B. Riley Financial, Inc. (NASDAQ:RILY) Files An 8-K Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement

B. Riley Financial, Inc. (NASDAQ:RILY) Files An 8-K Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement

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Item 2.04 Triggering Events that Accelerate a Direct Financial
Obligation or an Obligation Under an Off-Balance Sheet
Arrangement.

As previously disclosed, on June 17, 2018, B. Riley Financial,
Inc. (the Company or B. Riley) entered into certain agreements to
which B. Riley has, among other things, agreed to provide certain
debt and equity funding and other support in connection with the
acquisition (the Acquisition) by Vintage Rodeo Parent, LLC, a
Delaware limited liability company (the Vintage Parent), of
Rent-A-Center, Inc., a Delaware company (Rent-A-Center),
contemplated by that certain Agreement and Plan of Merger, dated
as of June 17, 2018, by and among Vintage Parent, Vintage Rodeo
Acquisition, Inc., a Delaware corporation and a wholly owned
subsidiary of Vintage Parent (the Merger Sub or the Borrower),
and Rent-A-Center (the Merger Agreement).

In connection therewith, B. Riley and Vintage RTO, L.P., an
affiliate of Vintage Parent (Vintage Merger Guarantor), entered
into a Limited Guarantee dated as of June 17, 2018 (the Limited
Guarantee), in favor of Rent-A-Center, to which B. Riley and
Vintage Merger Guarantor (together, the Merger Guarantors) agreed
to guarantee, jointly and severally, to Rent-A-Center the due and
punctual payment, performance and discharge when required by
Vintage Parent or the Merger Sub to Rent-A-Center of all of the
liabilities and obligations of Vintage Parent or Merger Sub under
the Merger Agreement when required to be paid by Vintage Parent
or Merger Sub to and in accordance with the Merger Agreement (the
Guaranteed Obligations), including without limitation, (i)
termination fees in the amount of $126,500,000 due to
Rent-A-Center if the Merger Agreement is properly terminated in
accordance with certain provisions of the Merger Agreement (the
Termination Fee); and (ii) all of the liabilities of Vintage
Parent or the Merger Sub to the Merger Agreement (including
reimbursement and indemnification obligations) when required to
be paid by Vintage Parent or Merger Sub to the Merger Agreement
(collectively, the Guarantee Obligations), provided, that in no
event shall the aggregate liability of the Guarantors under the
Limited Guarantee exceed $128,500,000.

In connection with the execution of the Limited Guarantee, the
Company entered into a Mutual Indemnity/Contribution Agreement,
dated as of June 17, 2018 (the Mutual Indemnity Agreement), with
the Vintage Merger Guarantor and Samjor Family, LP (collectively,
the Vintage Indemnity Parties). Under the Mutual Indemnity
Agreement, among other things, the Vintage Guarantors agreed,
jointly and severally, to indemnify and hold harmless B. Riley
and its affiliates from damages and liabilities arising out of
all Guarantee Obligations, other than those arising out of
Guarantee Obligations caused by a default by B. Riley or its
affiliates under their debt or equity commitments in support of
the transactions contemplated by the Merger Agreement.

On December 18, 2018, Rent-A-Center purported to terminate the
Merger Agreement by providing notice of such termination to
Vintage Parent, and notified Vintage Parent of its obligation
under the terms of the Merger Agreement to pay Rent-A-Center the
Termination Fee within three business days.

On December 18, 2018, Vintage Capital Management, LLC, an
affiliate of Vintage Parent (Vintage Capital), delivered a letter
to Rent-A-Center and issued a press release, both of which are
filed as exhibits to the Schedule 13D/A filed by Vintage Capital
on the same date, stating that Rent-A-Centers purported
termination of the Merger Agreement is invalid, that it believes
the Merger Agreement remains in effect and that Rent-A-Centers
actions constitute a further material breach of the Merger
Agreement, and that it intends to pursue all available remedies
against Rent-A-Center. Consistent with its position that the
purported termination of the Merger Agreement was invalid,
Vintage Parent does not believe that the Termination Fee is due
and has not paid the Termination Fee.

On December 21, 2018, Vintage Capital filed a complaint in the
Court of Chancery of the State of Delaware (the Court)
challenging Rent-A-Centers purported termination of the Merger
Agreement and demand for payment of the Termination Fee. The
relief sought by Vintage Capital includes declaratory judgements,
among other things, that the Merger Agreement has not been
terminated and remains in full force and effect, that
Rent-A-Center has breached its obligations under the Merger
Agreement and is not excused from failing to comply with its
obligations thereunder and that the Termination Fee is an
unenforceable penalty. The complaint further seeks orders to
require Rent-A-Center to perform its obligations under the Merger
Agreement and an award of costs and reasonable attorneys fees and
such other further relief as the Court finds appropriate.

