Exhibit
10.1


 


RESTATED
LICENSE AGREEMENT


 


THIS
RESTATED LICENSE AGREEMENT, is made and entered into as of
the 1st day of February, 2008 (the “Effective Date”), by and between Cherokee, Inc., 6835 Valjean Avenue, Van Nuys,
California  91406 (“Licensor”), and Target Corporation, 1000 Nicollet Mall, Minneapolis,
Minnesota 55403 (“Licensee”), collectively referred to as the “Parties” and
singly as a “Party”.


 


WHEREAS, the
Parties previously entered into an agreement dated November 12, 1997 as
assigned as of January 29, 2003 (as assigned the “Prior Agreement”);


 


WHEREAS,
Licensor is the owner of the “Cherokee” trademark, various other marks
incorporating the name Cherokee and certain common law rights in and to the
name Cherokee, with various stylized designs (collectively, the “Trademark”),
copies of which are attached as Exhibit A hereto, and the goodwill
associated with the Trademark; and


 


WHEREAS,
Licensor and Licensee desire to enter into this Restated License Agreement as
of the Effective Date on the terms and subject to the conditions set forth
herein.


 


NOW,
THEREFORE, the Parties hereto agree as follows:


 


	
  1.

  	
  Grant of License.

  
	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Upon the terms and
  conditions contained in this Restated Agreement, Licensor hereby grants to
  Licensee, and Licensee hereby accepts, the exclusive (as defined hereinbelow)
  right and license to use the Trademark, during the term provided in
  Section 2 below, solely in connection with the sale of the merchandise
  bearing the Trademark, in the categories indicated below (the “Merchandise”),
  solely by Target Retail Operations (as hereinafter defined), located in the
  United States of America (the “Retail Operations”), and to manufacture such
  Merchandise (and have such Merchandise manufactured) solely for sale by the
  Retail Operations. Such rights shall include the right to advertise the
  Trademark in connection with the Merchandise. Such license shall not include
  the right to grant sublicenses to third parties. The foregoing license is
  limited to use of the Trademark in connection with the sale of Merchandise by
  the Retail Operations and does not include the right to use the Trademark in
  connection with the manufacture, distribution or sale of any products except
  for Merchandise sold by the Retail Operations. As used herein, the Retail Operations
  shall mean Target Stores, Target Greatland, SuperTarget, and any other store
  opened by Licensee, within the United States, during the Term of this
  Restated Agreement, and/or any other merchandising activities undertaken by
  Licensee, within the United States, during the Term of this Restated
  Agreement, including but not limited to direct mail, interactive on line or
  kiosk selling. If Licensee desires to open a Retail Operation outside the
  United States, and Licensor owns the Trademark in such other country, and if
  Licensor has no license in such other country, this Restated Agreement shall
  then apply to Licensee in such other country.

  



 

















 


	
   

  	
  b.

  	
  The following
  categories of Merchandise, shall be exclusive to Licensee, in the United
  States, in all classes of trade:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)
             Men’s,
  Women’s and Children’s Apparel (including, but not limited to intimate
  apparel, foundations and sleepwear, but excluding industrial and school
  uniforms).*

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  Men’s, Women’s and
  Children’s Footwear (excluding nurses and lab technicians shoes).*

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  Men’s, Women’s and
  Children’s Accessories, including, but not limited to, luggage, jewelry,
  handbags, small leather goods, belts, neckwear, hairgoods, hats, rainwear,
  gloves, hosiery, slippers, sunglasses/eyewear and watches.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iv)

  	
  Bed and Bath Products
  and Accessories.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (v)

  	
  Luggage, Sportsbags and
  Backpacks.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (vi)

  	
  Home Textiles.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (vii)

  	
  Domestics and Home
  Decor.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (viii)

  	
  Home Furnishings.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ix)

  	
  Sporting Goods.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (x)

  	
  Cosmetics, Bath and
  Body Products.

  



 






*Licensor does not have the right to license the
Trademark in connection with the excluded goods.


 


Licensee may propose
additional classes of merchandise for inclusion in this Restated
Agreement.  Should Licensor, in its sole
discretion, determine to include such additional classes of merchandise, this
Restated Agreement shall be amended to include such additional classes of
merchandise within the definition of Merchandise.  Licensor shall be responsible for all costs
and attorney’s fees incurred by Licensor in obtaining trademark registration
under the laws of the United States for such additional classes of merchandise,
if necessary and available.


 


	
  2.

  	
  Term.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Initial Restated Term.
   The initial term of this Restated
  Agreement shall commence on the Effective Date and shall end January 31,
  2012. As used hereinafter, the term fiscal year shall mean the 12 month
  period ending at midnight on the Saturday closest to January 31
  (hereinafter “Fiscal Year”).

