INDEX NO.

650403/2016

FILED: NEW YORK COUNTY CLERK 01/25/2016 05:17 PM

NYSCEF DOC. NO. 1

RECEIVED NYSCEF: 01/25/2016

Anthony J. Viola
Andre K. Cizmarik
MINTZ, LEVIN, COHN, FERRIS,
GLOVSKY AND POPEO, P.C.
666 Third Avenue
New York, NY 10017
(212) 935-3000
Attorneys for Plaintiffs
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
X
PARLUX FRAGRANCES, LLC (successor to
PARLUX FRAGRANCES, INC.) and
PERFUMANIA HOLDINGS, INC.,

Index No.

Plaintiffs,
SUMMONS
-againstDate Index No. Purchased:
S. CARTER ENTERPRISES, LLC and SHAWN .
CARTER,
Defendants.
X
To the above named Defendants:
You are hereby summoned to answer the complaint in this action and to serve a copy of
your answer on the Plaintiff's attorneys within 20 days after the service of this summons,
exclusive of the day of service (or within 30 days after the service is complete if this summons is
not personally delivered to you within the State of New York); and in case of your failure to
appear or answer, judgment will be taken against you by default for the relief demanded in the
complaint.

The basis of venue is proper in this Court under CPLR 503(a) and (c) because Parlux's
principal office is located in New York County.
Dated: January 25, 2016
New York, New York
MINTZ LEVIN COHN FERRIS GLOVSKY AND
POPEO, P.C.
By:

To:
S. Carter Enterprises, LLC
15 North Mill Street,
Nyack, New York 10960-3015
Shawn Carter
195 Hudson Street, Apt. 84
New York, New York 10013-1813

/s/ Anthony J. Viola

Anthony J. Viola
Andre K. Cizmarik
666 Third Avenue
New York, New York 10017
Tel.: (212) 935-3000
Attorneys for Plaintiffs

Anthony J. Viola
Andre K. Cizmarik
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
666 Third Avenue
New York, NY 10017
(212) 935-3000
Attorneys for Plaintiffs
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
X
PARLUX FRAGRANCES, LLC (successor to
PARLUX FRAGRANCES, INC.) and
PERFUMANIA HOLDINGS, INC.,
Plaintiffs,

Index No.

Hon.

-againstCOMPLAINT
S. CARTER ENTERPRISES, LLC and SHAWN
CARTER,
Defendants.
X
Plaintiffs Parlux Fragrances, LLC (successor to Parlux Fragrances, Inc.) ("Parlux") and
Perfumania Holdings, Inc. ("Perfumania"), through their attorneys Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C., as and for their Complaint against S. Carter Enterprises, LLC and
Shawn Carter (collectively, "Defendants") allege as follows, upon personal knowledge as to their
own acts and otherwise upon information and belief:
PARTIES
1.

Plaintiff Parlux is a Delaware corporation with a principal place of business at

630 Third Avenue, New York, New York. Parlux owns and/or licenses prestige celebrity and
designer fragrance beauty product brands and manufactures and distributes those brands to
retailers and distributors throughout the world.

2.

Plaintiff Perfumania is a Florida corporation with a principal place of business at

35 Sawgrass Drive, Bellport, New York. Perfumania is the parent of Parlux and, among other
things, through its various subsidiaries, is involved in the licensing, design, distribution and
marketing of prestige designer and celebrity fragrances.
3.

Defendant S. Carter Enterprises, LLC ("Carter Enterprises") is a Delaware limited

liability company registered to do business in New York with a registered agent located at 15
North Mill Street, Nyack, New York.
4.

Defendant Shawn Carter ("Shawn Carter" or "Jay Z") is an individual residing in

the State of California.

5.

Carter Enterprises owns and controls the rights to market the name and any

related trademarks of Jay Z.

6.

Artistic Brands Development, LLC (f/k/a Iconic Fragrances, LLC) ("Artistic

Brands") is a Delaware limited liability company with its principal offices at 6990 N.W. 25th
Street, Miami, Florida.
7.

