PRIVILEGED & CONFIDENTIAL — DRAFT — SUBJECT TO CHANGE
ASSET PURCHASE AGREEMENT
Draft v1.0 — April 7, 2025
Prepared by: Calderwood & Harkness LLP One Liberty Plaza, 44th Floor New York, NY 10006
On behalf of: Meridian Consumer Brands LLC (Seller)
C&H Matter No. 1011-00006
ASSET PURCHASE AGREEMENT
TABLE OF CONTENTS
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into as of [●], 2025, by and between:
MERIDIAN CONSUMER BRANDS LLC, a Delaware limited liability company (the "Seller"), with its principal offices located at 450 Park Avenue South, 14th Floor, New York, NY 10016,
and
LAKEBRIDGE HOME & PERSONAL CARE, INC., an Ohio corporation (the "Buyer"), with its principal offices located at 7100 Rockside Road, Suite 400, Independence, OH 44131.
Seller and Buyer are each referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, Seller operates a multi-brand consumer products platform encompassing household cleaning, personal care, and pet care product lines, which together generated approximately Six Hundred Twenty Million Dollars ($620,000,000) in consolidated annual revenue for the fiscal year ended December 31, 2024 ("FY2024");
WHEREAS, Seller owns and operates the "PureGlow" personal-care product line, which consists of body wash, lotion, facial cleanser, and hand soap products across twenty-three (23) stock-keeping units ("SKUs") in four (4) product categories, and which generated approximately Fifty-Eight Million Dollars ($58,000,000) in revenue in FY2024;
WHEREAS, the board of managers of Seller (the "Board") voted in the fourth quarter of calendar year 2024 to approve the strategic divestiture of the PureGlow product line in order to focus Seller's resources and capital on its core household cleaning and pet care businesses;
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, certain assets comprising the PureGlow business (the "Business"), on the terms and subject to the conditions set forth herein;
WHEREAS, the Parties executed that certain Letter of Intent dated March 5, 2025 (Reference No. LOI-MCB-LHPC-2025-001), which set forth the principal terms upon which the Parties intended to negotiate and enter into a definitive agreement for the sale and purchase of the Business; and
WHEREAS, the Parties now desire to set forth their respective rights and obligations with respect to such sale and purchase in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Defined Terms
As used in this Agreement, the following terms shall have the meanings set forth below:
"Acquired Assets" has the meaning set forth in Section 2.1.
"Action" means any claim, action, suit, arbitration, inquiry, audit, examination, investigation, or proceeding by or before any Governmental Authority or any arbitrator or arbitration panel.
"Adjustment Amount" means the dollar amount by which Closing Net Working Capital exceeds or falls below the NWC Target, but only to the extent such difference exceeds the NWC Collar. For the avoidance of doubt, if the Closing Net Working Capital falls within the range established by the NWC Collar (i.e., between Six Million One Hundred Thousand Dollars ($6,100,000) and Six Million Six Hundred Thousand Dollars ($6,600,000)), no Adjustment Amount shall be payable.
"Affiliate" means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" (including, with correlative meanings, "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 or policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.
"Agreement" means this Asset Purchase Agreement, including all Exhibits and Schedules attached hereto or delivered in connection herewith, as may be amended, modified, or supplemented from time to time in accordance with the terms hereof.
"Ancillary Agreements" means, collectively, the Transition Services Agreement, the Escrow Agreement, the IP Assignment Agreement, the Bill of Sale, and the Lease Assignment and Assumption Agreement.
"Assumed Liabilities" has the meaning set forth in Section 2.3.
"Bill of Sale" means the Bill of Sale to be delivered at the Closing by Seller to Buyer in substantially the form attached hereto as Exhibit A.
"Business" means the PureGlow personal-care product line as conducted by Seller, including the manufacture, marketing, distribution, and sale of PureGlow-branded body wash, lotion, facial cleanser, and hand soap products across twenty-three (23) SKUs in four (4) product categories, together with all activities, operations, and functions primarily related thereto.
"Business Day" means any day other than a Saturday, a Sunday, or a day on which commercial banks in New York, New York are authorized or required by Law to close.
"Business Employees" has the meaning set forth in Section 4.11.
"Buyer" means Lakebridge Home & Personal Care, Inc., an Ohio corporation.
"Buyer Indemnified Parties" means Buyer and its Affiliates, and each of their respective officers, directors, employees, agents, successors, and permitted assigns.
"Closing" has the meaning set forth in Section 3.1.
"Closing Cash Amount" means an amount equal to the Purchase Price (as adjusted pursuant to Section 2.7(a)) minus the Escrow Amount.
"Closing Date" has the meaning set forth in Section 3.1.
"Closing Net Working Capital" or "Closing NWC" means the Net Working Capital of the Business as of the close of business on the day immediately preceding the Closing Date, calculated in accordance with the NWC Methodology set forth on Exhibit D and in accordance with GAAP applied consistently with Seller's past practice.
"Code" means the Internal Revenue Code of 1986, as amended, and any successor statute thereto.
"Confidential Information" means all non-public, confidential, or proprietary information of a Party or its Affiliates, whether disclosed orally, in writing, electronically, or by any other means, including technical data, trade secrets, business plans, financial information, customer and supplier lists, marketing strategies, pricing information, and product formulations, but excluding information that (a) is or becomes generally available to the public other than as a result of a breach of this Agreement or any Ancillary Agreement, (b) was available to the receiving Party on a non-confidential basis prior to its disclosure by the disclosing Party, (c) becomes available to the receiving Party on a non-confidential basis from a source other than the disclosing Party that is not known by the receiving Party to be bound by a duty of confidentiality to the disclosing Party, or (d) is independently developed by the receiving Party without use of or reference to the Confidential Information of the disclosing Party.
