THROUGHOUT THIS AGREEMENT, WHERE
INFORMATION HAS BEEN REPLACED BY AN ASTERISK
(*), THAT INFORMATION HAS BEEN OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED. THE
OMITTED INFORMATION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
EXHIBIT 10.69
LICENSE
AGREEMENT
THIS AGREEMENT (the "Agreement") made and entered into as of the
8th
day of December 2004, by and between Andy
R., Inc. ("Licensor") f/s/o Andy
Roddick ("Roddick"), a Florida corporation
with an address c/o SFX Sports Group,
Inc. ("SFX Sports"), 2665 South Bayshore
Drive, Suite 606, Coconut Grove, FL
33133 (Attn. Kenneth Meyerson), and PARLUX
FRAGRANCES, INC., a Delaware
corporation with offices at 3725 SW 30TH
Avenue, Ft. Lauderdale, FL. 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) and has used and
currently is using, directly and
through licenses, the License Mark for a
variety of products; and
WHEREAS, Roddick has licensed all such
rights and the right to provide all such
ancillary services to Licensor, along with
the rights to sublicense such rights
to third parties; 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 the Licensee and Licensee
desires
to obtain from Licensor, the exclusive
right and license to use the Licensed
Mark in the Territory (as hereinafter
defined) solely 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. Territory shall mean 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.
<PAGE>
B. Articles. Men's and women's fragrances
("fragrances") and related personal
care products such as after shave balm or
gel, deodorant stick, bath and shower
gel, body lotions, body mist and bath soap,
which are manufactured, produced,
sold, distributed, promoted and advertised
by Licensee and which bear the
Licensed Mark under this License Agreement.
Notwithstanding the foregoing, and
subject to the terms of Article 3 below,
Licensor shall have the option, by
providing written notice to Licensee, to
exclude any of the above-referenced
categories, with the exception of
fragrances, from the definition of "Articles"
in the event it wishes to enter into an
agreement to endorse a product in said
categories (i.e. Gillette).
C. Licensed Mark. The name Andy Roddick and
such other trademarks as are, from
time to time, agreed to by Licensor.
D. Roddick Endorsement. The Roddick
Endorsement shall mean the right to use,
subject to the provisions hereof, Roddick's
name, fame, nickname, initials,
autograph, voice, video, film portrayals or
performances, facsimile or original
signature, photograph, likeness and image
or facsimile image, and any other
means of endorsement by Roddick used in
connection with the advertising,
promotion and sale of the Articles.
E. Net Sales. The sales price at which
Licensee or any Subsidiary or Affiliate
(as hereinafter defined) bills its
customers for Articles less: (1) all
documented returns of damaged, defective or
other merchandise, uncollectible
accounts, 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, (ii) freight and shipping
charges, insurance costs and duties and
other governmental charges paid by the
Licensee to the extent stated separately on
any invoice, and/or (iii) all
receipts from sale of samples, displays,
brochures, gift-with-purchase and
similar advertising and promotional
materials and packaging supplies in which
the Licensee receives a minimum gross
margin of less than twenty five percent
(25%).
F. Subsidiary. Any corporation or other
entity which is one hundred percent
(100%) directly or indirectly owned by
Licensee.
G. Affiliate. Any corporation or other
entity which is at least fifty percent
(50%) owned by Licensee.
H. Annual Period. Each twelve (12) month
period commencing on each July 1st
during the Term (as hereinafter defined) 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.
I. Consumer Advertising. Consumer
Advertising shall be understood to include
newspapers, magazines, television, radio,
Internet, billboards (including
related artwork and production charges for
these five categories) cooperative
advertising, retailer demonstration
charges, retailers' catalogues,
<PAGE>
gifts-with-purchase (so long as any such
gifts do not violate one of Roddick's
or Licensor's existing or future
endorsement relationships (i.e. Reebok, Rolex,
etc.), direct mail, remittance envelopes,
blow-ins, billing inserts (both
scented and unscented), product samples,
pamphlets, free goods (including those
to Licensor for events and other public
relations activities), window and
counter displays (including testers,
dummies, counter cards and other visual
aids), in-store demonstrators and models,
special events, contests, publicity
and promotions.
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 solely 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.
Under no circumstances does this Agreement grant or purport to
grant to
Licensee the right to use any logo,
trademark, or service mark owned by the
Association of Tennis Professionals
("ATP"), the United States Tennis
Association ("USTA") or the International
Tennis Federation ("ITF"). Licensee
agrees and acknowledges that it must obtain
approval from the ATP, USTA and/or
ITF for the use of any such marks or
insignias, and in the absence of such
written approval, shall not make any use
whatsoever thereof.
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 or Roddick Endorsement on or in
connection with the endorsement of Articles
in the Territory. Licensor may use
or grant others the right to use the
Licensed Mark and Roddick Endorsement 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 Roddick
Endorsement 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 (i.e. Licensor shall
have the right to enter into an agreement
with Gillette to endorse its products
so long as Gillette does not brand its
products with the Licensor Mark.)
<PAGE>
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 attack, during the Term
of this Agreement and thereafter,
either Licensor's title in and to the
Licensed Mark or the Roddick Endorsement,
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, 2009. Licensee shall
have the option to renew this
Agreement for an additional three (3) year
period provided:
A.