Marcy Fragrance Trading Co. LLC ("Marcy Fragrance") is a Delaware limited

liability company with a principal place of business at 1411 Broadway, New York, New York.
8.

Marcy Fragrance owns a 40% membership interest in Artistic Brands.

9.

Shawn Carter is the Manager and 100% member of Marcy Fragrance.

10.

Shawn Carter is the Manager and 100% member of Carter Enterprises.

JURISDICTION AND VENUE

11.

This Court has jurisdiction over the defendants pursuant to CPLR 301 and 302

given that one or more of the agreements at issue were negotiated and executed in New York
State, that Carter Enterprises and Marcy Fragrance are each deemed to be a resident of New

York State, and that Shawn Carter owns and manages each of Carter Enterprises and Marcy
Fragrance.
12.

Venue is proper in this Court under CPLR 503(a) and (c) because Parlux's

principal office is located in New York County.

FACTS
13.

On or about April 18, 2012, Defendants Carter Enterprises and Shawn Carter,

individually, entered into a license (the "License Agreement") with Artistic Brands pursuant to
which Carter Enterprises, as "Licensor," granted Artistic Brands the exclusive right and license
to use the trademark and approved likeness of Jay Z in the manufacture, distribution, promotion,
and sale of fragrances and certain related beauty products.
14.

Carter Enterprises signed the License Agreement.

15.

Shawn Carter, individually, also signed the License Agreement, agreeing to be

bound by Articles 2C, 2D and 11E, which, inter alia, imposed certain obligations upon him
individually.
16.

The License Agreement provides at Article 18(D) that it "shall be construed and

interpreted in accordance with the laws of the State of New York . . . ."
17.

At or about the same time, and as was required by the License Agreement (at

Articles 2-B and 20), Artistic Brands and Parlux entered into an exclusive sub-license agreement
(the "Sub-License Agreement") pursuant to which Parlux obtained the sole and exclusive,
worldwide right to manufacture, promote, and distribute Jay Z branded fragrances.
18.

Both Shawn Carter, individually, and Carter Enterprises signed the Sub-License

Agreement and gave their explicit consent to it.

19.

In the Sub-License Agreement both Shawn Carter and Carter Enterprises agreed

that Parlux has the right to enforce the License Agreement against each of them to its full extent.
The Launch of the GOLD JAY Z Fragrance Brand
20.

The GOLD JAY Z fragrance brand was launched in late 2013 and the first

shipment date for the initial launch took place on or about October 31, 2013.
21.

The launch started out successfully and the product initially received rave reviews

from Parlux's retailer customers.

22.

However, in the fragrance industry, it is virtually impossible to sustain the success

of a celebrity fragrance brand without: (i) promotional support from the celebrity in the form of
public appearances; and (ii) regularly updating and refreshing the brand with "flanker" launches
and new line extensions, which are fragrance launches using new packaging, often new fragrance
scents and some variation on the name of the originally launched brand.
23.

Under the License Agreement and the Sub-License Agreement, Shawn Carter and

Carter Enterprises had specific obligations in both regards.

24.

Shawn Carter and Carter Enterprises have completely and willfully breached on

both counts, thus substantially defeating the purpose of the License Agreement and Sub-License
Agreement, denying Plaintiffs their consideration under those Agreements, crippling the
emerging brand and leading to millions of dollars in lost sales, all the while collecting a
handsome guaranteed minimum royalty as well as Perfumania common stock and warrants.
Hence, Plaintiffs do not have a complete and adequate remedy at law, and rescission is essential
to their protection.

JAY Z's Failure to Make Public Appearances

Pursuant to Article 11E of the License Agreement, Carter Enterprises is obligated

25.