"Contracts" means all contracts, agreements, leases, subleases, licenses, sublicenses, purchase orders, sales orders, commitments, arrangements, undertakings, and other instruments, whether written or oral, that are legally binding.
"Customer Contracts" means the eight (8) supply and distribution agreements listed on Schedule 2.1(d), entered into by Seller in connection with the Business.
"Dayton Facility" means the approximately one hundred twenty-seven thousand (127,000) square foot manufacturing and distribution facility located at 2200 Dryden Road, Dayton, OH 45439, which is leased by Seller pursuant to the Dayton Lease.
"Dayton Lease" means that certain Lease Agreement dated as of July 1, 2020, by and between Buckeye Industrial Realty Partners LLC, as landlord, and Seller, as tenant, with respect to the Dayton Facility, as such Lease Agreement may have been amended, modified, or supplemented from time to time.
"Deductible Basket" means Four Hundred Thousand Dollars ($400,000), representing one percent (1%) of the Purchase Price.
"Disclosure Schedules" means the disclosure schedules delivered by Seller to Buyer concurrently with the execution and delivery of this Agreement, which are incorporated herein by this reference.
"Encumbrance" means any lien, pledge, hypothecation, charge, mortgage, deed of trust, security interest, encumbrance, claim, infringement, interference, option, right of first refusal, right of first offer, preemptive right, community property interest, restriction on transfer, restriction on use, conditional sale or other title retention agreement, or other restriction or limitation of any kind or nature whatsoever, whether imposed by agreement, understanding, Law, equity, or otherwise.
"Environmental Laws" means all applicable federal, state, and local Laws, regulations, rules, ordinances, codes, orders, judgments, decrees, and permits relating to (a) the protection of the environment, natural resources, or human health and safety (as it relates to exposure to Hazardous Materials), (b) the generation, use, storage, handling, treatment, transport, disposal, release, or threatened release of Hazardous Materials, or (c) noise, odor, wetlands, indoor air, pollution, contamination, or any injury or threat of injury to Persons or property arising from any Hazardous Materials.
"Escrow Agent" means Pinnacle Trust Company, N.A., a national trust company, with offices at 385 Madison Avenue, New York, NY 10179.
"Escrow Agreement" means the Escrow Agreement to be entered into among Seller, Buyer, and the Escrow Agent at the Closing in substantially the form attached hereto as Exhibit B.
"Escrow Amount" or "Indemnity Escrow Amount" means Four Million Dollars ($4,000,000), representing ten percent (10%) of the Purchase Price.
"Escrow Release Date" means the date that is eighteen (18) months after the Closing Date.
"Estimated Closing Statement" has the meaning set forth in Section 2.7(a).
"Excluded Assets" has the meaning set forth in Section 2.2.
"Excluded Liabilities" has the meaning set forth in Section 2.4.
"FDA" means the United States Food and Drug Administration, or any successor agency thereto.
"Final Closing Statement" has the meaning set forth in Section 2.7(c).
"Fraud" means an intentional and knowing misrepresentation of a material fact constituting common law fraud under the laws of the State of New York, made with the intent to induce the other Party to enter into this Agreement or any Ancillary Agreement and upon which such other Party actually and reasonably relied to its detriment. For the avoidance of doubt, Fraud shall not include constructive fraud, negligent misrepresentation, or any form of fraud based on recklessness or negligence.
"Fundamental Representations" has the meaning set forth in Section 8.1(b).
"GAAP" means United States generally accepted accounting principles as in effect from time to time, applied on a consistent basis.
"General Cap" has the meaning set forth in Section 8.5(c).
"Governmental Authority" means any federal, state, local, municipal, or foreign government, any governmental, regulatory, or administrative authority, agency, instrumentality, or commission, or any court, tribunal, or judicial or arbitral body having jurisdiction.
"Hazardous Materials" means any substance, material, or waste that is listed, classified, regulated, characterized, or otherwise defined as hazardous, toxic, radioactive, dangerous, or a pollutant or contaminant under any Environmental Law, including petroleum and petroleum products, asbestos-containing materials, polychlorinated biphenyls, lead-based paint, radon, and per- and polyfluoroalkyl substances (PFAS).
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
"Indebtedness" means, with respect to any Person, without duplication, (a) all indebtedness for borrowed money, (b) all obligations evidenced by notes, bonds, debentures, or similar instruments, (c) all obligations under capital leases, (d) all obligations under letters of credit, banker's acceptances, or similar credit transactions, (e) all guarantees of obligations of the type described in clauses (a) through (d), and (f) all accrued and unpaid interest, premiums, penalties, fees, and other amounts payable in respect of the foregoing.
"Indemnified Party" has the meaning set forth in Section 8.4.
"Indemnifying Party" has the meaning set forth in Section 8.4.
"Independent Accountant" has the meaning set forth in Section 2.7(c).
"Intellectual Property" means all intellectual property and proprietary rights of any kind, including (a) trademarks, service marks, trade names, trade dress, brand names, logos, slogans, and all goodwill associated therewith, and all registrations and applications for registration thereof, (b) copyrights and all registrations and applications for registration thereof, (c) patents and patent applications, (d) Internet domain names, (e) trade secrets, formulations, recipes, know-how, inventions (whether or not patentable), technical data, processes, methods, techniques, compositions, research and development information, and confidential business information, and (f) all other intellectual property rights recognized under applicable Law.
