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PROMISSORY NOTE
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$3,500,000.00
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February 28, 2007
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FOR VALUE RECEIVED, NexCen Brands, Inc. ("
Company ") hereby promises to pay to the order of Marble
Slab Creamery, Inc., a Texas corporation (" Holder "), the
principal sum of Three Million Five Hundred Thousand and 00/100
Dollars ($3,500,000.00), together with interest thereon calculated
from the date hereof in accordance with the provisions of this note
(" Note ").
This Note is issued pursuant to that certain
Asset Purchase Agreement, dated as of February 14, 2007, among
NexCen Acquisition Corp. (" Buyer "), Holder, Holder’s
stockholders and the Company ( " Purchase Agreement ")
pursuant to which Buyer acquired substantially all the assets and
franchise operations of Holder (the " Business ") and is the
" Promissory Note " defined in the Purchase Agreement. This
Note evidences the absolute and unconditional obligation of the
Company.
1. Scheduled
Payments
(a) Principal . The entire unpaid principal balance of this
Note (together with all accrued and unpaid interest thereupon)
shall become due and payable in full on February 28, 2008, subject
to mandatory prepayments required under Section 1(c) ("
Maturity Date "). If, but only if, the Escrow Amount (defined
below) is sufficient to pay the unpaid principal balance of this
Note, plus accrued and unpaid interest, the release of the Escrow
Amount to the Holder shall constitute full and final satisfaction
of this Note.
(b) Interest . Interest shall accrue on the unpaid principal
amount of this Note from the date hereof through the Maturity Date
at the rate of six percent (6%) per annum, and after the Maturity
Date until paid at the rate of eight percent (8%) per annum.
Interest shall be calculated on the basis of the actual number of
days elapsed and a year of 365 days.
(c) Mandatory
Prepayment . Notwithstanding the foregoing, if, prior to the
Maturity Date, Buyer sells, transfers or otherwise disposes of all
or substantially all of the assets of the Business (based on the
book value thereof), or if the Company sells, transfers or
otherwise disposes of more than 49% of the Company’s equity
interests in the Buyer, in each case other than to an Affiliate (as
defined in the Purchase Agreement) of the Company, then upon the
closing of such transaction all of the outstanding principal
balance hereunder and all accrued and unpaid interest thereon shall
immediately become due and payable (a " Mandatory Prepayment
"), and the Maturity Date shall be the date the Mandatory
Prepayment becomes due.
(d) Optional
Prepayments . The Company may at any time prepay, without
premium or penalty, all or any portion of the Company’s
obligations under this Note. All such prepayments shall be applied
first to pay all accrued but unpaid interest and then to pay
outstanding principal.
2. Payment of
Note.
(a) Except to the
extent permitted in Section 2(b), all payments and prepayments of
principal of and interest on this Note shall be made to the Holder
or its order, or to the legal holder of this Note or such
holder’s order, in lawful money of the United States of
America by wire transfer of immediately available funds to a United
States bank account designated in writing by the Holder (or at such
other place as the holder hereof shall notify the Company in
writing).
(b) The Company
shall have the right, in its sole discretion, to make full and
final payment of principal of and accrued but unpaid interest on
this Note (but not any partial payment thereof), whether on the
Maturity Date or any earlier date, in shares of Common Stock, par
value $0.01 per share, of the Company (" Company Shares ")
in an amount equal to the quotient obtained by dividing (i) the
amount of such payment by (ii) the average per share closing price
for the Common Stock as reported on the Nasdaq Global Market for
the five consecutive trading days ending on the trading day
preceding the date of payment. As a condition to the
Company’s right to issue Company Shares in partial or full
satisfaction of this Note, the Company Shares issuable to the
Holder (i) shall be covered by a registration statement filed with
and declared effective by the Securities and Exchange Commission
and either registered or exempt under applicable state securities
laws, and (ii) shall not be subject to any restrictions on resale.
For the avoidanc
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