ASSET PURCHASE AGREEMENT
EXHIBIT 10.20
This Asset Purchase Agreement (this “Agreement”), dated as of December 23, 2021, is by and among Iron Out, Inc. d/b/a Summit Brands, a corporation organized and existing under the laws of the State of Indiana (“Buyer”), SLG Chemicals, Inc., a corporation organized and existing under the laws of the State of Colorado (“Seller”), and for the limited purposes stated herein, Xxxxx’x Liquid Gold-Inc., a Colorado corporation (“SLG”). Buyer and Seller shall be collectively referred to herein as the “Parties” and, each, individually, a “Party.”
A.Seller owns and operates the “dryel” product line, which includes dryer-activated cleaning cloths, reusable fabric protection bags, odor and wrinkle releaser, and stain pens (the “Business”).
B.Seller desires to sell, convey, transfer, assign and deliver to Buyer (or its designated Affiliates), and Buyer desires to (or to cause its designated Affiliates to) purchase and acquire from Seller, all of Seller’s right, title and interest in and to certain assets of Seller related to the Business, together with certain obligations and liabilities relating thereto, as more particularly set forth herein.
C.Concurrently with the execution and delivery of this Agreement and as a condition to the willingness of Buyer to enter into this Agreement, Seller will enter into a Transition Services Agreement with Buyer, as more particularly described herein.
D.In furtherance of the consummation of the transactions contemplated by this Agreement, the Parties desire to enter into this Agreement.
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1.2. |
Intellectual Property. All Intellectual Property Rights owned by Seller and solely used in the Business as set forth on Schedule 1.2 (collectively, the “Intellectual Property Assets”). |
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1.4. |
Prepaid Expenses. All prepaid and security deposits related to the Business listed on Schedule 1.4, including with respect to the Purchased Assets. |
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1.6. |
Permits. All Permits held relating to and required for the operation of the Business set forth in Schedule 1.6. |
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1.8. |
Goodwill. All rights in goodwill and the going concern value of the Business. |
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1.9. |
Other Assets. All other rights in intangible assets (including all claims, contract rights and warranty and product liability claims against third parties) related to the Purchased Assets identified above. |
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2.1. |
Accounts Receivable. Accounts Receivable of Seller. |
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2.3. |
Excluded Contracts. Contracts that are not included as Assumed Contracts (the “Excluded Contracts”). |
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2.5. |
Cash and Cash Equivalents. All of Seller’s cash and cash equivalents on hand or in bank accounts and short term investments. |
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2.6. |
Miscellaneous Assets. All other assets of Seller which are not used in or otherwise related primarily or exclusively to the Business. |
3. |
LIABILITIES. |
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3.2.1. |
any Liabilities of Seller arising or incurred in connection with the negotiation, preparation, investigation and performance of this Agreement, the other Transaction Documents and the transactions contemplated hereby and thereby, including fees and expenses of counsel, accountants, consultants, advisors and others; |
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3.2.2. |
any Liability for (a) Taxes of Seller (or any stockholder or Affiliate of Seller) or relating to the Business, the Purchased Assets or the Assumed Liabilities for any Pre-Closing Tax Period; (b) Taxes that arise out of the consummation of the transactions contemplated hereby or that are the responsibility of Seller pursuant to Section 8.3 (Taxes) of this Agreement; or (c) other Taxes of Seller (or any stockholder or Affiliate of Seller) that becomes a Liability of Buyer under any common law doctrine of de facto merger or transferee or successor liability or otherwise by operation of contract or Law relating to the period prior to the Closing Date. |
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3.2.3. |
any Liabilities relating to or arising out of the Excluded Assets; |
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3.2.4. |
any Liabilities in respect of any pending or threatened Action arising out of, relating to or otherwise in respect of the operation of the Business or the Purchased Assets to the extent such Action relates to such operation on or prior to the Closing Date; |
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3.2.5. |
any product Liability or similar claim for injury to a Person or property which arises out of or is based upon any express or implied representation, warranty, agreement or guaranty made by Seller, or by reason of the improper performance or malfunctioning of a product, improper design or manufacture, failure to adequately package, label or warn of hazards or other related product defects of any products at any time manufactured or sold or any service performed by Seller to the extent such Liability or claims relates to the Business on or prior to the Closing Date; |
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3.2.6. |
any recall, design defect or similar claims of any products manufactured or sold or any service performed by Seller to the extent related to the Business on or prior to the Closing Date; |
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3.2.7. |
any Environmental Claims, or Liabilities under Environmental Laws, to the extent arising out of or relating to facts, circumstances or conditions existing on or prior to the Closing or otherwise to the extent arising out of any actions or omissions of Seller; |
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3.2.8. |
any accounts payable of Seller, other than the Assumed Liabilities; |
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3.2.9. |
any Liabilities under the Excluded Contracts or any other Contracts, (a) which are not validly and effectively assigned to Buyer pursuant to this Agreement; (b) which do not conform to the representations and warranties with respect thereto contained in this Agreement; or (c) to the extent such Liabilities arise out of or relate to a breach by Seller of such Contracts prior to Closing; |
