License Agreement - Parlux Fragrances Inc. and Genesis International Marketing Corp.
LICENSE AGREEMENT
-----------------
THIS AGREEMENT made and entered into as of the 9th day of June, 1998,
by and between PARLUX FRAGRANCES, INC., a Delaware corporation with offices at
3725 SW 30TH Avenue, Ft. Lauderdale, Fl. 33312 ("Licensor"), and GENESIS
INTERNATIONAL MARKETING CORPORATION, a Florida corporation, with offices at 2335
NW 107th Avenue, Miami, Florida 33172("Licensee").
W I T N E S S E T H :
---------------------
WHEREAS, Licensor has used and currently is using, directly and through
licenses, the Licensed Marks (as hereinafter defined) for a variety of products;
WHEREAS, the Licensor is willing to grant the Licensee and Licensee
desires to obtain from Licensor, the exclusive right and license to use the
Licensed Marks in the Territory (as hereinafter defined) for use on and in
connection with the manufacture, promotion, distribution and sale of Articles
(as hereinafter defined);
NOW, THEREFORE, in consideration of the promises and mutual agreements
contained herein, the parties hereto covenant and agree as follows:
ARTICLE 1
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Definitions
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The following definitions shall apply:
A. Territory. The entire world, including but not limited to, all
duty-free shops, ships, airplanes, military bases and diplomatic missions of
every country of the world.
B. Articles. Men's and women's fragrances, cosmetics, skin care
products and bath and related personal beauty care products, or any other items
included in International Class 3, as listed in the United States Patent and
Trademark Office; Acceptable Identification of Goods and Services Manual, which
are manufactured,
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produced, sold, distributed, promoted and advertised by Licensee and which bear
the Licensed Marks under this License Agreement.
C. Licensed Marks. The trademarks "BAL A VERSAILLES, JEAN DESPREZ,
SHEHERAZADE, JARDANEL, REVOLUTION A VERSAILLES", and such other trademarks as
are, from time to time, agreed to by Licensor (hereto as Exhibit "A").
D. Net Sales. The sales price at which Licensee or any Subsidiary or
Affiliate (as hereinafter defined) bills its customers for Articles less all
returns of damaged, defective or other merchandise. Net sales shall not include
insurance, freight or any legitimate documented chargebacks from customers.
E. Subsidiary. Any corporation or other entity which is 100% directly
or indirectly owned by Licensee, or its subcontracted manufacturer of the
Articles.
F. Affiliate. Any party that, directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common control with
the Licensee, or by Luis and Norma Quintero.
G. Related Parties. Affiliates of the Licensee; entities that are
managed by or under the trusteeship of Licensee's management; principal owners
of the Licensee; its management; members of the immediate family of principal
owners of the Licensee and its management; and other parties with which the
Licensee may deal if one party controls or can significantly influence the
management or operating policies of the other.
ARTICLE 2
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Grant Of License
----------------
Upon the terms and conditions of this Agreement, Licensor hereby grants
to Licensee, during the term of this Agreement, an exclusive, non-transferable,
non-sublicensable (except as expressly otherwise provided below in Article 16)
non-assignable right and license to use the Licensed Marks in the Territory in
connection with the manufacture, promotion, sale and distribution solely of the
Articles and on all brand identifications. Licensee will not use the Licensed
Marks on or in connection with Articles for which the use of the Licensed Marks
has not been specifically approved by Licensor. Licensee acknowledges that the
rights granted to it hereunder
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do not include the right to operate a retail store outlet under the Licensed
Marks or any variation or simulation thereof. All rights in the Licensed Marks
other than those specifically granted in this Agreement are reserved by Licensor
for its own use and benefit. Licensor shall not, during any period this
Agreement is in effect, grant any rights to any third party in connection with
the Articles for the trademarks "BAL A VERSAILLES, JEAN DESPREZ, SHEHERAZADE,
JARDANEL, REVOLUTION A VERSAILLES", nor shall Licensor trade, manufacture or
distribute the articles for the above-referenced Licensed Marks themselves.
ARTICLE 3
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Exclusivity of License
----------------------
Licensor will not grant any other license effective during the term of
this Agreement for the use of the Licensed Marks on or in connection with the
Articles in the Territory. Licensor may use or grant others the right to use the
Licensed Marks on or in connection with goods of all other types and
descriptions in the Territory. Licensor acknowledges that Licensee presently
distributes in parts of the Territory articles similar to the Articles covered
by this Agreement which bear other trademarks. Licensor further acknowledges and
consents to the Licensee obtaining other additional licenses for the manufacture
and/or distribution of other similar lines during the term of this Agreement.
