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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Rule 14a-101)

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

o

 

Preliminary Proxy Statement

o

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

ý

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material Pursuant to §240.14a-12

 

NEXCEN BRANDS, INC.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

o

 

No fee required.

o

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

 

(1)

 

Title of each class of securities to which transaction applies:
        
 
    (2)   Aggregate number of securities to which transaction applies:
        
 
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        
 
    (4)   Proposed maximum aggregate value of transaction:
        
 
    (5)   Total fee paid:
        
 

ý

 

Fee paid previously with preliminary materials.

o

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-1-1(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

(1)

 

Amount Previously Paid:
        
 
    (2)   Form, Schedule or Registration Statement No.:
        
 
    (3)   Filing Party:
        
 
    (4)   Date Filed:
        
 

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GRAPHIC

Dear NexCen Stockholders:

        You are cordially invited to attend a special meeting of the stockholders of NexCen Brands, Inc. to be held on July 29, 2010 at 10:00 a.m., Eastern Time, at the offices of Kirkland & Ellis LLP, 601 Lexington Avenue, 50th Floor, New York, NY 10022. At the special meeting, NexCen is seeking your approval of:

        As discussed in more detail in the accompanying proxy statement, pursuant to the Acquisition Agreement, Global Franchise Group, LLC will acquire the subsidiaries of NexCen that hold our franchise business assets and also our franchise management operations, including our management operations in Norcross, Georgia, and our cookie and pretzel dough factory and research facility in Atlanta, Georgia. The purchase price is $112.5 million subject to closing adjustments for cash, indebtedness (other than indebtedness under the credit facility of certain of our subsidiaries with BTMU Capital Corporation), working capital, deferred franchise revenue, and other specified items. If the asset sale proposal is approved and the asset sale is consummated, NexCen will transfer substantially all of its assets and specified liabilities to Global Franchise Group, LLC, and NexCen will continue to exist as a separate legal entity.

        If the asset sale is not consummated, whether due to lack of stockholder approval or for other reasons, we believe that NexCen will have limited alternatives and that there is a substantial risk that stockholders will receive little or no value from any alternatives that might be pursued. As of the date of this proxy statement, NexCen is not aware of any viable alternatives that we expect would enable us to deliver similar or higher value to our stockholders (including value relating to the use of NexCen's accumulated tax loss carryforwards) or to continue in operation for an extended period of time. We believe that the terms of the asset sale and the accord and satisfaction agreement we have reached with BTMU Capital Corporation to forgive a sufficient amount of its debt such that we will retain a portion of the proceeds of the asset sale represent the best available outcome for stockholders under the circumstances, in light of the current value of our business, the significantly greater amount of debt owed to BTMU Capital Corporation by NexCen Holding Corporation and certain of its subsidiaries, and the operating and liquidity challenges we would face in the near term were we to attempt to continue to operate our business. We believe it would be extremely difficult to achieve an alternative that would be likely to provide similar potential value to stockholders or involve a low enough


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forgiveness of debt so as to gain the consent of BTMU Capital Corporation (which would be required). Absent a reasonable and attractive alternative that is agreeable to us and also to BTMU Capital Corporation, there is a substantial risk that our assets would be subject to foreclosure after a further default under the BTMUCC credit facility. If this were to happen, NexCen would lose control of all of its operating assets and cash flows and likely would have no choice but to file for bankruptcy protection. In such event, it is highly unlikely that there would be significant assets, if any, available for any distribution to NexCen's stockholders.

        In connection with the negotiation of the asset sale, as discussed in the accompanying proxy statement, we also have entered into an accord and satisfaction agreement with BTMU Capital Corporation that will allow us to use a substantial portion of the proceeds from the asset sale to completely satisfy the obligations under the credit facility with BTMU Capital Corporation and leave us with approximately $14 million to $15 million of cash.

        Following the closing of the asset sale and the satisfaction of the obligations to BTMU Capital Corporation, absent the emergence of a higher value alternative that the NexCen board of directors concludes it has a fiduciary duty to explore, NexCen shall use the remaining proceeds to pay, or make reasonable provision for, its outstanding, contingent and anticipated liabilities in accordance with existing agreements and contracts, its certificate of incorporation, Delaware law and the plan of dissolution. Any assets not used to satisfy outstanding, contingent and anticipated liabilities will be available for distribution to NexCen's stockholders pursuant to the plan of dissolution. NexCen currently estimates that, assuming that the asset sale is completed on its current terms, the assets ultimately available for distribution to the holders of NexCen common stock will be between $0.12 and $0.16 per share of common stock; however, NexCen is unable at this time to predict the exact amount, nature and timing of any distributions to its stockholders.

        The NexCen board of directors has carefully reviewed and considered the terms and conditions of the asset sale proposal (including the terms and conditions of the Acquisition Agreement), the plan of dissolution and the amendment to NexCen's certificate of incorporation and has concluded that the asset sale and, absent the emergence of a higher value alternative that the NexCen board of directors concludes it has a fiduciary obligation to explore, the liquidation and dissolution of NexCen pursuant to the plan of dissolution and the amendment to NexCen's certificate of incorporation are all in the best interests of NexCen and its stockholders. The NexCen board of directors made its determination with respect to the proposals after consultation with its independent legal and financial advisors and consideration of various factors discussed in the accompanying proxy statement. THE NEXCEN BOARD OF DIRECTORS THEREFORE HAS APPROVED THESE PROPOSALS AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE PROPOSALS SET FORTH IN THE ATTACHED PROXY STATEMENT.

        Approval of each of the asset sale proposal, the plan of dissolution proposal and the amendment to NexCen's certificate of incorporation proposal requires the affirmative vote of the holders of a majority in voting power of the outstanding shares of NexCen common stock. Approval of the adjournment proposal requires the affirmative vote of the holders of a majority in voting power of the shares of NexCen common stock present, either in person or by proxy, and entitled to vote at the special meeting.

        Your vote is very important.    Whether or not you plan to attend the special meeting, please complete, sign, date and return the enclosed proxy card, or submit your proxy by telephone or the Internet, as soon as possible. If you hold your shares in "street name," you should instruct your broker how to vote in accordance with your voting instruction card.

        If you do not either submit your proxy, instruct your broker how to vote your shares or vote in person at the special meeting, it will have the same effect as a vote against approval of the asset sale, the plan of dissolution and the amendment to NexCen's certificate of incorporation and will have no effect on the adjournment proposal.


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        You are also encouraged to review carefully the enclosed proxy statement, as it explains the reasons for the proposals to be voted on at the special meeting and contains other important information, including copies of the Acquisition Agreement, the plan of dissolution and the amendment to NexCen's certificate of incorporation, which are attached as annexes.

        Thank you for your cooperation and continued support.

 
   
       Sincerely,
   
GRAPHIC

 

 


Kenneth J. Hall
Chief Executive Officer

        Neither the Securities and Exchange Commission nor any state securities regulator has approved or disapproved the asset sale or plan of dissolution described in this proxy statement, passed upon the merits or fairness of the asset sale or plan of dissolution or passed upon the adequacy or accuracy of the disclosures in this document. Any representation to the contrary is a criminal offense.

        This proxy statement is dated June 11, 2010 and is first being mailed to NexCen stockholders on or about June 14, 2010.


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NexCen Brands, Inc.
1330 Avenue of the Americas, 34th Floor
New York, NY 10019


NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 29, 2010

Dear NexCen Stockholder:

        A special meeting of the stockholders of NexCen Brands, Inc., a Delaware corporation, will be held on July 29, 2010 at 10:00 a.m., Eastern Time, at the offices of Kirkland & Ellis LLP, 601 Lexington Avenue, 50th Floor, New York, NY 10022 for the following purposes:

        This proxy statement and the proxy card are being furnished to NexCen's stockholders in connection with the solicitation of proxies by the NexCen board of directors for use at the special meeting of stockholders.

        AFTER CONSULTATION WITH ITS INDEPENDENT LEGAL AND FINANCIAL ADVISORS AND CONSIDERATION OF VARIOUS FACTORS DISCUSSED IN THE ACCOMPANYING PROXY STATEMENT, THE NEXCEN BOARD OF DIRECTORS HAS APPROVED THE ACQUISITION AGREEMENT AND THE ASSET SALE, THE PLAN OF DISSOLUTION AND THE AMENDMENT TO NEXCEN'S CERTIFICATE OF INCORPORATION AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE ASSET SALE PROPOSAL, "FOR" THE PLAN OF DISSOLUTION PROPOSAL, "FOR" THE SHARE REDUCTION PROPOSAL AND "FOR" THE ADJOURNMENT PROPOSAL. The proposals are described in more detail in the accompanying proxy statement, which you should read in its entirety before voting.

        Your vote is very important, regardless of the number of shares of NexCen common stock that you own. Only holders of record of NexCen's capital stock at the close of business on June 4, 2010 are entitled to notice of and to vote at the special meeting or any adjournment or postponement thereof. Approval of the asset sale proposal, the plan of dissolution proposal and the share reduction proposal each requires the affirmative vote of the holders of a majority in voting power of the outstanding shares of NexCen common stock. Approval of the adjournment proposal requires the affirmative vote


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of the holders of a majority in voting power of the shares of NexCen common stock present, either in person or by proxy, and entitled to vote at the special meeting. Your failure to vote your shares will have the same effect as voting against the asset sale proposal, the plan of dissolution proposal and the share reduction proposal and will have no effect on the adjournment proposal.

        Stockholders attending the special meeting in person should be prepared to present photo identification. Stockholders who hold shares in street name should also bring proof of ownership such as an account statement or voting instruction from their custodian.

        Even if you plan to attend the special meeting in person, we request that you submit your proxy by telephone, over the Internet or by signing, dating and returning the enclosed proxy in the envelope provided prior to the special meeting and thus ensure that your shares will be represented at the special meeting if you are unable to attend. You may revoke your proxy at or at any time prior to the special meeting. If you are present at the special meeting or any adjournments or postponements of the special meeting, you may revoke your proxy and vote personally on the matters properly brought before the special meeting. Your shares will be voted at the special meeting in accordance with your proxy. If you sign, date and mail your proxy card without indicating how you wish to vote, your proxy will be counted as a vote in favor of the asset sale proposal, the plan of dissolution proposal, the share reduction proposal, and the adjournment proposal. If you hold your shares through a broker, bank or other nominee, please follow the instructions provided by your broker, bank or other nominee.


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TABLE OF CONTENTS

 
  Page

QUESTIONS AND ANSWERS REGARDING THE SPECIAL MEETING

  1

SUMMARY

  12

FACTORS TO BE CONSIDERED BY STOCKHOLDERS IN DECIDING WHETHER TO APPROVE THE PROPOSALS

  19
 

Risk Factors Relating to the Asset Sale

  19
 

Risk Factors Relating to the Plan of Dissolution

  21

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

  25

SPECIAL MEETING OF THE STOCKHOLDERS OF NEXCEN

  26
 

When and Where the Special Meeting Will Be Held

  26
 

What Will Be Voted Upon

  26
 

The NexCen Board of Directors' Recommendation

  26
 

Which Stockholders May Vote

  27
 

How Do NexCen Stockholders Vote

  27
 

Quorum and Vote Required to Approve Each Proposal

  27
 

Abstentions; Broker Non-Votes

  27
 

Revocability of Proxies

  28
 

Solicitation of Proxies and Expenses of Solicitation

  28
 

Assistance

  28

PROPOSAL ONE—THE ASSET SALE PROPOSAL

  29
 

The Companies

  29
 

Background of the Asset Sale and Plan of Dissolution

  29
 

Recommendation of the NexCen Board of Directors and NexCen's Reasons for the Asset Sale

  40
 

Opinion of NexCen's Financial Advisor

  44
 

Interests of Executive Officers and Directors of NexCen in the Asset Sale

  49
 

Material United States Federal Income Tax Consequences of the Asset Sale

  50
 

Regulatory Matters

  51

THE ACQUISITION AGREEMENT

  52
 

The Asset Sale

  52
 

Consideration to be Received by NexCen

  53
 

Dissolution of NexCen

  53
 

Completion of the Asset Sale

  53
 

Appraisal Rights

  53
 

Representations and Warranties

  54
 

NexCen's Conduct of Business Before the Closing of the Asset Sale

  55
 

Obligation of the NexCen Board of Directors with Respect to Its Recommendation and Holding of a Stockholders' Meeting

  57
 

No Solicitation of Other Offers

  57
 

Employee Benefit Matters

  59
 

Retention Bonuses

  59
 

Conditions to Obligations to Complete the Asset Sale

  59
 

Definition of Material Adverse Effect

  60
 

Termination

  61
 

Termination Fee

  62
 

Expenses Generally; Expense Reimbursement

  63
 

Amendment and Waiver

  63

THE EQUITY COMMITMENT LETTER

  63

THE ACCORD AND SATISFACTION AGREEMENT AND THE WAIVER AND OMNIBUS AMENDMENT

  64

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  Page

PROPOSAL TWO—THE PLAN OF DISSOLUTION PROPOSAL

  66
 

General

  66
 

Dissolution under Delaware Law

  66
 

Principal Provisions of the Plan of Dissolution

  67
 

Estimated Liquidating Distributions

  71
 

Conduct of the Company Following Dissolution

  72
 

Potential Liability of Stockholders

  73
 

Reporting Requirements

  73
 

Cessation of Transfers of Common Stock

  74
 

Cessation of Trading of Common Stock

  74
 

Regulatory Approvals

  74
 

Appraisal Rights

  74
 

Interests of Management in the Dissolution of the Company

  74
 

Material United States Federal Income Tax Consequences of the Dissolution

  75
 

Required Vote

  77

PROPOSAL THREE—THE SHARE REDUCTION PROPOSAL

  78
 

General

  78
 

Required Vote

  78

PROPOSAL FOUR—THE ADJOURNMENT PROPOSAL

  79
 

General

  79
 

Required Vote

  79

FUTURE NEXCEN STOCKHOLDER PROPOSALS

  80

WHERE YOU CAN FIND MORE INFORMATION

  81

Annex A:   Acquisition Agreement
Annex B:   Plan of Dissolution
Annex C:   Amendment to Certificate of Incorporation
Annex D:   Opinion of Rothschild Inc.
Annex E:   Annual Report on Form 10-K for the Year ended December 31, 2009 (as amended on April 29, 2010) and Quarterly Report on Form 10-Q for the Quarter ended March 31, 2010
Annex F:   Accord and Satisfaction Agreement
Annex G:   Waiver and Omnibus Amendment

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QUESTIONS AND ANSWERS REGARDING THE SPECIAL MEETING

        The following are some questions that you, as a stockholder of NexCen, may have regarding the asset sale, the plan of dissolution, the amendment to our certificate of incorporation and the special meeting and brief answers to those questions. We urge you to read carefully the remainder of this proxy statement because the information in this section may not provide all the information that might be important to you with respect to the proposals being considered at the special meeting. Additional important information is also contained in the annexes to this proxy statement.

        Except as otherwise specifically noted in this proxy statement, "NexCen," the "Company," "we," "our," "us" and similar words refer to NexCen Brands, Inc. and, where applicable, its subsidiaries.

Q:
Why am I receiving this proxy statement?

A:
NexCen is soliciting proxies for the special meeting of stockholders. You are receiving a proxy statement because you owned shares of NexCen common stock on June 4, 2010, the record date, and that entitles you to vote at the special meeting. Each share of our common stock is entitled to one vote. By use of a proxy, you can vote whether or not you attend the special meeting. This proxy statement describes the matters on which we would like you to vote and provides information on those matters so that you can make an informed decision. This proxy statement is first being mailed to NexCen stockholders on or about June 14, 2010.

Q:
What are the matters on which I am being asked to vote?

A:
At the special meeting, you will be asked to vote on four matters:

The sale of substantially all of our assets, which we refer to as the asset sale proposal, to Global Franchise Group, LLC, which we refer to as GFG, in accordance with the Acquisition Agreement, dated as of May 13, 2010, between NexCen and GFG, which we refer to as the Acquisition Agreement, that is described in this proxy statement and is attached as Annex A.

A plan of dissolution pursuant to which we would dissolve, wind down our business and, after addressing our outstanding, contingent and anticipated liabilities as required by Delaware law and as contemplated by the plan of dissolution, we would distribute remaining assets, if any, to our stockholders. We would not wind down our business and implement the plan of dissolution unless and until we complete the asset sale. The plan of dissolution is described in this proxy statement and is attached as Annex B.

An amendment to our certificate of incorporation to reduce the number of authorized shares of capital stock from 1 billion shares of common stock and 1 million shares of preferred stock to 100 million shares of common stock and 1 million shares of preferred stock. The proposed amendment to our certificate of incorporation is attached as Annex C.

Authorization of the NexCen board of directors, in its discretion, to adjourn the special meeting if the voting power of holders of NexCen common stock represented and voting in favor of the asset sale proposal, the plan of dissolution proposal or the share reduction proposal is insufficient to approve any of such proposals under Delaware law.

Q:
How does the board of directors recommend that I vote?

A:
After careful consideration of a variety of factors described in this proxy statement, the NexCen board of directors has unanimously recommended a vote "FOR" each of the four matters described in this proxy statement. Your vote is very important. If you do not either submit your proxy or instruct your broker how to vote your shares or vote in person at the special meeting, it

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Q.
Why did NexCen enter into the Acquisition Agreement?

A.
After exploring and considering various alternatives during the past nine months to address our existing debt and capital structure, and after presenting certain of these alternatives with our senior secured lender, BTMU Capital Corporation, which we refer to as BTMUCC, the NexCen board of directors concluded that the asset sale and payment to NexCen of the purchase price is the only viable mechanism that we believe can reasonably be expected to provide equity value to our stockholders in the foreseeable future. This decision was based on the following four primary reasons:

As previously disclosed, our financial condition and liquidity raise substantial doubt about our ability to continue as a going concern. In particular, we currently do not expect that we will be able to make a principal payment on (or restructure) our outstanding debt due in July 2011 estimated at $34.5 million. In addition, we currently anticipate that, absent further waivers and amendments from BTMUCC, we will breach certain financial and other restrictive covenants under the credit facility among NexCen Holding Corporation and certain of its subsidiaries, NexCen and BTMUCC, which we refer to as the BTMUCC credit facility, later in 2010. If we fail to meet debt service obligations, or otherwise breach the covenants of the BTMUCC credit facility, we would be in default under the BTMUCC credit facility. A default could trigger BTMUCC's right to accelerate all payment obligations, foreclose on virtually all of our assets and take control of all of our cash flow from operations. In such event, it is highly unlikely that there would be significant assets, if any, available for distribution to NexCen's stockholders or unsecured creditors.

BTMUCC is consenting to the asset sale, particularly in light of NexCen's current financial condition and the level of debt forgiveness the asset sale represents, and did not consent to other alternatives presented to it.

BTMUCC's agreement to forgive a portion of its debt, and thereby permit us to retain a portion of the sale proceeds and of our cash on hand made it reasonably likely that by completing the asset sale we would be able to deliver value to our stockholders and unsecured creditors.

As of the date of this proxy statement, NexCen is not aware of any viable alternatives that we expect would enable us to deliver similar or higher value to our stockholders (including value relating to the use of NexCen's accumulated tax loss carryforwards) or to continue in operation for an extended period of time.

Q.
Who is the purchaser?

A.
The purchaser is Global Franchise Group, LLC, or GFG, an affiliate of Levine Leichtman Capital Partners IV, L.P., or LLCP IV. LLCP IV is a fund that is managed by Levine Leichtman Capital Partners, Inc., or LLCP, a Los Angeles, California-based investment firm. LLCP currently manages approximately $5.0 billion of institutional investment capital through private equity partnerships, distressed debt and leveraged loan funds. LLCP has significant franchise management experience, including franchise investments in Quiznos, Wetzel's Pretzels, Beef 'O' Brady's and Cici's Pizza. GFG is a newly formed entity that has not engaged in any activity other than activities for the purpose of acquiring substantially all of NexCen's assets pursuant to the asset sale.

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Q.
What is the purchase price for NexCen's assets?

A.
The purchase price for NexCen's franchise business assets is $112.5 million subject to closing adjustments for cash, indebtedness (other than indebtedness under the BTMUCC credit facility), working capital, deferred franchise revenue, and other specified items.

Q.
Did NexCen obtain a fairness opinion from its independent financial advisor?

A.
Yes. Rothschild Inc., or Rothschild, delivered its opinion to the NexCen board of directors that, as of May 12, 2010 and based upon and subject to the qualifications, limitations and assumptions set forth therein, the $112.5 million purchase price to be paid to NexCen in cash for the assets and the assumption of certain liabilities by GFG pursuant to the Acquisition Agreement, was fair from a financial point of view to the Company.

Q.
What are the anticipated uses of the asset sale purchase price?

A.
Of the $112.5 million purchase price, BTMUCC will receive in full satisfaction of the total amount of the debt outstanding under the BTMUCC credit facility (which, as of May 31, 2010, was approximately $136.4 million), the following amount:

$98 million, plus

100% of the amount (if any) by which the aggregate consideration for the asset sale (after giving effect to various estimated adjustments at the closing of the asset sale) exceeds $112.5 million, plus

the amount by which NexCen's cash on hand immediately prior to closing (after giving effect to various estimated adjustments) exceeds $6 million, plus

payment of all outstanding third-party fees and expenses of BTMUCC, which are currently estimated to be approximately $150,000.

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Q.
When will NexCen know what impact the adjustments will have on the purchase price?

A:
The Acquisition Agreement provides that the purchase price will be adjusted at the closing of the asset sale based on estimated calculations prepared by NexCen and reviewed by GFG. Within 60 days after the closing, GFG will prepare revised calculations of the adjustment items, based on actual financial information of the acquired business as of the closing. NexCen will then have 20 days to review GFG's calculations, and if we have no objections, payment is due within 10 business days of the date on which we inform GFG of this fact. If we dispute any of GFG's calculations, we will have 20 days to seek an agreement with GFG, and absent that, the disputed items will be submitted to an accounting firm for resolution within 30 days. Any payments owed are due within 10 business days of the date on which the disputes are resolved.
Q.
What assets are being sold by NexCen?

A.
The Acquisition Agreement provides that:

NexCen will sell to GFG all of its equity interests in TAF Australia, LLC;

NexCen Holding Corporation will sell to GFG all of its equity interests in Athlete's Foot Brands, LLC, The Athlete's Foot Marketing Support Fund, LLC, GAC Franchise Brands, LLC, GAC Manufacturing, LLC, GAC Supply, LLC, MaggieMoo's Franchise Brands, LLC, Marble Slab Franchise Brands, LLC, PM Franchise Brands, LLC, PT Franchise Brands, LLC, and ShBx IP Holdings LLC. These companies, along with TAF Australia, LLC and their respective subsidiaries, are sometimes referred to as the Acquired Companies;

NB Supply Management Corporation, or NB Supply, will sell to GFG all of its assets, subject to certain specified exceptions, and assign to GFG certain specified liabilities; and

NexCen Franchise Management, Inc., or NF Management, will sell to GFG all of its assets, subject to certain specified exceptions, and assign to GFG certain specified liabilities.
Q.
What liabilities will be assumed by Global Franchise Group?

A.
In addition to the assumption of the liabilities of the Acquired Companies, GFG is only assuming the following liabilities of NB Supply and NF Management: all liabilities accruing after the closing under contracts included in the acquired assets, all liabilities under a finite list of employment agreements, and all current liabilities that are deferred revenue of the Acquired Companies or are included in the working capital adjustment or another adjustment to the purchase price. GFG is not assuming any other liabilities of NB Supply or NF Management.

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Q.
When does NexCen expect the asset sale to be completed?

A.
NexCen is working to complete the asset sale as soon as practicable and currently expects that the asset sale will be completed promptly following the receipt of stockholder approval of the asset sale proposal at the special meeting. However, NexCen cannot predict the exact timing of the completion of the asset sale because it is subject to other conditions to closing as set forth in the Acquisition Agreement.

Q.
What will happen if the asset sale is not approved?

A.
If the asset sale is not approved, absent a reasonable and attractive alternative that is agreeable to us and also to BTMUCC, there is a substantial risk that our assets would be subject to foreclosure after a further default under the BTMUCC credit facility. If this were to happen, NexCen would lose control of all of its operating assets and cash flows and likely would have no choice but to file for bankruptcy protection. In such event, it is highly unlikely that there would be significant assets, if any, available for any distribution to NexCen's stockholders.
Q.
What will happen under the plan of dissolution?

A.
Under the plan of dissolution, NexCen will file a certificate of dissolution with the Secretary of State of the State of Delaware, NexCen's jurisdiction of incorporation, to dissolve NexCen as a legal entity. NexCen expects it will satisfy its outstanding liabilities and distribute its remaining assets, if any, to NexCen stockholders. The NexCen board of directors, in its sole discretion, will determine the timing for this filing and any distribution to stockholders. The NexCen board of directors currently anticipates that the certificate of dissolution will be filed as soon as reasonably practicable after the closing of the asset sale.

Q.
If the asset sale and plan of dissolution proposals are approved and the asset sale is consummated on the terms contained in the Acquisition Agreement, what does NexCen estimate that the holders of NexCen common stock will receive?

A:
NexCen currently estimates that assets ultimately available for distribution to holders of NexCen common stock will be between $0.12 and $0.16 per share of common stock (assuming that the asset sale is consummated). However, the cash amount, if any, that may ultimately be distributed to the holders of NexCen common stock is not yet known given the uncertainty of the costs to resolve certain of NexCen's outstanding liabilities. If the asset sale is not approved, it is unlikely

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Q.
When and in what amounts will stockholders receive payment of any available liquidation proceeds?

A:
Although we are not able to predict with certainty the precise nature, amount or timing of any distributions, we expect to make an initial distribution as soon as reasonably practicable following the filing of the certificate of dissolution. We are not able to predict with certainty the precise nature, amount or timing of any distributions, primarily due to our inability to predict the amount of our remaining liabilities or the amount that we will expend during the course of the liquidation and the net value, if any, of our remaining non-cash assets, consisting of any office furniture, equipment, supplies and other miscellaneous assets. We do not expect that our non-cash assets will result in material, incremental value. If the amount of our liabilities and the amounts that are spent during the liquidation are greater, or the value of our non-cash assets is less than we anticipate, stockholders may receive substantially less than the amount estimated. The NexCen board of directors has not established a firm timetable for any final distributions to stockholders. Subject to contingencies inherent in winding up our business, the NexCen board of directors intends to authorize any distributions as promptly as reasonably practicable in our best interests and the best interests of stockholders. The NexCen board of directors, in its discretion, will determine the nature, amount and timing of all distributions. In any liquidation of NexCen, the claims of secured and unsecured creditors of NexCen take priority over the stockholders.

Q.
What vote of NexCen stockholders is required to approve the asset sale and the plan of dissolution proposals?

A:
Approval of the asset sale proposal and the plan of dissolution proposal each requires the affirmative vote of the holders of a majority in voting power of the outstanding shares of NexCen common stock.

Q.
Do NexCen's directors and officers have any interest in the asset sale and plan of dissolution?

A:
Yes. NexCen stockholders should be aware that some directors and executive officers of NexCen may have interests in the asset sale and the plan of dissolution that may be different from, or in addition to, the interests of NexCen stockholders. These interests include agreements that provide for severance payments following the termination of employment (which is currently anticipated to occur following the closing of the asset sale) of certain executive officers (but not any directors) of NexCen, and the right to continued customary indemnification and insurance coverage for a specified period following the asset sale and dissolution of the Company. The NexCen board of directors was aware of and considered these interests, among other matters, prior to negotiating and voting to approve the asset sale, voting to approve the plan of dissolution, and recommending the approval of the asset sale proposal and plan of dissolution proposal to NexCen's stockholders.

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Q.
Are there any risks related to the asset sale or the plan of dissolution?

A.
Yes. You should carefully review the section entitled "Factors to be Considered by Stockholders in Deciding whether to Approve the Proposals" beginning on page 19 of this proxy statement.

Q.
What are the United States federal income tax consequences of the asset sale?

A:
For United States federal income tax purposes, the asset sale will not be taxable directly to NexCen's stockholders. For United States federal income tax purposes, the sale of NexCen's assets pursuant to the Acquisition Agreement will be treated as a taxable asset sale, with NexCen as the seller and GFG as the purchaser. NexCen anticipates the asset sale will result in a loss for federal income tax purposes. In the event NexCen recognizes taxable gain as a result of the asset sale, although NexCen has tax loss carryforwards that could potentially offset a portion of such gain, such tax loss carryforwards could be unavailable, in whole or in part, due to potentially applicable limitations under the Internal Revenue Code.

Q.
What are the United States federal income tax consequences of the plan of dissolution?

A:
The NexCen board of directors has adopted a plan of dissolution, which, subject to the approval of NexCen's stockholders, provides for the complete liquidation and distribution of NexCen's assets to its stockholders. The dissolution of NexCen will be a taxable transaction for both NexCen and its stockholders. NexCen will recognize gain or loss equal to the difference, if any, between the fair market value and the adjusted basis of each asset sold or distributed in connection with its dissolution. Since NexCen will cease to exist, its unused tax loss carryforwards will be permanently lost. The NexCen stockholders generally will recognize gain or loss equal to the difference between the fair market value of their portions of the assets (determined net of liabilities to which such assets are subject) distributed to them and their adjusted bases in their NexCen stock. If the dissolution is not completed, NexCen and its stockholders, as applicable, may be exposed to greater (or lesser) tax liabilities with respect to any increases (or decreases) in the value of assets that are subsequently sold or distributed (whether or not in liquidation).

Q.
When will I be able to recognize a tax loss or a tax gain on the shares of NexCen common stock that I hold?

A:
You will not recognize any gain on liquidating distributions with respect to shares of NexCen common stock until you have recovered your adjusted tax basis for those shares. After you have recovered your adjusted tax basis, all liquidating distributions in excess of the amount of this recovered tax basis will be recognized by you as taxable gain. You will generally recognize any loss only when NexCen has made its final distribution, which may not be until 2013 or later. Even then, you will recognize a loss for tax purposes only if the aggregate value of all liquidating distributions with respect to your shares of NexCen common stock is less than your adjusted tax basis for those shares. In either case, this gain or loss will be long-term capital gain or loss if, as of the date of dissolution, you have held your shares of NexCen common stock for more than one year.
Q.
Is the dissolution of NexCen, as contemplated in the plan of dissolution, conditional upon the completion of the asset sale?

A:
Yes. NexCen does not intend to dissolve unless it first sells substantially all of its assets in the asset sale.

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Q.
Is the asset sale conditioned on the plan of dissolution proposal being approved?

A:
No. The asset sale is not conditioned on the plan of dissolution proposal being approved.

Q.
What will happen if the asset sale proposal is approved and the plan of dissolution proposal is not approved?

A:
If NexCen stockholders approve the asset sale and do not approve the plan of dissolution, NexCen will still complete the asset sale to GFG, upon the satisfaction of the remaining closing conditions in the Acquisition Agreement. In that case, NexCen will have transferred substantially all of its operating assets to GFG and will not have any assets to support ongoing operations. We also will have paid most of the proceeds from the asset sale to BTMUCC, in the agreed amount as satisfaction of amounts owed under the BTMUCC credit facility. Thereafter, the NexCen board of directors will evaluate what alternatives, if any, are available to the Company. As of the date of this proxy statement, NexCen is not aware of any viable alternatives that we expect would enable us to deliver similar or higher value to our stockholders (including value relating to the use of NexCen's accumulated tax loss carryforwards) or to continue in operation for an extended period of time. Unless additional financing sources become available to us, we may be required to cease operating and possibly seek protection under applicable United States bankruptcy laws. NexCen does not intend to invest in or acquire another operating business following the closing of the asset sale.

Q.
Am I entitled to appraisal rights in connection with the asset sale or the plan of dissolution proposals?

A:
No. As a NexCen stockholder, you will not be eligible for appraisal rights in connection with the asset sale or plan of dissolution, even if you abstain from voting or vote against the asset sale or the plan of dissolution proposals.

Q.
Will I still be able to sell my shares of NexCen common stock following the closing of the asset sale?

A:
Yes, although it may only be for a limited period of time. Although no assurance can be given that there will be an active trading market for NexCen common stock, you will be able to sell your shares of NexCen common stock until NexCen files its certificate of dissolution. If the plan of dissolution proposal is approved by NexCen stockholders, the NexCen board of directors will then decide when to file the certificate of dissolution with the Secretary of State of the State of Delaware. From and after the end of trading on the date the certificate of dissolution becomes effective with the Secretary of State of the State of Delaware, NexCen will no longer permit transfers of its capital stock and will discontinue recording transfers of shares of NexCen common stock. Thereafter, certificates representing shares of NexCen common stock will not be assignable or transferable on NexCen's books. NexCen intends to make a public announcement of the anticipated filing date of the certificate of dissolution at least three business days in advance of the filing.

Q.
Why is NexCen seeking your vote on the share reduction proposal?

A.
NexCen currently has 1 billion shares of common stock and 1 million shares of preferred stock authorized for issuance under its certificate of incorporation. There are approximately 57,001,730 shares of NexCen common stock outstanding. Because NexCen will not need to issue many (or any) additional shares given its current plans, and because a reduction in the number of authorized shares will save approximately $117,000 in annual Delaware franchise tax charges, NexCen is seeking your approval to amend our certificate of incorporation to reduce the total

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Q.
What vote of NexCen stockholders is required to approve the share reduction proposal?

A:
The share reduction proposal requires the affirmative vote of the holders of a majority in voting power of the outstanding shares of NexCen common stock.

Q.
Why is NexCen seeking your vote on the adjournment proposal?

A.
Adjourning the special meeting to a later date will give NexCen additional time to solicit proxies to vote in favor of approval of the asset sale, the plan of dissolution or the share reduction proposal. Consequently, NexCen is seeking your approval of the adjournment proposal to ensure that, if necessary, NexCen will have enough time to solicit the required votes for the asset sale, the plan of dissolution, and the share reduction proposals.

Q.
What vote of NexCen stockholders is required to approve the adjournment proposal?

A:
The adjournment proposal requires the affirmative vote of the holders of a majority in voting power of the outstanding shares of NexCen common stock present, either in person or by proxy, and entitled to vote at the special meeting.

Q.
When and where will the special meeting be held?

A.
The special meeting will be held on July 29, 2010 at 10:00 a.m., Eastern Time, at the offices of Kirkland & Ellis LLP, 601 Lexington Avenue, 50th Floor, New York, NY 10022.

Q.
Who is entitled to notice of and to vote at the special meeting?

A.
Only holders of record of NexCen common stock outstanding as of the close of business on June 4, 2010, which we refer to as the record date, are entitled to notice of and vote at the special meeting. As of the close of business on the record date, there were 57,001,730 shares of NexCen common stock outstanding and entitled to vote at the special meeting.

