Document:

Ex 10.1 Amendment No. 1 to the Credit Facility

AMENDMENT NO. 1 TO CREDIT AGREEMENT AND CONSENT
AMENDMENT NO. 1 TO CREDIT Agreement AND CONSENT, dated as of December 23, 2011 (this “Amendment No. 1”), is by and among Wells Fargo Bank, National Association, in its capacity as administrative and collateral agent for the Lenders (as hereinafter defined) pursuant to the Credit Agreement defined below (in such capacity, “Administrative Agent”), Bank of America, N.A., in its capacity as syndication agent for the Lenders (in such capacity, “Syndication Agent”), Regions Bank and RBS Business Capital, a division of RBS Asset Finance, Inc., a subsidiary of RBS Citizens, NA, in their capacity as co-documentation agents for the Lenders (in such capacity, “Co-Documentation Agents”), the parties to the Credit Agreement as lenders (individually, each a “Lender” and collectively, “Lenders”), Perfumania Holdings, Inc., a Florida corporation (sometimes referred to herein as the “Parent” or “Lead Borrower”), Quality King Fragrance, Inc., a Delaware corporation (“QKF”), Scents of Worth, Inc., a Florida corporation (“SOW”), Five Star Fragrance Company, Inc., a New York corporation (“Five Star”), Northern Group, Inc., a New York corporation (“Northern”), Perfumania, Inc., a Florida corporation (“Perfumania”), Magnifique Parfumes and Cosmetics, Inc., a Florida corporation (“Magnifique”), Ten Kesef II, Inc., a Florida corporation (“Ten Kesef”), Perfumania Puerto Rico, Inc., a Puerto Rico corporation (“Perfumania PR”) and Perfumania.com, Inc., a Florida corporation (“Perfumania.com” and together with Parent, QKF, SOW, Five Star, Northern, Perfumania, Magnifique, Ten Kesef and Perfumania PR, each a “Borrower” and collectively, the “Borrowers”), Aladdin Fragrances, Inc., a New York corporation (“Aladdin”), Niche Marketing Group, Inc., a New York corporation (“Niche”) and Model Reorg Acquisition, LLC, a Delaware limited liability company (“Model”, and together with Aladdin and Niche, each a “Guarantor” and collectively, the “Guarantors”).
W I T N E S S E T H :
WHEREAS, Administrative Agent, Lenders, Borrowers and Guarantors have entered into financing arrangements pursuant to which Lenders (or Administrative Agent on behalf of Lenders) have made and may make loans and advances and provide other financial accommodations to Borrowers as set forth in the Credit Agreement dated January 7, 2011, by and among Administrative Agent, Lenders, Borrowers and Guarantors (as from time to time amended, modified, supplemented, extended, renewed, restated or replaced, the “Credit Agreement”, and together with all agreements, documents and instruments at any time executed and/or delivered in connection therewith or related thereto, as from time to time amended, modified, supplemented, extended, renewed, restated, or replaced, collectively, the “Loan Documents”); 
WHEREAS, Borrowers have requested that Administrative Agent and Lenders (a) consent to the merger (the “Parlux Acquisition”) of Parlux Fragrances, Inc., a Delaware corporation (“Parlux”) with and into PFI Merger Corp., a wholly-owned subsidiary of Parent formed under the laws of the State of Delaware (“Merger Sub”) with Parlux surviving the Parlux Acquisition and, immediately thereafter, the merger of Parlux with and into Parlux LLC, a Delaware limited liability company that is a wholly-owned subsidiary of Parent (“Parlux LLC”) with Parlux LLC surviving such merger, all as described in the Agreement and Plan of Merger to be entered into by and among Parlux, Parent and Merger Sub, (b) consent to the incurrence by Parent of the Additional Nussdorf Sibling Indebtedness (as hereinafter defined), (c) consent to the amendment of the Nussdorf Sibling Notes to reflect the Additional Nussdorf Sibling Indebtedness, (d) add each of Parlux LLC and Parlux Ltd., a New York corporation, as a “Borrower” under, and as defined in, the Credit Agreement, (e) add each Subsidiary of Parlux LLC (other than any Borrower or CFC) as an additional “Guarantor” under, and as defined in, the Credit Agreement, 

and (f) make certain other amendments to the Credit Agreement and other Loan Documents as set forth herein, which Agent and Lenders are willing to do subject to the terms and provisions hereof;
WHEREAS, by this Amendment No. 1, Administrative Agent, Lenders, Borrowers and Guarantors desire and intend to evidence such amendments and consents;
NOW THEREFORE, in consideration of the foregoing and the mutual agreements and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.Definitions.
(a)    Additional Definitions.  As used herein or in the Credit Agreement or any of the other Loan Documents, the following terms shall have the meanings given to them below and the Credit Agreement and the other Loan Documents shall be deemed and are hereby amended to include, in addition and not in limitation, the following definitions:
(i)    “Additional Nussdorf Sibling Indebtedness” means the Indebtedness of Model incurred on the Parlux Acquisition Closing Date under the Nussdorf Sibling Notes, which is expressly subordinated in right of payment to the prior payment in full of the Obligations and which is in the form of the note attached as Exhibit A to Amendment No. 1.  
(ii)     “Amendment No. 1” means Amendment No. 1 to Credit Agreement and Consent, dated as of December 23, 2011 by and among Administrative Agent, Lenders, Borrowers and Guarantors, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.
(iii)    “Merger Sub” means PFI Merger Corp., a Delaware corporation formed by Parent on or prior to the Parlux Acquisition Closing Date that is a wholly-owned subsidiary of Parent. 
(iv)    “Merger Sub Formation Documents” means, collectively, the certified copy of the certificate of incorporation of Merger Sub (and all amendments thereto), the by-laws of Merger Sub, and all other agreements, documents and instruments executed and/or delivered in connection therewith and/or related thereto.
(v)    “Parlux” means Parlux Fragrances, Inc., a Delaware corporation. 
(vi)    “Parlux Acquisition” means the merger of Parlux with and into Merger Sub with Parlux the surviving company, pursuant to and in accordance with the Parlux Acquisition Agreement.  
(vii)    “Parlux Acquisition Agreement” means the Agreement and Plan of Merger among Parlux, Parent and Merger Sub dated December 23, 2011 with respect to the Parlux Acquisition, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.
(viii)    “Parlux Acquisition Closing Date” means the date on which all of the Parlux Acquisition Transactions have been consummated in accordance with the terms of the Parlux Acquisition Documents.

(ix)    “Parlux Acquisition Documents” means, collectively, the following (as the same now exist and may hereafter be amended, modified or supplemented): (A) the Parlux Acquisition Agreement, together with all of the schedules and exhibits thereto, and (B) all other agreements, documents and instruments executed and/or delivered in connection with the Parlux Acquisition Agreement and/or related thereto.
(x)     “Parlux Acquisition Transactions” means, collectively, the following:
(A)    the execution and delivery of the Parlux Acquisition Agreement by Parent;
(B)    the formation of Merger Sub by Parent on or prior to the Parlux Acquisition Closing Date;
(C)    the consummation of the Parlux Acquisition on the Parlux Acquisition Closing Date pursuant to the Parlux Acquisition Agreement;
(D)    the incurrence by Model of the Additional Nussdorf Sibling Indebtedness on the Parlux Acquisition Closing Date, as evidenced by the Nussdorf Sibling Notes as amended and restated on the Parlux Acquisition Closing Date and the Nussdorf Sibling Subordination Agreement as amended and restated on the Parlux Acquisition Closing Date; 
(E)    the use of the proceeds of Credit Extensions in an amount not to exceed (1) $32,000,000 to fund a portion of the cash consideration payable under the Parlux Acquisition Agreement; provided, that, such $32,000,000 amount shall be adjusted downward, on a dollar-for-dollar basis, equal to the difference, if any, between $15,000,000 and actual cash and cash equivalent amount held by Parlux and on hand at the Effective Time (as defined in the Parlux Acquisition Agreement) and (2) $11,000,000 to fund costs and expenses of the Parlux Acquisition Transactions; 
(F)    the issuance of shares of the common Equity Interests, $.01 par value, of Parent pursuant to Parlux Acquisition Agreement; 
(G)    the conversion of each Company Stock Option (as defined in the Parlux Acquisition Agreement) into an option to purchase a number of shares of common Equity Interests of Parent pursuant to the Parlux Acquisition Agreement; 
(H)     the conversion of each outstanding and unexercised Gopman Warrant (as defined in the Parlux Acquisition Agreement) into a warrant to purchase a number of shares of common Equity Interests of Parent pursuant to the Parlux Acquisition Agreement; 
(I)    the conversion of each outstanding and unexercised Licensor Warrant (as defined in the Parlux Acquisition Agreement) into (1) a warrant to purchase a number of shares of common Equity Interests of Parent and (2) the right to receive a number of shares of common Equity Interests of Parent, in each case pursuant to the Parlux Acquisition Agreement; and
(J)     the amendment of the articles of incorporation of Parent to increase the number of shares of common Equity Interests of Parent that Parent is authorized to issue to 35,000,000 shares.
(xi)    “Parlux Business” means the assets, liabilities and business of Parlux and 

