/03
THE TOPPS COMPANY, INC.
By: /Scott Silverstein/
---------------------
Name: Scott Silverstein
Date: 12/26/02
<PAGE>
EXHIBIT"A"
THE CHASE MANHATTAN BANK
5101 FOURTH AVENUE
BROOKLYN, NEW YORK 11220
BASEBALL PLAYER'S PICTURE LICENSE AGREEMENT
Definitions "Topps", when used herein shall refer to The Topps Company, Inc
its wholly-owned subsidiaries, licensees to which it may assign territorial
licenses outside the continental United State (including Alaska and Hawaii), and
its successors and assigns.
"MLBPA", when used herein, shall refer to the Major League Baseoal Plsyers
Associat,on, its successors, or any agent chosen to hold the rights granted
herein by a majority of major league baseball players who are parties to
agreements similar to this Agreement
1. Grant of rights in consideration of the payments provided for below, and
subject to the exclusions and provisos in paragraph 2 below, I hereby grant to
Topps the right to print, reproduce, publish, distribute and sell (collectively
"use") my name, picture, facsimile signature and a description and/or
biographical sketch of roe, or any of them (collectively, my "baseball picture")
in the form of two or three dimensional pictures, trading cards, postcards,
stickers, stamps, pressure-sensitive transfers, or decals each in a size no
larger than fifty square inches, and in larger sheets consisting of groups of
images, no one of which is larger than thirty-five square inches, or in the form
of medallions or coins, in molded metal or plastic, each capable of fitting into
a container with a capacity of four cubic inches or less and no dimension
greater than four inches, together with the baseball pictures of other baseball
players,
(a) exclusively, in combination with chewing gum and candy or either of
them, in the Western Hemisphere, the territories and possessions of the United
States, and the Philippines, except as provided in paragraph 2(b)
(b) nonexclusively, without accompanying items. Except as provided herein,
this grant of rights shall preclude Topps from using and shall permit me to
license others to use my baseball picture together with any item other than gum
or candy Topps may use my baseball picture together with incidental items, such
as game cards, whose cost is less than 20% of the cost of the baseball pictures
with which it is combined and whose function is to differentiate the package
from other packages. Should Topps seek to offer and incidental item which does
not consist of gum or candy and which varies substantially from the game cards
which Topps has traditionally employed, Topps shall furnish a sample thereof to
the MLBPA at least 30 days prior to the first such sale. I direct the MLBPA,
within 30 days, to notify Topps whether the proposed item is confusingly similar
to an itern which is being used, or is under active current consideration for
use, in combination with my baseball picture, by any other person duly
authorized by me, or is detrimental to my image as a baseball player. I direct
the MLBPA not unreasonably to withhold its consent to such use. Failing such
notification, Topps shall be free to sell my baseball picture in combination
with the proposed item. Topps agrees that the inclusion of such incidental items
by others in combination with my baseball picture in a package they otherwise
have rights to sell will not violate Topps' rights under this Agreement, except
to the degree that such incidental item is confusingly similar to an item used
by Topps.
(c) Nothing herein shall preclude Topps from distributing collector aids,
such as albums for stamps, display cases for trading cards, and similar items,
either alone or in combination with products to which I have granted rights
under paragraphs 1(a) or 1(b)
These rights are granted for the term of this Agreement and any extensions
or renewals thereat These rights are granted throughout the world The rights
granted herein shall not constitute a testimonial or endorsement of Topps'
products I shall not endorse any bubble gum product other than Topps.
2. Exclusions and provisos (a) Nothing herein shall interfere with my
ability to grant rights with regard to the use of my baseball picture for club
publicity purposes as provided in the Basic Agreement between the Major League
Baseball Players Association and Major League Baseball, as that Basic Agreement
may be amended hereafter, provided, however, that this paragraph shall not be
interpreted as a grant of rights to any major league baseball club.