Licensee will not, during the term of this Agreement and thereafter, attack
either Licensor's title in and to the Licensed Marks or the validity of this
Agreement.
Licensor agrees not to grant any other licenses or a right to use the
Licensed Marks to others or themselves, unless the products manufactured
pursuant to said right or license is to be used on articles of high standard and
prestige and in compliance with the standards set forth in Article 7,
sub-paragraph A(i) and C below, to ensure that the Licensed Marks maintain their
quality and exclusive distribution.
Licensor further agrees that it will not manufacture any product that
is confusingly similar to the Licensed Marks, or any product that bears
confusingly similar names, smells, or fragrance oils to the Licensed Marks.
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Article 4
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Term of Agreement
-----------------
The original term of this Agreement shall be for ten (10) years and
twenty-two (22) days, commencing as of June 10, 1998 and continuing through June
30, 2008. Thereafter, Licensee shall have the option to renew this Agreement as
provided in Article 17 below.
ARTICLE 5
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Confidentiality
---------------
Both parties acknowledge and agree that (i) all information relating to
the business and operations of either party which they either learn or have
learned during or prior to the term of this Agreement is confidential; (ii) the
need to preserve the confidentiality and secrecy of such information; and (iii)
during the term of this Agreement, and after the expiration or termination
hereof, neither party shall use or disclose same, and shall take all necessary
steps to preserve in all respects such confidentiality and secrecy. The
provisions of this paragraph shall not apply with respect to any information
which has entered the public domain through no fault of either party. The
provisions of this paragraph and Licensee's obligations hereunder shall survive
the expiration or termination of this Agreement.
ARTICLE 6
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Duties of Licensee
------------------
A. Best Efforts. During the term of this Agreement, Licensee will use
its best efforts to exploit the rights herein granted throughout the Territory
and to sell the maximum quantity of Articles therein consistent with the high
standards and prestige represented by the Licensed Marks.
B. Design and Sample Making. Licensor shall not be responsible for the
production, design or sample making of the Articles and Licensee shall bear all
costs related thereto.
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ARTICLE 7
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Quality Standards
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A. Manufacture of Articles; Quality Control.
(i) The contents and workmanship of Articles shall be at all
times of the highest quality consistent with the reputation, image and prestige
of the Licensed Marks and Articles shall be distributed and sold with packaging
and sales promotion materials appropriate for such highest quality Products. The
parties agree that the Articles shall be of such premium quality, prestige and
price similar to that of the Chanel, Christian Dior, and Guerlain fragrances.
(ii) All Articles shall be manufactured, labeled, sold,
distributed and advertised in accordance with all applicable national, state and
local laws and regulations.
(iii) Licensor and its duly authorized representatives shall
have the right, upon reasonable advance notice and during normal business hours,
at Licensor's expense, to examine Articles in the process of being manufactured
and to inspect all facilities utilized by Licensee in connection therewith.
B. Distribution. In order to maintain the reputation, image and
prestige of the Licensed Marks, Licensee's normal distribution patterns shall
consist of those retail establishments whose location, merchandising and overall
operations are consistent with the products described in paragraph A of Article
7 above. Licensee agrees that it will not use the Licensed Marks in any manner
whatsoever which, directly or indirectly, would derogate or detract from its
repute.
C. Sales Force. During the term of this Agreement, Licensee shall
maintain a non-exclusive sales force suitable to carry out the purpose of this
Agreement.
ARTICLE 8
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Guaranteed Minimum Royalty
--------------------------
In consideration of both the license granted and the services to be
performed by Licensor hereunder, Licensee shall pay to Licensor a Guaranteed
Minimum Royalty for each Annual Period as follows:
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GUARANTEED
ANNUAL PERIOD MINIMUM ROYALTY
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First 6/10/98-6/30/99 $ 100,000
Second to Tenth 7/01/99-6/30/08 $150,000 each year
The Guaranteed Minimum Royalty payable for each Annual Period shall be
paid to Licensor as follows: (i) $25,000 simultaneously with the execution
hereof, (ii) $25,000 on the first day of October 1998, January 1999, and April
1999, (iii) commencing with July 1, 1999, $37,500 on the first day of each July,
October, January and April during such period.
