License Agreement - Maria Sharapova and Parlux Fragrances Inc.
LICENSE AGREEMENT
THIS AGREEMENT made and entered into as of the 15th day of September
2004, by and between MARIA SHARAPOVA, an individual, c/o International
Merchandising Corporation, an Ohio corporation, with offices at IMG Center,
Suite 100, 1360 East 9th Street, Cleveland, Ohio 44114-1782 ("Licensor"), and
PARLUX FRAGRANCES, INC., a Delaware corporation, with offices at 3725 SW 30th
Avenue, Fort Lauderdale, Florida 33312 ("Licensee") (together the "Parties").
W I T N E S S E T H :
---------------------
WHEREAS, Licensor is the sole and exclusive owner of the Licensed Mark
(as hereinafter defined) has used and currently is using, directly and through
licenses, the License Mark for a variety of products; and
WHEREAS, Licensee is engaged in the business of manufacturing,
promoting and selling Articles (as hereinafter defined) and Licensor desires to
obtain the services of Licensee in connection with the manufacture, promotion
and sale of the Articles bearing the Licensed Mark; and
WHEREAS, Licensor is willing to grant Licensee and Licensee desires to
obtain from Licensor, the exclusive right and license to use the Licensed Mark
in the Territory (as hereinafter defined) for use on and in connection with the
manufacture, promotion, distribution and sale of Articles;
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereto covenant and agree as follows:
Article 1
Definitions
The following definitions shall apply:
A. Territory. All countries of the world and all duty-free-shops,
ships, airplanes, military bases and diplomatic missions of every country of the
world, including the world-wide web.
B. Articles. Men's and women's fragrances and related personal beauty
care products included in Class 3 such as body lotions, body creme, body mist,
-1-
<PAGE>
hand creme, bath and shower gel, massage oil, dusting powder, after shave balm
or gel, deodorant stick and bath soap, which are manufactured, produced, sold,
distributed, promoted and advertised by Licensee and which bear the Licensed
Mark under this License Agreement.
C. Licensed Mark. The name Maria Sharapova and such other trademarks as
are, from time to time, agreed to by Licensor.
D. Net Sales. The gross sales price at which Licensee or any Subsidiary
or Affiliate (as hereinafter defined) bills its customers for Articles less all
documented (i) returns of damaged, defective or other merchandise, trade and
cash discounts and allowances, and taxes directly applicable to the sale of
Articles (such as sales, use, value added or similar taxes) but only to the
extent included in the gross sales price (but no reserves for any of the
foregoing), and (ii) freight and shipping charges, insurance costs and duties
and other governmental charges paid by Licensee to the extent stated separately
on any invoice.
E. Subsidiary. Any corporation or other entity which is 100% directly
or indirectly owned by Licensee.
F. Affiliate. Any corporation or other entity which is at least 50%
owned by Licensee.
G. Annual Period. Each twelve (12) month period commencing on each July
1st during the term of this Agreement shall constitute and be referred to herein
as an "Annual Period" except that the first Annual Period shall commence on the
date hereof and shall terminate on June 30, 2006.
Article 2
Grant of License
Upon the terms and conditions of this Agreement, Licensor hereby grants
to Licensee, during the term of this Agreement, the sole and exclusive right and
license to use the Licensed Mark in the Territory as a trademark in connection
with the manufacture, promotion, sale and distribution solely of the Articles
and on all brand identifications, packing materials, containers, promotional
material, publicity, sales, advertising, newspaper, magazine, radio, television,
cinema and similar media presently existing or that may exist in the future, in
connection solely with the creation, manufacture, introduction, marketing,
distribution, sale and advertising of the Articles, through the channels
customarily used to manufacture, sell, distribute, advertise and promote
Articles of comparable prestige and quality in the ordinary course of business
as described in paragraph A of Article 7 below. Licensor shall not, during any
period this Agreement is in effect, grant to any third party any rights to use
the Licensed Mark or any other trademark which includes "Maria Sharapova" or any
derivative thereof in connection with the Articles during the term of this
Agreement. It is understood that the Licensed Marks may not be used in
-2-
<PAGE>
connection with any items for sale or resale, other than Articles as specified
herein. Licensee is not entitled to create, reproduce, publish, sell,
distribute, transmit, download or otherwise use any "Electronic Media"
containing the Licensed Marks, or to license any party to do any of the
foregoing, except solely for advertising and promotional purposes and not, in
each case, for sale, or resale or distribution in any manner. "Electronic Media"
includes, but is not limited to, all forms of electronic, magnetic, digital,
optical and laser-based information storage and retrieval systems, floppy
diskette-based software, CD-ROM, interactive software and compact discs,
floptical disks, ROM Card, silicon chip, on-line electronic or satellite-based
data transmission and other such systems, and any other device or medium for
electronic reproduction, publication, distribution or transmission, whether now
or hereafter known or developed. Notwithstanding anything to the contrary
contained herein, nothing shall prevent Licensor from licensing the right to use
her name, likeness or any other attribute of Licensor's endorsement,
identification or image in connection with any product competitive with, similar
to or the same as the Articles (other than fragrances) provided such product is
not branded with the Licensor Mark.
Article 3
Exclusivity of License
Licensor will not grant any other license effective during the term of
this Agreement for the use of the Licensed Mark on or in connection with the
Articles in the Territory. Licensor may use or grant others the right to use the
Licensed Mark on or in connection with goods of all other types and descriptions
in the Territory. Notwithstanding anything to the contrary contained herein,
nothing shall prevent Licensor from licensing the right to use her name,
likeness or any other attribute of Licensor's endorsement, identification or
image in connection with any product competitive with, similar to or the same as
the Articles (other than fragrances) provided such product is not branded with
the Licensor Mark. Licensor acknowledges that Licensee presently manufactures
and/or 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 Mark or the
validity of this License.
Article 4
Term of Agreement
Subject to the rights of termination set forth in this Agreement, the
initial term of this agreement shall commence on the date hereof and shall
terminate on June 30, 2008. Licensee shall have the right to renew this
Agreement for an additional three-year period provided:
A. Guaranteed Minimum Royalties (as hereinafter defined) for the
initial term of this Agreement have been paid;
B. Licensee is not otherwise in default hereunder;
C. Cumulative gross sales of Licensed Products in the first and second
Annual Periods are at least *; and
-3-
<PAGE>
D. Licensee gives Licensor notice in writing of its intent to renew no
later than December 31, 2007.
Article 5
Confidentiality
The Parties acknowledge that all non-public information relating to the
business and operations of Licensor and Licensee which they learn or have
learned from the other during or prior to the term of this Agreement is
confidential. The Parties acknowledge the need to preserve the confidentiality
and secrecy of such information and agree that, both during the term of this
Agreement and after the expiration or termination hereof, they shall not use or
disclose same, and shall take all reasonable steps to preserve in all respects
such confidentiality and secrecy, it being understood that a Party shall have
complied with the foregoing obligation if such Party understands at least the
same measures and precautions it uses to safeguard its own confidential
information. The provisions of this paragraph shall not apply with respect to :
A. any information that is generally available
to the public other than as a result of
disclosure in violation of the foregoing;
B. any information that is known to Licensor
prior to disclosure by Licensee or
independently developed by Licensor;
C. any otherwise confidential information that
is disclosed to Licensor by a third party
and such disclosure by the third party is
not, to the best knowledge of Licensor, in
violation of any confidentiality agreement
of that party to Licensee; or
D. information that is required to be disclosed
by judicial or administrative order or
required to be disclosed to enforce the
terms and conditions hereof.
The provisions of this paragraph shall survive the expiration or termination of
this Agreement.
Article 6
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 Mark. Licensee intends to
introduce/launch the Articles throughout the Territory by Fall of 2005;
provided, however, in no event shall Licensee introduce/launch the Articles
throughout the Territory later than the end of the first Annual Period.
-4-
<PAGE>
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.
C. Compliance with Law. Licensee shall be solely responsible for
ensuring that all uses of the Licensed Marks hereunder by any of Licensee comply
with applicable law. Licensee agrees that the Articles are, and shall at all
times during the term of this Agreement continue to be of first quality, free of
any defects, and shall be produced and sold by Licensee in accordance with all
national, state, local and other laws, regulations, rules and orders having
applicability thereto. All advertising and promotional materials used by
Licensee in connection with the sale of such Articles will be true, accurate and
complete and will comply with all national, state, local and other laws,
regulations, rules and standards having applicability thereto.
Article 7
Quality Standards
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 Mark 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 Calvin Klein, Ralph Lauren (excluding Purple
Label), and Perry Ellis fragrances as of the date of this Agreement.
(ii) All Articles shall be manufactured, labeled, sold,
distributed and advertised in accordance with all applicable national, state and
local laws and regulations.
(iii) Licensee shall submit to Licensor the fragrance, scent,
packaging and other material, designs, sketches, colors, tags, containers and
labels (collectively, the "Approval Package") for Licensor's review and
approval, such approval not to be unreasonably withheld or delayed. In the event
Licensor does not respond to Licensee within ten (10) business days of
Licensor's receipt of all items within the scope of the Approval Package,
Licensee shall send Licensor written notice requesting such approval once again
(the "Approval Request"). In the event Licensor does not respond to Licensee
within three (3) business days of Licensor's receipt of the Approval Request,
the items in such Approval Package shall be deemed approved.
(iv) During the term of this Agreement, upon Licensor's
request, Licensee shall submit, free of charge to Licensor, then current
production samples of each Article marketed. Production samples submitted by
Licensee for this purpose may be retained by Licensor and Licensor will pay
Licensee for any additional production samples Licensee requests and retains at
prices equal to Licensee's actual costs. All Articles to be sold hereunder shall
be at least equal in quality to the samples presented to Licensor. 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.
-5-
<PAGE>
B. Required Markings. Licensee shall cause to appear on all packaging
of Articles, (i) "the trademark, Maria Sharapova is licensed to Parlux
Fragrances, Inc.; and such additional legends, markings and notices complying
with the requirements of any law or regulation in the Territory and (ii) such
legends, markings and notices as Licensor, from time to time, may reasonably
request.
C. Distribution. In order to maintain the reputation, image and
prestige of the Licensed Mark, 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 (i) of
Article 7 above.
D. Premiums. Licensee shall not sell or otherwise supply to any third
party Articles if such Articles are intended to be given away free of charge or
sold at a substantial discount by such third party as a part of any plan
intended to promote the products, services or business of such third party. The
foregoing shall in no way limit or prohibit Licensee from so selling or
supplying Articles to third parties if such Articles are part of a plan intended
to promote exclusively Licensee's Articles.
E. 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
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
as follows:
Annual Period Guaranteed Minimum Royalty
------------- --------------------------
First (Execution through June 30, 2006) *
Second (July 1, 2006 through June 30, 2007) *
Third (July 1, 2007 through June 30, 2008) *
The Guaranteed Minimum Royalty for the Renewal Term, if any, will be as
set forth below:
Annual Period Guaranteed Minimum Royalty
------------- --------------------------
Fourth (July 1, 2008 through June 30, 2009) *
Fifth (July 1, 2009 through June 30, 2010) *
Sixth (July 1, 2010 through June 30, 2011) *
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.
-6-
<PAGE>
The Guaranteed Minimum Royalty payable for each Annual Period shall be
paid to Licensor in two equal semi-annual installments for the corresponding
Annual Period on or prior to the 1st day of each July and January; except that,
with respect to the first Annual Period, Licensee will pay * to Licensor upon
execution of this Agreement and the remaining * on or prior to July 1, 2005.
Article 9
Sales Royalty; Withholding Taxes
Licensee shall pay to Licensor a Sales Royalty on each Annual Period's
Net Sales of *. All Sales Royalties due Licensor hereunder shall accrue upon the
sale of the Articles. Regardless of time of collection by Licensee, Articles
shall be considered "sold" as of the date on which such Articles are invoiced,
shipped or paid for, whichever first occurs. If sales are made to any party
Affiliated with or related to Licensee, royalties shall be computed based upon
the regular wholesale price for such Articles charged to unrelated third
parties.
The Sales Royalty hereunder shall be accounted for and paid quarterly
within forty-five (45) days after the close of each period ending September 30,
December 31 and March 31 and within sixty (60) days after June 30 during the
term of this Agreement (or portion thereof in the event of earlier termination
for any reason) (each such date, a "Payment Date"). 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.
If applicable, Licensee shall compute any payment, on behalf of
Licensor, for all taxes (other than United States income taxes) which any
governmental authority in the Territory may impose on Licensor with respect to
royalties paid by Licensee to Licensor. The amount of such taxes shall be
deducted from payments of royalties, provided that Licensor is entitled under
applicable law to credit the amount of such taxes against its United States
Federal Income Tax obligations. Licensee shall furnish Licensor with an official
receipt (together with a translation thereof if not in English) promptly after
each such payment of taxes. In the event such taxes are not paid when due, all
resulting penalties and interest shall be borne by Licensee.
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.
Article 10
Advertising
A. Consumer Advertising. During the first Annual Period, Licensee will
spend throughout the Territory for Consumer Advertising (as defined below) at
least *.
-7-
<PAGE>
Beginning with the second Annual Period, Licensee will spend in the
United States for Consumer Advertising at least * of Net Sales in such market
for the immediately preceding Annual Period.
Beginning with the second Annual Period, for the other markets in the
Territory, Licensee or its distributors will jointly spend for Consumer
Advertising an amount equal to at least * of Net Sales in such markets during
the immediately preceding Annual Period.
It is understood that such required or actual spending shall not in any
way reduce Net Sales or Sales Royalties due hereunder or be used to satisfy or
offset any other obligation of Licensee hereunder.
"Consumer Advertising" shall mean direct out-of-pocket costs (excluding
overhead or allocated costs) for: the purchase of advertising space of units in
newspapers, magazines, television, radio, billboards (including related artwork
and production charges for these five categories ) cooperative advertising,
retailer demonstration charges, retailers' catalogues, gifts-with-purchase,
direct mail, remittance envelopes, blow-ins, billing inserts (both scented and
unscented), pamphlets, free goods (excluding those provided to Licensor
hereunder), window and counter displays (including testers, dummies, counter
cards and other visual aids), in-store demonstrators and models, special events,
contests, publicity and promotions.
B. Services.
(i) At Licensee's request, Licensor shall make up to four
appearances during the first Annual Period and up to two
appearances during each subsequent Annual Period in connection
with the advertisement, promotion and sale of the Articles
upon dates, times and locations mutually agreed to by Licensee
and Licensor and scheduled around Licensor's professional and
personal schedules. Such appearances may include, but are not
limited to: appearances to shoot photos for posters, brochures
or in-store displays; photo or production sessions related to
video productions, television commercials (in accordance with
the provisions of subparagraph (iv) following) and/or other
advertising; interactive computer network appearances; playing
in exhibition matches and Licensee-sponsored tennis events;
and attendance at tennis clinics, workshops, in-store
appearances, celebrity events or other appearances. All
photographs and stylists used for any photo shoot hereunder
are subject to the mutual agreement of Licensor and Licensee,
with consideration of Licensee's budget for such photo shoot.
However, Licensor shall not be required to participate in any
activities (a) which are subject to Federal or state security
laws, (b) which would impose a fiduciary duty upon Licensor to
Licensee's shareholders, (c) which would cause Licensor to
violate any laws, (d) which would cause injury to Licensor or
-8-
<PAGE>
(e) which may subject Licensor to public disrepute. Licensor
shall receive no additional remuneration for such appearances
except as otherwise expressly provided herein. Licensee
further understands that Licensee's unilateral failure to
utilize services of Licensor hereunder shall not result in any
reduction in payments to Licensor hereunder, nor may unused
appearances from one Annual Period be carried forward to
another Annual Period. The obligations of Licensor to provide
the services hereunder are subject to the condition that
payments to Licensor are current and up to date and Licensee
is not otherwise in breach of any provisions of the Agreement.
If Licensor confirms Licensor's availability for any
appearance and Licensor is unable to appear due to illness,
injury or other emergency, such non-appearance is not a breach
of this Agreement and neither Licensor nor Licensor shall be
responsible for any expenses incurred due to such
non-appearance. In such event, Licensor and Licensee shall
attempt in good faith to reschedule the appearance date.
However, Licensor acknowledges that if Licensor fails to
fulfill any appearance scheduled in accordance with the
provisions of this subparagraph for reasons other than
illness, injury or other emergency or other events of force
majeure, such failure may cause Licensee to suffer damage and
loss which might include, but not necessarily be limited to,
costs and expenses associated with the appearance, advertising
production costs, advertising or promotional opportunities,
and loss of goodwill, the amount and extent of which damage
and loss are impracticable to estimate prospectively and will,
in the event of such failure, be difficult if not impossible
to prove with any acceptable degree of certainty. Therefore,
in the event that Licensor fails for any reason other than
illness, injury or other emergency or other events of force
majeure, to fulfill any such scheduled appearance accepted by
Licensor, without Licensee's prior consent, then for each such
scheduled appearance which Licensor fails to fulfill, Licensee
shall have the right to reduce any fees otherwise due Licensor
hereunder hereof by the lesser of (x) Licensee's unrecoverable
out-of-pocket costs associated with such appearance and (y)
Ten Thousand Dollars ($10,000.00), as and for liquidated
damages. Notwithstanding anything to the contrary contained
herein, recovery of such liquidated damages shall be the sole
and exclusive remedy available to Licensee in connection with
such failure to appear by Licensor.
(ii) In addition, Licensee will be available, as she deems
reasonably necessary, to review, comment and provide input on
and approval of the Articles and the uses of the Licensed
Mark.
(iii) For each appearance made by Licensor hereunder:
a. Licensee agrees to pay all reasonable out-of-pocket
expenses incurred by Licensor, a personal companion of
Licensor and a representative of Licensor in connection
therewith (including, but not limited to first-class air
travel, or, at Licensor's option, the value of first class
airfare for Licensor, a personal companion of Licensor and
a representative of Licensor if Licensor elects to travel
by private jet);
-9-
<PAGE>
b. Licensee shall not request any appearance at a time which
would conflict with Licensor's obligations as a
professional tennis player;
c. Unless otherwise agreed upon in advance, no
non-production-related appearance shall exceed two (2)
hours; no production-related appearance shall exceed eight
(8) hours; and no appearance shall exceed twenty-four (24)
hours including travel time. For purposes of this
paragraph, "media-related" shall refer to appearances made
in connection with production sessions for such purposes as
photo shoots, print or television advertising or video
productions;
d. Licensor shall have fulfilled at least one appearance
obligation for each calendar day on which services are
provided to Licensee in accordance with this Paragraph; and
e. Travel time shall be included and considered an appearance
or appearances in accordance with the guidelines set forth
above if (1) one-way travel time (including all stops,
layovers and connections if traveling on a commercial
airline) exceeds three hours and (2) Licensor is not
otherwise required or previously committed to be at such
location for the benefit of a party other than Licensee.
(iv) If at any time during the term of this Agreement Licensee
elects to feature Licensor in a television commercial in
connection with the advertisement, promotion and sale of
Articles, Licensor agrees that she shall appear for and
participate in the filming and production of such television
commercial(s) and work cooperatively with Licensee's
designated advertising agency, subject to the provisions
hereof. Licensor further agrees that, if requested to do so,
she will enter into an appropriate talent agreement with
Licensee's advertising agency covering Licensor's performance
of services and the appearance by Licensor in such television
commercial(s). The parties agree for the purposes of this
subparagraph that the value of Licensee's use of Licensor in
such television commercial(s) shall be reasonably quantified
as such sum as Licensor and Licensee's advertising agency may
agree upon. If any remuneration shall be paid to Licensor by
Licensee's advertising agency for Licensor's performance of
services and appearance in such television commercial(s), the
net amount of such remuneration shall constitute a credit
against any remuneration thereafter payable by Licensee to
Licensor pursuant hereto, and Licensee shall be entitled to
reduce any subsequent payments of such remuneration due to
Licensor by the amount of such credit. Licensee shall insure
that its advertising agency pays such pension, welfare and
-10-
<PAGE>
other charges as may be properly levied by any union(s) having
jurisdiction over Licensor's appearance in such television
commercial(s) which amounts shall be in addition to any other
amounts required to be paid hereunder.
Article 11
Sales Statement; Books and Records; Audits
A. Sales Statement. Licensee shall deliver to Licensor on each Payment
Date, whether or not a Sales Royalty payment is due, a reasonably detailed
report signed by a duly authorized officer of Licensee indicating by quarter the
Net Sales 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 ninety (90) 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 and also setting forth the
information concerning expenditures for the advertising and promotion of
Articles during such Annual Period required by Article 10 hereof.
B. Books and Records; Audits. Licensee 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, including advertising
expenditures, arising out of or relating to this Agreement. Licensee shall keep
separate general ledger accounts 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
one (1) 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 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 two (2) years after
the end of the Annual Period to which they relate.
In the event that an error is discovered in the calculation of the
amounts payable to Licensor, the party that received the benefit of the error
shall promptly thereafter pay to the other the amount of overpayment or
underpayment, as the case may be. 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 * 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 the
next subsequent audit. Licensor's receipt of any royalty statement, or any
-11-
<PAGE>
royalty payment, does not preclude it from challenging the correctness of that
royalty statement.
Article 12
Indemnification and Insurance
A. Indemnification of Licensor. Licensee hereby agrees to save and hold
Licensor 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, subject to subparagraph D below, Licensor's reasonable
attorneys' fees and expenses) which Licensor 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 Licensee or any of
its servants, agents or employees in connection with Licensee's performance of
this Agreement, including but not limited to those arising out of the alleged
defect in any Article produced by Licensee under this Agreement, the
manufacture, labeling, sale, distribution or advertisement of any Article by
Licensee in violation of any national, state or local law or regulation or the
breach of Article 5 hereof. The provisions of this paragraph and Licensee's
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 US$3,000,000. 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 insured on each 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. Licensor will give Licensee notice of any action, claim,
suit or proceeding in respect of which indemnification may be sought and
Licensee shall defend such action, claim, suit or proceeding on behalf of
Licensor. In the event appropriate action is not taken by Licensee within thirty
(30) days after its receipt of notice from Licensor, then Licensor shall have
the right, but not the obligation, to defend such action, claim, suit or
proceeding. Licensor may, subject to Licensee's indemnity obligation under
-12-
<PAGE>
subparagraph A above, be represented by its own counsel in any 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. Nothing
contained in this paragraph shall be deemed to limit in any way the
indemnification provisions of the subparagraph A above except that in the event
appropriate action is being taken by Licensee by counsel reasonably acceptable
to Licensor, with respect to any not-trademark or intellectual property, action,
claim, suit or proceeding. Licensor shall not be permitted to seek
indemnification from Licensee for attorneys' fees and expenses incurred without
the consent of Licensee. In connection with the aforesaid actions, claims and
proceedings, the parties shall, where no conflict of interest exists, seek to be
represented by common reasonably acceptable counsel. In connection with actions,
claims or proceedings involving trademark or other intellectual property matters
which are subject to indemnification hereunder, Licensor shall at all times be
entitled to be represented by its own counsel, for whose reasonable fees and
disbursements it shall be entitled to indemnification hereunder.
Article 13
The Licensed Mark
A. Notwithstanding anything to the contrary contained herein, all uses
of the Licensed Mark, materials using or incorporating the Licensed Mark and
items used in connection with the Licensed Mark are subject to Licensor's review
and approval.
B. Licensee shall not join any name or names with the Licensed Mark so
as to form a new mark, unless and until Licensor consents thereto in writing.
Licensee acknowledges the validity of the Licensed Mark, the secondary meaning
associated with the Licensed Mark, and the rights of Licensor with respect to
the Licensed Mark in the Territory in any form or embodiment thereof and the
goodwill attached or which shall become attached to the Licensed Mark 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
Mark 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 Mark or any
registrations thereof or which, directly or indirectly, may reduce the value of
the Licensed Mark or detract from its reputation.
C. At Licensor's request, Licensee shall execute any documents,
including Registered User Agreements, reasonably required by Licensor to confirm
the respective rights of Licensor in and to the Licensed Mark in each
jurisdiction in the Territory and the respective rights of Licensor and Licensee
pursuant to this Agreement. Licensee shall cooperate with Licensor, in
connection with the filing and the prosecution by Licensor of applications to
register or renew the Licensed Mark for Articles sold hereunder in each
jurisdiction in the Territory where Licensee has reasonably requested the same.
Such filings and prosecution outside the U.S. shall be at the expense of
Licensee (Licensee shall pay for any application requested in advance) subject
to a credit given on a country by country basis for such payments against any
royalties due Licensor from sales derived in the particular country where the
application was made. Nothing contained herein shall obligate Licensor to
prosecute any trademark application outside the U.S. which is opposed or
rejected in any country after the application is filed, provided, however, that
nay such prosecution shall go forward if (i) Licensee requests same; (ii)
Licensee pays for same directly; and (iii) such prosecution is in Licensor's
-13-
<PAGE>
name and directed by Licensor. Licensor shall cooperate fully with any such
prosecution. If the prosecution fails, Licensee shall receive no credit for the
monies it expended in connection therewith; if the prosecution succeeds,
Licensee shall be entitled to receive a credit it against any royalties due
Licensor from sales derived in the country of such prosecution.
D. Licensee shall use the Licensed Mark 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 Mark 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.
E. Licensee shall never challenge the validity of the Licensed Mark or
any application for registration thereof, or any trademark registration hereof,
or any rights of Licensor therein. The foregoing shall not be deemed to prevent
Licensee from asserting, as a defense to a claim of breach of contract brought
against Licensee by Licensor for failure to perform its obligations hereunder,
that its ceasing performance under this Agreement was based upon Licensor's
failure to own the Licensed Mark in the United States of America, provided that
it is established in a court of law that Licensor does not own the Licensed
Mark, that the Licensed Mark is owned by a third party so as to preclude the
grant of the license provided herein.
F. In the event that Licensee learns of any infringement or imitation
of the Licensed Mark or of any use by any person of a trademark similar to the
Licensed Mark, 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.
G. Notwithstanding anything contained to the contrary in this
Agreement, in the event that (i) Licensee has (a) promptly notified Licensor
that a third party has offered or will soon offer for sale to a third party
Articles bearing the Licensed Mark of at least $100,000 at wholesale cost, were
the Articles legitimate, which offer is made in the U.S. or, (b) of at least
$150,000 at wholesale cost in another country and there is reasonable likelihood
of success based on both the facts and the country's past willingness to render
judgments against trademark counterfeiters operating in its territory (with
proof of same presented by Licensee), and (iii) Licensee has along with such
prompt notice presented Licensor with reasonable proof of the foregoing sale or
offer, including without limitation the identity and address(es) of the
third-party Seller, the location where the counterfeit merchandise is maintained
or to be shipped, and the proposed purchaser(s), if any, so as to enable
Licensor to proceed expeditiously against the purported third-party Seller and
Purchaser and; (ii) Licensor, after investigation of the facts relating to the
foregoing notice, which investigation does not disprove the facts in the notice,
fails to take reasonably prompt diligent action, first by cease and demand
letter to the third-parties (if the purported sale is to post-date the notice),
and if such letter is ineffective, fails to take legal action to enjoin the
sale, then Licensee shall be entitled to terminate this Agreement on written
notice, whereupon, the parties shall owe no further obligations on to the other,
except to the extent previously accrued or as provided in Articles 12 and 15 of
this Agreement.
-14-
<PAGE>
H. 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.
Article 14
Defaults; Termination
A. The following conditions and occurrences shall constitute "Events of
Default" by Licensee:
(i) 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;
(ii) the failure to deliver full and accurate reports pursuant to
any of the provisions of this Agreement by the prescribed due date therefor;
(iii) 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;
(iv) the failure to maintain the insurance required by Article 12;
(v) the use of the Licensed Mark in an unauthorized or unapproved
manner;
(vi) Licensee's use of other trademarks or in association with the
Articles, without prior written consent of Licensor;
(vii) 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
receiver, trustee or custodian of all or any substantial part of Licensee's
property, not dismissed 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;
(viii) the breach of any other material promise or agreement made
herein.
B. In the event Licensee fails to cure (i) an Event of Default under
Article 14(A)(i) within ten (10) days after written notice of default is
transmitted to Licensee, (ii) an Event of Default under Article 14(A)(iii), (v),
(iv), or (vii) within thirty (30) days after written notice of default is
transmitted to Licensee; or (ii) Licensee fails to cure any other Event of
Default within sixty (60) days after written notice of default is transmitted to
Licensee or within such further period as Licensor may allow, this Agreement
shall, at Licensor's option, be terminated, immediately upon notice to Licensee,
-15-
<PAGE>
and all the prorated Guaranteed Minimum Royalties for the Annual Period 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 expiration or termination of this Agreement for any reason,
Licensee, except as specified below, will immediately discontinue use of the
Licensed Mark, will not resume the use thereof or adopt any colorable imitation
of the Licensed Mark or any of its parts, will promptly deliver and convey to
Licensor (free of all liens and encumbrances) (i) all plates, engravings,
silk-screens, or the like used to make or reproduce the Licensed Mark and the
Designs, but not the bottle mold or tooling which Licensor shall be entitled to
purchase or recover as provided below; and (ii) all items affixed with likeness
or reproductions of the Licensed Mark, whether Articles, labels, bags, hangers,
tags or otherwise, and, upon request by Licensor, will assign to Licensor such
rights as Licensee may have acquired in the Licensed Mark. In the event that
this Agreement expires or is terminated by Licensor due to Licensee's default,
Licensor shall have an option, but not an obligation, to purchase the bottle
mold and tooling 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. Licensor shall pay
such cost as follows: 50% (fifty percent) at closing and the balance paid by six
(6) equal monthly payments. Licensor shall, at the time exercises its purchase
option, enter into a security agreement with Licensee with respect to the mold,
which shall entitle Licensee to foreclose on its security interest in the mold
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 mold or tools to any third party
for a period of two (2) years after the determination of the fair market value.
In the event of any permitted use of the bottle mold and/or tools by Licensee,
Licensee shall not use in connection therewith the Licensed Mark, any trademark
confusingly similar thereto, any trade dress associated with the Articles, 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 mold and tools are authorized by
Licensor or in some way associated with the Licensed Mark. Any permitted sale or
license of the bottle mold and/or tools by Licensee shall prohibit in writing
the purchaser or licensee from using the Licensed Mark, and confusingly similar
trademark and any such trade dress, advertising, promotional materials, markings
or other materials and shall expressly make Licensor a third party beneficiary
of such provision.
-16-
<PAGE>
Article 15
Rights on Expiration or Termination
A. If this Agreement expires or is terminated for any reason, Licensee
shall cease to manufacture Articles (except for work in process or to balance
component inventory) but shall be entitled, for an additional period of six (6)
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; provided
that Licensee shall have no such rights unless (i) Licensee is not in default of
any of its obligations hereunder on the date of termination, (ii) within thirty
(30) days after the date of termination, Licensee shall furnish to Licensor a
written statement of the number and description of all such products actually in
stock on the date of termination, and (iii) the quantity of all such products in
stock on the date of termination is not in excess of a reasonable inventory
based upon Licensee's sales of all such products during the term of the
Agreement. Such sales shall be made subject to all of the provisions of this
Agreement and to an accounting for and the payment of Sales Royalty thereon but
not to the payment of Guaranteed Minimum Royalties or the crediting of the Sales
Royalty against any Guaranteed Minimum Royalty or any other amounts. 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 Mark, 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 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,
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
then outstanding orders from Licensee to its suppliers and to Licensee from its
customers. Licensor shall pay Licensee for such Inventory within twenty (20)
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.
-17-
<PAGE>
Article 16
Sublicensing and Distribution
A. The performance of Licensee hereunder is of a personal nature.
Therefore, neither this Agreement nor the license or other rights granted
hereunder may be assigned, sublicensed or transferred by Licensee, whether to a
subsidiary or Affiliate except as approved by Licensor in advance, in writing,
which approval will not be unreasonably denied.
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
Miscellaneous
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 license Licensee
the Licensed Mark and that Licensor has not granted any other existing license
to use the Licensed Mark on products covered hereunder in the Territory and that
no such license will be granted during the term of this Agreement except in
accordance with the provisions hereof.
B. Licensor's Rights. Not withstanding anything to the contrary
contained in this Agreement, Licensor shall not have the right to negotiate or
enter into agreements with third parties pursuant to which it may grant a
license to use prior to the termination or expiration of this Agreement the
Licensed Mark in connection with the manufacture, distribution and/or sale of
products covered hereunder in the Territory or provide consultation and design
services with respect to such products in the Territory.
C. Licensor's Retail Stores. In the event Licensor opens one or more
retail stores or boutiques selling various products bearing the Licensed Mark,
Licensee agrees to sell Articles to Licensor for sale in such stores at regular
list prices less an additional 20% (twenty) discount. Licensee further agrees
that any sales pursuant to this paragraph shall be included in the computation
of Net Sales for any applicable Annual Period hereunder.
D. Articles for Use by Licensor. Throughout the term of the Agreement
Licensee agrees to supply to Licensor, at Licensee's expense, such quantities of
Articles as she (or Licensor's designated agent) may reasonably request for
Licensor's own use.
E. 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.
-18-
<PAGE>
F. 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.
G. 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.
H. 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.
I. Limitation of Liability. Notwithstanding anything to the contrary
contained herein, in the event Licensee incurs any expenses, damages or other
liabilities (including, without limitation, reasonable attorneys' fees) in
connection with the breach by Licensor of any term or provision hereof,
Licensor's liability to Licensee thereunder shall not exceed the remuneration,
excluding reimbursement of expenses, actually paid to Licensor by Licensee
hereunder.
J. Construction. This Agreement shall be construed without regard to
any presumption or other rule requiring construction against the party causing
this Agreement to be drafted. If any words or phrases in this Agreement shall
have been stricken out or otherwise eliminated, whether or not any other words
or phrases have been added, this Agreement shall be construed as if those words
or phrases were never included in this Agreement, and no implication or
inference shall be drawn from the fact that the words or phrases were so
stricken out or otherwise eliminated.
K. 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 or any accrued obligation for the payment of
money) when such delay or failure is by reason of lockouts, strikes, riots,
fires, explosions, blockade, civil commotion, epidemic, insurrection, war or
warlike conditions, terrorism or threat of terrorism, 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 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.