Q.
Who can attend and vote at the special meeting?

A.
All NexCen stockholders of record as of the close of business on the record date are entitled to receive notice of, attend and to vote at the special meeting.

Q.
How many shares must be present to conduct business?

A.
The presence at the meeting, in person or by proxy, of the holders of a majority of all of our outstanding common stock on the record date will constitute a quorum. A quorum is required to conduct business at the meeting. Both abstentions and broker non-votes are counted for the purpose of determining the presence of a quorum.

Q.
What do I need to do now in order to vote on the proposals being considered at the special meeting?

A:
You should carefully read and consider the information contained in this proxy statement, and you may vote by proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed, postage-paid envelope, by submitting a proxy over the Internet or by telephone following the instructions on the enclosed proxy card. If you sign, date and mail your proxy card without identifying how you want to vote, your proxy will be voted "FOR" the asset sale

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Q.
If my NexCen shares are held in "street name" by my broker, will the broker vote the shares on my behalf?

A:
If your shares are held in a stock brokerage account or by a bank or other nominee, then you are considered the beneficial owner of shares held in "street name" and these proxy materials are being forwarded to you by your broker, bank or other nominee, who is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote and are also invited to attend the special meeting. However, since you are not the stockholder of record, you may not vote these shares in person at the special meeting, unless you request a proxy from your broker, bank or other nominee. Your broker, bank or other nominee has enclosed a voting instruction card for you to use in directing the broker, bank or other nominee regarding how to vote your shares.
Q.
What will happen if I abstain from voting or fail to vote?

A.
Your abstention will have the same effect as a vote "AGAINST" the approval of the asset sale, the plan of dissolution, the adjournment and the share reduction proposals. Failure to attend and vote at the special meeting or to submit your proxy using one of the available methods will have the same effect as a vote "AGAINST" the approval of the asset sale, the plan of dissolution and the share reduction proposals, will have no effect on the adjournment proposal, and will result in your shares not being considered as "present" for purposes of determining a quorum.

Q.
Can I change my vote after I have delivered my proxy?

A.
Yes. If you are a holder of record, you can change your vote at any time before your proxy is voted at the special meeting by:

delivering a signed written notice of revocation to the Corporate Secretary of NexCen;

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Q.
What should I do if I receive more than one set of voting materials for the special meeting?

A:
You may receive more than one set of voting materials for the special meeting, including multiple copies of this proxy statement and multiple proxy cards or voting instruction forms. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction form for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card and voting instruction form. For each and every proxy card and voting instruction form that you receive, please vote as soon as possible using one of the following methods:

by telephone by calling the toll free number as instructed on the enclosed proxy card,

by using the Internet as instructed on the enclosed proxy card; or

by mail by completing, signing, dating and returning the enclosed proxy card in the postage-prepaid envelope enclosed for that purpose.

Q.
What should I do if only one set of voting materials for the special meeting are sent and there are multiple NexCen stockholders in my household?

A:
Some banks, brokers and other nominee record holders may be participating in the practice of "householding" proxy statements and annual reports. This means that only one copy of this proxy statement may have been sent to multiple stockholders in your household. If you prefer to receive multiple copies of this proxy statement at the same address, we will provide additional copies to you promptly upon request to our proxy solicitor at the number listed below. Alternatively, if you currently receive multiple copies at the same address and would prefer to receive a single copy please direct such request to our proxy solicitor at the number below.

Q.
Who can help answer my questions?

A.
If you have any questions about the asset sale, the plan of dissolution, the share reduction or the adjournment proposals, how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, you should contact NexCen's proxy solicitor, Innisfree M&A Incorporated.

Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Stockholders call toll free: (877) 456-3488
Banks and brokers may call collect: (212) 750-5833

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SUMMARY

        The following is a summary that highlights information contained in this proxy statement. This summary may not contain all of the information that may be important to you. For a more complete description of the Acquisition Agreement, the asset sale contemplated by the Acquisition Agreement, the plan of dissolution and the amendment to our certificate of incorporation, we encourage you to read carefully this entire proxy statement, including the attached annexes.

The Asset Sale (see page 52)

        NexCen and GFG agreed to the acquisition by GFG of substantially all of the assets of NexCen under the terms of the Acquisition Agreement that is described in this proxy statement. NexCen will continue as a public company after the closing of the asset sale. Throughout this proxy statement, we refer to GFG's acquisition of substantially all of the assets and specified liabilities of NexCen pursuant to the Acquisition Agreement as the asset sale. We have attached the Acquisition Agreement as Annex A to this proxy statement. We encourage you to read the Acquisition Agreement carefully in its entirety because it is the legal document that governs the asset sale.

Consideration to be Received by NexCen (see page 53)

        If completed, NexCen will receive at the closing of the asset sale cash in the amount of $112.5 million subject to closing adjustments for cash, indebtedness (other than indebtedness under the BTMUCC credit facility), working capital, deferred franchise revenue, and other specified items.

Plan of Dissolution (see page 66)

        If the asset sale is completed and the plan of dissolution is approved by NexCen's stockholders, following the asset sale and the satisfaction of the obligations to BTMUCC under the BTMUCC credit facility, absent the emergence of a higher value alternative that the NexCen board of directors concludes it has a fiduciary obligation to explore, NexCen shall file a certificate of dissolution with the Secretary of State of the State of Delaware, which will commence a formal process under which NexCen will dissolve, pay its known creditors and make reasonable provision for payment to its creditors (including amounts required to cover certain unknown or contingent liabilities), wind up its affairs, and distribute its remaining assets, if any, to its stockholders. The NexCen board of directors currently anticipates that the certificate of dissolution will be filed as soon as reasonably practicable after the closing of the asset sale.

Factors to be Considered By Stockholders in Determining Whether to Approve the Proposals (see page 19)

        In evaluating the asset sale and plan of dissolution proposals, you should carefully read this proxy statement and especially consider the factors discussed in the section entitled "Factors to be Considered by Stockholders in Deciding whether to Approve the Proposals" beginning on page 19 of this proxy statement.

NexCen Stockholders' Meeting; Vote Required (see page 26)

        The special meeting of NexCen stockholders will be held on July 29, 2010 at 10:00 a.m., Eastern Time, at the offices of Kirkland & Ellis LLP, 601 Lexington Avenue, 50th Floor, New York, NY 10022. At the special meeting, NexCen stockholders will be asked to approve:

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        Only holders of record of NexCen common stock outstanding as of the close of business on June 4, 2010, which we refer to as the record date, are entitled to notice of and vote at the special meeting. As of the close of business on the record date, there were 57,001,730 shares of NexCen common stock outstanding and entitled to vote at the special meeting.

        Approval of the asset sale, the plan of dissolution and the share reduction proposals require the affirmative vote of the holders of a majority in voting power of the shares of NexCen common stock.

        Approval of the adjournment proposal requires the affirmative vote of the holders of a majority in voting power of the shares of NexCen common stock present, either in person or by proxy, and entitled to vote at the special meeting.

Recommendation of the NexCen Board of Directors (see page 26)

        The NexCen board of directors has determined that the proposals are advisable, and fair to and in the best interests of NexCen and its stockholders, and recommends that you vote "FOR" the asset sale proposal, "FOR" the plan of dissolution proposal, "FOR" the share reduction proposal and "FOR" the adjournment proposal.

        In considering the recommendation of the NexCen board of directors with respect to the asset sale and the plan of dissolution, NexCen stockholders should be aware that certain executive officers and directors of NexCen have interests in the asset sale and the plan of dissolution that may be different from, or in addition to, the interests of NexCen stockholders generally. These interests include:

        The NexCen board of directors was aware of and considered these interests, among other matters, prior to negotiating and voting to approve the asset sale, voting to approve the plan of dissolution, and making its recommendation that the asset sale and plan of dissolution be approved by NexCen's stockholders.

Opinion of NexCen's Financial Advisor (see page 44 and Annex D)

        Rothschild Inc., or Rothschild, delivered its opinion to the NexCen board of directors that, as of May 12, 2010 and based upon and subject to the qualifications, limitations and assumptions set forth therein, the $112.5 million, or the Purchase Price, to be paid to the Company in cash for the assets and the assumption of certain liabilities by GFG pursuant to the Acquisition Agreement, was fair from a financial point of view to the Company. As discussed under "The Acquisition Agreement—Consideration to be Received by NexCen", the Purchase Price is subject to adjustment pursuant to the terms of the Acquisition Agreement, but Rothschild did not express any opinion as to such adjustment.

        The full text of the written opinion of Rothschild, dated May 12, 2010, which sets forth assumptions made, matters considered and limitations on the review undertaken in connection with the opinion, is attached to this proxy statement as Annex D. Rothschild provided its opinion for the information and assistance of the NexCen board of directors in connection with its consideration of the asset sale. The opinion of Rothschild was limited to the evaluation of the fairness, from a financial point of view, to the Company of the Purchase Price. Rothschild did not express any view or opinion as

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to the fairness, financial or otherwise, of the asset sale to, or any consideration received in connection therewith by, other constituencies or affiliates of the Company, nor as to the fairness of the amount or nature of any compensation or other amounts to be paid or payable to any of the stockholders, officers, directors or employees of the Company or to any creditor or lender of NexCen Holding Corporation or any of its affiliates, including the Company, whether relative to the Purchase Price or otherwise. The summary of Rothschild's opinion included in this proxy statement is qualified in its entirety by reference to the full text of such opinion. The Rothschild opinion is not a recommendation as to how any stockholder of the Company should vote with respect to the proposal to approve the asset sale or any other matter.

        Pursuant to an engagement letter between the Company and Rothschild, the Company agreed to pay to Rothschild a transaction fee equal to a percentage of the consideration received in connection with the asset sale. The transaction fee, which is approximately $2.5 million (excluding expenses), is payable upon the consummation of the asset sale. In addition, the engagement letter provides that Rothschild became entitled to receive, upon delivery of its opinion, a fee of $500,000, which is not contingent upon the consummation of the asset sale and will be credited against payment of the transaction fee.

Share Ownership of NexCen Directors and Executive Officers

        As of the record date, the directors and executive officers of NexCen and their affiliates owned and were entitled to vote 3,718,664 shares of NexCen common stock, which represents approximately 6.5% of the NexCen common stock outstanding on that date.

Conditions to Obligations to Complete the Asset Sale (see page 59 )

        The respective obligations of GFG and NexCen to complete the asset sale are subject to the satisfaction or waiver of the following conditions:

        GFG will not be obligated to complete the asset sale unless the following additional conditions are satisfied or waived:

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        NexCen will not be obligated to complete the asset sale unless the following additional conditions are satisfied or waived:

        Each of NexCen and GFG may waive the conditions to the performance of its respective obligations under the Acquisition Agreement and complete the asset sale even though one or more of these conditions have not been met. NexCen can give no assurance that all of the conditions to the asset sale will be either satisfied or waived or that the asset sale will occur.

Regulatory Matters (see pages 51 and 74)

        NexCen is not aware of any regulatory or governmental actions or approvals required to complete the asset sale.

        NexCen is not aware of any regulatory or governmental requirements that must be complied with or regulatory or governmental approvals that must be obtained in connection with the plan of dissolution.

NexCen Is Prohibited From Soliciting Other Offers (see page 57)

        The Acquisition Agreement restricts our ability to solicit or engage in discussions or negotiations with a third party regarding specified transactions involving NexCen. Notwithstanding these conditions, under certain limited circumstances, which permit the NexCen board of directors to comply with its fiduciary duties, the NexCen board of directors may respond to an unsolicited written bona fide proposal for an alternative transaction or terminate the Acquisition Agreement in order to enter into

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an agreement with respect to a superior proposal after paying the termination fee and certain expenses of GFG specified in the Acquisition Agreement.

Termination of the Acquisition Agreement and Termination Fee (see page 61)

        The Acquisition Agreement may be terminated at any time prior to completion of the asset sale:

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Termination Fee (see page 62)

        Under the terms of the Acquisition Agreement, NexCen may be required to pay certain termination fees to GFG, including:

Expenses Generally; Expense Reimbursement

        All fees and expenses incurred in connection with the asset sale will be paid by the party incurring the fees or expenses, whether or not the asset sale is completed, except for certain circumstances, where GFG may be entitled to expense reimbursement for all out-of-pocket fees and expenses actually incurred by GFG in connection with the transactions contemplated by the Acquisition Agreement up to an aggregate amount of $500,000.

Material United States Federal Income Tax Consequences of the Asset Sale (see page 50)

        The asset sale will be treated as a taxable asset sale, with NexCen as the seller, and GFG as the purchaser. Accordingly, NexCen will generally recognize taxable gain or loss in the transaction with respect to each of its assets, computed in each case as the fair market value of the consideration (including liabilities assumed) allocable to the asset sold by NexCen less the aggregate adjusted tax basis of the assets sold to GFG. NexCen anticipates that the asset sale will result in a loss for federal income tax purposes.

        Holders of NexCen stock will not recognize a tax gain or tax loss upon consummation of the asset sale.

        NexCen stockholders are urged to read the discussion in the section entitled "Proposal One—The Asset Sale Proposal—Material United States Federal Income Tax Consequences of the Asset Sale" beginning on page 50 of this proxy statement and to consult their tax advisors as to the United States federal income tax consequences of the asset sale, as well as the effect of state, local and foreign tax laws.

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Material United States Federal Income Tax Consequences of the Dissolution (see page 75)

        In the dissolution, NexCen will recognize gain or loss measured by the difference, if any, between the adjusted tax basis and the fair market value of each asset sold by NexCen or distributed to stockholders. In the dissolution, the principal assets of NexCen will consist of cash and certain non-cash assets. To the extent that NexCen has net operating losses, it may be able to use some or all of such losses to offset any gain that is recognized in the dissolution.

        Amounts received by NexCen stockholders pursuant to the plan of dissolution will be treated as full payment in exchange for their NexCen common stock. A NexCen stockholder's gain or loss on such amounts received will be computed on a "per share" basis. If NexCen makes more than one liquidating distribution, each liquidating distribution will be allocated proportionately to each share of stock owned by a stockholder. The amount of cash and the fair market value of any other property received by a stockholder in each liquidating distribution will be applied against and reduce the stockholder's adjusted tax basis in that stockholder's shares of common stock. A stockholder will not recognize any gain with respect to a share until the stockholder has recovered the stockholder's adjusted tax basis for that share. After the adjusted tax basis is recovered, all distributions in excess of such recovered basis will be recognized as taxable gain. Any loss will generally be recognized only when the final distribution from NexCen has been received, which may not be until 2013 or later, and then only if the aggregate value of all liquidating distributions with respect to a share is less than the stockholder's adjusted tax basis for that share. This gain or loss will be long-term capital gain or loss if, as of the date of dissolution, the holding period for such stock is more than one year

        NexCen stockholders are urged to read the discussion in the section entitled "Proposal Two—Plan of Dissolution Proposal—Material United States Federal Income Tax Consequences of the Dissolution" beginning on page 75 of this proxy statement and to consult their tax advisors as to the United States federal income tax consequences of the dissolution, as well as the effect of state, local and foreign tax laws.

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FACTORS TO BE CONSIDERED BY STOCKHOLDERS IN DECIDING
WHETHER TO APPROVE THE PROPOSALS

        In addition to the other information included in this proxy statement, there are many factors that stockholders should consider when deciding whether to approve the proposals. Such factors include the risk factors set forth below and those set forth in NexCen's filings with the SEC.


Risk Factors Relating to the Asset Sale

If the asset sale is not completed, there may be few, if any, assets available for distribution to NexCen stockholders.

        If the asset sale is not consummated, we believe that NexCen will have limited alternatives and that there is a substantial risk that stockholders will receive little or no value from any alternatives that might be pursued. As of the date of this proxy statement, NexCen is not aware of any viable alternatives that we expect would enable us to deliver similar or higher value to our stockholders (including value relating to the use of NexCen's accumulated tax loss carryforwards) or to continue in operation for an extended period of time. If the assets sale is not completed, absent a reasonable and attractive alternative that involves the same or less forgiveness of debt and that is otherwise agreeable to BTMUCC, there is a substantial risk that our assets would be subject to foreclosure after a further default under the BTMUCC credit facility. If this were to happen, NexCen would lose control of all of its operating assets and cash flows and likely would have no choice but to file for bankruptcy protection. In such event, it is highly unlikely that there would be significant assets, if any, available for any distribution to NexCen's stockholders.

The transaction may not be completed, which could materially and adversely impact our business, financial condition and results of operations.

        To complete the asset sale, NexCen stockholders must approve the transaction because it will be considered a sale of substantially all of the Company's assets. In addition, the Acquisition Agreement contains additional closing conditions, including the absence of any legal impediment to the consummation of the asset sale and the absence of any event constituting a "material adverse effect" from the date of signing. These conditions may not be satisfied, and there can be no guaranty that GFG will agree to waive any conditions which are not satisfied. If we are unable to complete the asset sale, NexCen would be subject to a number of risks, including the following:

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        The occurrence of any of these events individually or in combination could have a material adverse effect on our business, financial condition and results of operation.

The fact that there is a transaction pending could have a material and adverse effect on our business, financial condition and results of operations.

        While the asset sale is pending, it creates uncertainty about our future. As a result of this uncertainty, franchisees and other business partners may decide to delay, defer or cancel entering into new franchising or other business arrangements with us pending completion of the asset sale or termination of the asset sale.

        In addition, while the asset sale is pending, we are subject to a number of risks, including:

        The occurrence of any of these events individually or in combination could have a material adverse effect on our business, financial condition and results of operation.

Even if NexCen's stockholders approve the asset sale, the asset sale may not be completed.

        The completion of the asset sale is subject to numerous closing conditions, some of which are out of NexCen's control, and there can be no guarantee that NexCen will be able to satisfy all of the closing conditions set forth in the Acquisition Agreement. Conditions to closing under the Acquisition Agreement include, for example:

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As a result, even if the asset sale is approved by the required vote of our stockholders at the special meeting, NexCen cannot guarantee that the asset sale will be completed. If the asset sale is not completed, NexCen will likely have no choice but to file for, or be forced by its creditors to resort to, bankruptcy protection, and it is highly unlikely that there would be significant assets, if any, available for distribution to NexCen's stockholders in such event.

The Acquisition Agreement limits our ability to pursue alternatives to the transaction.

        The Acquisition Agreement contains provisions that make it more difficult for us to sell our franchising business to a party other than GFG. These provisions include a non-solicitation provision (including certain matching rights), a provision requiring that we submit the asset sale to our stockholders for approval unless the Acquisition Agreement has been terminated in accordance with its terms, and provisions obligating us to pay a termination fee of $4.5 million and to reimburse GFG for up to $500,000 in expenses in certain circumstances.

        These provisions could discourage a third party that might have an interest in acquiring all of or a significant part of the Company from considering or proposing that acquisition, even if that party were prepared to pay consideration with a higher value than the consideration to be paid by GFG. Furthermore, the payment of the termination fee and expense reimbursement could also have an adverse effect on our financial condition.

The asset sale may limit our ability to utilize our tax loss carryforwards.

        If NexCen does not maintain involvement in an active trade or business following the closing, the asset sale may be deemed to constitute a constructive liquidation of the Company or a constructive liquidation of certain subsidiaries of the Company for income tax purposes. If the asset sale is deemed a constructive liquidation of the Company or a constructive liquidation of certain of the subsidiaries, the Company or certain of its subsidiaries may lose, permanently, the ability to utilize their tax loss carryforwards in the future. Furthermore, if NexCen subsequently dissolves under the plan of dissolution, all of its unused tax loss carryforwards will be permanently lost.

Certain directors and executive officers of NexCen may have interests in the asset sale that may be different from, or in addition to, the interests of NexCen stockholders.

        NexCen stockholders should be aware that some directors and executive officers of NexCen may have interests in the asset sale and plan of dissolution that may be different from, or in addition to, the interests of NexCen stockholders. These interests include agreements that provide for severance payments following the termination of employment (which is currently anticipated to occur following the closing of the asset sale) of certain executive officers (but not any directors) of NexCen and the right to continued customary indemnification and insurance coverage for a specified period following the asset sale and dissolution of the Company. The NexCen board of directors was aware of and considered these interests, among other matters, prior to negotiating and voting to approve the asset sale, voting to approve the plan of dissolution, and making its recommendation that the asset sale and plan of dissolution be approved by NexCen's stockholders.


Risk Factors Relating to the Plan of Dissolution

Our stockholders could approve the asset sale but vote against the plan of dissolution, in which case the Company's resources may diminish completely and our stock price may be adversely affected.

        If we obtain stockholder approval of, and then close, the asset sale but do not obtain stockholder approval of the plan of dissolution, we would be in the difficult position of having to continue our business operations after having sold substantially all of our assets and having announced our intention to liquidate and dissolve the Company. All of the Company's revenue from operations is generated from its franchising business and the subsidiaries being transferred in the asset sale. If the asset sale closes, we will have no active business left to operate, we will have no assets with which to generate

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revenue, we will likely have transferred as part of the transaction substantially all of our employees, we will likely have terminated certain other employees at our corporate headquarters in New York, and we will have commenced the process of winding up. If the plan of dissolution is not approved, we will be forced to use any remaining cash and the cash received as consideration in the asset sale to pay ongoing operating expenses instead of making a distribution to our stockholders pursuant to the plan of dissolution. Additionally, if our stockholders do not approve the plan of dissolution, our stock price may be adversely affected due to market perception about our ability to successfully pursue strategic alternatives.

Further stockholder approval may not be required in connection with the implementation of the plan of dissolution, including for the sale of all or substantially all of our remaining non-cash assets as contemplated in the plan of dissolution.

        Stockholder approval of the plan of dissolution will authorize the NexCen board of directors to do and perform, or to cause our executive officers to do and perform, any and all acts and to make, execute, deliver or adopt any and all agreements, resolutions, conveyances, certificates and other documents of every kind that the NexCen board of directors deems necessary, appropriate or desirable, in the absolute discretion of our board of directors, to implement the plan of dissolution and the transactions contemplated thereby, including all filings or acts required by any state or federal law or regulation to wind up our affairs. Accordingly, following stockholder approval of the plan of dissolution, we may dispose of any and all of our other remaining non-cash assets, consisting of any office furniture, equipment, supplies and other miscellaneous assets, without further stockholder approval. As a result, the NexCen board of directors may authorize actions in implementing the plan of dissolution, including the terms and prices for the sale of our remaining non-cash assets, with which our stockholders may not agree.

We cannot determine at this time the amount or timing of any distributions to our stockholders because there are many factors, some of which are outside of our control, that could affect our ability to make such distributions.

        We cannot determine at this time when, or potentially whether, we will be able to make any distributions to our stockholders or the amount of any such distributions. Those determinations depend on a variety of factors, including whether the asset sale closes, the timing of the closing of the asset sale, the amount required to pay our known liabilities and obligations, the amount of our liabilities and obligations in the future, our future operating costs, potential limitations on the use of our tax loss carryforwards to offset any taxable gain, the resolution of currently known contingent liabilities, the amount of unknown or contingent liabilities of which we become aware after closing, general business and economic conditions, and other matters. We will continue to incur claims, liabilities and expenses from operations (such as operating costs, salaries, directors' and officers' insurance, payroll and local taxes, legal and accounting fees, compliance costs, and miscellaneous office expenses) as we seek to close the asset sale. Our estimates regarding our expense levels may be inaccurate. Any unforecasted or unexpected claims, liabilities or expenses that arise before and after the closing of the transaction or any claims, liabilities or expenses that exceed our estimates would likely reduce the amount of cash available for ultimate distribution to our stockholders.

The NexCen board of directors may abandon or delay implementation of the plan of dissolution even if it is approved by our stockholders.

        The NexCen board of directors has approved the asset sale and has adopted and approved a plan of dissolution for the dissolution and winding-up of the Company following the closing of the asset sale. However, even if the asset sale and the plan of dissolution are approved and adopted by our stockholders, our board of directors may, in its sole discretion, abandon the plan of dissolution if our board of directors concludes that its fiduciary obligations require it to pursue business opportunities that present themselves or to abandon the plan of dissolution. If the NexCen board of directors elects

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to pursue any alternative to the plan of dissolution, the value of our common stock may decline, and our stockholders may not receive any of the funds currently estimated to be available for distribution pursuant to the plan of dissolution.

We will continue to incur the expenses of complying with public company reporting requirements until either the SEC provides relief from such reporting requirements, the deregistration of our shares or the Company's dissolution.

        We will continue to have an obligation to comply with the applicable reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, until the Company is permitted to deregister its shares under the Exchange Act or the Company is dissolved. In order to curtail the economically burdensome expenses that the Company would incur to comply our Exchange Act reporting requirements, we intend to seek deregistration of our shares of common stock or other relief from the SEC from our reporting obligations. To the extent that we are unable to deregister our shares or the SEC denies such relief, we will be obligated to continue complying with the applicable reporting requirements of the Exchange Act. The expenses we incur in complying with the applicable reporting requirements will reduce the assets available for distribution to our stockholders.

If we fail to retain the services of appropriate personnel, the plan of dissolution may not succeed.

        The success of the plan of dissolution depends in large part upon our ability to retain the services of qualified personnel who will be charged with operating the Company following the closing of the asset sale. There can be no assurance that we will be successful in retaining the services of such qualified personnel. Given the amount that the Company will be able and willing to pay for such services, it may be difficult to retain qualified personnel.

Distributions to our stockholders could be delayed.

        All or a portion of the distribution could be delayed, depending on many factors, including if:

        Any of the foregoing could delay or substantially diminish the amount available for distribution to our stockholders.

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If we fail to create an adequate contingency reserve for payment of our expenses and liabilities, a stockholder could be held liable for payment to the Company's creditors up to the amount actually distributed to such stockholder.

        If the asset sale is completed and the plan of dissolution is approved by NexCen's stockholders, following the asset sale and the satisfaction of the obligations to BTMUCC under the BTMUCC credit facility, absent the emergence of a higher value alternative that the NexCen board of directors concludes it has a fiduciary obligation to explore, NexCen shall file a certificate of dissolution with the Secretary of State of the State of Delaware. Once a certificate of dissolution is filed with the Secretary of State of the State of Delaware, dissolving the Company, pursuant to Delaware law, the Company will continue to exist for three years after the dissolution becomes effective or for such longer period as the Delaware courts shall direct, for the sole purpose of winding up our business and affairs. Following the effective date of the dissolution, we will pay or make reasonable provision to pay all claims and obligations, including all contingent, conditional or unmatured contractual claims, known to us. We also may obtain and maintain insurance coverage or establish and set aside a reasonable amount of cash or other assets as a contingency reserve to satisfy claims against and obligations of the Company. If the amount of the contingency reserve, insurance and other resources calculated to provide for the satisfaction of liabilities and claims is insufficient to satisfy the aggregate amount ultimately found payable in respect of our liabilities and claims against us, each stockholder could be held liable for amounts due to creditors up to the amounts distributed to such stockholder under the plan of dissolution. In such event, a stockholder could be required to return all amounts received as distributions pursuant to the plan of dissolution and ultimately could receive nothing under the plan of dissolution. Moreover, for federal income tax purposes, payments made by a stockholder in satisfaction of our liabilities not covered by the cash or other assets in our contingency reserve or otherwise satisfied through insurance or other reasonable means generally would produce a capital loss for such stockholder in the year the liabilities are paid. The deductibility of any such capital loss generally would be subject to limitations for income tax purposes.

Stockholders may not be able to recognize a loss for federal income tax purposes until they receive a final distribution from us.

        As a result of our dissolution and liquidation, for federal income tax purposes, our stockholders generally will recognize gain or loss equal to the difference between (1) the sum of the amount of cash and the fair market value (at the time of distribution) of property, if any, distributed to them, and (2) their tax basis for their shares of our common stock. Liquidating distributions pursuant to the plan of dissolution may occur at various times and in more than one tax year. Any loss generally will be recognized by a stockholder only when the stockholder receives our final liquidating distribution to the stockholders, and then only if the aggregate value of all liquidating distributions with respect to a share is less than the stockholder's tax basis for that share. Stockholders are urged to consult their own tax advisors as to the specific tax consequences to them of our dissolution and liquidation pursuant to the plan of dissolution.

The directors and officers of the Company will receive additional benefits as a result of the transaction and the dissolution and liquidation.

        Following the filing of a certificate of dissolution with the Secretary of State of the State of Delaware, we will continue to indemnify each of our current and former directors and officers to the fullest extent permitted under Delaware law and our certificate of incorporation and bylaws as in effect immediately prior to the filing of the certificate of dissolution. In addition, we intend to maintain our current directors' and officers' insurance policy through the date of dissolution and are required pursuant to the terms of the Acquisition Agreement to obtain runoff coverage for at least six years after the closing.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

        This proxy statement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "PSLRA"). We base these forward-looking statements on our expectations and projections about future events, which we have derived from the information currently available to us. For each of these forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the PSLRA. Words such as "may," "could," "will," "should," "likely," "expects," "anticipates," "contemplates," "estimates," "believes," "plans," "intends," "projected," "predicts," "potential" or "continue," or similar terms and variations of these words and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are those that are not historical in nature, but rather those that relate to future events or our future performance, including statements regarding: our expected closing and timing of the closing of the asset sale and the dissolution of the Company; the expected cash to be received from the asset sale and cash to be disbursed to settle our obligations and liabilities, both known and unknown; the expected cash distribution amounts and the timing of these distributions; the expected expenses incurred in connection with the asset sale and the dissolution of the Company; possible or assumed future results of operations; and future revenue and earnings. Forward-looking statements are subject to certain known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed in any forward-looking statements. These risks and uncertainties include the following important factors with respect to the Company:

        Readers are cautioned not to place undue reliance on forward-looking statements, which express our expectations and beliefs only. The forward-looking events discussed in this proxy statement and other statements made from time to time by us or our representatives may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about the Company including those discussed elsewhere in this proxy statement and the risks discussed in our SEC filings.

        Any forward-looking statements made in this proxy statement or in any of the annexes attached hereto or that we may make from time to time are representative only as of the date they are made, and we undertake no obligation to update or revise our forward-looking statements, whether as a result of new information, future events or otherwise.

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SPECIAL MEETING OF THE STOCKHOLDERS OF NEXCEN

When and Where the Special Meeting Will Be Held

        The special meeting of the stockholders of NexCen will be held on July 29, 2010 at 10:00 a.m., Eastern Time, at the offices of Kirkland & Ellis LLP, 601 Lexington Avenue, 50th Floor, New York, NY 10022.


What Will Be Voted Upon

        The purpose of the special meeting is to consider and vote upon the following proposals:

        The NexCen board of directors does not currently intend to bring any business before the special meeting other than the specific proposals set forth above and specified in the notice of the special meeting. The NexCen board of directors does not know of any other matters that are to be brought before the special meeting. If any other business properly comes before the special meeting, it is the intention of the persons named in the enclosed form of proxy to vote the shares they represent as the NexCen board of directors may recommend.

        The matters to be considered at the special meeting are of great importance to NexCen's stockholders. Accordingly, stockholders are urged to read and carefully consider the information presented in this proxy statement, and to complete, date, sign and promptly return the enclosed proxy in the enclosed postage-paid envelope. Proxies may also be returned to NexCen by telephone or on the Internet.


The NexCen Board of Directors' Recommendation

        THE NEXCEN BOARD OF DIRECTORS HAS APPROVED THE ASSET SALE PROPOSAL, THE PLAN OF DISSOLUTION PROPOSAL, THE SHARE REDUCTION PROPOSAL AND THE ADJOURNMENT PROPOSAL AND RECOMMENDS THAT YOU VOTE "FOR" THE ASSET SALE PROPOSAL, "FOR" THE PLAN OF DISSOLUTION PROPOSAL, "FOR" THE SHARE REDUCTION PROPOSAL AND "FOR" THE ADJOURNMENT PROPOSAL.

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Which Stockholders May Vote

        The NexCen board of directors has fixed the close of business on June 4, 2010 as the record date for determining stockholders entitled to receive notice of the special meeting, and to vote their shares at the special meeting and any adjournment or postponement of the special meeting. Only holders of record of NexCen common stock at the close of business on the record date will be entitled to notice of, and to vote at, the special meeting and any adjournment or postponement of the special meeting. Each share of NexCen common stock is entitled to one vote.

        As of the close of business on the record date, there were 57,001,730 shares of NexCen common stock outstanding and entitled to vote at the special meeting.


How Do NexCen Stockholders Vote

        The NexCen proxy card accompanying this proxy statement is solicited on behalf of the NexCen board of directors for use at the special meeting. NexCen's stockholders are requested to complete, date and sign the accompanying proxy card and promptly return it in the accompanying envelope. NexCen's stockholders can also submit their proxy by telephone or the Internet. All proxies that are properly executed and returned, or submitted by telephone or the Internet, and that are not revoked, will be voted at the special meeting in accordance with the instructions indicated thereon. Executed or submitted but unmarked proxies will be voted "FOR" approval of all of the proposals listed on the proxy card.


Quorum and Vote Required to Approve Each Proposal

        Quorum.    The presence at the meeting, in person or by proxy, of the holders of a majority of all of our outstanding common stock on the record date will be necessary to constitute a quorum.

        Voting requirements for the approval of the asset sale proposal.    Assuming a quorum is present, approval of the asset sale proposal will require the affirmative vote of the holders of a majority in voting power of the outstanding shares of the NexCen common stock.

        Voting requirements for the approval of the plan of dissolution proposal.    Assuming a quorum is present, approval of the plan of dissolution proposal will require the affirmative vote of the holders of a majority in voting power of the outstanding shares of the NexCen common stock.

        Voting requirement for the approval of the share reduction proposal.    Assuming a quorum is present, approval of the share reduction proposal will require the affirmative vote of the holders of a majority in voting power of the outstanding shares of the NexCen common stock.

        Voting requirements for the adjournment proposal.    Assuming a quorum is present, the approval of the adjournment proposal will require the affirmative vote of the holders of a majority in voting power of the NexCen common stock present, either in person or by proxy, and entitled to vote at the special meeting.


Abstentions; Broker Non-Votes

        The inspector of elections at NexCen's special meeting will treat abstentions and shares represented by proxies that reflect abstentions as shares that are present and entitled to vote for the purpose of determining the presence of a quorum and as having voting power for the purpose of determining the outcome of any matter submitted to NexCen's stockholders for a vote. Abstentions will have the effect of votes against any proposal to be considered at the special meeting.

