Exhibit 10.9
SETTLEMENT AGREEMENT
     SETTLEMENT AGREEMENT, dated as of February 6, 2007 (“Agreement”), by and
among Glenn Nussdorf (“Nussdorf”), Parlux Fragrances, Inc., a Delaware
corporation (the “Company”), and Ilia Lekach (“Lekach”).
     WHEREAS, Nussdorf has commenced a consent solicitation (the “Consent
Solicitation”) to remove, without cause, all existing members of the Company’s
Board of Directors (the “Board”) and to elect his nominees to the Board; and
     WHEREAS, the Company has filed a lawsuit in the United States District
Court for the Southern District of New York against Quality King Distributors,
Inc., Model Reorg, Inc., Nussdorf, Michael Katz, Joshua Angel, Anthony
D’Agostino, Neil Katz and Robert Mitzman (each a “Defendant” and collectively,
the “Defendants”), alleging violations of antitrust and securities laws in
connection with the Consent Solicitation (the “Litigation”); and
     WHEREAS, Lekach is ceasing to serve as the Company’s Chief Executive
Officer and is agreeing to serve as a consultant to the Company; and
     WHEREAS, each of the parties hereto has determined that its or their
respective best interests, and in the case of the Company, the best interest of
its stockholders, would be served by entering into this Agreement.
     NOW, THEREFORE, in consideration of the foregoing, and the mutual
agreements and representations set forth herein, the receipt and sufficiency of
which are hereby acknowledged, and intending to be legally bound, the parties
hereto hereby agree as follows:
     1. Certain Definitions.
     For purposes of this Agreement, the following terms shall have the
following meanings:
     “2007 Meeting” shall have the meaning set forth in paragraph 6(d).
     “2008 Meeting” shall have the meaning set forth in paragraph 6(a).
     “Agreement” shall have the meaning set forth in the preamble.
     “Acquisition Proposal” means any bona fide proposal, whether or not in
writing, for the (i) direct or indirect acquisition or purchase of a business or
assets that constitutes 20% or more of the net revenues, net income or the
assets (based on the fair market value thereof) of the Company and its
subsidiaries, taken as a whole, (ii) direct or indirect acquisition or purchase
of 20% or more of any class of equity securities or capital stock of the Company
or any of its subsidiaries whose business constitutes 20% or more of the net
revenues, net income or assets of the Company and its subsidiaries, taken as a

 

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whole, (iii) merger, consolidation, restructuring, transfer of assets or other
business combination, sale of shares of capital stock, tender offer, exchange
offer, recapitalization, stock repurchase program or other similar transaction
that if consummated would result in any Person or Persons beneficially owning
20% or more of any class of equity securities of the Company or any of its
subsidiaries or such Person or Persons owning 20% or more of the net revenues,
net income or assets of the Company and its subsidiaries, taken as a whole.
     “Affiliates” and “Associates” have the meanings set forth in Rule 12b-2
under the Exchange Act, and includes Persons who become Affiliates or Associates
of another Person after the date of this Agreement, provided, however, with
respect to Nussdorf, the parties agree that the term Affiliate shall include
Quality King Distributors, Inc. and Model Reorg, Inc. For purposes of this
Agreement, the term Affiliate shall not include ECMV unless and until Nussdorf
and his Affiliates and Associates beneficially own in excess of 50% of the
equity securities entitled to vote in the election of directors of ECMV.
     “Board” shall have the meaning set forth in the recitals.
     “Buttacavoli” shall have the meaning set forth in paragraph 6(b).
     “Company” shall have the meaning set forth in the preamble.
     “Company Releasees” shall have the meaning set forth in paragraph 10(a).
     “Consent Solicitation” shall have the meaning set forth in the recitals.
     “Consulting Term” shall have the meaning set forth in paragraph 5(a).
     “Covered Person” shall have the meaning set forth in paragraph 6(e).
     “Defendant” and “Defendants” shall have the meaning set forth in the
recitals.
     “ECMV” means E Com Ventures, Inc.
     “Employment Agreement” shall have the meaning set forth in paragraph 4(b).
     “Exchange Act” shall have the meaning set forth in paragraph 8(a).
     “Exchange Act Filings” refers to those filings required of a company with a
class of equity securities registered under the Exchange Act.
     “Guaranty” shall have the meaning set forth in paragraph 12(b).
     “Incumbent Director” and “Incumbent Directors” shall have the meaning set
forth in paragraph 6(b).

