RVYL RYVYL Inc

Exhibit 10.1

 

 

PREFERRED STOCK REPURCHASE AND NOTE REPAYMENT AGREEMENT

 

This Preferred Stock Repurchase and Note Repayment Agreement, dated as of January 23, 2025 (this “Agreement”), is entered into by and between RYVYL Inc., a Nevada corporation (the “Company”), and ___________ , a company organized under the laws of the Cayman Islands (the “Investor”).

 

WHEREAS, on November 8, 2021, the Investor made a convertible loan to the Company, pursuant to a Securities Purchase Agreement, dated as of November 2, 2021 (the “Note SPA”), and pursuant to which the Company issued to the Investor an 8% Senior Convertible Note in the original principal amount of $100 Million (the “Note”) and also entered into (i) an Indenture with Wilmington Savings Fund Society FSB, as trustee (the “Trustee”), dated November 2, 2021 (the “Indenture”) and (ii) a First Supplemental Indenture dated November 2, 2021, with the Trustee (the “Supplemental Indenture”), both in connection with the Note; and

 

WHEREAS, on July 25, 2023, the Parties entered into an Exchange Agreement (the “Initial Exchange Agreement”), pursuant to which a portion of the outstanding indebtedness under the Note was converted into shares of Series A Convertible Preferred Stock of the Company (the “Series A Preferred Shares”), and which was amended by Amendment No. 1 to Exchange Agreement, dated as of August 18, 2023, and by Amendment No. 2 to Exchange Agreement, dated as of August 25, 2023; and

 

WHEREAS, on November 29, 2023, the Parties entered into a second Exchange Agreement (the “Second Exchange Agreement”, and together with the Initial Exchange Agreement, the “Exchange Agreements”), pursuant to which, among other things, all of the Investor’s Series A Preferred Shares were exchanged for 55,000 shares of the Company’s Series B Convertible Preferred Stock (the “Series B Preferred Shares”); and

 

WHEREAS, as of the date of this Agreement, the outstanding principal amount of the Note plus accrued and unpaid interest is equal to $18,385,400 and the Investor owns 53,099 Series B Preferred Shares; and

 

WHEREAS, in consideration for the payment of a total of $17,000,000 by the Company to the Investor ($17,050,000 in the event of an extension to the First Tranche Payment Due Date, as described in this Agreement), the entire outstanding principal balance of the Note, and all accrued and unpaid interest thereon, shall be deemed to have been paid, in full, and the Company also shall repurchase from the Investor, and the Investor shall sell to the Company, all 53,099 outstanding Series B Preferred Shares owned by the Investor (the Series B Preferred Shares to be sold hereunder, the “Shares”) in the manner and on the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, for and in consideration of the mutual promises set forth in this Agreement and other valuable consideration, the receipt and sufficiency of which the parties to this Agreement hereby acknowledge, and upon the terms and subject to the conditions of this Agreement, the parties agree as follows:

 

1. Definitions. For purposes of this Agreement, capitalized terms used herein but not defined elsewhere in this Agreement shall have the meanings ascribed below.

 

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person; provided, that:

 

 

(a) no securityholder of the Company shall be deemed to be an Affiliate of any other securityholder solely by reason of any investment in the Company,

 

(b) no portfolio company in which the Investor or any of its Affiliates have an investment shall be deemed an Affiliate of the Investor or any of its Affiliates, and

 

(c) the Company, its Subsidiaries and any of the Company’s other controlled Affiliates shall not be deemed an Affiliate of the Investor or any of its Affiliates.

 

For the purpose of this definition, the term “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Agreement” has the meaning set forth in the initial paragraph.

 

“Board” means the board of directors of the Company.

 

“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally open for use by customers on such day.

 

“Certificate” means that certain Certificate of Designation of the Series B Preferred Shares.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Common Stock” means the common stock, par value, $0.001 per share of the Company.

 

“Company” has the meaning set forth in the initial paragraph.

 

“Company Material Adverse Effect” means any material adverse effect on (i) the business, properties, assets, liabilities, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any Subsidiary, individually or taken as a whole, (ii) the Transactions, (iii) the authority or ability of the Company or any of its Subsidiaries to perform any of their respective obligations under this Agreement or (iv) any event, change, occurrence, state of facts, development, circumstance or condition that, individually or in the aggregate, would, or would reasonably be expected to, prevent or delay any of the Transactions.

 

“Financing” means the financing secured by the Company for the purpose of making the First Tranche Payment.

 

“First Closing” has the meaning set forth in Section 4.1(a).

 

“First Closing Date” has the meaning set forth in Section 4.1(a).

 

“First Tranche Payment” means $13,000,000.

 

 

“First Tranche Payment Due Date” means the earlier of (i) 48 hours after receipt of funds pursuant to the Financing and (ii) January 27, 2025 (provided that such date may be extended to February 3, 2025, at the sole option of the Company, in consideration for the payment of $50,000, as provided in this Agreement.