The Guaranteed Minimum Royalty for each Annual Period shall be credited
against the Sales Royalty for only the same Annual Period as provided in Article
9 below.
The Guaranteed Minimum Royalty for each renewal term will be $150,000
per year.
ARTICLE 9
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Sales Royalty; Withholding Taxes
--------------------------------
Licensee shall pay to Licensor a Sales Royalty of five percent (5%) on
Net Sales.
The Sales Royalty hereunder shall be accounted for and paid quarterly
within forty-five (45) days after the close of each quarter ending September 30,
December 31, March 31, and June 30th. The Sales Royalty payable for each period
during each Annual Period shall be computed on the basis of Net Sales during
such Annual Period, with a credit for any Guaranteed Minimum Royalty and Sales
Royalty payments made to Licensor for said Annual Period.
No payment of Sales Royalty for any Annual Period in excess of payments
of Guaranteed Minimum Royalty for the same Annual Period shall be credited
against the Guaranteed Minimum Royalty due to Licensor for any other Annual
Period.
The Sales Royalty shall be payable on each sale made by Licensee
directly or through its Affiliates or Subsidiaries, to an entity not "owned" or
"controlled" by Licensee, its Affiliates, Subsidiaries or Related Parties.
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ARTICLE 10
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Sales Statement; Books and Records; Audits
------------------------------------------
A. Sales Statement. Licensee shall deliver to Licensor at the time each
Sales Royalty payment is due, a statement indicating by month, the number,
description and invoice price of all Articles shipped during the period covered
by such Sales Royalty payment, the amount of discounts and credits from gross
sales which may be deducted therefrom pursuant to this Agreement and a
computation of the amount of Sales Royalty payable hereunder for said period.
Such statement shall be furnished to Licensor whether or not any Articles have
been sold during the period of which such statement is due.
Licensee shall deliver to Licensor, not later than sixty (60) days
after the close of each Annual Period during the term of this Agreement (or
portion thereof in the event of prior termination for any reason), a statement
signed by a duly authorized officer relating to said entire Annual Period,
setting forth the same information required to be submitted by Licensee in
accordance with the first paragraph of this Article.
B. Books and Records; Audits. Licensee, Affiliate, and Subsidiary shall
prepare and maintain, in such manner as will allow its accountants to audit same
in accordance with generally accepted accounting principles, complete and
accurate books of account and records (specifically including without limitation
the originals or copies of documents supporting entries in the books of account)
in which accurate entries will be made covering all transactions, arising out of
or relating to this Agreement. Licensee, Affiliate, and Subsidiary shall keep
separate books and records for such matters that do not include matters or sales
related to this Agreement. Licensor and its duly authorized representatives
shall have the right, for the duration of this Agreement and for three (3) year
thereafter, during regular business hours and upon seven (7) business days
advance notice (unless a shorter period is appropriate in the circumstances), to
audit said books of account and records and examine all other documents and
material in the possession or under the control of Licensee, Affiliate, and
Subsidiary with respect to the subject matter and the terms of this Agreement,
including, without limitation, invoices, credits and shipping documents, and to
make copies of any and all of the above. All such books of account, records,
documents and materials shall be kept available by Licensee for at least three
(3) years after the end of the Annual Period to which they relate.
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If, as a result of any audit of Licensee's books and records, it is
shown that Licensee's payments were less than the amount which should have been
paid by an amount equal to five (5%) percent or more of the payments actually
made with respect to sales occurring during the period in question, Licensee
shall reimburse Licensor for the cost of such audit and shall pay twice the
amount due for all payments required to be made to eliminate any discrepancy
revealed by said audit within ten (10) days after Licensor's demand therefor.
ARTICLE 11
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Indemnification and Insurance
-----------------------------
A. Indemnification of The Parties. Both parties hereby agree to save
and hold each other and their agents harmless of and from and to indemnify them
against any and all claims, suits, injuries, losses, liability, demands, damages
and expenses (including reasonable attorneys' fees and expenses) which either
party may incur or be obligated to pay, or for which either may become liable or
be compelled to pay in any action, claim or proceeding against it, for or by
reason of any acts, whether of omission or commission, that may be committed or
suffered by the other party or any of its servants, agents or employees in
connection with the performance of this Agreement, or failure thereof, including
but not limited to those arising out of the alleged defect in any Article
produced under this Agreement, or the manufacture, labeling, sale, distribution
or advertisement of any Article in violation of any national, state or local law
or regulation or the breach of Article 5 hereof. The provisions of this
paragraph and the obligations hereunder shall survive the expiration or
termination of this Agreement.