its Subsidiaries acquired by Parent, directly or indirectly, pursuant to the Parlux Acquisition Documents.
(xii)    “Parlux LLC” means the limited liability company that is a wholly-owned subsidiary of Parent organized under the laws of the State of Delaware to be formed prior to the Parlux Acquisition Closing Date for the sole purpose of merging with Parlux pursuant to the Parlux Acquisition Documents.
(xiii)    “Parlux Ltd.” means Parlux Ltd., a New York corporation.
(xiv)    “Specified Representations” means the representations and warranties set forth in Sections 5.01, 5.02, 5.04, 5.05, 5.06, 5.08(a), 5.14, 5.16 and 5.20 of the Credit Agreement.
(b)    Amendments to Definitions. 
(i)    The definition of “Consolidated EBITDA” set forth in Section 1.01 of the Credit Agreement is hereby amended by deleting clause (b) of such definition in its entirety and replacing it with the following: 
“(b) the following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated Interest Charges, (ii) the provision for Federal, state, local and foreign income Taxes, (iii) depreciation and amortization expense, (iv) the reasonable out-of-pocket expenses and fees (including fees and expenses payable to legal, accounting, financial, public relations and other professional advisors) paid by Parent arising out of, in connection with or related to the Parlux Acquisition or the other transactions contemplated by the Parlux Acquisition Agreement; provided, that, the aggregate amount of such expenses and fees included in this clause (iv) shall not exceed $11,000,000 during the term of this Agreement, and (v) other non-recurring expenses reducing such Consolidated Net Income which do not represent a cash item in such period or any future period, including Consolidated Deferred Financing Costs (in each case of or by Parent and its Subsidiaries for such Measurement Period),
(ii)    From and after the Parlux Acquisition Closing Date, the definition of “Nussdorf Sibling Notes” contained in Section 1.01 of the Credit Agreement is hereby amended by deleting such definition in its entirety and replacing it with the following: 
““Nussdorf Sibling Notes” means collectively, (a) the Second Amended and Restated Subordinated Promissory Note, dated the Parlux Acquisition Closing Date, by Model in favor of the Trust under Article 2 of the Trust Agreement dated November 1, 1998 with Glenn Nussdorf as Grantor (successor to the Glenn Nussdorf 10-Year Grantor Retained Annuity Trust Dated 11/1/98) in the original principal amount of $11,390,212.15, (b) the Second Amended and Restated Subordinated Promissory Note, dated the Parlux Acquisition Closing Date, by Model in favor of the Glenn Nussdorf 15-Year Grantor Retained Annuity Trust Dated 11/2/98 in the 

original principal amount of $17,065,018.85, (c) the Second Amended and Restated Subordinated Promissory Note, dated the Parlux Acquisition Closing Date, by Model in favor of the Trust under Article 2 of the Trust Agreement dated November 1, 1998 with Stephen Nussdorf as Grantor (successor to the Stephen Nussdorf 10-Year Grantor Retained Annuity Trust Dated 11/1/98) in the original principal amount of $11,390,212.15, (d) the Second Amended and Restated Subordinated Promissory Note, dated the Parlux Acquisition Closing Date, by Model in favor of the Stephen Nussdorf 15-Year Grantor Retained Annuity Trust Dated 11/2/98 in the original principal amount of $17,065,018.85, (e) the Second Amended and Restated Subordinated Promissory Note, dated the Parlux Acquisition Closing Date, by Model in favor of the Trust under Article 2 of the Trust Agreement dated November 1, 1998 with Arlene Nussdorf as Grantor (successor to the Arlene Nussdorf 10-Year Grantor Retained Annuity Trust Dated 11/1/98) in the original principal amount of $11,390,212.15 and (f) the Second Amended and Restated Subordinated Promissory Note, dated the Parlux Acquisition Closing Date, by Model in favor of the Arlene Nussdorf 15-Year Grantor Retained Annuity Trust Dated 11/2/98 in the original principal amount of $17,065,018.85, as the same now exist or may hereafter be amended, modified, supplemented, renewed, restated or replaced.
(iii)    From and after the Parlux Acquisition Closing Date, the definition of “Nussdorf Sibling Subordination Agreement” contained in Section 1.01 of the Credit Agreement is hereby amended by deleting such definition in its entirety and replacing it with the following: 
““Nussdorf Sibling Subordination Agreement” means the Amended and Restated Subordination Agreement dated the Parlux Acquisition Closing Date, by and between Administrative Agent and the Trust under Article 2 of the Trust Agreement dated November 1, 1998 with Glenn Nussdorf as Grantor (successor to the Glenn Nussdorf 10-Year Grantor Retained Annuity Trust Dated 11/1/98), Glenn Nussdorf 15-Year Grantor Retained Annuity Trust Dated 11/2/98, the Trust under Article 2 of the Trust Agreement dated November 1, 1998 with Stephen Nussdorf as Grantor (successor to the Stephen Nussdorf 10-Year Grantor Retained Annuity Trust Dated 11/1/98), Stephen Nussdorf 15-Year Grantor Retained Annuity Trust Dated 11/2/98, the Trust under Article 2 of the Trust Agreement dated November 1, 1998 with Arlene Nussdorf as Grantor (successor to Arlene Nussdorf 10-Year Grantor Retained Annuity Trust Dated 11/1/98), Arlene Nussdorf 15-Year Grantor Retained Annuity Trust Dated 11/2/98, as the same now exists or may hereafter be amended, supplemented or otherwise modified in accordance with the terms hereof.”
(iv)    The definition of “Permitted Acquisition” set forth in Section 1.01 of the Credit Agreement is hereby amended by deleting such definition in its entirety and replacing it with the 

following:
“Permitted Acquisition” means (a) the Parlux Acquisition and (b) any other Acquisition in which all of the following conditions are satisfied:
(i)    No Default then exists or would arise from the consummation of such Acquisition;
(ii)    Such Acquisition shall have been approved by the Board of Directors of the Person (or similar governing body if such Person is not a corporation) which is the subject of such Acquisition and such Person shall not have announced that it will oppose such Acquisition or shall not have commenced any action which alleges that such Acquisition shall violate applicable Law, unless Agent waives compliance with this condition;
(iii)    The Lead Borrower shall have furnished the Administrative Agent with thirty (30) days’ prior written notice of such intended Acquisition and shall have furnished the Administrative Agent with a current draft of the Acquisition Documents (and final copies thereof as and when executed), a summary of any due diligence undertaken by the Loan Parties in connection with such Acquisition, appropriate financial statements of the Person which is the subject of such Acquisition, pro forma projected financial statements for the twelve (12) month period following such Acquisition after giving effect to such Acquisition (including balance sheets, cash flows and income statements by month for the acquired Person, individually, and on a Consolidated basis with all Loan Parties), and such other information as the Administrative Agent may reasonably require, all of which shall be reasonably satisfactory to the Administrative Agent;
(iv)    Either (A) the legal structure of the Acquisition shall be acceptable to the Administrative Agent in its discretion, or (B) the Loan Parties shall have provided the Administrative Agent with a favorable solvency opinion from an unaffiliated third party valuation firm reasonably satisfactory to the Administrative Agent;  
(v)    After giving effect to the Acquisition, if the Acquisition is an Acquisition of the Equity Interests, a Loan Party shall acquire and own, directly or indirectly, a majority of the Equity Interests in the Person being acquired and shall Control a majority of any voting interests or shall otherwise Control the governance of the Person being acquired;
(vi)    Any assets acquired shall be utilized in, and if the Acquisition involves a merger, consolidation or stock acquisition, the Person which is the subject of such Acquisition shall be engaged in, a business otherwise permitted to be engaged in by a Borrower under this Agreement;
(vii) If the Person which is the subject of such Acquisition will be maintained as a Subsidiary of a Loan Party, or if the assets acquired in an acquisition will be transferred to a Subsidiary which is not then a Loan Party, such Subsidiary 