 

“Governmental Authority” means any nation, state, county, city, town, village, district, or other political jurisdiction of any nature, federal, state, local, municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal), multi-national organization or body; or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled by a government or a public international organization or any of the foregoing.

 

“Indenture” has the meaning set forth in the recitals.

 

“Investor” has the meaning set forth in the initial paragraph.

 

“Investor Material Adverse Effect” means, with respect to the Investor and its Subsidiaries, any event, change, occurrence, state of facts, development, circumstance or condition that, individually or in the aggregate, would, or would reasonably be expected to, prevent or delay of any of the Transactions.

 

“Judgments” has the meaning set forth in Section 5.3(c).

 

“MNPI” means material non-public information.

 

“Note” has the meaning set forth in the recitals.

 

“Note SPA” has the meaning set forth in the recitals.

 

“Partial Note Repayment” has the meaning set forth in Section 2(a).

 

“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any Governmental Entity or any department or agency thereof.

 

“Remaining Note Balance Repayment” has the meaning set forth in Section 2(b).

 

“Repurchase” has the meaning set forth in Section 3.

 

“Second Closing” has the meaning set forth in Section 4.1(b).

 

“Second Closing Date” has the meaning set forth in Section 4.1(b).

 

“Second Tranche Payment” means $4,000,000 ($4,050,000 in the event of an extension to the First Tranche Payment Due Date, as provided in this Agreement).

 

“Second Tranche Payment Due Date” means April 30, 2025.

 

“Series A Preferred Shares” has the meaning set forth in the recitals.

 

 

“Subsidiary” means any Person in which the Company, directly or indirectly, (I) owns any of the outstanding capital stock or holds any equity or similar interest of such Person or (II) controls or operates all or any part of the business, operations or administration of such Person, and each of the foregoing, is individually referred to herein as a “Subsidiary.”

 

“Trading Day” shall have the meaning as set forth in the Note.

 

“Trustee” has the meaning set forth in the recitals.

 

2. Repayment of Note.

 

(a) Subject to the terms and conditions of this Agreement, at the First Closing, and subject to the delivery of all applicable deliverables as set forth in Section 4.2 below (i) by the Investor to the Company at the First Closing, as provided in Section 4.2(a) hereafter and (ii) by the Company to the Investor at the First Closing, as provided in Section 4.2(b) hereafter, including payment of the First Tranche Payment, in full, the outstanding principal balance of the Note, and all accrued and unpaid interest thereon, shall be reduced to $4,000,000 ($4,050,000 in the event of an extension to the First Tranche Payment Due Date, as provided in this Agreement) and the maturity date of the Note shall be advanced to April 30, 2025 (the “Partial Note Repayment”).

 

(b) Subject to the terms and conditions of this Agreement, at the Second Closing, and subject to the delivery of all applicable deliverables as set forth in Section 4.2 below (i) by the Investor to the Company at the Second Closing, as provided in Section 4.2(c) hereafter and (ii) by the Company to the Investor at the Second Closing, as provided in Section 4.2(d) hereafter, including payment of the Second Tranche Payment, the remaining outstanding principal balance of the Note shall be deemed to have been be repaid, in full, the Note shall be cancelled on the books and records of the Company and the Indenture and Supplemental Indenture shall also be terminated (the “Remaining Note Balance Repayment”).

 

3. Repurchase of Shares. Subject to the terms and conditions of this Agreement, at the First Closing, and subject to the delivery of all applicable deliverables (i) by the Investor to the Company at the First Closing, as provided in Section 4.2(a) and (ii) by the Company to the Investor at the First Closing, as provided in Section 4.2(b) hereafter, including payment of the First Tranche Payment, in full, the Investor shall sell to the Company all of the Shares free and clear of any and all liens (other than those imposed under the Certificate or applicable securities laws), and the Company shall repurchase from the Investor, all of the Investor’s rights, title and interests in and to the Shares free and clear of any and all liens (other than those imposed under the Certificate or applicable securities laws) (the “Repurchase”).

 

4. Closings.

 

4.1 Time of Closings.

 

(a) First Closing. The closing of the Partial Note Repayment and the Repurchase (the “First Closing”) shall take place telephonically and through the mutual exchange via electronic means of executed copies of documents (including in “portable document format” (.pdf) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document) on a date mutually agreed to by the Company and the Investor, provided that such date shall not be later than First Tranche Payment Due Date, and subject to the satisfaction or, to the extent permitted by applicable law, waiver of the conditions in Section 8 hereafter applicable to the First Closing to be satisfied or waived (other than those conditions that by their nature are to be satisfied at the First Closing, but subject to the satisfaction or, to the extent permitted by applicable law, waiver of those conditions) or at such other time and place as the Company and the Investor mutually agree (such date, the “First Closing Date”).