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3.2.10. |
any Liabilities associated with indebtedness of Seller and/or the Business; and |
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3.2.11. |
any Liabilities arising out of, in respect of or in connection with the failure by Seller or any of its Affiliates to comply with any Law or Governmental Order. |
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all claims made by the Buyer or any other Buyer Indemnified Party (as defined below) against Seller pursuant to Section 9 (Indemnification). The Parties agree that on the three-month, six-month and nine-month anniversary of the Closing Date, so long as there are no pending indemnification claims by Buyer the cumulative amount which would be in excess of the Escrow Amount remaining in the escrow account, the Parties shall execute joint written directions to the Escrow Agent authorizing the release of One Hundred Twenty-Five Thousand and 00/100 Dollars ($125,000.00) from the escrow account, subject to adjustment of such amount in accordance with Section 5(a) of the Escrow Agreement. Upon the expiration of the Escrow Period, the balance of the Escrow Amount shall be released to Seller by the Escrow Agent. The Escrow Amount shall be so held, distributed and released in accordance with the terms of the Escrow Agreement, which shall be executed by the Seller and the Buyer at Closing (the “Escrow Agreement”). |
6. |
CLOSING. |
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6.2. |
Seller’s Closing Deliveries. At Closing, Seller shall deliver, or cause to be delivered, to Buyer each of the following, as applicable: |
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6.2.1. |
the Purchased Assets, free and clear of all Encumbrances other than Permitted Encumbrances; |
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6.2.2. |
the Escrow Agreement, duly executed by Seller; |
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6.2.6. |
a copy of a certificate of good standing of the Seller; |
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6.2.7. |
a copy of all resolutions adopted by the board of directors (or other similar governing body) of the Seller, authorizing the execution delivery and performance of this Agreement and the consummation of the transactions contemplated hereby; |
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6.2.8. |
a certificate pursuant to Treasury Regulations Section 1-1445-2(b) that the Seller is not a foreign person within the meaning of Section 1445 of the Code, duly executed by the Seller; |
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6.2.9. |
evidence in form and substance reasonably satisfactory to Buyer that all third-party consents have been received and that no such consents have been revoked; and |
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6.2.10. |
such other instruments as shall be reasonably requested by Buyer to carry out the transactions described herein. |
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6.3. |
Buyer’s Closing Deliveries. At Closing, Buyer shall deliver, or cause to be delivered, to Seller: |
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6.3.1. |
the Closing Amount; |
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6.3.2. |
the Escrow Agreement, duly executed by Buyer; |
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6.3.3. |
the Xxxx of Sale, duly executed by Buyer; |
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6.3.4. |
the Intellectual Property Assignments, duly executed by Buyer; |
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6.3.5. |
the Transition Services Agreement, duly executed by Buyer; |
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6.3.6. |
a copy of a certificate of good standing of the Buyer; |
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6.3.7. |
a copy of all resolutions adopted by the board of directors (or other similar governing body) of the Buyer, authorizing the execution delivery and performance of this Agreement and the consummation of the transactions contemplated hereby; and |
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6.3.8. |
such other instruments as shall be reasonably requested by Seller to carry out the transactions described herein. |
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6.4. |
Delivery of Escrow Amount. At Closing, Buyer shall deliver the Escrow Amount to the Escrow Agent, as more particularly described in Section 5.2 (Escrow Amount; Escrow Agreement) and the Escrow Agreement. |
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7.1.3. |
Financial Data. Schedule 7.1.3(a) contains true and complete copies of the unaudited sales, gross margin, and contribution margin of the Business for the eleven (11) month |
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period ended November 30, 2021 (collectively, the “Financial Data”). The Financial Data has been prepared in accordance with GAAP applied on a consistent basis throughout the period involved. The Financial Data is based on the books and records of the Business, and fairly present the financial condition of the Business as of the respective dates they were prepared and the results of the operations of the Business for the periods indicated. Seller maintains a standard system of accounting for the Business established and administered in accordance with GAAP. The Business does not have any Liabilities (absolute, accrued, contingent or otherwise) except as set forth on Schedule 7.1.3(b). Since December 31, 2020, the Business has not incurred any Liabilities material to the Business taken as a whole, except (a) Liabilities incurred in the ordinary course of business and consistent with past practices and (b) Liabilities expressly disclosed on the Schedule 7.1.3(b). |
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7.1.4. |
Material Adverse Effect. Since December 31, 2020, (i) the operations and affairs of Seller and the Business have been conducted only in the ordinary course of business consistent with past practice, (ii) no Restricted Event has occurred, and (iii) there has been no change in the Business or the financial condition, properties or results of operations of the Business, which has had or could reasonably be expected to have a Material Adverse Effect. |
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7.1.7. |