  
	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  Extended Restated Terms.
   Provided that Licensee is current in
  its payments of the Minimum Guaranteed Royalty (as hereinafter defined) for
  the Fiscal Year ending in

  



 


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  2012 (1/31/2013), this
  Restated Agreement will automatically renew for the Fiscal Year ending in
  2013 (1/31/2014), and will continue to automatically renew for successive one
  (1) Fiscal Year terms, provided that Licensee has paid a Minimum
  Guaranteed Royalty equal to or greater than $9,000,000 for the preceding
  Fiscal Year. (The Initial Restated Term and the Extended Restated Terms, if
  any, are hereinafter referred to as the “Restated Term”).

  
	
   

  	
   

  	
   

  
	
   

  	
  c.

  	
  Termination.
   Notwithstanding Section 2b above,
  (i) Licensee may terminate this Restated Agreement effective
  January 31, 2012, if it gives Licensor written notice of its intent to
  do so one (1) year prior to the date of termination.

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Payments.

  
	
   

  	
   

  
	
   

  	
  a.

  	
  Royalty.
   Each Fiscal Year during the Restated
  Term, Licensee shall pay to Licensor as a royalty (the “Royalty”) an amount
  equal to the greater of (i) the minimum guaranteed royalty applicable to
  such Fiscal Year, as set forth in Section 3c below (“Minimum Guaranteed
  Royalty”), or (ii) two percent (2%) of Licensee’s Net Sales (as defined
  in Section 3b below) of Merchandise during such Fiscal Year, on sales up
  to $300,000,000, one and one-half percent (11⁄2%) of Licensee’s Net Sales of
  Merchandise during such Fiscal Year on sales greater than $300,000,000 and up
  to $700,000,000, eight-tenths of one percent (.8%) of Licensee’s Net Sales of
  Merchandise during such Fiscal Year on sales greater than $700,000,000 and up
  to $1,000,000,000, seven-tenths of one percent (.7%) of Licensee’s Net Sales
  of Merchandise during such Fiscal Year on sales greater than $1,000,000,000
  and up to $1,500,000,000, and five-tenths of one percent (.5%) of Licensee’s
  Net Sales of Merchandise during such Fiscal Year on sales greater than
  $1,500,000,000.

  
	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  Net Sales.  The term “Net Sales” as used herein
  shall mean the gross sales price to customers of all sales of Merchandise
  (whether regular, markdown, clearance or otherwise), excluding sales tax and
  finance charges and less returns of Merchandise. No other deductions shall be
  taken.

  
	
   

  	
   

  	
   

  
	
   

  	
  c.

  	
  Minimum  Guaranteed Royalties. The
  Minimum Guaranteed Royalties for each Fiscal Year shall be $9,000,000.

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Manner of Payment.

  
	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Quarterly Payment.
  Not later than the 20th day after the end of each and every fiscal quarter,
  beginning with the first fiscal quarter of 2008, Licensee shall pay and
  deliver to Licensor an amount equal to the greater of (i) twenty five
  percent (25%) of the Minimum Guaranteed Royalty applicable to the then
  current Fiscal Year, or (ii) the applicable Royalty percentage (2%, 1
  1/2%, .8%, .7% or .5% or combinations thereof as the case may be, on a
  cumulative basis, as set forth in Section 3a above) multiplied by its
  Net Sales in the immediately previous fiscal quarter (the applicable
  royalty).

  



 


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  b.

  	
  Prompt Delivery.     Licensee acknowledges and agrees
  that the timely delivery of the payments required by Section 4a and the
  Quarterly Reports and Sales Reports required by Section 5 hereof are
  essential to this Restated Agreement. Interest shall accrue on all past due
  payments hereunder from their respective due dates until paid at the rate of
  one percent (1%) per month, or if such rate exceeds the maximum rate allowed
  by law, at the maximum rate allowed by law, and shall be payable on demand.

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Reports, Record Keeping and
  Audits

  
	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Maintenance of
  Records.    Licensee
  shall keep books of account and records in accordance with generally accepted
  accounting principles, consistently applied, covering all sales relating to
  this Restated Agreement and the license hereby granted. Such records shall be
  maintained for at least two (2) years after the quarter to which such
  records relate.

  
	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  Quarterly
  Reports.     Every
  Royalty payment pursuant to Section 4a shall be accompanied by a written
  report (individually, the “Quarterly Report” and collectively, the “Quarterly
  Reports”) as to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  The quantity,
  description and sales price of all Merchandise sold by Licensee during the
  quarter to which such Royalty relates;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  The aggregate gross
  sales of all Merchandise and the Net Sales of Merchandise, year to date, and
  the Net Sales of Merchandise for such quarter;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  Any other related
  information that may be reasonably requested by Licensor.

  
	
   

  	
   

  	
   

  
	
   

  	
  c.

