Exhibit 10.88

AGREEMENT

This Agreement (the “Agreement”) is made and entered into as of January 25, 2007
(the “Effective Date”), by and between Perry Ellis International, Inc., a
Florida corporation (the “Seller”) and Falic Fashion Group, LLC, a Florida
limited liability company and a wholly owned subsidiary of Duty Free Americas,
Inc. (“Buyer” and together with Seller, the “Parties”).

RECITALS

 

A. On the date set forth above, Buyer, Seller and Seller’s affiliates
(“Licensor”) have entered into that certain license agreement (the “License
Agreement”), pursuant to which Licensor grants to Buyer the sole and exclusive
license and authorization during the term of the License Agreement to use the
Licensed Marks in the Territory upon, and in connection with and/or in relation
to Licensed Products made by or for Buyer, including without limitation, the
right to the sole and exclusive manufacture and distribution of Licensed
Products in the Territory.

 

B. Seller wishes to assign and transfer to Buyer all inventory of Licensed
Products held by Seller, all of Seller’s know how and experience relating to and
in connection with Licensed Products and certain other assets held by Seller
related to the Licensed Products, and Buyer wishes to acquire such rights, title
and interest on the terms and conditions specified in detail below.

 

C. Capitalized terms used herein but not defined shall have the meaning ascribed
to such terms in the License Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties agree as follows:

1. Transactions. On the terms and subject to the conditions set forth in
Section 2 of this Agreement, Seller shall sell, assign, transfer, convey and
deliver to Buyer, or cause to be sold, assigned, transferred, conveyed and
delivered to Buyer, and Buyer shall purchase, acquire and accept from Seller all
of Seller’s right, title and interest in and to (i) all non-fulfilled sales
orders relating to, or in connection with, Licensed Product as of the date
hereof, as identified in Exhibit A attached hereto (the “Sales Orders”),
(ii) all non-fulfilled purchase orders relating to, or in connection with,
Licensed Product as of the date hereof, as identified in Exhibit B

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attached hereto (the “Purchase Orders”), (iii) the Seller’s know how and
experience as of the date hereof relating to and in connection with Licensed
Products and the existing operations of the business relating to and in
connection to the Licensed Products, and the names and contact information
relating to the Seller’s existing suppliers, fragrance houses, manufacturers and
distributors of Licensed Product set forth on Exhibit E attached hereto (the
“Operations”) (all rights, title and interest in (i) Sales Orders, (ii) Purchase
Orders, and (iii) Operations, are hereinafter collectively referred to as the
“Assets”), and (iv) all finished goods, raw materials and work-in process
inventory of Licensed Products owned by Seller, other than the Excluded
Inventory (as defined in Section 3), and all promotional supplies of Licensed
Products owned by Seller (collectively, the “Inventory”). A list of the
estimated unit volume and dollar value of the Inventory is attached hereto as
Schedule 1.

2. Total Price; Payment. The aggregate price to be paid by Buyer to Seller
consists of (i) forty two million dollars ($42,000,000) for the Assets (the
“Asset Price”); and (ii) approximately twenty one million dollars ($21,000,000)
for the Inventory (the “Inventory Price” and, together with the Asset Price, the
“Total Price”). Buyer shall pay the Total Price as follows:

(i) on the Effective Date, Buyer shall pay, in immediately available funds, to
an account designated by Seller, the Inventory Price; and

(ii) on the Effective Date, Buyer shall pay, in immediately available funds, to
an account designated by Seller, the Asset Price.

On the Effective Date, Seller shall execute and deliver a bill of sale and such
other documents reasonably requested in connection with the sale of the
Inventory and the Assets.

3. Delivery of Inventory.

(a) On the Effective Date, Seller shall close its books with regard to the
Inventory and shall not sell or dispose of Licensed Products other than as set
forth herein. Commencing January 26, 2007 (the “Inventory Transfer Date”), Buyer
shall perform a physical count of the Inventory, along with Seller, which
physical count shall be performed at the warehouses owned or used by

 

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Parlux Fragrances, Inc., the prior licensee of the Licensed Marks (“Prior
Licensee”) for the storage of Licensesd Products. From and after the Effective
Date (the “Transition Period”), Seller shall (i) discontinue all sales of
Licensed Products and shall not fulfill or permit the Prior Licensee to fulfill
any orders for Licensed Products, whether or not included in the Sales Orders,
except for Excluded Inventory, unless approved in writing by Buyer, and (ii) not
place any orders relating to the manufacture of Licensed Products.
Notwithstanding the foregoing, Buyer acknowledges that Seller owns up to two
million five hundred thousand dollars ($2,500,000) (valued at cost) of finished
goods inventory of Licensed Products that is not included on the listing set
forth on Schedule 1 and that has, as of the date hereof, been released and
approved for shipping by Prior Licensee (the “Excluded Inventory”), which
Excluded Inventory and receivables relating thereto are not being sold or
transferred to Buyer hereunder.