Compliance with Law. Seller is in compliance with all Laws applicable to the Business and/or the Purchased Assets. Neither Seller nor any of its Affiliates has received any written or other notice of or been charged with the violation of any Laws relating to the Business. Neither Seller nor any of its Affiliates is under investigation with respect to the violation of any Laws applicable to the Business and, to the |
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Knowledge of Seller, there are no facts or circumstances which could form the basis for any such violation of such Laws applicable to the Business. |
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7.1.10.4. |
The Intellectual Property Assets consist solely of items and rights which are owned solely by Seller. |
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7.1.10.5. |
Schedule 7.1.10.5 describes, with respect to each applicable Intellectual Property Asset, the current status of any pending applications, registrations and filings. |
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7.1.10.6. |
All Registered Intellectual Property Assets that are registered or issued are valid, enforceable and subsisting, in good standing, with all fees, payments and filings due as of the Closing Date duly made. Except as set forth on Schedule 7.1.10.6, (a) Seller has made all filings required to vest ownership of all Registered Intellectual Property Assets in Seller, and (b) Seller has not granted any third party any right in or to, or license under, or any covenant or other agreement not to xxx or enforce, with respect to any of the Intellectual Property Assets. |
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7.1.10.8. |
Seller has used commercially reasonable efforts to prevent unauthorized disclosure of each Intellectual Property Asset that Seller currently uses in the operation of the Business and that derives its value from being kept in confidence. |
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7.1.10.9. |
Each Intellectual Property Asset will be owned and available for use by Buyer on identical terms and conditions immediately after the Closing. |
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7.1.10.10. |
All Products and primary packaging materials used by Seller in the Business, and packaging of the Products, comply in all material respects with applicable Laws relating to the marking and identification of Intellectual Property Rights. Other than de minis failure to xxxx, (a) all Products covered by one or more patents included within the Registered Intellectual Property Assets have been marked with the appropriate patent number or numbers in accordance with 35 U.S.C. § 287, and (b) all Products and primary packaging materials used by Seller in the Business and packaging of the Products that utilize any registered trademark included within the Registered Intellectual Property Assets have been marked with the ® designation in accordance with 15 U.S.C. § 1111. |
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the ordinary course of business and in a manner consistent with past practices. The quantities of each item of Purchased Inventory are not excessive, but are reasonable in the present circumstances of Seller. All Purchased Inventory is owned by Seller free and clear of all Encumbrances, and no item of Purchased Inventory is held on a consignment basis, except as set forth on Schedule 7.1.11(a). The location(s) of all Purchased Inventory are listed in Schedule 7.1.11(a). Schedule 7.1.11(b) sets forth, as of the Closing Date, an inventory of all items of Purchased Inventory, including (i) a description (including item number assigned thereto), (ii) quantities, (iii) value at the lower of cost or market price for each Purchased Inventory item as of the Closing Date, and (iv) the total value of the Purchased Inventory (as calculated pursuant to subsection (iii)). |
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7.1.13. |
Litigation. There is no Action pending or to Seller’s Knowledge threatened against or involving the Business or any of the Purchased Assets. Seller is not in violation of any Governmental Order with respect to the Business. With respect to the Business and the Purchased Assets, neither Seller nor any Affiliate thereof is engaged in any Action to recover monies due it or for damages sustained by it. There are no Actions pending or to Seller’s Knowledge threatened against Seller or to which Seller is otherwise a party relating to this Agreement or any other Transaction Document or the transactions contemplated hereby or thereby. |
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7.1.14. |
Certain Payments. Neither Seller nor, to the Knowledge of Seller, any director, officer, employee, or other Person associated with or acting on behalf of any of them, has directly or indirectly (a) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback or other payment to any Person, private or public, regardless of form, whether in money, property, or services (i) to obtain favorable treatment in securing business for the Business; (ii) to pay for favorable treatment for business secured by Seller or any Affiliate thereof; (iii) to obtain special concessions or for special concessions already obtained, for or in respect of the Seller or any Affiliate thereof; or (iv) in violation of any Law; or (b) established or maintained any fund or asset with respect to the Business that has not been recorded in the books and records of the Seller. |
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7.1.15.1. |
Schedule 7.1.15.1 contains a complete and accurate list of all of Seller’s suppliers and customers comprising 90% of the revenue of the Business. Seller has not received notice that any such supplier or customer (i) plans to discontinue doing business with Seller or, after the Closing, Buyer, (ii) plans to reduce the level of business done with Seller or, after the Closing, Buyer, (iii) will not do business with Buyer on substantially the same terms, conditions and amounts subsequent to the Closing Date as supplier or customer (as the case may be) did with Seller since July 1, 2020; or (iv) is having supply chain issues, including problems associated with material scarcity, increased freight costs, or port congestion. All of the Seller’s relationships with its suppliers and customers (a) are described in written Contracts, copies of which have been provided to the Buyer; (b) have not been orally modified; and (c) require no performance by Seller beyond the written terms thereof. |