shall have been joined as a Borrower hereunder or as a Guarantor, as the Administrative Agent shall determine, and the Collateral Agent shall have received a first priority security and/or mortgage interest in such Subsidiary’s Equity Interests, Inventory, Accounts, Real Estate and other property of the same nature as constitutes collateral under the Security Documents;
(viii) The total consideration paid for all such Acquisitions (whether in cash, tangible property, notes or other property) after the Closing Date shall not exceed in the aggregate the sum of $2,500,000; and
(xi)    The Loan Parties shall have satisfied the Payment Conditions.”
(c)    Interpretation.  For purposes of this Amendment No. 1, all terms used herein which are not otherwise defined herein, including but not limited to, those terms used in the recitals hereto, shall have the respective meanings assigned thereto in the Credit Agreement as amended by this Amendment No. 1.
2.    Financial Statements.  
(a)    Section 6.01(c) of the Credit Agreement is hereby amended by deleting the reference to “as soon as available, but in any event within thirty (30) days after the end of each of the Fiscal Months of each Fiscal Year of Parent or, in the case of any Fiscal Month end that is the end of a Fiscal Quarter, fifty (50) days after the end of such Fiscal Month (commencing with the Fiscal Month ended on October 30, 2010),” and replacing it with “as soon as available, but in any event within thirty (30) days after the end of each of the Fiscal Months of each Fiscal Year of Parent or, in the case of any Fiscal Month end that is the end of a Fiscal Quarter, fifty (50) days after the end of such Fiscal Month, or in the case of January of each Fiscal Year, ninety (90) days after the end of such Fiscal Month, or in the case of February of each Fiscal Year, sixty (60) days after the end of such Fiscal Month (commencing with the Fiscal Month ended on October 30, 2010),”.
(b)    Section 6.01 of the Credit Agreement is hereby amended by (i) deleting the period at the end of clause (d) of such Section and replacing it with “; and” and (ii) adding a new clause (e) at the end thereof to read as follows: 
“(e) on or prior to the consummation of the Parlux Acquisition Closing Date, updates or modifications to the projections previously received by the Administrative Agent, in form and substance satisfactory to Administrative Agent (and reflecting the period between the date hereof and the Parlux Acquisition Closing Date), demonstrating that projected average Availability for each fiscal month at all times during the six (6) month period immediately succeeding the consummation of the Parlux Acquisition Transactions shall be not less than $25,000,000 after giving pro forma effect to the Parlux Acquisition Transactions.”
3.    Prepayments of Indebtedness.  From and after the Parlux Acquisition Closing Date, Section 7.07 of the Credit Agreement is hereby amended by deleting clause (c) of such Section in its entirety and replacing it with the following: 
“(c) regularly scheduled payments of interest in respect of Subordinated Indebtedness (in accordance with the terms of the QKD Notes, the Nussdorf Convertible Note and the 

Nussdorf Sibling Notes as in effect on the Parlux Acquisition Closing Date), as long as the Subordinated Indebtedness Payment Conditions are satisfied and the QKD Subordination Agreement, the Nussdorf Convertible Note Subordination Agreement and the Nussdorf Sibling Subordination Agreement are in full force and effect, and”
4.    Consent.  Notwithstanding anything to the contrary set forth in the Credit Agreement, Administrative Agent and Lenders hereby consent to the Parlux Acquisition Transactions, to the joinder of each of Parlux LLC and Parlux Ltd. as a “Borrower” under, and as defined in, the Credit Agreement, and to the joinder of each Subsidiary of Parlux LLC which is not a Borrower or a CFC as a “Guarantor” under, and as defined in, the Credit Agreement, provided, that, each of the following conditions has been satisfied in the determination of Administrative Agent:
(a)    on the Parlux Acquisition Closing Date and after giving effect to the Parlux Acquisition Transactions, no Event of Default shall exist or have occurred and be continuing;
(b)    on the Parlux Acquisition Closing Date and after giving effect to the Parlux Acquisition Transactions, the Specified Representations shall be true and correct in all material respects (where not already qualified by materiality, otherwise in all respects), it being agreed that the only representations and warranties being made as to the Parlux Business on the Parlux Acquisition Closing Date are the Specified Representations;
(c)    the Consolidated Fixed Charge Coverage Ratio of Parent and its Subsidiaries, calculated on a pro forma basis, shall be equal to or greater than 1.10:1.00 for the most recently ended Measurement Period after giving pro forma effect to the Parlux Acquisition Transactions as if the Parlux Acquisition Transactions had been entered into as of the first day of such Measurement Period; 
(d)    the Parlux Acquisition Closing Date shall occur on or before June 30, 2012;  
(e)    Administrative Agent shall have received a true, correct and complete copy of the Parlux Acquisition Agreement and each of the other Parlux Acquisition Documents, duly authorized, executed and delivered by the parties thereto, together with all schedules and exhibits thereto;
(f)    Administrative Agent shall have received the Merger Sub Formation Documents;
(g)    Administrative Agent shall have received and reviewed UCC, lien and judgment search results for the jurisdiction of incorporation or formation of Parlux and each of its Subsidiaries;
(h)    Administrative Agent shall have received, in form and substance satisfactory to Administrative Agent, a Joinder to the Credit Agreement pursuant to which each of Parlux LLC and Parlux Ltd. is added as a “Borrower” under, and as defined in, the Credit Agreement; 
(i)    Administrative Agent shall have received, in form and substance satisfactory to Administrative Agent, a Joinder to the Credit Agreement or a counterpart of the Facility Guaranty or such other document as the Administrative Agent shall deem appropriate, pursuant to which each Subsidiary of Parlux LLC which is not a Borrower or a CFC is added as a “Guarantor” under, and as defined in, the Credit Agreement; 
(j)    Parlux LLC shall have, and shall have caused each of its Subsidiaries (other than any CFC) to have, (i) granted a Lien to the Collateral Agent on such Person’s assets to secure the 