"to make Artist [Jay Z] available at reasonable intervals and for reasonable periods (which shall
involve at least three (3) appearances in each Sales Year of the Term, at least one of which shall
take place in New Yorkg City) for promotional tie-ins serving to associate Artist [Jay Z] with the
Licensed Products." Additionally, Shawn Carter signed the License Agreement and specifically
obligated himself to make the personal appearances required by Article 11(E).
Notwithstanding Shawn Carter's and Carter Enterprises' contractual obligations,

26.

since the launch of GOLD JAY Z in October 2013 through the present, Jay Z has steadfastly
refused to make any personal appearances in support of the fragrance brand and has not made
one single public appearance to promote this fragrance brand, even though he should have made
at least six such appearances by this time.
The following are but a few examples of Parlux's attempts to obtain Jay Z's

27.

support of the fragrance brand, without success:

a.

Parlux arranged for Jay Z to appear in the promotional video that was
produced to introduce the GOLD JAY Z fragrance brand. Jay Z declined.

b.

Parlux arranged for Jay Z to appear on Good Morning America and then to
appear at Sephora (in the same building) to showcase the GOLD JAY Z
launch. Jay Z declined.

c.

Parlux arranged for Jay Z to be interviewed by Peter Born, a senior reporter

for Women's Wear Daily, which would have enabled Mr. Carter and the
GOLD JAY Z launch to occupy the front cover of Women's Wear Daily. Jay
Z declined.

d.

Parlux asked Jay Z to make a promotional appearance at Macy's in connection

with the GOLD JAY Z brand. Jay Z declined.

e.

Parlux asked that Jay Z make several social media posts as part of a
promotional campaign for the GOLD JAY Z brand, a quite typical component
of an overall marketing strategy for any brand in today's world. He declined.

f.

When Parlux issued its press release in connection with the launch of the
GOLD JAY Z brand, it asked JAY Z for a quote to include in the release. He
declined.

g.

As part of an overall marketing campaign to promote the GOLD JAY Z brand,

Parlux proposed a contest for consumers in which it had Jacob the Jeweler
create a GOLD JAY Z bottle with an'18-carat gold cap and poured gold
exterior on the bottle at a cost in excess of $20,000, with the objective being
that the contest winner would win the gold bottle and cap. Parlux presented
Mr. Carter's team with approximately five different concepts for this contest
promotion. Mr. Carter rejected all of them and kept the prototype gold bottle.

28.

These failures were scheduled to be discussed in January 2014 with Jay Z and his

business manager, Desiree Perez. Jay Z failed to appear. Ms. Perez did appear, acknowledged
Defendants' failure to support the brand and its launch, and promised that the situation would be
rectified and that Jay Z would in the future abide by the personal appearance obligations of the
contracts and support the fragrance brand.
29.

That never happened.

30.

The failure of Jay Z to show up for any public appearances or otherwise support

and cooperate in the brand's launch and promotion is such a substantial, material and
fundamental breach so as to defeat the purpose of entering into the License Agreement and SubLicense Agreement.
31.

As discussed below, this was not the only material breach by Shawn Carter and

Carter Enterprises.
Jay Z's and Carter Enterprises' Failure to Assist in Developing Flanker Fragrances
32.

Department stores require regular extensions of and additions to fragrance lines

(known as "flankers") in order to keep the brand fresh in the mind of the consumer so that sales
remain strong.
33.

In fact, the License Agreement contemplates, in Article 7(B), the launch of

subsequent product lines after the initial launch of the first Jay Z fragrance, i.e., GOLD JAY Z.
Defendants had certain approval rights with respect thereto. However, under the License
Agreement, Defendants were obligated to "work together" with Parlux "in good faith" to develop
additional products (Article 7.C.), make every reasonable effort to adhere to agreed product
development schedules (Article 7.C.i.), and work "cooperatively" to modify and develop new
products (Article 7.C.ii.). Approvals were not to be unreasonably withheld (Article 7.A.iii.).
34.

Because of the ramp-up time associated with marketing and developing a flanker

fragrance, shortly after the original GOLD JAY Z launch the marketing and product
development professionals at Parlux began working on developing concepts and renderings for
several flankers for the GOLD JAY Z brand: the Trinity Collection, which included 3 different
bottle and "juice" (fragrance) options; and the Artisanal Collection, the Private Collection and
the Culture Collection, each with 3 different bottle and juice options.

