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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 6, 2000
iVillage Inc.
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(Exact name of registrant as specified in its charter)
Delaware 000-25469 13-3845162
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
organization)
212 Fifth Avenue, New York, New York 10010
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 206-3100
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(Former name or former address if changed since last report)
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Item 5. Other Events
On July 6, 2000, iBaby, Inc. ("iBaby"), a Delaware corporation and
wholly-owned subsidiary of iVillage Inc., a Delaware corporation ("iVillage"),
sold certain assets to Babygear.com, Inc. ("Babygear") pursuant to an Asset
Purchase Agreement, dated as of July 6, 2000, by and among iVillage, iBaby and
Babygear (the "Asset Purchase Agreement"). Pursuant to the Asset Purchase
Agreement, Babygear acquired (i) the trademarks and service marks "iBaby" and
"internetBaby"; (ii) the domain names "iBaby.com" and "internetBaby.com"; (iii)
certain on-hand and on-order inventory of iBaby (the "Inventory"); (iv) certain
hardware and software of iBaby and (v) all books, records, invoices and other
documents related to the foregoing (collectively, the "Assets").
The aggregate purchase price paid in connection with the acquisition
of the Assets consisted of an approximately $10.0 million convertible promissory
note of Babygear in favor of iBaby (the "Note") that will be adjusted on a
dollar-for-dollar basis in accordance with the results of an audit of the
Inventory (such an adjustment, if any, the "Adjustment"). The Note matures on
January 6, 2003 and is secured, pursuant to the terms of a Security Agreement,
dated as of July 6, 2000, by and between iBaby and Babygear (the "Security
Agreement"), by 100% of the Inventory. In addition, the Note is convertible as
described below.
On the consummation of one or more financings of Babygear resulting
in aggregate gross proceeds of $20 million or more (a "Financing") on or prior
to September 30, 2000, approximately $5.0 million of the Note shall convert into
(i) a cash payment of approximately $2.5 million less all prepayments of the
Note prior to the Financing and (ii) the issuance of a number of equity
securities of Babygear in an amount equal to approximately $2.5 million divided
by the purchase price per equity security. The type of equity securities to be
issued to iBaby will be the same equity securities as issued to the investors in
the Financing. If more than one financing constitutes the Financing then the
type of equity securities will be the type issued to the most recent investors.
If an Adjustment occurs, the above-referenced numbers related to the conversion
amounts will also be adjusted.
If a Financing is not consummated on or prior to September 30, 2000,
the Note shall automatically convert on September 30, 2000 into the issuance of
a number of equity securities of Babygear in an amount equal to approximately
$10.0 million divided by the purchase price per equity security. The type of
equity securities to be issued to iBaby will be either (i) the Series B
Convertible Preferred Stock of Babygear issued to certain investors in April
2000 at a purchase price per share of $10.91 or (ii) the same equity securities
as issued to investors in a financing consummated on or prior to September 30,
2000 generating at least $10.0 million of gross proceeds and with a purchase
price in excess of $10.91 per equity security. In addition, at iBaby's option,
on the consummation of any Financing occurring subsequent to September 30, 2000
and on or prior to March 31, 2001, iBaby may convert a number of the equity
securities issued upon the automatic conversion of the Note described in this
paragraph equal to approximately $7.5 million less any prepayments of the Note
prior to consummation of a Financing into (i) a cash payment of approximately
$2.5 million less all prepayments of the Note prior to the Financing and (ii) a
note in the principal amount of approximately $5.0 million with substantially
the same terms as the Note other than the conversion feature and adjustment
provisions. If an Adjustment occurs, the above-referenced
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numbers related to the conversion amounts will also be adjusted.
The consideration paid by Babygear for the Assets and the other
terms of the Asset Purchase Agreement, Note and Security Agreement were
determined on the basis of arms' length negotiations.
On July 6, 2000, iVillage and certain of its subsidiaries entered
into several five-year sponsorship agreements with Babygear, with an aggregate
value of approximately $18.3 million, whereby Babygear will be featured on
iVillage properties, including the iVillage.com home page, parenting and
shopping channels, as well as iVillage's Lamaze print publications and Newborn
Channel.
The descriptions of the Asset Purchase Agreement, Note and Security
Agreement contained herein, each of which are filed as an exhibit to this Form
8-K, do not purport to be complete and are qualified in their entirety by the
provisions of the Asset Purchase Agreement, Note and Security Agreement.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Not applicable.
(b) Not applicable.
(c) Exhibits
2.1 Asset Purchase Agreement, dated as of July 6, 2000, by
and among iVillage Inc., iBaby, Inc. and Babygear.com,
Inc.
2.2 Convertible Promissory Note of Babygear.com, Inc., dated
as of July 6, 2000, as accepted and agreed to by iBaby,
Inc.
2.3 Security Agreement, dated as of July 6, 2000, by and
between iBaby, Inc. and Babygear.com, Inc.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
iVillage Inc.
(Registrant)
Date: July 21, 2000 By: /s/ Steven A. Elkes
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Steven A. Elkes
Executive Vice President of
Operations and Business Affairs
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EXHIBIT INDEX
Exhibits
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2.1 Asset Purchase Agreement, dated as of July 6, 2000, by and among iVillage
Inc., iBaby, Inc. and Babygear.com, Inc.
2.2 Convertible Promissory Note of Babygear.com, Inc., dated as of July 6,
2000, as accepted and agreed to by iBaby, Inc.
2.3 Security Agreement, dated as of July 6, 2000, by and between iBaby, Inc.
and Babygear.com, Inc.