B. Insurance Policy. Licensee shall procure and maintain at its own
expense in full force and effect at all times during which Articles are being
sold, with a responsible insurance carrier acceptable to Licensor, a public
liability insurance policy including products liability coverage with respect to
Articles with a limit of liability not less than $2,000,000. It shall be
acceptable if such coverage is provided by a product liability policy and an
additional umbrella policy. Such insurance policies shall be written for the
benefit of Licensee and Licensor and shall provide for at least thirty (30) days
prior written notice to said parties of the cancellation or substantial
modification thereof. Licensor shall be a named additional insured on each
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such policy. Such insurance may be obtained by Licensee in conjunction with a
policy which covers products other than Articles.
C. Evidence of Insurance. Licensee shall, from time to time upon
reasonable request by Licensor, promptly furnish or cause to be furnished to
Licensor evidence in form and substance satisfactory to Licensor of the
maintenance of the insurance required by subparagraph B above, including, but
not limited to, copies of policies, certificates of insurance (with applicable
riders and endorsements) and proof of premium payments. Nothing contained in
this paragraph shall be deemed to limit in any way the indemnification
provisions of the subparagraph A above.
D. Notice. If either party receives notice of any action, claim, suit
or proceeding in respect of which indemnification may be sought, prompt notice
shall be given to the other party along with a demand that said party defend
such action, claim, suit or proceeding on behalf of both parties. In the event
appropriate action is not taken within twenty (20) days after receipt of notice,
then the notifying party shall have the right, but not the obligation, to defend
such action, claim, suit or proceeding. In any case, the Licensor and the
Licensee shall keep each other fully advised of all developments and shall
cooperate fully with each other in all respects in connection with any such
defense as is made.
ARTICLE 12
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The Licensed Marks
------------------
A. Licensee acknowledges the validity of the Licensed Marks, the
secondary meaning associated with the Licensed Marks, and the rights of Licensor
with respect to the Licensed Marks in the Territory in any form or embodiment
thereof and the goodwill attached or which shall become attached to the Licensed
Marks in connection with the business and goods in relation to which the same
has been, is or shall be used. Sales by Licensee shall be deemed to have been
made by Licensor for purposes of trademark registration and all uses of the
Licensed Marks by Licensee shall inure to the benefit of Licensor. Licensee
shall not, at any time, do or suffer to be done, any act or thing which may in
any way adversely affect any rights of Licensor in and to the Licensed Marks or
any registrations thereof or which, directly or indirectly, may reduce the value
of the Licensed Marks or detract from its reputation.
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B. Licensor shall be responsible for keeping any Licensed Marks
registered in International Class 3, in full force and effect throughout the
term of this Agreement, and, for any registration of the Licensed Marks in
International Class 3 beyond registrations which already exist in the Territory.
Licensee shall reimburse Licensor its actual out of pocket costs plus a fee of
fifty dollars ($50) per hour to Licensor for the maintenance of same and agrees
to provide Licensee with adequate documentation for time incurred. Licensor
shall follow up and advance all renewal registration fees and otherwise maintain
the rights in the Trade Marks in the Territory where presently maintained.
Licensor further agrees (a) to instruct its local trademark and patent agent(s)
to keep Licensee fully and completely informed of all action taken or scheduled
to be taken in respect of the Licensed Marks and to cooperate with Licensee to
take such actions as need be taken to maintain such Licensed Marks, and (b) to
notify Licensee at the time it makes an application for a patent or trademarks
or acquires any right in a patent or trademarks which is or becomes subject to
the terms of this Agreement.
C. Licensee shall use the Licensed Marks in each jurisdiction in the
Territory strictly in compliance with the legal requirements obtaining therein
and shall use such markings in connection therewith as may be required by
applicable legal provisions. Licensee shall cause to appear on all Articles and
on all materials on or in connection with which the Licensed Marks is used, such
legends, markings and notices as may be reasonably necessary in order to give
appropriate notice of any trademark, trade name or other rights therein or
pertaining thereto.
D. In the event that Licensee learns of any infringement or imitation
of the Licensed Marks or of any use by any person of a trademark similar to the
Licensed Marks, it promptly shall notify Licensor thereof. In no event, however,
shall Licensor be required to take any action if it deems it inadvisable to do
so.