  	
  Sales Reports.
     In addition, Licensee shall provide
  Licensor with weekly sales recap reports and seasonal sales projections as
  developed and revised (collectively, the “Sales Reports”); provided, however,
  that all such Sales Reports shall be in the form and format used by Licensee in
  the ordinary course of business.

  
	
   

  	
   

  	
   

  
	
   

  	
  d.

  	
  Audit.     Licensor and its duly authorized
  representatives shall have the right upon reasonable notice and at all
  reasonable hours during normal business days to examine and copy such books
  of account and records and all other documents and materials in the
  possession or under the control of Licensee as may be necessary to determine
  whether Royalties have been accurately calculated and paid hereunder, the
  cost of which shall be borne by Licensor. Licensor shall not conduct an audit
  more than once with respect to any Fiscal Year and in no event shall such
  audit be during Licensee’s fourth fiscal quarter. If the audit discloses that
  the Royalty payments actually due exceed the Royalty payments paid, Licensee
  shall pay the unpaid Royalty and interest on such unpaid Royalty payments
  computed from the date such Royalty payments were due, accrued at the rate of
  one percent (1%) per month, or if such rate exceeds the maximum rate allowed
  by law, at such maximum legal rate. If the audit discloses that the Royalty
  payments made by Licensee exceed the Royalty payments due, Licensor shall
  reimburse Licensee in the amount the overpaid Royalty and interest on such 

  



 


4

















 


	
   

  	
   

  	
  overpayment, computed
  from the date such Royalty payments were made, accrued at the rate of one
  percent (1%) per month. In addition, if the audit discloses that the Royalty
  payments actually due exceed the Royalty payments paid by an amount greater
  than five percent (5%) of the Royalty payments paid, the cost of the audit
  performed by Licensor shall be paid by Licensee.

  
	
   

  	
   

  	
   

  
	
   

  	
  e.

  	
  Financial
  Statements.     If, at
  any time during the Initial Term, Licensee is no longer a company required to
  provide public financial information pursuant to the Securities and Exchange
  Commission reporting requirements, Licensee shall, upon reasonable request of
  Licensor, and from time to time thereafter, provide Licensor with interim and
  audited annual financial statements.

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Standards
  of Quality

  
	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Standards and
  Prestige of Merchandise.    Licensee
  acknowledges that the Trademark has established prestige and goodwill and is
  well recognized in the minds of the public, and that it is of great
  importance to each party that in the manufacture and sale of the Merchandise
  the high standards and reputation that Licensor has established be
  maintained. Accordingly, all items of Merchandise manufactured or caused to
  be manufactured by Licensee hereunder and any other expression by Licensee,
  which by its nature conveys to others the existence of a relationship between
  the Licensee and the Trademark, including, without limitation, all packaging,
  labeling, fixturing, advertising, point-of-sale materials and product
  literature (any such expression as herein referred to as “Trademark Use
  Materials”) shall meet or exceed the quality and workmanship historically
  provided under the Prior Agreement. 
  From time to time during the Term of this Restated Agreement and as Licensor
  reasonably requests, so as not to disrupt the ongoing business processes of
  Licensee, Licensee shall supply Licensor or a designee of  Licensor
  with a reasonable assortment of samples of Merchandise (including samples of
  labeling and packaging used in connection therewith).  In addition, Licensee shall supply Licensor
  or a designee of Licensor with samples of its logo designs and formats for
  use of the Trademark in connection with labels and packaging materials.  Upon receipt of such designs and formats,
  Licensor shall have five (5) business days in which to review and
  approve those materials, which approval shall not be unreasonably
  withheld.  Thereafter, all uses of the
  Trademarks by Licensee in connection with labels and packaging materials
  shall conform in all materials respects with the approved designs and formats
  and Licensee shall have no obligation to provide samples of such materials
  for review or approval by Licensor, as long as there are no material changes
  to the approved designs and formats. 
  Licensor acknowledges and agrees that all Trademark Use Materials in
  use as of the Effective Date are deemed approved.  If Licensor shall not have indicated
  approval or disapproval of any such materials in such five (5) business
  days, then the Materials shall be deemed to have been approved.  If Licensor disapproves of a submission, it
  shall advise Target in writing of the reasons for such disapproval within
  such five (5) day period.  In the
  case of disapproval, the Parties shall work together in good faith to timely
  modify any such materials so that they are reasonably acceptable to Licensor
  and Licensee.  If the Parties are
  unable to reach agreement in three (3) consecutive

  



 


5

















 


	
   

  	
   

  	
  business days, Licensee
  may continue to use previously approved designs and formats.  Licensee shall sell or otherwise dispose of
  miscuts or damaged Merchandise only after Licensee has cut out the labels or
  any other item that identifies the Merchandise with the Trademark.