(b) Nothing herein shall interfere with my ability to grant to others the
non-exclusive right to publish or distribute my baseball picture with candy in a
package which contains at least 1 1/2 ounces of candy for each baseball picture
and a total of no more than six baseball pictures
(c) Nothing herein shall interfere with my ability to grant to others
exclusive rights (or, in connection with medallions or coins, non-exclusive
rights) with regard to my baseball picture to be sold in any form at an actual
retail sales price in excess of $4.00 per image
(d) Nothing herein gives Topps the right to sell my baseball picture in any
form to any person for use as a premium in combination with any product or
service unless the user has obtained from me the right to publish my baseball
picture in combination with that product or service. Nothing herein gives Topps
the right to sell my baseball picture in combination with any branded product or
service unless the brand is Topps' or its licensee's own, or to use the rights
granted herein in combination with any tradernark or trade name other than one
owned by Topps or an establishment which sells Topps products. Nothing herein
gives Topps the right under any circumstances to use my baseball picture for the
promotion or advertisement of alcohol, tobacco or any other product or service
which would be detrimental to my image as a baseball player
(e) Subject to the MLBPA s approval of the identity of the licensee and its
financial responsibility, which shall not unreasonably be withheld and which
shall be deemed granted if the MLBPA does not refuse approval after thirty days
written notice, Topps shall have the power to license to others the territorial
rights outside the continental United States with regard to use of rights
granted to it under this Agreement, provided, however, that Topps may only have
a single licensee in any territory and shall be responsible as a guarantor for
all payments to be made to me or for my account as a result of sales made by its
licensees.
(f) Topps may assign to another all, but not less than all of the rights
granted to it under this Agreement upon 60 days prior notice to the MLBPA,
provided, however, that if (i) Topps purports to assign these rights to any
person or entity which has the power to act for the owners of a majority
interest in a Major League Baseball Club ("Baseball Club"), or (ii) any person
or entity which has the power to act for the owners of a majority interest in a
Baseball Club shall obtain control of these rights or any portion thereof by the
acquisition of a majority interest in Topps, its successors or assigns, the
rights will automatically terminate and revert to me ninety days after written
notice to Topps by the MLBPA, unless within trial time the rights are assigned
to another not in control of a Baseball Club or the holder of these rights
assigns control of the Baseball Club to another. In the event of a termination
of rights under this paragraph, Topps shall have no further obligation to make
payments under paragraphs 4(b), 4(c), or 4(d) except for payments already earned
at the time the rights terminate.
3. Player's representations: I have reached majority. I have the full right
to enter into this Agreement I have not heretofore granted to others the rights
or any part of the rights granted to Topps hereunder. I shall not during the
term of this Agreement, or any extension or renewal thereof, enter into any
agreements with others conflicting with the rights granted herein, whether such
grant of rights to others be for the term of this Agreement or any part thereof,
or whether they be for a time commencing after the expiration of this Agreement,
except that during the final year of this Agreement as extended or renewed I may
grant such rights for a time commencing after the expiration of this Agreement.
4. Payment (a) Initially, Five ($5.00) Dollars by check to me in hand,
receipt of which I hereby acknowledge
(b) Periodic guaranteed lump sum payments: (i) For each Baseball Season
during the term of this Agreement and any extensions or renewals thereof during
which I am retained as an active, eligible member of a Major League Baseball
Club for the first 31 consecutive days of the Championship Baseball Season
("Baseball Season") without interruption, or my picture is used, Topps shall, no
later than June 1 in every such year, pay me Five Hundred Dollars ($500) and pay
the MLBPA Two Hundred Fifty Dollars ($250) and (ii) if I am a baseball player,
Topps shall also pay me an extension bonus of Seventy-Five Dollars ($75) per
year of extension each time I extend this Agreement for an additional term of
years pursuant to Topps' policy of attempting to extend its contracts with
baseball players in order to keep baseball players under contract for up to four
Baseball Seasons in advance. This extension bonus will be in addition to any
royalties payable under paragraph 4(c) or minimum royalties payable under
paragraph 4(d).
(c) Annual royalties: During any Baseball Season in which I have at least
one day of Major League service or any year in which my picture is used by
Topps, Topps shall pay on my account 10 the MLBPA, For inclusion in and
distribution in accordance with its group licensing program, a sum for each
Baseball Season during the term of this Agreement and any extensions or renewals
thereof, consisting of my pro rata portion of the total amount of a royalty of
thirteen and one-half percent (13 5%) of Topps' net sales (hereinafter defined)
made in the calendar year of any such Baseball Season. To the extent this
payment exceeds the minimum guaranteed royalty provided for in paragraph 4(d),
payment is due during banking hours on a regular business day no later than
February 1 of each for the previous Baseball Season. "Topps' net sales" shall
mean all sales of Topps' products employing the lights provided for in Topps'
contracts with major league baseball players, managers, coaches and trainers,
less discounts, returns and allowances made to customers.