E. Licensor shall not be required to protect, indemnify or hold
Licensee harmless against, or be liable to Licensee for, any liabilities,
losses, expenses or damages which may be suffered or incurred by Licensee as a
result of any infringement or allegation thereof by any other person, firm or
corporation, other than by reason of Licensor's breach of the representations
made and obligations assumed herein.
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ARTICLE 13
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Copyright
---------
Any copyright which may be created in any sketch, design,
packaging, label, tag or the like designed or approved by Licensor shall be the
property of Licensor. However, if said sketches, designs, or other artwork
created by the Licensee can be used without the Licensed Marks, then Licensee
shall have the right to do so. This right shall survive the termination or
cancellation of this Agreement. Licensee shall not, at any time, do or suffer to
be done, any act or thing which may adversely affect any rights of Licensor in
such sketches, designs, packaging, labels, containers, tags and the like,
including, without limitation, filing any application in its name to record any
claims to copyrights in Articles, and shall do all things reasonably required by
Licensor to preserve and protect said rights, including, without limitation,
placing the copyright notice specified by the Universal Copyright Convention on
all Articles and the packaging, labels and tags therefor.
ARTICLE 14
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Defaults; Termination
---------------------
A. The following conditions and occurrences shall constitute "Events of
Default" by Licensee:
1. the failure to pay Licensor the full amount due it under
any of the provisions of this Agreement by the prescribed date for such payment;
2. the failure to deliver full and accurate reports pursuant
to any of the provisions of this Agreement by the prescribed due date therefor;
3. the making or furnishing of a knowingly false statement in
connection with or as part of any material aspect of a report, notice or request
rendered pursuant to this Agreement;
4. the failure to maintain the insurance required by Article
11;
5. the attempted or actual assignment, transfer or sublicense
of Licensee's rights under this Agreement except as otherwise permitted
hereunder;
6. the use of the Licensed Marks in an unauthorized or
unapproved manner;
7. the commencement against Licensee of any proceeding in
bankruptcy, or similar law, seeking reorganization, liquidation, dissolution,
arrangement, readjustment, discharge of debt, or seeking the appointment of a
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receiver, trustee or custodian of all or any substantial part of Licensee's
property, not contested within sixty (60) days, or Licensee's making of an
assignment for the benefit of creditors, filing of a bankruptcy petition, its
acknowledgment of its insolvency or inability to pay debts, or taking advantage
of any other provision of the bankruptcy laws;
8. a merger or consolidation of Licensee where Licensee does
not survive which is not approved by Licensor, which approval shall not be
unreasonably withheld;
9. the material breach of any other material promise or
agreement made herein.
B. In the event of (i) an Event of Default under A.3, A.5, A.6, A.7, or
A.8; (ii) Licensee fails to cure any other Event of Default within thirty (30)
days after written notice of default is transmitted to Licensee, this Agreement
shall, at Licensor's option, be terminated, on notice to Licensee, and the
remaining Guaranteed Minimum Royalties for all Annual Periods under the current
term as in Article 8 above shall become due, without prejudice to Licensor's
right to receive other payments due or owing to Licensor under this Agreement or
to any other right of Licensor, including the right to damages and/or equitable
relief.
C. Upon the termination of this Agreement, in the event this Agreement
is not renewed as provided in Article 17 below, or in the event of the
termination or expiration of a renewal term of this Agreement, Licensee, except
as specified below, will immediately discontinue use of the Licensed Marks, will
not resume the use thereof or adopt any colorable imitation of the Licensed
Marks or any of its parts. Upon request by Licensor, Licensee shall assign to
Licensor such rights as Licensee may have acquired in the Licensed Marks. In the
event that this Agreement expires or is terminated, Licensor shall have an
option, but not an obligation, to purchase the bottle molds and tooling, and all
plates, engravings, silk-screens, or the like, used to make or reproduce the
Licensed Marks, and the Designs for the Articles, free of all liens and other
encumbrances, at a price equal to Licensee's cost for same established by
submission of bill(s) from supplier and satisfactory proof of payment for same
less its allocated depreciation.
