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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): MARCH 12, 1999
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BISCAYNE APPAREL, INC.
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(Exact name of registrant as specified in its charter)
FLORIDA 1-9635 65-0200397
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
1373 BROAD STREET
CLIFTON, NJ 07013
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(Address of principal executive offices)(Zip Code)
(973) 473-3240
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Registrant's telephone number, including area code:
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(Former Name or Former Address, if Changed Since Last Report)
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CURRENT REPORT ON FORM 8-K
BISCAYNE APPAREL, INC.
MARCH 12, 1999
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Biscayne Apparel, Inc. (the "Registrant") announced that on March 4, 1999 the
United States Bankruptcy Court for the Southern District of New York entered an
order (the "Bankruptcy Court Order") approving the Asset Purchase Agreement
(the "Asset Purchase Agreement") dated February 5, 1999 by and among the
Registrant's subsidiaries, M&L International, Inc. ("M&L"), M&L International
(H.K.) Limited (together with M&L, the "Sellers"), M&L International Group,
LLC, M&L Hong Kong, Ltd. and Amerex (USA) Inc. (collectively, the "Buyer"). The
Bankruptcy Court Order authorized M&L to sell a substantial portion of its
assets and operations (the "Assets") free and clear of all liens, claims and
encumbrances and authorized the assumption and assignment of certain contracts.
As a result of the Bankruptcy Court Order, on March 5, 1999 the Sellers
consummated the sale of the Assets to the Buyer pursuant to the terms of the
Asset Purchase Agreement for a purchase price (the "Purchase Price") of
$2,634,020, which was paid in cash. The Purchase Price is subject to
adjustments to be made within sixty (60) days of the closing date. The proceeds
from the Purchase Price were disbursed as follows: (a) approximately $98,374
was paid to certain creditors of Sellers to cure default amounts, (b) $200,000
was deposited with an escrow agent pending Purchase Price adjustments, and (c)
approximately $2,335,645 was paid to the agent for the secured bank lenders to
pay certain loans due under the Registrant's Loan Agreement with such lenders.
The Purchase Price was based on a certain agreed upon value for the Sellers'
inventory and operating costs and expenses incurred by Sellers from January 1,
1999 through the Closing Date, less certain interim gross profit earned by the
Sellers from January 1, 1999 through the Closing Date.
The Assets include all of Sellers' equipment, inventory, rights to real
property leased, certain intangible assets including trademarks and goodwill,
and rights under contracts used in connection with the operation of Sellers'
business. The Sellers' retained all accounts receivable generated by their
business prior to closing date. In conjunction with the closing, the parties
entered into Amendment No. 2 to the Asset Purchase Agreement, which provides
terms and conditions for Buyer to act as Sellers' agent to collect Sellers'
accounts receivable for a period of four months following the closing.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired
Not Applicable
(b) Pro Forma Financial Information
Not Applicable
(c) Exhibits
Description
10.1 Asset Purchase Agreement, dated February 5, 1999, by and
among M&L International, Inc. and M&L International (H.K.) Limited, as Sellers
and M&L International Group, LLC, M&L Hong Kong, Ltd. and Amerex (USA) Inc., as
Buyer. (1)
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10.2 Amendment to Asset Purchase Agreement and Interim Agreement
by and among M&L International, Inc. and M&L International (H.K.) Limited and
M&L International Group, LLC, M&L Hong Kong, Ltd. and Amerex (USA) Inc.
10.3 Amendment No. 2 to Asset Purchase Agreement by and among M&L
International, Inc. and M&L International (H.K.) Limited and M&L International
Group, LLC, M&L Hong Kong, Ltd. and Amerex (USA) Inc.
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(1)Incorporated herein by reference. Filed with the Securities and Exchange
Commission on February 12, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Current Report to be signed on its behalf
by the undersigned thereunto duly authorized.
BISCAYNE APPAREL, INC.
Date: March 12, 1998
By: /s/ Peter Vandenberg
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Peter Vandenberg, Jr.
President, Chief Operating Officer, Treasurer
and Chief Financial Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
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<S> <C>
10.1 Asset Purchase Agreement, dated February 5, 1999, by and
among M&L International, Inc. and M&L International (H.K.)
Limited, as Sellers and M&L International Group, LLC, M&L
Hong Kong, Ltd. and Amerex (USA) Inc., as Buyer. (1)
10.2 Amendment to Asset Purchase Agreement and Interim Agreement
by and among M&L International, Inc. and M&L International
(H.K.) Limited and M&L International Group, LLC, M&L Hong
Kong, Ltd. and Amerex (USA) Inc.
10.3 Amendment No. 2 to Asset Purchase Agreement by and among M&L
International, Inc. and M&L International (H.K.) Limited and
M&L International Group, LLC, M&L Hong Kong, Ltd. and Amerex
(USA) Inc.
</TABLE>
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(1)Incorporated herein by reference. Filed with the Securities and Exchange
Commission on February 12, 1999.
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EXHIBIT 10.2
AMENDMENT TO ASSET PURCHASE AGREEMENT
AND INTERIM AGREEMENT
M&L International Group, LLC, M&L Hong Kong, Ltd. and Amerex (USA)
Inc. (collectively, "Buyer") and M&L International, Inc. and M&L International
(H.K.) Limited, (collectively, "Seller") agree to the following amendments to
the Asset Purchase Agreement and Interim Agreement.
1. Buyer acknowledges that the Conditions set forth in Section 5
of the Interim Agreement have been satisfied by the issuance and entry of the
order dated February 11, 1999 (the "Procedures Order").