"IP Assignment Agreement" means the intellectual Property Assignment Agreement to be delivered at the Closing in substantially the form attached hereto as Exhibit C.
"Knowledge of Seller" means the actual knowledge, after reasonable inquiry of his or her direct reports, of each of the following individuals: Catherine Albrecht (Chief Executive Officer), Rajiv Subramaniam (Chief Financial Officer), Gerald Fontenot (General Counsel), and Diane Choi (Vice President, Business Development). For purposes of this definition, "reasonable inquiry" means inquiry of those employees of Seller who would reasonably be expected to have knowledge of the relevant matter.
"Landlord" means Buckeye Industrial Realty Partners LLC, an Ohio limited liability company, the landlord under the Dayton Lease.
"Landlord Consent" means the written consent of the Landlord to the assignment by Seller to Buyer of Seller's right, title, and interest as tenant under the Dayton Lease, in form and substance reasonably acceptable to Buyer.
"Law" means any federal, state, local, municipal, foreign, or other law, statute, legislation, constitution, principle of common law, resolution, ordinance, code, rule, regulation, edict, decree, directive, ruling, proclamation, requirement, or Order enacted, promulgated, issued, enforced, or entered by any Governmental Authority.
"Lease Assignment" means the Lease Assignment and Assumption Agreement to be delivered at the Closing in substantially the form attached hereto as Exhibit E.
"Losses" means any and all damages, losses, liabilities, costs, expenses (including reasonable attorneys' fees and expenses of investigation and defense), judgments, fines, penalties, charges, amounts paid in settlement, diminution in value, and other amounts, whether or not involving a third-party claim.
"Material Adverse Effect" means any change, event, occurrence, effect, condition, development, or circumstance that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on (a) the business, assets, liabilities, financial condition, or results of operations of the Business, taken as a whole, or (b) the ability of Seller to consummate the transactions contemplated by this Agreement and the Ancillary Agreements; provided, however, that none of the following, either alone or in combination, shall be deemed to constitute, or shall be taken into account in determining whether there has been, a Material Adverse Effect: (i) changes in general economic, regulatory, political, or business conditions, including changes in the credit, debt, financial, securities, or capital markets (including changes in interest rates or exchange rates), (ii) changes in conditions generally affecting the consumer products industry in which the Business operates, (iii) changes in applicable Law or in GAAP (or authoritative interpretations thereof), (iv) acts of war, terrorism, sabotage, cyberattack, military action, or any escalation or worsening thereof, (v) epidemics, pandemics, disease outbreaks, or other public health emergencies, (vi) earthquakes, hurricanes, floods, or other natural disasters or acts of God, (vii) the announcement or pendency of this Agreement or the transactions contemplated hereby (including any impact on relationships with customers, suppliers, employees, or others), or (viii) any action taken or omitted to be taken by Seller at the express written request of Buyer or as expressly required by this Agreement; provided, further, that the exceptions in clauses (i) through (vi) shall not apply to the extent that the relevant change, event, occurrence, effect, condition, development, or circumstance has a disproportionate adverse effect on the Business relative to other participants in the industry in which the Business operates.
"Mini-Basket" means Twenty-Five Thousand Dollars ($25,000) per individual claim, as further described in Section 8.5(a).
"Net Working Capital" or "NWC" means, as of any date of determination, the current assets of the Business minus the current liabilities of the Business, in each case as calculated in accordance with the NWC Methodology set forth on Exhibit D and in accordance with GAAP applied consistently with Seller's past practice. For the avoidance of doubt, the specific line items included in and excluded from the calculation of Net Working Capital are set forth in detail on Exhibit D.
"NWC Collar" means the range of plus or minus Two Hundred Fifty Thousand Dollars ($250,000) from the NWC Target (i.e., the range of Six Million One Hundred Thousand Dollars ($6,100,000) to Six Million Six Hundred Thousand Dollars ($6,600,000)), within which no adjustment to the Purchase Price shall be made.
"NWC Methodology" means the methodology for calculating Net Working Capital as set forth on Exhibit D, including the specific accounting policies, practices, methods, and procedures described therein.
"NWC Target" means Six Million Three Hundred Fifty Thousand Dollars ($6,350,000), which is based on the trailing twelve-month average Net Working Capital of the Business for the period ending December 31, 2024.
"Order" means any order, writ, judgment, injunction, decree, stipulation, determination, ruling, award, or assessment entered by or with any Governmental Authority.
"Outside Date" means August 15, 2025.
"Permitted Encumbrances" means (a) statutory liens for current Taxes, assessments, or other governmental charges not yet due and payable or the amount or validity of which is being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP, (b) mechanics', carriers', workers', repairers', and similar statutory liens arising or incurred in the ordinary course of business for amounts that are not delinquent or are being contested in good faith by appropriate proceedings, (c) zoning, entitlement, building, and other land use regulations imposed by any Governmental Authority having jurisdiction over any leased real property, which are not violated by the current use or occupancy of such real property, (d) covenants, conditions, restrictions, easements, and other similar non-monetary matters of record affecting title to any leased real property that do not materially impair the occupancy or use of such real property for the purposes for which it is currently used in connection with the Business, and (e) Encumbrances arising under or created by the Dayton Lease in favor of the Landlord.
"Person" means any individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, Governmental Authority, or other entity.
"Pre-Closing Tax Period" means any Tax period (or portion thereof) ending on or before the Closing Date.
"Proposed Closing Statement" has the meaning set forth in Section 2.7(b).
"Purchase Price" means Forty Million Dollars ($40,000,000), subject to adjustment as set forth in Section 2.7.