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coverage. None of Seller or any of its Affiliates is in default under, or has otherwise failed to comply with, in any material respect, any provision contained in any such Insurance Policy. True and complete copies of the Insurance Policies have been made available to Buyer. |
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7.2.1. |
Organization and Good Standing; Binding Obligation. Buyer is an Indiana corporation duly organized, validly existing, and in good standing under the laws of the State of Indiana of the United States of America. All corporate action necessary to authorize the execution and delivery of this Agreement by Buyer and the other Transaction Documents to which Buyer is a party, and the performance of its obligations hereunder and thereunder, have been duly authorized and taken. |
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7.2.2. |
No Conflicts; Consent. The execution, delivery and consummation of this Agreement and the other Transaction Documents to which Buyer is a party, and the consummation of the transactions contemplated hereby and thereby, by Buyer: (a) will not violate in any material respect any Law or Governmental Order to which Buyer is a party or to which Buyer is bound or subject, conflict in any material respect with or result in a material breach of, or give rise to a right of termination of, require consent under, or accelerate the performance required by, the terms of any material contract to which Buyer is a party or to which the Buyer’s business is bound or subject; and (b) will not constitute a default in any material respect thereunder. |
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7.2.3. |
Brokers. Except for True North Strategic Advisors, LLC, neither Buyer nor any Person acting on behalf of Buyer has agreed to pay a commission, finder’s fee, investment banking fee or similar payment in connection with this Agreement or any other Transaction Document. |
8. |
COVENANTS. |
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8.1. |
Expenses. Except as otherwise specifically provided in this Agreement, the Parties shall bear their respective expenses incurred in connection with the preparation, execution and performance of this Agreement and the consummation of the transactions contemplated hereby, including all fees and expenses of their respective Representatives. |
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8.2. |
Use of Intellectual Property. Following the Closing, Seller and its Affiliates shall not challenge the validity or enforceability of the Intellectual Property Assets or the exclusive ownership of any of the Intellectual Property Assets by Buyer or its Affiliates or successors or assigns, provided, however, that Seller may (a) use the Intellection Property Assets on a transitional basis solely as needed to perform the Services as provided in the Transition Services Agreement; and (b) assert and defend its right to make such use of the Intellectual Property Assets. |
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8.5.2. |
Seller accordingly agrees that, without the express prior written consent of Buyer, for a period of five (5) years after the Closing Date in the case of Section 8.5.2.1 and for a period of two (2) years after the Closing Date in the case of Sections 8.5.2.2 and 8.5.2.3 (the “Restrictive Period”): |
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8.5.3. |
For a period of one year after the Closing, Seller will not and will cause its respective directors, officers, employees and Affiliates not to solicit to employ any employees of the Business (as of and after the Closing Date) or otherwise engage any such individual. The term “solicit to employ” does not include (i) using general solicitations of employment, such as general advertisements, not specifically directed toward employees of the Buyer. |
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8.5.5. |
Seller acknowledges that (a) the Business is international in scope; (b) the Business is marketed in North American and that Buyer contemplates potential distribution throughout North America; (c) the Business competes with other businesses that are or could be located in any part of North America; (d) Buyer has required that the Seller make the covenants set forth in this Section 8.5 as a condition to Buyer’s purchase of the Purchased Assets and assumption of Assumed Liabilities; (e) the provisions of this Section 8.5 are reasonable and necessary to protect and preserve Buyer’s interests in and right to the ownership and operation of the Business after the Closing; and (f) Buyer would be irreparably damaged if Seller were to breach the covenants set forth in this Section 8.5. |
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8.5.6. |
Seller further acknowledges and agrees that damages cannot adequately compensate the Buyer in the event of any of Seller’s breach of any of the covenants contained in this Section 8.5. Accordingly, Seller agrees that in the event of a breach of any such covenants, Buyer shall be entitled to seek injunctive relief against the breaching Seller, without bond (unless required by Law) in addition to such other relief as may be available at law or in equity. |
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8.8. |
Public Announcements. Unless otherwise required by applicable Law or stock exchange requirements (based upon the reasonable advice of counsel), no Party to this Agreement shall make any public announcements in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without the prior written consent of the other Party (which consent shall not be unreasonably withheld or delayed), and the Parties shall cooperate as to the timing and contents of any such announcement. |
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8.9. |