  
	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  Standards and
  Procedures. Upon the request of Licensor, but not more than
  once each Fiscal Year, Licensee shall provide Licensor with a written copy of
  Licensee’s quality control standards and procedures.  At Licensee’s request, Licensor and
  Licensee will meet annually before Licensor’s Quality Control Standards are
  established for such year and Licensee shall have the right to approve such
  standards and procedures before they are implemented; provided, however, that
  such Quality Control Standards shall be consistent with the quality standard
  set forth in Section 6a hereinabove.

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Protection of Trademark

  
	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Acknowledgments and
  Agreements of Licensee. 
  As a material inducement to Licensor to enter into this Restated
  Agreement, and as a material part of the consideration to Licensor hereunder,
  Licensee hereby acknowledges and agrees that:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  (a) Licensor owns
  the Trademark in various countries worldwide, and all rights, registrations,
  applications and filings with respect to such Trademark, and all renewals and
  extensions of any such registrations, applications and filings, (b) Licensor
  has the right to license the Trademark, and (c) Licensee is acquiring
  hereby only the right to use the Trademark for the purpose stated in and
  pursuant to the terms and conditions of the Restated Agreement.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  (a) Great value is
  placed on the Trademark, and the goodwill associated therewith, (b) the
  Trademark and all rights therein and goodwill pertaining thereto belong
  exclusively to Licensor, and (c) all authorized use of the Trademark by
  Licensee shall inure to the benefit of Licensor.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  The conditions, terms,
  restrictions, covenants and limitations of this Restated Agreement are
  necessary, equitable, reasonable and essential to assure the consuming public
  that all goods sold under the Trademark are of the same consistently high
  quality as sold by Licensor and by others who are licensed to design,
  manufacture and/or sell any products by, under or with the Trademark, if any.

  
	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  Protection of Rights.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  Restriction on Use.  Licensee shall not use or permit the
  use of the Trademark for any purpose or use other than the uses licensed
  under this Restated Agreement.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  General.  Licensee shall cooperate fully and in
  good faith with Licensor for the purpose of securing and preserving
  Licensor’s (or any grantee of

  
					



 


6

















 


	
   

  	
   

  	
   

  	
  Licensor’s) rights in
  and to the Trademark. Licensee shall cause to appear on and in connection
  with the Merchandise and the Trademark Use Materials the Ò
  or ä as applicable.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  Registration.    Licensee shall, upon request, supply
  to Licensor enough specimens of advertisements, tags, labels and other use of
  the Trademark as may be required in connection with any of Licensor’s
  Trademark applications or registrations. Licensee shall execute any
  instrument Licensor shall reasonably deem necessary or desirable to record or
  cancel Licensee as a registered user of the Trademark, it being understood
  and agreed that Licensee’s right to use the Trademark in the event that the
  filing of a registered user application is required or is requested by
  Licensor shall commence only upon the filing of such registered user
  application, and shall continue only so long as this Restated Agreement
  remains in effect.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iv)

  	
  Customer
  Complaints.    Licensee
  shall, in connection with its duty to use the Trademark so as to promote the
  continuing goodwill thereof, give immediate attention and take necessary
  action to satisfy all legitimate customer complaints brought against Licensee
  in connection with the Merchandise or the Stores. Licensee shall give
  Licensor immediate written notice of all complaints that in Licensee’s
  opinion are likely to result in litigation. Licensee shall cooperate with
  Licensor upon request to achieve as good a reputation and press for the
  Trademark as possible.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (v)

  	
  Exclusivity.
      Licensor agrees that during the term
  of this Restated Agreement it will not license the Trademark, and/or renew or
  otherwise extend existing license agreements between Licensor and any third
  party(ies), in the United States, in any merchandise category whatsoever.

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Defaults
  and Remedies.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Defaults by
  Licensee.     The
  occurrence of any one or more of the following shall constitute a default by
  Licensee under this Restated Agreement:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  Licensee shall fail to
  make any payment, submit any Quarterly Report or provide any financial
  information required under this Restated Agreement when due, and such failure
  continues for more than thirty (30) days after written notice thereof, unless
  such failure cannot be cured within such thirty (30) day period and Licensee
  shall have commenced to cure the failure and proceeds diligently thereafter
  to cure such failure.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  Licensee uses the
  Trademark in any manner likely to endanger the validity of the Trademark or
  to damage or impair the reputation or value of the Trademark, and such action
  continues for more than thirty (30) days after written notice thereof, unless
  the action cannot be cured within such thirty 

  
					



 


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  (30) day period and
  Licensee shall have commenced to cure the action and proceeds diligently
  thereafter to cure such action.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  The failure of Licensee
  to perform any of its other material obligations under this Restated
  Agreement and such failure continues for more than thirty (30) days after
  written notice thereof, unless the failure cannot be cured within such thirty
  (30) day period and Licensee shall have commenced to cure the failure and
  proceeds diligently thereafter to cure such failure.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  Default by
  Licensor.     If
  Licensor fails to perform any of its material obligations under this Restated
  Agreement and such failure continues for more than thirty (30) days after the
  written notice thereof, such failure shall constitute a failure by Licensor
  under this Restated Agreement, unless the failure cannot be cured within such
  thirty (30) day-period and Licensor shall have commenced to cure such failure
  and proceeds diligently thereafter to cure such failure.