"Purchase Price Allocation" has the meaning set forth in Section 2.8.
"PureGlow IP" means all intellectual Property related to the PureGlow brand, including the "PureGlow" trademarks, trade names, trade dress, product formulations, know-how, Internet domain names (including, without limitation, pureglow.com and pureg1ow.com), social media accounts, and all goodwill associated therewith, as more fully described on Schedule 2.1(c) and Schedule 4.8.
"R&W Insurance Policy" means the representations and warranties insurance policy to be obtained by Buyer from Great Northern Mutual Insurance Company, with a policy limit of Ten Million Dollars ($10,000,000), as further described in Section 5.7.
"Seller" means Meridian Consumer Brands LLC, a Delaware limited liability company.
"Seller Indemnified Parties" means Seller and its Affiliates, and each of their respective members, managers, officers, employees, agents, successors, and permitted assigns.
"Tax" or "Taxes" means (a) all federal, state, local, and foreign income, gross receipts, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, ad valorem, personal property (tangible and intangible), stamp, excise, occupation, sales, use, transfer, value added, alternative minimum, estimated, and other taxes, fees, duties, assessments, or charges of any kind whatsoever, together with any interest, additions, and penalties with respect thereto, and (b) any liability for the payment of any amounts of the type described in clause (a) as a result of being (or having been) a member of an affiliated, consolidated, combined, or unitary group or as a result of any obligation under any agreement or arrangement with respect to the payment of such amounts.
"Tax Representations" means the representations and warranties of Seller set forth in Section 4.10.
"Tax Return" means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule, attachment, or amendment thereto.
"Transferred Employees" has the meaning set forth in Section 6.5(a).
"Transfer Taxes" has the meaning set forth in Section 6.10.
"Transition Services Agreement" or "TSA" means the Transition Services Agreement to be entered into between Seller and Buyer at the Closing in substantially the form attached hereto as Exhibit F.
"Treasury Regulations" means the United States Treasury Regulations promulgated under the Code.
"WARN Act" means the Worker Adjustment and Retraining Notification Act of 1988, as amended, and any similar state or local Law.
Section 1.2 — Rules of Construction
Unless the context of this Agreement otherwise requires, (a) words of any gender include each other gender, (b) words using the singular or plural number also include the plural or singular number, respectively, (c) the terms "hereof," "herein," "hereby," "hereto," and derivative or similar words refer to this entire Agreement, (d) the terms "Article," "Section," "Exhibit," and "Schedule" refer to the specified Article, Section, Exhibit, or Schedule of or to this Agreement unless otherwise specified, (e) the word "including" (and its various forms) means "including, without limitation," (f) the word "or" is disjunctive but not exclusive, (g) the word "extent" in the phrase "to the extent" means the degree to which a subject or other thing extends, and such phrase does not mean simply "if," (h) all references to "dollars" or "$" are to United States dollars, (i) all references to any period of days shall refer to calendar days unless Business Days are specified, (j) all references to any Law shall be deemed to refer to such Law as amended from time to time and to any rules and regulations promulgated thereunder, (k) all references to any Contract shall be deemed to refer to such Contract as amended, modified, or supplemented from time to time in accordance with its terms, and (l) the headings contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement, and shall not be referred to in connection with the construction or interpretation of this Agreement. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring either Party by virtue of the authorship of any of the provisions of this Agreement. The Disclosure Schedules shall be arranged in sections and subsections corresponding to the numbered and lettered sections and subsections contained in this Agreement, and disclosure of any item in any section or subsection of the Disclosure Schedules shall be deemed disclosure with respect to any other section or subsection to which the relevance of such item is reasonably apparent on the face of such disclosure.
ARTICLE II — PURCHASE AND SALE
Section 2.1 — Acquired Assets
Subject to the terms and conditions of this Agreement, at the Closing, Seller shall sell, assign, transfer, convey, and deliver to Buyer, and Buyer shall purchase and acquire from Seller, free and clear of all Encumbrances (other than Permitted Encumbrances), all of Seller's right, title, and interest in and to the following assets, properties, and rights, in each case used or held for use exclusively or primarily in the conduct of the Business (collectively, the "Acquired Assets"):
(a) Inventory. All finished goods, raw materials, work-in-process, packaging materials, labels, and supplies of the Business, wherever located, as of the Closing Date, including those items identified on Schedule 2.1(a).
(b) Tangible Personal Property. All machinery, equipment, tools, molds, dies, furniture, fixtures, vehicles, spare parts, and other tangible personal property used exclusively or primarily in the Business, including all manufacturing, filling, packaging, and labeling equipment located at the Dayton Facility, as more fully described on Schedule 2.1(b).
(c) intellectual Property. All PureGlow IP, including the "PureGlow" trademarks, trade names, trade dress, product formulations, know-how, Internet domain names, social media accounts, and all associated goodwill, as more fully described on Schedule 2.1(c).
(d) Customer Contracts. All eight (8) supply and distribution agreements set forth on Schedule 2.1(d), including the supply agreement between Seller and Hartwell Retail Group dated as of February 1, 2023 (which generated FY2024 sales of approximately Fourteen Million Two Hundred Thousand Dollars ($14,200,000) for the PureGlow product line).
(e) Assigned Contracts. All other Contracts used exclusively or primarily in the Business as set forth on Schedule 2.1(e), including raw material supply agreements, co-packaging agreements, logistics and freight agreements, and other operational Contracts relating to the Business.
(f) Dayton Lease. All of Seller's right, title, and interest as tenant under the Dayton Lease, subject to receipt of the Landlord Consent pursuant to Section 6.3 and the execution and delivery of the Lease Assignment at the Closing.