35.

Indeed, as early as June 25, 2014, Parlux representatives met with Jay Z's

business manager, Desiree Perez, in Miami, and provided Ms. Perez with drawings and concepts
for these flanker collections.
36.

Since it takes a considerable amount of time and effort to transition from

drawings and concepts to actual product development and manufacturing, Parlux was eager to
receive Jay Z's comments/revisions or approval so as to be able to move the process forward.
37.

At the Miami meeting on June 25, Ms. Perez informed Parlux representatives that

she would arrange a meeting in New York between Jay Z and Parlux's product and fragrance
creative team within ten days of the Miami meeting to get some decisions from Jay Z so Parlux
could move forward with the project.
38.

Despite repeated telephone calls and messages throughout the summer of 2014 to

Jay Z's team, that meeting never happened. In fact, despite repeated efforts to meet with Jay Z,
Parlux was informed in late August that Jay Z was unavailable and that, "[h]e's not back till
October."
39.

Based on the representations that Jay Z was not available until October, attempts

were made in late September to set up a meeting with Jay Z. In response, Ms. Perez advised that
Jay Z "is not back till December."
40.

Moreover, Parlux did not receive any substantive feedback or approval from Jay

Z or his management team with respect to the proposed flanker collections or the fragrance
scents that had been developed for those collections and provided to his team.
41.

Notwithstanding Jay Z's unavailability, Parlux continued to work on these design

concepts, which were evolving. On October 14, 2014, Parlux sent bottles, cartons and fragrance
juices to Desiree Perez for the GOLD JAY Z NOIR, GOLD JAY Z PARIS LIGHTS and GOLD

JAY Z LONDON UNDERGROUND flankers that Parlux had developed and for which it was
seeking approval from Defendants. Thereafter, Defendants requested some revisions to the color
of the boxes, and Parlux made all of the requested changes.
42.

Parlux was still eager to meet with Jay Z to finalize the flanker lines and obtain

his approval. Obviously, for a celebrity branded fragrance to have any chance of success, the
celebrity's "buy-in," excitement about, and support for, the product is very important.
43.

Despite Defendants' failures to abide by their contractual obligations, Parlux

continued to attempt to support the brand by developing additional lines and products.
44.

Based on Ms. Perez's representations that Jay Z was not available until

December, Parlux's package designer contacted Ms. Perez in early December asking for a few
minutes with Jay Z to go through these revisions with him. Ms. Perez responded on December 9,
2014 that Jay Z was "not available this year."
45.

Thus, despite repeated requests for a meeting with Jay Z, Jay Z was unavailable

from July to December 2014. And, virtually no feedback from, or attention by, Defendants
occurred during that entire time.
46.

This pattern continued. Despite more phone calls, Parlux could not get either a

meeting with Jay Z or his approval for the bottles, packaging or fragrances in January 2015,
despite the fact that the International Sales meeting was taking place the week of January 26,
2015. As a result, Parlux had nothing new to present on the JAY Z brand.
47.

In February 2015, on multiple occasions, Parlux sent several samples of proposed

fragrances (the bottles and the liquid inside) to Jay Z's team and each time Jay Z's team either
lost the samples or could not locate them. Finally, in late February 2015, after sending samples

to Jay Z's team for the fourth time in the past month, Jay Z's team finally acknowledged receipt
of the samples.
48.

Subsequently, more phone calls and emails were directed to Jay Z's business

team, but no substantive responsive was ever received from Jay Z or his team.
49.

By way of example only, on April 9, 2015 Ms. Perez was reminded in an e-mail

that the Jay Z brand was suffering due to neglect from Jay Z and his team. Ms. Perez responded,
"we are super busy on this [i.e., another] project and can't dedicate time to anything else at the
moment." The context of the e-mail made plain that Carter Enterprises and Jay Z were involved
in another project and were unable and unwilling to spend any time in connection with launching
additional Jay Z fragrances or to otherwise support the brand.
50.