  
	
   

  	
   

  	
   

  
	
   

  	
  c.

  	
  Remedies

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  If Licensee has not
  cured any such breach or non-performance in accordance with Section 8a
  above, in addition to all other rights and remedies available to Licensor,
  whether pursuant to the terms of this Restated Agreement at law in equity or
  otherwise, Licensor shall have the right to terminate this Restated Agreement
  without further notice to Licensee and all unpaid Minimum Guaranteed Royalty
  payments due and owing under this Restated Agreement, shall be immediately
  due and payable.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  If Licensor has not
  cured any such breach or non-performance in accordance with Section 8b
  above, in addition to all of the other rights and remedies available to
  Licensee, whether pursuant to the terms of this Restated Agreement at law, in
  equity or otherwise, Licensee shall have the right to terminate this Restated
  Agreement without further notice to Licensor.

  
	
   

  	
   

  	
   

  
	
   

  	
  d.

  	
  Effect of
  Expiration or Termination.       Except
  as specifically provided herein to the contrary, upon expiration or
  termination of this Restated Agreement, the rights and licenses granted
  herein shall terminate and Licensee shall have no further right to use the
  Trademark in connection with the Merchandise or the Trademark Use Materials.
  Upon the request of Licensor, Licensee shall immediately execute without
  further consideration such assignments and other instruments which may be
  required to be recorded to effect the termination of the licenses and rights
  granted herein (and the assignments of Licensee’s rights to Licensor). Within
  twenty (20) days of the expiration or termination of this Restated Agreement,
  Licensee shall deliver to Licensor all unpaid Royalties together with a final
  Quarterly Report covering all sales of Merchandise from the end of the period
  covered by the preceding Quarterly Report through the date of expiration or
  termination of this Restated Agreement.

  



 


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  e.

  	
  Merchandise and
  Trademark Use Materials.     For
  one hundred and twenty (120) days after the expiration or termination of this
  Restated Agreement, Licensee shall have the right to use the Trademark to
  dispose of any Merchandise manufactured, or ordered and in production, and
  any piece goods in the possession of Licensee, its agents, manufacturers or
  subcontractors, on the termination date (the “Sell-Off Period”). Such
  disposition must be through the same channels used by Licensee prior to the
  termination date. Within thirty (30) days of the expiration of the Sell-Off
  Period Licensee shall, at its sole expense, (i) remove or obliterate the
  Trademark from all Merchandise and Trademark Use Materials from which the
  Trademark can be removed or obliterated, and (ii) either destroy or
  deliver to Licensor all Merchandise and Trademark Use Materials from which
  the Trademark cannot be removed or obliterated.

  
	
   

  	
   

  	
   

  
	
   

  	
  f.

  	
  Assignments.
     Except as set forth herein, neither
  this Restated Agreement nor any of the rights or duties hereunder nor the
  license granted hereby may be assigned, sub-licensed, encumbered or otherwise
  transferred in any way by either Party, without the prior written consent and
  agreement of the other Party, to WalMart, J.C. Penney, Sears Holdings,
  Federated Department Stores or Kohl’s, or any of their affiliates, successors
  or assigns (collectively, “Competitive Entities”); provided, however, that
  Licensor may assign its right to receive payment(s) hereunder. Any such
  purported assignment, sub-license, encumbrance or other transfer, whether
  voluntary or involuntary, by operation of law, or otherwise, to a Competitive
  Entity, including  ownership or control of Licensor by a
  Competitive Entity, shall be null and void and shall constitute a default
  hereunder by the Party assignor. Notwithstanding the foregoing, Licensee hereby
  consents and agrees (i) to the transfer or assignment of this Agreement
  (and related Trademarks), including any and all rights or duties of Licensor
  hereunder or thereunder, or in connection herewith, by Licensor to a
  different entity, including a “bankruptcy remote” special purpose entity
  (“SPE”), (ii) to the assignment and pledging of rights (and related
  Trademarks) of the Licensor under this Agreement to investors as collateral
  in a financing or securitization transaction, (iii) to make payments under
  this Agreement to a designated controlled account, and (iv) to furnish
  information and take such other measures (at no material cost or disruption
  to Licensee) which are reasonably requested by Licensor to facilitate the
  proposed financing or securitization. In the event of a transfer or
  assignment of this Agreement to a successor licensor hereunder, Licensor
  shall no longer mean Cherokee Inc. but its successor licensor; provided,
  however, that once a transfer or assignment is made pursuant to the clauses
  (i) and (ii) above, any subsequent assignment or transfer to
  successor licensor hereunder, including but not limited to, any sale or
  transfer of equity ownership in the SPE, may only be made with the written
  approval of Licensee, which approval shall not be unreasonably withheld.