        Broker non-votes occur when a broker holding stock in street name does not vote the shares on some or all matters. Brokers are permitted to vote on routine, non-controversial proposals in instances

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where they have not received voting instruction from the beneficial owner of the stock but are not permitted to vote on non-routine matters. Uncast votes on non-routine matters are referred to as "broker non-votes." The inspector of elections will treat broker non-votes as shares that are present and entitled to vote for the purpose of determining the presence of a quorum. However, for the purpose of determining the outcome of any matter as to which the broker or nominee has indicated on the proxy that it does not have discretionary authority to vote, the inspector of elections will be required to treat those shares as not having voting power with respect to that matter (even though their shares may represent voting power with respect to other matters, such as routine matters). Broker non-votes will not be considered to have been voted for or against the approval of the asset sale proposal, the plan of dissolution proposal or the share reduction proposal. However, because the votes required to approve the asset sale proposal, the plan of dissolution proposal and the share reduction proposal are based on a percentage of the total number of shares outstanding, or in the case of the adjournment proposal, the number of votes present in person or by proxy, rather than as a percentage of the voting power represented at the meeting and entitled to vote on the specific proposal, broker non-votes will have the effect of a vote against those proposals.


Revocability of Proxies

        Stockholders of record who execute proxies may revoke them by giving written notice to, or by signing and delivering a new, valid proxy bearing a later date to, NexCen's Corporate Secretary at any time before such proxies are voted. Stockholders who submit a proxy by telephone or the Internet can revoke them by submitting another proxy by telephone or the Internet by following the instructions on the enclosed proxy card. Attendance at the special meeting will not have the effect of revoking a proxy unless the stockholder attending the special meeting notifies the Corporate Secretary, in writing, of the revocation of the proxy at any time prior to the voting of the shares represented by the proxy. If a stockholder's shares are held in "street name," the stockholder must contact its broker, bank or other nominee to change its vote.


Solicitation of Proxies and Expenses of Solicitation

        NexCen will bear the costs of printing, filing and mailing this proxy statement. NexCen will bear the costs of holding the special meeting and the cost of soliciting proxies. In addition to solicitation by mail, NexCen's directors, officers and regular employees (who will not be specifically compensated for such services) may solicit proxies by telephone, facsimile, email and personal meetings. NexCen has retained Innisfree M&A Incorporated to aid in the solicitation of proxies from stockholders for an initial retainer of $5,000 plus additional fees and reimbursement of out-of-pocket expenses.


Assistance

        If you have any questions about the asset sale, the plan of dissolution, the share reduction or the adjournment proposals, how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, you should contact: NexCen's proxy solicitor, Innisfree M&A Incorporated.


Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Stockholders call toll free: (877) 456-3488
Banks and brokers may call collect: (212) 750-5833

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PROPOSAL ONE—THE ASSET SALE PROPOSAL

The Companies

        NexCen Brands, Inc., a Delaware corporation, is a strategic brand management company that owns and manages a portfolio of seven franchised brands, operating in the single business segment of franchising. Five of our brands (Great American Cookies®, Marble Slab Creamery®, MaggieMoo's®, Pretzel Time® and Pretzelmaker®) are in the quick service restaurant industry. The other two brands (The Athlete's Foot® and Shoebox New York®) are in the retail footwear and accessories industry. Our wholly-owned subsidiary, NF Management, manages all seven brands. Our franchise network, across all our brands, consists of approximately 1,700 retail stores in 38 countries. Our annual report on Form 10-K for the year ended December 31, 2009, filed with the SEC on March 26, 2010, amendment No. 1 to our annual report on Form 10-K/A for the year ended December 31, 2009, filed with the SEC on April 29, 2010, and our quarterly report for the quarter ended March 31, 2010, filed with the SEC on May 17, 2010, are attached as Annex E to this proxy statement.

        Global Franchise Group, LLC, or GFG, is a newly formed Delaware limited liability company. GFG is an affiliate of Levine Leichtman Capital Partners IV, L.P., a fund that is managed by Levine Leichtman Capital Partners, Inc., a Los Angeles, California-based investment firm. LLCP currently manages approximately $5.0 billion of institutional investment capital through private equity partnerships, distressed debt and leveraged loan funds. LLCP has significant franchise management experience, including franchise investments in Quiznos, Wetzel's Pretzels, Beef 'O' Brady's and Cici's Pizza. GFG has not engaged in any activity other than activities for the purpose of acquiring substantially all of NexCen's assets pursuant to the asset sale.


Background of the Asset Sale and Plan of Dissolution

        For more than two years, NexCen has been working to reduce its indebtedness and rationalize its capital structure. The NexCen board of directors and our senior management, with the advice and input of outside financial and legal advisors, have pursued various strategies in an effort to achieve a capital structure that would permit the development of the Company's operations, the generation of sufficient liquidity to meet debt service and working capital needs, and the growth of stockholder value.

        In January 2008, NexCen amended the BTMUCC credit facility to accommodate the acquisition of the Great American Cookie Company. The amendment allowed NexCen's subsidiaries to borrow an additional $70 million in order to finance the acquisition, and included an obligation to re-pay $30 million of the additional borrowings on or before October 16, 2008. This increased the total outstanding borrowings under the BTMUCC credit facility to approximately $176 million.

        In May 2008, following the appointment of a new chief financial officer and in conjunction with preparing the financial statements for the first quarter of 2008 10-Q, NexCen determined that without changes to the terms of the amended BTMUCC credit facility or other measures to enhance our liquidity, it would face a cash shortfall of approximately $7 million to $10 million over the coming months and also would need additional cash to make the required principal payment on October 17, 2008. In light of these issues as well as an inability to refinance some or all of the outstanding debt, NexCen announced in May 2008 that there was substantial doubt about its ability to continue as a going concern. At that time, the NexCen board of directors commenced an examination of strategic alternatives, which was announced publicly on May 19, 2008. NexCen retained the restructuring firm FTI Consulting, Inc. in order to assist the NexCen board of directors with reviewing alternatives to stabilize NexCen's financial situation, including restructuring the debt under the BTMUCC credit facility. It also retained Rothschild Inc. to assist with restructuring efforts, and explore the potential sales of the Bill Blass and Waverly brands. While the Company reviewed a wide range of potential options to enhance its liquidity, it focused on efforts to restructure the BTMUCC credit facility, reduce operating expenses and explore the possible sale of the Bill Blass and Waverly licensing businesses so that the Company could focus on its core franchise business.

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        In the second half of 2008, NexCen completed a restructuring of the BTMUCC credit facility. The amended facility significantly revised the terms of the outstanding borrowings, reducing debt service obligations, extending maturities, and substantially alleviating short-term liquidity constraints. The changes also further restricted the operating expenses that would be reimbursed under the BTMUCC credit facility and provided for additional events of default that are customary in a restructured credit facility. The amended facility also provided that NexCen use its best efforts to sell, for a commercially reasonable price (determined with respect to existing circumstances), the Bill Blass and Waverly licensing businesses, which transactions were completed in October 2008 and December 2008, respectively, with the assistance of Rothschild. In the second half of 2008, the Company also made significant changes to its senior management and significantly reduced spending.

        On January 27, 2009, NexCen completed an additional waiver and amendment to the BTMUCC credit facility which, among other things, reduced the fixed interest rate on the Class B Franchise Note of the credit facility from 12% (increasing to 15% in July 2009), to a fixed rate of 8% through the maturity of the Class B Franchise Note in July 2011.

        The amendments to the BTMUCC credit facility, as well as NexCen's expense reductions and sale of its licensing businesses stabilized NexCen's business and significantly reduced its rate of cash consumption, and through the first quarter of 2009, our senior management was optimistic that the Company's performance would enable NexCen to operate successfully under the restructured BTMUCC credit facility. However, the Company remained highly levered and faced severe limits on its access to cash, due to, among other things, customary limitations imposed by the terms of the restructured BTMUCC credit facility and the effects of the broad economic recession, which negatively impacted NexCen's access to cash or operating performance, as applicable, in the second quarter of 2009.

        As a result of, among other things, the poor economic conditions and customary limitations imposed by the terms of the restructured BTMUCC credit facility, the Company found itself in July of 2009 needing several waivers and amendments to its restructured credit facility to address and avoid various defaults and potential defaults. These waivers and amendments were obtained from BTMUCC on July 15, 2009.

        In August 2009, in light of continuing adverse general economic conditions, and revised financial projections showing that the Company would likely in the long run have difficulty meeting its obligations under the BTMUCC credit facility and would be unlikely to make the July 2011 principal payment of the Class B Franchise Note, the NexCen board of directors and management determined that the Company needed to explore a range of strategic alternatives to avoid a future liquidity crisis or a potential foreclosure by BTMUCC after a further default under the BTMUCC credit facility, either of which would destroy value for all stakeholders. As a result, NexCen decided to engage a financial advisor and begin more formally exploring a range of possible strategic alternatives.

        In October 2009, NexCen announced its first quarter 2009 and full year audited 2008 financial results, which included impairment charges of approximately $242 million with respect to the Company's intangible assets and resulted in a shareholders' deficit (negative equity) of approximately $49.5 million and $47.3 million as of December 31, 2008 and March 31, 2009, respectively.

        In early October 2009, after reviewing proposals from four potential financial advisors with significant experience in the consumer and franchising spaces, the NexCen board of directors entered into a new engagement with Rothschild as its exclusive financial advisor to assist with the review of strategic alternatives. The NexCen board of directors authorized Rothschild to run a broad, multi-pronged process to:

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Based on its preliminary work to value the Company, Rothschild indicated to the NexCen board of directors that any strategic transaction was likely to value the Company at an amount substantially less than the approximately $138 million of then outstanding debt under the BTMUCC credit facility.

        During November and December 2009, as part of its assessment of strategic alternatives, Rothschild worked with management to prepare a confidential information memorandum regarding NexCen and to identify third parties that might be interested in pursuing a strategic transaction involving the Company. During this period and in early January 2010, Rothschild contacted 26 potential investors (previously approved by management), including six strategic investors and 20 financial investors, to discuss their potential interest in a transaction with or investment in the Company. Included in the initial list of parties contacted were parties that the Company considered to be credible potential investors who had previously contacted either NexCen or BTMUCC and expressed interest in purchasing all or a portion of the Company or the debt owed in connection with the BTMUCC credit facility. Additionally, Rothschild invited potential investors to submit bids based upon various investment structures so that the Company could more fully evaluate prospective investments and alternative transaction structures. In response to Rothschild's solicitations, 10 parties, referred to as the Initially Interested Parties, entered into confidentiality agreements with NexCen and received the confidential information memorandum that had been prepared by Rothschild and management. The confidentiality agreements contained customary confidentiality and standstill provisions, as well as restrictions on the Initially Interested Parties' ability to make proposals to BTMUCC or any other person regarding any potential transaction unless requested to do so by the Company. LLCP was one of the 26 potential purchasers initially contacted, but it did not participate in the process at this time. Separately, throughout this period, Rothschild and management also continued to work on other strategic alternatives, including the restructuring or refinancing of the debt outstanding under the BTMUCC credit facility, and NexCen and Rothschild also regularly updated BTMUCC, who reserved all of its rights under the BTMUCC credit facility.

        As this process was proceeding, NexCen again experienced increasing liquidity concerns as its revenues and forecasts declined and its projected expenses for 2009 approached the 2009 management fee cap established under the BTMUCC credit facility. In response to this situation, the Company initiated discussions with BTMUCC about obtaining a waiver, if needed, to the 2009 spending limits in the BTMUCC credit facility. During the course of these discussions, BTMUCC expressed concern about both the decline in the Company's revenues and the Company's inability to reduce the level of its expenses as originally anticipated and rejected the Company's waiver request.

        Throughout the course of late 2009 and early 2010, the NexCen board of directors met and conferred frequently with members of management, Rothschild and our legal advisor, Kirkland & Ellis LLP, or Kirkland, regarding the progress of the strategic alternative evaluation process.

        In January 2010, six of the Initially Interested Parties submitted indications of interest in purchasing some or all of NexCen's business that were based on the information contained in the confidential information memorandum, as well as publicly available information. Of the six Initially Interested Parties, three indications of interest were received from financial purchasers interested in acquiring all of our operating assets at proposed enterprise values ranging from $60 million to $103 million, and two indications of interest were received from financial purchasers who bid for just selected assets with values ranging from $40 million to $55 million. The sixth indication of interest was received from a strategic purchaser who bid for either all of NexCen's assets at an enterprise value of $60 million to $70 million or for just selected assets at a price to be based on a multiple of the assets' earnings before interest, taxes, depreciation and amortization, which NexCen calculated implied a value

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range of $45 million to $60 million. LLCP was not one of the parties that submitted a non-binding indication of interest at this time.

        Throughout January 2010, members of the Company's senior management and Mr. George Stamas, one of our directors, had periodic discussions with BTMUCC regarding the possibility of restructuring BTMUCC's debt or effecting a recapitalization of the Company.

        On January 14, 2010, NexCen completed an additional amendment to the BTMUCC credit facility which:

        On January 25, 2010, the NexCen board of directors met with members of management and our financial and legal advisors. Mr. Stamas and Mr. Kenneth Hall, our chief executive officer, provided the directors with an update regarding their recent conversations with BTMUCC. Mr. Hall expressed his concern that, based upon BTMUCC's refusal to provide the requested relief under the 2009 expense cap at that time and the short-term nature of the waivers provided in January 2010, BTMUCC would be less willing to grant waivers and to agree to additional amendments to the terms of the outstanding debt. Rothschild provided the directors with a summary of the indications of interest that had been received and discussed the relative degrees of interest and perceived commitment of the various bidders. Rothschild again advised the board that based on the indications of interest received and Rothschild's own valuation assessments, it appeared likely that the near-term value of NexCen's business was substantially lower than the outstanding amount of debt owed to BTMUCC. Kirkland also reviewed with the directors their fiduciary obligations in light of the Company's circumstances. The NexCen board of directors, together with management and our financial and legal advisors, discussed numerous issues, including:

At the conclusion of this meeting, the NexCen board of directors discussed the likely possibility that the Company would face increasing pressure to identify and complete a strategic transaction to avoid a further default under the BTMUCC credit facility and a potential foreclosure by BTMUCC after such

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a default under the BTMUCC credit facility that would deprive unsecured creditors and stockholders of any value. The directors agreed that it was critical for the Company to continue to provide regular updates to BTMUCC while Rothschild continued its exploration of possible strategic options for the Company.

        On February 3, 2010, Messrs. Hall and Stamas, Mr. Seth Burroughs, our vice president of corporate development, and Rothschild met in Boston with BTMUCC and its outside legal counsel, Mayer Brown LLP, or Mayer Brown. As an initial matter, Mr. Stamas stated that the Company's willingness to proceed with a sale transaction would depend upon BTMUCC's willingness to forgive an amount of debt that would allow the Company to retain a portion of any sale proceeds for the benefit of unsecured creditors and stockholders, should a sale transaction be completed at a price less than the amount of the outstanding debt owed to BTMUCC. Representatives of BTMUCC indicated general support for this concept, if a sufficient sale price could be achieved. Rothschild then summarized the process it had conducted to explore potential strategic alternatives, the indications of interest that had been received to date and Rothschild's preliminary valuation range for NexCen's business. The parties also discussed the possibility of restructuring the debt under the BTMUCC credit facility without a third-party sale or investment, as an alternative to a sale transaction. Mr. Stamas reiterated that the NexCen board of directors and management would have little incentive to pursue a strategic transaction if the result for stockholders was the same as would occur in a foreclosure by BTMUCC after a further default under the BTMUCC credit facility or a bankruptcy (i.e., no value for stockholders). BTMUCC noted that it was considering all of its options, including a possible foreclosure on NexCen's assets after a further default under the BTMUCC credit facility. Although BTMUCC said it could not express a view at this point about whether it would support a sale within the range of values identified in the initial indications of interest, it acknowledged that pursuing a sale process might well prove productive, in light of the possibilities presented by the values reached by the initial bids. BTMUCC also acknowledged that a consensual approach would likely preserve more value for all stakeholders than a foreclosure after a further default under the BTMUCC credit facility or other adversarial process.

        Following the meeting with BTMUCC, Mr. Stamas spoke with Mayer Brown and again advocated for a restructuring of the debt, which Mr. Stamas felt presented the prospect of a greater recovery for all stakeholders, including BTMUCC. Mr. Stamas also raised the possibility of NexCen seeking to refinance a portion of the debt owed to BTMUCC with new debt from a third party as part of an overall recapitalization of the Company. Mayer Brown was asked to discuss these possibilities with BTMUCC, and reiterated BTMUCC's concern about the Company's financial performance and the level of the Company's ongoing public company expenses.

        On February 4, 2010, the NexCen board of directors met with members of management and our financial and legal advisors. Mr. Stamas provided the board with an update on the recent meeting with BTMUCC and his conversations with BTMUCC's counsel. At this meeting, the NexCen board of directors discussed the establishment of a special Strategy Committee to take the lead in ongoing discussions with BTMUCC and third-party bidders and the development of a potential alternative transaction.

        On February 10, 2010, the Company completed an additional waiver and amendment of the BTMUCC credit facility that again provided short-term relief to the Company, including a 31 day extension of the date under which BTMUCC would be entitled to receive warrants for up to 2.8 million shares of the Company's common stock, and a waiver of defaults related to the Company's free cash flow margin for an additional 30 day period.

        On February 11, 2010, Mayer Brown contacted Mr. Stamas and advised him that BTMUCC may be receptive to a potential restructuring of the debt or some limited sharing of sale proceeds with NexCen's equity holders if the Company were to complete a sale of its franchise business.

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        Throughout February 2010, Rothschild worked with management and members of the Strategy Committee to develop the terms of a proposed restructuring of the BTMUCC credit facility that would reduce the amount of outstanding debt, restructure the operations of the Company to reduce operating expenses, and give BTMUCC equity ownership in the Company. The Company concluded that, in order to complete the proposed restructuring, there would be certain costs (including the satisfaction of accounts payable and other obligations to unsecured creditors, the fees and expenses of financial and legal advisors, severance obligations to NexCen employees, and the costs associated with the termination of various contracts that NexCen was a party to) that would need to be funded either through reduced debt payments to BTMUCC or from a third party investment. As part of this effort, Rothschild identified and contacted several third-parties that might be interested in participating in a restructuring of the Company, but none of the third-parties preliminary terms that were shared with BTMUCC included economic terms that were acceptable to BTMUCC. During this period, the Initially Interested Parties were told that the Company was trying to reach an agreement with BTMUCC that would allow for a transaction and that NexCen would get back to them if it appeared that an agreement could be reached.

        On February 19, 2010, several of NexCen's directors met with our financial and legal advisors. Mr. Stamas summarized his recent conversations with Mayer Brown. Rothschild then outlined a potential debt restructuring transaction that might serve as an alternative to a sale of some or all of the Company's businesses. The proposed restructuring contemplated that BTMUCC would forgive approximately $48 million in debt in exchange for a 40% ownership interest in NexCen. The potential implications of any transaction for the ongoing value of the Company's tax loss carry forwards, as well as the potential costs of reducing the Company's corporate expenses as part of a recapitalization transaction, were also discussed.

        The Strategy Committee of the NexCen board of directors, consisting of Mr. Paul Caine, Mr. Edward Mathias and Mr. Stamas, with Mr. Stamas as chair, was formed by the unanimous written consent, dated February 22, 2010, of the NexCen board of directors.

        On February 25, 2010, Mr. Stamas provided BTMUCC with a restructuring proposal developed by Rothschild and the NexCen board of directors which was consistent with the proposal presented to the NexCen board of directors on February 19. Over the course of the next week, Mr. Stamas, members of our management team and our financial and legal advisors held periodic telephone conversations with BTMUCC and Mayer Brown regarding the potential debt restructuring and sought to make adjustments and refinement to the proposed terms of the transaction. Among other concerns, BTMUCC indicated that it would be unwilling to effectively fund the up-front costs of such a restructuring because such costs were unrelated to the BTMUCC credit facility and was concerned with the Company's ability to meet the business plan that supported the proposed restructuring. In addition, BTMUCC expressed concern over the deferral of a significant portion of their potential recovery in the form of equity (versus their existing debt). BTMUCC ultimately indicated that they were unwilling to pursue the restructuring transaction that had been presented to them, and that BTMUCC would not likely be willing to consider any alternative restructuring proposal unless such transaction included significant payments on their existing debt in order to mitigate their risk.

        Also on February 25, 2010, the NexCen board of directors met to receive an update from Mr. Stamas regarding his ongoing discussions with BTMUCC, including BTMUCC's unwillingness to pursue the restructuring transaction as then presented to them, and to discuss the various remaining strategic alternatives and the potential risks and benefits that each alternative presented to the different stakeholders in the Company.

        On March 1, 2010, Messrs. Hall and Stamas, as well as Rothschild, met with BTMUCC and Mayer Brown to review the ongoing sales process and an alternative business plan for the Company (which focused on further cost reduction initiatives), revisit the possibility of a revised debt restructuring transaction, and discuss BTMUCC's willingness to forgive a sufficient amount of debt such that the

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Company could retain a portion of the proceeds of a sale transaction even if the sale price is below the amount of outstanding debt owed to BTMUCC, and various related process and timing considerations. There was a discussion of, in the case of a sale, what expenses the Company would have to pay before making a distribution to stockholders, if the Company were allowed to retain a portion of any sale proceeds. No agreements were reached and no decisions were made and BTMUCC reiterated that it was considering all of its options, including a possible foreclosure on NexCen's assets after a further default under the BTMUCC credit facility. On March 2, 2010, Mr. Stamas updated the Strategy Committee on this meeting.

        Over the next week, Messrs. Hall, Stamas and Burroughs, as well as Rothschild, had periodic discussions with BTMUCC, to get a better understanding of the basis on which BTMUCC would consent to a sale of NexCen for less than the amount of its outstanding debt while permitting the Company to retain a portion of the sale proceeds. During this period, BTMUCC indicated that it was focused primarily on the possibility of a sale transaction, although both BTMUCC and the Company remained concerned that unless a sale transaction could be completed at a price near or above the high end of the range of the initial indications of interest submitted by the Initially Interested Parties, it would be difficult to provide BTMUCC with sufficient proceeds and also allow the Company to retain a reasonable amount for distribution to the Company's stockholders.

        On March 9, 2010, the Strategy Committee met with Mr. Hall, Mr. David Oros, the chairman of the NexCen board of directors, and our legal advisors. In addition to receiving an update regarding the ongoing discussions with BTMUCC, the meeting participants discussed the situation, the possibility that a lengthy process could harm the Company's business, and the potential expenses the Company might need to satisfy before it could make a distribution to stockholders (if a sale transaction were completed and BTMUCC were to agree to forgive a sufficient amount of debt such that the Company could retain a portion of the sale proceeds). The participants also discussed with outside counsel the directors' fiduciary obligations to unsecured creditors, members of management and the stockholders and the potential conflict of interests of management, created by their severance arrangements in the event of a wind-down of the Company. Following these discussions, it was determined that the Company should continue discussions with BTMUCC about all of these matters and that if reasonable understandings could be reached, the Company should pursue an accelerated process to see if a sale transaction could be achieved at a price sufficient to provide a satisfactory amount of debt forgiveness by BTMUCC and also provide the Company with an opportunity to make a reasonable distribution to its stockholders.

        Over the next several days, Mr. Stamas sought BTMUCC's consent to an arrangement that would include forgiveness of a sufficient amount of debt so that the Company could retain a portion of any sale proceeds that could be expected, after addressing the Company's anticipated liabilities, to permit a distribution to stockholders of an amount no less than NexCen's then-current market capitalization, which ranged between $4 million and $6 million during this time. No specific agreement was reached, but BTMUCC indicated that it might be willing to forgive a sufficient amount of debt to leave the Company with sufficient cash from a sale process to potentially fund a distribution to stockholders of no less than $4 million, depending upon the actual sale price achieved by the Company and the amount of the Company's anticipated liabilities. The Company agreed that it and Rothschild would work to obtain best and final offers from a small number of potential bidders in an accelerated sale process.

        Following these discussions, at the direction of the NexCen board of directors, Rothschild contacted the Initially Interested Parties that had submitted the three highest bids in early January and invited them to engage in intensive due diligence, participate in management meetings and prepare and submit best and final offers by the early part of April. These three potential purchasers, referred to as Purchaser A, Purchaser B and Purchaser C, were financial purchasers that had indicated a potential interest in acquiring substantially all of our assets for between $60 million and $103 million.

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        On March 12, 2010, NexCen completed an additional waiver and amendment to the BTMUCC credit facility which again provided short-term relief of potential defaults related to the Company's free cash flow margin for the month of March, and waived the requirement that the Company provide audited financials for certain of its subsidiaries as required under the BTMUCC credit facility.

        During the remainder of March and in early April 2010, the three potential purchasers were provided with access to additional confidential information and held various meetings with both our corporate and operational management teams. During this time, one additional potential investor, who was not among the Initially Interested Parties, expressed interest in participating in the process. While this party executed a confidentiality agreement with NexCen, received confidential information and held meetings with members of our management, it did not ultimately submit an indication of interest with respect to a potential transaction.

        Also during this time, the NexCen board of directors was regularly updated as to any developments in the ongoing strategic review process, and NexCen's senior management conferred with the Company's financial, legal and tax advisors regarding the potential impact of any sale or restructuring transaction on NexCen's substantial accumulated tax loss carryforwards, including the degree to which NexCen would be able to offset any taxable income or gains from any such transactions with the accumulated tax losses and the potential for such accumulated tax losses to have ongoing value to NexCen or to a third party following a sale of NexCen's business. These discussions continued from time to time into early May.

        On March 26, 2010, the Company announced its fiscal 2009 financial results. In its press release, the Company included the following statement:

        On March 30, 2010, LLCP contacted Mr. Hall and indicated that it was interested in pursuing a transaction with NexCen and was prepared to work quickly. After conferring with the Strategy Committee, Mr. Hall directed Rothschild to engage LLCP and invite it to sign a confidentiality agreement and submit an indication of interest. Also on March 30, 2010, NexCen completed another amendment to the BTMUCC credit facility which extended the date that NexCen was required to issue the Class B Franchise Note warrants from March 31, 2010 to April 30, 2010.

        On April 5, 2010 LLCP submitted a preliminary, non-binding indication of interest to acquire all of our assets at a proposed enterprise value ranging from $95 million to $115 million. On the basis of this indication of interest, LLCP was invited to conduct additional diligence, hold meetings with management and submit a revised indication of interest providing for a definitive price of a narrower value range. LLCP proceeded to conduct additional diligence on an expedited basis, and met with management in early April.

        During late March and the first weeks of April, Purchaser A, Purchaser B and Purchaser C conducted additional detailed financial, accounting and legal diligence. LLCP conducted diligence on an expedited basis in the first weeks of April. During this time, each potential purchaser also met with members of the operating management team.

        In early April 2010, Purchasers A and B submitted revised indications of interest that were consistent with their preliminary offers, including as to valuation, although both of the revised indications of interest were below the high end of the original value range. During this time, Purchaser C informed Rothschild that it did not intend to submit a final offer based upon its difficulty getting comfortable with the underlying risks inherent in the franchisee base and the unit economics of the Company's brands.

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        On April 12, 2010, LLCP submitted a revised offer to acquire substantially all of the businesses and assets of NexCen at a proposed enterprise value ranging from $105 million to $115 million. At Rothschild's request, LLCP agreed to conduct further diligence and submit a best and final offer within the next ten days.

        On April 15, 2010, NexCen and its legal advisors had a call with LLCP and its counsel, Honigman Miller Schwartz and Cohn LLP, or Honigman. During this call, LLCP indicated that it would be interested in exploring the possibility of structuring the transaction as a sale pursuant to Section 363 of the United States Bankruptcy Code. In response, NexCen indicated that such a structure would not be acceptable because it almost certainly would not provide for a potential distribution to the Company's stockholders and as both NexCen and BTMUCC were concerned that the bankruptcy process would be damaging to the Company's business.

        Rothschild reviewed the various offers with the NexCen board of directors, management and our legal advisor on April 16, 2010. After discussion about the offers that had been received, other options that might be available to the Company and NexCen's prospects for being able to make a distribution to stockholders, the NexCen board of directors agreed that the offer from LLCP, which was the highest offer, was the only offer that proposed a sufficiently high price to be likely to provide a satisfactory amount of forgiveness of debt for BTMUCC and also provide the Company with the potential to retain cash that could be distributed to stockholders. The NexCen board of directors agreed that the indications of interest should be reported to BTMUCC before any decision was made about how to proceed.

        On April 20, 2010, NexCen completed an additional waiver and amendment to the BTMUCC credit facility which provided the Company with another 30 days of relief of potential defaults related to the Company's free cash flow margin, the issuance dates of the Class B Franchise Note warrants, and expected potential defaults related to the Company's ratio of cash available for debt service to the monthly debt service.

        On April 22, LLCP submitted a final indication of interest to acquire substantially all of the businesses and assets of NexCen for $112.5 million in cash. The offer was not subject to a financing contingency.

        On April 23, 2010, Messrs. Hall and Stamas, as well as Rothschild, met with BTMUCC in Boston to review the indications of interest and other strategic alternatives. Mr. Stamas first sought confirmation from BTMUCC regarding forgiveness of debt in an amount sufficient to allow a portion of the potential sales proceeds to be retained by the Company. During the course of the meeting, BTMUCC indicated that it was supportive of pursuing a transaction with LLCP in light of the value it was offering and was not willing to consent to any of the other potential alternatives that had been discussed, including the other proposed sale transactions. Mr. Stamas reiterated his view, which he said was shared by our other directors, that a debt restructuring transaction had the potential to provide superior returns to all stakeholders, but BTMUCC indicated that it did not share the board's view in the likelihood of success of the proposed restructuring and was open to pursuing a transaction at the level of LLCP's offer.

        Later that day, the NexCen board of directors met with management and our financial and legal advisors. After reviewing the meeting with BTMUCC, the directors discussed the potential implications for the Company and its stakeholders of a sale at the levels indicated in the bids received, as well as the other options available to the Company. Following a discussion of various issues, and in light of the value LLCP was offering and the amount of forgiveness of debt that was satisfactory to BTMUCC, the NexCen board of directors agreed that the Company should pursue accelerated discussions with LLCP and that Rothschild should seek to keep the other bidders engaged in case discussions with LLCP broke down.

        On April 28, 2010, LLCP met with members of NexCen's corporate and operations management teams in Atlanta to conduct further diligence.

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        On April 29, 2010, Kirkland and Honigman discussed the possibility of structuring the asset sale as an assignment for the benefit of creditors. After this initial discussion, Kirkland informed Honigman that NexCen was not interested in pursuing this alternative as NexCen did not think this approach would provide for a potential distribution to the Company's stockholders and as it did not want to proceed with the sale of substantially all of its assets without having the Company's stockholders vote on the matter.

        On April 30, 2010, Mayer Brown provided NexCen with the economic terms which would provide BTMUCC with a satisfactory amount of forgiveness of debt in connection with the LLCP transaction. The transaction would involve the sale of substantially all of our assets to LLCP at the $112.5 million price proposed by LLCP. Specifically, BTMUCC agreed in principle that, in full satisfaction of the amount of NexCen's debt outstanding under the BTMUCC credit facility, BTMUCC would accept a payment of the following amount:

In addition to this payment, BTMUCC would require the return of the letter of credit, undrawn, that was issued in favor of JPMorgan Chase in support of certain of our bank accounts.

        On the afternoon of May 4, 2010, Rothschild and LLCP spoke regarding certain of the material issues raised by Honigman's comments on the draft acquisition agreement (which had been provided to LLCP on April 28). Also on the that afternoon, Mayer Brown circulated an initial draft of an accord and satisfaction agreement that reflected, among other things, the economic terms proposed on April 30, 2010 regarding the satisfaction of the obligations under the BTMUCC credit facility, the release of the security that had been provided in connection therewith and the retention by NexCen of a portion of the sale proceeds.

        During the evening of May 4, 2010 and throughout the day on May 5, 2010, Kirkland and Honigman negotiated certain of the terms of the acquisition agreement and related documents.

        On May 6, 2010, principals from LLCP met with Messrs. Stamas and Hall in New York to discuss certain open business and legal issues related to the potential asset sale, including LLCP's request that the Company agree to pursue a prompt dissolution and liquidating distribution to stockholders following completion of the sale transaction. They discussed the parameters of the "material adverse effect" definition and a retention bonus plan, and also negotiated the general parameters and amounts of the termination fee that would be owed to LLCP if the transaction did not close and the circumstances under which such amounts would be payable. On this same day, Kirkland provided Honigman with a revised draft of the acquisition agreement reflecting the negotiations that had occurred during the course of the prior two days and provided Mayer Brown with comments on the accord and satisfaction agreement, including comments on the scope of additional waivers and support provisions that NexCen felt it needed in order to be able to close the asset sale.

        Between May 7, 2010, and May 10, 2010, NexCen, Kirkland, LLCP and Honigman continued to exchange drafts and negotiate the terms of the acquisition agreement and the related documentation. During the course of these negotiations, LLCP made it clear that it would not proceed with the asset sale transaction unless it was comfortable that stockholder approval of the transaction was likely, which it believed required a clear and definite path, such as dissolution of NexCen, to provide for distribution to the Company's stockholders of as much of the available transaction proceeds as possible as promptly

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as possible. Also during these days, BTMUCC, Mayer Brown, NexCen, and Kirkland, and LLCP and Honigman, though Kirkland continued to exchange drafts and negotiate the terms of the accord and satisfaction agreement. On the morning of May 10, 2010, Mayer Brown provided Kirkland with a draft of the waiver and omnibus amendment to the BTMUCC credit facility, which was subsequently shared by Kirkland with Honigman.

        Throughout the day on May 10 and May 11, 2010, NexCen, LLCP, Kirkland and Honigman met in New York to negotiate the acquisition agreement and related disclosure schedules, the equity commitment letter, the accord and satisfaction agreement and the waiver and omnibus amendment. Mayer Brown and BTMUCC participated by telephone in discussions with NexCen and Kirkland regarding the bank-related documents during the course of these days.

        On the evening of May 11, 2010, the NexCen board of directors met with members of our senior management team and our financial and legal advisors, including representatives of Morris Nichols, Arsht & Tunnell LLP, or Morris Nichols, Delaware counsel to NexCen. Mr. Stamas provided the directors with an update as to the status of the negotiations and certain material issues that remained unresolved. Kirkland reviewed various legal matters, including the terms of the acquisition agreement, the accord and satisfaction agreement and the waiver and omnibus amendment. Kirkland and Morris Nichols also discussed with the directors the process of dissolution under Delaware law and LLCP's requirement that sale agreement include a commitment by the Company, following completion of the transaction with LLCP, to pursue dissolution, subject to the NexCen board of directors' ongoing fiduciary obligations. Rothschild reviewed with the NexCen board of directors its financial analysis of the asset sale. In connection with the directors' deliberations, Rothschild rendered to the NexCen board of directors its preliminary opinion (subsequently finalized), as to the fairness, from a financial point of view as of the date of the opinion, to NexCen of the purchase price of $112.5 million to be received by NexCen in the asset sale, which opinion is described below under the section entitled "—Opinion of NexCen's Financial Advisor" beginning on page 44 of this proxy statement. Discussions among the members of the NexCen board of directors, our management team and our financial and legal advisors ensued, including consideration of the factors described under "—Recommendation of the NexCen Board of Directors and NexCen's Reasons for the Asset Sale." Thereafter, the NexCen board of directors unanimously determined to approve and adopt the acquisition agreement and the transactions contemplated thereby and to approve and adopt the related transaction agreements, subject to the final material issues being resolved within certain parameters set by the NexCen board of directors.