(g) Books and Records. All books, records, files, invoices, correspondence, data, documents, manuals, technical specifications, quality assurance records, batch records, and other documentation, whether in physical or electronic form, to the extent relating exclusively or primarily to the Business or the Acquired Assets; provided, however, that Seller shall be entitled to retain copies of such books and records to the extent necessary for Tax, accounting, regulatory, or legal purposes.
(h) Permits and Licenses. All transferable permits, licenses, registrations, approvals, authorizations, orders, and certifications issued by any Governmental Authority to the extent relating to the Business, including FDA product listings for the PureGlow facial cleanser (salicylic acid OTC formulation), as set forth on Schedule 4.13.
(i) Goodwill. All goodwill associated with the Business and the Acquired Assets, including the going-concern value of the Business.
(j) Claims and Rights. All claims, causes of action, choses in action, rights of recovery, rights of set-off, rights of recoupment, and rights of indemnification to the extent relating to the Business or the Acquired Assets, whether arising by way of counterclaim or otherwise, and whether known or unknown, contingent or non-contingent.
(k) Prepaid Items. All prepaid expenses, advance payments, deposits, credits, and similar items, in each case to the extent relating exclusively or primarily to the Business or the Acquired Assets.
Section 2.2 — Excluded Assets
Notwithstanding anything in Section 2.1 to the contrary, the Acquired Assets shall not include any of the following assets, properties, or rights of Seller (collectively, the "Excluded Assets"):
(a) All cash, cash equivalents, bank deposits, and bank accounts of Seller, including all checking accounts, savings accounts, money market accounts, certificates of deposit, and short-term investments.
(b) All assets, properties, and rights of Seller that are not used exclusively or primarily in the Business, including all assets, properties, and rights related to Seller's household cleaning and pet care product lines.
(c) All rights of Seller under this Agreement and the Ancillary Agreements.
(d) Seller's organizational documents, minute books, member registers, Tax records (except to the extent relating exclusively to the Business and included in Section 2.1(g)), corporate seals, and records of internal corporate proceedings.
(e) All insurance policies maintained by Seller and all rights thereunder, including all claims, refunds, and proceeds arising from or relating to such policies (subject to Seller's cooperation obligations with respect to pre-Closing claims under Section 8.9).
(f) All employee benefit plans, programs, and arrangements of Seller, including all defined benefit pension plans, 401(k) plans, health and welfare plans, and deferred compensation arrangements (except as expressly provided in Section 6.5).
(g) All Contracts not included in the Acquired Assets pursuant to Section 2.1(d), Section 2.1(e), or Section 2.1(f).
(h) All Tax refunds, Tax credits, and Tax deposits of Seller for Pre-Closing Tax Periods, regardless of when received or applied.
(i) All rights of Seller under non-competition, non-solicitation, and confidentiality agreements with current or former employees, consultants, or other Persons, to the extent not exclusively related to the Business.
(j) The names "Meridian" and "Meridian Consumer Brands" and all associated trademarks, service marks, trade names, trade dress, logos, and corporate identifiers (other than the PureGlow brand and the PureGlow IP), together with all goodwill associated therewith.
Section 2.3 — Assumed Liabilities
At the Closing, Buyer shall assume and agree to pay, perform, and discharge when due only the following liabilities and obligations of Seller (collectively, the "Assumed Liabilities"):
(a) All obligations and liabilities arising under the Customer Contracts, the Assigned Contracts, and the Dayton Lease, in each case solely to the extent such obligations and liabilities arise from or relate to the period on or after the Closing Date and do not arise from any breach, default, or failure to perform by Seller occurring prior to the Closing Date.
(b) All trade payables of the Business, in each case solely to the extent such trade payables are included as current liabilities in the calculation of Closing Net Working Capital as set forth in the Final Closing Statement.
(c) All product warranty obligations, product return obligations, and product replacement obligations arising from products of the Business manufactured, distributed, or sold on or after the Closing Date.
(d) All liabilities and obligations for Transferred Employees arising from or relating to their employment with Buyer on or after the Closing Date, including all salary, wages, benefits, and employment-related obligations accruing on or after the Closing Date.
Section 2.4 — Excluded Liabilities
Notwithstanding anything in this Agreement to the contrary, Buyer shall not assume and shall not be responsible for, and Seller shall retain and pay, perform, and discharge when due, all liabilities and obligations of Seller other than the Assumed Liabilities (collectively, the "Excluded Liabilities"), including the following:
(a) All liabilities and obligations arising out of, relating to, or in connection with the Excluded Assets.
(b) All liabilities and obligations for Taxes of Seller or the Business for any Pre-Closing Tax Period, including all income, employment, sales, use, and other Taxes attributable to the operation of the Business prior to the Closing Date.
(c) All liabilities and obligations arising from the ownership, operation, or conduct of the Business prior to the Closing Date, except to the extent expressly included in the Assumed Liabilities pursuant to Section 2.3.
(d) All product liability claims, actions, suits, and proceedings arising from or relating to products of the Business manufactured, distributed, or sold prior to the Closing Date, regardless of when such claims are asserted.
(e) All employment-related liabilities, obligations, and claims for employees of Seller (including Business Employees who do not become Transferred Employees) arising prior to the Closing Date, including all wages, salaries, bonuses, commissions, accrued vacation, severance obligations, workers' compensation claims, and employee benefit obligations.
(f) All Indebtedness of Seller, including any guarantees, letters of credit, or similar credit support arrangements provided by Seller.