(d) Guaranteed minimum royalties: If I am eligible for payment under
paragraph 4(b)(i), Topps shall pay the greater of Fifteen Honored Dollars
($1,500) or two-thirds of the average of total royalties earned for each player
under paragraph 4(c) during the preceding three Baseball Seasons which shall
include any amount paid to me or the MLBPA under paragraph 4(b)(i) Payments
under this paragraph 4(d) will be made whether or not they are earned as
royalties. To the extent they exceed the amount payable to me and to the MLBPA
under paragraph 4(t)(i), these minimum guaranteed royalty amounts shall be
payable to the MLBPA on my account in two equal installments on the fifteenth
day following the close of Topps' quarterly accounting periods ending closest to
September 1 and December 1 in each year.
(e) It is understood that I shall have the option to accept merchandise or
other things of value offered by Topps in lieu of cash payments to me under
paragraph 4(b). The value of said merchandise shall be deemed to be the value
set forth in Topps' catalog which shell be submitted to me for selection. Topps
shall provide copies of the catalog to the MLBPA in advance of their use.
5. Term of contract: This Agreement shall be effective as of the date
hereof, and shall bind both me and Topps (subject to paragraph 2(e) and
paragraph 7) for four full Baseball Seasons in which payment becomes due to me
under paragraph 4(b). In no event shall this Agreement, as it may be renewed or
extended hereafter, ever bind me, at any point in time, for more than four such
Baseball Seasons into the future. Unless renewed or extended, this Agreement
shall automatically terminate on October 31 in the year of the last Baseball
Season for which is binds me, or one year following my retirement from active
uniformed service in professional baseball, whichever is earlier. If this
Agreement terminates at a time when Topps has on hand stocks of my baseball
picture which it has been licensed to print and reproduce under this Agreement,
but which have not yet been sold, Topps may continue to sell off such stocks for
a period of four months.
6. Rights and Duties of the MLBPA: (a) Generally. Effective at such time as
I first become eligible for payment under this Agreement, I hereby designate and
authorize the MLBPA to act as my agent in connection with the interpretation and
enforcement of this Agreement; to renegotiate this Agreement as provided in
paragraph 6(b), to receive annual royalty statements and statements of my
account from Topps in the form mutually agreed between Topps and the MLBPA; to
inspect and audit Topps' books and records, including this Agreement and any
documents concerning its duration, terms or extensions, and to collect on my
behalf all royalties referred to herein. I may withdraw this authorization at
any time. Topps agrees to maintain detailed records of its net sales, and to
provide the MLBPA with periodic statements thereof in the agreed form, and to
permit the MLBPA through an independent certified public accountant to conduct
annual audits and inspections of Topps' books and records, in order to verify
the amount of total sales subject to royalty, and the amounts of other payments
due under this Agreement as extended. Topps further agrees to remit royalties
and other payments hereunder to the MLBPA on my behalf. It is a material
condition of Topps agreements hereunder that the MLBPA and its certified public
accountant keep strictly confidential any information obtained by either of them
from Topps' royalty reports or from the exercise of the rights of audit, and not
disclose such information directly or indirectly to any person in any way except
as may be mutually agreed or required by law, or in arbitration proceedings
under paragraph 12(b) hereof.
(b) Periodic renegotiation of royalty rates: To the extent that this
Agreement, as renewed or extended, may be in force, I hereby authorize the MLBPA
to enter into negotiations with Topps on August 1, 2001 and every three years
thereafter to readjust, for the succeeding three years, the royalty rates and
guaranties under this Agreement and other agreements of baseball players with
Topps to reflect changes, if any, in the value of the right granted to Topps
under those agreements. If Topps and the MLBPA cannot agree upon such rates and
guaranties within 120 days, the issues presented for negotiation will be
submitted to binding arbitration in accordance with paragraphs 12 and 13 below.