        On May 12, 2010, Mr. Stamas and members of our management team met with principals from LLCP in order to negotiate the remaining open business issues. Kirkland and Honigman participated in the meetings. During the course of these discussions, the final material issues between LLCP and NexCen were resolved. During the remainder of the day on May 12 and through the earlier morning of May 13, 2010, NexCen, LLCP, Kirkland and Honigman continued negotiating the acquisition agreement and related disclosure schedules, the equity commitment letter, and NexCen and Kirkland negotiated the accord and satisfaction agreement and the waiver and omnibus amendment by telephone with Mayer Brown and BTMUCC.

        Early in the morning on May 13, 2010, the parties executed the acquisition agreement and the related transaction documents, including the accord and satisfaction agreement and the waiver and omnibus amendment to the BTMUCC credit facility. Prior to the opening of the financial markets in New York City on this date, the execution of the agreements and the transaction contemplated thereby were announced in a press release by NexCen.

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        On May 20, 2010, the NexCen board of directors met with members of management and our outside legal advisors from Kirkland and Morris Nichols. The directors reviewed a proposed plan of dissolution and also reviewed the likely limited value of the Company's accumulated tax loss carryforwards (other than to offset taxable income and gains from the sale transaction with LLCP), in view of applicable tax laws and rules, the Company's limited financial resources and the market value of its common stock. They also discussed that the Company would be legally permitted, even after adoption of the plan of dissolution by the NexCen board of directors and stockholders, to abandon dissolution and pursue a different strategy if one were identified (prior to the filing of the certificate of dissolution) that was considered likely to provide stockholders with significant additional value, whether through use of the accumulated tax loss carryforwards or otherwise. The directors also reviewed the anticipated liabilities and obligations, including contingent obligations that the Company expected to need to address in any dissolution process, the alternatives the Company would have to address such matters and the potential timing for their resolution and the making of a final distribution to stockholders. The NexCen board of directors then unanimously adopted the proposed plan of dissolution, noting that it appeared to be the most likely available strategy to allow the Company to deliver the greatest value to stockholders and that it would not preclude the Company from pursuing a more beneficial strategy, should one be identified in the future.


Recommendation of the NexCen Board of Directors and NexCen's Reasons for the Asset Sale

        In approving the asset sale and the Acquisition Agreement, and recommending that the NexCen stockholders approve the asset sale proposal, the NexCen board of directors considered a number of factors, including those listed below. The NexCen board of directors believes the asset sale and the Acquisition Agreement are advisable and in the best interests of NexCen and its stockholders. The NexCen board of directors has also determined that, absent the emergence of a higher value alternative that the NexCen board of directors concludes, in the exercise of its fiduciary duties, should be pursued, it is advisable and in the best interests of NexCen and its stockholders to liquidate and wind up NexCen's affairs pursuant to the plan of dissolution following the closing of the asset sale for the reasons set forth in this section. Among the factors that the NexCen board of directors considered are the following:

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        The NexCen board of directors also considered a variety of risks and other potentially negative factors applicable to either or both of the asset sale and the plan of dissolution, including the following:

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        The foregoing summarizes the material factors and risks considered by the NexCen board of directors but it is in no way meant to be exhaustive of the discussion and information considered by the board of directors. In view of its many considerations, the NexCen board of directors did not quantify or otherwise assign relative significance to each factor considered. In addition, each member of the NexCen board of directors may have given different significance to different factors. The NexCen board of directors concluded that the potential benefits of the asset sale on the terms of the Acquisition Agreement outweighed the potential risks of the transaction and that, overall, the proposed asset sale had greater potential benefits to NexCen, its stockholders and other stakeholders than other strategic alternatives currently available to or reasonably anticipated to be available to NexCen.

        After discussing and evaluating all of these considerations, the NexCen board of directors unanimously:

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        At a meeting on May 20, 2010, following further discussion and evaluation of the applicable issues and considerations, the NexCen board of directors also unanimously:

        For the reasons set forth above, the NexCen board of directors believes that the asset sale and the Acquisition Agreement and the subsequent liquidation and dissolution of NexCen pursuant to the plan of dissolution are in the best interests of NexCen and its stockholders and recommends that stockholders vote "FOR" the approval of the asset sale proposal and "FOR" the approval of the plan of dissolution proposal.


Opinion of NexCen's Financial Advisor

        The Company retained Rothschild Inc. to act as the Company's exclusive financial advisor in connection with its evaluation of possible strategic transactions. The Company selected Rothschild based on its reputation and experience. As part of its investment banking business, Rothschild regularly values businesses and their securities in connection with mergers and acquisitions, restructurings and other transactions.

        Rothschild delivered its opinion to the NexCen board of directors that, as of May 12, 2010 and based upon and subject to the qualifications, limitations and assumptions set forth therein, the Purchase Price to be paid to the Company for the assets being sold, which we refer to as the NC Business, and the assumption of certain liabilities pursuant to the Acquisition Agreement, all as more fully described in the Acquisition Agreement, was fair from a financial point of view to the Company.

        The full text of the written opinion of Rothschild, dated May 12, 2010, which sets forth assumptions made, matters considered and limitations on the review undertaken in connection with the opinion, is attached to this proxy statement as Annex D. Rothschild provided its opinion for the information and assistance of the NexCen board of directors in connection with its consideration of the asset sale. The opinion of Rothschild was limited to the evaluation of the fairness, from a financial point of view, to the Company of the Purchase Price. Rothschild did not express any view or opinion as to the fairness, financial or otherwise, of the asset sale to, or any consideration received in connection therewith by, other constituencies or affiliates of the Company, nor as to the fairness of the amount or nature of any compensation or other amounts to be paid or payable to any of the stockholders, officers, directors or employees of the Company or to any creditor or lender of NexCen Holding Corporation or any of its affiliates, including the Company, whether relative to the Purchase Price or otherwise. The summary of Rothschild's opinion included in this proxy statement is qualified in its entirety by reference to the full text of such opinion. The Rothschild opinion is not a recommendation as to how any stockholder of the Company should vote with respect to the asset sale proposal or any other matter.

        Pursuant to an engagement letter between the Company and Rothschild, the Company agreed to pay to Rothschild a transaction fee equal to a percentage of the consideration received in connection with the asset sale. The transaction fee, which is approximately $2.5 million (excluding expenses), is payable upon the consummation of the asset sale. In addition, the engagement letter provides that Rothschild became entitled to receive, upon delivery of its opinion, a fee of $500,000, which is not contingent upon the consummation of the asset sale and will be credited against payment of the transaction fee.

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        In connection with rendering the opinion described above, among other things, Rothschild:

        For the purpose of rendering its opinion, Rothschild relied upon, without assuming responsibility for independent verification of, the accuracy and completeness of information, whether publicly available or discussed with or furnished to it, concerning the NC Business or the Company, including, without limitation, any financial information considered by Rothschild in rendering its opinion. Accordingly, with the Company's consent, Rothschild assumed, that any forward-looking information made available to Rothschild and used in Rothschild's analyses had been reasonably prepared on bases reflecting the best currently available judgments of the Company's management as to the matters covered thereby. Rothschild did not express any opinion on the reasonableness of such forward-looking information or any assumption on which it is based. With the Company's consent, Rothschild did not prepare or obtain any independent evaluation or appraisal of any of the assets or liabilities (contingent or otherwise) of the NC Business or the Company nor did Rothschild make any physical inspection of the assets being sold in the asset sale. Rothschild did not review, seek or obtain advice of legal counsel regarding legal matters relating to the NC Business or the Company. Rothschild also assumed that no material change in the assets, financial condition, results of operations, business or prospects of the NC Business or the Company had occurred since the respective dates on which the most recent financial or other information, if any, relating to the NC Business or the Company, as the case may be, was made available or disclosed to Rothschild. With the Company's consent, Rothschild assumed that, in all respects material to its analysis, the representations and warranties of each party to the Acquisition Agreement contained in or made pursuant to the Acquisition Agreement were true and correct, that each party to the Acquisition Agreement will timely perform all of the covenants and agreements to be performed by it under the Acquisition Agreement and that the asset sale will be consummated in accordance with the terms and conditions set forth in the Acquisition Agreement without any waiver or modification thereof. With the Company's consent, Rothschild assumed that any material governmental, regulatory or other approvals and consents required in connection with the consummation of the asset sale timely will be obtained and that in connection with obtaining any necessary governmental, regulatory or other approvals and consents, or any amendments, modifications or waivers to any agreements, instruments or orders to which any party to the Acquisition Agreement is a party or is subject or by which it is bound, no limitations, restrictions or conditions will be imposed or amendments, modifications or waivers made that would have an adverse effect on the NC Business,

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GFG or the Company or on the expected benefits of the asset sale to the Company, in each case, in any way meaningful to Rothschild's analysis. With the Company's consent, Rothschild assumed that the final Acquisition Agreement was substantially the same as the draft of the Acquisition Agreement dated May 11, 2010, reviewed by Rothschild. Rothschild's opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available or disclosed to Rothschild as of, the date of the opinion. Subsequent developments may affect Rothschild's opinion, however, Rothschild does not have any obligation to update, revise or reaffirm its opinion.

        Rothschild's opinion was limited to the fairness to the Company, from a financial point of view, of the Purchase Price to be paid by GFG pursuant to the Acquisition Agreement, and Rothschild expressed no opinion as to the merits of the underlying decision by the Company to engage in the asset sale or as to any other aspect of the asset sale or the relative merits of the asset sale as compared to any alternative business strategies that might be available to the Company. Rothschild also expressed no opinion and provided no advice with respect to the solvency of the Company or any other entity at any time in connection with the asset sale or otherwise. Rothschild's opinion was approved by its Investment Banking Commitment Committee, with the advice and counsel of members of its Opinion Subcommittee.

        The following is a summary of the material financial analyses delivered by Rothschild to the NexCen board of directors in connection with rendering the opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Rothschild, nor does the order of analyses described represent relative importance or weight given to those analyses by Rothschild. Some of the summaries of the financial analyses include information presented in tabular format. These tables must be read together with the full text of each summary and are alone not a complete description of Rothschild's financial analyses. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Rothschild's opinion. In arriving at its fairness determination, Rothschild considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Rothschild made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. The preparation of a fairness opinion is a complex process involving subjective judgments and is not necessarily susceptible to partial analysis or summary description. With respect to the analyses below, no company, business division or transaction used as a comparison was either identical or directly comparable to the NC Business or the asset sale. These analyses necessarily involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the public trading or acquisition values of the companies concerned.

        Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before May 10, 2010 and is not necessarily indicative of current market conditions.

        The Company's management provided its projections about the NC Business to Rothschild on January 22, 2010. These projections, which underlie Rothschild's analyses, are not necessarily indicative of future results of values, which may be significantly more or less favorable than those estimates. Estimates of the financial value of companies do not purport to be appraisals or reflect the prices at which companies may actually be sold.

        Given the mix of the NC Business' operations and the limited number of publicly traded companies with business operations directly comparable to those of the NC Business, Rothschild analyzed the market values and trading multiples of selected publicly traded companies with lines of business, or operating and financial characteristics, generally similar to those of the NC Business.

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Companies with enterprise values in excess of $2.75 billion were excluded due to size. Using publicly available information, Rothschild analyzed the following companies that operate in the quick service restaurant, sporting goods and bread manufacturing sectors:

Quick Service Restaurants(1)   Sporting Goods Companies   Bread Manufacturer
•  AFC Enterprises   •  Finish Line   •  Canada Bread Company
•  Panera   •  Foot Locker    
•  Sonic        

(1)
Includes companies that franchise a majority of their locations

        Estimated financial data for the selected companies were based on publicly available research analyst estimates. Estimated financial data for the NC Business was based on the Company's management projections. Rothschild reviewed enterprise values of the selected companies as multiples of 2010 and 2011 revenues and earnings before interest, taxes, depreciation and amortization, or EBITDA. All multiples were based on closing prices as of May 10, 2010. Based on the enterprise value / revenue and enterprise value / EBITDA multiples derived from the selected public companies, Rothschild applied the following reference range to the corresponding data for the NC Business:

 
  Low   High  

Enterprise value / 2010E revenue

    1.76x     2.16x  

Enterprise value / 2011E revenue

    1.63x     1.99x  

Enterprise value / 2010E EBITDA

   
6.8x
   
8.3x
 

Enterprise value / 2011E EBITDA

    6.2x     7.6x  

        This analysis indicated the following approximate implied enterprise value reference range for the NC Business, as compared to the Purchase Price:

Implied enterprise value reference
range for the NC Business
  Purchase Price

$80—$120

 

$112.5

        Given the mix of the NC Business' operations and the limited number of publicly disclosed transactions involving companies directly comparable to the NC Business, Rothschild analyzed certain merger and acquisition transactions involving companies that it deemed most comparable to the business and operations of the NC Business.

Target   Acquirer
Magic Brands   Tavistock Group
CKE Restaurants   Apollo Management
Wendy's International   Wendy's/Arby's Group
Great American Cookies   NexCen Brands
Bojangles' Holdings   Allied Capital; Falfurrias Capital
Pretzel Time / Pretzelmaker   NexCen Brands
CKE Restaurants (7 Restaurants)   Ponder Enterprises
Marble Slab / Maggie Moo's   NexCen Brands
Sbarro   MidOcean Partners
TAF   NexCen Brands
Afton Food Group   Coffee Time Donuts
Back Yard Burgers   Cherokee Advisors
Hot Stuff Foods   Allied Capital
Sports Authority   Leonard Green & Partners
El Pollo Loco   Trimaran Capital Partners

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        Rothschild calculated a range of multiples of the transaction value to the latest twelve months, or LTM, revenues and LTM EBITDA implied in these transactions. Based on the enterprise value / revenue and enterprise value / EBITDA multiples derived from the selected transactions, Rothschild applied the following reference range to the corresponding data for the NC Business:

 
  Low   High  

Enterprise value / 2010E revenue

    2.22x     2.71x  

Enterprise value / 2010E EBITDA

    7.1x     8.7x  

        This analysis indicated the following approximate implied enterprise value reference range for the NC Business, as compared to the Purchase Price:

Implied enterprise value reference
range for the NC Business
  Purchase Price  
$ 100—$125   $ 112.5  

        Rothschild performed a discounted cash flow analysis of the NC Business based on financial projections provided by the Company's management for the years 2009—2014. Rothschild's analysis was based on the present value of the estimated unlevered free cash flows of the NC Business for the next five fiscal years, plus a terminal value at the end of this period, based on a weighted average cost of capital between 17.3% and 19.3%. The terminal value was determined by using perpetuity growth rates ranging from 2.0% to 3.0% and an exit EBITDA multiple range of 6.25x to 8.25x. This analysis indicated the following approximate implied enterprise value reference range for the NC Business, as compared to the Purchase Price:

Implied enterprise value reference range for the NC Business   Purchase Price  
$ 100—$110   $ 112.5  

        Rothschild conducted a leveraged buy-out, or LBO, analysis to review the returns that potentially could be achieved by a private equity investor in an LBO transaction at various purchase prices, based on management's forecasts and assuming total leverage of 3.0x—3.5x total debt / 2010E EBITDA. Based on targeted annual equity returns of 25%—30% over a five year investment horizon, this analysis indicated the following approximate implied enterprise value reference range for the NC Business, as compared to the Purchase Price:

Implied enterprise value reference range for the NC Business   Purchase Price  
$ 90—$125   $ 112.5  

        Rothschild prepared these analyses for purposes of providing its opinion to the NexCen board of directors as to the fairness from a financial point of view, as of May 12, 2010, of the Purchase Price to be paid to the Company for the NC Business pursuant to the Acquisition Agreement. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities may actually be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors and events beyond the control of the parties and their respective advisors, none of the Company, Rothschild or any other person assumes responsibility if future results are materially different from those forecast.

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        Rothschild provided advice to the Company during the course of such negotiations; however, the decision to enter into the Acquisition Agreement was solely that of the NexCen board of directors. The amount of the Purchase Price was determined through arms'-length negotiations between the Company and GFG and was approved by the NexCen board of directors. Rothschild did not recommend any specific amount of consideration to the Company or to the NexCen board of directors or that any specific amount of consideration constituted the only appropriate consideration for the asset sale.

        As described above, Rothschild's opinion to the NexCen board of directors was one of many factors taken into consideration by the NexCen board of directors in making its determination to approve the Acquisition Agreement. The foregoing summary does not purport to be a complete description of the analyses performed by Rothschild in connection with its opinion and is qualified in its entirety by reference to the full text of the written opinion of Rothschild attached as Annex D.

        In connection with Rothschild's services as exclusive financial advisor to NexCen in connection with the asset sale, Rothschild has received certain customary fees and will be paid certain additional fees, a portion of which are contingent upon consummation of the asset sale. In addition, the Company has agreed to reimburse Rothschild's expenses and indemnify Rothschild against certain liabilities arising out of Rothschild's engagement by the Company. Rothschild has previously served as financial advisor to the Company and certain of the Company's subsidiaries in connection with the sale of their "Bill Blass" and "Waverly" assets in October and December of 2008, respectively, for which Rothschild received customary fees.


Interests of Executive Officers and Directors of NexCen in the Asset Sale

        NexCen stockholders should be aware that some directors and executive officers of NexCen have interests in the asset sale that may be different from, or in addition to, the interests of NexCen stockholders. The NexCen board of directors was aware of and considered these interests, among other matters, prior to negotiating and voting to approve the asset sale, and making its recommendation that the asset sale be approved by NexCen's stockholders.

        Acceleration of Vesting of Outstanding Options under NexCen's Equity Plans:    Certain of our directors and executive officers are recipients of stock option awards issued by the Company which include time-based vesting provisions. Our 2006 Long-Term Equity Incentive Plan provides for full acceleration of vesting upon a change of control transaction such as the proposed asset sale. Consequently, upon the consummation of the asset sale, all of the outstanding stock option awards held by our directors and executive officers with time-based vesting will be subject to accelerated vesting in conjunction with the closing of the asset sale. All of the outstanding stock options exercisable for NexCen common stock held by our directors and executive officers have exercise prices higher than the current trading price of our common stock as of the date of this proxy statement and in most cases far higher than the amount per share estimated to be available for distribution to the holders of NexCen common stock in connection with the plan of dissolution. As a result, NexCen does not expect any of these stock options to be exercised despite the accelerated vesting. Additional information regarding outstanding option awards related to certain of our directors and executive officers can be found in our Annual Report on Form 10-K/A for the year ended December 31, 2009, filed with the SEC on April 29, 2010, which is attached as Annex E to this proxy statement.

        Salary and Severance Benefits for Executive Officers:    We expect to continue compensating our executive officers at their existing compensation levels in connection with their services provided during the pendency of the asset sale. Additionally, certain of our executive officers are also party to employment agreements with the Company that provide for certain severance benefits if their employment is terminated without cause. As a result, certain of our executive officers will be entitled to certain severance benefits if their employment is terminated without cause in connection with the plan of dissolution. The NexCen board of directors currently anticipates that the employment of certain executive officers will be terminated after the closing of the asset sale as part of a cost reduction effort

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in anticipation of the dissolution of the Company. The NexCen board of directors has not made a final determination on which executive officers will be terminated as part of this cost reduction effort. Nevertheless, the Company anticipates that its severance obligations in connection with the termination of certain executive officers, along with other officers and employees of the Company, could total approximately $3 million. Additional information regarding severance benefits related to certain of our executive officers can be found in our Annual Report on Form 10-K/A for the year ended December 31, 2009, filed with the SEC on April 29, 2010, which is attached as Annex E to this proxy statement.

        Retention and Transaction Bonuses:    Certain executive officers, namely Chris Dull, Sue Nam, and Mark Stanko, are entitled to a retention or transaction bonus, in aggregate amount of $200,000. For additional information regarding the retention bonus, see "Proposal One—The Asset Sale Proposal—The Acquisition Agreement—Retention Bonuses," and for additional information regarding the transaction bonus for Ms. Nam, see our Annual Report on Form 10-K/A for the year ended December 31, 2009, filed with the SEC on April 29, 2010, which is attached as Annex E to this proxy statement.

        Indemnification and Insurance:    Following the closing of the asset sale and the filing of the certificate of dissolution with the Secretary of State of the State of Delaware, NexCen will continue to indemnify each of its current and former directors and officers to the extent required under Delaware law, its certificate of incorporation and its bylaws as in effect immediately prior to the filing of the certificate of dissolution. In addition, NexCen intends to maintain its current directors' and officers' insurance policy through the date of dissolution and to obtain runoff coverage for at least an additional 6 years after the filing the certificate of dissolution.


Material United States Federal Income Tax Consequences of the Asset Sale

        The discussion set forth below summarizes the material United States federal income tax consequences of the asset sale. This discussion is based on the Internal Revenue Code, existing and proposed regulations thereunder and administrative rulings and court decisions, all as in effect on the date of this proxy statement and all of which are subject to change or differing interpretations (possibly with retroactive effect). Any such change or differing interpretation could alter the tax consequences described herein.

        This discussion is not a complete description of all the United States federal income tax consequences that may be relevant to the asset sale. In addition, this discussion does not address all of the tax consequences that may be relevant to particular NexCen stockholders in light of their particular circumstances or to NexCen stockholders that are subject to special tax treatment under United States federal income tax laws, such as stockholders that are, for United States federal income tax purposes:

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        In addition, the following discussion does not address the tax consequences of the asset sale under foreign, state or local tax laws, the tax consequences of transactions effectuated prior or subsequent to, or concurrently with, the asset sale (whether or not any such transactions are undertaken in connection with the asset sale). NexCen has not requested, and does not plan to request, a ruling from the IRS with regard to any of the tax consequences of the asset sale.

        Each NexCen stockholder is urged to consult its own tax advisors as to the specific tax consequences of the asset sale, including the applicable, federal, state, local and foreign tax consequences, in light of the particular circumstances of such holder.

Material United States Federal Income Tax Consequences to NexCen of the Asset Sale

        The asset sale will be treated as a taxable asset sale, with NexCen as the seller, and GFG as the purchaser. Accordingly, NexCen will generally recognize taxable gain or loss in the transaction with respect to each of its assets, computed in each case as the fair market value of the consideration (including liabilities assumed) allocable to the asset sold by NexCen less the aggregate adjusted tax basis of the asset sold to GFG. NexCen anticipates that the asset sale will result in a loss for federal income tax purposes. In the event that NexCen recognizes taxable gain as a result of the asset sale, although NexCen has tax loss carryforwards that potentially could offset a portion of such gain, such tax loss carryforwards could be unavailable, in whole or in part, due to potentially applicable limitations under the Internal Revenue Code.

Material United States Federal Income Tax Consequences to NexCen Stockholders of the Asset Sale

        The asset sale, by itself, will have no material United States federal income tax consequences to NexCen's existing stockholders as such. Therefore, holders of NexCen stock will not recognize a tax gain or tax loss upon consummation of the asset sale. For a discussion of the tax consequences of the dissolution, see "Proposal Two—The Plan of Dissolution Proposal—Material United States Federal Income Tax Consequences of the Dissolution" beginning on page 75 of this proxy statement.

        THE PRECEDING DISCUSSION IS A SUMMARY OF THE MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE ASSET SALE AND DOES NOT PURPORT TO BE A COMPLETE ANALYSIS OR DISCUSSION OF ALL POTENTIAL TAX EFFECTS RELEVANT THERETO. THIS DISCUSSION WAS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR AVOIDING PENALTIES THAT MAY BE IMPOSED. THIS DISCUSSION WAS WRITTEN TO SUPPORT THE SOLICITATION OF PROXIES FOR THE SPECIAL MEETING. NEXCEN STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO THEM OF THE ASSET SALE, THE APPLICABILITY OF STATE, LOCAL, FOREIGN AND OTHER APPLICABLE TAX LAWS AND ANY PROPOSED TAX LAW CHANGES.


Regulatory Matters

        We do not believe that the asset sale is subject to review by any governmental authorities under the antitrust laws of the jurisdictions where NexCen and GFG conduct business.

        Nevertheless, even after completion of the asset sale, the Antitrust Division of the United States Department of Justice, or the Antitrust Division, the United States Federal Trade Commission, or the FTC, or any other United States or foreign governmental authority could challenge or seek to unwind the asset sale under the antitrust laws as it deems necessary or desirable in the public interest. Moreover, in some jurisdictions, a competitor, customer or other third party could initiate a private action under the antitrust laws challenging or seeking to enjoin or unwind the asset sale before or after it is completed. We cannot be sure that a challenge to the asset sale will not be made or that, if a challenge is made, we will prevail.

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THE ACQUISITION AGREEMENT

        The following summary describes the material provisions of the Acquisition Agreement. The provisions of the Acquisition Agreement are complicated and not easily summarized. This summary may not contain all of the information about the Acquisition Agreement that is important to you. The Acquisition Agreement is attached to this proxy statement as Annex A and is incorporated by reference into this proxy statement, and we encourage you to read it carefully in its entirety for a more complete understanding of the Acquisition Agreement.


The Asset Sale

        Acquired assets.    The Acquisition Agreement provides for the sale of substantially all of the assets of NexCen to GFG, a newly formed, wholly owned subsidiary of LLCP IV. Specifically, the Acquisition Agreement provides that NexCen will sell to GFG all of the equity interests in TAF Australia, LLC and will cause NexCen Holding Corporation to sell to GFG all of its equity interests in Athlete's Foot Brands, LLC, The Athlete's Foot Marketing Support Fund, LLC, GAC Franchise Brands, LLC, GAC Manufacturing LLC, GAC Supply, LLC, MaggieMoo's Franchise Brands, LLC, Marble Slab Franchise Brands, LLC, PM Franchise Brands, LLC, PT Franchise Brands, LLC and ShBx IP Holdings, LLC. In addition, the Acquisition Agreement provides that NexCen will cause NB Supply and NF Management to sell to GFG certain specified assets and to assign to GFG certain specified liabilities. The certain specified assets to be acquired from NB Supply and NF Management include:

        Excluded assets.    The assets of NB Supply and NF Management excluded from the asset sale include all claims for refunds of taxes from the City of New York for the year 2006.

        Assumed liabilities.    The Acquisition Agreement also provides that in addition to acquiring certain specified assets of NexCen as set forth in the agreement, GFG will also assume certain specified liabilities of NexCen, other than those liabilities excluded under the Acquisition Agreement. The liabilities to be assumed include:

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        Excluded liabilities.    The liabilities excluded from those being assumed by GFG under the Acquisition Agreement include:


Consideration to be Received by NexCen

        Consideration to be paid at closing.    If the asset sale is completed, NexCen will receive at the closing of the asset sale cash in the amount of $112.5 million subject to closing adjustments for cash, indebtedness (other than indebtedness under the BTMUCC credit facility), working capital, deferred franchise revenue, and other specified items.

        Escrow arrangement.    On the closing of the asset sale, $1 million of the cash consideration to be received by NexCen will be deposited in an escrow account to secure certain potential working capital adjustment obligations to GFG. Any amount remaining in the escrow account approximately 80 days after closing will be released to NexCen (other than any amounts required to secure any unresolved adjustments for working capital, which amounts will be released following the resolution of those outstanding adjustments). At the closing, GFG, NexCen and an escrow agent to be selected by the parties will enter into an escrow agreement setting forth the terms and procedures relating to the escrow account and the distribution of proceeds from the escrow account.


Dissolution of NexCen

        In connection with the asset sale, NexCen is proposing a plan of dissolution pursuant to which it will satisfy its obligations, distribute its assets, wind up its affairs and cease its corporate existence. Because NexCen has significant outstanding liabilities which must be satisfied out of the proceeds it receives in connection with the asset sale, the amount of consideration that may ultimately be distributable to NexCen's stockholders will be substantially less than the consideration received by NexCen. NexCen stockholders should carefully review the section of this proxy statement entitled "Proposal Two—The Plan of Dissolution Proposal" beginning on page 66 of this proxy statement, which contains important information about the amounts that may ultimately be distributed to the stockholders of NexCen. NexCen stockholders should also carefully review the risks described under "Factors to be Considered by Stockholders in Deciding whether to Approve the Proposals."


Completion of the Asset Sale

        NexCen and GFG will complete the asset sale when all of the conditions to completion of the sale contained in the Acquisition Agreement, which are described in the section entitled "The Acquisition Agreement—Conditions to Obligations to Complete the Asset Sale" beginning on page 59 of this proxy statement, are satisfied or waived, including approval of the asset sale by the stockholders of NexCen.


Appraisal Rights

        Under the DGCL, NexCen's stockholders are not entitled to appraisal rights in connection with the asset sale.

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Representations and Warranties

        The Acquisition Agreement contains general representations and warranties made by NexCen, on the one hand, and GFG, on the other, regarding aspects of their respective businesses, financial condition and structure, as well as other facts pertinent to the asset sale. These representations and warranties are subject to materiality, knowledge and other similar qualifications in many respects and expire at the effective time of the asset sale. The representations and warranties of each of NexCen, on the one hand, and GFG, on the other, have been made solely for the benefit of the party or parties to which they have been made, and those representations and warranties should not be relied on by any other person. In addition, those representations and warranties may be intended not as statements of actual fact, but rather as a way of allocating risk between the parties, may have been modified by the disclosure schedules attached to the Acquisition Agreement, are subject to the materiality standards described in the Acquisition Agreement, which may differ from what may be viewed as material by you, and were made only as of the date of the Acquisition Agreement or another date specified in the Acquisition Agreement.

        NexCen made a number of representations and warranties to GFG in the Acquisition Agreement, including representations and warranties relating to the following matters:

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        GFG made a number of representations and warranties to NexCen in the Acquisition Agreement, including representations and warranties relating to the following subject matters:


NexCen's Conduct of Business Before the Closing of the Asset Sale

        Under the Acquisition Agreement, NexCen has agreed, until the closing of the asset sale, except under certain circumstances or as consented to in writing by GFG (which consent will not be unreasonably withheld, restricted or delayed), to conduct its business in the ordinary course and to use

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reasonable best efforts to (i) keep intact its business, (ii) keep available the services of its employees, (iii) preserve its relationships with customers, franchisees and others with whom it deals, and (iv) renew all expired but continuing franchise agreements.

        In addition, NexCen agreed that, until the closing of the asset sale, it will not (and will not permit its subsidiaries to) without the prior written consent of GFG (which consent will not be unreasonably withheld, restricted or delayed):

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Obligation of the NexCen Board of Directors with Respect to Its Recommendation and Holding of a Stockholders' Meeting

        Under the terms of the Acquisition Agreement, NexCen agreed to call, give notice of, convene and hold a meeting of its stockholders as promptly as commercially practicable following the date on which this proxy statement is cleared by the SEC, for the purpose of voting on the asset sale proposal. Subject to its rights discussed in the section entitled "Termination" beginning on page 61 of this proxy statement, NexCen's obligation to call, give notice of, convene and hold the stockholders' meeting is not limited or otherwise affected by any withholding, withdrawal, qualification or modification of the recommendation of the NexCen board of directors with respect to the asset sale proposal.

        Subject to its rights discussed in the next section, "No Solicitation of Other Offers," the NexCen board of directors agreed (i) to recommend the approval of the asset sale proposal to its stockholders, (ii) not to change, qualify, withhold, withdraw or modify, or publically propose to change, qualify, withhold, withdraw or modify, in a manner adverse to GFG, the recommendation of the NexCen board of directors that NexCen's stockholders vote in favor of the approval of the asset sale proposal, (iii) not to take any formal action or make any recommendation or public statement in connection with any alternate sale proposal that is structured as a tender or exchange offer, other than a recommendation against such transaction or "stop, look and listen" communication pursuant to Exchange Act rules, or (iv) to adopt, approve or recommend to stockholders, or publically propose to approve or recommend to the stockholders any alternate sale proposal (clauses (ii) through (iv) of this paragraph, collectively "Adverse Recommendation Change").


No Solicitation of Other Offers

        Under the terms of the Acquisition Agreement, NexCen agreed to cease, and that it would use reasonable best efforts to cause its subsidiaries and each of their representatives to cease, and cause to be terminated any discussions or negotiations with any parties (other than GFG and its representatives) that may have been ongoing as of the date of the Acquisition Agreement. Additionally, under the terms of the Acquisition Agreement, subject to certain exceptions described below, NexCen agreed that it will not, and that it will use reasonable best efforts to cause its subsidiaries and each of their representatives not to:

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        Notwithstanding the foregoing, at any time prior to obtaining the approval of the asset sale by NexCen's stockholders, NexCen may, in response to a bona fide written alternative sale proposal from a third party that the NexCen board of directors reasonably determines appears to be capable of pursuing such alternative sale proposal, furnish information and/or draft agreements with respect to NexCen and the Acquired Companies to the person making such alternative sale proposal pursuant to a customary confidentiality agreement, and participate in discussions or negotiations with such person regarding the alternative sale proposal, provided that such alternative sale proposal:

        In connection with providing any such information, NexCen must promptly provide GFG (and in any event within 24 hours) a copy of the alternative sale proposal (including disclosing the identity of the person making the alternative sale proposal) and a written summary of the material terms of any such alternative sale proposal not made in writing.

        Under the terms of the Acquisition Agreement, subject to certain exceptions described below, the NexCen board of directors agreed not to make an Adverse Recommendation Change or authorize, cause or permit NexCen or any of its subsidiaries to enter into any letter of intent, agreement or agreement in principle with respect to any alternative sale proposal. Notwithstanding the foregoing, at any time prior to obtaining the approval of the asset sale by NexCen's stockholders, the NexCen board of directors may make an Adverse Recommendation Change and authorize, cause or permit NexCen or any of its subsidiaries to enter into a letter of intent, agreement or agreement in principle with respect to any alternative sale proposal, if:

        In connection with any such action by the NexCen board of directors, NexCen must (i) give GFG at least five business days prior written notice of its intentions to take such action, (ii) negotiate, and use its reasonable best efforts to cause its representatives to negotiate, in good faith with GFG during such notice period to the extent GFG wishes to negotiate, to enable GFG to revise the terms of the Acquisition Agreement such that it would cause such "superior proposal" to no longer constitute a "superior proposal," and (iii) following the end of such notice period, the NexCen board of directors shall have considered in good faith any changes to the Acquisition Agreement proposed in writing by GFG and shall have determined that the "superior proposal" would continue to constitute a "superior proposal" if such revisions were to be given such effect. In the event that material revisions are made to the terms of the "superior proposal" during the five day notice period, NexCen is obligated to give GFG an additional notice and a three business day notice period shall commence.