  
	
   

  	
   

  
	
   

  	
  g.

  	
  Contracts.
      Licensee shall have the right to
  contract the manufacture of the Merchandise and the Trademark Use Materials
  bearing the Trademark to third party manufacturers, so long as (i) each
  such contractor shall agree to protection for the Trademark equal to or
  greater than that provided under the Prior Agreement, (ii) each such
  contractor shall be meet or exceed Licensee’s Standards of Vendor Engagement and
  other global compliance procedures and programs, including without
  limitation,

  



 


9

















 


	 
	
   

  	
  the inspection and
  quality control procedures set forth therein, (iii) each such contractor
  shall comply with Licensee’s liquidation guidelines, including without
  limitation, no sales outside of the United States and payment of a 3% royalty
  to Licensor on the sale of Merchandise, and (iv) the Merchandise and
  Trademark Use Materials meet the quality standards set forth in this Restated
  Agreement. 

  
	 
	
   

  	
   

  
	 
	
  9.

  	
  Warranties.

  
	 
	
   

  	
   

  
	 
	
   

  	
  a.

  	
  Licensor warrants and
  represents that Licensor (i) is free to enter into this Restated
  Agreement, (ii) has the full power, right and authority to make the
  grant of rights to Licensee as provided hereunder and that the exercise by
  Licensee of such rights, as authorized hereunder, shall not violate the
  rights of any third party, and (iii) is not subject to any obligation
  which will or might hinder or prevent the full completion and performance by
  Licensor of any of the covenants and the conditions to be kept and performed
  by Licensor hereunder.

  
	 
	
   

  	
   

  	
   

  
	 
	
   

  	
  b.

  	
  Licensee hereby
  represents and warrants that Licensee (i) is free to enter into this
  Restated Agreement, (ii) is not subject to any obligation which will or
  might hinder or prevent the full completion and performance by Licensee of
  any of the covenants and conditions to be kept and performed by Licensee
  hereunder, and (iii) will ensure that all uses of the Trademark and
  Trademark Use Materials comply with the terms of this Restated Agreement.

  
	 
	
   

  	
   

  	
   

  
	 
	
  10.

  	
  Indemnification and Insurance.

  
	 
	
   

  	
   

  	
   

  
	 
	
   

  	
  a.

  	
  Indemnification
  of Licensor.     Licensee
  shall indemnify and hold Licensor and its affiliates, directors, officers,
  employees and agents harmless from and against any and all liabilities,
  losses, claims, suits, damages, costs and expenses (including, without
  limitation, reasonable attorneys’ fees and expenses) arising out of or
  otherwise relating to any claims of third parties against the Licensor
  involving the design, manufacture, packaging, distribution, promotion, sale,
  marketing, advertising or other use of the Trademark, the Merchandise or the
  Trademark Use Materials, by Licensee and/or its contractors, provided that
  (i) prompt written notice is given to Licensee, upon Licensor becoming
  aware of any such actual or threatened claims or suits, (ii) Licensee
  shall have the option to exclusively undertake and conduct the defense and/or
  settlement of any such claims or suits, (iii) Licensor acts, with the
  prior consent of Licensee, to mitigate any damages, and (iv) no settlement
  or attempt at settlement of any such claims or suits is made without the
  prior written consent of Licensee. Licensee acknowledges that this indemnity
  does not include those items for which Licensor is indemnifying Licensee in
  Section 10b or 10c below.

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  b.

  	
  Limitation on
  Indemnification of Licensor.  The foregoing notwithstanding, it is hereby acknowledged that the
  Parties desire to participate in establishing common law usage of the
  Cherokee name in the cosmetics, bath and body category, but cannot anticipate
  what issues, if any, may be raised in that regard. As such Licensor shall
  defend,indemnify and hold Licensee and its affiliates, directors, officers,
  employees, and

  	 

					



 


10

















 


	
   

  	
   

  	
  agents harmless, from
  and against any and all liabilities, losses, claims, suits, damages, costs
  and expenses (including, without limitation, reasonable attorneys’ fees and
  expenses) which may be sustained or suffered by or secured against Licensee
  based upon or arising out of any actual or alleged trademark infringement,
  unfair competition or infringement of similar proprietary rights, arising
  solely out of establishing common law usage of the Cherokee name in
  connection with such goods. The indemnification period will commence upon
  signing of this Restated Agreement and will extend six (6) months after
  the date goods are first offered for sale in connection with the use of the
  Cherokee name in the cosmetics, bath and body category. In the event that
  Licensor obtains a federal trademark registration of the Cherokee name for
  the cosmetics, bath and body category, the provisions of Section 10c
  below shall apply from the date of registration.