I understand that this paragraph may lead to either an increase or a decrease in
the payments to which I may be entitled under this Agreement. The increase or
decrease in any royalty rate will be limited to no more than a twelve percent
(12%) change in such rate, the increase or decrease in any guaranty will be
limited to no more than a 25% change in the dollar amount of such guaranty
7. Failure to achieve guaranteed levels of sales: In the event the total
dollar amount of Topps' net sales shall fall below the levels sufficient to earn
each individual player One Thousand Dollars ($1,000) for a full Baseball Season
in annual royalties under paragraph 4(c) hereof, for each of two consecutive
years (unless excused by the operation of paragraph 8), the exclusive rights
granted to Topps hereunder shall automatically become non-exclusive as of
December 1 of the second year. In the event Topps' rights become non-exclusive
by operation of this paragraph, Topps shall have no obligation to make further
payments under paragraph 4(d) except for payments already earned at the time the
rights become non-exclusive.
8. Unforeseen contingencies: Acts of war, public disorder or nature,
accidents to plant or machinery, orders of courts or governments or their
bureaus or departments, the interruption of the Major League Baseball Season,
strikes, or failure of usual sources of supply of material, or any contingency
beyond the control of Topps, whether related or unrelated or similar or
dissimilar to any of the aforementioned shall be sufficient reason for
nonpayment by Topps of amounts otherwise payable under paragraph 4(d), but only
to the extent caused by said condition; notwithstanding such condition or
nonpayment of the Agreement in all other respects shall continue in full force
and effect.
9. Topps right of Agreement: Topps shall have the right, independently of
the MLBPA, to enforce this Agreement upon my behalf as against any third party
which Topps believes is infringing the rights granted to it hereunder, provided,
however, that Topps will give the MLBPA reasonable notice of its intention to
enforce this Agreement and that if there is a bona fide dispute between Topps
and the MLBPA as to whether Topps has the rights in question, such dispute shall
first be resolved by arbitration in accordance with paragraph 12(a).
10. Noninterference with rights of third parties: If this Agreement is in
conflict with any prior agreement that I may have signed, validly granting to
another some or al of the rights to my baseball picture as defined herein, (a)
to the extent the prior grant of rights is exclusive, this Agreement shall be
inoperative to grant Topps such rights for any period of time in which they have
been validly granted to another, but shall otherwise be in full force and
effect; (b) to the extent the prior grant of rights is nonexclusive, the rights
granted in paragraph 1 hereof shall be subject only to the rights already
granted; and (c) if Topps chooses to publish or sell my baseball picture in any
form, Topps shall have the obligation to make payments to me or on my behalf to
the full extent provided in paragraph 4 hereof, notwithstanding that some person
other than Topps may also possess rights to my baseball picture by virtue of my
prior grant of rights.
11. Governing law: This Agreement shall be governed by the laws at the
State of New York.
12. Arbitration: All disputes concerning the following matters shall be
submitted to arbitration in accordance with the procedures outlined in paragraph
13. No other disputes arising out of this Agreement shall be considered
arbitrable.
(a) Whether a particular product or product combination is, or is not,
within the scope of the rights granted to Topps under paragraphs 1 and
2. (b) What payments are properly owing for any year under the terms
of paragraphs 4(b), (c) and (d), and (if applicable) paragraph 8. (c)
What royalty rates and guaranties properly reflect changes in the
value of the rights granted hereunder, if agreement cannot be reached
pursuant to paragraph 6(b).
13. Arbitration procedure: (a) Within ten days after a notice of intention
to arbitrate is served, the MLBPA and Topps shall each select on arbitrator with
a residence or office within 25 miles of New York City. (b) Within twenty days
thereafter, the two arbitrators so selected shall agree upon the appointment of
a third arbitrator with a residence or office within 25 miles of New York City.
Failing such agreement either Topps or the MLBPA shall promptly make an
appropriate application for the judicial appointment of a third arbitrator. (c)
The three arbitrators so selected shall meet in New York City and hold such
hearings as they deem appropriate and at which the parties shall submit such
evidence as the arbitrators deem appropriate. (d) The cost of the arbitration
shall be shared equally by Topps and the MLBPA with each side to bear its own
attorneys' fees. (e) Any award rendered by the arbitrators may be confirmed and
reduced to judgment in any court of competent jurisdiction in the State of New
York.