(b) During the Transition Period, Seller shall (i) use its best efforts to cause
the Prior Licensee to permit Buyer to have access to all locations where the
Inventory of Licensed Products resides for any reason deemed necessary by Buyer
including, but not limited to, to conduct a physical audit of the Inventory,
(ii) use its best efforts to facilitate Buyer’s access to all third parties that
hold the Inventory and (iii) assist in transitioning inventory from suppliers,
distributors and fragrance houses to Buyer. For the avoidance of doubt, during
the Transition Period, Seller shall not have the right to dispose of any stock
or inventory of Licensed Products (other than the Excluded Inventory) to any
person and Buyer does not consign such stock or inventory to Seller for any
period, or for any purpose, whatsoever.

(c) As soon as practicable after the Inventory Transfer Date Seller and Buyer
shall agree on a final report (the “Inventory Report”) setting forth as of the
Inventory Transfer Date, and without duplication, (i) the physical count of
finished Licensed Products included in the Inventory, including Inventory at
those locations where physical counts were not performed; (ii) finished Licensed
Products included in the Inventory that were in transit as of the Inventory
Transfer Date; (iii) all finished Licensed Products received

 

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by Seller or Prior Licensee on Seller’s behalf after the Inventory Transfer Date
and delivered to Buyer; (iv) the physical count of raw materials and components
in production or in transit with respect to Licensed Product as of the Inventory
Transfer Date; (v) the raw materials and components in production or in transit
with respect to Licensed Product that were utilized on and after the Inventory
Transfer Date; and (vi) the raw materials and components in production or in
transit with respect to Licensed Product received by Seller or Prior Licensee
during the Transition Period. On the Inventory Transfer Date, Seller shall
notify the Prior Licensee that it has transferred the Inventory to Buyer.
Commencing on the Inventory Transfer Date Seller shall deliver to Buyer at the
Prior Licensee’s warehouses or at third party facilities, and Buyer, at Buyer’s
sole expense, shall receive, accept, coordinate the movement of and move all
finished inventory of Licensed Products to Buyer’s facilities (the “Inventory
Transfer”). Seller shall cooperate with Buyer in transitioning the Inventory of
Licensed Products and the Operations.

(d) Within ten (10) days following the last shipment of Inventory pursuant to
the Inventory Transfer (the “Inventory Review Date”), Buyer shall prepare a
report (the “Inventory True-up Report”) setting forth the calculation of the
dollar value (at cost, based on the unit values set forth on Schedule 1) of all
raw materials and components in production or in transit with respect to
Licensed Product and the Inventory as of the Inventory Transfer Date (the
“Inventory True-Up Price”). The calculation shall include for the benefit of
Buyer a reduction for damaged merchandise which shall be separately itemized.
Seller shall have three (3) business days to dispute any amounts on the
Inventory True-up Report; provided, however, that Seller shall notify Buyer of
the amount in dispute, and provide an explanation of why the amount is in
dispute. In the event of such a dispute, the Parties shall reconcile their
differences within five (5) business days of Buyer’s receipt of notification of
dispute, and any resolution by them as to any disputed amounts shall be final
and binding on the Parties. Within ten (10) business days of the Inventory
Review Date, the following amount shall be paid: (i) if the Inventory True-Up
Price is less than twenty one million dollars ($21,000,000), Seller shall pay
Buyer, in immediately available funds, an amount calculated as twenty one
million dollars ($21,000,000) less the Inventory True-Up Price or (ii) if the

 

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Inventory True-Up Price is greater than twenty one million dollars
($21,000,000), Buyer shall pay Seller, in immediately available funds, an amount
calculated as Inventory True-Up Price less twenty one million dollars
($21,000,000).

(e) Buyer and Seller acknowledge and agree that, from and after the Effective
Date, (i) Buyer shall be entitled to receive all proceeds from, and relating to,
the sales of Licensed Products (other than the Excluded Inventory), (ii) all
Inventory shall be considered as being owned solely and exclusively by Buyer,
and any and all sales of Licensed Product (other than the Excluded Inventory) by
Seller shall be subject to approval by Buyer and if approved, shall be made by
Seller on behalf of Buyer with payment for same being made directly to the
account of Buyer as designated by Buyer, (iii) risk of loss with respect to the
Inventory shall pass to Buyer, and (iv) Buyer shall be vested with good and
marketable title to the Inventory free and clear of any liens, security
interests or other encumbrances, claims or other obligation or liability of any
kind. Seller shall furnish Buyer upon execution of this Agreement a copy of the
consent of Seller’s lenders to the transaction contemplated by this agreement,
which shall include an acknowledgement from Seller’s lender that the Inventory
and Assets are not and shall not be subject to any liens in favor of Seller’s
lenders.