Further Assurances. Seller and Buyer shall each deliver or cause to be delivered to the other on the Closing Date such instruments as the other may reasonably request for the purpose of carrying out the transactions contemplated by this Agreement and shall take or cause to be taken all actions necessary or appropriate to consummate the transactions contemplated hereby. At any time and from time to time after the Closing, Seller shall, at the reasonable request of Buyer and at Seller’s expense and without further consideration, execute and deliver any further deeds, bills of sale, endorsements, assignments and other instruments of conveyance and transfer, and take such other actions as Buyer may reasonably request in order (a) more effectively to transfer, convey, assign and deliver to Buyer, and to place Buyer in actual possession and operating control of, and to vest, perfect or confirm, of record or otherwise, in Buyer all right, title and interest in, to and under the Purchased Assets, (b) to assist in the collection or reduction to possession of any and all of the Purchased Assets or to enable Buyer to exercise and enjoy all rights and benefits with respect thereto, or (c) to otherwise carry out the intents and purposes of this Agreement. |
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breach of representations and warranties contained in Section 7.1.6 shall survive for the full period of all applicable statutes of limitations plus 60 days; and (b) covenants and agreements made by the Parties in this Agreement shall survive for the period provided in such covenants and agreements, if any, or until fully performed; provided, however, that any obligations under Section 9.1 and Section 9.2 shall not terminate with respect to any losses, liabilities, damages, obligations, Actions, demands, penalties, interest, cost and expenses, including reasonable legal fees and expenses relating thereto, as to which the Indemnified Party shall have given notice to the Indemnifying Party in accordance with Section 9.3 before the termination of the applicable survival period. |
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9.5. |
Limitations. Notwithstanding anything herein to the contrary, the maximum amount subject to indemnification under this Section shall not exceed $1,000,000, other than with respect to any breach of any representation or warranty in Sections 7.1.1, 7.1.2, 7.1.6, 7.1.8, and 7.1.17, which amount subject to indemnification shall not exceed the Purchase Price. Further, Buyer shall not make a claim hereunder until such claim or claims in the aggregate exceed $20,000 (“Basket”), in which event Seller and/or SLG shall be liable for all such losses from the first dollar; provided, however, the Basket shall not apply with respect to losses based upon, arising out of, with respect to or by reason of any breach of any representation or warranty in Sections 7.1.1, 7.1.2, 7.1.6, 7.1.8, and 7.1.17. No Party shall have liability under this Agreement to the extent that such liability resulted from the willful misconduct or gross negligence of the other Party hereto. Each Party hereto shall take and shall cause to be taken steps reasonably necessary to mitigate any liability promptly after becoming aware of any event that could reasonably be expected to give rise to such liability. |
10. |
MISCELLANEOUS. |
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10.2. |
Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns. None of the Parties may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. No assignment shall relieve the assigning Party of any of its obligations hereunder. |
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10.3. |
No Third Party Beneficiaries. Except as provided in Section 9 (Indemnification), this Agreement is for the sole benefit of the Parties and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. |
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10.4. |
Choice of Law; Submission to Jurisdiction; Waiver of Jury Trial. |
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10.4.1. |
This Agreement shall be governed by and construed under and the rights of the Parties determined in accordance with the Laws of the State of Delaware (without reference to the choice of law provisions of the State of Delaware). |
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10.4.2. |
Each of the Parties irrevocably consents to the service of any process, pleading, notices or other papers by the mailing of copies thereof by registered, certified or first class mail, postage prepaid, to such Party at such Party’s address set forth herein, or by any other method provided or permitted under the Laws of the State of Delaware. |
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10.4.3. |
To the extent that a Party has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, such Party hereby irrevocably waives such immunity in respect of its obligations pursuant to this Agreement. |
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10.4.4. |
Except as otherwise provided in this Agreement, any proceeding or litigation arising out of relating to this Agreement or any contemplated transaction hereunder shall be brought in the courts of the State of Delaware, and each of the Parties irrevocably submits to the exclusive jurisdiction of each such court in any such proceeding or litigation, waives any objection it may now or hereafter have to venue or to convenience of forum, agrees that all claims in respect of such proceeding or litigation shall be heard and determined only in any such court, and agrees not to bring any proceeding or litigation arising out of or relating to this Agreement or any contemplated transaction hereunder in any other court. Each Party acknowledges and agrees that this Section 10.4.4 constitutes a voluntary and bargained-for agreement between the Parties. |
If to Seller or SLG: |
Xxxxx’x Liquid Gold-Inc. 0000 X. Xxxxxxxx Xxxxxxx, Xxxxx 000 Xxxxxxxxx Xxxxxxx, XX 00000 E-mail: xxxxxx@xxxxxx.xxx Attention: Chief Financial Officer
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with a copy to: |
Holland & Xxxx LLP 000 00xx Xxxxxx Xxxxxx, XX 00000 E-mail: xxxxxxx@xxxxxxxxxxx.xxx Attention: Xxx X. Xxxxxx
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If to Buyer: |
Iron Out, Inc. d/b/a Summit Brands 0000 Xxxxxx Xxxxxxxxx Xxx, Xxxxx 000 Xxxx Xxxxx, Xxxxxxx 00000 Facsimile: 000-000-0000 E-mail: xxxxxxx@xxxxxxxxxxxx.xxx Attention: Xxxx X. Xxxxxx, CEO |
with a copy to: |
Xxxxxx LLP 000 X. Xxxxxxxxx Xxxx., Xxxxx 000 Xxxx Xxxxx, Xxxxxxx 00000 Facsimile: 000-000-0000 E-mail: xxxx@xxxxxxxxx.xxx & xxxxxx@xxxxxxxxx.xxx Attention: Xxxxxx X. Xxxx & Xxxxxxx X. Xxxxxx |
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10.6. |
Entire Agreement. This Agreement, together with the exhibits and schedules hereto, the other Transaction Documents, and the Confidentiality Agreement, constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior understandings and agreements, whether written or oral, and no Party shall be liable or bound to any other Party in any manner by any warranties, representations or covenants except as specifically set forth herein. |
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10.8. |
Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement. |
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10.9. |
Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so |
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as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible. |
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10.10. |
Specific Performance. The Parties 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 specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity. |
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10.12. |
Attorneys’ Fees. In the event of any action to enforce, interpret or construe this Agreement, in addition to any other relief to which it may be entitled at law or in equity, the prevailing party shall be entitled to its reasonable costs incurred, including attorneys’ fees and the costs of appeal, if any. |
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10.13. |
Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement. |
11. |
DEFINITIONS. For purposes of this Agreement, terms capitalized herein shall be defined in accordance with the following definitions. |
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11.2. |
“Action” shall mean any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity. |
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11.3. |
“Affiliate” shall mean, as to a specified Person, a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by or is under common control with, the Person specified. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. |
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11.4. |
“Assumed Contracts” shall have the meaning set forth in Section 1.3. |
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11.5. |
“Assumed Liabilities” shall have the meaning set forth in Section 3.1. |
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11.6. |
“Xxxx of Sale” shall have the meaning set forth in Section 6.2.3. |
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11.7. |
“Business” shall have the meaning set forth in the Recitals. |
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11.8. |
“Business Day” shall mean any day other than a Saturday, Sunday or holiday on which national banking associations in the State of Indiana are authorized or required to be closed. |
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11.9. |
“Buyer” shall have the meaning set forth in the Preamble. |
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11.10. |
“Buyer Indemnified Parties” shall have the meaning set forth in Section 9.1. |
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11.11. |
“Closing” shall have the meaning set forth in Section 6.1. |
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11.12. |
“Closing Date” shall have the meaning set forth in Section 6.1. |
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11.14. |
“Confidentiality Agreement” shall have the meaning set forth in Section 10.11. |
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11.15. |
“Contracts” shall mean all contracts, leases, deeds, mortgages, licenses, instruments, notes, commitments, undertakings, indentures, joint ventures and all other agreements, commitments and legally binding arrangements, whether written or oral relating to the Business. |
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11.16. |
“Disclosure Schedules” shall have the meaning set forth in Section 7.1. |
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11.17. |
“Encumbrance” shall mean any lien (including mechanics, warehousemen, laborers and landlords liens), charge, claim, hypothecation, pledge, security interest, mortgage, preemptive right, right of first refusal, option, judgment, title defect right of first refusal, easement or conditional sale or other title retention agreement or other restriction or encumbrance of any kind. |
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11.18. |
“Environmental Claim” shall mean any Action, Governmental Order, Encumbrance, fine, penalty, or, as to each, any settlement or judgment arising therefrom, by or from any Person alleging liability of whatever kind or nature (including liability or responsibility for the costs of enforcement proceedings, investigations, cleanup, governmental response, removal or remediation, natural resources damages, property damages, personal injuries, medical monitoring, penalties, contribution, indemnification and injunctive relief) arising out of, based on or resulting from: (a) the presence, release of, or exposure to, any hazardous materials; or (b) any actual or alleged non-compliance with any Environmental Law or term or condition of any environmental Permit. |
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11.19. |
“Environmental Law” shall mean any applicable Law, and any Governmental Order or binding agreement with any Governmental Authority: (a) relating to pollution (or the cleanup thereof) or the protection of natural resources, endangered or threatened species, human health or safety, or the environment (including ambient air, soil, surface water or groundwater, or subsurface strata); or (b) concerning the presence of, exposure to, or the management, manufacture, use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge, transportation, processing, production, disposal or remediation of any hazardous materials. |
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11.20. |
“Escrow Agent” shall have the meaning set forth in Section 5.2. |
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11.21. |
“Escrow Agreement” shall have the meaning set forth in Section 5.2. |
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11.22. |
“Escrow Amount” shall have the meaning set forth in Section 5.2. |
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11.23. |
“Escrow Period” shall have the meaning set forth in Section 5.2. |
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11.24. |
“Excluded Assets” shall have the meaning set forth in Section 2. |
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11.25. |
“Excluded Contracts” shall have the meaning set forth in Section 2.3. |
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11.26. |
“Excluded Inventory” shall have the meaning set forth in Section 2.4. |
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11.27. |
“Excluded Liabilities” shall have the meaning set forth in Section 3.2. |
