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EXHIBIT 10.24

 

AMENDMENT NO. 1 TO

RESTATED LICENSE AGREEMENT

 

THIS AMENDMENT NO. 1 to the Restated License Agreement (this “Amendment”), is made and entered into on the day of 1st day of December 2011, between Cherokee Inc., (“Licensor”), and TARGET GENERAL MERCHANDISE, INC., a Minnesota corporation and a wholly owned affiliate of Target Corporation, with its headquarters at 1000 Nicollet Mall, Minneapolis, MN 55403 (“TGMI”), with reference to the following facts:

 

WHEREAS, the Parties entered into a Restated License Agreement, dated as of February 1, 2008 (the “Restated Agreement”); and

 

WHEREAS, TGT Corp assigned all of its right, title and interest in and to the Restated Agreement to TGMI effective January 29, 2011 in accordance with Section 8.f. of the Agreement.

 

WHEREAS, the Parties desire to amend the Restated Agreement on the terms and conditions contained herein.

 

NOW THEREFORE, the Parties hereto agree as follows:

 

1.                                     Capitalized terms used and not defined herein shall have the same meaning as in the Restated Agreement.

 

2.                                     The Parties acknowledge and agree that on even date herewith, Licensor is entering into a license agreement titled “Canada Affiliate Agreement” with Target Canada Co. (“TCC”) regarding a license to manufacture and sell Merchandise in Canada on substantially the same terms as the Restated Agreement except as expressly set forth therein.  The Parties further agree that Net Sales of Merchandise in Canada shall be aggregated with Net Sales of Merchandise in the United States for the purposes of calculating the Minimum Guaranteed Royalties for TGMI.  For such purposes, the currency exchange rate used to convert CAD sales to USD sales will be the currency exchange rate prevailing during the relevant Fiscal period determined by TGT Corp, which will approximate a weighted average rate based on sales transacted over such period (the “Exchange Rate”). The Exchange Rate will be consistent with the currency exchange rate used for reporting Target Corporation’s Canadian Segment sales (in CAD) on a reported basis (in USD) for external reporting purposes.

 

3.                                     Effective as of February 1, 2013, the Minimum Guaranteed Royalties for each Fiscal Year set forth in Section 3.c. shall be $10,500,000, and such section shall be deemed amended to that effect.

 

4.                                     This Amendment No. 1 may be executed by facsimile and in one or more counterparts, all of which shall be considered one and the same agreement.

 

5.                                     Except as expressly amended or set forth herein, all of the terms and conditions contained in the Restated Agreement shall remain in full force and effect. References herein or in the Restated Agreement to “this Agreement” shall be deemed to refer to the Restated Agreement as amended by this Amendment No. 1.

 

[SIGNATURE PAGE FOLLOWS]

 

 

IN WITNESS WHEREOF, each of the parties has executed this Amendment No. 1 on the date first written above.

 

	
Target General Merchandise, Inc.
    	
 
    	
 
    	
Cherokee   Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Patricia M. Adams
    	
 
    	
By:
    	
/s/   Henry Stupp
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Patricia M. Adams
    	
 
    	
 
    	
Henry   Stupp
    
	
 
    	
Senior Vice President
    	
 
    	
 
    	
Chief   Executive Officer
    
						

 

2EXHIBIT 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

 

 

                       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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