More than 18 months have elapsed since the June 2014 presentation in Miami and

Parlux has not been able to finalize the prototype and commence manufacturing additional Jay Z
fragrance products or lines.
51.

Parlux's large department store customers have been regularly urging Parlux to

launch a flanker for GOLD JAY Z for the past eighteen months and these customers have
expressed disappointment that the flankers were never launched. Now, instead of selling GOLD
JAY Z, these department stores are returning their inventory of it resulting in lost profits and
related handling charges being incurred by Parlux.
52.

Parlux has invested millions of dollars in this license, including by paying to

Defendants nearly $2 million in actual and guaranteed minimum royalties under the contracts.
Parlux has made every effort to accommodate Jay Z's schedule but to no avail.

10

53.

Parlux's concern that sales would decline without a flanker to update the GOLD

JAY Z brand have been proven true. Sales of Gold Jay Z have declined considerably because of
Jay Z's and his team's lack of interest in supporting and promoting his own brand.
54.

In particular, this inordinate delay has frustrated Parlux's ability to achieve

sufficient net sales to cover its guaranteed minimum royalty obligations and minimum
advertising expenditure obligation under the License Agreement. Major department store
customers now no longer wish to carry the brand because of the lack of any flankers or line
extensions and the failure by Jay Z to support his own brand.
55.

Moreover, with regard to the proposed flankers, Parlux has expended

approximately $60,000 in out-of-pocket expense in development costs, in addition to the

significant hours expended by Parlux's internal staff to no avail.
56.

Based on Parlux's track record and expertise in the industry, the Jay Z fragrance

brand was realistically projected to be highly profitable with sales of $15 million in the first year
after the launch and $35 million in the second and subsequent years after the launch (including
flankers), at wholesale.
57.

However, in the first year following launch, this brand generated only about $14

million in net sales, and did much worse in the second year following launch. Parlux has
experienced a net loss on this brand after taking into account marketing and promotional
expenses, guaranteed minimum royalties and all other operating expenses associated with the
brand.
58.

After factoring in the returns that retailers are making of GOLD JAY Z because of

the absence of Jay Z's participation and a follow-on flanker line, this brand experienced sales in
the second year after the launch of only $6.1 million, rather than the projected $35 million.

11

59.

It is expected that sales in subsequent years will continue to fall.

60.

As a result, rather than an anticipated profit (for just the first three years) of

$16.15 million, Parlux has suffered a loss, including a dimunition in the value of the equity of the
brand (which is a multiple of revenues).
61.

Despite those losses to Parlux, Parlux has paid to Defendants almost $2 million in

guaranteed minimum royalties.

62.

The lack of responsiveness of Jay Z and his team and Jay Z's failure to make

public appearances has completely undermined the success of the GOLD JAY Z brand resulting
in lost sales and profits on the existing GOLD JAY Z line, eliminating the prospect for additional
sales and profits on subsequent flanker lines, and essentially eliminating the prospects for a
successful continuation of the GOLD JAY Z line.
63.

By reason of the foregoing, Carter Enterprises and Shawn Carter have materially

breached the License Agreement and Sub-License Agreement, deprived Plaintiffs of the
consideration for those contracts, and substantially defeated the purpose of the License
Agreement and Sub-License Agreement. These breaches are not reasonably curable.
64.

In addition to royalty payments, as additional consideration for the License

Agreement and Sub-License Agreement, Shawn Carter was given 300,000 shares of Perfumania
common stock and 800,000 warrants to purchase Perfumania common stock.
65.

Pursuant to a December 23, 2011 Agreement ("2011 Agreement") among

Perfumania, Carter Enterprises and Artistic Brands, Perfumania agreed to issue 300,000 shares
of Perfumania common stock to Artistic Brands or its designees as consideration for Shawn

12

Carter's agreement to, inter alia, enter into the Sub-License Agreement and License Agreement
and as consideration for Carter Enterprises' agreement to, inter alia, enter into the License
Agreement.
66.

These 300,000 shares of Perfumania common stock were issued to Shawn Carter.

67.