4. Agreements. On the Effective Date, Buyer shall assume the obligations listed
on Exhibit C with respect to the manufacture, supply, storage, and distribution
of Licensed Products (the “Assumed Obligations”), and agrees to pay, perform and
discharge the Assumed Obligations accruing after the Effective Date and shall
defend, indemnify and hold Seller harmless in regard to the Assumed Obligations
including, but not limited to, any liability incurred by Seller (i) to any
customer by reason of (A) Seller’s failure to fulfill such customer’s Sales
Order set forth on Exhibit A that had not been filled as of December 6, 2006
because of Buyer’s request, or (B) Buyer’s failure to fulfill after the
Effective Date such customer’s Sales Order set forth on Exhibit A that has not
been filled as of the Effective Date or (ii) to any manufacturer or vendor by
reason of Buyer’s failure to pay any amount set forth on Exhibit B that is owing
as of the Effective Date with respect to any Purchase Order. For the avoidance
of doubt, Buyer shall not have any responsibility for or any liability arising
from, under or relating to any agreement, written or oral, of Seller or the
Prior Licensee, in connection with

 

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the manufacture, supply, storage, and distribution of Licensed Products, other
than the Assumed Obligations expressly listed on Exhibit C. In addition, with
respect to the Purchase Orders, Buyer shall have no obligation to pay, and
Seller shall reimburse Buyer for the payment of, any Purchase Order in respect
of which the related Inventory is included in the Inventory True-up Report in
accordance with Section 3(d) hereof. Buyer expressly understands and agrees that
if (i) Seller does not receive full payment of the Total Price as set forth in
Section 2 of this Agreement, or (ii) Buyer violates or breaches this Agreement,
Seller may unconditionally terminate the License Agreement (without the
necessity for cause or any grace period).

5. Representations and Warranties.

(a) Each of the Parties represents, covenants, warrants and agrees that, as of
the Effective Date, (i) it has all requisite power and authority to enter into
this Agreement and to carry out the transactions contemplated hereby, and to
perform its obligations hereunder, (ii) it is duly organized, validly existing
and in good standing under the laws of its state of organization and it has the
requisite power and authority to execute and deliver this Agreement and to
perform its obligations hereunder, (iii) the execution and delivery of this
Agreement and the performance of its obligations hereunder have been duly
authorized by all necessary action on its part and each party shall deliver to
the other, simultaneously with the execution of this Agreement, written
confirmation of such authority. Buyer represents, covenants and warrants that
neither the purchase of the Assets or Inventory, nor the execution, delivery and
performance of this Agreement does or will violate or conflict with any
agreement to which Buyer is a party. Seller represents, covenants and warrants
that: (i) neither the sale of the Assets or Inventory, nor the execution,
delivery and performance of this Agreement does or will violate or conflict with
any agreement between Seller and the Prior Licensee, or any agreement between
Seller and any third party, or infringe, misappropriate or otherwise violate any
third party intellectual property or other rights, or any applicable law;
(ii) Exhibit C hereof sets forth any and all indebtedness owed and obligations,
by Seller or to the best of Seller’s knowledge and belief, the Prior Licensee,
to any third party relating to, or in connection with, Licensed Product;
(iii) Exhibit D hereof lists all

 

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distributors of Licensed Product, to the best of Seller’s knowledge and belief,
all of such distributors, other than the Puerto Rico distributor referred to
below, will have no rights to distribute the Licensed Products after the
Effective Date and may be terminated by Buyer without liability; and
(iv) Exhibit E hereof lists all fragrance houses, liner suppliers, label
suppliers, bottle suppliers, pump suppliers, canister suppliers, packaging
companies and shipping companies, and all other companies, used by Seller or, to
the best of Seller’s knowledge and belief, the Prior Licensee, in connection
with the manufacture and distribution of Licensed Products. All Licensed Product
received by Buyer pursuant to the Inventory Transfer shall have a shelf life of
at least three (3) years from the Inventory Transfer Date as long as such items
are stored in a manner similar to those used by Prior Licensee.

(b) All Assets and Inventory are to be transferred to Buyer on the Effective
Date, and Buyer shall receive, on the Effective Date, good and marketable title,
free and clear of any and all liens, security interests or any other encumbrance
or claim of any kind.