2. The Asset Purchase Agreement definition of "Break-up Fee"
shall mean $200,000 as approved by the Procedures Order.
3. The Bidding Procedures as defined in Section 7.9 of the Asset
Purchase Agreement shall be deemed amended to conform to the Procedures Order
and the terms of the exhibits attached to the Procedures Order.
M&L HONG KONG, LTD. M&L INTERNATIONAL, INC.
By: /s/ Fred R. Shvetz By: /s/ Peter Vandenberg,Jr.
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Fred R. Shvetz Peter Vandenberg, Jr.
Chairman Vice President
M&L INTERNATIONAL GROUP, LLC M&L INTERNATIONAL (H.K) LIMITED
By: /s/ Fred R. Shvetz By: /s/ Peter Vandenberg, Jr.
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Fred R. Shvetz Peter Vandenberg, Jr.
Chairman Attorney-in-Fact
AMEREX (USA) INC.
By: /s/ Fred R. Shvetz
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Fred R. Shvetz
Chairman
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EXHIBIT 10.3
AMENDMENT NO. 2 TO ASSET PURCHASE AGREEMENT
M&L International Group, LLC, M&L Hong Kong, Ltd. and Amerex (USA)
Inc. (collectively, "Buyer") and M&L International, Inc. and M&L International
(H.K.) Limited, (collectively, "Seller") agree to the following amendments to
the Asset Purchase Agreement dated February 5, 1999 (the "Asset Purchase
Agreement").
Section 8.3 of Asset Purchase Agreement is hereby amended in its
entirety by deleting the entire text thereof and substituting therefore the
following:
Section 8.3 Collection of Sellers' Accounts Receivable.
(a) After the Closing and during the
"Collection Period" (as defined below), Buyer hereby agrees
to collect Sellers' accounts receivable existing as of the
close of business on the day prior to the Closing Date
("Sellers' Receivables") and Sellers hereby appoint Buyer as
their agent for the purpose of collecting Sellers'
Receivables. Sellers shall deliver to Buyer the Books and
Records pertaining to Sellers' Receivables for Buyer's use in
collecting Sellers' Receivables as agent for Sellers. Buyer
shall use its best efforts to effectuate collection of
Sellers' Receivables. All collections of Sellers' Receivables
shall be remitted to the lock box at Chase Manhattan Bank (
Acct. No. 91027555429) (the "Lock Box") previously maintained
by Sellers prior to the Closing. Buyer shall not direct the
payment of any of Sellers' Receivables to any address other
than the Lock Box. Buyer shall not settle or compromise any
of Sellers' Receivables without Sellers' prior written
approval. Except for paying to Sellers the proceeds collected
in respect of Sellers' Receivables, and except for Buyer's
wilful misconduct or gross negligence, Buyer shall have no
liability to Sellers whatsoever in connection with the
collection of Sellers' Receivables.
(b) As compensation for its services as
collection agent of Sellers' Receivables pursuant to this
Section 8.3, Buyer shall be paid a fee equal to one and
one-quarter percent (1-1/4%) of Sellers' Receivables
collected by Buyer (the "Collection
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Fee"). Buyer shall pay to Sellers each week any proceeds
collected by Buyer in respect of Sellers' Receivable and also
remit to Sellers on a weekly basis a statement and accounting
of the amounts collected with respect to Sellers' Receivables
and, the Collection Fee applicable to such receivables.
Sellers shall remit payment to Buyer for the Collection Fee
within 15 days of its receipt of such statement. Buyer and
Sellers shall cooperate in good faith to reconcile payments
against Receivables and to prepare weekly reconciliations.
(c) The "Collection Period" shall mean the
period commencing immediately after the Closing and ending on
the earlier of (i) four (4) months after the Closing Date or
(ii) the date on which uncollected Sellers' Receivable are
equal to $250,000 or less or (iii) such earlier date as is
designated by Sellers in writing. After the Collection
Period, Sellers may effect collection of any Sellers'
Receivables remaining unpaid, provided Sellers effect such
collections in a manner consistent with Buyer's collection
practices and, provided further, that Sellers shall take no
action with respect to such collections that materially
adversely affect Buyers' relationship with any customer,
provided however that nothing contained herein shall preclude
Sellers from taking customary collection activities
(including litigation) to collect its accounts receivable.
After the Collection Period, Buyer shall transfer to Sellers
the Books and Records pertaining to uncollected Sellers'
Receivables and Sellers shall have reasonable telephone
access to Buyer's employees at reasonable times during
business hours for the purpose of inquiring about the status
and results of collection efforts by Buyer during the
Collection Period.
(d) Buyers shall preserve records of their
collection activities during the Collection Period, including
copies of payment or remittance documents and records
regarding application of payments to Sellers' invoices. If
the customer designates payment of a specific invoice, then
remittances will be applied as instructed. In the event a
customer does not designate a specific invoice for payment,
Sellers and Buyer agree to
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cooperate in good faith in order to determine which invoice
the customer was paying and the proper application of funds.
M&L HONG KONG, LTD. M&L INTERNATIONAL, INC.
By: /s/ Fred R. Shvetz By: /s/ Peter Vandenberg,Jr.
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Fred R. Shvetz Peter Vandenberg, Jr.
Chairman Vice President
M&L INTERNATIONAL GROUP, LLC M&L INTERNATIONAL (H.K) LIMITED
By: /s/ Fred R. Shvetz By: /s/ Peter Vandenberg,Jr.
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Fred R. Shvetz Peter Vandenberg, Jr.
Chairman Attorney-in-Fact
AMEREX (USA) INC.
By: /s/ Fred R. Shvetz
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Fred R. Shvetz
Chairman
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