The Children's Place Retail Stores, Inc. today announced that it has entered into a refurbishment amendment to the license agreement with The Walt Disney Company (Disney) which modifies certain aspects of the agreement entered into in June of 2007 and the original license agreement entered into in November 2004. This refurbishment amendment supersedes and replaces the June letter agreement. As a result of this refurbishment amendment, the Company has addressed the breach referenced in the August 23rd press release. In addition, the Company has received a waiver from its lenders regarding the cross-default under the secured credit facility for the Disney Store chain, which was also mentioned in the August 23rd press release. Under its license agreement with The Walt Disney Company the Company operates the Disney Store chain in the United States and Canada.
As previously announced, on June 8, 2007, the Company and Disney executed a letter agreement which modified certain provisions of the parties' long-term license agreement, to address claims by Disney that the Company had committed numerous material breaches of the license agreement. The June letter agreement provided that Disney would treat the Company's breaches as having been cured so long as the Company complied with the terms of the June letter agreement. The June letter agreement imposed specific obligations on the Company with respect to the remodeling and refreshing of numerous stores in the Disney Store chain between fiscal 2007 and fiscal 2011 and, for the stores to be remodeled in fiscal 2007 and fiscal 2008, set forth a detailed timetable for submission of plans and completion dates.
As previously announced on August 23, 2007, the Company had been unable to meet several of the deadlines set forth in the June letter agreement and identified various upcoming deadlines during the third and fourth quarters of fiscal 2007 that it would likely miss. The Company and Disney engaged in discussions regarding potential changes to the requirements of the June letter agreement that would postpone the due dates of certain of the Company's remodel and maintenance obligations and require the Company to remodel two additional stores. Following such discussions, the companies reached an agreement regarding an amended timeline for store remodels and "maintenance refreshes."
Also as previously discussed in the Company's August 23, 2007 press release, in consideration for these changes, the Company agreed to amend the original license agreement to allow Disney to relocate its flagship store in Manhattan and also relaxed the restrictions on Disney's ability to grant direct licenses for the sale of Disney merchandise to specialty retail stores other than children's specialty retail stores.
See the actual timeline and complete article here: http://money.cnn.com/news/newsfeeds/...ire/125923.htm