UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
report (Date of earliest event reported): December 24,
2008
(Exact
Name of Registrant as Specified in Its Charter)
(State or
Other Jurisdiction of Incorporation)
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000-27707
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20-2783217
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(Commission
File Number)
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(IRS
Employer Identification No.)
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1330
Avenue of the Americas, 34th
Floor, New York, NY
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10019-5400
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(Registrant’s
Telephone Number, Including Area Code)
(Former
Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions (see General Instruction A.2.
below):
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01
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Entry
into Material Definitive Agreement
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Asset
Sale of Bill Blass Licensing Business
As
previously disclosed, NexCen Brands, Inc. (the “Company”) has been in active
discussions to sell its Bill Blass licensing business as part of its announced
restructuring plan which is centered on the Company’s franchising
business.
On
December 24, 2008, the Company, NexCen Fixed Asset Company, LLC (“NFAC”), NexCen
Brand Management, Inc. (“NBM”), Bill Blass Holding Co., Inc. (“Bill Blass
Holdings”), Bill Blass Licensing Co., Inc. (“Bill Blass Licensing”), Bill Blass
Jeans, LLC (“Bill Blass Jeans”) and Bill Blass International LLC (“Bill Blass
International,” and with NFAC, NBM, Bill Blass Holdings, Bill Blass Licensing
and Bill Blass Jeans each individually, a “Seller,” and collectively, the
“Sellers,” each of which is a direct or indirect wholly-owned subsidiary of the
Company), sold substantially all of the assets of the Company’s Bill Blass
licensing business to Peacock International Holdings, LLC, a New York limited
liability company (“Buyer”). The disposition was completed pursuant
to the terms of an Asset Purchase Agreement dated December 24, 2008 by and among
the Company, the Sellers and Buyer (the “Purchase Agreement”). A copy
of the Purchase Agreement is attached as Exhibit 2.1 to this Current Report on
Form 8-K and is incorporated herein by reference.
Pursuant
to the Purchase Agreement, Buyer agreed to purchase substantially all of the
assets associated with the Company’s Bill Blass licensing
business. The purchase price was approximately $10 million in
cash.
The
Purchase Agreement contains customary representations, warranties and
covenants. Subject to limited exceptions for specified
representations that are subject to extended survival, the representations and
warranties of the Company, the Sellers and Buyer will survive the closing for
one year. Indemnification claims are generally capped at $2.25
million and are subject to a minimum claim amount of $25,000 and a $200,000
aggregate threshold (with claims payable from dollar one once the aggregate
exceeds this threshold). The foregoing limits do not apply to claims
based on fraud.
The
foregoing description of the Purchase Agreement and the transactions
contemplated thereby does not purport to be complete and is qualified in its
entirety by the terms and conditions of such agreement, which is filed as
Exhibit 2.1 to this Current Report on Form 8-K.
The
Purchase Agreement has been included as an exhibit to this Current Report on
Form 8-K to provide you with information regarding its terms. The
Purchase Agreement contains representations and warranties that the parties
thereto made to the other parties thereto as of specific dates. The
assertions embodied in the representations and warranties in the Purchase
Agreement were made solely for purposes of the contracts among the respective
parties, and each may be subject to important qualifications and limitations
agreed to by the parties in connection with negotiating the terms
thereof. Moreover, some of those representations and warranties may
not be accurate or complete as of any specified date, may be subject to a
contractual standard of materiality different from those generally applicable to
stockholders or may have been used for the purpose of allocating risk among the
parties rather than establishing matters as facts.
Amendment
to Existing Credit Facility
On
December 24, 2008, in connection with the sale of the assets related to the Bill
Blass licensing business as detailed above, the Company amended its existing
bank credit facility (the “Facility”) by and among NexCen Holding Corp., a
wholly owned subsidiary of the Company (“Issuer”), certain of the Issuer’s
subsidiaries (“Subsidiary Borrowers”) and BTMU Capital Corporation
(“BTMUCC”).