Licensor shall pay such cost as follows: 25% (twenty-five) at closing and the
balance payable in six (6) equal monthly payments. Licensor shall, at the time
it exercises its
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purchase option, enter into a security agreement with Licensee with respect to
the molds, which shall entitle Licensee to foreclose on its security interest in
the molds in the event Licensor fails to make any installment payment due within
fifteen (15) days after receiving notice of default. Licensor shall exercise its
aforesaid option within thirty (30) days after Licensee's submission of
documents establishing cost. Notwithstanding the foregoing, if Licensor has
terminated this Agreement due to Licensee's default, Licensor, at its option,
shall be entitled, in exercising its purchase option, to deduct from the cost
price an amount equal to the sales and guaranteed minimum royalties Licensor is
entitled to recover, for which deduction Licensee shall receive a credit. In the
event Licensor exercises its aforesaid option, Licensee shall be precluded
forever from using the bottle molds or tools and from selling or otherwise
transferring or licensing any rights whatsoever in the molds or tools to any
third party. In the event that Licensor does not exercise its aforesaid option,
Licensee shall not use the bottle molds or tools or sell or otherwise transfer
or license any rights whatsoever in the bottle molds or tools to any third party
for a period of three (3) years after the determination of the fair market
value. In the event of any permitted use of the bottle molds and/or tools by
Licensee, Licensee shall not use in connection therewith the Licensed Marks, any
trademark confusingly similar thereto, any advertising or promotional materials
used in connection with the Articles or any other markings or materials which
would cause a reasonable consumer to believe that any new items sold using the
bottle molds and tools are authorized by Licensor or in some way associated with
the Licensed Marks. Any permitted sale or license of the bottle molds and/or
tools by Licensee shall prohibit in writing the purchaser or licensee from using
the Licensed Marks, and confusingly similar trademark, advertising, promotional
materials, markings or other materials and shall expressly make Licensor a third
party beneficiary of such provision.
ARTICLE 15
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Rights on Expiration or Termination
-----------------------------------
A. If this Agreement expires or is terminated, Licensee shall cease to
manufacture Articles (except for work in process or to balance component
inventory) but shall be entitled, except upon a termination by Licensor pursuant
to Article 14 above, for an additional period of twelve (12) months only, on a
non-exclusive basis, to sell and dispose of its inventory subject, however, to
the provisions of paragraph D of this Article. Such sales shall be made subject
to all of the provisions of this
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Agreement and to an accounting for and the payment of Sales Royalty thereon but
not to the payment of Guaranteed Minimum Royalties. Such accounting and payment
shall be made monthly.
B. In the event of termination in accordance with Article 14 above,
Licensee shall pay to Licensor, the Sales Royalty then owed to it pursuant to
this Agreement or otherwise.
C. Notwithstanding any termination in accordance with Article 14 above,
Licensor shall have and hereby reserve all rights and remedies which it has, or
which are granted to it by operation of law, to enjoin the unlawful or
unauthorized use of the Licensed Marks, and to collect royalties payable by
Licensee pursuant to this Agreement and to be compensated for damages for breach
of this Agreement.
D. Upon the expiration or termination of this Agreement, Licensee shall
deliver to Licensor a complete and accurate schedule of Licensee's inventory of
Articles and of related work in process then on hand (including any such items
held by Subsidiaries, Affiliates, Related Parties or others on behalf of
Licensee) (hereinafter referred to as "Inventory). Such schedule shall be
prepared as of the close of business on the date of such expiration or
termination and shall reflect Licensee's cost of each such item. Notwithstanding
anything contained to the contrary in this Agreement, Licensor thereupon shall
have the option, but not an obligation, exercisable by notice in writing
delivered to Licensee within thirty (30) days after its receipt of the complete
Inventory schedule, to purchase any or all of the Inventory, free of all liens
and other encumbrances, for an amount equal to the lowest Licensee's selling
price. In the event such notice is sent by Licensor, Licensee shall deliver to
Licensor or its designee all of the Inventory referred to therein within thirty
(30) days after Licensor's said notice and, in respect of any Inventory so
purchased, assign to Licensor all outstanding orders to Licensee from its
customers. Licensor shall pay Licensee for such Inventory within forty-five (45)
days after the delivery of such Inventory to Licensor. No Sales Royalty shall be
payable to Licensor with respect to any such inventory purchased by Licensor.
E. In addition to the option afforded Licensor by paragraph D in this
Article, if, at any time after the termination of this Agreement, Licensee is
willing to sell all or substantially all of its remaining Inventory to a single
purchaser or group of related
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purchasers, Licensee will advise Licensor of the identity of the prospective
purchaser(s) and the price and terms of the proposed sale and the Licensor or
its designee will have the right of first refusal to buy the remaining Inventory
at that price and on those terms and shall have the right to an assignment and
assumption of any and all then outstanding orders from Licensee to its suppliers
and from Licensee's customers to Licensee for the Articles bearing the Licensed
Marks.