        A "superior proposal" is defined as a bona fide written alternative sale proposal for all or substantially all of NexCen's voting securities or assets that the NexCen board of directors has determined in good faith, after consultation with independent financial advisors and outside legal counsel, is reasonably likely to be consummated in accordance with its terms, taking into account all legal, regulatory, timing and other financial aspects of the proposal and the person making the

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proposal, and if consummated, would result in a transaction more favorable to NexCen's stakeholders from a financial point of view than the asset sale contemplated by the Acquisition Agreement, and the gross consideration to be received by NexCen and/or its stakeholders must be at least $117,500,001.


Employee Benefit Matters

        Prior to closing but effective upon the closing date, GFG will make offers of employment to each of the employees of NF Management and NB Supply. For a period of no less than 12 months following the closing, GFG shall provide or cause to be provided to each employee who accepts the offer of employment compensation and employee benefits that are no less favorable in the aggregate to those provided to such employee by NexCen immediately prior to the closing. GFG has agreed to recognize prior service with NexCen for purposes of eligibility, vesting and entitlement to benefits (but not for accrual of retirement type benefits), to the extent past service was recognized for employees under NexCen's benefits plans immediately prior to the closing and to the same extent past service is credited under such plans or arrangements for similarly situated employees of GFG. NexCen and GFG will take all actions necessary to transfer and assign NexCen's employee benefit plans (other than its 401(k) plan) to GFG. GFG will create a 401(k) plan that, subject to certain conditions, will accept a direct rollover of continuing employees account balances. NexCen will terminate its 401(k) on or prior to the closing of the asset sale.


Retention Bonuses

        NexCen is implementing a retention bonus plan, on terms and conditions as are reasonably consented to by GFG, covering certain specified members of our management team based in Georgia which plan provides for aggregate payments of up to $290,000, with up to half of the amount being paid on the closing date and up to half being paid six months following the closing date as long as the individuals remain employed by GFG as of the applicable payment bonus payment date. NexCen and GFG are splitting the costs of the retention bonus plan equally.


Conditions to Obligations to Complete the Asset Sale

        The respective obligations of GFG, on the one hand, and NexCen, on the other, to complete the asset sale are subject to the satisfaction or waiver of the following conditions:

        Mutual Closing Conditions:

        Additional Conditions to GFG's Obligations:

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        Additional Conditions to NexCen's Obligations:


Definition of Material Adverse Effect

        Under the terms of the Acquisition Agreement, a "Material Adverse Effect" means any change, effect, event, occurrence or state of facts that has a material adverse effect, individually or in the aggregate, on the financial condition, business, assets or results of operations of NexCen's franchise business taken as a whole or which materially impairs or delays the ability of NexCen to consummate the transactions contemplated by the Acquisition Agreement. The definition of "Material Adverse Effect" also includes certain specified events related to NexCen's manufacturing facility in Atlanta, Georgia related to physical condition of the facility and disruption of its operations beyond specified levels (subject to specified cure periods). However, the following changes, effects, events, occurrences or state of facts are not considered to be "Material Adverse Effects" for purposes of the Acquisition Agreement:

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Termination

        The Acquisition Agreement may be terminated in accordance with its terms at any time prior to completion of the asset sale:

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Termination Fee

        Under the terms of the Acquisition Agreement, NexCen may be required to pay certain termination fees to GFG:

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Expenses Generally; Expense Reimbursement

        All fees and expenses incurred in connection with the asset sale will be paid by the party incurring the fees or expenses, whether or not the asset sale is completed, except for under certain circumstances, where GFG may be entitled to expense reimbursement for all out-of-pocket fees and expenses actually incurred by GFG in connection with the transactions contemplated by the Acquisition Agreement up to an aggregate amount of $500,000. GFG is entitled to such expense reimbursement if the agreement is terminated for any of the reasons that would entitle GFG to a termination fee (as detailed above), as well as if an SEC investigation or stockholder litigation results in the inability of the parties to close the asset sale.


Amendment and Waiver

        The Acquisition Agreement may be amended at any time by a writing signed on behalf of GFG and NexCen.

        At any time prior to the closing of the asset sale, to the extent legally allowed, any party may extend the time for performance, waive any inaccuracies in the representations and warranties or waive compliance with any of the agreements or conditions of the parties, provided that such extension or waiver is set forth in a writing signed on behalf of such party.


THE EQUITY COMMITMENT LETTER

        In connection with the signing of the Acquisition Agreement, LLCP IV entered into a letter agreement, dated May 13, 2010, in which it committed to provide the funding required by GFG to complete the acquisition or, absent a closing, to support certain obligations of GFG that may be owed to NexCen. NexCen is also a party to this letter agreement. Funding is conditioned upon the absence of an insolvency by NexCen or any of its subsidiaries and the occurrence of any one of the following:

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The letter agreement will terminate upon the occurrence of specified events, including closing under the Acquisition Agreement, termination or expiration of the Acquisition Agreement in accordance with its terms (except where NexCen makes a claim against GFG for a pre-closing breach, in which case the letter agreement will remain in effect until the claim is resolved), termination of the accord and satisfaction agreement, actions by BTMUCC to enforce its remedies under the BTMUCC credit facility (such as acceleration of the maturity of outstanding debt or foreclosures on collateral) and an insolvency involving NexCen or its subsidiaries. The maximum amount that LLCP IV is required to fund under the letter agreement is $112.5 million.


THE ACCORD AND SATISFACTION AGREEMENT AND THE WAIVER
AND OMNIBUS AMENDMENT

        Also in connection with the signing of the Acquisition Agreement, NexCen, the Issuer, the Co-Issuers, and BTMUCC entered into the accord and satisfaction agreement and the waiver and omnibus amendment with respect to the BTMUCC credit facility.

        The accord and satisfaction agreement provides that the Issuer, the Co-Issuers and NexCen can satisfy and permanently extinguish all of their respective outstanding obligations under the BTMUCC credit facility through the payment of:

        In addition to the payment of the amounts set forth above, the effectiveness of the accord and satisfaction agreement is contingent upon:

        The accord and satisfaction agreement requires that the Issuer, each Co-Issuer and NexCen use commercially reasonable efforts to consummate the acquisition as provided in the Acquisition Agreement. The accord and satisfaction agreement terminates if the closing conditions are not met by October 1, 2010. The accord and satisfaction agreement is attached to this proxy statement as Annex F.

        The waiver and omnibus amendment, among other things:

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        Additionally, the waiver and omnibus amendment extended, the date on which BTMUCC would become entitled to receive penny warrants for up to 2.8 million shares of the Company's common stock from May 31, 2010 to the earlier of (i) October 1, 2010 or (ii) the termination of the accord and satisfaction agreement (if the Class B franchise notes are not repaid by this date, BTMUCC will be entitled to the warrants). The waiver and omnibus amendment is attached to this proxy statement as Annex G.

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PROPOSAL TWO—THE PLAN OF DISSOLUTION PROPOSAL

General

        At the special meeting, you will be asked to approve our voluntary dissolution and complete liquidation pursuant to the plan of dissolution. On May 20, 2010, the NexCen board of directors approved, subject to stockholder approval, the dissolution and liquidation of the Company pursuant to the plan of dissolution, substantially in the form of Annex B attached to this proxy statement. The material features of the plan of dissolution are summarized below. We urge stockholders to read the plan of dissolution carefully and in its entirety.

        If the stockholders approve the plan of dissolution proposal, we estimate that the aggregate amount of cash distributions to stockholders will be in the range of $0.12 to $0.16 per share of common stock (assuming the asset sale is consummated on the terms set forth in the Acquisition Agreement). However, uncertainties as to the precise net value of our remaining assets after the asset sale, the ultimate amount of our liabilities, the amount of operating costs during the liquidation and winding-up process and the related timing to complete such transactions make it impossible to predict with certainty the actual net cash amount that will ultimately be available for distribution to stockholders or the timing of any such distribution. If the asset sale is not approved, we will reconsider what options, if any, are available. As of the date of this proxy statement, NexCen is not aware of any viable alternatives that we expect would enable us to deliver similar or higher value to our stockholders (including value relating to the use of NexCen's accumulated tax loss carryforwards) or to continue in operation for an extended period of time. Absent a reasonable and attractive alternative that is agreeable to us and also to BTMUCC, there is a substantial risk that our assets would be subject to foreclosure after a further default under the BTMUCC credit facility. If this were to happen, NexCen would lose control of all of its operating assets and cash flows and likely would have no choice but to file for bankruptcy protection. In such event, it is highly unlikely that there would be significant assets, if any, available for any distribution to NexCen's stockholders.


Dissolution under Delaware Law

        The Delaware General Corporation Law, or DGCL, provides that a corporation may dissolve upon the recommendation of the board of directors, followed by the approval of its stockholders. Following such approval, our dissolution would be effected by filing a certificate of dissolution with the Secretary of State of the State of Delaware. The corporation is dissolved on the date specified in the certificate of dissolution upon which the certificate of dissolution will become effective.

        Section 278 of the DGCL provides that after a corporation is dissolved, its existence continues for a period of three years "or for such longer period as the Delaware Court of Chancery shall in its discretion direct" for the purpose of prosecuting and defending suits and to enable the corporation gradually to settle and close its business, sell its properties, wind up its affairs, discharge its liabilities and distribute any remaining assets to stockholders.

        In order to ensure that its stockholders and directors are afforded certain protections under the DGCL, a dissolving corporation may opt to follow a court supervised dissolution procedure, pursuant to Section 280 of the DGCL, which requires the corporation to give notice by mail and publication of its dissolution to all persons known to have a claim against the corporation and require those persons to submit their claims in accordance with the notice. The notice will be mailed to all known claimants, including persons with claims asserted against the corporation in a pending proceeding to which it is a party, and published in accordance with the DGCL. Any claim against the corporation will be barred if the known claimant is given the required notice and does not present the claim to the corporation by the cut-off date referred to in the notice.

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        The court supervised procedure under Section 280 of the DGCL also contemplates that the corporation will offer security to claimants with contingent or conditional claims. The corporation must petition the Delaware Court of Chancery to determine the amount of security for contingent and conditional claimants who have rejected the offered security, for claims that are the subject of pending litigation and for claims that have not been made known to the corporation but are likely to become known within 5 years of the date of dissolution.

        The corporation may also dissolve pursuant to the non-court supervised procedure of Section 281(b) of the DGCL. The non-court supervised procedure also requires the corporation to pay or make reasonable provision for certain categories of claims.


Principal Provisions of the Plan of Dissolution

        This section of the proxy statement describes material aspects of the proposed plan of dissolution. While we believe that the description covers the material terms of the plan of dissolution, this summary may not contain all of the information that is important to you. You should carefully read this entire proxy statement, including the plan of dissolution attached hereto as Annex B, and the other documents delivered with this proxy statement for a more complete understanding of the plan of dissolution.

        The plan of dissolution must be approved by the affirmative vote of a majority of all of our outstanding shares of common stock. The approval of the plan of dissolution proposal by the requisite vote of the stockholders will constitute adoption of the plan of dissolution and will grant full and complete authority to the NexCen board of directors and officers, without further stockholder action, to do and perform any and all acts and to make, execute and deliver any and all agreements, conveyances, assignments, transfers, certificates and other documents of any kind and character that the NexCen board of directors or officers deems necessary, appropriate or advisable, to implement the plan of dissolution and to proceed with our dissolution and liquidation in accordance with any applicable provision of the DGCL, sell, dispose, convey, transfer and deliver assets of the Company, satisfy or provide for the satisfaction of NexCen's obligations in accordance with any applicable provisions of the DGCL, and distribute all of the remaining funds of NexCen and any unsold assets of NexCen to its stockholders.

        After the effective date of the dissolution, we expect that the NexCen board of directors (or some subset thereof) will continue in their positions for the purpose of winding up our business and affairs. We also expect that certain of our current officers' employment will be terminated after the asset sale and prior to the effective date of the dissolution as part of a cost reduction effort in anticipation of the Company's dissolution. The NexCen board of directors may appoint officers, hire employees and retain independent contractors in connection with the winding up process, and is authorized to pay our directors, officers, employees, and independent contractors compensation or additional compensation above their regular compensation, in money or other property, in recognition of the extraordinary efforts they may be required to undertake in connection with the successful implementation of the plan of dissolution. Adoption of the dissolution and liquidation of the Company pursuant to the plan of dissolution proposal by the requisite vote of the stockholders will constitute approval by the stockholders of any such cash or non-cash compensation. As previously mentioned, the NexCen board of directors currently anticipates that the employment of certain executive officers of the Company will be terminated after the closing of the asset sale and currently expects that it will need to retain independent contractors to implement the winding up process.

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        If the plan of dissolution proposal is approved by the requisite vote of the stockholders, the steps set forth below may be completed at such times as the NexCen board of directors, in its discretion and in accordance with the DGCL, deems necessary, appropriate or advisable in our best interests and the best interests of the stockholders:

        The plan of dissolution gives the NexCen board of directors the authority to dispose of all of our remaining non-cash property and assets, including but not limited to all tangible assets, consisting of any office furniture, equipment, supplies and other miscellaneous assets, and intellectual property and other intangible assets, without further stockholder approval. The Company's non-cash assets and properties may be sold in one transaction or in several transactions to one or more buyers. Additionally, the Company shall not be required to obtain appraisals, fairness opinions or other third-party opinions as to the value of its properties and assets in connection with the liquidation.

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        The NexCen board of directors may, but is not required to, establish a liquidating trust and distribute assets of the Company to a liquidating trust. The liquidating trust may be established by agreement with one or more trustees selected by the NexCen board of directors. If a liquidating trust is established by agreement with one or more trustees, the trust agreement establishing and governing the liquidating trust shall be in form and substance determined by the NexCen board of directors. To the fullest extent permitted by law, adoption of the plan of dissolution by the requisite vote of the stockholders shall constitute the approval of the stockholders of the appointment of the trustees, any trust agreement and any transfer of assets by the Company to the liquidating trust. In the alternative, the NexCen board of directors may petition the Delaware Court of Chancery for the appointment of one more trustees to conduct the liquidation of the Company, subject to the supervision of such court. Whether appointed by an agreement or by the Delaware Court of Chancery, the trustees shall in general be authorized to take charge of the Company's property, and to collect the debts and property due and belonging to the Company, with power to prosecute and defend, in the name of the Company, or otherwise, all such suits as may be necessary or proper for the foregoing purposes, and to appoint agents under them and to do all other acts which might be done by the Company that may be necessary, appropriate or advisable for the final settlement of the unfinished business of the Company.

        It is specifically contemplated that the NexCen board of directors may authorize the payment of a retainer fee to a law firm or law firms for legal fees and expenses of the Company, including, among other things, to cover any costs payable pursuant to the indemnification of our directors and officers provided by the Company pursuant to our certificate of incorporation and bylaws or the DGCL or otherwise. In addition, in connection with and for the purpose of implementing and assuring completion of the plan of dissolution, the Company may, in the sole and absolute discretion of the NexCen board of directors, pay any brokerage, agency and other fees and expenses of persons rendering services to the Company in connection with the collection, sale, exchange or other disposition of the Company's property and assets and the implementation of the plan of dissolution. The adoption of the plan of dissolution by the requisite vote of the stockholders shall, to the fullest extent permitted by law, constitute approval of such payments by the stockholders of the Company.

        We will continue to indemnify our directors, officers, employees and agents in accordance with our certificate of incorporation and bylaws and any contractual arrangements, for actions taken in connection with the plan of dissolution and the winding up of our business and affairs. The NexCen board of directors, in its sole and absolute discretion, is also authorized to obtain and maintain insurance as may be necessary, appropriate or advisable to cover the Company's above mentioned indemnification obligations, including directors' and officers' liability coverage.

        We will, as determined by the NexCen board of directors, (i) pay or make reasonable provision to pay all claims and obligations, including all contingent, conditional or unmatured contractual claims known to us, (ii) make such provisions as will be reasonably likely to be sufficient to provide payment for any claim against us which is the subject of a pending action, suit or proceeding to which we are a party and (iii) make such provision as will be reasonably likely to be sufficient to provide payment for claims that have not been made known to us or that have not arisen but that, based on facts known to us or our successor entity, are likely to arise or to become known within 10 years after the effective date of the dissolution of the Company. Any of our assets remaining after the payment or the provision for payment of claims against and obligations of the Company shall be distributed by us pro rata to our

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stockholders. Such distribution may occur all at once or in a series of distributions and shall be in cash or assets, in such amounts, and at such time or times, as the NexCen board of directors or trustee(s), if any, in their absolute discretion, may determine.

        If any liquidating distribution to a stockholder cannot be made, whether because the stockholder cannot be located, has not surrendered its certificates evidencing our common stock as may be required pursuant to the plan of dissolution, or for any other reason, then the distribution to which such stockholder is entitled will be transferred, at such time as the final liquidating distribution is made, to the official of such state or other jurisdiction authorized or permitted by applicable law to receive the proceeds of such distribution. The proceeds of such distribution will thereafter be held solely for the benefit of and for ultimate distribution to such stockholder as the sole equitable owner thereof and will be treated as abandoned property and escheat to the applicable state or other jurisdiction in accordance with applicable law. In no event will the proceeds of any such distribution revert to or become the Company's property.

        Notwithstanding the NexCen board of directors' approval of the plan of dissolution and any subsequent approval of the plan of dissolution by NexCen stockholders, the Company may continue to pursue other business opportunities and transactions, and, if for any reason, including the pursuit of such opportunities or transactions, the NexCen board of directors determines that such action would be in our best interests and the best interests of the stockholders, it may, prior to the effective date of such plan of dissolution (which, absent the emergence of a higher value alternative that the NexCen board of directors concludes it has a fiduciary obligation to explore, we intend to file as soon as reasonably practicable after the closing of the asset sale), abandon the proposed plan of dissolution pursuant to the DGCL. The plan of dissolution would be void upon the effective date of any such abandonment. We are not currently aware of any such higher value alternative.

        If for any reason the NexCen board of directors determines, prior to filing the certificate of dissolution, that such action would be in our best interest and the best interest of the stockholders, the NexCen board of directors may, in its sole discretion and without requiring further stockholder approval, amend or modify the plan of dissolution and all action contemplated thereunder; provided, however, that the Company may not amend, or modify the plan of dissolution under circumstances that would require additional stockholder approval under federal securities laws without complying with such requirements.

        We intend that the plan of dissolution constitute a plan of complete liquidation of the Company within the meaning of Sections 331 and 336 of the Internal Revenue Code, which plan of dissolution shall only go into effect upon the effective date of the certificate of dissolution and not prior to such date. The plan of dissolution will be deemed to authorize the taking of such action as, in the opinion of counsel for the Company, may be necessary to conform with the provisions of Sections 331 and 336 of the Internal Revenue Code and the regulations promulgated thereunder, including the making of any elections thereunder, if applicable.

        The plan of dissolution authorizes and directs the Company's officers to file an appropriate statement of corporate dissolution with the IRS after the effective date. The Company's officers are also authorized to file any additional returns, forms and reports with the IRS, or other taxing authorities, including state and local taxing authorities, as may be necessary or appropriate in connection with the plan of dissolution and the actions contemplated thereby.

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Estimated Liquidating Distributions

        Many of the facts influencing the amount of cash distributed to stockholders as a liquidating distribution cannot currently be quantified with certainty and are subject to change. Accordingly, you will not know the exact amount of any liquidating distributions you may receive as a result of the plan of dissolution when you vote on the plan of dissolution proposal. You may receive substantially less or more than the amount currently estimated.

        The following projected liquidating distribution analysis assumes that (i) the asset sale is consummated in accordance with the Acquisition Agreement, (ii) the obligations to BTMUCC under the BTMUCC credit facility are satisfied in accordance with the terms of the accord and satisfaction agreement, and (iii) our stockholders approve the plan of dissolution proposal. We intend to sell our remaining non-cash assets, consisting of any office furniture, equipment, supplies and other miscellaneous assets, for the best price available as soon as reasonably practicable after the effective date of the dissolution of the Company. We do not expect that our non-cash assets will result in material, incremental value. The amount available to be distributed to stockholders will be deducted by the amount necessary to satisfy the Company's obligations to current and potential claimants pursuant to the applicable provisions of the DGCL. Based on the foregoing, if both the asset sale and the plan of dissolution are approved, we estimate that the aggregate amount of cash distributions to our stockholders will be in the range of $0.12 to $0.16 per share of common stock. However, uncertainties as to the precise net value of our assets, the ultimate amount of our liabilities, the amount of operating costs during the liquidation and winding-up process and the related timing to complete such transactions make it impossible to predict with certainty the actual net cash amount that will ultimately be available for distribution to our stockholders or the timing of any such distribution. If our stockholders do not approve the plan of dissolution proposal, no liquidating distributions will be made pursuant to the plan of dissolution.

        The following estimates are not guarantees, do not reflect the total range of possible outcomes and have not been audited or reviewed by our independent certified public accounting firm. You may receive substantially less than the amount currently estimated, or you may not receive any liquidating distributions even if our stockholders approve the asset sale and plan of dissolution proposals.

 
  Low Range of
Net Proceeds for
Distribution
($, in millions)
  High Range of
Net Proceeds for
Distribution
($, in millions)
 

Net Cash to NexCen(1)

    14.3     15.3  
 

Remaining NexCen Liabilities

             
   

Employee Severance(2)

    (2.9 )   (2.9 )
   

Accounts Payable

    (1.4 )   (0.9 )
   

Settlement of Lease Liabilities(3)

    (1.1 )   (0.7 )
   

Insurance

    (1.1 )   (0.8 )
   

Other Operating Expenses(4)

    (1.0 )   (0.8 )
           
   

Total

    (7.5 )   (6.1 )

Estimated Cash to Distribute to Stockholders

    6.8     9.2  

Estimated Per Share Distribution(5)

    0.12     0.16  

(1)
Estimated amounts calculated pursuant to the terms and conditions of the Acquisition Agreement and the accord and satisfaction agreement discussed in this proxy statement, adjusted for (i) an estimated working capital adjustment that would reduce the amount paid to NexCen by approximately $1.3 million to $1.7 million, (ii) an estimated special adjustment related to a Bill Blass pension liability estimated to range between approximately $0.2 million and $0.3 million that would reduce the amount paid to NexCen, (iii) estimated cash on hand at closing that NexCen will

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(2)
Estimated amounts assume that all executive officers and corporate employees at NexCen's headquarters in New York and certain corporate employees in Norcross, Georgia will be terminated in connection with the consummation of the asset sale and the implementation of the plan of dissolution.

(3)
Estimated amounts are net of a $550,000 letter of credit issued to secure the New York City corporate lease.

(4)
Estimated amounts assume that any costs involved in resolving pending litigation, including the amount of any settlements, will be covered by available insurance for such matters.

(5)
Calculated based on 57,202,000 fully diluted shares (including only those outstanding options with an exercise price of not more than $0.16 per share) outstanding as of May 13, 2010.

        Pursuant to the plan of dissolution, we intend to liquidate all of our remaining non-cash assets and, after paying or making reasonable provision for the payment of claims against and obligations of the Company as required by law, and distribute any remaining cash to stockholders. We may defend suits and incur claims, liabilities and expenses (such as salaries and benefits, directors' and officers' insurance, payroll and local taxes, facilities expenses, legal, accounting and consulting fees, rent, and miscellaneous office expenses) following approval of the plan of dissolution and during the three years following the effective date of the dissolution of the Company. Satisfaction of these claims, liabilities and expenses will reduce the amount of cash available for ultimate distribution to stockholders. While we cannot predict the actual amount of our liabilities, other obligations and expenses and claims against us, we believe that available cash (assuming the asset sale is completed) and any amounts received from the sale of our remaining non-cash assets will be adequate to provide for the satisfaction of our liabilities, other obligations and expenses and claims against us and that we will make one or more cash distributions to stockholders.


Conduct of the Company Following Dissolution

        If the plan of dissolution is approved, we will file a certificate of dissolution with the Secretary of State of the State of Delaware when determined by the NexCen board of directors as soon as reasonably practicable after the closing of the asset sale. Despite the anticipated timing, the NexCen board of directors may abandon the plan of dissolution if it determines, prior to the filing of the certificate of dissolution, that such course of action is necessary or advisable, in view of its fiduciary obligations. We intend to make a public announcement in advance of the anticipated effective date of the dissolution of the Company. After the effective date of the dissolution of the Company, our corporate existence will continue but we may not carry on any business except that appropriate to wind-up and liquidate our business and affairs, including collecting and disposing of our assets, satisfying or making reasonable provision for the satisfaction of our liabilities and, subject to legal requirements, distributing our remaining property among the stockholders.

        Under the DGCL, we are required, in connection with our dissolution, to satisfy or make reasonable provision for the satisfaction of all claims and liabilities. Following the effective date of the dissolution of the Company, we will pay all expenses and other known liabilities and make reasonable provision for certain other claims and liabilities. We also may seek to acquire insurance coverage and take other steps the NexCen board of directors determines are reasonably calculated to provide for the satisfaction of the reasonably estimated amount of such liabilities. At this time, we are not able to

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provide a precise estimate of the amount of the cost of insurance or other steps that may be undertaken to make provision for the satisfaction of liabilities and claims, but any such amount will be deducted before the determination of amounts available for distribution to stockholders.

        The actual amount necessary to satisfy the Company's obligations to current and potential claimants may vary from time to time and will be based upon estimates and opinions of the NexCen board of directors, derived from consultations with management and outside experts, if the NexCen board of directors determines that it is advisable to retain such experts, and a review of our estimated contingent liabilities and estimated ongoing expenses, including: anticipated costs for a third party to manage our business; estimated investment banking, auction broker, legal and accounting fees; rent; payroll and other taxes; miscellaneous office expenses; facilities costs; expenses accrued in connection with the preparation of our financial statements; and costs related to public company reporting matters. We anticipate that expenses for professional fees and other expenses of liquidation may be significant. Our assets may not be sufficient to satisfy all of our obligations, expenses and liabilities, and if a distribution to stockholders is made in such circumstances, a creditor could bring a claim against our stockholders for the total amount distributed by us to such stockholders pursuant to the plan of dissolution.


Potential Liability of Stockholders

        Under the DGCL, if the NexCen board of directors fails to make reasonable provision for the satisfaction of liabilities and claims, each stockholder could be held liable for amounts due to creditors up to the amounts distributed to such stockholder under the plan of dissolution. So long as we dispose of our claims in accordance with the DGCL, the potential for stockholder liability regarding a distribution continues for three years after the date of dissolution. Under the DGCL, our dissolution does not remove or impair any remedy available against the Company, its directors, officers or stockholders for any right or claim existing, or any liability incurred, prior to such dissolution or arising thereafter, unless the action or other proceeding thereon is not commenced within three years (or any court extension thereof) after the date of dissolution.

        If we were held by a court to have failed to make adequate provision for expenses and liabilities or if the amount ultimately required to be paid in respect of such liabilities exceeded the amount available, a creditor could seek an injunction against us to prevent us from making distributions to stockholders in accordance with the plan of dissolution. Any such action could delay and substantially diminish liquidating distributions to stockholders.


Reporting Requirements

        Whether or not the plan of dissolution is approved, we have an obligation to continue to comply with the applicable reporting requirements of the Exchange Act, even though compliance with such reporting requirements may be economically burdensome and of minimal value to stockholders. In order to curtail expenses, we intend to seek relief from the SEC to suspend our reporting obligations under the Exchange Act, and ultimately to terminate the registration of our common stock. We anticipate that, if granted such relief, we would continue to file current reports on Form 8-K to disclose material events relating to our dissolution and liquidation along with any other reports that the SEC might require. If we are unable to suspend our obligation to file periodic reports with the SEC, we will be obligated to continue complying with the applicable reporting requirements of the Exchange Act and will be required to continue to incur the expenses associated with these reporting requirements, including legal and accounting expenses, which will reduce the cash available for distribution to stockholders.

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Cessation of Transfers of Common Stock

        Transfers of common stock shall be discontinued as of the date of the effectiveness of the certificate of dissolution with the Secretary of State of the State of Delaware. Thereafter, certificates representing shares of our common stock will not be assignable or transferable on our books except by will, intestate succession or operation of law, and we will not issue any new stock certificates. See "Cessation of Trading of Common Stock" below.

        The liquidating distributions to stockholders pursuant to the plan of dissolution shall be in complete redemption and cancellation of all of the outstanding shares of the Company's common stock. As a condition to receipt of the liquidating distribution, the NexCen board of directors or any trustees, if appointed in connection with the formation of a liquidating trust, may require the stockholders to (i) surrender to the Company their certificates evidencing their shares of common stock or (ii) furnish the Company with evidence satisfactory to the NexCen board of directors or trustees, if any, of the loss, theft or destruction of such certificates, together with such surety bond or other security or indemnity as may be required by and satisfactory to the NexCen board of directors or trustees, if any. After receipt of a liquidating distribution, each stockholder will cease to have any rights with respect to his, her or its shares, except the right to receive distributions pursuant to the plan of dissolution.

        If the surrender of stock certificates will be required following the dissolution, we will send you written instructions regarding such surrender. Any distributions otherwise payable by us to stockholders who have not surrendered their stock certificates, if requested to do so, may be held in trust for such stockholders, without interest, pending the surrender of such certificates (subject to escheat pursuant to the laws relating to unclaimed property).


Cessation of Trading of Common Stock

        We anticipate that we will request that our common stock stop trading on the Pink OTC Markets on the date of dissolution. As noted above, we also currently expect to cease recording our stock transfers and issuing stock certificates upon the effectiveness of the certificate of dissolution with the Secretary of State of the State of Delaware.


Regulatory Approvals

        No United States federal or state regulatory requirements must be complied with or approvals obtained in connection with the plan of dissolution, other than the requirements of the DGCL.


Appraisal Rights

        Under the DGCL, NexCen's stockholders are not entitled to appraisal rights for their shares of NexCen common stock in connection with the transactions contemplated by the plan of dissolution.


Interests of Management in the Dissolution of the Company

        NexCen stockholders should be aware that some directors and executive officers of NexCen have interests in the plan of dissolution that may be different from, or in addition to, the interests of NexCen stockholders. The NexCen board of directors was aware of and considered these interests, among other matters, prior to voting to approve the plan of dissolution, and making its recommendation that the plan of dissolution be approved by NexCen's stockholders.

        Salary and Severance Benefits for Executive Officers:    We expect to continue compensating our executive officers at their existing compensation levels in connection with their services provided during the pendency of the asset sale. Additionally, certain of our executive officers are also party to employment agreements with the Company that provide for certain severance benefits if their employment is terminated without cause. As a result, certain of our executive officers will be entitled to

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certain severance benefits if their employment is terminated without cause in connection with the plan of dissolution. The NexCen board of directors currently anticipates that the employment of certain executive officers will be terminated after the closing of the asset sale as part of a cost reduction effort in anticipation of the dissolution of the Company. The NexCen board of directors has not made a final determination on which executive officers will be terminated as part of this cost reduction effort. Nevertheless, the Company anticipates that its severance obligations in connection with the termination of certain executive officers, along with other officers and employees of the Company, could total approximately $3 million. Additional information regarding severance benefits related to certain of our executive officers can be found in our Annual Report on Form 10-K/A for the year ended December 31, 2009, filed with the SEC on April 29, 2010, which is attached as Annex E to this proxy statement.

        See also the considerations discussed in "Proposal One—The Asset Sale Proposal—Interests of Executive Officers and Directors of NexCen in the Asset Sale."


Material United States Federal Income Tax Consequences of the Dissolution

        The discussion set forth below summarizes the material United States federal income tax consequences to stockholders of NexCen in connection with the dissolution of NexCen pursuant to the plan of dissolution. This discussion is based on the Internal Revenue Code, existing and proposed Treasury regulations thereunder and administrative rulings and court decisions, all as in effect on the date of this proxy statement and all of which are subject to change or differing interpretations (possibly with retroactive effect). Any such change or differing interpretation could alter the tax consequences to NexCen and its stockholders described herein.

        This discussion is not a complete description of all the United States federal income tax consequences that may be relevant to NexCen's dissolution. In addition, this discussion does not address all of the tax consequences that may be relevant to particular NexCen stockholders in light of their particular circumstances or to NexCen stockholders that are subject to special tax treatment under United States federal income tax laws, such as stockholders that are, for United States federal income tax purposes:

        In addition, the following discussion does not address the tax consequences of the dissolution under foreign, state or local tax laws, the tax consequences of transactions effectuated prior or subsequent to, or concurrently with, the dissolution (whether or not any such transactions are

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undertaken in connection with the dissolution). Neither NexCen nor GFG has requested, nor will request, a ruling from the IRS with regard to any of the tax consequences of the dissolution.

        Each NexCen stockholder is urged to consult its own tax advisors as to the specific tax consequences of the dissolution, including the applicable, federal, state, local and foreign tax consequences, in light of the particular circumstances of such holder.

Material United States Federal Income Tax Consequences to NexCen and NexCen Stockholders of the Dissolution

        The NexCen board of directors has adopted a plan of dissolution, which, subject to approval of the NexCen stockholders, provides for liquidation and distribution of NexCen's assets to its stockholders. In the dissolution, NexCen will recognize gain or loss measured by the difference, if any, between the adjusted tax basis and the fair market value of each asset sold by NexCen or distributed to stockholders. In the dissolution, the principal assets of NexCen will consist of cash and certain non-cash assets. To the extent that NexCen has net operating losses, it may be able to use some or all of such losses to offset any gain that is recognized in the dissolution.

        Amounts received by NexCen stockholders pursuant to the plan of dissolution will be treated as full payment in exchange for their NexCen common stock. A NexCen stockholder's gain or loss on such amounts received will be computed on a "per share" basis. If NexCen makes more than one liquidating distribution, each liquidating distribution will be allocated proportionately to each share of stock owned by a stockholder. The amount of cash and the fair market value of any other property received by a stockholder in each liquidating distribution will be applied against and reduce the stockholder's adjusted tax basis in that stockholder's shares of common stock. A stockholder will not recognize any gain with respect to a share until the stockholder has recovered the stockholder's adjusted tax basis for that share. After the adjusted tax basis is recovered, all distributions in excess of such recovered basis will be recognized as taxable gain. Any loss will generally be recognized only when the final distribution from NexCen has been received, which may not be until 2013 or later, and then only if the aggregate value of all liquidating distributions with respect to a share is less than the stockholder's adjusted tax basis for that share. This gain or loss will be long-term capital gain or loss if, as of the date of dissolution, the holding period for such stock is more than one year.

