E. Gluck Corporation - Bidding Procedures / APA Summary

Asset Purchase Agreement Summary

Parties Involved

• Seller: E. Gluck Corporation, a New York corporation that has operated for over six decades as a designer, importer, and distributor of watches, including its proprietary Armitron brand and licensed brands such as Anne Klein and Nine West.
• Purchaser: E. Gluck Global LLC, a Delaware limited liability company.

Assets Being Sold

• The transaction contemplates the sale of substantially all of the Seller’s assets, free and clear of all encumbrances other than permitted encumbrances.
• Purchased Assets generally include:
  • Inventory, receivables, tangible personal property, and intellectual property;
  • Goodwill, customer lists, IT systems, books and records, and permits;
  • Rights under assigned contracts and leases;
  • Unfulfilled customer and vendor purchase orders;
  • Insurance proceeds related to acquired assets and customs duty refunds; and
  • The Seller's equity interest in Hedgehog eCommerce Corporation.
• Excluded Assets include, among other items:
  • Avoidance actions;
  • The Seller's membership interests in WITHit Holdings, LLC, and EGC Holdings, LLC, and ownership interests in Clarity Limited and E. Gluck Company Limited;
  • Contracts and leases that are not assigned;
  • Employee benefit plans; and
  • A specific cause of action against Ruben Azrak and/or Steven Jacob Odzer.
• Assumed Liabilities primarily consist of:
  • Liabilities arising from the ownership of the acquired assets after the closing date;
  • Obligations under assigned contracts and leases, including all determined cure costs;
  • Liabilities related to unfulfilled customer orders and certain outstanding supplier purchase orders; and
  • Transfer taxes.
• All liabilities not explicitly assumed are Excluded Liabilities, including pre-closing liabilities, employee-related obligations, liabilities under the IDB Loan Documents, and product liability claims related to products sold prior to closing.

Stalking Horse Bid

• The purchase price consists of:
  • A cash payment equal to the IDB Payoff Amount, which is estimated to be approximately $30 million. This estimate is indicative and does not represent a floor or cap.
  • The assumption of Assumed Liabilities.
• The cash portion of the purchase price will be paid directly to IDB at closing.

Bid Protections

• Break-Up Fee: 2% of the IDB Payoff Amount.
• Expense Reimbursement: Up to $250,000.
• The break-up fee and expense reimbursement are payable if, among other conditions, an alternative transaction is approved and closed. Both are to be treated as administrative expense claims under section 503(b) of the Bankruptcy Code.

Assumption and Assignment

• The Purchaser will assume designated executory contracts and unexpired leases and will be responsible for paying the associated cure costs as determined by the Bankruptcy Court.
• The Seller is required to file a schedule of its good-faith estimate of the cure costs for each contract and lease.
• The Purchaser retains the right to exclude any contract or lease from the sale up to five business days prior to closing. The Purchaser may also exclude a contract or lease if its final determined cure cost exceeds the Seller's initial estimate.

Sale Free and Clear

• The Seller seeks to sell the assets under sections 363 and 365 of the Bankruptcy Code, free and clear of all liens, claims, and encumbrances.
• The sale is subject to the entry of a sale order that includes a finding that the Purchaser has acted in good faith within the meaning of section 363(m) of the Bankruptcy Code.

Post-Closing Arrangements

• Within ten days of closing, the Seller must change its corporate name to one not confusingly similar to its current name or any transferred trademarks.
• For at least three years post-closing, the parties will provide each other with reasonable access to books, records, and employees to assist with the wind-down of the Seller's estate, tax matters, and claims reconciliation.

Termination Conditions

• The agreement may be terminated by the Purchaser if certain milestones are not met, including failure to obtain a bidding procedures order within 25 days of the petition date, failure to hold an auction by Feb. 3, 2026, or if the closing does not occur by the outside date of Feb. 13, 2026.
• Additional termination triggers for the Purchaser include the dismissal or conversion of the chapter 11 case, the approval of an alternative transaction, or a material breach by the Seller.
• Either party may terminate by mutual consent or if a court issues a final, non-appealable order prohibiting the transaction.

Key Dates & Deadlines

• Petition Date: December 01, 2025
• Bidding Procedures Order Entry Deadline: Within 25 days of the Petition Date
• License Agreements Execution Deadline: Dec. 15, 2025
• Auction (if necessary): On or before Feb. 3, 2026
• Closing Deadline: Feb. 6, 2026
• Outside Date: Feb. 13, 2026