(c) Buyer acknowledges that Seller has informed Buyer that the Prior Licensee
had a distributor relationship in Puerto Rico which may not be terminated by
Buyer except in compliance with applicable law; and Buyer agrees to be
financially responsible for and shall defend, indemnify and hold Seller harmless
from claims relating to (i) Buyer’s attempt to terminate, alter or change such
distributor relationship, any other breach by Buyer thereof, or any liability
arising under applicable law as a result of such termination, alteration,
modification or breach, and (ii) Buyer, directly or indirectly, selling or
distributing Licensed Product in Puerto Rico to any person or entity other than
such distributor.

(d) Seller shall be financially responsible for and shall defend, indemnify and
hold Buyer harmless from the following claims (the “Seller’s Indemnifiable
Claims”): (i) all returned Licensed Products received by Seller, Buyer or Prior
Licensee prior to March 31, 2007 which were sold and delivered by Seller or the
Prior Licensee prior to the Effective Date, (ii) chargeback claims and related
administrative service fees for Licensed Products sold by Seller or the Prior
Licensee prior to the Effective Date, (iii) customer, supplier, vendor and
manufacturer claims that arose prior to the Effective Date and received no later
than one (1) year

 

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from the Effective Date, except as otherwise provided pursuant to Section 4 of
this Agreement, (iv) claims received within one (1) year of the Effective Date
arising out of alleged defects in Licensed Products sold by Seller or the Prior
Licensee to their respective distributors prior to the Effective Date,
(v) claims by third parties relating to the execution of this Agreement and the
transactions contemplated hereby received no later than one (1) year from the
Effective Date, (vi) claims and liabilities arising from Seller’s or the Prior
Licensee’s actions prior to the Effective Date (A) under or in respect of the
Assumed Obligations received no later than one (1) year from the Effective Date,
except as otherwise provided pursuant to Section 4 of this Agreement and (B) in
connection with or related to the consummation by Seller and the Prior Licensee
of the transactions contemplated by the Agreement dated December 6, 2006 between
Seller and the Prior Licensee (“Dec. 6 Agreement”), including, without
limitation, any actions taken or omitted to be taken by Seller in respect of the
Prior Licensee’s attempt to transfer its rights under the License Agreement (as
defined in the Dec. 6 Agreement) to a third party or Seller’s refusal to consent
to such transfer, and (vii) any other claims or liability resulting from a
breach of any of Seller’s representations, warranties or covenants hereunder or
under the License Agreement. Buyer shall afford Seller the opportunity to defend
at Seller’s cost, all such claims, with counsel reasonably acceptable to Buyer,
and will not settle or compromise any such claims without Seller’s prior written
consent, which consent will not be unreasonably withheld. Seller shall pay
Seller’s Indemnifiable Claims promptly upon the receipt of a written invoice for
the same and shall pay all costs and expenses, including, without limitation,
reasonable attorney’s fees, arising from or related to the defense of any such
Seller’s Indemnifiable Claims. Seller shall use its best efforts to enforce its
rights and exercise all available recourse and remedies it has or may have
against the Prior Licensee in the event that a third party, as a result of
actions or inaction of the Prior Licensee, claims to have rights to any of the
Assets or Inventory sold to Buyer pursuant to this Agreement.

(e) Buyer shall be financially responsible for and shall defend, indemnify and
hold Buyer harmless from the following claims (the “Buyer’s Indemnifiable
Claims”): (i) customer, supplier, vendor, distributor and manufacturer claims
that arise after the Effective Date as a result of Buyer’s sales of Licensed
Products, including, but not limited to, the Assumed Obligations, (ii) claims
and

 

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liabilities arising from Buyer’s failure to pay, perform and discharge the
Assumed Obligations, and (iii) any other claims or liability resulting from a
breach of any of Buyer’s representations, warranties, agreements or covenants
hereunder including, but not limited to, Section 4 and 5 of this Agreement.
Seller shall afford Buyer the opportunity to defend at Buyer’s cost, all such
claims, with counsel reasonably acceptable to Seller, and will not settle or
compromise any such claims without Buyer’s prior written consent, which consent
will not be unreasonably withheld. Buyer shall pay all Buyer’s Indemnifiable
Claims promptly upon the receipt of a written invoice for the same and shall pay
all costs and expenses, including, without limitation, reasonable attorney’s
fees, arising from or related to the defense of any such Buyer’s Indemnifiable
Claims.