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     “Lekach” shall have the meaning set forth in the preamble.
     “Lekach Releasees” shall have the meaning set forth in paragraph 10(a).
     “Lekach Warrants” shall have the meaning set forth in paragraph 4(c).
     “Litigation” shall have the meaning set forth in the recitals.
     “Moving Party” shall have the meaning set forth in paragraph 14.
     “Note” shall have the meaning set forth in paragraph 12(b).
     “Nussdorf” shall have the meaning set forth in the preamble.
     “Nussdorf Designee” and “Nussdorf Designees” shall have the meaning set
forth in paragraph 6(b).
     “Nussdorf Releasees” shall have the meaning set forth in paragraph 10(a).
     “Person” means any individual, partnership, corporation, limited liability
company, group, syndicate, trust, government or agency thereof, or any other
association or entity.
     “Restricted Business” shall have the meaning set forth in paragraph 5(b).
     “Search Committee” shall have the meaning set forth in paragraph 7(b).
     “SEC” shall have the meaning set forth in paragraph 8(a).
     “Specified Date” shall have the meaning set forth in paragraph 6(c).
     “Stephen Nussdorf Lawsuit” shall have the meaning set forth in paragraph
12(b).
     “Voting Securities” means the Company’s common stock, any preferred stock
issued by the Company, and any other securities entitled to vote in the election
of directors, or any securities convertible into, or exercisable or exchangeable
for, the Company’s common stock or other securities, whether or not subject to
the passage of time or other contingencies.
     “Zebede” shall have the meaning set forth in paragraph 6(b).
     2. Dismissal of Litigation. As promptly as practicable following the
execution of this Agreement, the Company shall take all measures necessary to
dismiss, as to all Defendants, the Litigation with prejudice and without costs
or expenses to any party.

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     3. Termination of Consent Solicitation. Nussdorf hereby terminates the
Consent Solicitation and agrees not to submit written consents to the Company in
connection with the Consent Solicitation.
     4. Resignation of Lekach.
     (a) By his execution of this Agreement, Lekach hereby resigns, effective
immediately, (i) as a director of the Company and as Chairman of the Board,
(ii) as a member of all committees of the Board on which he serves, (iii) if
applicable, as a director of any direct or indirect subsidiary and other
Affiliates of the Company on whose board of directors he serves and as a member
of all committees of any such board of directors on which he serves, and (iv) if
applicable, as a trustee of (or any similar position with) any benefit plans
maintained by, or for the benefit of employees of, the Company or any such
subsidiary. Upon execution of this Agreement, Lekach shall cease to be the Chief
Executive Officer or an employee of the Company, its direct and indirect
subsidiaries and other Affiliates.
     (b) The Company and Lekach agree that within two (2) business days
following the execution of this Agreement, subject to paragraph 4(d) below, the
Company shall pay to Lekach the sum of $1,200,000 in cash by wire transfer of
immediately available funds to an account specified in writing by Lekach, in
full and final satisfaction, settlement and discharge of any and all payments,
perquisites, benefits and services to which Lekach is entitled under the
employment agreement between Lekach and the Company, dated as of June 1, 2005
(the “Employment Agreement”) or any previous employment or similar agreement
between Lekach and the Company. Other than as specifically set forth in this
Agreement, neither the Company nor Lekach have any further rights or obligations
under the Employment Agreement.
     (c) The Company and Lekach agree that upon the execution of this Agreement,
and subject to paragraph 4(d) below, the Company shall grant to Lekach warrants
to purchase 500,000 shares of the Company’s common stock at a price per share of
$1.1654 (the “Lekach Warrants”). In consideration of the foregoing and the other
agreements set forth herein, all warrants to purchase shares of the Company’s
common stock previously granted to Lekach shall not be subject to
Section 7(d)(iv) of the Employment Agreement and no “doubling” or adjustment of
such warrants shall occur, either as a result of this Agreement or otherwise and
all of Lekach’s outstanding warrants for the purchase of the Company’s common
stock shall be amended to eliminate any provisions that allows for “doubling” of
such warrants upon a change of control (as defined on the face of such
warrants).
     (d) The Company shall deduct and withhold from the payments made by the
Company to Lekach under this Agreement all amounts as may be required to be
deducted and withheld with respect to the making of such payments and issuance
of the Lekach Warrants pursuant to the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder or under any
provision of state or local tax law, and the withheld amounts shall be treated
for all purposes of this Agreement as having been paid to Lekach.