 

 

(b) Second Closing. The closing of the Remaining Note Repayment (the “Second Closing”) shall take place telephonically and through the mutual exchange via electronic means of executed copies of documents (including in “portable document format” (.pdf) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document) on a date mutually agreed to by the Company and the Investor, provided that such date shall not be later than the Second Tranche Payment Due Date, and subject to the satisfaction or, to the extent permitted by applicable law, waiver of the conditions in Section 8 hereafter applicable to the Second Closing to be satisfied or waived (other than those conditions that by their nature are to be satisfied at the Second Closing, but subject to the satisfaction or, to the extent permitted by applicable law, waiver of those conditions) or at such other time and place as the Company and the Investor mutually agree (such date, the “Second Closing Date”).

 

4.2 Closing Deliverables. Subject to the terms and conditions contained herein:

 

First Closing:

 

(a) At the First Closing, the Investor shall deliver or cause to be delivered to the Company a duly completed Internal Revenue Service Form W-9 executed by the Investor;

 

(b) At the First Closing, the Company shall deliver to the Investor:

 

(i) the First Tranche Payment;

 

(ii) the Legal Fee Amount (as defined below);

 

(iii)         the certificate of the Company that Section 8.1(d) requires.

 

Second Closing:

 

(c) At the Second Closing, the Investor shall deliver or cause to be delivered to the Company the Note for cancellation (or a lost note affidavit, in form and substance reasonably satisfactory to the Company:

 

(d) At the Second Closing, the Company shall deliver to the Investor:

 

(i) the Second Tranche Payment; and

 

(ii) the certificate of the Company that Section 8.1(d) requires.

 

5. Representations of the Company. The Company hereby represents and warrants to the Investor that:

 

5.1 Organization. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. The Company is duly licensed or qualified to transact business as a foreign corporation in each jurisdiction in which the conduct of its business requires licensing or qualification, except where failure to so qualify would not have a Company Material Adverse Effect.

 

5.2 Authority. The Company has the corporate power and authority to execute, deliver and perform this Agreement and to carry out its obligations pursuant to this Agreement. The Company’s execution, delivery and performance of this Agreement and the consummation of the transactions that this Agreement contemplates have been duly authorized by all requisite corporate action on the part of the Company. The Company has duly and validly executed and delivered this Agreement and, assuming due authorization,

 

 

execution and delivery by the Investor, this Agreement constitutes (and each of the other documents to which the Company is or will be a party when executed and delivered, will constitute) a valid and binding obligation of the Company enforceable against the Company in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles).

 

5.3 No Conflicts. None of the Company’s execution and delivery of this Agreement, nor the Company’s consummation of the transactions that this Agreement contemplates, will :

 

(a) conflict with or violate any provision of the Company’s Amended and Restated Articles of Incorporation, as amended, or Amended and Restated Bylaws; or

 

(b) violate or constitute a default (or constitute an event which, with notice or lapse of time or both, would violate or constitute a default), result in the termination of or a right of termination or cancellation, or result in the loss of any benefit or require a payment or incur a penalty under any of the terms or provisions of any loan or credit agreement, indenture, debenture, note, bond, mortgage, deed of trust, lease, sublease, license, contract or other agreement (each, a “Contract”) to which the Company or any of its Subsidiaries is a party or accelerate the Company’s or, if applicable, any of its Subsidiaries’ obligations under any such Contract, except as would not reasonably be expected to have a Company Material Adverse Effect, after giving effect to the transactions that this Agreement contemplates; or

 

(c) violate any law or any judgment, ruling, order, writ, injunction or decree (collectively, “Judgments”) applicable to the Company or any Subsidiary of the Company or any of their respective properties or assets.

 

5.4 Governmental Approvals. Except for the securities or blue sky laws of various states or filings required by or compliance with federal securities laws, no consent or approval of, or filing, license, permit or authorization, declaration or registration with, any Governmental Authority is necessary for the Company’s execution and delivery of this Agreement, the Company’s performance of its obligations under this Agreement and the Company’s consummation of the transactions that this Agreement contemplates, other than any of those consents, approvals, filings, licenses, permits or authorizations, declarations or registrations that, if not obtained, made or given.

 

5.5 Actions. As of the date of this Agreement, there is no action, suit, investigation or proceeding, governmental, regulatory or otherwise by or before any court or other Governmental Authority, pending or, to the knowledge of the Company, threatened, against the Company or any of its Subsidiaries that would reasonably be expected to prevent the transactions that this Agreement contemplates.