        Upon any liquidating distribution of property (other than cash), the stockholder's adjusted tax basis in such property immediately after the distribution will be the fair market value of such property at the time of distribution. The gain or loss realized upon the stockholder's future sale of that property will be measured by the difference between the stockholder's adjusted tax basis in the property and the proceeds of such sale.

        If a liquidating trust is used, the distribution of assets and liabilities of NexCen to the trust would be treated for United States federal income tax purposes as if the assets and liabilities had been distributed to the NexCen stockholders in a liquidating distribution (with the tax consequences described above) and then contributed by them to the trust. The NexCen stockholders would not be required to recognize any additional gain or loss on the deemed contribution of the assets and liabilities to the liquidating trust. The liquidating trust would be treated as a grantor trust for United States federal income tax purposes, and gains or losses realized by the trust in the course of its administration would be passed through to the stockholders, who would be taxed on their respective shares of such gains and losses on their own tax returns.

Material United States Federal Income Tax Consequences to NexCen and NexCen Stockholders after the Asset Sale if there is no Dissolution

        If NexCen does not ultimately consummate the dissolution pursuant to the plan of dissolution, it may nevertheless distribute various assets to the NexCen stockholders. If non-liquidating distributions

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are made, NexCen may recognize gain (but not loss) on such distributions. For NexCen stockholders, non-liquidating distributions would be treated either in whole or in part as dividends taxable at ordinary income rates without regard to the recipients' basis in the NexCen stock, or as partial liquidating distributions eligible for capital gain or loss treatment to NexCen stockholders, or as part of a series of liquidating distributions also eligible for capital gain or loss treatment for NexCen stockholders, depending on the particular circumstances of the distribution and each recipient stockholder. If any such distribution were treated as a dividend, the amount taxable as a dividend would not exceed the current and accumulated earnings and profits of NexCen in the distribution year.

Federal Backup Withholding

        A NexCen stockholder may be subject, under some circumstances, to backup withholding at a rate of 28% with respect to any amounts (including cash and the fair market value of other assets) received with respect to NexCen stock, unless such stockholder provides proof of an applicable exemption or a correct taxpayer identification number, and otherwise complies with applicable requirements of the backup withholding rules.

        Any amount withheld from a payment to a stockholder under the backup withholding rules is not an additional tax and may be refunded or credited against the stockholder's United States federal income tax liability, provided that the required information is timely furnished to the IRS.

        THE PRECEDING DISCUSSION IS A SUMMARY OF THE MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE DISSOLUTION AND DOES NOT PURPORT TO BE A COMPLETE ANALYSIS OR DISCUSSION OF ALL POTENTIAL TAX EFFECTS RELEVANT THERETO. THIS DISCUSSION WAS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR AVOIDING PENALTIES THAT MAY BE IMPOSED. THIS DISCUSSION WAS WRITTEN TO SUPPORT THE SOLICITATION OF PROXIES FOR THE SPECIAL MEETING. NEXCEN STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO THEM OF THE DISSOLUTION, INCLUDING TAX RETURN REPORTING REQUIREMENTS, THE APPLICABILITY OF STATE, LOCAL, FOREIGN AND OTHER APPLICABLE TAX LAWS AND ANY PROPOSED TAX LAW CHANGES.


Required Vote

        The affirmative vote of the holders of a majority in voting power of the outstanding shares of NexCen common stock is required for the approval of the plan of dissolution.

        The NexCen board of directors recommends that stockholders vote "FOR" the approval of the plan of dissolution proposal.

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PROPOSAL THREE—THE SHARE REDUCTION PROPOSAL

General

        On May 20, 2010, the NexCen board of directors approved an amendment to NexCen's certificate of incorporation to reduce the total number of authorized shares to 100 million shares of common stock and 1 million shares of preferred stock. NexCen currently has 1 billion shares of common stock and 1 million shares of preferred stock authorized under its certificate of incorporation and there are approximately 57,001,730 shares of NexCen common stock issued and outstanding.

        The NexCen board of directors believes that the share reduction would be in the best interests of NexCen because (i) NexCen will not need to issue many (or any) additional shares, given its current plans, and (ii) the reduction in the total number of authorized shares will save approximately $117,000 in annual Delaware franchise tax charges.

        The share reduction will become effective when the amendment to NexCen's certificate of incorporation is filed with the Secretary of State for the State of Delaware. The amendment will have no impact on any outstanding shares of NexCen common stock. NexCen intends to file this amendment promptly after the stockholders approve the share reduction proposal.


Required Vote

        Assuming a quorum is present, approval of the share reduction proposal will require the affirmative vote of the holders of a majority in voting power of the outstanding shares of the NexCen common stock.

        The NexCen board of directors recommends that stockholders vote "FOR" the approval of the share reduction proposal.

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PROPOSAL FOUR—THE ADJOURNMENT PROPOSAL

General

        If at the special meeting the number of shares of NexCen stock present or represented and voting in favor of the approval of the asset sale, the plan of dissolution or the share reduction proposals is insufficient to approve the asset sale, the plan of dissolution or the share reduction proposals under Delaware law, the NexCen board of directors intends to move to adjourn the special meeting in order to solicit additional proxies in favor of the approval of each of these proposals. In that event, NexCen will ask its stockholders to vote only upon the adjournment proposal, and not the asset sale, the plan of dissolution or the share reduction proposals.

        If at the special meeting the number of shares of NexCen stock present or represented and voting in favor of the approval of the asset sale proposal is sufficient to approve the asset sale proposal under Delaware law, but the number of shares of NexCen stock present or represented and voting in favor of the approval of the plan of dissolution or the share reduction proposals is insufficient to approve either or both of those proposals under Delaware law, then the NexCen board of directors will hold a vote on the asset sale proposal and each other proposal that shall have garnered sufficient votes to approve that proposal, if any, and then move to adjourn the special meeting as to the remaining proposals in order to solicit additional proxies in favor of the approval of those remaining proposals, if any. Accordingly, NexCen may ask its stockholders to vote at the special meeting only upon some of the proposals described in this proxy statement.

        In this proposal, NexCen is asking you to authorize the NexCen board of directors to adjourn the special meeting, and any later adjournments, to a later date, in order to enable NexCen to solicit additional proxies in favor of the approval of the asset sale, the plan of dissolution or the share reduction proposals. If the stockholders approve the adjournment proposal, the NexCen board of directors could adjourn the special meeting, and any adjourned session of the special meeting, to a later date and use the additional time to solicit additional proxies in favor of the approval of the asset sale, the plan of dissolution or the share reduction proposals, including the solicitation of proxies from stockholders that have previously voted against the approval of the asset sale, the plan of dissolution or the share reduction proposals. Among other things, approval of the adjournment proposal could mean that, even if NexCen had received proxies representing a sufficient number of votes against the approval of the asset sale, the plan of dissolution or the share reduction proposals to defeat any of these proposals, NexCen could adjourn the special meeting without a vote on the asset sale, the plan of dissolution or the share reduction proposals and seek during such adjournment to convince the holders of those shares to change their votes to votes in favor of the approval of the asset sale, the plan of dissolution or the share reduction proposals.


Required Vote

        The adjournment proposal requires the affirmative vote of the holders of a majority in voting power of NexCen common stock present, either in person or by proxy, and entitled to vote at the special meeting.

        The board of directors believes that if the voting power of NexCen common stock present or represented by proxy at the special meeting and voting in favor of the approval of the asset sale, the plan of dissolution or the share reduction proposals is insufficient to approve the asset sale, the plan of dissolution or the share reduction proposals, it is in the best interests of the stockholders of NexCen to enable NexCen, for a limited period of time, to continue to seek to obtain a sufficient number of additional votes in favor of approval of the asset sale, the plan of dissolution or the share reduction proposals to bring about its approval.

        The NexCen board of directors recommends that stockholders vote "FOR" the approval of the adjournment proposal.

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FUTURE NEXCEN STOCKHOLDER PROPOSALS

        If the asset sale and plan of dissolution are not approved by our stockholders, or alternatively, not consummated for any other reason, we anticipate holding our next Annual Meeting of Stockholders. If such meeting is held, the deadlines set forth below will apply to matters that stockholders desire to introduce at such meeting and stockholder proposals intended for inclusion in the proxy statement to be furnished by NexCen to its stockholders entitled to vote at such meeting.

        Bylaw Provisions—Under NexCen's bylaws, stockholders may propose business to be brought before an Annual Meeting. In order for a stockholder to submit a proposal for consideration at NexCen's next Annual Meeting, the stockholder must fulfill the requirements set forth in our bylaws and notify the Corporate Secretary no later than September 8, 2010 and no earlier than July 25, 2010. For each stockholder proposal, the stockholder must provide: (i) a brief description of the business desired to be brought before the meeting; (ii) the reasons for bringing such business and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (iii) the class and number of shares of NexCen which are beneficially owned and held of record for such stockholder and such beneficial owner, if applicable. Proposals should be addressed to Corporate Secretary, NexCen Brands, Inc., 1330 Avenue of the Americas, 34th Floor, New York, New York 10019.

        Inclusion in NexCen's Proxy Statement—A stockholder who desires to present a proposal for inclusion in NexCen's proxy statement for the next annual meeting pursuant to SEC Rule 14a-8 must deliver the proposal to our principal executive offices so that materials are received by the Corporate Secretary, no later than June 25, 2010. Submissions should be addressed to Corporate Secretary, NexCen Brands, Inc. 1330 Avenue of the Americas, 34th Floor, New York, New York 10019, and should comply with all applicable SEC rules.

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WHERE YOU CAN FIND MORE INFORMATION

        NexCen incorporates by reference the Acquisition Agreement attached to this proxy statement as Annex A, the plan of dissolution attached to this proxy statement as Annex B, the amendment to our certificate of incorporation attached to this proxy statement as Annex C, the opinion of NexCen's financial advisor, Rothschild Inc., attached to this proxy statement as Annex D, our annual report on Form 10-K for the year ended December 31, 2009 (as amended) and our quarterly report on Form 10-Q for the quarter ended March 31, 2010 attached to this proxy statement as Annex E, the accord and satisfaction agreement attached to this proxy statement as Annex F, and the waiver and omnibus amendment attached to this proxy statement as Annex G. Certain exhibits to Annex E have been omitted but may be obtained through NexCen, or from the SEC through the SEC's website at www.sec.gov.

        Global Franchise Group, LLC has supplied all information contained in the sections entitled "Questions and Answers Regarding the Special Meeting—Who is the Purchaser" and "Proposal One—The Asset Sale Proposal—The Companies" on pages 2 and 29 of this proxy statement relating to GFG and LLCP IV, and NexCen has supplied all information contained in this proxy statement relating to NexCen.

        You can obtain any of the documents incorporated by reference into this proxy statement through NexCen, or from the SEC through the SEC's website at www.sec.gov. Documents incorporated by reference are available from NexCen without charge, excluding any exhibits to those documents, unless the exhibit is specifically incorporated by reference as an exhibit in this proxy statement. NexCen stockholders may request a copy of such documents by contacting NexCen's proxy solicitor, Innisfree M&A Incorporated:


Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Stockholders call toll free: (877) 456-3488
Banks and brokers may call collect: (212) 750-5833

        IN ORDER FOR YOU TO RECEIVE TIMELY DELIVERY OF THE DOCUMENTS IN ADVANCE OF THE SPECIAL MEETING, NEXCEN SHOULD RECEIVE YOUR REQUEST NO LATER THAN JULY 15, 2010.

        This proxy statement does not constitute the solicitation of a proxy in any jurisdiction to or from any person to whom or from whom it is unlawful to make such proxy solicitation in that jurisdiction. You should rely only on the information contained in this proxy statement to vote your shares at the special meeting. No persons have been authorized to give any information or make any representation other than those contained in this proxy statement and if given or made, such information or representations must not be relied upon as having been authorized by us or any other person. This proxy statement is dated as of June 11, 2010. You should assume that the information contained in this proxy statement is accurate only as of this date, and the mailing of this proxy statement to stockholders should create any implication to the contrary.

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Annex A

Execution Copy

ACQUISITION AGREEMENT

Dated as of May 13, 2010

Between

NexCen Brands, Inc.

and

Global Franchise Group, LLC

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TABLE OF CONTENTS

 
   
  Page

ARTICLE I

Purchase and Sale

SECTION 1.01.

 

The Stock Purchase

 
A-5

SECTION 1.02.

 

The Asset Purchase

  A-5

SECTION 1.03.

 

Aggregate Consideration

  A-5

ARTICLE II

Documentation and Closing

SECTION 2.01.

 

The Closing

 
A-6

SECTION 2.02.

 

Purchaser Closing Conditions

  A-8

SECTION 2.03.

 

Seller Closing Conditions

  A-9

SECTION 2.04.

 

Adjustments to Aggregate Consideration

  A-10

SECTION 2.05.

 

Required Withholding

  A-12

SECTION 2.06.

 

Timing of Transfer

  A-12

ARTICLE III

Representations and Warranties of Seller

SECTION 3.01.

 

Organization

 
A-13

SECTION 3.02.

 

Authority; Enforceability

  A-13

SECTION 3.03.

 

Non-Contravention

  A-14

SECTION 3.04.

 

Governmental Consents

  A-14

SECTION 3.05.

 

Equity Securities of the Acquired Companies

  A-14

SECTION 3.06.

 

Subsidiaries

  A-15

SECTION 3.07.

 

SEC Reports; Financial Statements

  A-15

SECTION 3.08.

 

Absence of Certain Changes

  A-16

SECTION 3.09.

 

No Undisclosed Material Liabilities

  A-16

SECTION 3.10.

 

Material Contracts

  A-16

SECTION 3.11.

 

Compliance with Laws and Governmental Orders

  A-18

SECTION 3.12.

 

Litigation

  A-18

SECTION 3.13.

 

Owned and Leased Properties; Title

  A-19

SECTION 3.14.

 

Sufficiency of the Acquired Assets

  A-19

SECTION 3.15.

 

Intellectual Property Rights

  A-19

SECTION 3.16.

 

Licenses and Permits

  A-20

SECTION 3.17.

 

Tax Matters

  A-20

SECTION 3.18.

 

Employee Plans

  A-21

SECTION 3.19.

 

Labor and Employment Matters

  A-21

SECTION 3.20.

 

Environmental Compliance

  A-22

SECTION 3.21.

 

Franchise Matters

  A-23

SECTION 3.22.

 

Suppliers

  A-24

SECTION 3.23.

 

Brokers

  A-24

SECTION 3.24.

 

Board Approval

  A-24

SECTION 3.25.

 

Bank Accounts

  A-25

SECTION 3.26.

 

No Other Representations

  A-25

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  Page

ARTICLE IV

Representations and Warranties of Purchaser

SECTION 4.01.

 

Organization

 
A-25

SECTION 4.02.

 

Authority; Enforceability

  A-25

SECTION 4.03.

 

Non-Contravention

  A-25

SECTION 4.04.

 

Governmental Consents

  A-25

SECTION 4.05.

 

Funds

  A-26

SECTION 4.06.

 

Brokers

  A-26

SECTION 4.07.

 

Purchaser

  A-26

SECTION 4.08.

 

Litigation

  A-26

SECTION 4.09.

 

Information Supplied

  A-26

SECTION 4.10.

 

Purchase for Investment

  A-26

SECTION 4.11.

 

No Other Representations

  A-26

ARTICLE V

Covenants

SECTION 5.01.

 

Conduct of Business Prior to the Closing

 
A-26

SECTION 5.02.

 

Pre-Closing Access to Information

  A-28

SECTION 5.03.

 

Regulatory and Other Authorizations; Notices and Consents

  A-28

SECTION 5.04.

 

Notice of Developments

  A-29

SECTION 5.05.

 

Insurance

  A-30

SECTION 5.06.

 

Books and Records

  A-30

SECTION 5.07.

 

Further Action

  A-31

SECTION 5.08.

 

Confidentiality

  A-31

SECTION 5.09.

 

Excluded Assets; Excluded Liabilities

  A-32

SECTION 5.10.

 

Proxy Statement; Stockholders' Meeting

  A-32

SECTION 5.11.

 

No Solicitation of Transactions

  A-33

SECTION 5.12.

 

Employee Benefits Matters

  A-35

SECTION 5.13.

 

Retention Bonus Plan

  A-37

SECTION 5.14.

 

Director Resignations

  A-37

SECTION 5.15.

 

Deposit Account Control Agreement

  A-37

SECTION 5.16.

 

Extension of Accord and Satisfaction Agreement

  A-37

SECTION 5.17.

 

Enforcement of Certain Rights

  A-37

ARTICLE VI

Tax Matters

SECTION 6.01.

 

Preparation and Filing of Returns; Payment of Taxes

 
A-38

SECTION 6.02.

 

Refunds, Credits and Offsets

  A-38

SECTION 6.03.

 

Cooperation

  A-38

SECTION 6.04.

 

Transfer Taxes

  A-38

SECTION 6.05.

 

FIRPTA Certificate

  A-38

SECTION 6.06.

 

Aggregate Consideration Adjustments and Allocation

  A-38

SECTION 6.07.

 

Tax Sharing Agreements

  A-39

SECTION 6.08.

 

Tax Elections

  A-39

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  Page

ARTICLE VII

Termination

SECTION 7.01.

 

Termination

 
A-39

SECTION 7.02.

 

Effect of Termination; Termination Fee. 

  A-40

SECTION 7.03.

 

Fees and Expenses

  A-42

ARTICLE VIII

Other Matters

SECTION 8.01.

 

Notices

 
A-42

SECTION 8.02.

 

Amendments; No Waivers

  A-43

SECTION 8.03.

 

Governing Law

  A-43

SECTION 8.04.

 

Enforcement; Expenses of Litigation

  A-43

SECTION 8.05.

 

Severability

  A-43

SECTION 8.06.

 

Counterparts

  A-44

SECTION 8.07.

 

Assignment

  A-44

SECTION 8.08.

 

WAIVER OF JURY TRIAL

  A-44

SECTION 8.09.

 

Entire Agreement

  A-44

SECTION 8.10.

 

Captions

  A-44

SECTION 8.11.

 

Specific Performance

  A-44

SECTION 8.12.

 

Public Announcement

  A-44

SECTION 8.13.

 

No Survival

  A-45

APPENDIX A

 

Definitions

 
A-47

EXHIBIT A

 

Form of Equity Commitment Agreement

   

EXHIBIT B

 

Form of Accord and Satisfaction Agreement

   

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        THIS ACQUISITION AGREEMENT dated as of May 13, 2010 (this "Agreement"), is made by and between NexCen Brands, Inc., a Delaware corporation ("Seller"), and Global Franchise Group, LLC, a Delaware limited liability company ("Purchaser"). Each of Purchaser and Seller are referred to herein as a "Party" and together as "Parties".

        WHEREAS, Seller owns the NC Business;

        WHEREAS, upon the terms and subject to the conditions set forth in this Agreement, Seller wishes to sell to Purchaser, and Purchaser wishes to acquire, directly or indirectly, the NC Business;

        WHEREAS, concurrently with the execution of this Agreement, and as a condition to the willingness of Seller to enter into this Agreement, Levine Leichtman Capital Partners IV, L.P. (the "Fund") is entering into an equity commitment agreement in the form attached as Exhibit A (the "Equity Commitment Agreement"), pursuant to which the Fund is, among other things, supporting certain obligations of Purchaser in connection with this Agreement and agreeing to provide equity financing to Purchaser in connection with the Transactions;

        WHEREAS, concurrently with the execution of this Agreement, NC Holding, the subsidiary borrowers party thereto, the managers party thereto, Seller, BTMU Capital Corporation, as Agent, and the Noteholders (as defined therein) are entering into an Accord and Satisfaction Agreement in the form attached as Exhibit B, including the Waiver and Omnibus Amendment attached thereto (collectively, the "Accord and Satisfaction Agreement");

        WHEREAS certain capitalized terms used in this Agreement are defined in Appendix A.

        NOW, THEREFORE, the Parties hereto agree as follows:


ARTICLE I

Purchase and Sale

        SECTION 1.01.    The Stock Purchase.     Upon the terms and subject to the conditions of this Agreement, at the Closing Seller shall, or cause NexCen Holding Corporation, a Delaware corporation and a wholly-owned subsidiary of Seller (the "NC Holding" and, together with Seller, the "Share Sellers") sell to Purchaser, and Purchaser shall purchase, all the securities listed on Section 1.01 of the Seller Disclosure Letter (the "Shares").


        SECTION 1.02.
    The Asset Purchase.     (a) Upon the terms and subject to the conditions of this Agreement, at the Closing, Seller shall cause the Asset Sellers to, sell, assign, transfer, convey and deliver to Purchaser or one of its Subsidiaries, and Purchaser or one of its Subsidiaries shall purchase, acquire and accept, all Right, title and interest of the Asset Sellers in, to and under the Acquired Assets together with all Rights attaching thereto.


        SECTION 1.03.
    Aggregate Consideration.     The aggregate consideration payable by Purchaser for the Shares and the Acquired Assets shall be (i) $112,500,000, minus (ii) the amount of Closing Date Funded Indebtedness (if any), plus (iii) the Net Working Capital Adjustment, as calculated pursuant to Section 2.04, minus (iv) the Special Adjustments, minus (v) the Deferred Revenue Adjustment and plus (vi) the amount of Cash (if any) (the "Aggregate Consideration").

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ARTICLE II

Documentation and Closing

        SECTION 2.01.    The Closing.     The Closing shall occur at the offices of Kirkland & Ellis LLP, 601 Lexington Avenue, New York, New York at 10:00 a.m., New York City time on (a) the second Business Day following the satisfaction or waiver of the conditions contained in Section 2.02 and Section 2.03, other than those conditions that by their nature can be satisfied only on the Closing Date or (b) such date as otherwise agreed to by the Parties hereto. The date on which the Closing occurs shall be called the "Closing Date". At the Closing:

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        SECTION 2.02.
    Purchaser Closing Conditions.     The obligation of Purchaser to consummate the Closing is subject to the satisfaction or waiver by Purchaser of the following further conditions:

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        SECTION 2.03.    Seller Closing Conditions.     The obligation of Seller to consummate the Closing is subject to the satisfaction or waiver by Seller of the following further conditions:

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        SECTION 2.04.
    Adjustments to Aggregate Consideration.     

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        SECTION 2.05.
    Required Withholding.     All payments of Aggregate Consideration and adjustments to the Aggregate Consideration shall be subject to any withholding(s) required by law.


        SECTION 2.06.
    Timing of Transfer.     Notwithstanding any other provision of this Agreement, title to the Shares and the Acquired Assets will be conveyed to Purchaser simultaneous with the payment by

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Purchaser of the Estimated Aggregate Consideration pursuant to a funds flow memorandum to be agreed upon in good faith by the Parties at least two Business Days prior to the Closing (which funds flow will include, among other line items, the wiring of funds directly to the Agent (as defined in the BTMUCC Credit Facility), on behalf of Seller and the Co-Issuers (as defined in the BTMUCC Credit Facility), in accordance with the Accord and Satisfaction Agreement and Payoff Letter.


ARTICLE III

Representations and Warranties of Seller

        Seller represents and warrants to Purchaser that, except with respect to the Excluded Assets and the Excluded Liabilities and subject to any information contained in any of Seller SEC Filings (but excluding disclosures in the exhibits or schedules to such SEC Filings) filed on or after March 26, 2010 and prior to the date hereof and such exceptions as are set forth in the letter, dated as of the date of this Agreement from Seller to Purchaser (the "Seller Disclosure Letter") (it being understood that (a) the disclosure of any fact or item in any section of the Seller Disclosure Letter shall, should the existence of such fact or item be relevant to any other section, be deemed to be disclosed, with respect to that other section to which the relevance of that disclosure is reasonably apparent from a reading of such disclosure (i.e., without the need to examine the underlying document), and (b) the disclosure of any matter or item in Seller Disclosure Letter shall not be deemed to constitute an acknowledgement that such matter or item is required to be disclosed therein or is material to a representation or warranty set forth in this Agreement and shall not be used as a basis for interpreting the terms "material," "materially," "materiality" or "Material Adverse Effect" or any word or phrase of similar import and does not mean that such matter or item would, alone or together with any other matter or item, reasonably be expected to have a Material Adverse Effect):


        SECTION 3.01.
    Organization.     Each of the Share Sellers, the Asset Sellers and the Acquired Companies (a) is duly organized, validly existing and in good standing under the laws of its jurisdiction of its organization, which jurisdiction is set forth in Section 3.01 of the Seller Disclosure Letter, and (b) has the requisite power to own its properties and to carry on its business as it is now being conducted and to perform all of its respective obligations under all Contracts, (c) is not in violation of its certificate of incorporation or bylaws (or comparable organizational documents) and (d) is duly qualified to do business in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary, except, in the case of each of clauses (b) and (d), for such circumstances that have not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Complete and correct copies of the certificate of incorporation and by-laws (or comparable constitutive documents) of Seller, each Asset Seller and each Acquired Company have been delivered to Purchaser. Seller owns all of the capital stock of NC Holding and each Asset Seller.


        SECTION 3.02.
    Authority; Enforceability.     Seller has the corporate power and authority to execute and deliver this Agreement and perform its obligations hereunder. The execution and delivery by Seller of this Agreement and the performance by Seller of its obligations hereunder have been duly authorized by all necessary corporate action and no other corporate proceedings on the part of Seller and no stockholder votes are necessary to authorize this Agreement or to consummate the Transactions other than the affirmative vote of holders of a majority of outstanding shares of Seller's Common Stock to adopt this Agreement and approve the transactions provided for herein (the "Stockholder Approval"). This Agreement has been duly executed and delivered by Seller and constitutes a legal, valid and binding agreement of Seller, enforceable against Seller in accordance with its terms, subject to bankruptcy, insolvency (including all Laws relating to fraudulent transfers), reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors' rights and to general equity principles (the "Bankruptcy and Equity Exception").

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        SECTION 3.03.
    Non-Contravention.     Assuming that the Stockholder Approval is obtained, the execution, delivery and performance by Seller of this Agreement does not (a) violate, conflict with or result in the breach of any provision of the certificate of incorporation or by-laws (or comparable constitutive documents) of any Share Seller, any Acquired Company or any Asset Seller, (b) conflict with or violate any Law or Governmental Order applicable to the Acquired Assets or to any Share Seller, any Acquired Company, any Asset Seller or any of their assets or properties or (c) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent or the giving of notice under, or give to others any right to purchase or sell assets or securities or to exercise any remedy or modify any obligation under, or any rights of termination, amendment or acceleration of, or result in the creation of any Encumbrance on the Shares, the Acquired Assets or on any of the assets or properties of any Acquired Company pursuant to, any Contract to which any Share Seller, any Asset Seller or any Acquired Company is a party or by which any of their respective properties or assets is bound or affected except, in the case of clauses (b) and (c), for any such conflict, violation, breach, default, consent, right of termination, amendment or acceleration or Encumbrance as has not had and would not reasonably be expected to have, in each case, individually or in the aggregate, a Material Adverse Effect.


        SECTION 3.04.
    Governmental Consents.     The execution, delivery and performance by Seller of this Agreement does not require any material consent, approval, authorization or other Governmental Order of, action by, filing with or notification to any Governmental Authority, except for (a) if required, the filing of a notification and report form under the HSR Act, (b) all filings required to be made, and all consents, approvals and authorizations required to be obtained, prior to the Closing Date by either Party with or from any Governmental Authority responsible for enforcement of antitrust Laws or foreign investment Laws in order to consummate the Transactions, and (c) filings that may be required under the Securities Act or the Exchange Act.


        SECTION 3.05.
    Equity Securities of the Acquired Companies.     

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        SECTION 3.06.
    Subsidiaries.     


        SECTION 3.07.
    SEC Reports; Financial Statements.     (a) Seller has timely filed all forms, reports and other documents required to be filed by it under the Securities Act or the Exchange Act, as the case may be, since November 5, 2009 (collectively, the "Seller SEC Filings"). Each Seller SEC Filing (i) as of its date (or, if amended, at the time of such amendment), complied in all material respects with the applicable requirements of the Securities Act, the Exchange Act, and the Sarbanes-Oxley Act of 2002, as the case may be, and the rules and regulations of the SEC thereunder, and (ii) did not, at the time it was filed (or, if amended, at the time of such amendment), contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. As of the date of this Agreement, no Acquired Company is subject to the periodic reporting requirements of the Exchange Act.

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        SECTION 3.08.    Absence of Certain Changes.     From the Balance Sheet Date to the date of this Agreement, the NC Business has been conducted in the ordinary course consistent with past practices and there has not been any change, effect, event, occurrence or state of facts that has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.


        SECTION 3.09.
    No Undisclosed Material Liabilities.     There is no Liability of an Acquired Company or that will be an Assumed Liability other than Liabilities (a) reflected in the Balance Sheet, (b) incurred after the Balance Sheet Date in the ordinary course of the NC Business, (c) under this Agreement, (d) under Material Contracts to which Seller or any of its Subsidiaries is a party (excluding Liabilities for breach of any such Contract by Seller or any of its subsidiaries), (e) arising with respect to the subject matters covered by the other Sections of this Article III, and (f) which do not exceed $100,000 individually or $750,000 in the aggregate.


        SECTION 3.10.
    Material Contracts.     (a) Except as described in Section 3.10(a) to the Seller Disclosure Letter, as of the date of this Agreement, no Acquired Company or Asset Seller is a party to or is bound by, and none of the Acquired Assets includes any:

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        SECTION 3.11.
    Compliance with Laws and Governmental Orders.     Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the NC Business is being conducted in compliance with all applicable Laws (including Franchise Laws or other Laws related to the operation of the NC Business) and all applicable Governmental Orders.


        SECTION 3.12.
    Litigation.     (a) Except as described in Section 3.12(a) to the Seller Disclosure Letter, as of the date of this Agreement, there is no material Action pending against, or, to the Knowledge of Seller, threatened against any Share Seller, any Asset Seller or any Acquired Company, or any material Governmental Order that is binding on any Share Seller, any Asset Seller, any Acquired Company or any of the Acquired Assets.

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        SECTION 3.13.
    Owned and Leased Properties; Title.     


        SECTION 3.14.
    Sufficiency of the Acquired Assets.     The assets of the Acquired Companies and the Acquired Assets, together with the Rights conveyed to Purchaser under this Agreement and the Excluded Assets, constitute all the assets necessary to conduct the NC Business as currently conducted and to permit Purchaser to conduct the NC Business immediately after the Closing in all material respects in the same manner as the NC Business has been conducted by Seller and its Affiliates during the past 12 months and as conducted immediately prior to the Closing Date.


        SECTION 3.15.
    Intellectual Property Rights.     

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        SECTION 3.16.
    Licenses and Permits.     Seller, the Asset Sellers and/or the Acquired Companies hold and are in compliance in all material respects with all applicable material permits, certificates, licenses, approvals, registrations and authorizations (collectively, the "Permits"), required by them under all applicable Laws to conduct their businesses as currently conducted (including all Permits related to or governing franchises and/or the offer or sales of franchises, and/or the operation of the Share Sellers', the Assets Sellers' and/or the Acquired Companies' franchising business).


        SECTION 3.17.
    Tax Matters.     Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect:

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        SECTION 3.18.
    Employee Plans.     (a) Section 3.18(a) of the Seller Disclosure Letter sets forth a list of each material Seller Employee Plan and the name of its sponsor or, where applicable, the name of the entity that is party to the Seller Employee Plan.


        SECTION 3.19.
    Labor and Employment Matters.     

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        SECTION 3.20.
    Environmental Compliance.     Except as to matters that have not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect:

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        SECTION 3.21.    Franchise Matters.     

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        SECTION 3.22.
    Suppliers.     Section 3.22 of the Seller Disclosure Letter sets forth a true, correct and complete list of the ten largest suppliers or vendors to each of GAC Manufacturing, LLC and NFM ("Suppliers") (based on purchases from April 1, 2009, through May 31, 2010), together with the dollar amount of purchases made from such Suppliers during such period. To the Knowledge of Seller, all of the material goods, materials or services provided by the Suppliers and used in the NC Business could be purchased or obtained from other Persons than the Suppliers. No Supplier has reduced or otherwise discontinued, or threatened in writing to reduce or discontinue, supplying such goods, materials or services to Seller or any Subsidiary on reasonable terms, except for such matters as, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.


        SECTION 3.23.
    Brokers.     Except for Rothschild Inc., no broker, finder or investment banker is entitled to any brokerage, finders or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of the Share Sellers, any Asset Seller or any of the Acquired Companies. Seller is solely responsible for the fees and expenses of Rothschild Inc.


        SECTION 3.24.
    Board Approval.     On or prior to the date of this Agreements, (i) the board of directors of Seller (the "Board") has received from Rothschild Inc., its opinion, subject to the limitations, qualifications and assumptions set forth therein, that the unadjusted purchase price of $112,500,000, to be received by Seller is fair from a financial point of view to Seller and (ii) the Board unanimously adopted resolutions (a) approving this Agreement and (b) recommending to Seller's stockholders that they vote in favor of adopting this Agreement in accordance with the terms hereof (the "Board Recommendation"). A copy of such opinion from Rothschild Inc. will be provided to Purchaser promptly for information purposes only following receipt thereof by Seller.

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        SECTION 3.25.
    Bank Accounts.     Section 3.25 of the Seller Disclosure Letter sets forth a true, correct and complete list of the names and locations of all accounts of the with banks, trust companies, savings and loan associations and other financial institutions at which any Acquired Company or Asset Seller maintains bank accounts of any nature and the account numbers of all such accounts. Section 3.25 of the Seller Disclosure Letter sets forth a true, correct and complete list of the names and locations of all such accounts of Shoe Box Holdings LLC and its Subsidiaries.


        SECTION 3.26.
    No Other Representations.     Purchaser agrees that, except for the representations and warranties made by Seller that are expressly set forth in this Article III or in any other document or instrument executed and delivered by the Seller or any of its Affiliates pursuant to this Agreement, none of Seller or any of its Affiliates or Representatives has made, and none of them shall be deemed to have made, to Purchaser or its Affiliate or Representatives any representation or warranty of any kind.


ARTICLE IV

Representations and Warranties of Purchaser

        Purchaser represents and warrants to Seller that:


        SECTION 4.01.
    Organization.     Purchaser is a limited liability company organized, validly existing and in good standing under the laws of the State of Delaware.


        SECTION 4.02.
    Authority; Enforceability.     Purchaser has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution and delivery by Purchaser of this Agreement and the performance by Purchaser of its obligations hereunder have been duly authorized by all necessary limited liability company action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and constitutes a legal, valid and binding agreement of Purchaser, enforceable against it in accordance with its terms, subject to the Bankruptcy and Equity Exception.