To the extent that the License Agreement and/or Sub-License Agreement are

rescinded or are otherwise determined to be void ab initio, and/or Shawn Carter and Carter
Enterprises have breached their obligations under the 2011 Agreement, Perfumania is entitled to
the return of the 300,000 shares of Perfumania common stock.
68.

Pursuant to Article 20A of the License Agreement, and as consideration for that

agreement, on or about April 17, 2012, Shawn Carter was issued warrants to purchase 266,667
shares of Perfumania common stock.
69.

To the extent that the License Agreement and/or Sub-License Agreement are

rescinded, or are otherwise determined to be void ab initio, and/or Shawn Carter and Carter
Enterprises have breached their obligations under the License Agreement and/or Sub-License
Agreement, Parlux is entitled to the return of the 266,667 warrants.
70.

Separately, pursuant to an April 2009 Agreement (the "2009 Agreement"), as

material inducement to entering into the License Agreement and Sub-License Agreement, Shawn
Carter and/or Carter Enterprises were issued warrants to purchase 533,333 shares of Perfumania
common stock. In addition, the delivery of those warrants was contingent on, inter alia, the
License Agreement and Sub-License Agreement being in full force and effect.

13

71.

To the extent that the License Agreement and/or Sub-License Agreement are

rescinded, or are otherwise determined to be void ab initio, and/or Shawn Carter and Carter
Enterprises have breached their obligations under the License Agreement and/or Sub-License
Agreement, Parlux is entitled to the return of the 533,333 warrants.
COUNT I
(Rescission)
72.

Parlux realleges each of the foregoing paragraphs of the complaint as though fully

set forth herein.

73.

Parlux performed all relevant obligations under the License Agreement and Sub-

License Agreement.
74.

There was a complete failure to perform by Shawn Carter and Carter Enterprises

which was caused by, inter alia, Jay Z's failure to show up at public appearances to promote the
fragrance brand or cooperate in the development and extension of the brand.
75.

Carter Enterprises' and Shawn Carter's breaches of the License Agreement and

Sub-License Agreement were material, willful, substantially defeated the purpose of the License
Agreement and Sub-License Agreement, and deprived Parlux of its bargain and consideration.
76.

Parlux has been prejudiced by Carter Enterprises' and Shawn Carter's breaches.

77.

Parlux has no complete and adequate remedy at law.

78.

Accordingly, this Court should rescind the License Agreement and Sub-License

Agreement, and order the return of all contract advances and royalties as well as the return of all
Perfumania stock and warrants which were granted as consideration for the Agreements.

14

COUNT II
(Breach of Contract)
79.

Parlux realleges each of the foregoing paragraphs of the complaint as though fully

set forth herein.

80.

Parlux performed all relevant obligations under the License Agreement and Sub-

License Agreement.
81.

Carter Enterprises and Shawn Carter materially breached the License Agreement

and the Sub-License Agreement as a result of Jay Z's failure to show up at public appearances to
promote the fragrance brand or cooperate in the development and extension of the brand.
82.

Parlux has been, and continues to be, damaged by Defendants' breaches.

83.

Accordingly, Parlux has suffered actual damages including its payment of

contract advances, royalties and Perfumania stock and warrants, as well as its lost profits and
dimunition in the value of the brand's equity, in addition to any other damages suffered by
Parlux, in a sum to be proven at trial, but presently believed to be at least $18 million, plus
interest thereon.
COUNT III
(Breach of Contract)
84.

Perfumania realleges each of the foregoing paragraphs of the complaint as though

fully set forth herein.

85.

Perfumania is a party to the 2011 Agreement, pursuant to which Shawn Carter

was given 300,000 shares of Perfumania common stock in connection with, inter alia, his
agreement to enter into the License Agreement and Sub-License Agreement.
86.

Perfumania performed all relevant obligations under the 2011 Agreement.

15

87.

Carter Enterprises and Shawn Carter breached the 2011 Agreement to the extent

that the License Agreement and Sub-License Agreement are rescinded or otherwise declared
void ab initio.
88.

Perfumania has been, and continues to be, damaged by Defendants' breaches.