Obligations, (ii) delivered  copies of financing statements in appropriate form for purposes of filing in such office or offices as may be necessary to perfect such Liens, (iii) delivered to the Administrative Agent documents of the types referred to in clauses (iii) and (iv) of Section 4.01(a) of the Credit Agreement and favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the Loan Documents, including the Joinder Agreements, Facility Guarantees or such other documents as Agent shall deem appropriate, and (iv) pledged any Equity Interests of Subsidiaries owned by or on behalf of any Loan Party; provided, that, the Equity Interests of any Subsidiary of Parlux LLC that is a CFC to be pledged shall be limited to 65% of the outstanding voting Equity Interests of such CFC and 100% of the non-voting Equity Interests of such CFC, in each case in form, content and scope reasonably satisfactory to the Administrative Agent;
(k)    Administrative Agent shall have received evidence that Model has received not less than $30,000,000 in immediately available funds as proceeds from the Additional Nussdorf Sibling Indebtedness, and true, correct and complete copies of all of the agreements, documents and instruments executed and/or delivered in connection therewith and/or related thereto, including each of the Nussdorf Sibling Notes as amended and restated on the Parlux Acquisition Closing Date and in the form attached as Exhibit A and the Nussdorf Sibling Subordination Agreement as amended and restated on the Parlux Acquisition Closing Date; and 
(l)    Administrative Agent shall have received a certificate signed by a Responsible Officer of the Lead Borrower certifying (i) that each of the conditions set forth in this Section 4 have been satisfied and (ii) as to the Solvency of the Loan Parties as of the Parlux Acquisition Closing Date after giving effect to the transactions contemplated by the Parlux Acquisition Documents; and
(m)    Agent shall have received all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the Patriot Act and requested of the Parent with respect to Merger Sub, Parlux LLC, Parlux Ltd., Parlux and its Subsidiaries at least 10 business days prior to the Parlux Acquisition Closing Date.
5.    Parlux Acquisition Agreement.  
(a)    Other than changes that are not materially adverse to the Credit Parties, no terms or conditions of the Parlux Acquisition Agreement shall be amended, modified or waived without the consent of the Administrative Agent, it being agreed that any amendment, modification or waiver to Section 2.7(a) or 2.7(b)(i) of the Parlux Acquisition Agreement shall be deemed to be  materially adverse to the Credit Parties.
(b)    Contemporaneously with the consummation of the Parlux Acquisition Transactions, (i) one hundred (100%) percent of any cash and cash equivalents acquired by Parent or any of its Subsidiaries pursuant to the Parlux Acquisition Agreement shall be applied to the Obligations in accordance with the provisions of Section 2.05(f) of the Credit Agreement and (ii) Borrowers shall deliver, or cause to be delivered, to Administrative Agent, and Administrative Agent shall have received, all releases, terminations and such other documents as Administrative Agent may request to evidence and effectuate the termination or the release by any party, including, without limitation General Electric Capital Corporation, as Administrative Agent under the Company Credit Facility (as defined in the Parlux Acquisition Agreement), of any interest in and to any of the Parlux Business, including, without limitation, UCC termination statements for all UCC financing statements previously filed by any such person and the authorization to file such UCC termination statements.

6.    Eligibility of Assets of the Parlux Business for Lending Purposes: 
(a)    Notwithstanding any consent or amendment contained herein, each Loan Party hereby acknowledges and agrees that in no event shall any of the assets included in the Parlux Business be deemed Eligible Credit Card Receivables, Eligible Inventory or Eligible Trade Receivables, unless and until:
(i)    Administrative Agent shall have conducted a field examination with respect to the Parlux Business, the scope and results of which shall be satisfactory to Administrative Agent (and at Administrative Agent’s option, at Borrowers’ expense, obtained an appraisal of the Inventory and other Collateral, including, without limitation, the assets of a type included in the Borrowing Base, by an appraiser reasonably acceptable to Administrative Agent and in form, scope and methodology reasonably acceptable to Administrative Agent and addressed to Administrative Agent and upon which Administrative Agent is expressly permitted to rely, which appraisal shall be in addition to any appraisals which Administrative Agent may obtain pursuant to its rights under Section 6.10 of the Credit Agreement) and then only to the extent the criteria for Eligible Credit Card Receivables, Eligible Inventory or Eligible Trade Receivables, as applicable, set forth in the Credit Agreement are satisfied with respect thereto (or such other or additional criteria as Administrative Agent may, at its option, establish with respect thereto and subject to such Reserves as Administrative Agent may establish with respect thereto); and
(ii)    Administrative Agent shall have received all releases, terminations and such other documents as Administrative Agent may request to evidence and effectuate the termination or the release by any party of any interest in and to any of the Parlux Business, including, without limitation, UCC termination statements for all UCC financing statements previously filed by any such person and the authorization to file such UCC termination statements.
(b)    Each Borrower agrees to cooperate fully in Administrative Agent’s due diligence covering the Parlux Business, including, but not limited to, a field examination, site visit, appraisal, and review of books and records in respect thereof. 
(c)    Any assets included in the Parlux Business not deemed Eligible Credit Card Receivables, Eligible Inventory or Eligible Trade Receivables by Administrative Agent shall nevertheless be and remain part of the Collateral together with the products and proceeds thereof.
7.    Representations and Warranties.  Borrowers and Guarantors, jointly and severally, represent and warrant with and to Administrative Agent and Lenders as follows, which representations and warranties shall survive the execution and delivery hereof:
(a)    no Default or Event of Default has occurred and is continuing as of the date of this Amendment No. 1; 
(b)    the execution, delivery and performance by each Loan Party of this Amendment No. 1 and each other agreement to be executed and delivered by Borrowers and Guarantors in connection herewith (collectively, together with this Amendment No. 1, the “Amendment Documents”) to which such Person is or is to be a party, has been duly authorized by all necessary corporate or other organizational action, and does not and will not (i) contravene the terms of any of such Person’s Organization Documents; (ii) conflict with or result in any breach, termination, or contravention of, or constitute a default under, or require any payment to be made under (A) any Material Contract or any Material Indebtedness to which such Person is a party or affecting such Person or the properties of such Person or 

any of its Subsidiaries or (B) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; (C) result in or require the creation of any Lien upon any asset of any Loan Party (other than Liens in favor of the Collateral Agent under the Security Documents); or (D) violate any Law;  
(c)    this Amendment No. 1 has been, and each other Amendment Document and each Parlux Acquisition Document, when delivered, will have been, duly executed and delivered by each Loan Party that is party thereto.  This Amendment No. 1 constitutes, and each other Amendment Document and each Parlux Acquisition Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law;
(d)    on the Parlux Acquisition Closing Date, each Loan Party shall have valid and merchantable title to all of the assets and properties acquired by such Loan Party in connection with the Parlux Acquisition Transactions, subject to no Liens of any kind, except those granted to Administrative Agent or Collateral Agent and Permitted Encumbrances;
(e)    on the Parlux Acquisition Closing Date, the Liens granted to Collateral Agent, for the benefit of the Secured Parties referred to therein, under the Credit Agreement, the Joinder Agreements and the other Loan Documents, shall create in favor of the Collateral Agent, for the benefit of such Secured Parties, a legal, valid, continuing and enforceable security interest in the Collateral, the enforceability of which is subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law;
(f)    upon delivery to the Collateral Agent of any Collateral consisting of Pledged Securities (as defined in the Security Agreement) with respect to Parlux LLC and its Subsidiaries (together with stock powers or other appropriate instruments of transfer executed in blank form), the Collateral Agent shall have a fully perfected first priority Lien on, and security interest in, to and under all right, title and interest of each pledgor thereunder in such Collateral, and such security interest shall be in each case prior and superior in right and interest to any other Person; 
(g)    upon the filing of the financing statements provided under Section 4(j) above, the Collateral Agent will have a perfected Lien on, and security interest in, to and under all right, title and interest of the grantors thereunder in all Collateral that may be perfected by filing, recording or registering a financing statement or analogous document (including without limitation the proceeds of such Collateral subject to the limitations relating to such proceeds in the UCC), under the UCC (in effect on the date this representation is made) in each case prior and superior in right to any other Person, subject only to, with respect to priority, Permitted Encumbrances having priority by operation of law;
(h)    upon the filing of an Intellectual Property Security Agreement (or a short form thereof) in the United States Patent and Trademark Office and the United States Copyright Office, the Collateral Agent shall have a fully perfected Lien on, and security interest in, all right, title and interest of Parlux LLC and its Subsidiaries in the Intellectual Property (as defined in the Security Agreement) in which a security interest may be perfected by filing, recording or registering a security agreement, financing statement or analogous document in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, in each case prior and superior in right to any other Person 

(it being understood that subsequent recordings in the United States Patent and Trademark Office and the United States Copyright Office may be necessary to perfect a Lien on registered trademarks, trademark applications and copyrights acquired by the Loan Parties after the date hereof); 
(i)     each Borrower and Guarantor is Solvent and will continue to be Solvent after giving effect to the consummation of the Parlux Acquisition Transactions; 
(j)    the resolutions of the board of directors or managers of each Loan Party delivered to Administrative Agent by such Loan Party on the Closing Date have not been revoked and are in full force and effect; and
(k)    all of the representations and warranties set forth in the Credit Agreement and the other Loan Documents, each as amended hereby, are true and correct in all material respects on and as of the date hereof, as if made on the date hereof; provided, that, (i) to the extent that a representation and warranty specifically refers to an earlier date, it shall be true and correct in all material respects as of such earlier date and (ii) any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects on such respective dates with such effect. 
8.    Conditions Precedent. The amendments and consents contained herein shall only be effective upon the satisfaction of each of the following conditions precedent in a manner satisfactory to Administrative Agent:
(a)    Administrative Agent shall have received counterparts of this Amendment No. 1, duly authorized, executed and delivered by Borrowers, Guarantors and the Required Lenders;
(b)        Administrative Agent shall have received a true, correct and complete copy of the Parlux Acquisition Agreement, duly authorized, executed and delivered by the parties thereto, together with all schedules and exhibits thereto;
(c)        Administrative Agent shall have received a true and correct copy of each consent, waiver or approval (if any) to or of this Amendment No. 1, which Borrowers and Guarantors are required to obtain from any other Person, and such consent, approval or waiver (if any) shall be in form and substance reasonably satisfactory to Administrative Agent; and
(d)    No Default or Event of Default shall have occurred and be continuing.
9.    Effect of Amendment No. 1.  Except as expressly set forth herein, no other amendments, changes or modifications to the Loan Documents are intended or implied, and in all other respects the Loan Documents are hereby specifically ratified, restated and confirmed by all parties hereto as of the effective date hereof and Borrowers and Guarantors shall not be entitled to any other or further amendment by virtue of the provisions of this Amendment No. 1 or with respect to the subject matter of this Amendment No. 1.  To the extent of conflict between the terms of this Amendment No. 1 and the other Loan Documents, the terms of this Amendment No. 1 shall control.  The Credit Agreement and this Amendment No. 1 shall be read and construed as one agreement.
10.    Governing Law.  This Amendment No. 1 shall be governed by, and construed in accordance with the laws of the State of New York (including Sections 5-1401 and 5-1402 of the New York General Obligations Law but otherwise without regard to the conflict of law principles thereof).

11.    Jury Trial Waiver.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT NO. 1 OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AMENDMENT NO. 1 BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
12.    Binding Effect.  This Amendment No. 1 shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.
13.    Waiver, Modification, Etc.  No provision or term of this Amendment No. 1 may be modified, altered, waived, discharged or terminated orally, but only by an instrument in writing executed by the party against whom such modification, alteration, waiver, discharge or termination is sought to be enforced.
14.    Further Assurances.  Borrowers and Guarantors shall execute and deliver such additional documents and take such additional action as may be reasonably requested by Administrative Agent to effectuate the provisions and purposes of this Amendment No. 1.
15.    Entire Agreement.  This Amendment No. 1 represents the entire agreement and understanding concerning the subject matter hereof among the parties hereto, and supersedes all other prior agreements, understandings, negotiations and discussions, representations, warranties, commitments, proposals, offers and contracts concerning the subject matter hereof, whether oral or written.
16.    Headings.  The headings listed herein are for convenience only and do not constitute matters to be construed in interpreting this Amendment No. 1.
17.    Counterparts.  This Amendment No. 1 may be executed in any number of counterparts, each of which shall be an original, but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of this Amendment No. 1 by telefacsimile or other electronic method of transmission shall have the same force and effect as delivery of an original executed counterpart of this Amendment No. 1.  Any party delivering an executed counterpart of this Amendment No. 1 by telefacsimile or other electronic method of transmission shall also deliver an original executed counterpart of this Amendment No. 1, but the failure to do so shall not affect the validity, enforceability, and binding effect of this Amendment No. 1.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be duly executed and delivered by their authorized officers as of the day and year first above written. 
	
	
	BORROWERS:

	 

	PERFUMANIA HOLDINGS, INC.

	PERFUMANIA, INC.

	MAGNIFIQUE PARFUMES AND COSMETICS, INC.

	TEN KESEF II, INC.

	PERFMANIA PUERTO RICO,INC.

	QUALITY KING FRAGRANCE, INC.

	SCENTS OF WORTH, INC.

	FIVE STAR FRAGRANCE COMPANY, INC.

	NORTHERN GROUP, INC.

	 

	By: /S/ Michael W. Katz

	Michael W. Katz

	President and Chief Executive Officer

	 

	GUARANTORS:

	 

	ALADDIN FRAGRANCES, INC.

	NICHE MARKETING GROUP, INC.

	 

	By: /S/ Michael W. Katz

	Michael W. Katz

	President and Chief Executive Officer

	 

	MODEL REORG ACQUISITION, LLC

	 

	By PERFUMANIA HOLDINGS, INC.,

	as sole member

	 

	By: /S/ Michael W. Katz

	Michael W. Katz

	President and Chief Executive Officer

[SIGNATURES CONTINUED ON NEXT PAGE]

	
	
	WELLS FARGO BANK, NATIONAL ASSOCIATION, as

	Administrative Agent, Collateral Agent, Swing Line Lender and

	a Lender

	 

	By: /S/ Wai Yin Cheng

	Name: Wai Yin Cheng

	Title: Vice President

	
	
	REGIONS BANK

	 

	By: /S/ George Louis McKinley

	Name: George Louis McKinley

	Title:Attorney in Fact

	
	
	GENERAL ELECTRIC CAPITAL

	CORPORATION

	 

	By: /S/ Kristina M. Miller

	Name: Kristina M. Miller

	Title: Duly Authorized Signatory

	
	
	COMPASS BANK

	 

	By: /S/ Jason Nichols

	Name: Jason Nichols

	Title: Senior Vice President

	
	
	BANK LEUMI USA

	 

	By: /S/ John Grieco

	Name: John Grieco

	Title: EVP

	 

	BANK LEUMI USA

	 

	By: /S/ Alex Kozlowsky

	Name: Alex Kozlowsky

	Title: VP

	
	
	THE HUNTINGTON NATIONAL BANK

	 

	By: /S/ Derek C. Taylor

	Name: Derek C. Taylor

	Title: Vice President

	
	
	TD BANK, N.A.

	 

	By: /S/ Edward Behnen

	Name: Edward Behnen

	Title: Vice President

 

	
	
	RBS BUSINESS CAPITAL, a Division of RBS Asset

	Finance, Inc. a Subsidiary of RBS Citizens, NA

	 

	By: /S/ Michael E. [illegible]

	Name: Michael E. [illegible]

	Title: Senior Vice President

	
	
	BANK OF AMERICA, N.A

	 

	By: /S/ Joseph Becker

	Name: Joseph Becker

	Title: Managing DirectorEx 10.2 Form of Voting Agreement With Parlux and Nussdorfs

Exhibit 10.2
VOTING AGREEMENT
THIS VOTING AGREEMENT (this “Agreement”) is made and entered into as of December 23, 2011 by and among Parlux Fragrances, Inc., a Delaware corporation (the “Company”) and the undersigned stockholders (each a “Stockholder” and collectively, the “Stockholders”) of Perfumania Holdings, Inc., a Florida corporation (“Parent”).
RECITALS
A.    Concurrently with the execution of this Agreement, Parent, PFI Merger Corp., a Delaware corporation and wholly-owned subsidiary of Parent (“Merger Sub”), and the Company are entering into an Agreement and Plan of Merger of even date herewith (as it may be amended from time to time, the “Merger Agreement”), pursuant to which, among other things, (i) the Company will merge with an into Merger Sub (the “Merger”) and (ii) except as otherwise provided in the Merger Agreement, each outstanding share of the common stock of the Company, $.01 par value per share, will be converted into the right to receive the consideration set forth in the Merger Agreement.
B.    As of the date hereof, each Stockholder is the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of such number of shares of common stock, $.01 par value, of Parent (the “Parent Common Stock”) and options to purchase such number of shares of Parent Common Stock as is indicated on the signature page of this Agreement.
C.    As a condition and inducement to Parent and Company to enter into the Merger Agreement, the Stockholders (in the Stockholders’ capacity as such) are hereby agreeing to vote the Shares as described herein and to take such other actions as provided for herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements contained herein, and intending to be legally bound, the parties hereto agree as follows:
1.Certain Definitions. All capitalized terms that are used but not defined herein shall have the respective meanings ascribed to them in the Merger Agreement. For all purposes of and under this Agreement, the following terms shall have the following respective meanings:
(a)    “Expiration Date” shall mean the earliest to occur of (i) such date and time as the Merger Agreement shall have been terminated pursuant to Article 7 thereof, or (ii) such date and time as the Merger shall become effective in accordance with the terms and provisions of the Merger Agreement.
(b)    “Shares” shall mean (i) all securities of the Parent (including all shares of Parent Common Stock and, to the extent transferable by their terms, all options, warrants and other rights to acquire shares of Parent Common Stock) owned by any of the Stockholders as of the date 

hereof, and (ii) all additional securities of Parent (including all additional shares of Parent Common Stock and, to the extent transferable by their terms, all additional options, warrants and other rights to acquire shares of Parent Common Stock) of which the Stockholders acquire ownership during the period from the date of this Agreement through the Expiration Date (including by way of stock dividend or distribution, split-up, recapitalization, combination, exchange of shares and the like).
(c)    “Transfer” A Person shall be deemed to have effected a “Transfer” of a Share if such person directly or indirectly (i) sells, pledges, encumbers, assigns, grants an option with respect to, transfers or disposes of such Share or any interest in such Share, or (ii) enters into an agreement or commitment providing for the sale of, pledge of, encumbrance of, assignment of, grant of an option with respect to, transfer of or disposition of such Share or any interest therein.
2.    Transfer of Shares.  Except as expressly permitted by this Agreement, until the Expiration Date, no Stockholder shall directly or indirectly: (i) cause or permit any Transfer of any of the Shares of which Stockholder is the beneficial owner (x) unless each Person to which any of such Shares, or any interest in any of such Shares, is or may be transferred shall have: (A) executed a counterpart of this Agreement and a proxy in substantially the form attached hereto as Exhibit A and (B) agreed in writing to hold such Shares (or interest in such Shares) subject to all of the terms and provisions of this Agreement or (y) except by will or by operation of law, in which case this Agreement will bind the transferee; (ii) grant any proxies or powers of attorney, other than consistently with the terms of Section 3, or deposit any Shares into a voting trust or enter into a voting agreement with respect to any Shares; or (iii) take any action that would make any representation or warranty of such Stockholder contained herein untrue or incorrect or have the effect of preventing or disabling such Stockholder from performing any of such Stockholder's obligations under this Agreement.
3.    Agreement to Vote Shares.
(a)    Until the Expiration Date, each Stockholder agrees that, at every meeting of the stockholders of Parent called, and at every adjournment or postponement thereof, and on every action or approval by written consent of the stockholders of Parent, such Stockholder (in such Stockholder’s capacity as such) shall, or shall cause the holder of record on any applicable record date to, vote the Shares:
(i)    in favor of (A) the issuance of shares of Parent Common Stock pursuant to the Merger Agreement, (B) the amendment of the articles of incorporation of Parent to increase the number of shares of Parent Common Stock that Parent is authorized to issue to 35,000,000 shares, and (C) each of the other actions contemplated by the Merger Agreement;
(ii)    against approval of any proposal made in opposition to, or in competition with, the Merger or any other transactions contemplated by the Merger Agreement; and
(iii)    against any actions (other than those actions that relate to the Merger and any other transactions contemplated by the Merger Agreement) that are intended, or could reasonably be expected to, impede, interfere with, delay, postpone, discourage or adversely affect 

the Merger or any other transactions contemplated by the Merger Agreement.
(b)    In the event that a meeting of the stockholders of Parent is held, Stockholder shall, or shall cause the holder of record of the Shares on any applicable record date to, appear at such meeting or otherwise cause the Shares to be counted as present thereat for purposes of establishing a quorum.
(c)    No Stockholder shall enter into any agreement or understanding with any Person to vote or give instructions in any manner inconsistent with the terms of this Section 3.
(d)    Except as expressly set forth in this Section 3, each Stockholder shall retain at all times the right to vote such Stockholder’s Shares in such Stockholder’s sole discretion and without any other limitation on matters that are at any time or from time to time presented for consideration to the Company’s stockholders.
4.    Directors and Officers.  Notwithstanding any provision of this Agreement to the contrary, nothing in this Agreement shall (or require the Stockholders to attempt to) limit or restrict any designee of any Stockholder who is a director or officer of Parent from acting in such capacity or voting in such person’s sole discretion on any matter (it being understood that this Agreement shall apply to each Stockholder solely in such Stockholder’s capacity as a stockholder of the Parent).
5.    No Ownership Interest.  Nothing contained in this Agreement shall be deemed to vest in the Company any direct or indirect ownership or incidence of ownership of or with respect to any Shares.  All rights, ownership and economic benefits of and relating to the Shares shall remain vested in and belong to the Stockholders, and the Company shall not have any authority to direct the Stockholders in the voting of any of the Shares, except as otherwise provided herein.
6.    Representations and Warranties of the Stockholder.  Each Stockholder hereby represents and warrants to the Company as follows:
(a)    Power; Binding Agreement.  Such Stockholder has full power and authority to execute and deliver this Agreement, to perform the Stockholder’s obligations hereunder and to consummate the transactions contemplated hereby.  The execution, delivery and performance by such Stockholder of this Agreement, the performance by such Stockholder of its obligations hereunder and the consummation by such Stockholder of the transactions contemplated hereby have been duly and validly authorized by such Stockholder and no other actions or proceedings on the part of  such Stockholder is necessary to authorize the execution and delivery by it, him or her of this Agreement, the performance by such Stockholder of its, his or her obligations hereunder or the consummation by such Stockholder of the transactions contemplated hereby.  This Agreement has been duly executed and delivered by such Stockholder and constitutes the valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms.
(b)    No Conflicts.  Except as set forth in the Merger Agreement, no filing with, and no permit, authorization, consent, or approval of, any Governmental Entity is necessary for the execution by the Stockholder of this Agreement, the performance by the Stockholder of such Stockholder’s obligations hereunder and the consummation by the Stockholder of the transactions 

contemplated hereby.  None of the execution and delivery by the Stockholder of this Agreement, the performance by the Stockholder of such Stockholder’s obligations hereunder or the consummation by the Stockholder of the transactions contemplated hereby will (i) result in a violation or breach of, or constitute (with or without notice or lapse of time or both) a default (or give rise to any third party right of termination, cancellation, material modification or acceleration) under any of the terms, conditions or provisions of any note, loan agreement, bond, mortgage, indenture, license, contract, commitment, arrangement, understanding, agreement, or other instrument or obligation of any kind to which such Stockholder is a party or by which the Stockholder or any of the Stockholder’s properties or assets may be bound, or (ii) violate any order, writ, injunction, decree, judgment, order, statute, rule, or regulation applicable to the Stockholder or any of the Stockholder’s properties or assets.
(c)    Absence of Litigation.  As of the date hereof, there is no suit, action, investigation or proceeding pending or, to the knowledge of such Stockholder, threatened against or affecting the Stockholder that could reasonably be expected to materially impair the ability of the Stockholder to perform its, his or her obligations hereunder or to consummate the transactions contemplated hereby on a timely basis.
(d)    Ownership of Shares.  Such Stockholder (i) is the beneficial owner of, and has good and valid title to, the shares of Parent Common Stock indicated on the signature page of this Agreement, all of which are free and clear of any Liens (except any Liens arising under securities laws or arising hereunder), (ii) is the owner of options that are exercisable for the number of shares of Parent Common Stock indicated on the signature page of this Agreement, all of which options and shares of Parent Common Stock issuable upon the exercise of such options are free and clear of any Liens (except any Liens arising under securities laws or arising hereunder), and (iii) does not own, beneficially or otherwise, any securities of the Parent other than the shares of Parent Common Stock, options to purchase shares of Parent Common Stock, and shares of Parent Common Stock issuable upon the exercise of such options indicated on the signature page of this Agreement.
(e)    Voting Power.  Except as noted on Schedule I attached hereto, such Stockholder has and will have sole voting power, sole power of disposition, sole power to issue instructions with respect to the matters set forth herein, and sole power to agree to all of the matters set forth in this Agreement, in each case with respect to all of such Stockholder’s Shares, with no limitations, qualifications or restrictions on such rights, subject to applicable federal securities laws and the terms of this Agreement.  Except as noted on Schedule I, there are no proxies, voting trusts or understandings to or by which such Stockholder is a party or bound or that expressly requires that any of such Stockholder’s Shares be voted in a specific manner other than as provided in this Agreement or that provide for any right on the part of any other person other than Stockholder to vote such Shares.  Notwithstanding anything in this Agreement to the contrary, nothing herein shall require the Stockholder to exercise any option to purchase shares of Company Common Stock.
(f)    Information.  None of the information relating to the Stockholder provided in writing by or on behalf of the Stockholder for inclusion in documents filed by the Company with the Securities and Exchange Commission (the “SEC”) will, at the respective times such information is sent or given to Parent or the Company, contain any untrue statement of material fact or omit to 

state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  The Stockholder agrees to promptly notify the Company of any required corrections with respect to any such information.
(g)    No Finder’s Fees.  No broker, investment banker, financial advisor or other person is entitled to any broker’s, finder’s, financial adviser’s or other similar fee or commission in connection with the transactions contemplated by the Merger Agreement or this Agreement based upon arrangements made by or on behalf of such Stockholder.
(h)    Reliance by Parent and Company.  Such Stockholder understands and acknowledges that both Parent and Company are entering into the Merger Agreement in reliance upon the Stockholder’s execution and delivery of this Agreement.
7.    Representations and Warranties of the Company.  The Company represents and warrants to the Stockholders as follows:
(a)    Power; Binding Agreement.  The Company has full power and authority to execute and deliver this Agreement, to perform its obligations hereunder and, subject to receipt of Company Shareholder Approval, to consummate the transactions contemplated hereby.  The execution, delivery and performance by the Company of this Agreement, the performance by it of its obligations hereunder and the consummation by it of the transactions contemplated hereby have been duly and validly authorized by the Company and no other actions or proceedings on its part is necessary to authorize the execution and delivery of this Agreement, or, subject to receipt of the Company Shareholder Approval, the performance by it of its obligations hereunder and the consummation by it of the transactions contemplated hereby.  This Agreement has been duly executed and delivered by the Company and constitutes its valid and binding obligation, enforceable against it in accordance with its terms.
(b)    No Conflicts.  Except as set forth in the Merger Agreement, no filing with, and no permit, authorization, consent, or approval of, any Governmental Entity is necessary for the execution by the Company of this Agreement, the performance by the Company of its obligations hereunder and the consummation by it of the transactions contemplated hereby.  None of the execution and delivery by the Company of this Agreement, the performance by it of its obligations hereunder or the consummation by it of the transactions contemplated hereby will (i) result in a violation or breach of, or constitute (with or without notice or lapse of time or both) a default (or give rise to any third party right of termination, cancellation, material modification or acceleration) under any of the terms, conditions or provisions of any note, loan agreement, bond, mortgage, indenture, license, contract, commitment, arrangement, understanding, agreement, or other instrument or obligation of any kind to which it is a party or by which it or any of its properties or assets may be bound, or (ii) violate any order, writ, injunction, decree, judgment, order, statute, rule, or regulation applicable to it or any of its properties or assets.
8.    Certain Restrictions.  No Stockholder shall directly or indirectly, take any action that would make any representation or warranty of the Stockholder contained herein untrue or incorrect.
9.    Disclosure.  Subject to reasonable prior notice and approval (which shall not be 

unreasonably withheld or delayed), the Stockholders hereby authorize Parent and Company to publish and disclose each Stockholder’s:  identity, ownership of Shares and the nature of each Stockholder’s commitments, arrangements and understandings under this Agreement in all documents and schedules filed with the SEC and any press release or other disclosure document that Parent or Company determines to be necessary or desirable in connection with the Merger and any transactions related to the Merger.
10.    Further Assurances.  Subject to the terms and conditions of this Agreement, each Stockholder shall use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary to fulfill such Stockholder’s obligations under this Agreement.  
11.    Legending of Shares.  If so requested by Parent, each Stockholder agrees that the Shares shall bear a legend stating that they are subject to this Agreement.
12.    Termination.  This Agreement shall terminate and shall have no further force or effect as of the Expiration Date.  Notwithstanding the foregoing, nothing set forth in this Section 12 or elsewhere in this Agreement shall relieve either party hereto from liability, or otherwise limit the liability of either party hereto, for any willful breach of this Agreement prior to the Expiration Date.
13.    Miscellaneous.
(a)    Validity.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of the other provisions of this Agreement, which will remain in full force and effect.  In the event any Governmental Entity of competent jurisdiction holds any provision of this Agreement to be null, void or unenforceable, the parties hereto shall negotiate in good faith and execute and deliver an amendment to this Agreement in order, as nearly as possible, to effectuate, to the extent permitted by law, the intent of the parties hereto with respect to such provision.
(b)    Binding Effect and Assignment.  This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, but neither this Agreement nor any of the rights, interests or obligations of the parties hereto may be assigned by any of the parties without the prior written consent of the others.
(c)    Amendments; Waiver.  This Agreement may be amended by the parties hereto, and the terms and conditions hereof may be waived, only by an instrument in writing signed on behalf of each of the parties hereto, or, in the case of a waiver, by an instrument signed on behalf of the party waiving compliance.
(d)    Specific Performance; Injunctive Relief.  The parties hereto acknowledge that the Company shall be irreparably harmed and that there shall be no adequate remedy at law for a violation of any of the covenants or agreements of the Stockholders set forth herein.  Therefore, it is agreed that, in addition to any other remedies that may be available to the Company upon any such violation, the Company shall have the right to enforce such covenants and agreements by 

specific performance, injunctive relief or by any other means available to the Company at law or in equity.
(e)    Notices.  All notices and other communications pursuant to this Agreement shall be in writing and deemed to be sufficient if contained in a written instrument and shall be deemed given if delivered personally, telecopied, sent by nationally-recognized overnight courier or mailed by registered or certified mail (return receipt requested), postage prepaid, to the parties at the following address (or at such other address for a party as shall be specified by like notice):
If to the Company:
Parlux Fragrances, Inc. 
5900 N. Andrews Avenue 
Suite 500 
Fort Lauderdale, FL 33309  
Attn: Frederick E. Purches, Chief Executive Officer
Facsimile No.: (212)752-5526

with a copy to (which shall not constitute notice) to:
Squire, Sanders & Dempsey (US) LLP 
200 South Biscayne Blvd. 
Suite 4100 
Miami, FL 33131 
Attn: Alvin B. Davis
Facsimile No.: (305)577-7001

If to the Stockholders:
To the respective addresses and fax numbers shown on the signature pages for each Stockholder
with copies (which shall not constitute notice) to:
Alfred R. Paliani Esq. 
General Counsel 
Quality King Distributors, Inc. 
35 Sawgrass Drive 
Bellport, NY  11713
Facsimile No.: (631)439-2262 
 
Skadden, Arps, Slate, Meagher & Flom LLP 
Four Times Square 
New York, NY 10036 
Attn:  Richard J. Grossman, Esq.
Facsimile No.: (917)777-2116