        SECTION 4.03.
    Non-Contravention.     The execution, delivery and performance by Purchaser of this Agreement does not (a) violate, conflict with or result in the breach of any provision of the certificate of formation or operating agreement of Purchaser, (b) conflict with or violate any Law or Governmental Order applicable to Purchaser any of its assets or properties or (c) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent or the giving of notice under, or give to others any right to exercise any remedy under, or any rights of termination, amendment or acceleration of, or result in the creation of any Encumbrance on any of the assets or properties of Purchaser pursuant to, any Contract to which Purchaser is a party or by which any of its assets or properties is bound or affected, except for any such conflict, violation, consent, right of termination, amendment or acceleration or Encumbrance as would not reasonably be expected, individually or in the aggregate, to materially impair or delay the ability of Purchaser to consummate the Transactions.


        SECTION 4.04.
    Governmental Consents.     The execution, delivery and performance by Purchaser of this Agreement does not require any consent, approval, authorization or other order of, action by, filing with or notification to any Governmental Authority, except for (a) if required, the filing of a notification and report form under the HSR Act, (b) all filings required to be made, and all consents, approvals and authorizations required to be obtained, prior to the Closing Date by either Party with or from any Governmental Authority responsible for enforcement of antitrust Laws or foreign investment Laws in order to consummate the Transactions, and (c) filings that may be required under the Securities Act or the Exchange Act.

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        SECTION 4.05.    Funds.     Purchaser has available to it, and will have available to it through the Closing or the earlier termination of this Agreement, all funds necessary for the purchase of the Shares and the Acquired Assets in accordance with the terms of this Agreement and to pay all related fees and expenses.


        SECTION 4.06.
    Brokers.     No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of Purchaser except for any such Person whose fees and expenses shall be the responsibility of Purchaser.


        SECTION 4.07.
    Purchaser.     Since the date of its formation, Purchaser has not carried on any business or conducted any operations other than the execution of this Agreement, the performance of its obligations hereunder and matters ancillary thereto.


        SECTION 4.08.
    Litigation.     As of the date of this Agreement, there is no material Action pending against, or, to the Knowledge of Purchaser, threatened in writing against Purchaser or any of its Affiliates, or any Governmental Order that is binding on Purchaser, any of its Affiliates or any of their respective assets, in each case that challenges or that may have the effect of delaying, preventing or making illegal any of the Transactions.


        SECTION 4.09.
    Information Supplied.     None of the information supplied or to be supplied by Purchaser or its Affiliates or Representatives expressly for inclusion or incorporation by reference in the Proxy Statement will, as of the time such documents (or any amendment thereof or supplement thereto) are mailed to the holders of shares of Seller's Common Stock and at the time of the Stockholders' Meeting, contain any untrue statement of a material fact, or omit to state any material fact required to be stated therein in order to make the statements therein, in light of the circumstances under which they were made, not misleading.


        SECTION 4.10.
    Purchase for Investment.     Purchaser acknowledges that the Shares have not been registered under the Securities Act or under any state or foreign securities Laws. Purchaser (i) is acquiring the Shares solely for investment with no present intention to distribute any of the Shares to any Person and (ii) will not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities Laws.


        SECTION 4.11.
    No Other Representations.     Seller agrees that, except for the representations and warranties made by Purchaser that are expressly set forth in this Article III or in any other document or instrument executed and delivered by Purchaser or any of its Affiliates pursuant to this Agreement, none of Purchaser or any of its Affiliates or Representatives has made, and none of them shall be deemed to have made, to Seller or its Affiliate or Representatives any representation or warranty of any kind.


ARTICLE V

Covenants

        SECTION 5.01.    Conduct of Business Prior to the Closing.     Except as contemplated by this Agreement or as set forth in Section 5.01 of the Seller Disclosure Letter, prior to the Closing, Seller shall cause the NC Business to be conducted in all material respects in the ordinary course of the NC Business and use its reasonable best efforts to (i) keep intact its business, (ii) keep available the services of its employees, and (iii) preserve its relationships with customers, Franchisees and others with whom it deals, and (iv) renew all expired but continuing Franchise Agreements. Without limiting the generality of the foregoing, except as expressly contemplated by this Agreement or as set forth in Section 5.01 of the Seller Disclosure Letter, Seller shall not, and shall cause NC Holding, the Asset Sellers (in connection with the Acquired Assets) and the Acquired Companies not to do any of the

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following without the prior written consent of Purchaser (which consent will not be unreasonably withheld, restricted or delayed):

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        SECTION 5.02.
    Pre-Closing Access to Information.     From the date hereof until the Closing, Seller shall afford, insofar as permitted by Law, and shall cause the Acquired Companies and the Asset Sellers to afford the employees, agents and representatives of Purchaser reasonable access, during normal business hours, to the offices, properties, facilities, and Records of the NC Business, as Purchaser reasonably deems necessary or advisable, and to those NC Employees to whom Purchaser reasonably requests access. All information obtained by Purchaser and its employees, agents and representatives pursuant to this Section 5.02 shall be kept confidential in accordance with the Confidentiality Agreement.


        SECTION 5.03.
    Regulatory and Other Authorizations; Notices and Consents.     (a) Each of Seller and Purchaser shall:

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        SECTION 5.04.
    Notice of Developments.     Prior to the Closing, each Party shall, promptly after obtaining knowledge of the occurrence (or non-occurrence) of any event, circumstance or fact arising subsequent to the date of this Agreement which would reasonably be expected to result in the inaccuracy or breach of any representation or warranty or covenant of such Party in this Agreement, give notice thereof to the other Party and shall use its reasonable best efforts to prevent or to remedy promptly such breach; provided, however, that the delivery of, or failure to deliver, any notice pursuant to this Section 5.04 shall not limit or otherwise affect the remedies available hereunder and shall not be or be deemed to be a cure for any such breach.

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        SECTION 5.05.    Insurance.     (a) Seller shall use its reasonable best efforts to keep, or cause to be kept, all current insurance policies to the extent relating to the NC Business, in full force and effect through the close of business on the Closing Date.


        SECTION 5.06.
    Books and Records.     

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        SECTION 5.07.
    Further Action.     Prior to and after the Closing, each of the Parties shall use its reasonable best efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things necessary, proper or advisable, in the reasonable opinion of Purchaser, under applicable Law, and execute and deliver such documents and other papers, as may be required to consummate the Transactions and to carry out and effectuate the purpose and intent of this Agreement, including to effect the transfer of all of the Acquired NC Assets (including benefits plans and insurance policies (other than Seller's directors and officers policies) to Purchaser and facilitate the assignment and assumption of any Assumed Liabilities by Purchaser.


        SECTION 5.08.
    Confidentiality.     (a) Purchaser acknowledges that the information provided or to be provided to it in connection with the Transactions is subject to the terms of the Confidentiality Agreement, the terms of which are incorporated herein by reference. Effective upon, and only upon, the Closing, the Confidentiality Agreement shall terminate with respect to information relating solely to the NC Business; provided, however, that Purchaser acknowledges that any and all other information provided to it by Seller or Seller's representatives concerning Seller shall remain subject to the terms and conditions of the Confidentiality Agreement after the Closing Date.

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        SECTION 5.09.
    Excluded Assets; Excluded Liabilities.     Prior to the Closing, Seller shall cause (a) all Excluded Assets that reside in any Acquired Company to be transferred to Seller or a Subsidiary of Seller (other than any Acquired Company), and (b) the Excluded Liabilities that reside in any Acquired Company to be discharged or assumed by Seller or a Subsidiary of Seller (other than an Acquired Company), in each case without Liability to any Acquired Company or Purchaser.


        SECTION 5.10.
    Proxy Statement; Stockholders' Meeting.     

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        SECTION 5.11.
    No Solicitation of Transactions.     

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        SECTION 5.12.
    Employee Benefits Matters.     

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        SECTION 5.13.
    Retention Bonus Plan.     As soon as practicable following the date hereof (and, in any event, within 10 Business Days), Seller shall implement a retention bonus plan on such terms and conditions as are reasonably consented to by Purchaser) (the "Retention Bonus Plan") which provides for aggregate payments of up to $290,000 (maximum payments of $145,000 to be payable on each of (i) the Closing Date by Seller (or one of its Affiliates) (the "Seller Retention Portion") and (ii) six months following the Closing Date by Purchaser (or one of its Affiliates) (the "Purchaser Retention Portion")) to the NC Employees listed, and in the amounts set forth, in Section 5.13 of the Seller Disclosure Letter who become Continuing Employees and remain employed by Purchaser or one of its Affiliates as of the applicable payment bonus payment date; provided that if the actual amount of the Purchaser Retention Portion incurred by Purchaser and its Affiliates in connection with the Retention Bonus Plan is less than $145,000, one half of such shortfall shall be promptly (but in no event less than 5 Business Days after the six month anniversary of Closing) be paid in cash to Seller by wire transfer to an account designated by Seller.


        SECTION 5.14.
    Director Resignations.     Seller shall use its reasonable best efforts to obtain the written resignation(s) of each director of any Acquired Company identified by Purchaser at least five Business Days prior to Closing Date, effective as of the Closing Date.


        SECTION 5.15.
    Deposit Account Control Agreement.     In consideration for the mutual covenants and other agreements contained in this Agreement, Seller hereby grants for the exclusive benefit of Purchaser an Encumbrance upon and security interest in a bank account (the "Deposit Account") to be established as soon as practicable following the date hereof (and, in any event, within 7 Business Days). Seller shall execute a deposit account control agreement (such agreement, including any subordination or intercreditor agreement relating to the Deposit Account, the "Deposit Account Control Agreement") in favor of Purchaser providing for a first lien on such Deposit Account (the terms of which are reasonably satisfactory to Seller and Purchaser and shall include that no funds shall be withdrawn therefrom, unless expressly provided for in the Deposit Account Control Agreement, without the prior written consent of Purchaser). The Deposit Account shall maintain a balance no less than $500,000, such amount to be disbursed to Purchaser in satisfaction of any amounts as may be due to Purchaser as set forth in Section 7.02(c). In the event that all amounts due and payable to Purchaser under Section 7.02(c) have been satisfied, any remaining balance in the Deposit Account shall be released to Seller (or an account designated by Seller) within one Business Day of such satisfaction date, and Purchaser shall take all appropriate action, do or cause to be done all things necessary, proper or advisable under applicable Law, and execute and deliver such documents and other papers, as may be required to release such balance to Seller.


        SECTION 5.16.
    Extension of Accord and Satisfaction Agreement.     Seller may, and, if requested by Purchaser, shall, use its reasonable best efforts to obtain an extension of the Effectiveness Deadline (as such term is defined in the Accord and Satisfaction Agreement) from October 1, 2010 to the Outside Date. Notwithstanding any other provision of this Agreement, any action taken, or not taken, with the consent of Purchaser in connection with Seller's compliance with its obligations hereunder shall not be deemed a breach of this or any other provision of this Agreement.


        SECTION 5.17.
    Enforcement of Certain Rights.     Seller shall, to the extent reasonably requested by Purchaser, use its reasonable best efforts (which, for this purpose, will include, at its cost, initiating and pursuing litigation in order to enforce its rights) to enforce its rights under the Accord and Satisfaction Agreement and the Deposit Account Control Agreement or to cause the secured lender to enter into the subordination or intercreditor agreement as contemplated in Section 5.15. Notwithstanding any other provision of this Agreement, any action taken, or not taken, with the consent of Purchaser in connection with Seller's compliance with its obligations hereunder shall not be deemed a breach of this or any other provision of this Agreement.

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ARTICLE VI

Tax Matters

        SECTION 6.01.    Preparation and Filing of Returns; Payment of Taxes.     


        SECTION 6.02.
    Refunds, Credits and Offsets.     


        SECTION 6.03.
    Cooperation.     The Share Sellers, the Asset Sellers, the Acquired Companies, and Purchaser shall reasonably cooperate, and shall cause their respective Affiliates and Representatives reasonably to cooperate, in preparing and filing all Tax Returns and in resolving all disputes and audits with respect to all taxable periods relating to Taxes and in any other matters relating to Taxes, including (a) by maintaining and making available to each other all books and records and all relevant correspondence with Governmental Authorities in connection with Taxes and (b) by promptly informing each other of notice of any Tax audit or other Tax proceeding in respect of which the other Party or any of its Affiliates may have a Liability.


        SECTION 6.04.
    Transfer Taxes.     All transfer, documentary, sales, use, stamp, registration and applicable real estate transfer and stock transfer Taxes incurred in connection with this Agreement and the Transactions shall be borne 50% by Purchaser and 50% by Seller. Seller shall make all reasonable filings, if available, required to be relieved of (and to relieve Purchaser from) any such transfer Taxes otherwise applicable to the Transactions.


        SECTION 6.05.
    FIRPTA Certificate.     Seller shall deliver to Purchaser at the Closing a certificate or certificates in form and substance reasonably satisfactory to Purchaser certifying that the Transactions are exempt from withholding under Section 1445 of the Code.


        SECTION 6.06.
    Aggregate Consideration Adjustments and Allocation.     

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        SECTION 6.07.
    Tax Sharing Agreements.     Seller shall cause any tax sharing, tax allocation or tax indemnification agreement between any of the Acquired Companies and either Seller or any subsidiary of Seller (excluding, for the avoidance of doubt, any Acquired Company) to be terminated at and as of the Closing.


        SECTION 6.08.
    Tax Elections.     If Purchaser so requests at any time prior to Closing, Share Sellers shall elect to forego loss on disposition of the Acquired Companies (by reducing the basis) of such stock or interests under Section 1.1502-36(d)(6)(i)(A) of the Treasury Regulations. Seller shall furnish to Purchaser, at least 15 days prior to the timely filing of each of the foregoing elections, a copy of the completed form of such election for Purchaser's review and comment; provided, that if Purchaser requests such election to be made less than 15 days prior to the Closing, then Purchaser shall be granted a reasonable notice period to review such elections prior to the filing by Purchaser.


ARTICLE VII

Termination

        SECTION 7.01.    Termination.     This Agreement may be terminated at any time prior to the Closing:

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        SECTION 7.02.
    Effect of Termination; Termination Fee.     

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        SECTION 7.03.    Fees and Expenses.     Except as otherwise expressly set forth in this Agreement, all fees and expenses incurred in connection herewith and the Transactions shall be paid by the Party incurring such expenses, whether or not the Closing occurs.


ARTICLE VIII

Other Matters

        SECTION 8.01.    Notices.     All notices, requests and other communications to any Party hereunder shall be in writing (including facsimile transmission) and shall be given,

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or such other address or facsimile number as such party may hereafter specify for the purpose by notice to the other Parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5 p.m. in the place of receipt and such day is a Business Day, in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt.


        SECTION 8.02.
    Amendments; No Waivers.     (a) Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each Party to this Agreement or, in the case of a waiver, by each Party against whom the waiver is to be effective.


        SECTION 8.03.
    Governing Law.     This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof; provided, however, that the laws of the respective jurisdictions of incorporation of each of the Parties hereto shall govern the relative rights, obligations, powers, duties and other internal affairs of such Party and its board of directors or equivalent governing body.


        SECTION 8.04.
    Enforcement; Expenses of Litigation.     (a) Each Party hereby consents to the exclusive jurisdiction of any New York state or United States Federal court sitting in the City of New York with respect to disputes arising out of this Agreement.


        SECTION 8.05.
    Severability.     If any term, provision, covenant, restriction or other condition of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, illegal or incapable of being enforced by any rule or Law, or public policy, all other terms, provisions, covenants, restrictions and conditions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions is not affected in any manner materially adverse to either Party. Upon such a determination, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the Transactions are consummated to the extent possible.

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        SECTION 8.06.
    Counterparts.     This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties.


        SECTION 8.07.
    Assignment.     Neither this Agreement nor any of the Rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of Law or otherwise by either Party without the prior written consent of the other Party; provided that Purchaser may assign or collaterally assign its rights but not its obligations under this Agreement any Affiliate of Purchaser without the prior written consent of Seller (provided that such assignment shall not (i) release Purchaser from, or affect the obligations of Purchaser under, this Agreement, (ii) affect the obligations of the Fund under the Equity Commitment Agreement or (iii) impede or delay the consummation of the Transactions). Any purported assignment without such consent shall be void. Subject to the preceding sentences, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and assigns.


        SECTION 8.08.
    WAIVER OF JURY TRIAL.     EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS.


        SECTION 8.09.
    Entire Agreement.     This Agreement, together with the Confidentiality Agreement, constitutes the entire agreement between the Parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the Parties with respect to the subject matter of this Agreement.


        SECTION 8.10.
    Captions.     The captions herein are included for convenience of reference only and shall be ignored as in the construction or interpretation hereof.


        SECTION 8.11.
    Specific Performance.     The Parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the Parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof. If any Party brings any Action to enforce specifically the performance of the terms and provisions hereof by any other Party hereto, the Outside Date shall automatically be extended by (i) the amount of time during which such Action is pending, plus 20 Business Days or (ii) such other time period established by the court presiding over such Action. If a court of competent jurisdiction has declined to specifically enforce the obligations of Purchaser to consummate the Transactions pursuant to a claim for specific performance brought against Purchaser pursuant to this Section 8.11, Seller may pursue any other remedy available to it at law or in equity, including monetary damages (which Purchaser agrees shall not be limited to reimbursement of expenses or out-of-pocket costs, and may include the benefit of the bargain lost by Seller's stockholders and creditors). If a court has granted an award of damages for such alleged breach against Purchaser, Seller may enforce such award and accept damages for such alleged breach.


        SECTION 8.12.
    Public Announcement.     The initial press release regarding the Transactions shall be mutually agreed upon by Seller and Purchaser. Prior to Closing, neither Purchaser nor Seller shall issue or make any subsequent press release or other public statement with respect to the Transactions without prior written approval of the other Party, except as may be required by Law, provided that in any such case the disclosing Party shall provide the non-disclosing Party with adequate notice of any such proposed disclosure and a reasonable opportunity to comment thereon.

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        SECTION 8.13.
    No Survival.     None of the representations and warranties contained in Article III and Article IV or contained in any certificate or any writing delivered pursuant hereto shall survive the Closing or the termination of this Agreement hereunder. The covenants of Purchaser and Seller contained in the Agreement shall not survive the Closing other than those covenants and agreements contained herein that by their terms apply, or that are to be performed in whole or in part, after the Closing, which shall survive the Closing until fully performed.

[Signature page follows]

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        IN WITNESS WHEREOF, Seller and Purchaser have duly executed this Agreement, all as of the date first written above.

  NEXCEN BRANDS, INC.

 

By:

 

/s/ KENNETH J. HALL


      Name:   Kenneth J. Hall

      Title:   Chief Executive Officer

 

GLOBAL FRANCHISE GROUP, LLC

 

By:

 

Levine Leichtman Capital Partners,
Inc., its manager

 

By

 

/s/ STEVEN E. HARTMAN


      Name:   Steven E. Hartman

      Title:   Vice President

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APPENDIX A

Definitions

        "Accord and Satisfaction Agreement" shall have the meaning set forth in Recitals hereto.

        "Accounting Principles" means GAAP consistently applied using the same methods, policies and procedures with consistent classifications and estimates as were used in the preparation of the Financial Statements, as modified by the sample Net Working Capital calculation set forth in Section CA.

        "Acquired Assets" means all assets, properties, Rights and businesses, of every kind and description, wherever located, real, personal or mixed, tangible or intangible, owned, leased, licensed, used or held for use by the Asset Sellers in the conduct of the NC Business, including but not limited to those items set forth in Section 1.02(a) of the Seller Disclosure Letter, but excluding the Excluded Assets.

        "Acquired Companies" means the Companies and each of the direct and indirect Subsidiaries of the Companies.

        "Acquired Contracts" means the Contracts set forth in Section ACA of the Seller Disclosure Letter.

        "Acquired NC Assets" means the Shares, the Acquired Assets and, for the avoidance of doubt, the Acquired Companies.

        "Action" means any claim, action, suit, arbitration, inquiry, proceeding, audit, contest, investigation or other action by or before any Governmental Authority.

        "Adverse Recommendation Change" shall have the meaning set forth in Section 5.11(e).

        "Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person. For purposes of this definition, following the Closing, none of Seller and its Subsidiaries, on the one hand, and Purchaser and its Affiliates, on the other hand, shall be deemed to be Affiliates of each other.

        "Aggregate Consideration" shall have the meaning set forth in Section 1.03.

        "Agreement" shall have the meaning set forth in the Recitals hereto.

        "Asset Sellers" means NB Supply and NFM.

        "Assumed Liabilities" means those Liabilities set forth on Section AL of the Seller Disclosure Letter.

        "Balance Sheet" means the audited consolidated balance sheet of Seller as of December 31, 2009 included in the Form 10-K filed by Seller.

        "Balance Sheet Date" means December 31, 2009.

        "Bankruptcy and Equity Exception" shall have the meaning set forth in Section 3.02.

        "Board" shall have the meaning set forth in Section 3.24.

        "Board Recommendation" shall have the meaning set forth in Section 3.24.

        "BTMUCC Credit Facility" means that certain amended and restated note funding agreement dated August 15, 2008 and entered into between BTMU Capital Corporation, NC Holding and the other parties thereto, as may be amended, restated and modified from time to time (including as amended January 29, 2008 and August 15, 2008).

        "BTMUCC Security Agreement" means that certain agreement dated August 15, 2008 and entered into between BTMU Capital Corporation, as agent, NC Holding and the other parties thereto, as may be amended, restated and modified from time to time (including as amended January 29, 2008,

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August 15, 2008, September 11, 2008, December 24, 2008, January 27, 2009, July 15, 2009, August 6, 2009, January 14, 2010, February 10, 2010, March 12, 2010, March 30, 2010, April 20, 2010 and May 13, 2010).

        "Business Day" means any day other than a Saturday, Sunday or any other day which is a legal holiday under the Laws of the State of New York or is a say on which banking institutions located in the State of New York are authorized or required by Law or other governmental action to close.

        "Cash" means, as of the Determination Time, the cash and cash equivalents of the Acquired Companies, determined in accordance with the Accounting Principles (in each case, (i) excluding Restricted Cash, but (ii) including deposits in banks or other financial institution accounts of any kind and restricted cash collateralizing letters of credit extended on behalf of the Acquired Companies (other than the letter of credit issued to NFM by JPMorgan Chase Bank N.A. dated September 16, 2009)).

        "Closing" means the purchase and sale of the Shares, the Acquired Assets and the NBI Acquired Contracts.

        "Closing Balance Sheet" shall have the meaning set forth in Section 2.04(b)(i).

        "Closing Date" shall have the meaning set forth in Section 2.01.

        "Closing Date Funded Indebtedness" means, in each case except to the extent the following are included in the Closing Net Working Capital or in the Special Adjustment, as of the Determination Time, without duplication, the aggregate amount (including the current portions thereof) of all (i) indebtedness of the Acquired Companies (or otherwise included in the Assumed Liabilities) for borrowed money or for the deferred purchase price of property or services (but excluding trade payables and receivables in the ordinary course of business consistent with past practice), (ii) obligations of the Acquired Companies (or otherwise included in the Assumed Liabilities) evidenced by bonds, debentures, notes or other similar instruments, (iii) obligations of the Acquired Companies (or otherwise included in the Assumed Liabilities) to pay rent or other amounts under any lease of real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet under Accounting Principals, (iv) bank overdrafts or liability or obligations of the Acquired Companies (or otherwise included in the Assumed Liabilities) under a letter of credit, banker's acceptance or note purchase facility, (v) interest expense accrued but unpaid to the date of determination on or relating to any of the items included in the foregoing clauses (i) to (iv), (vi) prepayment penalties, fees, premiums, costs and expenses (if any) relating to any of the Acquired Companies (or otherwise included in the Assumed Liabilities)that are required to be prepaid, (vii) liabilities of the Acquired Companies (or otherwise included in the Assumed Liabilities) under interest rate cap agreements, interest rate swap agreements, foreign currency exchange agreements and other hedging agreements or arrangements, (viii) any unsatisfied obligation of the Acquired Companies (or otherwise included in the Assumed Liabilities) for "withdrawal liability" to a "multi-employer plan" as such terms are defined under ERISA, and (ix) without duplication, indebtedness of the type described in clauses (i) through (viii) above guaranteed, directly or indirectly, by any of the Acquired Companies (or otherwise included in the Assumed Liabilities). For purposes of this Agreement, "Closing Date Funded Indebtedness" (A) shall not include any trade accounts payables to the extent included in the Closing Net Working Capital or in the Special Adjustment or any indebtedness under the BTMUCC Credit Facility and (B) shall be determined in a manner consistent with the Accounting Principles.

        "Closing Net Working Capital" means the Net Working Capital as of the Determination Time.

        "Closing Statement" shall have the meaning set forth in Section 2.04(b)(i).

        "Code" means the Internal Revenue Code of 1986, as amended.

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        "Common Stock" means Seller's issued and outstanding common stock, par value $.01 per share.

        "Company" and "Companies" means each of the entities listed on Section 1.01 of the Seller Disclosure Letter as referred to in this Agreement individually as a "Company" and collectively as the "Companies".

        "Confidentiality Agreement" means that certain confidentiality agreement entered into between Seller and Levine Leichtman Capital Partners, Inc. dated March 31, 2010.

        "Continuing Employees" shall have the meaning set forth in Section 5.12(a).

        "Contract" means any contract, arrangement, lease, license, indenture, agreement, commitment and any other legally binding arrangement, whether oral or written.

        "control" (including, with correlative meanings, the terms "controlling", "controlled by" and "under common control with") means, with respect to any Person, the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting interests, by Contract or otherwise.

        "Current Assets" means, to the extent an asset of any Acquired Company or otherwise included in the Acquired Assets, all (i) trade receivables, net of allowances, (ii) other receivables, (iii) inventory and prepaid expense and other current assets of the Acquired Companies or included in the Acquired Assets, all as determined in accordance with the Accounting Principles; provided that Current Assets shall not include any (A) Cash, (B) Restricted Cash, (C) the Seller Lease Deposits and Receivables or (D) the account receivable relating to the MM Agreement.

        "Current Liabilities" means, to the extent a Liability of any Acquired Company or otherwise included in the Assumed Liabilities, all (i) accounts payable and (ii) accrued expenses, all as determined in accordance with the Accounting Principles; provided that Current Liabilities shall not include (A) restructuring accruals, (B) deferred revenue, (C) acquisition related liabilities, (D) any item included in the Closing Date Funded Indebtedness or the Special Adjustment, (E) any potential payments owed to Jeffries & Co related to previous engagement letters entered into between Seller and Jeffries & Co., or (F) the payment contemplated by the MM Agreement and the Settlement Agreement, dated March 4, 2010, by and between Seller and Stuart Olsten, as the Securityholders' Representative under the MM Agreement.

        "Default Account" shall have the meaning set forth in Section 7.03(e).

        "Deferred Revenue Adjustment" means the amount of deferred revenue, determined in accordance with the Accounting Principles, of the Acquired Companies as of the Determination Time determined as follows: (i) with respect to the Franchise Agreements set forth in Section DRA(i) of the Seller Disclosure Letter, the lesser of $5,000 per Franchise Agreement and the actual deferred revenue with respect to that Franchise Agreement as of the Determination Time, (ii) with respect to each Franchise Agreement set forth in Section DRA(ii) of the Seller Disclosure Letter, the amount indicated as applicable to that Franchise Agreement in such Section of the Seller Disclosure Letter, (iii) with respect to each Franchise Agreement included in the deferred revenue of the Acquired Companies or the Asset Sellers governing a United States location, other than Franchise Agreements covered by clauses (i) or (ii), the lesser of $16,125 per Franchise Agreement and the actual deferred revenue with respect to that Franchise Agreement as of the Determination Time, and (iv) with respect to each Franchise Agreement included in the deferred revenue of the Acquired Companies or the Asset Sellers governing a non-United States location, other than Franchise Agreements covered by clauses (i) or (ii), the lesser of $18,000 per Franchise Agreement and the actual deferred revenue with respect to that Franchise Agreement as of the Determination Time.

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        "Deposit Account" shall have the meaning set forth in Section 5.15.

        "Deposit Account Control Agreement" shall have the meaning set forth in Section 5.15.

        "Determination Time" shall have the meaning set forth in Section 2.04(a).

        "Disputed Items" shall have the meaning set forth in Section 2.04(b)(ii).

        "DOJ" shall have the meaning set forth in Section 5.03(a)(ii).

        "Employee Attrition Event" means a 25% or more reduction in the number of employees included in the Pre-Signing Employee Workforce as compared to the Pre-Closing Employee Workforce.

        "Encumbrance" means any security interest, pledge, mortgage, lien, charge, option to purchase or lease or otherwise acquire any interest, conditional sales agreement, claim, restriction, covenant, easement, right of way, title defect, adverse claim of ownership or use, or other encumbrance of any kind. The definition of "Encumbrance" shall not include any licenses or other rights to use or covenants not to assert Intellectual Property Rights.

        "Environmental Law" means any applicable federal, state, local or foreign Law (including common Law), treaty, regulation, rule, Governmental Order, or any agreement with any Governmental Authority, relating to the environment, natural resources, the effect of the environment on human health and safety, or to pollutants, contaminants, wastes or chemicals or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substances, wastes or materials.

        "Environmental Permits" means all permits, licenses, franchises, certificates, approvals and other similar authorizations of Governmental Authorities required by Environmental Laws and relating to the NC Business, the Acquired Companies or the Acquired Assets.

        "Equity Commitment Agreement" hall have the meaning set forth in the Recitals.

        "Equity Security" means (i) any capital stock or other equity security, (ii) any security directly or indirectly convertible into or exchangeable for any capital stock or other equity security or security containing any profit participation features, (iii) any warrants, options or other rights, directly or indirectly, to subscribe for or to purchase any capital stock, other equity security or security containing any profit participation features or directly or indirectly to subscribe for or to purchase any security directly or indirectly convertible into or exchangeable for any capital stock or other equity security or security containing profit participation features, or (iv) any stock appreciation rights, phantom stock rights or other similar rights.

        "ERISA" means the Employee Retirement Income Security Act of 1974, as amended.

        "ERISA Affiliate" means any entity that would be deemed a "single employer" with Seller or any of its Subsidiaries under Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.

        "Escrow Agent" means the escrow agent under the Escrow Agreement, as reasonably agreed upon by the Parties.

        "Escrow Agreement" means an escrow agreement, in form and substance reasonably acceptable to Purchaser and Seller entered into by Purchaser, the Escrow Agent and Seller prior to Closing.

        "Estimated Aggregate Consideration" means an amount equal to (i) $112,500,000, minus (ii) the Estimated Closing Date Funded Indebtedness, plus (iii) the Estimated Net Working Capital Adjustment, minus (iv) the Estimated Special Adjustment, (v) minus the Estimated Deferred Revenue Adjustment, plus (vi) the Estimated Unrestricted Cash.

        "Estimated Balance Sheet" shall have the meaning set forth in Section 2.04(a).

        "Estimated Closing Date Funded Indebtedness" shall have the meaning set forth in Section 2.04(a).

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        "Estimated Closing Statements" shall have the meaning set forth in Section 2.04(a).

        "Estimated Deferred Revenue Adjustment" shall have the meaning set forth in Section 2.04(a).

        "Estimated Net Working Capital Adjustment" shall have the meaning set forth in Section 2.04(a).

        "Estimated Special Adjustment" shall have the meaning set forth in Section 2.04(a).

        "Estimated Unrestricted Cash Adjustment" shall have the meaning set forth in Section 2.04(a).

        "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

        "Excluded Assets" means those assets set forth in Section EA of the Seller Disclosure Letter.

        "Excluded Liabilities" means those Liabilities set forth in Section EL of the Seller Disclosure Letter.

        "FDD" means the franchise disclosure document prepared in accordance with the FTC Rule (or its predecessor) or any applicable Franchise Law.

        "Financial Statements" shall have the meaning set forth in Section 3.07(b).

        "Final Statement" shall have the meaning set forth in Section 2.04(b)(ii).

        "Franchise Agreement" means, collectively, all currently effective franchise agreements, conversion agreements, license agreements, subfranchise agreements, sublicense agreements, master franchise agreements, development agreements, area development agreements and similar agreements, together with such service agreements, operator agreements, and other similar agreements that alone, or together with other agreements with Seller, the Asset Sellers and/or the Acquired Companies, grant or purport to grant to a third party the right to operate, or license others to operate, a store or outlet as part of or in connection with the NC Business.

        "Franchisee" means a Person who has entered into, as applicable, a Franchise Agreement with Seller, the Asset Sellers and/or an Acquired Company.

        "Franchise Law" means the FTC Rule and any other Law regulating the offer and/or sale of franchises, business opportunities, seller-assisted marketing plans or similar relationships.

        "FTC" shall have the meaning set forth in Section 5.03(a)(ii).

        "FTC Rule" means the Federal Trade Commission trade regulation rule entitled "Disclosure Requirements and Prohibitions Concerning Franchising," 16 C.F.R Section 436.1 et seq.

        "Fund" shall have the meaning set forth in Recitals hereto.

        "GAAP" shall mean generally accepted accounting principles as applied in the United States.

        "Governmental Authority" means any governmental authority, quasi- governmental authority, instrumentality, court, arbitrator, government or self-regulatory organization, commission, tribunal or organization or any regulatory, administrative or other agency, whether domestic, foreign or supranational or any political or other subdivision, department or branch of any of the foregoing.

        "Governmental Order" means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

        "Group" shall have the meaning provided in Section 13(d) of the Exchange Act.

        "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

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        "include" and "including" (and words of similar import) shall be deemed to be followed by the phrase "without limitation."

        "Insolvency Event" means any voluntary or involuntary insolvency, bankruptcy, receivership, custodianship, liquidation, dissolution, reorganization, assignment for the benefit of creditors, appointment of a custodian, receiver, trustee or other officer with similar powers or any other proceeding for the liquidation, dissolution or other winding up of NC Holding, any Asset Seller or any Acquired Company; provided that, for the avoidance of doubt, "Insolvency Event" (i) does not include Seller's seeking, or the receipt of, the affirmative vote of the holders of a majority of the outstanding shares of Seller's Common Stock of the dissolution of Seller, (ii) but would include Seller's filing of the certificate of dissolution.

        "Intellectual Property Rights" means all of the following items in any jurisdiction throughout the world: (i) patents, patent applications, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice) and any reissue, continuation, continuation in part, division, revision, extension or reexamination thereof, (ii) trademarks, service marks, trade dress, logos, trade names, corporate names and Internet domain names, together with all goodwill associated therewith, and all registrations, applications and renewals for any of the foregoing, (iii) registered and unregistered copyrights, and copyrightable works and all registrations, applications and renewals for any of the foregoing, (iv) trade secrets (including processes, methods, formulae, improvements, specifications, technical data and other know-how), (v) computer software and software systems (including source code, object code, data, databases and related documentation), (vi) copies and tangible embodiments of the foregoing, and (vii) Rights to sue at law or in equity and/or recover and retain damages and costs and attorneys' fees for past, present and future infringement or misappropriation of any of the foregoing.

