Consent and Seventh Amendment to Loan and Security Agreement, Dated January 23, 2023

Exhibit 10.1

CONSENT AND SEVENTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT

THIS CONSENT AND SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) dated as of January 23, 2023, is entered into by umb bank, n.a. (together with its successors and assigns, “Lender”), SCOTT’S LIQUID GOLD-INC., a Colorado corporation (“SLG”), SLG CHEMICALS, INC., a Colorado corporation (“Chemicals”), and NEOTERIC COSMETICS, INC., a Colorado corporation (“NC”, and together with SLG and Chemicals, collectively, “Borrowers” and each, a “Borrower”) and each of the undersigned guarantors (collectively “Guarantors” and together with Borrowers, “Obligors”), with reference to the following facts:

RECITALS

A. Lender and Borrowers are parties to a Loan and Security Agreement dated as of July 1, 2020 (as amended, supplemented, replaced, restated or otherwise modified, the “Loan Agreement”), pursuant to which Lender has provided certain credit facilities to Borrowers.

B. Borrowers have requested that Lender consent to the entry by Chemicals and SLG into the Asset Purchase Agreement, dated as of January 23, 2023 (the “SLG APA”), with Nakoma Products LLC (“SLG Buyer”) and the sale of the Purchased Assets (as defined therein) (the “SLG Assets”).

C. Lender is willing to provide such accommodations to the Borrowers on the terms and conditions set forth below.

NOW, THEREFORE, the parties hereby agree as follows:

“‘Borrowing Base’ means, as of any date of determination, an amount equal to:

(a) 85% (or such lesser percentage as Lender may in its Permitted Discretion determine from time to time) of the Net Amount of Eligible Accounts; plus

(b) the least of:

(i) 50% minus the Inventory Advance Reduction Amount (or such lesser percentage as Lender may in its Permitted Discretion determine from time to time) of the Net Amount of Eligible Inventory minus the SLG Sale Reserve;

(ii) 85% minus the Inventory Advance Reduction Amount (or such lesser percentage as Lender may in its Permitted Discretion determine from time to time) of the Net Orderly Liquidation Value of Eligible Inventory minus the SLG Sale Reserve; and

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(iii) $250,000, minus

(c) the sum of all other Reserves, including, without limitation, the Prell Sale Reserve.

Without limiting Lender’s Permitted Discretion to implement other Reserves, Lender shall have the option to institute Reserves with respect to Eligible Accounts in the event that dilution exceeds 5.00% such that the advance rate on such account shall be reduced by 1.00% for each percentage of dilution in excess of 5.00%.

‘Prell Sale Reserve” means $328,000 plus the amount of any Prell Royalty Payments.

‘Revolving Facility Limit’ means (a) $500,000 through the earlier to occur of (i) the receipt by Borrowers of a tax refund in an amount not less than $200,000, or (ii) February 23, 2023, and (b) $250,000 thereafter.

‘Total Facility Limit’ means the Revolving Facility Limit.

‘SLG APA’ means the Asset Purchase Agreement, dated as of January 23, 2023, among Chemicals, SLG and Nakoma Products LLC.

‘SLG Royalty Payments’ means all Royalty Payments (as defined in the SLG APA).

‘SLG Sale Reserve’ means $1,405,000 plus the amount of any SLG Royalty Payments.”

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“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”

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[Signature Page Follows]

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IN WITNESS WHEREOF, Obligors and Lender have executed this Amendment by their respective duly authorized officers as of the date first above written.

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