(g) All liabilities and obligations arising from any Contract of Seller that is not an Acquired Asset (each, an "Excluded Contract").
(h) All environmental liabilities and obligations arising from conditions existing at the Dayton Facility or any other location prior to the Closing Date, including any remediation, cleanup, or response costs arising under any Environmental Law.
Section 2.5 — Purchase Price
(a) The aggregate purchase price for the Acquired Assets shall be Forty Million Dollars ($40,000,000) (the "Purchase Price"), subject to adjustment as set forth in Section 2.7.
(b) At the Closing:
(i) Buyer shall pay to Seller an amount equal to Thirty-Six Million Dollars ($36,000,000) (the Purchase Price, as adjusted pursuant to Section 2.7(a), minus the Escrow Amount) (the "Closing Cash Amount") by wire transfer of immediately available funds in United States dollars to one or more accounts designated by Seller in writing not less than two (2) Business Days prior to the Closing Date.
(ii) Buyer shall deposit the Indemnity Escrow Amount of Four Million Dollars ($4,000,000) with the Escrow Agent by wire transfer of immediately available funds in United States dollars to the account designated by the Escrow Agent pursuant to the Escrow Agreement.
Section 2.6 — Escrow
At the Closing, the Escrow Amount of Four Million Dollars ($4,000,000) shall be deposited with Pinnacle Trust Company, N.A. in accordance with the terms and conditions of the Escrow Agreement. The Escrow Amount shall be held by the Escrow Agent for a period of eighteen (18) months following the Closing Date (through the Escrow Release Date) to secure Seller's indemnification obligations to the Buyer Indemnified Parties under Article VIII of this Agreement. The Escrow Amount represents ten percent (10%) of the Purchase Price. All investment income earned on the Escrow Amount shall be allocated and reported for Tax purposes in accordance with the Escrow Agreement. On the Escrow Release Date, the Escrow Agent shall release and distribute to Seller (by wire transfer of immediately available funds to an account designated by Seller) any portion of the Escrow Amount (together with any investment income earned thereon) that is not then subject to pending or unresolved indemnification claims properly asserted by Buyer prior to the Escrow Release Date. Any portion of the Escrow Amount that is subject to pending or unresolved indemnification claims as of the Escrow Release Date shall continue to be held by the Escrow Agent until the final resolution of such claims, at which time the Escrow Agent shall distribute the applicable portion of the Escrow Amount in accordance with the terms of the Escrow Agreement and any joint written instructions of the Parties.
Section 2.7 — Net Working Capital Adjustment
Section 2.7(a) — Estimated Closing Statement
No later than three (3) Business Days prior to the Closing Date, Seller shall prepare and deliver to Buyer a written statement (the "Estimated Closing Statement") setting forth Seller's good faith estimate of Closing Net Working Capital as of the close of business on the day immediately preceding the Closing Date, prepared in accordance with the NWC Methodology set forth on Exhibit D and GAAP applied consistently with Seller's past practice. The Estimated Closing Statement shall contain reasonable detail of the line items and calculations used to derive the estimated Closing NWC. The Parties agree that the NWC Target is Six Million Three Hundred Fifty Thousand Dollars ($6,350,000), based on the trailing twelve-month average Net Working Capital of the Business for the period ending December 31, 2024, and that the NWC Collar is plus or minus Two Hundred Fifty Thousand Dollars ($250,000) (i.e., the range of Six Million One Hundred Thousand Dollars ($6,100,000) to Six Million Six Hundred Thousand Dollars ($6,600,000)). If the estimated Closing NWC set forth in the Estimated Closing Statement exceeds the upper end of the NWC Collar (i.e., exceeds Six Million Six Hundred Thousand Dollars ($6,600,000)), then the Purchase Price payable at Closing shall be increased on a dollar-for-dollar basis by the amount of such excess. If the estimated Closing NWC set forth in the Estimated Closing Statement is less than the lower end of the NWC Collar (i.e., is less than Six Million One Hundred Thousand Dollars ($6,100,000)), then the Purchase Price payable at Closing shall be decreased on a dollar-for-dollar basis by the amount of such shortfall. If the estimated Closing NWC falls within the NWC Collar, no adjustment to the Purchase Price shall be made at Closing.
Section 2.7(b) — Post-Closing Determination
Within ninety (90) calendar days after the Closing Date, Buyer shall prepare and deliver to Seller a written statement (the "Proposed Closing Statement") setting forth Buyer's calculation of the actual Closing Net Working Capital as of the close of business on the day immediately preceding the Closing Date, prepared in accordance with the NWC Methodology set forth on Exhibit D and GAAP applied consistently with Seller's past practice. The Proposed Closing Statement shall contain reasonable detail of the line items and calculations used to derive the Closing NWC. Buyer shall provide Seller and its representatives with reasonable access to the books and records, working papers, and supporting documentation used by Buyer in preparing the Proposed Closing Statement.
Section 2.7(c) — Review and Dispute Resolution
Seller shall have a period of thirty (30) calendar days after receipt of the Proposed Closing Statement (the "Review Period") to review the Proposed Closing Statement and either (i) accept the Proposed Closing Statement in writing, in which case the Proposed Closing Statement shall become the final and binding determination of Closing NWC (the "Final Closing Statement"), or (ii) deliver to Buyer a written notice of disagreement (a "Dispute Notice") specifying in reasonable detail the items or amounts on the Proposed Closing Statement as to which Seller disagrees, the reasons for such disagreement, and Seller's proposed alternative amounts. Any items or amounts on the Proposed Closing Statement that are not specifically identified in the Dispute Notice shall be deemed accepted by Seller and shall be final and binding. If Seller does not deliver a Dispute Notice within the Review Period, the Proposed Closing Statement as delivered by Buyer shall be deemed accepted by Seller and shall become the Final Closing Statement.