(f)    No Waiver.  The failure of any party hereto to exercise any right, power or remedy provided under this Agreement or otherwise available in respect of this Agreement at law or in equity, or to insist upon compliance by any other party with its obligation under this Agreement, and any custom or practice of the parties at variance with the terms of this Agreement, shall not constitute a waiver by such party of such party’s right to exercise any such or other right, power or remedy or to demand such compliance.
(g)    No Third Party Beneficiaries.  This Agreement is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder.
(h)    Governing Law.  This Agreement shall be governed by the laws of the State of Delaware, without reference to any provision that would require the application of the laws of another jurisdiction.
(i)    Submission to Jurisdiction.  All actions and proceedings arising out of or relating to this Agreement shall be heard and determined exclusively in any Delaware state or federal court sitting in New Castle County.  The parties hereto hereby (i) submit to the exclusive jurisdiction of any state or federal court sitting in the New Castle County for the purpose of any action arising out of or relating to this Agreement brought by any party hereto, and (ii) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, that the venue of the action is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any of the above-named courts.
(j)    Rules of Construction.  The parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.
(k)    Entire Agreement.  This Agreement contains the entire understanding of the parties hereto in respect of the subject matter hereof, and supersede all prior negotiations, agreements and understandings, both written and oral, between the parties hereto with respect to the subject matter hereof.
(l)    Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated herein are not affected in any manner materially adverse to any party hereto.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to give effect to the original intent of the parties hereto as closely as possible in a mutually acceptable manner.
(m)    Interpretation.

(i)    Whenever the words “include,” “includes” or “including” are used in this Agreement they shall be deemed to be followed by the words “without limitation.” As used in this Agreement, the term “affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under the Exchange Act.
(ii)    The article and section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties hereto and shall not in any way affect the meaning or interpretation of this Agreement.
(n)    Counterparts.  This Agreement may be executed in several counterparts, each of which shall be an original, but all of which together shall constitute one and the same agreement.
(o)    Stockholder Obligations.  The obligations of the Stockholders under this Agreement shall be several and not joint.
[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed by their respective duly authorized officers to be effective as of the date first above written.
        
	
		
	PARLUX FRAGRANCES, INC.

	 
	 

	By:
	/S/ Frederick E. Purches

	Name:
	Frederick E. Purches

	Title:
	Chairman and Chief Executive Officer

    
	
	
	STOCKHOLDER:

	/S/ Glenn Nussdorf

	Glenn Nussdorf

	 

	Address:

	c/o Perfumania Holdings, Inc.

	35 Sawgrass Drive, Suite 2

	Bellport, New York 11713

	Attn:  Michael W. Katz

	 

	Share beneficially owned:

	
			
	2,576,657
	

	shares of Parent Common Stock

	443,757
	

	shares of Parent Common Stock issuable upon

	 
	exercise outstanding options or warrants

        
	
	
	STOCKHOLDER:

	/S/ Stephen Nussdorf

	Stephen Nussdorf

	 

	Address:

	c/o Perfumania Holdings, Inc.

	35 Sawgrass Drive, Suite 2

	Bellport, New York 11713

	Attn:  Michael W. Katz

	 

	Share beneficially owned:

	
			
	2,327,375
	

	shares of Parent Common Stock

	443,757
	

	shares of Parent Common Stock issuable upon

	 
	exercise outstanding options or warrants

    
	
	
	STOCKHOLDER:

	/S/ Arlene Nussdorf

	Arlene Nussdorf

	 

	Address:

	c/o Perfumania Holdings, Inc.

	35 Sawgrass Drive, Suite 2

	Bellport, New York 11713

	Attn:  Michael W. Katz

	 

	Share beneficially owned:

	
			
	1,745,444
	

	shares of Parent Common Stock

	443,757
	

	shares of Parent Common Stock issuable upon

	 
	exercise outstanding options or warrants

SCHEDULE I
EXCEPTIONS
[ ]

EXHIBIT A
IRREVOCABLE PROXY 
The undersigned stockholder (the “Stockholder”) of Perfumania Holdings, Inc. (“Parent”) hereby irrevocably (to the fullest extent permitted by law) appoints [______________] and [_____________] of Parlux Fragrances, Inc., a Delaware corporation (the “Company”), and each of them, as the sole and exclusive attorneys and proxies of the undersigned, with full power of substitution and resubstitution, to vote and exercise all voting and related rights (to the full extent that the undersigned is entitled to do so) with respect to all of the shares of capital stock of the Parent that now are or hereafter may be beneficially owned by the undersigned, and any and all other shares or securities of the Parent issued or issuable in respect thereof on or after the date hereof (collectively, the “Shares”) in accordance with the terms of this Irrevocable Proxy until the Expiration Date (as defined below).  Upon the undersigned’s execution of this Irrevocable Proxy, any and all prior proxies given by the undersigned with respect to any Shares are hereby revoked and the undersigned agrees not to grant any subsequent proxies with respect to the Shares until after the Expiration Date. 
This Irrevocable Proxy is irrevocable to the fullest extent permitted by law, is coupled with an interest and is granted pursuant to that certain Voting Agreement of even date herewith by and among the Company and the undersigned stockholder, and is granted in consideration of the Company entering into that certain Agreement and Plan of Merger of even date herewith (the “Merger Agreement”), among Parent, Merger Sub, a Delaware corporation and wholly-owned subsidiary of Parent (“Merger Sub”), and the Company.  The Merger Agreement provides for, among other things, (i) the Company will merge with an into Merger Sub (the “Merger”) and (ii) except as otherwise provide in the Merger Agreement, each outstanding share of the common stock of the Company, $.01 par value per share will be converted into the right to receive the consideration set forth in the Merger Agreement. 
As used herein, the term “Expiration Date” shall mean the earlier to occur of (i) such date and time as the Merger Agreement shall have been terminated pursuant to Article 7 thereof, or (ii) such date and time as the Merger shall become effective in accordance with the terms and provisions of the Merger Agreement.
The attorneys and proxies named above, and each of them, are hereby authorized and empowered by the undersigned, at any time prior to the Expiration Date, to act as the undersigned’s attorney and proxy to vote the Shares, and to exercise all voting, consent and similar rights of the undersigned with respect to the Shares (including, without limitation, the power to execute and deliver written consents) at every annual, special, adjourned or postponed meeting of stockholders of the Parent and in every written consent in lieu of such meeting:  (i) in favor of (A) the issuance of shares of Parent Common Stock pursuant to the Merger Agreement, (B) the amendment of the articles of incorporation of Parent to increase the number of shares of Parent Common Stock that Parent is authorized to issue to 35,000,000 shares, and (C) each of the other actions contemplated by the Merger Agreement; (ii) against approval of any proposal made in opposition to, or in competition with, the Merger or any other transactions contemplated by the Merger Agreement; and (iii) against any actions (other than those actions that relate to the Merger and any other transactions contemplated by the Merger Agreement) that is intended, or could reasonably be 

expected to, impede, interfere with, delay, postpone, discourage or adversely affect the Merger or any other transactions contemplated by the Merger Agreement.
The attorneys and proxies named above may not exercise this Irrevocable Proxy on any other matter.  The undersigned stockholder may vote the Shares on all other matters.
Any obligation of the undersigned hereunder shall be binding upon the successors and assigns of the undersigned.
This Irrevocable Proxy shall terminate, and be of no further force and effect, automatically upon the Expiration Date.
This Irrevocable Proxy shall be governed by the laws of the State of Delaware, without reference to rules of conflicts of law.
All actions and proceedings arising out of or relating to this Irrevocable Proxy shall be heard and determined exclusively in any Delaware state or federal court sitting in New Castle County.  The parties hereto hereby (i) submit to the exclusive jurisdiction of any state or federal court sitting in the New Castle County for the purpose of any action arising out of or relating to this Irrevocable Proxy brought by any party hereto, and (ii) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, that the venue of the action is improper, or that this Irrevocable Proxy or the transactions contemplated hereby may not be enforced in or by any of the above-named courts.
	
			
	PARLUX FRAGRANCES, INC.
	 
	SHAREHOLDER:

	By: ___________________
	 
	Name: ________________

	Name: _________________
	 
	 

	Title: __________________
	 
	 

*****IRREVOCABLE PROXY ****

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