ARTICLE 16
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Sublicensing and Distribution
-----------------------------
A. The performance of Licensee hereunder is of a personal nature.
Therefore, this Agreement may be assigned, sublicensed or transferred by
Licensee to a Subsidiary or Affiliate. However, this Agreement may not be
assigned, sublicensed or transferred by Licensee to a non-affiliated party,
except as approved by Licensor's prior written approval, which approval may be
denied by Licensor for any reason in its sole discretion. In the event that
Licensee should assign, sublicense or transfer, whether to a subsidiary or an
affiliate, as permitted by the constraints of this Article 16, Licensee hereby
acknowledges and agrees that it shall be wholly and ultimately responsible for
all of the terms and conditions for the remainder of the then current term of
this Agreement, including financial commitments as provided herein.
B. Licensee shall be entitled to use distributors in connection with
its sale of Articles under this Agreement without approval of Licensor. No such
distributor, however, shall be entitled to exercise any of Licensee's rights
hereunder except for the sale of Articles which have been approved by Licensor
hereunder.
ARTICLE 17
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Renewals
--------
A. Provided Licensee is not in default of any obligation owed Licensor
hereunder or cancelled at the end of the period by Licensee, and the Agreement
has not been previously terminated by Licensor due to an event of default, as
defined in Article 14 (a) above, this Agreement will automatically renew for an
additional five (5) year term. The first renewal term will commence on July 1,
2008 and expire on June 30, 2013. The terms and conditions applicable to the
first renewal term shall be the same as set forth in the Agreement for the
original term except that the Guaranteed
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Minimum Royalty for each Annual Period in the first renewal term shall be
$200,000. One-quarter of the amount due for each Annual Period shall be paid on
the first day of each July, October, January and April during such period with
the Guaranteed Minimum Royalty paid for such Annual Period credited against the
Sales Royalty Paid for such Annual Period as provided in Article 9 above.
Notwithstanding anything contained to the contrary in this Agreement, in the
event the Agreement is terminated by Licensor due to a default by Licensee
during the first renewal term, Licensee shall pay Licensor all monies due for
the remainder of that term.
B. At the end of the first renewal term, provided Licensee is not in
default of any obligation owed Licensor hereunder or cancelled at the end of the
period by Licensee, and the Agreement has not been previously terminated by
Licensor, this Agreement will automatically renew every five (5) years. The
terms and conditions applicable to the subsequent renewal terms shall be the
same as set forth in the Agreement for the original term and the Guaranteed
Minimum Royalty for each Annual Period in all subsequent renewal terms shall be
$200,000. One-quarter of the amount due for each Annual Period shall be paid on
the first day of each July, October, January and April during such period with
the Guaranteed Minimum Royalty paid for such Annual Period credited against the
Sales Royalty Paid for such Annual Period as provided in Article 9 above.
Notwithstanding anything contained to the contrary in this Agreement, in the
event the Agreement is terminated by Licensor due to a default by Licensee
during any subsequent renewal term, Licensee shall pay Licensor all monies due
for the remainder of that term.
ARTICLE 18
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Miscellaneous
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A. Representations. The parties respectively represent and warrant
that they have full right, power and authority to enter into this
Agreement and perform all of their obligations hereunder and that
they are under no legal impediment which would prevent their
signing this Agreement or consummating the same. Licensor
represents and warrants that it has the right to grant the
Licensee an exclusive license to use the Licensed Marks for
products covered under International Class 3 and that Licensor has
not granted any other existing license to use the Licensed Marks
on products covered hereunder in the Territory and that no such
license will be granted
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during the term of this Agreement except in accordance with the
provisions hereof.
B. Governing Law; Entire Agreement. This Agreement shall be construed
and interpreted in accordance with the laws of the State of
Florida applicable to agreements made and to be performed in said
State, contains the entire understanding and agreement between the
parties hereto with respect to the subject matter hereof,
supersedes all prior oral or written understandings and agreements
relating thereto and may not be modified, discharged or
terminated, nor may any of the provisions hereof be waived,
orally.
C. No Agency. Nothing herein contained shall be construed to
constitute the parties hereto as partners or as joint venturers,
or either as agent of the other, and Licensee shall have no power
to obligate or bind Licensor in any manner whatsoever.