If Seller delivers a Dispute Notice within the Review Period, the Parties shall negotiate in good faith for a period of fifteen (15) calendar days (or such longer period as the Parties may mutually agree in writing) following delivery of the Dispute Notice to resolve the disputed items. If the Parties are unable to resolve all disputed items within such fifteen (15) day period, the remaining disputed items shall be submitted for final and binding resolution to a nationally recognized independent accounting firm mutually agreed upon by the Parties (the "Independent Accountant"). If the Parties are unable to agree upon an Independent Accountant within five (5) Business Days, either Party may request the American Arbitration Association to appoint a nationally recognized independent accounting firm to serve in such capacity. The Independent Accountant shall act as an expert, not as an arbitrator, and shall consider only the specific items and amounts that remain in dispute and shall resolve each such item within the range of the amount proposed by Buyer in the Proposed Closing Statement and the amount proposed by Seller in the Dispute Notice. The Independent Accountant shall render a written determination as promptly as practicable, but in no event later than thirty (30) calendar days after submission of the disputed items, and such determination shall be final, conclusive, and binding upon the Parties and not subject to appeal. The Proposed Closing Statement, as adjusted by any resolution of disputed items agreed to by the Parties and/or by the determination of the Independent Accountant, shall become the Final Closing Statement. The fees and expenses of the Independent Accountant shall be borne by the Party (or Parties) in inverse proportion to how the Independent Accountant resolves the disputed items — that is, the costs shall be allocated to the Party whose aggregate position is further from the Independent Accountant's final determination.
Section 2.7(d) — Final Adjustment Payment
Within five (5) Business Days after the Final Closing Statement becomes final and binding in accordance with Section 2.7(c):
(i) If the Closing NWC as set forth in the Final Closing Statement exceeds the NWC Target by more than the NWC Collar (i.e., exceeds Six Million Six Hundred Thousand Dollars ($6,600,000)), Buyer shall pay to Seller the amount of such excess over the upper end of the NWC Collar, to the extent not already reflected in the Purchase Price adjustment made at Closing pursuant to Section 2.7(a), by wire transfer of immediately available funds to an account designated by Seller.
(ii) If the Closing NWC as set forth in the Final Closing Statement is less than the NWC Target by more than the NWC Collar (i.e., is less than Six Million One Hundred Thousand Dollars ($6,100,000)), Seller shall pay to Buyer the amount of such shortfall below the lower end of the NWC Collar, to the extent not already reflected in the Purchase Price adjustment made at Closing pursuant to Section 2.7(a), by wire transfer of immediately available funds to an account designated by Buyer.
(iii) All adjustment payments made pursuant to this Section 2.7(d) shall bear interest from the Closing Date through the date of payment at a per annum rate equal to the prime rate as published in The Wall Street Journal on the Closing Date, calculated on the basis of the actual number of days elapsed over a 365-day year.
Section 2.8 — Purchase Price Allocation
(a) The Purchase Price (together with the Assumed Liabilities, to the extent treated as additional consideration for federal income Tax purposes) shall be allocated among the Acquired Assets in accordance with Section 1060 of the Code and the Treasury Regulations promulgated thereunder, as set forth on Schedule 2.8. The Purchase Price Allocation shall be as follows:
(b) Buyer and Seller each agree to (i) be bound by the Purchase Price Allocation set forth on Schedule 2.8, (ii) act in accordance with the Purchase Price Allocation in the preparation and filing of all financial statements and Tax Returns, including IRS Form 8594 (Asset Acquisition Statement Under Section 1060) and any similar state or local Tax form, and (iii) take no position (whether in any Tax Return, any Tax proceeding, or otherwise) that is inconsistent with the Purchase Price Allocation, unless otherwise required by a "determination" within the meaning of Section 1313(a) of the Code or by applicable Law. The Parties shall cooperate in the preparation and timely filing of all IRS Forms 8594 and any required amendments thereto. If the Purchase Price is subsequently adjusted pursuant to Section 2.7, Section 2.8, or Article VIII of this Agreement, the Purchase Price Allocation shall be adjusted in a manner consistent with Section 1060 of the Code and the Treasury Regulations thereunder.
Section 2.9 — Withholding
Buyer shall be entitled to deduct and withhold from any amounts payable pursuant to this Agreement any amounts that Buyer is required to deduct and withhold under any provision of applicable Tax Law. To the extent that any such amounts are so deducted or withheld and timely remitted to the applicable Governmental Authority, such deducted or withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made. Buyer agrees to provide Seller with reasonable advance notice of any intended withholding (other than withholding required with respect to employees) and to cooperate with Seller to minimize or eliminate any such withholding, including by accepting a FIRPTA certificate delivered in accordance with Treasury Regulation Section 1.1445-2(b)(2).
Section 2.10 — Nonassignable Contracts and Consents
(a) Notwithstanding anything in this Agreement to the contrary, this Agreement shall not constitute an agreement to assign or transfer any Acquired Asset or any claim, right, or benefit arising thereunder if an attempted assignment or transfer thereof, without the consent, approval, or waiver of a third party (including any Governmental Authority), would constitute a breach, violation, or default thereof or would otherwise adversely affect the rights of Buyer or Seller thereunder. To the extent that any such consent, approval, or waiver has not been obtained as of the Closing with respect to any Acquired Asset (each, a "Deferred Asset"), the Closing shall proceed with respect to all other Acquired Assets, and the provisions of this Section 2.10 shall apply to each such Deferred Asset.
