NexCen Brands Announces Agreement To Sell Franchise Business To Levine Leichtman Capital Partners

NexCen Brands, Inc. (PINK SHEETS: NEXC) today announced that it has entered into an agreement to sell its franchise business to an affiliate of Levine Leichtman Capital Partners (“LLCP”), an independent investment firm with significant franchise management experience. The purchase price for the business is $112.5 million and is subject to a customary closing working capital adjustment.

Under the terms of the acquisition agreement, LLCP’s affiliate, Global Franchise Group, LLC, will acquire the subsidiaries of NexCen Brands that own the franchise business assets including all of NexCen Brand’s interest in the Great American Cookies, MaggieMoo's, Marble Slab Creamery, Pretzelmaker, Pretzel Time, TAF (The Athlete’s Foot) and Shoebox New York, and also will acquire the Company’s franchise management operations in Norcross, Georgia and its manufacturing facility in Atlanta, Georgia. Closing of the sale is subject to various conditions, including approval of the stockholders of NexCen Brands. The agreement does not provide for any post-closing indemnities. The transaction is expected to close in the third quarter of 2010.

In conjunction with the acquisition agreement, NexCen Brands and certain of its subsidiaries entered into an agreement with their lender, BTMU Capital Corporation (“BTMUCC”), under which BTMUCC will accept a portion of the sale proceeds, at the closing of the transaction, in full satisfaction of the outstanding indebtedness owed to BTMUCC. NexCen Brands will retain the remainder of the sale proceeds, plus a portion of the cash on hand at closing. NexCen Brands and certain of its subsidiaries also entered into an amendment and waiver agreement with BTMUCC, which includes certain limited waivers of covenants and obligations in the existing credit agreement with BTMUCC. NexCen Brands expects that these waivers will enable it and its subsidiaries to remain in compliance with the credit agreement pending completion of the sale transaction.

The acquired franchise business is expected to be operated by LLCP through its affiliate as a cohesive, stand-alone business in its current Georgia location. The agreement between NexCen Brands and Global Franchise Group, LLC also provides for management and personnel of NexCen Franchise Management, Inc. and the manufacturing facility to continue with the business under its new ownership.