-19-
<PAGE>
L. 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.
M. Resolution of Disputes. This Agreement shall be governed by and
interpreted in accordance with the laws of the state of Florida. The parties
agree that the procedures set forth herein shall be the exclusive means for
resolving any claim, dispute, or controversy arising from or relating to this
Agreement, whether sounding in contract, tort, equity, or otherwise, including
any dispute over the validity and/or scope of this Section paragraph M or of any
other aspect of this Agreement. Any dispute arising under this Agreement will be
first referred for resolution to each party's respective management designee. To
the extent that such designees cannot resolve the dispute within ten (10)
business days of referral to them, the parties agree to try in good faith to
settle the dispute by non-binding mediation under the Commercial Mediation Rules
of Judicial Arbitration and Mediation Services, Inc. ("JAMS"). Any and all
mediation hearings shall be held in Broward County, Florida, unless the parties
agree otherwise. If and to the extent after five (5) days of mediation with the
mediator, the dispute is not settled, or if the mediator declares an impasse
prior to the end of the five (5) day period, then and only then the aggrieved
party may pursue arbitration as set forth herein. Any arbitration hereunder
shall be conducted under the Dispute Resolution Rules of JAMS as modified
herein. Arbitration proceedings shall take place in Broward County, Florida,
before a single arbitrator who shall be a lawyer. The parties shall request that
JAMS provide them with a list of five (5) arbitrators and each party, beginning
with Licensee, shall alternately strike one name from such list until one
arbitrator remains and such arbitrator shall conduct the proceedings. All
arbitration proceedings shall be confidential. Neither party shall disclose any
information about the evidence produced by the other party in the arbitration
proceedings, except in the course of judicial, regulatory, or arbitration
proceeding, or as may be demanded by government authority. Before making any
disclosure permitted by the preceding sentence, a party shall give the other
party reasonable advance written notice of the intended disclosure and an
opportunity to prevent disclosure. In connection with any arbitration provisions
hereunder, each party shall have the right to take the deposition of up to two
individuals and any expert witness retained by the other party. Additional
discovery may be had only where the arbitrator so orders, upon a showing of
substantial need. Only evidence that is directly relevant to the issues may be
obtained in discovery. Each party bears the burden of persuasion of any claim or
counterclaim raised by that party. The arbitration provisions of this Agreement
shall not prevent any party from obtaining injunctive or other equitable relief
from a court of competent jurisdiction to enforce the obligations for which such
party may obtain provisional relief pending a decision on the merits by the
arbitrator. Each of the parties hereby consents to the jurisdiction of Florida
courts for such purpose. The arbitrator shall have authority to award any remedy
or relief that a court of the State of Florida could grant in conformity to
applicable law, except that the arbitrator shall have no authority to award
attorneys' fees or punitive damages. Any arbitration award shall be accompanied
by a written statement containing a summary of the issues in controversy, a
description of the award, and an explanation of the reasons for the award. The
arbitrator's award shall be final and judgment may be entered upon such award by
any court.
N. Third Parties. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed to
-20-
<PAGE>
confer upon or give to any person, corporation or other entity other than the
parties hereto and their successors or assigns, any rights or remedies under or
by reason of this Agreement.
O. Assignment/Delegation. Neither Licensee nor Licensor shall assign or
delegate their obligations under this Agreement without the prior written
consent of the other Party, which will not be unreasonably withheld or delayed,
but Licensor shall have the right to assign its financial benefits hereunder.
Licensee hereby consents to such assignment, provided Licensor continues to
perform its obligations hereunder. Notwithstanding the foregoing, Licensor may
assign its rights and/or obligations to any entity controlled by Licensor
provided such assignment does not diminish Licensee's rights hereunder.
P. Survival. The provisions of Articles 11, 12A, 12D, 13, 15, 16, and
17 shall survive any expiration or termination of this Agreement.
Q. Paragraph Headings. The paragraph headings in this Agreement are for
convenience of reference only and shall be given no substantive effect.
Article 18
Notices
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 sent by certified mail or registered mail, return receipt
requested, recognized overnight courier or confirmed facsimile, 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: Maria Sharapova
c/o International Merchandising Corporation
IMG Center, Suite 100
1360 East 9th Street
Cleveland, Ohio 44114-1782
Telephone: (212) 436-3454
Facsimile: (212) 436-3678
Attention: Max Eisenberg
with a copy to: Polly Grunfeld Sack, Esq.
--------------
International Merchandising Corporation
IMG Center, Suite 100
1360 East 9th Street
Cleveland, Ohio 44114-1782
Telephone: (212) 436-3669
Facsimile: (216) 436-3173
-21-
<PAGE>
To Licensee: PARLUX FRAGRANCES, INC.
-----------
3725 SW 30th Avenue
Ft. Lauderdale, Florida, 33312
Attention: Ilia Lekach
Chairman & CEO
Telephone: (954) 316-9008
Facsimile: (954) 316-8155
with a copy to: MITCHELL SCHRAGE & ASSOCIATES
--------------
126 East 56th Street
New York, New York 10022
Attention: Mitchell R. Schrage, Esq.
Telephone: (212) 758-9000
Facsimile: (212) 758-1616
Notice of the change of any such address shall be duly given by either
party to the other in the manner herein provided.
PARLUX FRAGRANCES, INC.
By: /s/ Frank A. Buttacavoli Date: September 14, 2004
--------------------------------------- ------------------
Print name: Frank A. Buttacavoli
Title: Exec. VP / COO / CFO
/s/ Maria Sharapova Date: September 15, 2004
-------------------------------------------- ------------------
MARIA SHARAPOVA
Soc. Sec. No.: xxx-xx-xxxx
Dated: September 15, 2004
RATIFIED AND APPROVED:
/s/ Yuriy Sharapov
---------------------------------
Father
/s/ Yelena Sharapova
---------------------------------
Mother
-22-