(b) Following the Closing, Seller and Buyer shall use commercially reasonable efforts to obtain any required consents, approvals, or waivers with respect to each Deferred Asset as promptly as practicable. Pending the receipt of such consent, approval, or waiver, (i) Seller shall hold each Deferred Asset in trust for the benefit of Buyer and shall cooperate with Buyer in any arrangement designed to provide Buyer with the benefits of the Deferred Asset, and (ii) Buyer shall perform, at Seller's direction and for Buyer's account, any obligations arising under such Deferred Asset to the extent that the benefits thereof are being provided to Buyer.
(c) As of the date of this Agreement, three (3) of the eight (8) Customer Contracts require the consent of a third party for assignment, including the supply agreement with Hartwell Retail Group dated as of February 1, 2023. The specific Customer Contracts requiring consent are identified on Schedule 2.1(d) and Schedule 4.3. Seller has initiated the consent process with each applicable counterparty and expects to receive all such consents prior to the Closing Date.
ARTICLE III — CLOSING
Section 3.1 — Closing Date and Location
The closing of the purchase and sale of the Acquired Assets and the assumption of the Assumed Liabilities contemplated by this Agreement (the "Closing") shall take place at 10:00 a.m. Eastern Time on the date that is thirty-one (31) days following the date of this Agreement, or on such other date as the Parties may mutually agree in writing (the "Closing Date"); provided, that all of the conditions to the obligations of the Parties to consummate the Closing set forth in Article VII shall have been satisfied or waived (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions at the Closing). Assuming execution of this Agreement on May 16, 2025, the target Closing Date would be June 16, 2025. The Closing shall take place at the offices of Calderwood & Harkness LLP, One Liberty Plaza, 44th Floor, New York, NY 10006, or, at the election of the Parties, remotely via the electronic exchange of documents and signatures through a mutually agreed upon secure document platform. All proceedings to be taken and all documents to be executed and delivered by all Parties at the Closing shall be deemed to have been taken, executed, and delivered simultaneously, and no proceeding shall be deemed to have been taken nor documents executed or delivered until all have been taken, executed, and delivered.
Section 3.2 — Seller's Closing Deliverables
At the Closing, Seller shall deliver (or cause to be delivered) to Buyer each of the following:
(a) The Bill of Sale, duly executed by Seller, in substantially the form attached hereto as Exhibit A, conveying to Buyer all of Seller's right, title, and interest in and to the Acquired Assets (other than the PureGlow IP and the Dayton Lease, which shall be conveyed by separate instruments).
(b) The IP Assignment Agreement, duly executed by Seller, in substantially the form attached hereto as Exhibit C, assigning to Buyer all of Seller's right, title, and interest in and to the PureGlow IP.
(c) The Lease Assignment and Assumption Agreement, duly executed by Seller, in substantially the form attached hereto as Exhibit E, assigning to Buyer all of Seller's right, title, and interest as tenant under the Dayton Lease, together with evidence of the Landlord Consent from Buckeye Industrial Realty Partners LLC in form and substance reasonably acceptable to Buyer.
(d) The Transition Services Agreement, duly executed by Seller, in substantially the form attached hereto as Exhibit F.
(e) The Escrow Agreement, duly executed by Seller and the Escrow Agent, in substantially the form attached hereto as Exhibit B.
(f) An officer's certificate of Seller, dated as of the Closing Date, signed by Catherine Albrecht, Chief Executive Officer, or Rajiv Subramaniam, Chief Financial Officer, of Seller, certifying the satisfaction of the conditions set forth in Sections 7.2(a), 7.2(b), and 7.2(e).
(g) A secretary's (or equivalent officer's) certificate of Seller, dated as of the Closing Date, certifying and attaching (i) true, correct, and complete copies of the resolutions of the members and/or managers of Seller authorizing the execution, delivery, and performance of this Agreement and the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby, (ii) true, correct, and complete copies of the Certificate of Formation and Limited Liability Company Agreement of Seller (as amended through the Closing Date), and (iii) an incumbency certification with respect to each officer of Seller executing this Agreement, any Ancillary Agreement, or any document delivered at the Closing.
(h) A certificate of good standing (or equivalent certificate) of Seller issued by the Secretary of State of the State of Delaware, dated not more than ten (10) Business Days prior to the Closing Date.
(i) A certificate, duly executed by Seller in accordance with Treasury Regulation Section 1.1445-2(b)(2), certifying that Seller is not a "foreign person" within the meaning of Section 1445 of the Code (a "FIRPTA Certificate").
(j) The Estimated Closing Statement prepared and delivered in accordance with Section 2.7(a).
(k) A legal opinion of Calderwood & Harkness LLP, counsel to Seller, dated as of the Closing Date and addressed to Buyer, in form and substance reasonably acceptable to Buyer, covering such matters as are customary in transactions of this type.
(l) Evidence of the receipt of all third-party consents required under Section 7.2(c), including (i) the Landlord Consent from Buckeye Industrial Realty Partners LLC for assignment of the Dayton Lease and (ii) customer consents under those Customer Contracts identified on Schedule 7.2(c) as requiring consent for assignment.
(m) Evidence of the termination or release of all Encumbrances on the Acquired Assets (other than Permitted Encumbrances), including UCC-3 termination statements and lien releases from all secured parties, as applicable.
Section 3.3 — Buyer's Closing Deliverables
At the Closing, Buyer shall deliver (or cause to be delivered) to Seller each of the following: