This Assignment and Assumption Agreement involves
Title: ASSIGNMENT AND ASSUMPTION AGREEMENT
Governing Law: Ohio Date: 8/12/2016
Industry: Consumer Financial Services Sector: Financial
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”), dated as of May 18, 2016, and is by and between Taso Group LLC, a Florida limited liability company (“Seller”), and (ii) Buckeye Check Cashing of Florida, Inc., an Ohio corporation (“Buyer”). The Buyer and Seller are sometimes referred to collectively herein as the “Parties” and, individually, as a “Party”. In addition, for purposes of the provisions contained in Section 9 hereof, Buckeye Check Cashing of Florida II, LLC, a Delaware limited liability company (“BCCOF II”), hereby executes and delivers this Agreement.
A. Pursuant to that certain Secured Revolving Note dated as of January 31, 2016 to which Buyer and Seller are party (the “Note”), Seller is indebted to Buyer.
B. An Event of Default under the Note has occurred and is continuing.
C. Seller does not believe that it can repay its obligations in full under the Note on the dates required therein.
D. To maximize its recovery of amounts advanced under the Note, to avoid costs of associated with the possible exercise of remedies and to facilitate an orderly transition of business to Buyer, Buyer has agreed to accept, on the conditions more particularly described herein, the assets more particularly described herein in satisfaction of the obligations under the Note (such acceptance, the “Purchase”).
E. In connection with the Purchase, Buyer is willing to accept and assume, and Seller desires to assign and delegate, certain liabilities of the Seller as more particularly described herein. Buyer and Seller now desire to execute this Agreement pursuant to the terms and conditions set forth below.
NOW, THEREFORE , for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
1. Definitions .
“Effective Date” means the date on which the Purchase is consummated.
“Employees” means those natural persons employed by Seller who worked for the Business immediately prior to the Purchase.
“Excluded Assets” means (a) any books and records which Seller is prohibited from disclosing or transferring to Buyer under applicable law and is required by
applicable law to retain, (b) Past Due Accounts and (c) items deposited into an account of Seller prior to the consummation of the Purchase.
“Past Due Accounts” means any payday loans for which a check was deposited before the consummation of the Purchase and which check is returned unpaid. and any check cashing transactions consummated prior to consummation of the Purchase where the check is returned unpaid.
2. Assignment and Transfer .
(a) Upon the payment of the Purchase Price, (i) all of Seller’s right, title’ and interest in all assets (including cash and cash equivalents), properties, records (including records relating to Employees to be retained by Buyer), contractual rights, goodwill, going concern value, rights and claims related to, used or useful in or held for use in the check-cashing, payday lending and related business operations conducted by Seller at the locations (the “Locations”) listed on Schedule A hereto (the “Business”), wherever situated and of whatever nature, kind and description, whether tangible or intangible, owned, leased or licensed, real, personal or mixed, whether or not reflected on the books and records of Seller (collectively, the “Acquired Assets”) except Excluded Assets, shall be sold, conveyed and otherwise transferred to Buyer and (b) Buyer shall assume: (i) lease obligations arising and payable after the Effective Date with respect to the Locations (excluding any obligations in such leases (the “Business Leases”) pertaining to locations other than the Locations), (ii) obligations to Estrella (or Estrella sublessees) arising out of activities conducted at the Locations after the Effective Date and (iii) obligations arising and payable after the Effective Date with respect to personal property leases for equipment (the “Assumed Liabilities”) and no other liabilities or obligations with respect to the Acquired Assets, including, without limitation, any liabilities or obligations to remittees, such as Western Union, Florida Power & Light, Insight Credit Card Services, other like persons and any individual or with respect to any money order sales, bill payments or like transactions.
(b) The aggregate purchase price for the Purchased Assets shall be $4,820,000 (the “ Purchase Price ”), which Purchase Price may be paid, (a) at Buyer’s election, with an offset to the amounts owing under the Note), or (b) by wire transfer on the date that the Purchase is consummated. In addition, it is understood and agreed that the Buyer will assume the Assumed Liabilities.
3. Seller Representations : Seller makes the following representations and warranties:
(a) Seller is a limited liability organization duly organized, validly existing and in good standing under the laws of the state of Florida. Seller is duly authorized to, and has the power and authority to enter into this Agreement and consummate the transactions contemplated hereby. This Agreement is enforceable against the Seller in accordance with its terms.
(b) Seller has all licenses necessary or appropriate to conduct the Business as presently conducted.