D. No Waiver. No waiver by either party, whether express or implied,
of any provision of this Agreement, or of any breach or default
thereof, shall constitute a continuing waiver of such provision or
of any other provision of this Agreement. Acceptance of payments
by Licensor shall not be deemed a waiver by Licensor of any
violation of or default under any of the provisions of this
Agreement by Licensee.
E. Void Provisions. If any provision or any portion of any provision
of this Agreement shall be held to be void or unenforceable, the
remaining provisions of this Agreement and the remaining portion
of any provision held void or unenforceable in part shall continue
in full force and effect.
F. Force Majeure. Neither party hereto shall be liable to the other
for delay in any performance or for the failure to render any
performance under the Agreement (other than payment to any accrued
obligation for the payment of money) when such delay or failure is
by reason of riots, fires, explosions, blockade, civil commotion,
epidemic, insurrection, war or warlike conditions, the elements,
embargoes, act of God or the public enemy, compliance with any
law, regulation or other governmental order, whether or not valid,
or other similar causes beyond the control of the party
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effected. The party claiming to be so affected shall give notice
to the other party promptly after it learns of the occurrence of
said event and of the adverse results thereof. Such notice shall
set forth the nature and extent of the event. The delay or failure
shall not be excused unless such notice is so given.
Notwithstanding any other provision of this Agreement, either
party may terminate this Agreement if the other party is unable to
perform any or all of its obligations hereunder for a period of
six (6) months by reason of said event as if the date of
termination were the date set forth herein as the expiration date
hereof. If either party elects to terminate this Agreement under
this paragraph, Licensee shall have no further obligations for the
Guaranteed Minimum Royalty beyond the date of termination (which
shall be prorated if less than an Annual Period is involved) and
shall be obligated to pay any Sales Royalty which is then due or
becomes due.
G. Binding Effect. This Agreement shall inure to the benefit of and
shall be binding upon the parties, their respective successors,
Licensor's transferees and assigns and Licensee's permitted
transferees and assigns.
H. Resolution of Disputes. Any dispute relating to this Agreement
shall be resolved in a court of law located in the State of
Florida, County of Dade or Broward, without a jury. Both parties
expressly waive trial by jury and consent to the jurisdiction of
such courts.
I. Survival. The provisions of Articles 10, 11A, 11D, 12,13, 14, 15,
17 (if so renewed) and 18 shall survive any expiration or
termination of this Agreement.
J. Paragraph Headings. The paragraph headings in this Agreement are
for convenience of reference only and shall be given no
substantive effect.
K. Counterparts. This Agreement may be signed in counterparts.
ARTICLE 19
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Notices
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Any notice or other communications required or permitted by this
Agreement to be given to a party will be in writing and will be considered to be
duly given when
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sent by certified mail or registered mail, return receipt requested, or by any
other expedited delivery service wherein proof of delivery is obtained, to the
party concerned to the following persons or addresses (or to such other persons
or addresses as a party may specify by notice to the other):
TO LICENSOR PARLUX FRAGRANCES, INC.
3725 S.W. 30th Avenue
Ft. Lauderdale, Florida 33312
Attention: Zalman Lekach, President & COO
Tel: 954/316-9008; Fax: 954/316-8155
WITH A COPY TO: ISSLER & SCHRAGE. L.L.P.
Park Avenue Tower
65 East 55th Street
New York, New York 10022-3219
Attention: Mitchell R. Schrage, Esq.
Tel: 212/758-1600; Fax: 212/758-1616
TO LICENSEE: GENESIS INTERNATIONAL MARKETING CORPORATION
2335 NW 107th Avenue
Miami, Florida 33172
Attention: Mr. Luis Quintero, President
Tel: 305/591-3565; Fax: 305/594-7641
WITH A COPY TO: Barry M. Boren, Esq.
Dadeland Towers
9200 S. Dadeland Blvd., Suite 412
Miami, Florida 33156
Tel: 305/670-2200; Fax: 305/670-1747
Notice of the change of any such address shall be duly given by either
party to the other in the manner herein provided.
I N WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
PARLUX FRAGRANCES, INC. GENESIS INTERNATIONAL
MARKETING CORPORATION
BY: /s/Zalman Lekach BY: /s/Luis Quintero
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Zalman Lekach, President & COO Luis Quintero, President
Date: June 9, 1998 Date: June 9, 1998
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