On December 28, 2018, Rent-A-Center provided each of B. Riley and
the Vintage Merger Guarantors with a written request under the
Limited Guarantee (a Performance Demand), to promptly, and in any
event within ten (10) Business Days, pay to Rent-A-Center the
Guaranteed Obligations (including the Termination Fee) in full.
B. Riley supports the position of Vintage Capital that
Rent-A-Centers purported termination of the Merger Agreement is
invalid and that the payment of the Termination Fee is not
required.

On December 30, 2018, B. Riley filed a motion in the Court to
intervene in the above referenced case filed by Vintage Capital
to which B. Riley is seeking declaratory judgments, among other
things, that the parties agreed to extend the End Date under the
Merger Agreement and that Rent-A-Center is estopped from
terminating the Merger Agreement, that Rent-A-Center has breached
the Merger Agreement and its obligations of good faith and fair
dealing in connection with consummating the Merger, and that the
Termination Fee is an unenforceable penalty. B. Riley is also
seeking an award of costs and reasonable attorneys fees and such
other further relief as the Court finds equitable and
appropriate.

At a hearing held on December 31, 2018, the Court stated that it
would grant a temporary restraining order to preserve the status
quo, which order would prohibit Rent-A-Center from engaging in
certain transactions pending an expedited trial on the merits.
The Court asked for the parties to cooperate and submit proposals
for a formal order to such effect. The Court further indicated
that a trial date is to be scheduled in February 2019. On January
3, 2019, the Court granted B. Rileys motion to intervene in the
Vintage Capital case. B. Riley intends to vigorously defend its
positions and to pursue all available remedies against
Rent-A-Center. Due to the inherent uncertainties of litigation,
there can be no assurance as to the outcome of this litigation.

B. Riley believes that, should any Guaranteed Obligations become
due and payable by it arising out of or in connection with the
purported December 18, 2018 termination of the Merger Agreement
by Rent-A-Center, B. Riley would be entitled to full
indemnification by the Vintage Indemnity Parties under the Mutual
Indemnification Agreement. However, there can be no assurance
that the Vintage Indemnity Parties would not contest such
obligation, and even if not contested, that the Vintage Indemnity
Parties would have sufficient funds to satisfy any or all of its
obligations under such Mutual Indemnity Agreement. Due to the
uncertainty of the outcome of this litigation, the Company cannot
currently reasonably predict the timing or outcome, or estimate
the amount of loss, if any, or its effect, if any, on our
financial statements.

Forward Looking Statement Disclaimer.

This Report includes forward-looking statements within the
meaning of the safe harbor provisions of the United States
Private Securities Litigation Reform Act of 1995. These
forward-looking statements express the Companys current
expectations or forecasts of possible future results or events.
You can identify these statements by the fact that they do not
relate strictly to historic or current facts and often use words
such as anticipate, estimate, expect, believe, will likely
result, should, outlook, plan, project and other words and
expressions of similar meaning. Such forward looking statements
include but are not limited to statements regarding the validity
of Rent-A-Center’s purported termination of the Merger
Agreement, and any implication concerning the outcome of any
dispute that may arise by or among B. Riley, Rent-A-Center,
Vintage Parent, the Vintage Indemnity Parties or any other person
in connection therewith. Due to the inherent uncertainties of
litigation, we may not prevail in any action that may arise out
of this dispute. Moreover, both the costs of defending lawsuits
and any settlements or judgments against us could adversely
affect our results of operations and cash flows. No assurance can
be given that the results in any forward-looking statement will
be achieved and actual results could be affected by one or more
factors, which could cause them to differ materially. In addition
to the information in this report, you should carefully consider
the risk factors and risks and uncertainties included in our
Annual Report on Form 10-K for the fiscal year ended December 31,
2017 and other periodic reports filed with the SEC. The
information set forth in this report is current as of the date
hereof, and, except as may otherwise be required by law, the
Company undertakes no duty to update this information.

About B. Riley Financial, Inc. (NASDAQ:RILY)

B. Riley Financial, Inc. provides collaborative financial services and solutions through several subsidiaries, including: B. Riley & Co. LLC, a investment bank which provides corporate finance, research, and sales and trading to corporate, institutional and high net worth individual clients; Great American Group, LLC, a provider of advisory and valuation services, asset disposition and auction solutions, and commercial lending services; B. Riley Capital Management, LLC, an Investment Advisor, which includes B. Riley Asset Management, a provider of investment products to institutional and high net worth investors, and B. Riley Wealth Management (formerly MK Capital Advisors), a multi-family office practice and wealth management firm focused on the needs of ultra-high net worth individuals and families; and Great American Capital Partners, LLC, a provider of senior secured loans and second lien secured loan facilities to middle market public and private United States companies.

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