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     (e) The Company agrees that, as soon as it becomes “current” with respect
to its Exchange Act Filings, the Company shall request in writing that, with
respect to the Company’s registration statement on Form S-3 (File
No. 333-132288), the Staff of the SEC waive the requirements of paragraph 1.A.3
of the Registrant Requirements of the General Instructions regarding the use of
Form S-3 to allow the Company to continue to use such registration statement for
the sale of the securities contemplated thereby immediately thereafter.
     5. Lekach Consulting Agreement; Non-Compete
     (a) The Company and Lekach hereby agree that during the period commencing
on the date hereof and ending on the fourth anniversary of the date hereof (the
“Consulting Term”), the Company shall engage Lekach as a consultant and Lekach
hereby agrees to provide consulting services to the Company. Lekach shall devote
his business time, attention, skill and efforts to the business and affairs of
the Company and its subsidiaries and Affiliates when requested to do so by the
Board or the Chief Executive Officer of the Company, including by assisting the
Company with fragrance brand licenses and international distribution of the
Company’s products, provided that the foregoing shall not prevent Lekach from
accepting other employment and Lekach shall not be required to spend more than
20% of his working time on such consulting services. During the Consulting Term,
Lekach shall not be required to travel outside of the Fort Lauderdale/Miami
metropolitan area except with his consent, not to be unreasonably withheld.
During the Consulting Term, the Company shall not be required to provide Lekach
with office space or secretarial or other support services or office assistance,
nor shall the Company be required to reimburse Lekach for any such or similar
expenditures he may incur in connection with maintaining an office. In addition,
the Company shall not be required to provide Mr. Lekach with any perquisites or
benefits during the Consulting Term, except that the Company shall reimburse
Lekach for all reasonable out-of-pocket business and travel expenses incurred
with prior Company approval which approval shall not be unreasonably withheld
relating to his consultancy hereunder, upon Lekach presenting appropriate
receipts therefor.
     (b) For a period of four (4) years from the date of this Agreement, Lekach
agrees neither he nor any of his Affiliates shall, directly or indirectly,
engage in any business or business venture that is either directly or indirectly
involved in the manufacture, marketing, distribution, licensing or sale of
fragrances (the “Restricted Business”) whether as a director, officer, employee,
agent, stockholder or investor; provided, however, that Lekach and his
Affiliates may own, in the aggregate, directly or indirectly, (i) less than 3%
of any class of equity securities of any entity that is publicly traded and
engaged in the Restricted Businesses; (ii) any interest in any entity that
derives less than 5% of its revenue from the Restricted Businesses; and
(iii) any instrument of indebtedness (that is not convertible or exchangeable
for equity securities, except as may be permitted by clauses (i) or (ii) above)
of any person or entity engaged in the Restricted Businesses.
     (c) The Company and Lekach agree that within two (2) business days
following the execution of this Agreement, subject to paragraph 4(d) hereof, the

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Company shall pay to Lekach the sum of $1,200,000, by wire transfer of
immediately available funds to an account specified in writing by Lekach, in
full and final consideration for the agreements of Lekach set forth under this
paragraph 5.
     6. Board Composition; Related Matters.
     (a) The parties agree that effective upon execution of this Agreement the
bylaws of the Company shall be amended to provide that the number of directors
of the Company shall be fixed at six (6), and prior to the day following the
certification of the vote in connection with the 2008 Annual Meeting of
Stockholders (the “2008 Meeting”), the size of the Board shall not be increased
or decreased without the approval of three-fourths of the directors then in
office.
     (b) The parties agree that effective upon the execution of this Agreement,
the Board shall consist of Glenn H. Gopman, Esther Egozi Choukroun and David
Stone (each an “Incumbent Director” and collectively, the “Incumbent
Directors”), and Anthony D’Agostino, Neil Katz and Robert Mitzman (each a
“Nussdorf Designee” and collectively, the “Nussdorf Designees”). By his
execution of this Agreement, because the parties’ settlement calls for equal
representation on the Parlux Board by the current independent directors, and in
order to facilitate such transition, Frank A. Buttacavoli (“Buttacavoli”) hereby
resigns, effective immediately, (i) as a director of the Company, (ii) as a
member of all committees of the Board on which he serves, and (iii) if
applicable, as a director of any direct or indirect subsidiary and other
Affiliates of the Company on whose board of directors he serves and as a member
of all committees of any such board of directors on which he serves. By her
execution of this Agreement, because the parties’ settlement calls for equal
representation on the Parlux Board by the current independent directors, and in
order to facilitate such transition, Jaya Kader Zebede (“Zebede”) hereby
resigns, effective immediately, (i) as a director of the Company, (ii) as a
member of all committees of the Board on which she serves, (iii) if applicable,
as a director of any direct or indirect subsidiary and other Affiliates of the
Company on whose board of directors she serves and as a member of all committees
of any such board of directors on which she serves, and (iv) if applicable, as a
trustee of (or any similar position with) any benefit plans maintained by, or
for the benefit of employees of, the Company or any such subsidiary.
     (c) The Company agrees that during the period commencing on the date of the
first Board meeting following the date hereof, which Board meeting shall be held
not later than five (5) business days following the date hereof, and continuing
until the earlier of (i) the day following the certification of the vote in
connection with the election of directors at the 2008 Meeting or (ii) eighteen
(18) months from the date hereof (such earlier date being referred to as the
“Specified Date”), and subject to the listing requirements of the Nasdaq Global
Market, each of the Board’s Audit Committee, Compensation Committee, Nominating
Committee, Special Committee of Independent Directors and the Search Committee
shall consist of four (4) directors, two (2) of whom shall be Incumbent
Directors, as designated by the Incumbent Directors, and two (2) of whom shall
be Nussdorf Designees, as designated by the Nussdorf Designees.