 

5.6 No Other Representations or Warranties. Except for the representations and warranties that Section 6 expressly sets forth and those in any certificate delivered in connection with this Agreement, the Company acknowledges that no Person, including the Investor:

 

(a) has made or is making any other express or implied representation or warranty with respect to the Investor or its businesses, operations, assets, liabilities, condition (financial or otherwise) or prospects, including with respect to any information provided or made available to the Company or any of its representatives or any information the Company or any of its representatives develops; or

 

(b) will have or be subject to any liability or indemnification obligation to the Company resulting from the delivery, dissemination or any other distribution to the Company or any of its representatives, or the use by the Company or any of its representatives, of any information, documents, estimates, projections,

 

 

forecasts or other forward-looking information, business plans or other material developed by or provided or made available to the Company or any of its representatives.

 

The Company, on behalf of itself and on behalf of its respective Affiliates, expressly waives any such claim in this Section 5.6 relating to the foregoing matters.

 

5.7 No Brokers. Neither the Company nor any of its Subsidiaries is bound by or subject to any Contract with any Person that will result in the Investor being obligated to pay any finder’s fees, brokerage or agent’s commissions or other like payments in connection with the consummation of any of the transactions contemplated under this Agreement.

 

6. Representations of the Investor. The Investor hereby represents and warrants to the Company that:

 

6.1 Ownership of Shares. The Investor is the beneficial and record owner of 53,099 Series B Preferred Shares. The Investor owns the Shares free and clear of any and all liens (other than those imposed under the Certificate or applicable securities laws), and, at the First Closing, the Investor will deliver to the Company the Shares free and clear of liens (other than those imposed under the Certificate or applicable securities laws). The Investor has not granted any rights to purchase the Shares to any other Person. The Investor has the sole right to transfer the Shares to the Company. The Shares constitute all of the Series B Preferred Shares owned it, and the Investor does no beneficially own any options, warrants or other securities exercisable for, or convertible into, Series B Preferred Shares.

 

6.2 No Assignment of Note. The Investor is the sole owner of the Note and has not assigned the Note or any of its rights thereunder to any other Person and has the sole right to payment of any and all outstanding amounts due and payable under the Note.

 

6.3 Authority. The Investor has the corporate or other power and authority to execute, deliver and perform this Agreement and to carry out its obligations under this Agreement. The Investor’s execution, delivery and performance of this Agreement and the consummation of the transactions that this Agreement contemplates have been duly authorized by all requisite corporate action on the part of the Investor. The Investor has duly and validly executed and delivered this Agreement and, assuming due authorization, execution and delivery by the Company, this Agreement constitutes (and each of the other documents to which the Investor is or will be a party when executed and delivered, will constitute) a valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles).

 

6.4 No Conflict. The Investor’s execution, delivery and performance of this Agreement, and the consummation of the transactions that this Agreement contemplates, will not:

 

(a) conflict with or violate any provision of its organizational documents;

 

(b) violate any law or Judgment applicable to the Investor or any Subsidiary of the Investor or any of the Investor’s properties or assets, except as would not reasonably be expected to have an Investor Material Adverse Effect; or

 

(c) violate or constitute a default (or constitute an event which, with notice or lapse of time or both, would violate or constitute a default), result in the termination of or a right of termination or cancellation, or result in the loss of any benefit or require a payment or incur a penalty, in each case, under any of the terms or provisions of any Contract to which the Investor or any of its Subsidiaries is a party or accelerate

 

 

the Investor’s or, if applicable, any of its Subsidiaries’ obligations under any Contract, except as would not reasonably be expected to have an Investor Material Adverse Effect.

 

6.5 Governmental Approvals. Except for the securities or blue sky laws of the various states or filings required by or compliance with federal securities laws, no consent or approval of, or filing, license, permit or authorization, declaration or registration with, any Governmental Authority is necessary for the Investor’s execution and delivery of this Agreement, the Investor’s performance of its obligations under this Agreement and the Investor’s consummation of the transactions that this Agreement contemplates.

 

6.6 Actions. As of the date of this Agreement, there is no action, suit, investigation or proceeding, governmental, regulatory or otherwise by or before any court or other Governmental Authority, pending or, to the knowledge of the Investor, threatened, against the Investor that would reasonably be expected to have an Investor Material Adverse Effect.

 

6.7 Tax Liability. The Investor has reviewed with its own Tax advisors the U.S. federal, state and local and foreign Tax consequences of the transactions that this Agreement contemplates. The Investor has relied solely on its advisors and not on any statements or representations of the Company or any of its agents regarding Tax consequences the Investor that may result from the transactions that this Agreement contemplates. The Investor confirms that it (and not the Company) shall be responsible for any Tax liability of the Investor that may arise as a result of the transactions that this Agreement contemplates. For the avoidance of doubt, any excise tax imposed with respect to the Repurchase under Section 4501 of the Code shall be treated as a Tax liability of the Company, and not a Tax liability of the Investor.

 

6.8 Independent Review. The Investor acknowledges (for itself and on behalf of its Affiliates and representatives) that it has conducted, to its satisfaction, its own independent investigation with such investment, legal, Tax, accounting and other advisers as it deemed necessary of the business, operations, assets and financial condition of the Company and its Subsidiaries and, in making its determination to proceed with the transactions that this Agreement contemplates, including the Investor’s sale of the Shares. The Investor and its representatives have relied exclusively on the results of their own independent investigation without reliance on any representation or warranty of the Company other than those contained in Section 5 of this Agreement or any advice from the Company.

 

6.9 No Brokers. Neither the Investor nor any of its Subsidiaries or Affiliates is bound by or subject to any Contract with any Person that will result in the Company being obligated to pay any finder’s fees, brokerage or agent’s commissions or other like payments in connection with the consummation of any of the transactions contemplated under this Agreement.

 

7. Covenants.

 

7.1 Covenants and Agreements of the Investor. The Investor covenants and agrees as follows:

 

(a)    Subject to the provisions of Section 7.1(b) hereafter, until the First Closing Date, the Investor will not submit any conversion notices under the Note or for conversion of the Series B Preferred Shares, unless the dollar volume of the shares of Common Stock traded on the Trading Day on which conversion notice is submitted exceeds $500,000.

 

(b)    Until the First Closing Date, Investor will be permitted to convert an amount, in one or more conversions, not in excess of $400,000, in the aggregate, of Series B Preferred Shares (which amount shall automatically be increased to $500,000 if the First Tranche Payment Date is extended, as provided in this Agreement), which shall be incrementally increased by $100,000 for each $5,000,000 of trading volume on the date of conversion

 

 

(c)    From the First Closing Date until the earlier of (i) the Second Closing Date or the Second Tranche Payment Due Date, the Investor will not convert any of the outstanding balance of the Note.

 

(d)    As long as the proceeds of the Financing are used to pay the First Tranche Payment, the Investor waives any consent that may be required to the Company’s entering into the Financing and also agrees to any amendment to the Note which is required for a pledge, assignment or transfer of any assets or securities of the Company or any of its Subsidiaries and/or any amendment or other action required under the terms of the Indenture to permit any such pledge, assignment or transfer of any assets or securities of the Company or any of its Subsidiaries.

 

(e)    The Investor acknowledges and agrees that it may be a condition to the Company’s securing the Financing that a fully-executed version of this Agreement be provided to the Financing source. The Investor agrees that if so required, the Company shall be permitted to provide a fully-executed version of this Agreement to the Financing source.

 

7.2 No Material Non-Public Information.  Nothing in this Agreement, including, without limitation, the transactions contemplated hereby, constitutes material non-public information.  As of the time of execution of this Agreement, the Investor is not in possession of any material, nonpublic information received from the Company or any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents, that has not been publicly disclosed.  The Company shall not, and shall cause its officers, directors, employees, affiliates and agents, not to, provide the Investor with any material, nonpublic information regarding the Company from and after the time of execution of this Agreement without the express written consent of the Investor. To the extent that the Company delivers any material, non-public information to the Investor after the time of execution of this Agreement without the Investor’s express prior written consent, the Company hereby covenants and agrees that the Investor shall not have any duty of confidentiality to the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect to, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents not to trade on the basis of, such material, non-public information.  Neither the Company, its Subsidiaries nor the Investor shall issue any press releases or any other public statements with respect to the transactions contemplated hereby, without the written prior approval of the other party; provided, however, the Company shall be entitled, without the prior approval of the Investor, to make a press release or other public disclosure with respect to such transactions (i) in substantial conformity with a Current Report on Form 8-K describing the applicable terms of the transactions contemplated thereby in the form required by the Securities Exchange Act of 1934 , as amended and attaching the applicable forms of as exhibits to such filing (including all attachments, the “8-K Filing”) and contemporaneously therewith or (ii) as is required by applicable law and regulations (provided that in the case of clause (i) the Investor shall be consulted by the Company in connection with any such press release or other public disclosure prior to its release).  Without the prior written consent of the Investor (which may be granted or withheld in the Investor’s sole discretion), except as required by applicable law, the Company shall not (and shall cause each of its Subsidiaries and affiliates to not) disclose the name of the Investor in any filing, announcement, release or otherwise. 

 

7.3 Temporary Waiver of Certain Covenants. From the First Closing Date until the Second Closing Date, the Investor will temporarily waive (i) the prohibition against the Company’s issuing any additional securities that would cause a breach or default under the Note, pursuant to Section 4(m) of the Note SPA and (ii) dilutive issuances, pursuant to Section 4(r) of the SPA; in each case, solely with respect to a single offering of securities that are used to repay, in full, the Note. In the event that the Second Closing has not occurred on or before the Second Tranche Payment Due Date, the temporary waiver of such covenants shall terminate and all terms of the Note, including such covenants shall be reinstated.

 

 

7.4 Temporary Non-accrual of Interest; No Payments Due under Note until Maturity Date. From the First Closing Date until the Second Closing Date, no interest will accrue on the outstanding balance of the Note. In the event that the Second Closing has not occurred on or before the Second Tranche Payment Due Date, interest will be deemed to have accrued commencing as of the First Closing Date and shall continue thereafter in accordance with the terms of the Note. In addition, subject to payment of the First Tranche Payment, no additional payments are owed, pursuant to the Note, unless the Second Tranche Payment is not made on or before April 30, 2025, in which case interest will become due and payable again.

 

7.5 Public Announcements. Except as may be required by applicable law, no party shall make any public announcements or otherwise communicate with any news media with respect to this Agreement or any of the transactions that this Agreement contemplates (other than in conformity with the 8-K Filing), without prior consultation with the other parties as to the timing and contents of any announcement or communications; provided, that nothing contained in this Agreement shall prevent any party from promptly making all filings with any Governmental Authority or disclosures with the trading market, if any, on which the Company’s Common Stock is listed, as may, in its judgment, be required in connection with the execution and delivery of this Agreement or the consummation of the transactions that this Agreement contemplates, in each case following a reasonable opportunity to review and comment by the other party.

 

8. Conditions to Closing.

 

8.1 Conditions to the Investor’s Obligations. The obligations of the Investor to consummate the transactions that this Agreement contemplates to be consummated at the Closing is subject to the satisfaction of the following conditions, any of which may be waived in writing by the Investor.

 

(a) No Judgments. No temporary or permanent Judgment shall have been enacted, promulgated, issued, entered, amended or enforced by any Governmental Authority nor shall any proceeding brought by a Governmental Authority seeking any of the foregoing be pending, or any applicable law shall be in effect enjoining or otherwise prohibiting consummation of the transactions to be consummated on the applicable Closing Date.

 

(b) Representations and Warranties and Covenants of the Company. The representations and warranties of the Company set forth in Section 5 shall be true and correct in all material respects (other than such representations qualified by materiality or Company Material Adverse Effect, which shall be true and correct in all respects ), in each case, as of the date of this Agreement and as of the applicable Closing as though made on and as of that date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case the representation and warranty shall be true and correct as of such earlier date).

 

(c) Performance of Obligations of the Company. The Company shall have performed, in all respects, all obligations that this Agreement requires to be performed by it on or prior to the applicable Closing Date.

 

(d) Delivery of a Certificate. The Company shall have delivered a certificate to the Investor, executed by any authorized officer of the Company as to the matters referred to in Sections 8.1(b) and 8.1(c).

 

8.2 Conditions to the Company’s Obligations. The obligation of the Company to consummate the transactions that this Agreement contemplates to be consummated at the applicable Closing is subject to the satisfaction of the following conditions, any of which may be waived in writing by the Company.

 

(a) No Judgments. No temporary or permanent Judgment shall have been enacted, promulgated, issued, entered, amended or enforced by any Governmental Authority nor shall any proceeding brought by

 

 

a Governmental Authority seeking any of the foregoing be pending, or any applicable law shall be in effect enjoining or otherwise prohibiting consummation of the transactions to be consummated on the applicable Closing Date.

 

(b) Representations and Warranties and Covenants of the Investor. The representations and warranties of the Investor set forth in Section 6 (other than Section 6.2 and Section 6.3) shall be true and correct in all material respects (other than such representations qualified by “materiality”, “Investor Material Adverse Effect” or words of similar import set forth therein, which shall be true and correct in all respects) as of the date of this Agreement and as of the applicable Closing as though made on and as of that date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date). The representations and warranties of the Investor set forth in Section 6.2 shall be true and correct in all respects as of the date of this Agreement and as of the First Closing as though made on and as of that date. The representations and warranties of the Investor set forth in Section 6.3 shall be true and correct in all respects as of the date of this Agreement and as of the First Closing or the Second Closing, as applicable, as though made on and as of that date.

 

(c) Performance of the Obligations of the Investor. The Investor shall have performed, in all material respects, all obligations required by this Agreement to be performed by it on or prior to the applicable Closing Date.

 

9. Termination.

 

9.1 This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the First Closing:

 

(a) by written agreement of the Company and the Investor;

 

(b) by either the Company, on the one hand, or the Investor, on the other hand, by giving written notice of the termination to the other party or parties if the First Closing shall not have occurred on or prior to First Tranche Payment Due Date, and the failure of the First Closing to occur is not caused by a breach of this Agreement by the party or parties seeking to terminate this Agreement pursuant to this Section 9.1(b).

 

9.2 In the event of any termination of this Agreement pursuant to this Section 9, this Agreement shall be terminated, and there shall be no further liability or obligation under this Agreement on the part of any party; provided, that nothing contained in this Agreement (including this sentence) will relieve any party from liability for any breach of any of its representations, warranties, covenants or agreements set forth in this Agreement.

 

10. Miscellaneous.

 

10.1 Survival. The covenants made in this Agreement that by their terms are to be performed following the applicable Closing (including the covenants, agreements and restrictions set forth in Section 7 and this Section 10) shall survive the applicable Closing and remain operative and in full force and effect until terminated in accordance with their respective terms. Regardless of any purported general termination of this Agreement, the provisions of Sections 9.2 and 10 shall remain operative and in full force and effect as between the Investor and the Company, unless the Investor and the Company execute a writing that expressly terminates such rights and obligations as between the Investor and the Company.

 

 

10.2 Notices. All notices, requests and other communications to any party hereunder shall be in writing (including in “portable document format” (.pdf) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document) and shall be given:

 

If to the Company:

 

RYVYL Inc.

3131 Camino Del Rio North, Suite 1400

San Diego, CA 92108

Attention: George Oliva  

Email: george@ryvyl.com    

 

with a copy to:

 

Ellenoff Grossman & Schole LLP

1345 Avenue of the Americas, 11^th Floor

New York, New York 10105

Attention: Scott M. Miller

Email: smiller@egsllp.com

 

If to Investor:

 

                                                  

 

                                                  

                                                  

                                                  

Attention:                                  

Email:                                        

 

 

with a copy to:

 

Kelley Drye & Warren LLP

3 World Trade Center

175 Greenwich Street

New York, NY 10007

Attention: Michael A. Adelstein

Email:  madelstein@kelleydrye.com

 

or such other address, email address or facsimile number as a party may hereafter specify for the purpose by notice to the other parties. All notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and the day is a Business Day; provided, that all electronic submissions shall be deemed received only upon confirmation of receipt. Otherwise, any notice, request or communication shall be deemed not to have been received until the next succeeding Business Day.

 

10.3 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, except with respect to any matters specifically relating to the issuance or exchange of the Company’s securities, which shall be governed by the Nevada Revised Statutes, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York, the State of Nevada, or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state or federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or

 

 

in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

10.4 Entire Agreement. This Agreement (together with the Exchange Documents (as defined in the Exchange Agreements) and the Transaction Documents (as defined in the Note SPA)) constitutes the entire agreement among the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, among the parties with respect to the subject matter of this Agreement.

 

10.5 Amendment; Waiver. Any provision of this Agreement may be amended or waived if, but only if, the amendment or waiver is in writing and is signed, in the case of an amendment, by each party, or in the case of a waiver, by the party against whom the waiver is to be effective. No failure or delay by any party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

 

10.6 Counterparts; E-Signatures. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party shall have received a counterpart of this Agreement signed by all of the other parties. Until and unless each party has received a counterpart of this Agreement signed by the other parties, this Agreement shall have no effect, and no party shall have any right or obligation under this Agreement (whether by virtue of any other oral or written agreement or other communication). Except as expressly set forth in this Agreement, no provision of this Agreement is intended to confer any rights, benefits, remedies, obligations, or liabilities hereunder upon any Person other than the parties and their respective successors and assigns.

 

10.7 Interpretation. The section headings contained in this Agreement are for convenience only and shall not in any way affect the meaning or interpretation of this Agreement. Unless the context specifically requires to the contrary, when used in this Agreement:

 

(a) the words “include”, “includes” or “including” mean “including, without limitation”;

 

(b) the word “or” means “one or more of”;

 

(c) the word “party” means each of the Company and the Investor;

 

(d) references to a particular section shall refer to a section or subsection of this Agreement;

 

(e) references to a particular schedule or exhibit are references to the schedules or exhibits of this Agreement;

 

 

(f) references to the singular shall include the plural, and vice versa; and

 

(g) references to a particular gender shall include all genders as well unspecified genders.

 

10.8 Successors and Assigns. Except as otherwise provided in this Agreement, neither this Agreement nor any of the rights or obligations under this Agreement shall be assigned, in whole or in part (except by operation of law pursuant to a merger whose purpose is not to avoid the provisions of this Agreement), by any party without the prior written consent of the other parties. Subject to the foregoing and except as provided in this Agreement, this Agreement shall bind and inure to the benefit of and be enforceable by the parties and their respective permitted successors and assigns.

 

10.9 Severability. If a court of competent jurisdiction or other authority holds any term, provision, covenant or restriction of this Agreement to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions that this Agreement contemplates is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner so that the transactions that this Agreement contemplates be consummated as originally contemplated to the fullest extent possible.

 

10.10 Expenses. The Company shall reimburse Kelley Drye & Warren, LLP (counsel to the Investor) in an aggregate non-accountable amount of $100,000 (the “Legal Fee Amount”) for costs and expenses incurred by it in connection with drafting and negotiation of this Agreement. Each party to this Agreement shall bear its own expenses in connection with the structuring, documentation, negotiation and closing of the transactions contemplated hereby, except as provided in the previous sentence and except that the Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, transfer agent fees, Depository Trust Company (“DTC”) fees relating to or arising out of the transactions contemplated hereby.