6. Governing Law; Legal Proceedings. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida without giving
effect to its principles or rules of conflict of laws to the extent such
principles or rules would require or permit the application of laws of another
jurisdiction. Each Party irrevocably consents to the jurisdiction of the courts
of the State of Florida and of the United States District Court for the Southern
District of Florida in any action arising out of, in connection with, or
relating to this Agreement.

7. Miscellaneous. This Agreement, together with the License Agreement,
represents the entire agreement between the Parties with respect to the matters
addressed herein and supersedes all prior negotiations, representations, or
agreements between the Parties, whether oral or written, on the subject hereof.
This Agreement shall be binding on all successors, administrators, executors,
representatives and assigns of each of the Parties. This Agreement may not be
amended, modified, altered or rescinded except upon a written instrument
designated as an amendment to this Agreement and executed by the Parties.

8. Further Assurances. At and after the Effective Date, from time to time, at
Buyer’s request and expense, Seller shall execute and deliver such other
instruments and take such other actions as Buyer may reasonably request to more
effectively put Buyer in possession and control of the Inventory and the Assets.
Seller shall cooperate with Buyer to deliver such bills of sale, endorsements,

 

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assignments and other good and sufficient instruments of conveyance and transfer
in form and substance reasonably satisfactory to Buyer and its counsel, as are
commercially reasonable under the circumstances, to vest in Buyer good and valid
title to the Assets and Inventory free and clear of any encumbrances.

9. Specific Performance. The Parties recognize and affirm that in the event of
breach by either Party of any of the provisions of this Agreement, money damages
would be inadequate and no adequate remedy at law would exist. Accordingly, the
Parties agree that each Party shall have the right, in addition to any other
rights and remedies existing in its favor, to enforce its rights and the
obligations of the other Party under this Agreement not only by an action or
actions for damages, but also by an action or actions for specific performance,
injunction and/or other equitable relief in order to enforce or prevent any
violations of the provisions of this Agreement.

10. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall, collectively and separately, constitute one and the same
agreement.

11. No Third Party Beneficiaries. This Agreement shall not confer any rights or
remedies upon any person other than the Parties hereto and their respective
successors and permitted assigns.

12. Assign; Buyer Designee. Seller shall have the right to assign any and all of
its rights under this Agreement to one or more of its subsidiaries or
affiliates. Buyer shall not have the right to assign its rights under this
Agreement without the prior written consent of Seller, which consent shall not
be withheld unreasonably.

13. Notices. All notices, requests, demands, claims, and other communications
hereunder will be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given if (and then two business
days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:

 

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If to BUYER:

Falic Fashion Group, LLC

6100 Hollywood Blvd, 7th Floor

Hollywood, Florida 33024

Attn: President

If to Seller:

Perry Ellis International, Inc.

3000 N.W. 107th Avenue

Miami, Florida 33172

Attn: Chief Executive Officer

With a copy to:

Perry Ellis International, Inc.

3000 N.W. 107th Avenue

Miami, Florida 33172

Attn: General Counsel

Either Party may also send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication shall be deemed to have
been duly given unless and until it actually is received by the intended
recipient. Either Party may change the address to which notices, requests,
demands, claims, and other communications hereunder are to be delivered by
giving the other parties hereto notice in the manner herein set forth.

14. Brokerages Fees; Certain Expenses.

(a) Brokerage Fees. The Parties confirm and agree that no business broker/finder
facilitated the transactions contemplated by this Agreement and that no business
broker/finder is entitled to a fee, commission, compensation or any other
payment as a result of this Agreement.

(b) Certain Expenses. Except as otherwise provided in this Agreement and
regardless of whether the transactions contemplated by this Agreement are
consummated, each Party agrees to pay all expenses, fees and costs (including,
without limitation, legal, accounting and consulting expenses) incurred by it in
connection with the transactions contemplated hereby.

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first written above.

 

FALIC FASHION GROUP, LLC By:  

/s/ Timothy McCloskey

  Timothy McCloskey Its:   Chief Financial Officer PERRY ELLIS INTERNATIONAL,
INC. By:  

/s/ George Feldenkreis

  George Feldenkreis Its:   Chief Executive Officer

 

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SCHEDULE 1

INVENTORY (ESTIMATED)

SEE ATTACHED LISTING

 

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EXHIBIT A

SALES ORDERS

Attached hereto

 

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EXHIBIT B

PURCHASE ORDERS

Attached hereto

 

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EXHIBIT C

ASSUMED OBLIGATIONS

Attached hereto

 

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EXHIBIT D

LIST OF DISTRIBUTORS

Attached hereto

 

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EXHIBIT E

LIST OF FRAGRANCE HOUSES, MANUFACTURES,

SUPPLIERS, PACKAGERS AND SHIPPERS

Attached hereto