  
	
   

  	
   

  	
   

  
	
   

  	
  c.

  	
  Indemnification
  of Licensee.     Licensor
  shall defend, indemnify and hold Licensee and its affiliates, directors,
  officers, employees and agents harmless from and against any and all
  liabilities, losses, claims, suits, damages, costs and expenses (including,
  without limitation, reasonable attorney’s fees and expenses) which may be
  sustained or suffered by or secured against Licensee based upon or arising
  out of any actual or alleged trademark infringement, unfair competition or
  infringement of similar proprietary rights, arising solely out of the use by
  Licensee and/or its contractors of the Trademark as authorized in this
  Restated Agreement, provided that (i) prompt written notice is given to
  Licensor, upon Licensee becoming aware of any such actual or threatened
  claims or suits, (ii) Licensor shall have the option to exclusively
  undertake and conduct the defense and/or settlement of any such claims or
  suits, (iii) Licensee acts, with the prior consent of Licensor, to
  mitigate any damages, and (iv) no settlement or attempt at settlement of
  any such claims or suits is made without the prior written consent of Licensor.

  
	
   

  	
   

  	
   

  
	
   

  	
  d.

  	
  Insurance.   Licensee shall obtain and maintain
  throughout the term of this Restated Agreement, at its own expense, general
  liability insurance and product liability insurance, with a responsible
  insurance carrier or carriers acceptable to Licensor, providing adequate
  protection (at least in the amount of $1,000,000 single limits for personal
  injury or property damage) and naming Licensor as an additional insured. As
  soon as possible after the execution of this Restated Agreement, Licensee shall
  deliver to Licensor a fully paid certificate or certificates of insurance,
  naming Licensor as an additional insured, and providing that such policy or
  policies are cancelable only after thirty (30) days prior written notice to
  Licensor. No changes shall be made in such policy or policies of insurance
  that affect Licensor without written notice of such changes being given to
  Licensor.

  



 


11.                              Confidentiality.


 


Licensor acknowledges and
agrees that any and all reports and financial information disclosed by Licensee
pursuant to this Restated Agreement is confidential information commercially
valuable to Licensee (hereinafter the “Licensee Information”).  Licensor acknowledges that the Licensee
Information is disclosed to Licensor on a confidential basis to be used only as


 


11

















 


may be expressly
permitted by the terms and conditions of this Restated Agreement.  Licensor, its officers, directors, employees,
and agents shall protect the Licensee Information as the confidential
information and property of Licensee. 
Licensor shall not disclose any Licensee Information to any other
person, firm, organization, or employee who is not authorized, in writing, by
Licensee.  Except as expressly permitted
hereunder, the Licensee Information may not be copied, reprinted, duplicated,
or recreated in whole or in part without the express written consent of
Licensee.  Licensor shall take reasonable
action by instruction, agreement or otherwise with respect to Licensor’s
employees or other persons permitted to access the Licensee Information to
comply fully with Licensor’s obligations hereto with respect to the use,
copying, protection, and security of the Licensee Information.  Licensor agrees to return the Licensee
Information, and all copies thereof, to Licensee, upon request.  Licensee hereby consents to the disclosure of
the License Information to any of the Licensor’s attorneys, accountants and
other third parties who have a business “need to know” in connection with any
financing or securitization.


 


12.                                 General Provisions.


 


	
   

  	
  a.

  	
  Notices.   All notices and other communications
  required or permitted to be given under this Restated Agreement shall be in
  writing and shall be delivered either by personal service, facsimile or by
  prepaid over-night courier service and addressed as follows:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If to Licensor:

  	
   

  	
  With a copy to:

  
	
   

  	
   

  	
  Cherokee Inc.

  	
   

  	
  Jeffer Mangels
  Butler & Marmaro LLP

  
	
   

  	
   

  	
  6835 Valjean Avenue

  	
   

  	
  1900 Avenue of the
  Stars; 7th Floor

  
	
   

  	
   

  	
  Van Nuys, CA 91406

  	
   

  	
  Los Angeles, CA 90067

  
	
   

  	
   

  	
  Attn: Chief
  Executive Officer

  	
   

  	
  Attn: Rod S.
  Berman, Esq.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If to Licensee:

  	
   

  	
  With a copy to:

  
	
   

  	
   

  	
  Target Corporation

  	
   

  	
  Target Corporation

  
	
   

  	
   

  	
  1000 Nicollet Mall

  	
   

  	
  1000 Nicollet Mall

  
	
   

  	
   

  	
  Minneapolis, MN 55403

  	
   

  	
  Minneapolis, MN 55403

  
	
   

  	
   

  	
  Attn: SVP Merchandising,
  Softlines

  	
   

  	
  Attn: General Counsel

  



 


                                                If
delivered personally, such notices or other communications shall be deemed
delivered upon delivery. If sent by fax, such notice or other communications
shall be deemed delivered when received, provided that the sender has
confirmation of receipt.  If sent by
prepaid over-night courier service, such notices or other communications shall
be deemed delivered upon delivery or refusal to accept delivery as indicated on
the return receipt. Either party may change its address at any time by written
notice to the other party as set forth above.