89.

Accordingly, Perfumania should be awarded the return of 300,000 of its shares of

common stock, in addition to any other damages suffered by Perfumania, in a sum to be proven
at trial, plus interest. Alternatively, to the extent that Shawn Carter sold or otherwise transferred
those Perfumania shares, Perfumania is entitled to the value of those shares, in an amount to be
proven at trial, plus interest.
COUNT IV
(Breach of Contract)
90.

Parlux realleges each of the foregoing paragraphs of the complaint as though fully

set forth herein.

91.

Parlux is a party to the 2009 Agreement.

92.

Pursuant to the terms of the 2009 Agreement, and as a material inducement to

Parlux to enter into that agreement, Shawn Carter and Carter Enterprises were given 533,333
warrants to purchase Perfumania common stock which were issued to Shawn Carter by Parlux.
93.

Parlux performed all relevant obligations under the 2009 Agreement.

94.

Carter Enterprises and Shawn Carter breached their obligations to the extent that

the License Agreement and Sub-License Agreement are rescinded or otherwise declared void ab
initio.
95.

Parlux has been, and continues to be, damaged by Defendants' breaches.

96.

Accordingly, Parlux should be awarded the return of 533,333 warrants, in

addition to any other damages suffered by Parlux, in a sum to be proven at trial, plus interest.
16

COUNT V
(Breach of Implied Covenant of Good Faith and Fair Dealing)
97.

Plaintiffs reallege each of the foregoing paragraphs of the complaint as though

fully set forth herein.

98.

Defendants owed Plaintiffs a duty to deal fairly and in good faith, under the

License Agreement and Sub-License Agreement, the 2011 Agreement and the 2009 Agreement,
including, but not limited to, participating in the development and launch of flanker fragrances
and having Jay Z show up for personal appearances to promote the brand.
99.

Defendants breached their duty to deal fairly and in good faith with Plaintiffs by,

among other things, failing to assist in connection with the launching of the flanker fragrances
and by failing to have Jay Z personally appear to promote the product.
100.

Accordingly, Plaintiffs have suffered actual damages, in addition to any other

damages suffered by Plaintiffs, in a sum to be proven at trial, plus interest thereon.

COUNT VI
(Declaratory Judgment)
101.

Parlux realleges each of the foregoing paragraphs of the complaint as though fully

set forth herein.

102.

An actual controversy exists between Parlux and Defendants in that Parlux alleges

that the License Agreement and Sub-License Agreement are void ab initio and should be
rescinded due to Defendants' material breaches thereof.
103.

Parlux requests a declaratory judgment that Defendants have materially breached

the License Agreement and Sub-License Agreement in such a material and fundamental manner
such that those agreements are rescinded, and thus void ab initio.

17

WHEREFORE, Plaintiffs respectfully request judgment as follows:

(a)

for the return of advances and royalties paid by Parlux in an amount to be

determined at trial plus interest, the return of 300,000 shares of Perfumania common stock to
Perfumania (or, alternatively, in the event that the shares have been sold or otherwise transferred,
then the value of those shares), and the return of 800,000 Perfumania warrants to Parlux;
(b)

declaring that the License Agreement and Sub-License Agreement (and any and

all other agreements associated with or collateral to them) have been breached and are void ab
intio and/or rescinded;
(c)

for such damages as it shall prove at trial, presently believed to be at least $18

million including, but not limited to, compensatory damages, lost profits, dimunition in the value
of the brand's equity, punitive damages, together with interest, attorneys' fees, and the costs and
disbursements of this action; and
(d)

granting such other and further relief in favor of Plaintiffs and against Defendants

as this Court deems just and proper.

Dated: New York, NY
January 25, 2016

MINTZ LEVIN COHN FERRIS GLOVSKY AND

POPEO, P.C.
By:

18

/s/ Anthony J. Viola

Anthony J. Viola
Andre K. Cizmarik
666 Third Avenue
New York, New York 10017
Tel.: (212) 935-3000
Attorneys for Plaintiffs