EXHIBIT 10.25

 

CANADA AFFILIATE AGREEMENT

 

This Canada Affiliate Agreement (the “CAA”) dated as of December 1, 2011 is
entered into by and between Cherokee, Inc. (“LICENSOR”) and Target Canada Co.,
(“TCC”), each a “Party” and collectively the “Parties”.

 

The Parties acknowledge and agree as follows:

 

1.              Target General Merchandise, Inc. (“TARGET”) and LICENSOR have
entered into a Restated License Agreement dated February 1, 2008 and amended on
even date herewith (as amended, the “RESTATED LICENSE”) granting Target the
exclusive right and license in the United States to manufacture and sell certain
merchandise under the CHEROKEE® trademark, all as more specifically set forth in
the RESTATED LICENSE.

 

2.              TCC is an affiliate of TARGET.

 

3.              LICENSOR and TCC agree, to the extent not superseded in this
CAA, to incorporate and be bound by the terms, conditions, covenants and
performance obligations of the RESTATED LICENSE into this CAA for the territory
of Canada effective February 1, 2013.  A copy of the RESTATED LICENSE and the
Amendment of even date herewith are attached hereto as Appendix A.  For the
purposes of this CAA, all references to Target or TGMI in the RESTATED LICENSE
shall be interpreted to refer to TCC, all references to LICENSOR in the RESTATED
LICENSE shall be interpreted to refer to LICENSOR, and all references to
TERRITORY in the RESTATED LICENSE shall be interpreted to refer to CANADA.

 

4.              TCC shall be solely responsible and liable for any and all of
its obligations and liabilities under this CAA.

 

5.              LICENSOR shall perform all of its obligations and liabilities
under this CAA.

 

6.              For all purposes under this CAA, TCC shall be bound to perform
its obligations in the same manner as TARGET is bound under the RESTATED LICENSE
and LICENSOR shall perform its obligations in the same manner as it is bound
under the RESTATED LICENSE.

 

7.              TCC’s license shall be exclusive, except with respect to
Hudson’s Bay Company and Zellers Inc. (“HBC”) through January 31, 2014 subject
to the license agreement between LICENSOR and HBC (the “ZELLERS LICENSE”).  Upon
termination or expiration of the ZELLERS LICENSE or February 1, 2014, whichever
comes first, the license granted hereunder to TCC shall be exclusive.

 

8.              The Parties agree that the Royalty for TCC under this CAA shall
be one and one-half percent (11/2%) of TCC’s Net Sales of Merchandise. 
Royalties shall be paid directly by TCC to LICENSOR in Canadian dollars not
later than the 20th day after the end of each and every Fiscal Quarter during
the Term, and TCC shall withhold the amount of any taxes levied by the
Government of Canada on payments made by TCC to LICENSOR and which are by law
payable by LICENSOR, shall promptly effect payment thereof to the appropriate
tax authorities, and shall transmit to LICENSOR official tax receipts or other
evidence issued by the appropriate tax authorities sufficient to enable LICENSOR
to support a claim for the United States income tax credit in respect of any
such taxes so paid.  The Parties acknowledge and agree that there shall be no
Minimum Guaranteed Royalties applicable to TCC.

 

9.              TCC agrees to supply LICENSOR with distinct and separate Reports
for Net Sales of Merchandise in Canada.

 

10.        Section 8(g)(iii) of the Restated License shall be deleted in its
entirety and replaced with the following:

 

“8(g)(iii) each such contractor shall comply with TCC’s liquidation
guidelines as such are developed for TCC’s private label products,”

 

11.        The Parties hereby for greater certainty acknowledge and confirm that
Licensor’s grant of license to TCC: (i) is separate from and entirely unrelated
to any and all purchase arrangements and agreements that TCC may enter into for
the sourcing of the Merchandise for sale in Canada; (ii) that the payment of the
Royalty by TCC is not a condition of the sale to TCC of any of the Merchandise
by any one or more of its suppliers wherever located; (iii) that the

 

                       Royalty shall be paid quarterly based on sales of the
Merchandise within Canada and entirely independently of the dates for the
placement of purchase orders, delivery or importation of the Merchandise into
Canada regardless from where sourced; and (iv) the Licensor’s remedies on
default of the payment of Royalty are set out in the Restated License, and are
entirely separate from and unrelated to any and all rights and obligations set
out in the purchase arrangements or agreements (including the consideration
payable and shipment of the Merchandise)  that TCC

 

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                       enters into with its suppliers for the sourcing of the
Merchandise for sale in Canada.  Licensor agrees to fully cooperate with TCC,
and to provide such further information or assurances as may be required, for
TCC to be able to establish to the Canadian customs authorities that the payment
of the Royalty is not a condition of the sale of the Merchandise to Canada and
that the Royalty is not dutiable for customs purposes.

 

12.        Subject to the applicable law of this CAA, LICENSOR warrants that
LICENSOR is not listed in any Canadian or applicable foreign sanctions list. 
LICENSOR shall immediately notify TCC if LICENSOR becomes listed in any Canadian
or applicable foreign sanctions list.

 

13.        For greater certainty, this CAA shall expire and may be terminated
according to the same expiration and termination provisions in the RESTATED
LICENSE.

 

14.        Notices

 

Target Canada Co.

LICENSOR

Address: c/o Target Corporation

Address:

Cherokee, Inc.

1000 Nicollet Mall

 

6835 Valjean Avenue

Minneapolis, MN 55403

 

Van Nuys, California 91406

U.S.A.

 

U.S. A.

Attn: General Counsel

 

Attn: CEO

 

15.        This CAA shall be governed by the laws of Ontario and all laws of
Canada applicable therein.  Each Party submits to the exclusive jurisdiction of
any Ontario courts sitting in Toronto in any action, application,  reference or
other proceeding arising out of or related to this CAA and agrees that all
claims in respect of any such actions, application, reference or other
proceeding shall be heard and determined in such Ontario courts.  The Parties
shall not raise any objection to the venue of any action, application, reference
or other proceeding arising out of or related to this CAA in the Ontario courts
sitting in Toronto, including the objection that the proceedings have been
brought in an inconvenient forum. The Parties acknowledge and agree that while
TCC’s subsidiaries, and affiliates,  and each of their respective successors and
assigns, and the agents, trustees, shareholders, directors, officers, and
employees of each of them and of TCC (collectively the ‘Third Party
Beneficiaries”) are not parties to this CAA and have no obligations under this
CAA, TCC is a trustee of each of the Third Party Beneficiaries for the limited
purpose of holding in trust for each of the Third Party Beneficiaries the
covenants expressed to be in favour of one or more of the Third Party
Beneficiaries.  Accordingly, the Parties agree that each of the Third Party
Beneficiaries may enforce such rights and promises in their own right (and will
not be required to add TCC as a party to any proceedings for such enforcement).

 

16.        The Parties acknowledge that, in the event of a conflict between the
terms and conditions of the RESTATED LICENSE and this CAA, the terms and
conditions of the CAA shall prevail.

 

17.        This CAA includes the following appendices:

 

A.     Restated License Agreement;

B.       Canadian Trademark Registrations

 

In consideration of the mutual agreements contained herein, TCC and LICENSOR
agree to the terms and conditions attached to this CAA and represent that this
CAA has been executed by each party’s duly authorized representative as of the
above date:

 

Target Canada Co.

 

Cherokee, lnc

 

 

 

 

 

By:

/s/ John Morioka

 

By:

/s/ Henry Stupp

 

 

 

 

 

Name:

John Morioka

 

Name:

Henry Stupp

 

 

 

 

 

Title:

Senior VP Merchandising, Target Canada

 

Title:

CEO

 

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