(c) Seller has good and valid title to all the Acquired Assets.
(d) Other than the security interest granted pursuant to the Loan Documents immediately prior to the Purchase, there are no liens or other security interests on the Acquired Assets; this representation and warranty does not address any purported lien that may be asserted by Landmark Bank against the Acquired Assets through Check Cashing U.S.A. Inc. or any of its affiliates.
(e) With respect to the Locations, no payment of rent or equipment lease obligation is past due.
(f) With respect to the Employees at the Locations, all such Employees have been paid for all work performed through the Effective Date. No employee that worked at any Location prior to the Effective Date has any unused or accrued vacation for which such employee has not been fully reimbursed.
(g) The Acquired Assets include $1,700,000 in cash and net current consumer receivables.
(h) After the consummation of the Purchase and giving effect to the offset of the obligations under the Note, the Seller shall be solvent (in that both the fair value of its assets will not be less than the sum of its liabilities and that the present saleable value of its assets will not be less than the amount required to pay its probable liabilities as they become absolute and matured); (b) will have adequate capital with which to engage in its business; and (c) will not have incurred and will not plan to incur liabilities beyond its ability to pay as they become absolute and matured.
(i) Seller has the right to deal generally with the customers at the Locations, and the assets at the Locations belong to Seller and are sufficient to operate the Business at the Locations.
(j) Seller shall have substantially complete information relating to its customers and customer accounts.
(k) Seller has not solicited any employee who performs substantial work with respect to the Business to remain with Seller after the Purchase.
(l) Except as described Exhibit B, there is no suit, claim, action or litigation, or governmental, administrative, arbitral or other similar proceeding, investigation or inquiry, pending or, to the knowledge of Seller, threatened against the Seller which, individually or in the aggregate, will have a materially adverse effect on the Seller, its results of operations, assets, or condition, financial or otherwise.
(m) Since January 31, 2016, there have been no material additions to or dispositions of fixed assets at the Locations.
4. Buyer Representations . Buyer makes the following representations and warranties:
Buyer is a corporation duly organized, validly existing and in good standing under the laws of the state of Florida. Buyer is duly authorized to, and has the power and authority to, enter into this Agreement and consummate the transactions contemplated hereby. This Agreement is enforceable against the Buyer in accordance with its terms.
5. Conditions to Closing . The obligation of the Buyer to purchase the Acquired Assets and assume the Assumed Liabilities is subject to the following conditions precedent:
(a) Each of the representations and warranties of Seller are true and correct immediately prior to the Purchase.
(b) Each of the parties (other than affiliates of Buyer) to that certain Membership Interest Purchase Agreement dated as of January 31, 2016 have executed and delivered acknowledgments, UCC financing statement authorizations and releases satisfactory to Buyer with respect to the Acquired Assets.
(c) Seller shall have delivered evidence of the approval of the Purchase by the members (or sole member) of Seller.
(d) A Bill of Sale shall have been executed and delivered by Seller.
6. Termination of Loan Documents . Upon the Purchase, the Note and each other Loan Document (as defined in the Note) shall terminate, and the security interests granted thereunder shall be released. Seller shall be entitled to file UCC-3 termination statements upon consummation of the Purchase reflecting the termination of the security interest under the Loan Documents, and Buyer agrees to execute and deliver such documentation reasonably necessary to release its control over any deposit account of Seller subject to a deposit account control agreement. Nothing in this document is intended to limit, terminate or otherwise affect the indemnification rights under the Membership Interest Purchase Agreement dated January 31, 2016 between Buyer and Buckeye Check Cashing of Florida III, LLC.
Notwithstanding anything contained to the contrary contained in this Agreement, the Seller shall continue to be bound by its obligations under Section 7.13 of the Secured Note, and the Seller hereby ratifies and confirms its obligations thereunder; provided, however that (a) iQ Ventures shall no longer be a Retained Vendor (as defined in the Note). (b) Seller’s obligations under such Section 7.13 to the extent any liabilities thereunder are caused by volume reductions attributable to the Purchase by the Buyer shall be reduced by such extent, and (c) to the extent a Retained Vendor executes and delivers an agreement with Seller that releases Buyer from any obligations with respect to a Retained Vendor Agreement (as defined in the Note).
7. Further Acts and Assurances .
(a) The Seller will execute and deliver (or will cause the execution and delivery) from time to time hereafter, at the request of Buyer and at the sole cost and expense of the S