Guaranteed Minimum Royalties (as hereinafter defined) for the
initial
term of this Agreement have been paid; and
B.
Licensee gives Licensor notice in writing of its intent to renew
no
later than December 31, 2008.
ARTICLE 5
Confidentiality
The Parties acknowledge that all non-public proprietary
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 the party to Licensee; or
<PAGE>
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.
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. Marketing Commitment. During the Term of
the Agreement, Licensee agrees to
develop, produce, market and sell a Roddick
line of Articles, which consist of:
(i) no fewer than one (1) brand of Roddick
Articles (the "Roddick Articles") in
the first Annual Period, which shall have a
commercial release to the general
public no later than May 1, 2006; and (ii)
no fewer than one (1) additional
brand of Roddick Articles in the third
Annual Period which shall have a
commercial release to the general public
between July 1, 2007 and January 1,
2008. Licensee agrees that all Roddick
Articles will at least be distributed
through channels normally used to
distribute Articles. All rights of Licensee to
develop, produce, market or sell any
Roddick Articles shall terminate upon the
expiration or termination of this Agreement
except as provided herein.
Furthermore, during the Term, Licensee
agrees that it shall not, without
Licensor's prior written permission, which
shall not be unreasonably withheld,
conditioned or delayed, disassociate the
Roddick Endorsement from any Roddick
Articles.
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. 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.
<PAGE>
(iii) Licensee shall
submit to Licensor the fragrance, scent,
packaging and other material, designs, sketches, colors, tags,
containers and labels (collectively, the "Approval Package"),
as
well as any materials utilizing the Licensed Mark or the
Roddick
Endorsement 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 Licensor 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.
B. Required Markings. Licensee shall cause
to appear on all packaging of
Articles, (i) "the trademark, Andy Roddick
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. 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/Supply of Articles
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:
<PAGE>
Annual Period Guaranteed
Minimum Royalty (in USD$)
First (Execution through June 30, 2006)
*
Second (July 1, 2006 through June 30, 2007)
*
Third (July 1, 2007 through June 30, 2008)
*
Fourth (July 1, 2008 through June 30, 2009)
*
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
payable for each Annual Period shall be
paid to Licensor in four equal quarterly
installments for the corresponding
Annual Period on or prior to the 15th day
of each, July, October, January and
April; except that, with respect to the
first Annual Period, Licensee will pay *
to Licensor upon execution of this
Agreement, which will be credited against the
Guaranteed Minimum Royalty due for the
initial Annual Period. The Guaranteed
Minimum Royalty shall be made payable to
"Andy R., Inc." and should be sent c/o
Andy R., Inc., 1499 Las Casas Road, Boca
Raton, FL 33486 (Attn.: Jerry Roddick).
The Guaranteed Minimum Royalty for each Annual Period in the
renewal
term will be *.
Additionally, throughout the Term of the Agreement, Licensee agrees
to
supply to Licensor, at Licensee's expense,
such quantities of Articles as it (or
Licensor's designated agent) may reasonably
request for Roddick's own use.
ARTICLE 9
Sales Royalty; Withholding Taxes
Licensee shall pay to Licensor a sales royalty (the "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 or shipped, whichever
first occurs.
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 prior 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. The
Sales Royalty shall be made payable to
"Andy R., Inc." and should be sent c/o
Andy R., Inc., 1499 las Casas Road, Boca
Raton, FL 33486 (Attn.: Jerry Roddick).
<PAGE>
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.
ARTICLE 10
Advertising
Licensee agrees to spend in the United States for Consumer
Advertising
* of Net Sales from the just-completed
Annual Period in such market during each
Annual Period. However, in the first Annual
Period, Licensee agrees to spend in
the United States for "consumer
advertising" no less than *.
For the other markets in the Territory, Licensee or its
distributors
will jointly spend not less than * of Net
Sales from the just-completed Annual
Period in such markets during each Annual
Period. However, in the first Annual
Period, Licensee agrees to spend in other
markets in the Territory for Consumer
Advertising no less than *.
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.
At Licensee's request, Licensor shall make up to three (3)
appearances
during each of the first and second Annual
Periods, and up to four (4)
appearances during each of the third and
fourth Annual Periods to make himself
available at reasonable intervals and for
reasonable periods of time solely for
promotional tie-ins serving to associate
him with the Articles. Each appearance
shall be no longer than eight (8)
consecutive hours in any 24-hour period, and
shall take place at mutually agreed upon
dates, times and locations, and fully
subject to Roddick's obligations as a
professional tennis player. It is agreed
that any unused appearances at the end of
an Annual Period shall be waived and
shall not carry over to a subsequent Annual
Period. Subject to Article 7,
Section A(iii), Licensee shall also be
entitled to the use of the Roddick
Endorsement solely in connection with the
advertising and promotion of the
Articles. Licensee further understands that
its failure to utilize services of
Roddick hereunder shall not result in any
reduction in payments to Licensor
hereunder. Licensor shall not be required
to participate in any activities (i)
which are subject to federal or state
security laws, (ii) which would impose a
fiduciary duty upon Licensor or Roddick to
Licensee's shareholders, (iii) which
would cause Roddick to violate any laws,
(iv) which would cause injury to
<PAGE>
Roddick, or (v) which may subject Roddick
to public disrepute. Licensor shall
make every effort, in light of Roddick's
busy schedule and tournament
commitmen