I have received a copy of this Agreement
________________________ _________________ _______________
Players Signature Players Soc Sec # Date
THE TOPPS COMPANY, INC.
________________________ ________________
(Authorized Agent) Date
THIS CONTRACT IS ON BOTH SIDES
================================================================================
Home address: Consent of Parent or Guardian
(if necessary)
________________________________ ________________________________
No. Street Signature
________________________________ ________________
City State Zip Date
<PAGE>
EXHIBIT "B"
BASEBALL PLAYER'S SUPPLEMENTAL NON-MAJOR LEAGUE
NON-EXCLUSIVE PICTURE LICENSE AGREEMENT
Whereas, I have entered into a Baseball Player's Picture License Agreement
with The Topps Cornpany, Inc )"Topps") for the publication or my baseball
picture as a Major Leaguer (as hereafter defined), and Whereas, I want Topps to
be able to use my baseball picture in any Product Year (as hereafter defined)
that I am not a Major Leaguer, and Topps will compensate me directly for that
use, it is now THEREFORE AGREED THAT
1. In any year in which I am not a Major Leaguer, Topps and its successors
and assigns may use my baseball picture as defined in the Baseball Player's
Picture License Agreement, to the same extent baseball pictures may be used
under that Agreement.
2. Payment:
(a) Topps has paid me Five Dollars ($5 00) by check upon the signing of
this Supplemental Agreement, receipt of which I hereby acknowledge.
(b) fit any Product Year for which Topps uses m~ baseball picture under
paragraph 1 of this Agreement, Topps will pay me and I will accept as payment in
full no less than Two Thousand Dollars ($2,000) payable as follows (I) Five
Hundred Dollars ($500) within sixty (60) days after the time my baseball picture
is published, and (it) the greater of Fifteen Hundred Dollars ($1500) or "My
individual 5% Share" (hereafter defined) of Topps Net Sales (hereafter defined)
of Non-Major League Baseball Items (hereafter defined), less the Five Hundred
Dollars ($500) previously paid me, no later than January 31 following the end of
the Product Year in which my baseball picture is used.
(c) Topps agrees to pay me Seventy-Five Dollars ($75) each time I extend
this Agreement for an additional year.
3. Duration, Unless extended, this Agreement shall bind both me and Topps
for four full baseball seasons in which payment becomes due to me under
paragraph 2(b) In no event shall this Agreement, as it maybe renewed or extended
hereafter, ever bind me at any point In time, for more than four such baseball
seasons in the future Nor will Topps ever extend both this Agreement and the
Baseball Player's Picture License Agreement with respect to the use of any
baseball picture in the same Product Year or on the basis of the same payment I
hereby acknowledge and agree that, If I accept payment to extend the Baseball
Player's Picture License Agreement for a year in which I have no Major League
service that payment shall be used to extend this Agreement, and not the
Baseball Player's Picture License Agreement.
4. Definitions:
(a) "Major Leaguer" means a baseball player, coach, manager or trainer who
has at least one day's service on an active Major League roster or disabled list
during the Major League Championship Baseball Season, excluding spring training,
exhibition and post-season play, in the Product Year for which his baseball
picture is used or who otherwise has a least one day's active service for MLBPA
dues purposes in that Product Year.
(b) "Product Year" shall mean the calendar year of the championship
baseball season identified on a Topps product.
(c) "Non-Major League Baseball Items" shat mean the individual baseball
cards, stickers, medallions and similar items authorized under this Agreement
containing the picture of one or more Non-Major Leaguers.
(d) "Net Sales" shall mean the gross sales during a Product Year of
Non-Major League Baseball Items, less returns, discounts and allowances made to
customers.
(e) "My lndividual 5% Share" shall mean 5% of Topps Net Sales of Non-Major
League Baseball Items divided by the total number of Non-Major Leaguers whose
baseball pictures are used by Topps in a Product Year.
I have received a copy of this Agreement
Home address: Consent of Parent or Guardian
(if necessary)
________________________________ ________________________________
No. Street Signature
________________________________ ________________
City State Zip Date