Unassociated Document
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): August 7, 2007
(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):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01 Entry
into Material Definitive Agreement
On
August
7, 2007, NexCen Brands, Inc., a Delaware corporation (the “Company”), through
its wholly-owned subsidiary NexCen Asset Acquisition, LLC, a Delaware limited
liability company (the “Purchaser”), acquired substantially all of the assets of
Pretzel Time Franchising, LLC, a Delaware limited liability company (“Pretzel
Time”), and Pretzelmaker Franchising, LLC, a Delaware limited liability company
(“Pretzelmaker” and together with Pretzel Time, the “Sellers”), each a
wholly-owned subsidiary of Mrs. Fields Famous Brands, LLC, a Delaware limited
liability company (“MFFB”). The acquisition was completed pursuant to the terms
of an Asset Purchase Agreement (the “Purchase Agreement”), dated August 7, 2007,
by and among the Company, the Purchaser, Pretzel Time, Pretzelmaker, and MFFB.
A
copy of the Purchase Agreement is attached as Exhibit 2.1 to this Current Report
on Form 8-K.
The
purchase price paid at closing was approximately $29.4 million, consisting
of
$22.1 million in cash and $7.3 million in shares of the Company’s common stock,
with the stock valued at the closing price of one share of the Company’s stock
on the NASDAQ Global Market on August 6, 2007. A total of 1,000,915 shares
of
the Company’s common stock (valued at $7.35 per share) were issued in the
transaction, but under the terms of the Purchase Agreement, 536,419 shares
(valued at $3.9 million) will be held in escrow for up to fifteen
(15) months
and be available to satisfy indemnity claims. The purchase price represents
a
multiple of royalties and franchise fees earned by Pretzel Time and Pretzelmaker
over the twelve months ended June 30, 2007, as set forth in the Purchase
Agreement. This amount was estimated at closing and is subject to a customary
post-closing review and adjustment to the extent actual amounts are determined
to differ from the estimated amounts.
The
Purchase Agreement contains customary representations, warranties and covenants.
Subject to limited exceptions, the representations and warranties of the Sellers
and MFFB will survive the closing for nine (9) months. Specified fundamental
representations, such as sufficiency of assets and title to assets, will survive
indefinitely. Indemnification claims made by the Purchaser for breaches of
representations and warranties are generally capped at the purchase price and
are subject to a $200,000 threshold.
On
August
7, 2007, simultaneously with the execution of the Purchase Agreement and the
closing of the acquisition, the Company entered into the following additional
agreements:
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A
registration rights agreement by and among the Company and the Sellers
(the “Registration Rights Agreement”). The Registration Rights Agreement
provides that the Company will file a registration statement within
180
days of the closing to register the shares issued to the Sellers
as
consideration pursuant to the Purchase Agreement. Under the terms
of the
Purchase Agreement, these shares will not be permitted to be resold
for
twelve (12) months following the closing of the acquisition, and
thereafter certain of the shares will be subject to resale limitations
until the 21-month anniversary of the closing. However, notwithstanding
the transfer limitations on the shares, the Sellers are permitted
to
pledge their rights under the terms of an indenture by and among
MFFB,
Mrs. Fields Financing Company, Inc. and the Bank of New York dated
March
16, 2004.
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A
voting agreement by and among the Company and the Sellers (the “Voting
Agreement”). The Voting Agreement grants a power of attorney to a proxy
holder designated by the Company’s board of directors to vote or act by
written consent with respect to the Company’s common stock issued as
consideration pursuant to the Purchase
Agreement.
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The
foregoing descriptions of the Purchase Agreement, the Registration Rights
Agreement and the Voting Agreement do not purport to be complete and are
qualified in their entirety by the terms and conditions of such agreements,
which are filed as Exhibits 2.1, 4.1 and 9.1, respectively, 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
and 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.
Item
2.01 Completion
of Acquisition or Disposition of Assets
On
August
7, 2007, the Company, through the Purchaser, completed the purchase of
substantially all of the assets of Pretzel Time and Pretzelmaker, as described
above in Item 1.01.
Item
3.02 Unregistered
Sales of Equity Securities
On
August
7, 2007, as partial consideration for the acquisition described in Items 1.01
and 2.01 above, the Company issued 608,556 shares of its common stock to Pretzel
Time and 392,359 shares to Pretzelmaker. This includes 536,419 shares being
held
in escrow to satisfy any indemnity obligations, as described above in item
1.01.
In
issuing these shares, the Company relied on an exemption from registration
under
Section 4(2) of the Securities Act of 1933, as amended.
Item
8.01 Other
Events
On
August
7, 2007, the Company issued a press release announcing the signing and closing
of the acquisition described in Items 1.01 and 2.01 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.
Item
9.01 Financial
Statements and Exhibits
(a)
Financial Statements of Businesses Acquired
The
Company intends to provide the financial statements for the periods specified
in
Rule 3-05(b) of Regulation S-X under cover of a Current Report on Form 8-K/A
within the time allowed for such filing by Item 9.01(a)(4) of this Current
Report on Form 8-K.
(b)
Pro
Forma Financial Information
The
Company intends to provide the pro forma financial information required by
Article 11 of Regulation S-X under cover of a Current Report on Form 8-K/A
within the time allowed for such filing by Item 9.01(b)(2) of this Current
Report on Form 8-K.
(d)
Exhibits
2.1 Asset
Purchase Agreement, dated August 7, 2007, by and among the Company, the
Purchaser, the Sellers and MFFB.
4.1 Registration
Rights Agreement, dated August 7, 2007, by and among the Company and the
Sellers.
9.1 Voting
Agreement, dated August 7, 2007, by and among the Company and the
Sellers.
99.1 Press
release of NexCen Brands, Inc., dated August 7, 2007.
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 August 7, 2007.
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NEXCEN
BRANDS, INC.
/s/
David B.
Meister
By: David
B. Meister
Its:
Senior
Vice President and Chief Financial
Officer
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