This
amendment modifies certain provisions of the Facility that would have otherwise
been applicable because the net proceeds from the sale of the Bill Blass
licensing business are not sufficient to fully redeem the original note issued
under the Facility and related to the Bill Blass licensing
assets. After application of the net proceeds from this sale to the
partial redemption of principal and the payment of accrued and unpaid interest
on the original note related to the Bill Blass licensing assets, the remaining
principal balance of such original note will be approximately $14.2 million.
Under the terms of the Facility, this remaining note converted into a deficiency
note that bears interest at an annual rate of 15% and matures on January 1,
2010. This amendment modifies the terms of the deficiency note and
addresses certain related matters.
The key
provisions of the amendment include the following:
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·
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the
maturity date of the deficiency note has been extended from January 1,
2010 to July 31, 2013;
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·
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scheduled
principal payment obligations related to the deficiency note have been
deferred until maturity of the note and a payment-in-kind interest feature
was added to defer interest payments during the term of the deficiency
note; and
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BTMUCC’s
contingent right to receive warrants to purchase 2.8 million shares of
common stock of the Company has been amended so that the existence of the
deficiency note on and after March 31, 2009 will not be trigger the
issuance of such warrants to
BTMUCC.
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The
foregoing description of this amendment to the Facility and the modifications
contained therein does not purport to be complete and is qualified in its
entirety by the terms and conditions of such amendment, which is filed as
Exhibit 10.1 to this Current Report on Form 8-K. Additional
information regarding the terms and conditions of the Facility are included in
the Company’s Current Report on Form 8-K filed with the Securities Exchange
Commission on August 21, 2008.
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Item
2.03
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant
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As
discussed above in Item 1.01, the Company amended its existing bank credit
facility in connection with the sale of the assets related to the Bill Blass
licensing business. The descriptions in Item 1.01 are incorporated
herein by reference.
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Item
2.04
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Triggering
Events That Accelerate or Increase a Direct Financial Obligation or
an Obligation under an Off-Balance Sheet
Arrangement
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As
discussed above in Item 1.01, as a result of the net proceeds from the sale of
the Bill Blass licensing business being insufficient to repay in full all
amounts owed under the original note issued under the Facility and related to
the Bill Blass licensing assets, the original note automatically converts into a
deficiency note with a principal amount equal to the unpaid principal amount of
the original note (approximately $14.2 million). The annual interest
rate on the original note was LIBOR (the one-month rate
as in effect from time to time) plus 7% per year, and that rate
automatically increased to 15% upon conversion to a deficiency note, although
interest payments are deferred and payment-in-kind is permitted under the terms
of the deficiency note. The descriptions in Item 1.01 are
incorporated herein by reference.
On
December 29, 2008, the Company issued a press release announcing the sale of the
assets related to the Bill Blass licensing business and the amendment to its
existing bank credit facility as described above. A copy of the press
release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is
incorporated herein by reference.
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Item
9.01
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Financial
Statements and Exhibits
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(d)
Exhibits
2.1 Asset
Purchase Agreement by and among NexCen Brands, Inc., NexCen Fixed Asset Company,
LLC, NexCen Brand Management, Inc., Bill Blass Holding Co., Inc., Bill Blass
Licensing Co., Inc., Bill Blass Jeans, LLC, Bill Blass International, LLC and
Peacock International Holdings, LLC dated December 24, 2008.
10.1 Second
Amendment to Amended and Restated Security Agreement by and among NexCen Brands,
Inc., NexCen Holding Corp., the Subsidiary Borrowers parties thereto and BTMU
Capital Corporation dated December 24, 2008.
99.1 Press
Release dated December 29, 2008.
SIGNATURES
According
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized on December 29, 2008.
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NEXCEN
BRANDS, INC.
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/s/ Sue J. Nam
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By:
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Sue
J. Nam
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Its:
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General
Counsel
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