 


b.                                      Entire
Agreement.  This Restated Agreement
sets forth the entire agreement between the Parties with respect to the subject
matter hereof, and all prior negotiations, discussions, commitments and/or
understandings relating thereto, if any, are merged


 


12

















 


herein.  Effective February 1, 2008, this
Restated Agreement shall supersede any and all other agreements and amendments
between the Parties, including, without limitation, the Prior Agreement between
Licensor and Licensee, and may be modified only by a written agreement signed
by duly authorized of each of the Parties. 
No representations, oral or otherwise expressed or implied, other than
those specifically contained in this Restated Agreement have been made by any
party hereto.  No other agreements not
referred to or specifically contained herein, oral or otherwise, shall be
deemed to exist or to bind any of the Parties hereto.


 


c.                                       Successors
and Assigns.  This Restated Agreement
shall be binding upon and shall inure to the benefit of the successors and
permitted assigns of the Parties.


 


d.                                      Choice
of Law.  The validity, construction
and enforcement of this Restated Agreement shall be governed by the laws of the
State of California without regard to its choice of law principles.


 


e.                                       No
Waiver.  No waiver by either party,
whether express or implied, of any provision of this Restated Agreement or of
any breach or default of any party, shall constitute a continuing waiver of
such provision or any other provisions of this Restated Agreement, and no such
waiver by any party shall prevent such party from acting upon the same or any
subsequent breach or default of the other party of the same or any other
provision of this Restated Agreement.


 


f.                                         Disclaimer
of Agency.  Nothing in this Restated
Agreement shall create a partnership or joint venture or establish the
relationship of principal and agent or any other relationship of a similar
nature between the parties hereto, and neither Licensee nor Licensor shall have
the power to obligate or bind the other in any manner whatsoever.


 


g.                                      Counterparts.
This Restated Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.


 


h.                                      Authority.  Each individual signing on behalf of a party
hereto represents and warrants that he or she is authorized to execute this
Restated Agreement on behalf of such party.


 


i.                                          Termination
on Insolvency of Licensee.  Licensor
may terminate this Restated Agreement if a petition for relief under applicable
bankruptcy law is filed by or against Licensee, and is not dismissed within
sixty (60) days of such filing, if Licensee makes any assignment for the
benefit of its creditors, or if a receiver is appointed for Licensee for all or
substantially are of its business interests.


 


                                                The
license and rights granted hereunder are personal to Licensee. No assignee for
the benefit of creditors, receiver, debtor in possession, trustee in
bankruptcy, sheriff or any other officer of court charged with taking over
custody of Licensee’s assets or business shall have any right to continue
performance to exploit or in any way use the Trademark if this Restated
Agreement is terminated, except as may be required by law.


 


13

















 


j.                                          Termination
on Insolvency of Licensor.  Licensee
may terminate this Restated Agreement, if a petition for relief under
applicable bankruptcy law is filed by or against Licensor, and is not dismissed
within sixty (60) days of such filing, if Licensor makes any assignment for the
benefit of its creditors, or if a receiver is appointed for Licensor for all or
substantially all of its business interests.


 


                                                In
the event of such termination, Licensee shall have the right to continue
thereafter to import and/or sell any and all Merchandise which Licensee has
purchased, produced or committed to purchase prior to the date of termination.


 


k.                                       Non-Disclosure
of Terms.  The existence and content
of this Restated Agreement are confidential and are trade secrets, and shall
not be released in whole or in part to any third party, or disclosed to any
newspaper or other public medium, or in any other fashion whatsoever, without
the mutual, prior approval of the Parties, in their sole discretion; except
that any party shall have the right to make such disclosures as required by law
or court order, or on a “need to know” basis within their respective
organizations and related, affiliated and subsidiary companies, and to their
respective accounts and attorneys.


 


The provisions of this Section 12
shall survive the expiration or sooner termination of this Restated Agreement.


 


IN
WITNESS WHEREOF, the parties hereto have executed this
Restated Agreement effective as of the 1st day of February, 2008.


 


	
  TARGET CORPORATION

  	
  CHEROKEE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   /s/ Patricia M.
  Adams

  	
   

  	
  By: 

  	
   /s/ Robert
  Margolis

  	
   

  
	
   

  	
  Patricia M. Adams

  	
   

  	
  Robert Margolis

  
	
   

  	
  SVP, Merchandising,
  Softlines

  	
   

  	
  Chief Executive Officer

  
						



 


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