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     (d) If, prior to the Specified Date, a Nussdorf Designee shall cease to be
a director for any reason whatsoever, or, if unable or unwilling to stand for
election as a director at the 2007 Annual Meeting (the “2007 Meeting”) or any
other election of directors prior to the 2008 Meeting, then the Nussdorf
Designees shall be entitled to designate another person reasonably acceptable to
a majority of the members of the entire Board, and any such person shall become
a “Nussdorf Designee” for all purposes under this Agreement. If, prior to the
Specified Date, an Incumbent Director shall cease to be a director for any
reason whatsoever, or, if unable or unwilling to stand for election as a
director at the 2007 Meeting or any other election of directors prior to the
2008 Meeting, then the Incumbent Directors shall be entitled to designate
another person reasonably acceptable to a majority of the members of the entire
Board as a replacement for such Incumbent Director, and any such person so
designated shall become an “Incumbent Director” for all purposes under this
Agreement.
     (e) For a period of six (6) years following the execution of this
Agreement, the Company agrees that it will continue to indemnify and hold
harmless Lekach, Buttacavoli and Zebede (each a “Covered Person”) against any
costs or expenses (including reasonable attorneys’ fees), judgments, fines,
losses, claims, damages or liabilities incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to matters
existing or occurring while such Covered Persons served as officers or directors
of the Company to the fullest extent permitted under the Delaware General
Corporation Law (including the advancing of such costs and expenses as incurred
to the fullest extent permitted under applicable law); provided, however, that
such Covered Person must provide an undertaking to the Company to repay such
advances if it is ultimately determined by a court of competent jurisdiction
(which determination shall have become final) that such Covered Person is not
entitled to indemnification; and provided further, however, that, to the fullest
extent permitted by law: (i) the Company shall have the right to assume the
defense thereof, and the Company shall not be liable to any such Covered Person
for any legal expenses of other counsel or any other expenses subsequently
incurred by such Covered Person in connection with the defense thereof, except
that if the Company elects not to assume such defense, such Covered Person may
retain counsel satisfactory to it, and the Company shall pay all reasonable fees
and expenses of such counsel for such Covered Person promptly as statements
therefor are received; provided, however, that whether or not the Company
assumes the defense of a Covered Person, the Company shall not admit any
liability with respect to, or settle, compromise or discharge, or offer to
settle, compromise or discharge, such claim without such Covered Person’s prior
written consent, which consent shall not be unreasonably withheld, conditioned
or delayed, unless such settlement or compromise includes as one of its terms
the complete release of the Covered Person without any admission of guilt; and
provided further, however, that the Company shall be obligated pursuant to this
paragraph 6(e) to pay for only one firm or counsel for all Covered Persons and
all other current or former directors or officers of the Company in any
jurisdiction; (ii) such Covered Persons will reasonably cooperate in the defense
of any such matter; and (iii) the Company shall not be liable for any settlement
effected without the prior written consent of the Company.

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     (f) The Company shall maintain a policy of directors’ and officers’
liability insurance for six (6) years following the execution of this Agreement
with respect to claims arising from facts or events that occurred on or before
the execution of this Agreement, and which policy shall contain substantially
the same coverage and amounts as, and contain terms and conditions no less
advantageous than, in the aggregate, the coverage currently provided by such
current policy; provided, however, that in no event shall the Company be
required to expend for all directors’ and officers’ liability insurance coverage
more than it currently pays for such coverage and, provided further, however,
that, if the premiums of such insurance coverage exceeds such amount, the
Company shall be obligated to obtain such policies with the greatest coverage
available for a cost not exceeding such amount.
     7. Interim Chief Executive Officer.
     (a) The parties agree that effective upon the execution of this Agreement,
Neil Katz shall be the interim Chief Executive Officer of the Company. Neil Katz
shall continue as the interim Chief Executive Officer, unless he is removed by
the vote of two-thirds of the full membership of the Board, or until a permanent
Chief Executive Officer is designated by the Board in accordance with paragraph
7(b). The compensation and benefit package for Mr. Katz will be determined by
the newly constituted Compensation Committee as promptly as practicable
following the execution of this Agreement and shall be effective as of the date
of this Agreement.
     (b) The parties agree that as soon as practicable after the execution of
this Agreement, the Board shall form a search committee (the “Search Committee”)
to conduct a search for a permanent Chief Executive Officer of the Company, and
will consider Neil Katz for such position along with other candidates. The vote
of two-thirds of the full membership of the Board shall be required to designate
a person as the permanent Chief Executive Officer of the Company.
     8. Lekach Covenants. Lekach agrees that during the period commencing on the
date hereof and ending on the fourth anniversary of the date hereof (but subject
to the provisions of paragraph 9(c)), without the prior written consent of the
Company’s Board as specifically expressed in a resolution adopted by a majority
of the entire membership of the Board, neither he, nor his Affiliates or
Associates or any Person acting at his or their direction, will, directly or
indirectly:
     (a) make, engage or in any way participate in, directly or indirectly, any
“solicitation” (as such term is used in the proxy rules of the Securities and
Exchange Commission (the “SEC”)) of proxies or consents (whether or not relating
to the election or removal of directors); seek to advise, encourage or influence
any Person with respect to the voting of any Voting Securities; initiate,
propose or otherwise “solicit” (as such term is used in the proxy rules of the
SEC) shareholders of the Company for the approval of shareholder proposals
whether made pursuant to Rule 14a-8 or Rule 14a-4 under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), or otherwise, or cause or
encourage or attempt to cause or encourage any other Person to initiate any such
shareholder proposal; otherwise communicate with the Company’s shareholders or
others

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pursuant to Rule 14a-1(l)(2)(iv) under the Exchange Act; or participate in, or
take any action pursuant to, any “shareholder access” proposal which may be
adopted by the SEC, whether in accordance with proposed Rule 14a-11 or
otherwise;
     (b) seek, propose, or make any statement with respect to, any merger,
consolidation, business combination, tender or exchange offer, sale or purchase
of assets, sale or purchase of securities, dissolution, liquidation,
restructuring, recapitalization or similar transactions of or involving the
Company or any of its Affiliates;
     (c) acquire, offer or propose to acquire, or agree to acquire (except by
way of stock dividends, stock splits, reverse stock splits or other
distributions or offerings made available to holders of any Voting Securities
generally), directly or indirectly, whether by purchase, tender or exchange
offer, through the acquisition of control of another Person, by joining a
partnership, limited partnership, syndicate or other “group” (within the meaning
of Section 13(d)(3) of the Exchange Act) or otherwise, any Voting Securities;
provided, however, Lekach may acquire Voting Securities upon the exercise of
stock options held by him as of January 1, 2007 and upon the exercise of the
Lekach Warrants;
     (d) form, join or in any way participate in a “group” (within the meaning
of Section 13(d)(3) of the Exchange Act) with respect to any Voting Securities,
other than a currently disclosed “group” of which Lekach is a member as set
forth in a Schedule 13D with respect to the Company filed by Lekach and other
members of such “group” with the SEC;
     (e) act, alone or in concert with others, to control or seek to control, or
influence or seek to influence, the management, Board or policies of the
Company;
     (f) seek, alone or in concert with others, election or appointment to or
representation on, or nominate or propose the nomination of any candidate to,
the Board, or seek the removal of any member of the Board;
     (g) make any publicly disclosed proposal or enter into any discussion
regarding any of the foregoing;
     (h) make any proposal, statement or inquiry, or disclose any intention,
plan or arrangement (whether written or oral) inconsistent with the foregoing,
or make or disclose any request to amend, waive or terminate any provision of
paragraph 8 of this Agreement;
     (i) have any discussions or communications, or enter into any arrangements,
understanding or agreements (whether written or oral) with, or advise, finance,
assist or encourage, any other Person in connection with any of the foregoing,
or make any investment in or enter into any arrangement with, any other Person
that engages, or offers or proposes to engage, in any of the foregoing; or
     (j) otherwise take, or solicit, cause or encourage others to take, any
action inconsistent with any of the foregoing.

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Notwithstanding anything to the contrary in this paragraph 8, Lekach shall not,
directly or indirectly, be restricted in any manner in his ability to sell,
transfer or vote any Voting Securities beneficially owned by him in his sole
discretion.
     9. Nussdorf Covenants.
     (a) Nussdorf agrees that during the period commencing on the date hereof
and ending on the second anniversary of the date hereof, neither he, nor his
Affiliates or any Person acting at his or their direction, will, directly or
indirectly, make an Acquisition Proposal, unless (i) invited by a majority of
the full membership of the Board to make such an Acquisition Proposal, or (ii)
such Acquisition Proposal is for all shares of common stock of the Company, for
a price valued at not less than $11 per share in cash or the equivalent value of
a publicly-traded equity security, or a combination thereof. Notwithstanding
anything to the contrary in paragraph 9(a), Nussdorf shall not, directly or
indirectly, be prohibited from taking any of the actions described in, or be
subject to the limitations set forth in, the foregoing provisions of this
paragraph, and the restrictions of the first sentence of paragraph 9(a) shall
terminate and be of no further force and effect, if (i) the Board receives an
Acquisition Proposal from a third party or the Company publicly announces that
it is pursuing strategic alternatives which may include seeking an Acquisition
Proposal, (ii) the Company furnishes any Person, other than Nussdorf or his
Affiliates, with non-public information with the view toward receiving from such
Person an Acquisition Proposal, (iii) the Board approves a transaction (or
enters into an agreement relating thereto) with any person or group that would
result in such person or group beneficially owning more than 20% of the
outstanding Voting Securities of the Company (or a successor to the Company in a
merger or consolidation transaction) or all or a substantial portion of its
assets, (iv) the Board approves a transaction with any Person or group involving
a merger, consolidation, tender or exchange offer, recapitalization or other
business combination or similar transaction involving the Company or its
subsidiaries or that would result in any Person or group having the right to
nominate, elect or appoint members of the Board, or (v) any Person, other than
Nussdorf, becomes the beneficial owner of 20% or more of the outstanding Voting
Securities of the Company or has commenced or publicly announced its intention
to commence a tender or exchange offer for more than 20% of the outstanding
Voting Securities of the Company.
     (b) Nussdorf agrees that until the earlier of (i) the date which is
eighteen (18) months from the date hereof or (ii) sixty (60) days prior to the
date of the 2008 Meeting, neither he or his Affiliates nor any Person acting at
his or their direction, will, directly or indirectly, solicit proxies or written
consents from stockholders of the Company for election of directors. The
Incumbent Directors agree that they will nominate the Nussdorf Designees for
election at the 2007 Meeting or at any other election of directors held prior to
the 2008 Meeting. The Company agrees to provide Nussdorf written notice of the
date of the 2008 Meeting not less than seventy (70) days prior to the date of
the 2008 Meeting.
     (c) Notwithstanding any provision contained herein to the contrary, in the
event that ECMV shall make an Acquisition Proposal which, if made by Nussdorf

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would not be permitted under paragraph 9(a), then, Lekach’s obligations under
paragraph 8 shall expire at such time as such Acquisition Proposal is made by
ECMV. Nussdorf agrees that until the second anniversary of the date hereof, he
will not vote any shares of ECMV which he beneficially owns and is entitled to
vote in favor of any Acquisition Proposal made by ECMV, which if made by
Nussdorf would not be permitted under paragraph 9(a).
     10. Mutual Releases; Non-Disparagement.
     (a) Each of the Company, on behalf of itself and its directors and
executive officers, in each case as in office immediately prior to the execution
of this Agreement, and the Company’s agents, proxy solicitors, public relations
firms, lawyers, and other representatives (the “Company Releasees”), and Lekach,
on behalf of himself, his Affiliates and Associates and his agents, lawyers, and
other representatives (the “Lekach Releasees”), hereby irrevocably releases,
acquits and fully and forever discharges each of Nussdorf, the Defendants,
Alfred Paliani, Stephen Nussdorf, Arlene Nussdorf-Mark, Lillian Ruth Nussdorf,
their respective Affiliates and Associates and their respective agents, proxy
solicitors, public relations firms, lawyers, and other representatives
(collectively, the “Nussdorf Releasees”), from and with respect to any and all
disputes, complaints, claims, counter-claims, actions, causes of action,
liabilities, suits or damages, whether at law or in equity, statutory or
otherwise, whether known or unknown, asserted or unasserted, or every kind and
matter whatsoever (collectively, “Claims”), that any Company Releasee or Lekach
Releasee ever had, now has, or hereafter can, shall or may have against any
Nussdorf Releasee for, upon, or by reason of any matter, cause of action or
thing, whatsoever from the beginning of the world to the date hereof, arising
out of or in connection with the Consent Solicitation or the Litigation,
including, without limitation, any and all Claims made in the Litigation, but
expressly excluding, or any Claims for breach of or to enforce this Agreement.
     (b) Nussdorf, on behalf of himself and the Nussdorf Releasees, hereby
irrevocably releases, acquits and fully and forever discharges each of the
Company Releasees and the Lekach Releasees, from and with respect to any and all
Claims that any Nussdorf Releasee ever had, now has, or hereafter can, shall or
may have against any Company Releasee or Lekach Releasee for, upon or by reason
of any matter, cause of action or thing, whatsoever from the beginning of the
world to the date hereof, arising out of or in connection with the Consent
Solicitation or the Litigation, but expressly excluding, or any Claims for
breach of or to enforce this Agreement.
     (c) For the period commencing on the date hereof and ending on the second
anniversary of the date hereof, the Company shall not, and shall not permit any
of the Company Releasees and any of the then current members of its Board or
executive officers to, disparage or make or solicit any comments, statements or
the like to or from any Person that are derogatory or detrimental to any of the
Nussdorf Releasees or any of the Lekach Releasees.
     (d) For the period commencing on the date hereof and ending on the second
anniversary of the date hereof, Nussdorf shall not, and shall not permit any of
the

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Nussdorf Releasees to, disparage or make or solicit any comments, statements or
the like to or from any Person that are derogatory or detrimental to any of the
Company Releasees or Lekach Releasees.
     (e) For the period commencing on the date hereof and ending on the second
anniversary of the date hereof, Lekach shall not, and shall not permit any of
the Lekach Releasees to, disparage or make or solicit any comments, statements
or the like to or from any Person that are derogatory or detrimental to any of
the Nussdorf Releasees or Company Releasees.
     11. Expenses. Within two (2) business days following the execution of this
Agreement, the Company shall pay Nussdorf the sum of One Million ($1,000,000)
Dollars by wire transfer of immediately available funds to an account specified
in writing by Nussdorf in reimbursement for expenses incurred by Nussdorf in
connection with the Consent Solicitation, the Litigation and the negotiation and
execution of this Agreement. Nussdorf represents that the expenses incurred by
him in connection with the Consent Solicitation, the Litigation and the
negotiation and execution of this Agreement are in excess of $1,000,000. As soon
as practicable after receiving statements evidencing at least $1,000,000 in
expenses, Nussdorf will furnish the Company with appropriate documentation
confirming such expenses.
     12. Representations and Warranties.
     (a) The Company hereby represents and warrants to the other parties hereto
as follows:

  (i)   The Company has the corporate power and authority to execute, deliver
and carry out the terms and provisions of this Agreement and to consummate the
transactions contemplated hereby, and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement and the
transactions contemplated hereby.     (ii)   This Agreement has been duly and
validly authorized, executed and delivered by the Company and constitutes a
valid and binding agreement of the Company, enforceable in accordance with its
terms.     (iii)   The payments being made by the Company pursuant to the terms
of this Agreement will not have an adverse effect on the Company’s operating and
capital plans or budgets and will not constrain or have a material adverse
effect on the Company’s liquidity.

     (b) Lekach hereby represents and warrants to the Company that, except for
the letter agreement between Stephen Nussdorf and Lekach and Deborah Lekach
amending the terms of that certain promissory note, dated July 14, 2003 (the
“Note”), the related guaranty, dated July 14, 2003 (the “Guaranty”), and
agreeing to

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dismiss the lawsuit filed by Stephen Nussdorf in the United States District
Court for the Southern District of New York, entitled Stephen Nussdorf v. Ilia
Lekach and Deborah Lekach, Docket No. 06 CV 14284 (DAB), to enforce the Note and
Guaranty (the “Stephen Nussdorf Lawsuit”), neither Lekach, his Affiliates nor
any Person acting at his or their direction has entered into any other side or
collateral contracts, agreements, arrangements, or understandings with Nussdorf
or his Affiliates or any Person acting at his or their direction with respect to
the Company or any equity security of the Company, other than as provided
pursuant to this Agreement.
     (c) Nussdorf hereby represents and warrants to the Company that, except for
the letter agreement referenced in paragraph 12(b) concerning the Note, Guaranty
and the Stephen Nussdorf Lawsuit, neither Nussdorf, his Affiliates nor any
Person acting at his or their direction has entered into any side or collateral
contracts, agreements, arrangements, or understandings with Lekach or his
Affiliates or any Person acting at his or their direction with respect to the
Company or any equity security of the Company, other than as provided pursuant
to this Agreement.
     (d) The Company and Lekach each hereby represents and warrants to Nussdorf
that there are no side or collateral contracts, agreements, arrangements, or
understandings between the Company, its Affiliates and any Person acting at its
or their direction, on the one hand, and Lekach, his Affiliates or any Person
acting at his or their direction, on the other hand, other than as provided
pursuant to this Agreement.
     13. Press Release. Upon execution of this Agreement, the Company and
Nussdorf will issue a joint press release in the form attached hereto as
Exhibit A.
     14. Specific Performance. Each of the parties hereto acknowledges and
agrees that irreparable harm to the others would occur in the event that any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached and that such injury would not be
compensable in damages. It is accordingly agreed that each party hereto (the
“Moving Party”) will be entitled to specific performance of, and injunctive
relief to prevent any violation of, the terms hereof and the other parties
hereto will not take action, directly or indirectly, in opposition to the Moving
Party seeking such relief on the grounds that any other remedy or relief is
available at law or in equity.
     15. No Waiver. Any waiver by any party of a breach of any provision of this
Agreement will not operate as or be construed to be a waiver of any other breach
of such provision or of any breach of any other provision of this Agreement. The
failure of a party to insist upon strict adherence to any term of this Agreement
on one or more occasions will not be considered a waiver or deprive that party
of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement.
     16. Successors and Assigns. All the terms and provisions of this Agreement
will inure to the benefit of and will be enforceable by the successors and
assigns of the parties hereto.