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11.28. |
“Existing Customer” shall mean any Person who is, as of the Closing Date, purchasing Products from Seller or any Person who purchases, from and after the Closing Date and during the Restrictive Period, from Buyer products relating to the Business, including the Products. |
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11.29. |
“Financial Data” shall have the meaning set forth in Section 7.1.3. |
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11.30. |
“Former Customer” shall mean any Person who is not an Existing Customer, but who had, within the 18-month period immediately preceding the Closing Date, purchased Products from Seller. |
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11.31. |
“GAAP” shall mean United States generally accepted accounting principles in effect from time to time. |
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11.32. |
“Governmental Authority” shall mean any governmental, regulatory or administrative body, agency, subdivision or authority, any court or judicial authority, arbitrator (public or private) |
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or any public, private or industry regulatory authority, whether national, federal, state, local, foreign or otherwise. |
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11.33. |
“Governmental Order” shall mean any order, writ, judgment, injunction, decree, stipulation, ruling, determination or award entered by or with any Governmental Authority. |
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11.34. |
“Indemnified Party” shall have the meaning set forth in Section 9.3. |
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11.35. |
“Indemnifying Party” shall have the meaning set forth in Section 9.3. |
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11.36. |
“Insurance Policies” shall have the meaning set forth in Section 7.1.16. |
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11.37. |
“Intellectual Property Assets” shall have the meaning set forth in Section 1.2. |
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11.38. |
“Intellectual Property Assignments” shall have the meaning set forth in Section 6.2.4. |
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11.40. |
“Inventory” shall have the meaning set forth in Section 1.7. |
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11.41. |
“Inventory Purchase Price” shall mean the Inventory Purchase Price pursuant to Section 5.3. |
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11.42. |
“Inventory Statement” shall have the meaning set forth in Section 5.3. |
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11.43. |
“Knowledge”, shall mean, with respect to Seller and SLG, the actual or constructive knowledge of any directors and officers of the Seller and SLG, after due inquiry. |
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11.44. |
“Law” shall mean any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority. |
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11.45. |
“Liability” shall mean any direct or indirect indebtedness, liability, assessment, claim, loss, damage, deficiency, obligation or responsibility, expense (including reasonable attorneys’ fees, court costs, accountants’ fees, environmental consultants’ fees, laboratory costs and other professionals’ fees), order, settlement payments, Taxes, fines and penalties, fixed or unfixed, xxxxxx or inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute, actual or potential, contingent or otherwise (including any liability under any guaranties, letters of credit, performance credits or with respect to insurance loss accruals). |
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11.46. |
“Material Adverse Effect” shall mean any event, occurrence, fact, condition or change that is, or is reasonably be expected to become, individually or in the aggregate, materially adverse to (a) the business, results of operations, financial condition, or assets of the Business; (b) the use or value of the Purchased Assets or a material increase in the amount of Assumed Liabilities; or (c) the ability of Seller to consummate the transactions contemplated hereby on a timely basis or perform its obligations under any of the Transaction Documents; provided that none of the following events, occurrences, facts, conditions or changes shall be deemed, either alone or in combination, to constitute a Material Adverse Effect, or be taken into account in determining whether there has been a Material Adverse Effect: (a) changes in general economic conditions, the securities markets generally or debt or financing markets generally, including changes in interest rates, exchange rates, lack of liquidity or trading volumes, (b) changes in general legal, tax, regulatory or political conditions, (c) changes in GAAP, (d) changes or effects that generally affect the industries in which the Seller operates, (e) changes in applicable law or the interpretation or enforcement thereof, (f) changes or effects resulting or arising from the commencement, occurrence, continuation or intensification of any war (whether or not declared), sabotage, armed hostilities or acts of violence or terrorism, (g) earthquakes, hurricanes, tsunamis, pandemics, epidemics, or other natural disasters, (h) changes or effects that arise out of or are attributable to the acts or omissions of, or circumstances affecting, Buyer or its Affiliates, (i) changes or effects that relate to any failure by the Seller to meet projections or forecasts for any period or (j) changes or effects resulting or arising from the negotiation, execution, public announcement or performance of this Agreement; provided, however, that the exceptions set forth in clauses (a) through (g) above shall apply only to such changes or effects that do not have a materially disproportionate impact on the Seller relative to other companies in the industry in which the Seller operates. |
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11.47. |
“Material Customers” shall have the meaning set forth in Section 7.1.15.2. |
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11.48. |
“Material Suppliers” shall have the meaning set forth in Section 7.1.15.3. |
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11.49. |
“Names” shall have the meaning set forth in Section 1.1. |
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11.50. |