        "IRS" means the U.S. Internal Revenue Service.

        "Knowledge" means with respect to Seller or Purchaser, as the case may be, a particular fact or other matter that (a) with respect to Seller, Sue Nam, Seth Burroughs, Ken Hall, Mark Stanko, Chris Dull, and, with respect to franchise matters of Seller and its Subsidiaries only, Melissa Rothring and (b) with respect to Purchaser, Steven Hartman, in each case, is actually aware of, following due inquiry.

        "Law" means any Federal, state, local or foreign statute, law, ordinance, regulation, rule, code, order, other requirement or rule of law.

        "Leased Properties" shall have the meaning set forth in Section 3.13(a).

        "Liabilities" means any and all indebtedness and other liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured.

        "Material Adverse Effect" means any change, effect, event, occurrence or state of facts that has a material adverse effect, individually or in the aggregate, on the financial condition, business, assets or results of operations of the NC Business taken as a whole or which materially impairs or delays the ability of Seller to consummate the Transactions, other than any change, effect, event, occurrence or state of facts relating to or arising from (i) changes generally affecting any segment of the industries in which Seller and its Subsidiaries operate or affecting the economy or financial markets generally (unless such changes have a materially disproportionate adverse effect on the NC Business, taken as a whole, as compared to other participants in the industries in which the NC Business operates), (ii) the negotiation (including activities relating to due diligence), execution, delivery or public announcement or the pendency of this Agreement or the Transactions, (iii) any actions taken (or not taken) in compliance herewith or otherwise with the consent of Purchaser, including the impact thereof on the relationships of Seller, the Acquired Companies or the NC Business with customers, suppliers, distributors, consultants, employees, franchisees, licensees or independent contractors or other third parties with whom they have any relationship, (iv) any change or announcement of a potential change

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in the credit rating of Seller or any of its Subsidiaries or any of their securities, (v) acts of God, calamities, national or international political or social conditions including the engagement by any country in hostilities, whether commenced before or after the date hereof, and whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack, (vi) changes in Law or GAAP (or any interpretation thereof), or (vii) any Action arising from allegations of a breach of fiduciary duty or other allegations of a violation of applicable Law relating to this Agreement or the Transactions. The Parties acknowledge and agree that (a) the destruction of the Great American Cookies manufacturing facility in Atlanta, Georgia or (b) any disruption to the operations of the Great American Cookies manufacturing facility in Atlanta, Georgia, whether resulting from the destruction or disrepair of all or a portion of the facility or of the machinery or other operating assets in the facility, or the loss of employees working in the facility, that results in or would reasonably be expected to result in a deterioration in the level or quality of the operation of the facility of at least 50% as compared to the ordinary course, historical levels of operation of the facility prior to the occurrence of such disruption for a period of at least 30 days (and that is not actually remediated prior to the earlier of the Outside Date and termination of this Agreement pursuant to Article VII; provided, however, that in the event that any such disruption occurs within 30 days of the Outside Date and is capable of being cured, the Parties hereby agree that the Outside Date will be extended, and the Closing delayed, until the 31st day after the date on which the disruption first occurred).

        "Material Contracts" shall have the meaning set forth in Section 3.10(b).

        "MM Agreement" means the Agreement and Plan of Merger, dated as of February 14, 2007, by and among Seller, MM Acquisition Sub, LLC, MaggieMoo's International, LLC, Stuart Olson, Jonathan Jameson and the Securityholders Representative.

        "NB Supply" means NB Supply Management Corp., a Delaware corporation and wholly-owned direct subsidiary of Seller.

        "NBI Acquired Contracts" means the Contracts in which Seller is a party to related to the conduct of the NC Business set forth in Section NAC of the Seller Disclosure Letter.

        "NC Business" means the business of strategic brand management and franchising of the seven franchised brands listed in Section NB of the Seller Disclosure Letter as conducted by the Acquired Companies, the Asset Sellers and Seller, including the franchising of retail stores, production and supply of and the licensing of the brands for products, which products are distributed primarily though franchised retail stores.

        "NC Employee" means any current or former officer or employee of Seller or any of its Subsidiaries.

        "NC Employment Agreement" means any individual agreement or arrangement, including any amendments thereto, in effect as of the date of this Agreement, between Seller or any of its Subsidiaries (including the Acquired Companies and Asset Sellers), on the one hand, and a NC Employee, on the other hand, other than any agreement, arrangement or other document under any stock option or other equity plan of Seller or any of its Subsidiaries (including the Acquired Companies and Asset Sellers).

        "NC Holding" shall have the meaning set forth in Section 1.01.

        "NC Licensed Intellectual Property Rights" means all Intellectual Property Rights relating to the NC Business that are owned by a Person and licensed or sublicensed by either Seller or any of its Subsidiaries, as the case may be.

        "NC Owned Intellectual Property Rights" means all Intellectual Property Rights relating to the NC Business that are owned by either Seller or any of its Subsidiaries, as the case may be.

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        "Net Working Capital" means Current Assets minus Current Liabilities.

        "Net Working Capital Adjustment" means (i) the amount of the Closing Net Working Capital minus (ii) the Working Capital Target. For the avoidance of doubt, the Net Working Capital Adjustment may be a positive or negative number.

        "NFM" means NexCen Franchise Management, Inc., a Delaware corporation and wholly-owned direct subsidiary of Seller.

        "Outside Date" shall have the meaning set forth in Section 7.01(b)(ii).

        "Owned Properties" shall have the meaning set forth in Section 3.13(a).

        "Party" and "Parties" shall have the meaning set forth in the Recitals hereto.

        "Payoff Letter" shall have the meaning set forth in Section 2.02(g).

        "Pension Payment" means the Bill Blass pension liability payable to UNITE HERE National Retirement Fund in the aggregate amount of $256,000.

        "Permits" shall have the meaning set forth in Section 3.16.

        "Permitted Encumbrances" means (i) leases, subleases, licenses and similar occupancy agreements entered into in the ordinary course of the NC Business and all other Encumbrances as are set forth in Seller Disclosure Letter with respect to Section 3.13, (ii) liens for Taxes, assessments and governmental charges or levies not yet due and payable, (iii) Encumbrances imposed by applicable Law, (iv) pledges or deposits to secure obligations under workers' compensation Laws or similar legislation or to secure public or statutory obligations, (v) any Encumbrance or condition that may be shown by a current accurate survey or physical inspection of any property owned, leased, used or held for use by the Acquired Companies or Asset Sellers in the course of the NC Business, easements, covenants and rights of way (each of record) and other similar restrictions of record that do not materially adversely affect the current use of the applicable property owned, leased, used or held for use by the Acquired Companies or Asset Sellers in the course of the NC Business (to the extent conducted thereat), (vi) mechanics', carriers', workmen's, repairmen's or other like Encumbrances arising or incurred in the ordinary course of the Acquired Companies and Encumbrances arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of the NC Business, (vii) any Encumbrances the existence of which is referred to in the notes to the financial statements provided pursuant to Section 3.07(b), (viii) zoning, building and other similar restrictions that do not materially adversely affect the current use of the applicable property owned, leased, used or held for use by the Acquired Companies or Asset Sellers in the course of the NC Business (to the extent conducted thereat), (ix) unrecorded easements, covenants, rights-of-way and other similar restrictions that do not materially adversely affect the current use of the applicable property owned, leased, used or held for use by the Acquired Companies or Asset Sellers in the course of the NC Business (to the extent conducted thereat) and (x) as to any property leased by any of the Acquired Companies or Asset Sellers, any Encumbrance affecting the interest of the lessor thereof.

        "Person" means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including (i) a government or political subdivision or an agency or instrumentality thereof and (ii) any Group.

        "Pre-Closing Employee Workforce" means all of the employees of NFM and NB Supply as of immediately prior to the Closing.

        "Post-Closing Tax Period" means any period taxable period other than a Pre-Closing Tax Period.

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        "Pre-Closing Tax Period" means any period ending on (and including) or before the Closing Date and, in the case of a Straddle Period, the portion of such taxable period ending on (and including) the Closing Date.

        "Pre-Signing Employee Workforce" means all of the employees of NFM and NB Supply as of the date of this Agreement.

        "Proxy Statement" shall have the meaning set forth in Section 5.10(a).

        "Purchase Price Allocation" shall have the meaning set forth in Section 2.01(a)(v).

        "Purchaser" shall have the meaning set forth in Recitals hereto.

        "Purchaser Expenses" shall have the meaning set forth in Section 7.02(c).

        "Records" means Contracts, documents, books, records and files, including records and files stored on computer discs or tapes or any other storage medium.

        "Reduced Termination Fee" shall have the meaning set forth in Section 7.02(a).

        "Registered Intellectual Property" shall mean issued, registered or applied for Intellectual Property Rights owned by Seller or any of its Subsidiaries that are material to the conduct of the NC Business as currently conducted, as set forth in Section 3.15(a) of the Seller Disclosure Letter.

        "Representatives" means with respect to any Person, the respective directors, officers, employees, agents, consultants, advisors, or other representatives of such Person, including legal counsel, accountants, financial advisors and financing sources.

        "Restricted Cash" means (i) cash in a deposit, securities or other account of an Acquired Company (or otherwise included in the Acquired Assets) to the extent that checks, drafts or other instruments have been issued by Seller or any of its Subsidiaries against that account but have not been debited against that account, (ii) cash held in respect of the payment obligation of Seller under the Retention Bonus Plan, (iii) restricted cash collateralizing the letter of credit issued to NFM by JPMorgan Chase Bank N.A. dated September 16, 2009, and (iv) the items set forth in Section RC of the Seller Disclosure Letter.

        "Retention Bonus Plan" shall have the meaning set forth in Section 5.13.

        "Rights" means any rights, title, interest or benefit of whatever kind or nature.

        "SEC" shall mean the United States Securities and Exchange Commission.

        "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

        "Selected Firm" shall have the meaning set forth in Section 2.04(c).

        "Seller" shall have the meaning set forth in the Recitals hereto.

        "Seller Acquisition Agreement" means a letter of intent, agreement or agreement in principle with respect to any Takeover Proposal (other than a confidentiality agreement).

        "Seller Disclosure Letter" shall have the meaning set forth in Article III.

        "Seller Employee Plan" means each material "employee benefit plan" within the meaning of Section 3(3) of ERISA, all medical, dental, life insurance, equity, bonus or other incentive compensation, disability, salary continuation, severance, retention, retirement, pension, deferred compensation, vacation, sick pay or paid time off plans or policies, and any other material plans, agreements (including NC Employment Agreements), policies, trust funds or arrangements (whether written or unwritten, insured or self-insured) (i) established, maintained, sponsored or contributed to

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(or with respect to which any obligation to contribute has been undertaken) by Seller or any of its Subsidiaries or any of their respective ERISA Affiliates on behalf of any employee, officer, director or other service provider of the NC Business (whether current, former or retired) or their beneficiaries, or (ii) with respect to which Seller or any Acquired Company or any of their respective ERISA Affiliates has any current or contingent Liabilities.

        "Seller Intellectual Property" shall have the meaning set forth in Section 3.15(b).

        "Seller Lease Deposits and Receivables" means any current asset related to leases not included in the Acquired Assets or acquired through the acquisition of the Acquired Companies.

        "Seller SEC Filing" shall have the meaning set forth in Section 3.07(a).

        "Seller's Dispute Notice" shall have the meaning set forth in Section 2.04(b)(ii).

        "Share Sellers" shall have the meaning set forth in Section 1.01.

        "Shares" shall have the meaning set forth in Section 1.01.

        "Special Adjustment" means the aggregate amount of (i) all accounts payable of the Acquired Companies or otherwise included in the Acquired Assets that are, as of the Determination Time, at least 60 days old and (ii) the Pension Payment (to the extent not satisfied prior to Closing, such satisfaction to be evidenced by a release in form and substance reasonably acceptable to Purchaser with respect to the Liability underlying the Pension Payment).

        "Stockholder Approval" shall have the meaning set forth in Section 3.02.

        "Stockholders' Meeting" shall have the meaning set forth in Section 5.10(b).

        "Straddle Period" means any taxable period that begins on or before, and ends after, the Closing Date.

        "Subsidiary" means, with respect to a Person, (i) any entity of which securities or other ownership interests having ordinary voting power to elect or designate a majority of the board of directors or other Persons performing similar functions are at the time owned, directly or indirectly, by such Person and (ii) any entity that does not have a board of directors or other Persons performing similar functions in which such Person beneficially owns more than 50% of the class of equity interests that has an unlimited entitlement to distributions upon liquidation of such entity.

        "Superior Proposal" shall mean any bona fide written Takeover Proposal that the Board has determined in good faith, after consultation with independent financial advisors and outside legal counsel, is reasonably likely to be consummated in accordance with its terms, taking into account all legal, regulatory, timing and other financial aspects of the proposal and the Person making the proposal, and if consummated, would result in a transaction more favorable to Seller's stockholders and creditors from a financial point of view than the Transactions contemplated by this Agreement (including any changes to the terms of this Agreement proposed by Purchaser in response to such Takeover Proposal or otherwise), provided that for purposes of the definition of "Superior Proposal", the references to "20% or more" in the definition of Takeover Proposal shall be deemed to be references to "all or substantially all" and the gross consideration to be received by Seller and/or its stakeholders must be at least $117,500,001.

        "Suppliers" shall have the meaning set forth in Section 3.22.

        "Takeover Proposal" shall mean any inquiry, proposal or offer relating to (i) the acquisition of 20% or more of the outstanding voting shares of Seller and any other voting securities of Seller by any Person, (ii) a merger, consolidation, business combination, reorganization, share exchange, sale of assets, recapitalization, liquidation, dissolution or similar transaction which would result in any Person acquiring 20% or more (measured by fair market value) of the assets of Seller and the Companies,

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taken as a whole (including capital stock of Subsidiaries), (iii) any other transaction which would result in a Person acquiring 20% or more (measured by fair market value) of the assets of Seller and the Companies, taken as a whole (including capital stock of Subsidiaries), immediately prior to such transaction (whether by purchase of assets, acquisition of stock of a Subsidiary of Seller or otherwise), (iv) any material amendment or any restructuring or refinancing of the BTMUCC Credit Facility and/or the BTMUCC Security Agreement undertaken without the consent of Purchaser or (v) any combination of the foregoing.

        "Tax" means any tax, governmental fee or other like assessment or charge of any kind whatsoever (including withholding on amounts paid to or by any Person), together with any interest, penalty, addition to tax or additional amount imposed by any Taxing Authority.

        "Tax Return" means any return, filing, report, questionnaire, information statement or other document required to be filed, including any amendments that may be filed, for any taxable period with any Taxing Authority.

        "Taxing Authority" means any Governmental Authority responsible for the imposition of any such tax (domestic or foreign), including by reason of membership in an affiliated, consolidated, combined, unitary or similar Tax group by Contract, indemnity or otherwise.

        "Termination Fee" shall have the meaning set forth in Section 7.02(b).

        "Transactions" means the transactions contemplated by this Agreement.

        "Working Capital Escrow Account" means the escrow account to which Purchaser delivers the Working Capital Escrow Amount at Closing.

        "Working Capital Escrow Amount" means $1,000,000.

        "Working Capital Target" means $3,660,000.

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Annex B

PLAN OF COMPLETE DISSOLUTION AND
LIQUIDATION OF NEXCEN BRANDS, INC.

        This Plan of Complete Dissolution and Liquidation (the "Plan") is intended to accomplish the complete dissolution and liquidation of NexCen Brands, Inc., a Delaware corporation (the "Company"), in accordance with Section 275 and other applicable provisions of the General Corporation Law of Delaware ("DGCL") and Sections 331 and 336 of the Internal Revenue Code of 1986, as amended (the "Code").

1.     Approval and Adoption of Plan.

        This Plan shall be effective when all of the following steps have been completed:

        Notwithstanding the authorization of the Board pursuant to Section 1(a) above or the authorization of stockholders pursuant to Section 1(b) above, the Company may continue to pursue other business opportunities and transactions, and, if for any reason, including the pursuit of such opportunities or transactions, the Board determines that such action would be in the best interests of the Company, it may, prior to the Effective Date, abandon the proposed dissolution and the proposed Plan pursuant to Section 275(e) of the DGCL. Upon the abandonment of the proposed dissolution and the proposed Plan, the Plan shall be void.

2.     Dissolution and Liquidation Period.

        After the Effective Date, the steps set forth below shall be completed at such times as the Board, in its absolute discretion, deems necessary, appropriate or advisable. Without limiting the generality of the foregoing, the Board may instruct the officers of the Company to delay the taking of any of the following steps until the Company has performed such actions as the Board or such officers determine

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to be necessary, appropriate or advisable for the Company to maximize the value of the Company's assets upon liquidation:

        Notwithstanding the foregoing, the Company shall not be required to follow the procedures described in Section 280 of the DGCL, and the adoption of the Plan by the holders of the Company's Common Stock shall constitute full and complete authority for the Board and the officers of the Company, without further stockholder action, to proceed with the dissolution and liquidation of the Company in accordance with any applicable provision of the DGCL, including, without limitation, Section 281(b) thereof.

3.     Authority of Officers and Directors.

        After the Effective Date, the Board and the officers of the Company shall continue in their positions for the purpose of winding up the affairs of the Company as contemplated by Delaware law. The Board may appoint officers, hire employees and retain independent contractors in connection with the winding up process, and is authorized to pay to the Company's officers, directors and employees, or any of them, compensation or additional compensation above their regular compensation, in money or

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other property, in recognition of the extraordinary efforts they, or any of them, will be required to undertake, or actually undertake, in connection with the successful implementation of this Plan. To the fullest extent permitted by law, adoption of this Plan by stockholders shall constitute approval of the payment of any such compensation.

        The adoption of the Plan by the holders of the Company's Common Stock shall constitute full and complete authority for the Board and the officers of the Company, without further stockholder action, to do and perform any and all acts and to make, execute and deliver any and all agreements, conveyances, assignments, transfers, certificates and other documents of any kind and character that the Board or such officers deem necessary, appropriate or advisable: (i) to dissolve the Company in accordance with the laws of the State of Delaware and cause its withdrawal from all jurisdictions in which it is authorized to do business; (ii) to sell, dispose, convey, transfer and deliver the assets of the Company; (iii) to satisfy or provide for the satisfaction of the Company's obligations in accordance with Sections 280 and 281 of the DGCL; and (iv) to distribute all of the remaining funds of the Company and any unsold assets of the Company to the holders of the Company's Common Stock.

4.     Sale of All or Substantially All of the Non-Cash Assets.

        The Company shall determine whether and when to collect, sell, exchange or otherwise dispose of all or substantially all of its non-cash property and assets, including but not limited to all tangible assets, intellectual property and other intangible assets, in one or more transactions upon such terms and conditions as the Board, in its absolute discretion, deems expedient and in the best interests of the Company and the best interests of the stockholders, without any further vote or action by the Company's stockholders. The Company's non-cash assets and properties may be sold in one transaction or in several transactions to one or more buyers. The Company shall not be required to obtain appraisals, fairness opinions or other third-party opinions as to the value of its properties and assets in connection with the liquidation.

5.     Professional Fees and Expenses.

        It is specifically contemplated that the Board may authorize the payment of a retainer fee to a law firm or law firms for legal fees and expenses of the Company, including, among other things, to cover any costs payable pursuant to the indemnification of the Company's officers or members of the Board provided by the Company pursuant to its Certificate of Incorporation and Bylaws or the DGCL or otherwise.

        In addition, in connection with and for the purpose of implementing and assuring completion of this Plan, the Company may, in the sole and absolute discretion of the Board, pay any brokerage, agency and other fees and expenses of persons rendering services to the Company in connection with the collection, sale, exchange or other disposition of the Company's property and assets and the implementation of this Plan. Adoption of the Plan by stockholders shall, to the fullest extent permitted by law, constitute approval of such payments by the stockholders of the Company.

6.     Indemnification.

        The Company shall continue to indemnify its officers, directors, employees and agents in accordance with its Certificate of Incorporation and Bylaws and any contractual arrangements, for actions taken in connection with this Plan and the winding up of the affairs of the Company. The Board, in its sole and absolute discretion, is authorized to obtain and maintain insurance as may be necessary, appropriate or advisable to cover the Company's obligations hereunder, including without limitation directors' and officers' liability coverage.

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7.     Liquidating Trust.

        The Board may, but is not required to, establish a liquidating trust (the "Liquidating Trust") and distribute assets of the Company to the Liquidating Trust. The Liquidating Trust may be established by agreement with one or more trustees (the "Trustees") selected by the Board. If the Liquidating Trust is established by agreement with one or more Trustees, the trust agreement establishing and governing the Liquidating Trust shall be in form and substance determined by the Board. To the fullest extent permitted by law, adoption of the Plan by stockholders shall constitute the approval of the appointment of the Trustees, any trust agreement and any transfer of assets by the Company to the Trust. In the alternative, the Board may petition the Court for the appointment of one more Trustees to conduct the liquidation of the Company, subject to the supervision of the Court. Whether appointed by an agreement or by the Court, the Trustees shall in general be authorized to take charge of the Company's property, and to collect the debts and property due and belonging to the Company, with power to prosecute and defend, in the name of the Company, or otherwise, all such suits as may be necessary or proper for the foregoing purposes, and to appoint agents under them and to do all other acts which might be done by the Company that may be necessary, appropriate or advisable for the final settlement of the unfinished business of the Company.

8.     Liquidating Distributions.

        Liquidating distributions, in cash or in kind, may be made from time to time to the holders of record of outstanding shares of Common Stock of the Company at the close of business on the Effective Date, as provided in Section 2 above, pro rata in accordance with the respective number of shares then held of record; provided that, in the opinion of the Board, provision has been made for the payment of the obligations of the Company to the extent required by law. All determinations as to the time for and the amount and kind of liquidating distributions shall be made in the exercise of the absolute discretion of the Board and in accordance with Section 281 of the DGCL. As provided in Section 11 below, distributions made pursuant to this Plan shall be treated as made in complete liquidation of the Company within the meaning of the Code and the regulations promulgated thereunder.

9.     Amendment or Modification of Plan.

        If for any reason the Board determines that such action would be in the best interests of the Company, it may amend or modify the Plan and all action contemplated thereunder, notwithstanding stockholder approval of the Plan; provided, however, that the Company will not amend or modify the Plan under circumstances that would require additional stockholder approval under the federal securities laws without complying with the federal securities laws.

10.   Cancellation of Stock and Stock Certificates.

        Following the Effective Date and subject to applicable law, the Company shall no longer permit or effect transfers of any of its stock, and the Company's capital stock and stock certificates evidencing the Company's Common Stock will be treated as no longer being outstanding. As a condition to receipt of any liquidating distribution, the Board, in its absolute discretion, may require the stockholders to (i) surrender their certificates evidencing the Common Stock to the Company or its agents for recording of such distributions thereon, or (ii) furnish the Company with evidence satisfactory to the Board of the loss, theft or destruction of their certificates evidencing the Common Stock, together with such surety bond or other security or indemnity as may be required by and satisfactory to the board.

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11.   Liquidation under Code Sections 331 and 336.

        It is intended that this Plan shall be a plan of complete liquidation of the Company in accordance with the terms of Sections 331 and 336 of the Code, which plan shall only go into effect upon the Effective Date, and not prior to such date. The Plan shall be deemed to authorize the taking of such action as, in the opinion of counsel for the Company, may be necessary to conform with the provisions of Sections 331 and 336 and the regulations promulgated thereunder, including, without limitation, the making of any elections thereunder, if applicable.

12.   Filing of Tax Forms.

        The appropriate officers of the Company are authorized and directed, within thirty (30) days after the Effective Date, to execute and file United States Treasury Form 966 for the Company and any appropriate subsidiaries, pursuant to Section 6043 of the Code. The appropriate officers of the Company and its subsidiaries are also authorized to file any additional returns, forms and reports with the Internal Revenue Service, or other taxing authorities, including state and local taxing authorities, as may be necessary or appropriate in connection with this Plan and the carrying out thereof.

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Annex C

CERTIFICATE OF AMENDMENT

OF THE

CERTIFICATE OF INCORPORATION

OF

NEXCEN BRANDS, INC.

Under Section 242 of the General Corporation Law of the State of Delaware

        Pursuant to Section 242 of the General Corporation Law of the State of Delaware, the undersigned, being the Chief Executive Officer of NexCen Brands, Inc. (hereinafter called the "Corporation") does hereby certify:

        FIRST:    The name of the Corporation is NexCen Brands, Inc.

        SECOND:    The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on May 4, 2005 and a Certificate of Amendment was filed on October 31, 2006 with the Secretary of State of the State of Delaware.

        THIRD:    The Certificate of Incorporation of the Corporation is hereby amended by deleting the first sentence of paragraph 4 in its entirety and substituting in lieu thereof a new first sentence of paragraph 4 to read as follows:

        FOURTH:    The amendment of the Certificate of Incorporation herein certified has been duly adopted in accordance with the provisions of Sections 141(f) and 242 of the General Corporation Law of the State of Delaware.

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        IN WITNESS WHEREOF, the undersigned has duly executed this Certificate of Amendment of Certificate as of this    day of                 , 2010.

  NEXCEN BRANDS, INC.

 

By:

 

  


      Name:   Kenneth J. Hall

      Title:   Chief Executive Officer

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Annex D

May 12, 2010

The Board of Directors of
NexCen Brands, Inc.
1330 Avenue of the Americas
34th Floor
New York, NY 10019
Attention: Sue Nam

Members of the Board of Directors:

        You have requested our opinion ("Opinion") as to the fairness, from a financial point of view, to NexCen Brands, Inc. (the "Seller") of $112.5 million (the "Purchase Price") to be paid by Global Franchise Group, LLC (the "Purchaser") for the sale to the Purchaser of (a) the Shares and (b) the Acquired Assets and the assumption by the Purchaser of the Assumed Liabilities (such sale and assumption, collectively, the "Transactions") pursuant to the terms and subject to the conditions set forth in the Acquisition Agreement, dated as of May 11, 2010 (the "Agreement"), by and among the Purchaser and the Seller. The terms and conditions of the Transactions are set forth in more detail in the Agreement. Capitalized terms used herein without definition shall have the meanings given them in the Agreement.

        In arriving at our Opinion, we have, among other things: (i) reviewed the financial terms and conditions of the Transactions as set forth in a draft of the Agreement dated May 11, 2010; (ii) discussed with the Seller's management certain past and present operations and the financial condition and prospects of the NC Business; (iii) reviewed certain financial forecasts regarding the NC Business as provided by the Seller's management; (iv) reviewed certain internal historical, unaudited financial information and other data prepared by the Company's management relating to the NC Business; (v) compared certain historical and projected financial information regarding the performance of the NC Business with that of certain publicly traded companies; (vi) reviewed, to the extent available to us, certain financial terms of certain transactions that we deemed to be generally relevant in evaluating the Transactions; (vii) reviewed certain materials relating to the NC Business available in the due diligence data room; and (viii) considered such other factors and information, and conducted such other analyses and examinations, as we deemed appropriate. In addition, at your request and direction, we contacted various strategic and financial third parties to solicit indications of interest in a possible transaction with the Seller and held discussions with certain of these parties prior to the date hereof.

        Rothschild Inc. ("Rothschild") has not assumed responsibility for independent verification of, and has not independently verified, any information, whether publicly available or furnished to it, concerning the NC Business, the Acquired Companies, the Asset Sellers or the Seller, including, without limitation, any financial information considered by Rothschild in connection with the rendering of this Opinion. Accordingly, in the course of our analyses and for purposes of this Opinion, we have relied upon the accuracy and completeness of all such information. With your consent, we have not prepared or obtained any independent evaluation or appraisal of any of the assets or liabilities (contingent or otherwise) of the NC Business or the Seller nor have we made any physical inspection of the Acquired Assets. We have not made any review of or sought or obtained advice of legal counsel regarding legal matters relating to the NC Business or the Seller. We have assumed that any forward-looking information made available to us and used in our analyses has been reasonably prepared on bases reflecting the best currently available judgments of the Seller's management as to the matters covered thereby. In rendering this Opinion, we express no view as to the reasonableness of such forward-looking information or any assumption on which it is based.

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        For the purposes of rendering this Opinion, with your consent, we have assumed that there has not occurred any material change in the assets, financial condition, results of operations, business or prospects of the NC Business, the Acquired Companies, the Asset Sellers or the Seller since the respective dates on which the most recent financial or other information, if any, relating to the NC Business, the Acquired Companies, the Asset Sellers or the Seller, as the case may be, was made available to us. With your consent, we have assumed that, in all respects material to our analysis, the representations and warranties of each party to the Agreement contained in or made pursuant to the Agreement are true and correct, that each party to the Agreement will timely perform all of the covenants and agreements to be performed by it under the Agreement and that the Transactions will be consummated in accordance with the terms and conditions set forth in the Agreement without any waiver or modification thereof. With your consent, we have assumed that any material governmental, regulatory or other approvals and consents required in connection with the consummation of the Transactions timely will be obtained and that in connection with obtaining any necessary governmental, regulatory or other approvals and consents, or any amendments, modifications or waivers to any agreements, instruments or orders to which any party to the Agreement is a party or is subject or by which it is bound, no limitations, restrictions or conditions will be imposed or amendments, modifications or waivers made that would have an adverse effect on the NC Business, the Acquired Companies, the Asset Sellers, the Purchaser or the Seller or on the expected benefits of the Transactions to the Seller, in each case, in any way meaningful to our analysis. With your consent, we have assumed that the final Agreement will be substantially the same as the draft of the Agreement, reviewed by us as indicated above. This Opinion is necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to us as of, the date hereof. Events occurring after the date hereof may affect this Opinion and the assumptions used in preparing it, and we do not assume any obligation to update, revise or reaffirm this Opinion.

        In connection with our services as exclusive financial advisor to the Seller in connection with the Transactions, Rothschild has received certain customary fees and will be paid certain additional fees (including upon the delivery of this Opinion), a substantial portion of which are contingent upon consummation of the Transactions. In addition, the Seller has agreed to reimburse our expenses and indemnify us against certain liabilities arising out of our engagement. Rothschild has previously served as financial advisor to the Seller and certain of its subsidiaries in connection with the sale of their "Bill Blass" and "Waverly" assets in October and December of 2008, respectively, for which Rothschild received customary fees.

        This Opinion is addressed to, and is for the use and benefit of, the Board of Directors of the Seller in connection with its evaluation of the Transactions and does not constitute a recommendation to the Board of Directors of the Seller to approve the proposed Transactions. This Opinion is limited to the fairness to the Seller, from a financial point of view, of the Purchase Price to be paid by the Purchaser pursuant to the Agreement, and we express no opinion as to the merits of the underlying decision by the Seller to engage in the Transactions or as to any other aspect of the Transactions or the relative merits of the Transactions as compared to any alternative business strategies that might be available to the Seller. We do not express any view on, and this Opinion does not address, the fairness of the Transactions to, or any consideration received in connection therewith by, other constituencies or affiliates of the Seller, nor as to the fairness of the amount or nature of any compensation or other amounts to be paid or payable to any of the stockholders, officers, directors or employees of the Seller, the Asset Sellers or the Acquired Companies or to any creditor or lender of NexCen Holding Corporation or any of its affiliates, including the Seller, whether relative to the Purchase Price or otherwise. Nothing herein may be construed as rendering, supporting or implying any advice or opinion with respect to the solvency of the Seller or any other entity at any time in connection with such Transactions or otherwise. In no event does this Opinion constitute or imply any duty or advice by Rothschild to the stockholders of the Seller or to the board of directors (or other comparable governing body) or stockholders of any Asset Seller or Acquired Company, including as to how they

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should vote in connection with the Transactions or otherwise, or to BTMU Capital Corporation as to whether or not to enter into any agreement in connection with the Transactions.

        This Opinion may not be disclosed, quoted, referred to or communicated (in whole or in part) to any third party for any purpose whatsoever except with our prior written approval, except that this Opinion may be included in any filing, including without limitation any proxy statement, that the Seller is required to make with the Securities and Exchange Commission in connection with the Transactions if such inclusion is required by applicable law, provided that this Opinion is reproduced in such filing in full and any description of or reference to us or summary of this Opinion and the related analyses in such filing is in a form acceptable to us and our counsel. This Opinion has been approved by the Investment Banking Commitment Committee of Rothschild Inc., with the advice and counsel of members of its Opinion Subcommittee.

        Based upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Purchase Price to be paid by the Purchaser pursuant to the Agreement is fair to the Seller, from a financial point of view.

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Annex E

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-K


ý

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009

OR

o

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER: 000-27707

NEXCEN BRANDS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE
(State or other jurisdiction of
incorporation or organization)
  20-2783217
(IRS Employer
Identification Number)

1330 Avenue of the Americas, 34th Floor, New York, N.Y.
(Address of principal executive offices)

 

10019-5400
(Zip Code)

(Registrant's telephone number, including area code): (212) 277-1100

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

Common Stock, par value $.01
(Title of class)

         Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o    No o

         Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o    No o

         Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o    No o

         Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o    No o

         Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of the Form 10-K or any amendment of this Form 10-K. o

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o   Accelerated filer o   Non-accelerated filer o   Smaller reporting company ý

         Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o    No ý

         The aggregate market value of voting stock held by non-affiliates of the registrant was $9,869,307 ($.18 per share) as of June 30, 2009.

         As of February 28, 2010, 56,951,730 shares of the registrant's common stock, $.01 par value per share, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

         The registrant will disclose the information required under Part III, Items 10, 11, 12, 13 and 14 by (a) incorporating the information by reference from the registrant's definitive proxy statement or (b) filing an amendment to this Form 10-K which contains the required information no later than 120 days after the end of the registrant's fiscal year.

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NEXCEN BRANDS, INC.

ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2009

INDEX

PART I

 

Item 1

 

Business

   
E-4
 

Item 1A

 

Risk Factors

    E-13  

Item 1B

 

Unresolved Staff Comments

    E-22  

Item 2

 

Properties

    E-22  

Item 3

 

Legal Proceedings

    E-23  

Item 4

 

[Removed and Reserved]

    E-25  

PART II

 

Item 5

 

Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

   
E-25
 

Item 6

 

Selected Financial Data

    E-27  

Item 7

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

    E-27  

Item 7A

 

Quantitative and Qualitative Disclosures About Market Risk

    E-42  

Item 8

 

Financial Statements and Supplementary Data

    E-44  

Item 9

 

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

    E-90