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     17. Entire Agreement; Amendments. This Agreement (and the Exhibits hereto)
contain the entire understanding of the parties with respect to its subject
matter and merges and supersedes all prior discussions, agreements (whether
written or oral) and understandings of every kind and nature between them in
respect of this Agreement’s subject matter, including, but not limited to, the
Employment Agreement and any and all other employment and/or severance
agreements between Lekach and the Company. Except as described herein, there are
no restrictions, agreements, promises, representations, warranties, covenants or
undertakings whether oral or written other than those expressly set forth
herein. This Agreement may be amended only by a written instrument duly executed
by the parties or their respective successors or assigns.
     18. Headings. The paragraph headings contained in this Agreement are for
reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement.
     19. Notices. All notices and other communications hereunder will be in
writing and will be given by hand delivery (including by overnight courier
service) or by facsimile, receipt confirmed, to the respective parties as
follows:
     If to the Company:
Board of Directors of Parlux Fragrances, Inc.
3725 S.W. 30th Avenue
Fort Lauderdale, Florida 33312
     with a copy to:
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, New York 10166
Attention: Scott Kislin, Esq. and Adam Offenhartz, Esq.

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          If to Nussdorf:
Glenn Nussdorf
2060 Ninth Avenue
Ronkonkoma, New York 11779
with copies to:
Alfred R. Paliani, Esq.
c/o Quality King Distributors, Inc.
2060 Ninth Avenue
Ronkonkoma, NY 11779
and
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Fax: (212) 735-2000
Attention: Daniel E. Stoller, Esq. and Richard J. Grossman, Esq.
          If to Lekach:
Ilia Lekach
c/o Seth P. Joseph, Esq.
Carlton Fields, P.A.
4000 Bank of America Tower
at International Place
100 S.E. Second Street
Miami, Florida 33131
Fax: (305) 530-0055
with copies to:
Carlton Fields, P.A.
4000 Bank of America Tower
at International Place
100 S.E. Second Street
Miami, Florida 33131
Fax: (305) 530-0055
Attention: Seth P. Joseph, Esq.
or to such other address or fax number as the person to whom notice is given may
have previously furnished to the others in writing in the manner set forth
above.
          20. Governing Law. This Agreement will be governed by and construed
and enforced in accordance with the laws of the State of Delaware, without
reference to the conflict of laws principles thereof. The parties hereto agree
and consent

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to personal jurisdiction and venue in any action brought to enforce this
Agreement in the Court of Chancery of the State of Delaware or any other
appropriate court in the State of Delaware.
          21. Counterparts. This Agreement may be executed in counterparts, each
of which will be an original, but each of which together will constitute one and
the same Agreement.
          22. No Admission of Liability. This Agreement shall not be construed
as an admission of liability of any party or any admission that any party has
acted in any way wrongfully toward the other.
          23. Rule of Construction. This Agreement has been negotiated by all
parties, and all parties have participated in the drafting of the language of
this Agreement. No rule of construction of contracts requiring that provisions
be construed against the drafter of an agreement shall be applied to this
Agreement.
          24. Severability. In the event any portion or clause of this Agreement
is deemed invalid or unenforceable in a court of law, the remainder of this
Agreement shall be severed from the invalid or unenforceable portion.

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          IN WITNESS WHEREOF, and intending to be legally bound hereby, each of
the undersigned parties has executed or caused this Agreement to be executed on
the date first above written.

                  PARLUX FRAGRANCES, INC.    
 
           
 
  By:   /s/ Glenn H. Gopman
 
        Name: Glenn H. Gopman         Title: Director    
 
                /s/ Ilia Lekach                   ILIA LEKACH    
 
                /s/ Glenn Nussdorf                   GLENN NUSSDORF    

          Solely with Respect to the Provisions     of paragraphs 6(b), 6(e) and
6(f):    
 
        /s/ Frank A. Buttacavoli           Frank A. Buttacavoli
   
 
        /s/ Jaya Kader Zebede           Jaya Kader Zebede
   
 
        Solely with Respect to the Provisions     of paragraphs 9(a), 9(b) and
10:    
 
        QUALITY KING DISTRIBUTORS, INC.    
 
       
By:
  /s/ Michael W. Katz    
 
 
 
    Name: Michael W. Katz     Title: Executive Vice President    
 
        MODEL REORG, INC.    
 
       
By:/s/
  Donna Dellomo    
 
 
 
    Name: Donna Dellomo     Title: Chief Financial Officer