“Party” and “Parties” shall have the meaning set forth in the Preamble. |
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11.51. |
“Permits” shall mean all permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances and similar rights obtained, or required to be obtained, from Governmental Authorities. |
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11.52. |
“Permitted Encumbrances” shall mean: written outbound licenses of the Intellectual Property Assets entered into in the ordinary course of business with manufacturers and service providers, as disclosed on Schedule 11.52; liens arising under the Seller’s credit facilities, which will be released with respect to the Purchased Assets upon the Closing; liens for Taxes, assessments and other charges of Governmental Authorities not yet due and payable or being contested in |
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good faith by appropriate proceedings, which proceedings are disclosed on Schedule 11.52; and mechanics’, workmens’, repairmens’, warehousemens’, carriers’ or other like liens arising or incurred in the ordinary course of business or by operation of Law and which are not material to the Purchased Assets, are not delinquent, and none of such liens will individually or in the aggregate impair the continued use and operation of the property to which they relate in the Business as presently conducted. |
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11.53. |
“Person” shall mean, any natural person, corporation, partnership, proprietorship, other business organization, trust, union, association or Governmental Authority. |
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11.54. |
“Pre-Closing Tax Period” shall mean any taxable period ending on or before the Closing Date and, with respect to any taxable period beginning before and ending after the Closing Date, the portion of such taxable period ending on and including the Closing Date. |
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11.55. |
“Products” shall mean dryer-activated cleaning cloths, reusable fabric protection bags, odor and wrinkle releaser, and stain pens sold under the “dryel” product line. |
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11.56. |
“Purchase Price” shall have the meaning set forth in Section 5.1. |
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11.57. |
“Purchased Assets” shall have the same meaning set forth in Section 1. |
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11.58. |
“Purchased Inventory” shall have the meaning set forth in Section 1.7. |
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11.59. |
“Records” shall have the meaning set forth in Section 1.5. |
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11.60. |
“Registered Intellectual Property Asset” shall have the meaning set forth in Section 7.1.10.1. |
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11.61. |
“Representative” shall mean, as to a specified Person, any officer, director, agent, employee, attorney, accountant, consultant or other representative of the Person specified. |
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11.62. |
“Restrictive Period” shall have the meaning set forth in Section 8.5. |
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11.63. |
“Restricted Event” means, with respect to Seller’s operation of the Business: (a) entering into, terminating or receiving notice of termination of any Permit, license, royalty, noncompetition, joint venture, credit or other Contract or transaction that involves a total remaining commitment of more than $25,000; (b) selling, leasing, licensing or otherwise disposing of any material asset, or incurring or suffering any Encumbrance on any material property or asset; (c) canceling or waiving any claim or right, or writing down or writing off any accounts or notes receivable, in each case with a value in excess of $25,000; (d) changing any accounting method or principle; (e) failing to cause any uncontested liability or obligation in excess of $25,000 individually or in the aggregate to be paid or satisfied when the same becomes due; (f) incurring or suffering material damage to or destruction or loss of any of any material asset, whether or not covered by insurance; (g) failing to pay any supplier or other creditor in the ordinary course of business consistent with past practice for longer than 60 days; (i) licensing, selling or transferring any Intellectual Property Assets, other than Permitted Encumbrances; (j) entering into a Contract or making a binding commitment to do any of the foregoing; (k) terminating, or permitting the termination or expiration of any Permit; or (l) agreeing to or executing any settlement or compromise with any with any Governmental Authority or third Person. |
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11.64. |
“Seller” shall have the meaning set forth in the Preamble. |
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11.65. |
“SLG” shall have the meaning set forth in the Preamble. |
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11.67. |
“Tax Return” shall mean any return, declaration, report, claim for refund, information return or statement or other document relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof. |
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11.68. |
“Transaction Documents” shall mean this Agreement, the Escrow Agreement, the Xxxx of Sale, the Assignment and Assumption Agreement, the Intellectual Property Assignments, the Transition Services Agreement and all other agreements, instruments and documents required to be delivered at Closing or in connection with the transactions contemplated by this Agreement. |
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11.69. |
“Transition Services Agreement” shall have the meaning set forth in Section 6.2.5. |
[Remainder of page intentionally left blank; Signatures on following page]
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IN WITNESS WHEREOF, the Parties hereto have caused this Asset Purchase Agreement to be executed as of the Effective Date by their respective officers thereunto duly authorized.
“SELLER”
SLG Chemicals, Inc.
/s/ Xxxxx Pedrazzini___________
Printed Name: Xxxxx Xxxxxxxxxx
Title: President
“BUYER”
Iron Out, Inc. d/b/a Summit Brands
/s/ Xxxx E Harter_
Printed Name: Xxxx X. Xxxxxx
Title: CEO
“SLG”
Xxxxx’x Liquid Gold-Inc.
/s/ Xxxxx Xxxxxxxxxx
Printed Name: Xxxxx Xxxxxxxxxx
Title: President
17888367_v8
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