 

10.11 Remedies. Each party acknowledges the other parties would be irreparably damaged, and that money damages would not be an adequate remedy, if any of the covenants or agreements in this Agreement are not performed in accordance with its terms, and it is therefore agreed that in addition to and without limiting any other remedy or right it may have, the non-breaching party shall be entitled, without proof of damages, to enforce any provision of this Agreement by a decree of specific performance and shall have the right to an injunction, temporary restraining order or other equitable relief in any court of competent jurisdiction enjoining any such breach. All rights, powers and remedies provided under this Agreement or otherwise available in respect of this Agreement at law or in equity shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by the party.

 

10.12 Withholding. All payments and distributions under this Agreement shall be subject to withholding and backup withholding of tax to the extent required by applicable law, and amounts withheld, if any, shall be treated as received by the Investor. The Company shall notify Investor if it intends to withhold any amounts pursuant to this Section 10.12. The Company agrees that, so long as it receives a valid Internal Revenue Service Form W-9 from the Investor pursuant to Section 4.2(a)(iv) of this Agreement, it shall not withhold U.S. federal taxes from the payment made by the Company to the Investor.

 

 

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and year first above written.

 

 

COMPANY:

 

RYVYL INC.

 

 

By: /s/ Fredi Nisan                           

       Name: Fredi Nisan

       Title: Chief Executive Officer

 

 

INVESTOR:

 

                                                  

 

 

By:                                                   

       Name:                                                   

       Title:                                                     

 

 

 

 

 

[Signature Page to Preferred Stock Repurchase and Note Repayment Agreement] 

Exhibit 10.2

 

 

STOCK PURCHASE AGREEMENT

 

by and between

 

RYVYL, INC.,

 

TRANSACT EUROPE HOLDINGS EOOD,

 

and

 

HAMPSTEAD HOLDINGS LTD

 

Dated as of January 23, 2025

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS AND INTERPRETATION		1
	Section 1.01 Defined Terms	1
	Section 1.02 Interpretation	1
ARTICLE II PURCHASE AND SALE		2
	Section 2.01 Purchase and Sale of Shares	2
	Section 2.02 Escrow Agent	2
ARTICLE III PURCHASE PRICE AND TERMINATION		2
	Section 3.01 Purchase Price; Deposit of Escrow Funds	2
	Section 3.02 If Closing does not occur	3
ARTICLE IV FUNDING; CLOSING		3
	Section 4.01 Funding Deliverables	3
	Section 4.02 Transactions to be Effected at Funding	4
	Section 4.03 Closing	5
	Section 4.04 Closing Deliverables	5
ARTICLE V REPRESENTATIONS AND WARRANTIES OF COMPANY GROUP		5
	Section 5.01 Organization; Standing and Authority; Charter Documents of Company	6
	Section 5.02 Organization; Standing and Authority; Charter Documents; Capitalization of the Seller	6
	Section 5.03 Organization; Standing and Authority; Charter Documents; Capitalization of of Ryvyl EU	7
	Section 5.04 No Conflicts; Approvals; Consents	8
	Section 5.05 SEC Filings; Financial Statements; NASDAQ.	8
	Section 5.06 Undisclosed Liabilities	9
	Section 5.07 Absence of Certain Events and Conditions	9
	Section 5.08 Material Contracts and Permits	10
	Section 5.09 Leased Real Property	11
	Section 5.10 Intellectual Property	11
	Section 5.11 IT Systems; Privacy and Data Security	13
	Section 5.12 Taxes	13
	Section 5.13 Employment Matters	16
	Section 5.14 Legal Actions; Governmental Orders	16

 

 

	Section 5.15 Compliance with Laws	16
	Section 5.16 Insurance	16
	Section 5.17 Material Customers	17
	Section 5.18 Full Disclosure	17
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER		17
	Section 6.01. Organization and Qualification	17
	Section 6.02. Authorization	17
	Section 6.03. Non-Contravention	17
ARTICLE VII COVENANTS		18
	Section 7.01 Conduct of Business Prior to Closing	18
	Section 7.02 Access to Information	18
	Section 7.03 Exclusive Dealings	19
	Section 7.04 Confidentiality	19
	Section 7.05 Non-Competition; Non-Solicitation	19
	Section 7.06 Preservation of Books and Records	20
	Section 7.07 Public Announcements	21
	Section 7.08 Further Assurances	21
	Section 7.09 Supplemental Disclosure	21
	Section 7.10 Best Efforts	22
ARTICLE VIII TAX MATTERS		22
	Section 8.01 Tax Elections, Returns, and Practices	22
	Section 8.02 Termination of Tax Sharing Agreements	22
	Section 8.03 Transfer Taxes	22
	Section 8.04 Filing of Tax Returns	22
	Section 8.05 Tax Indemnification	23
	Section 8.06 Straddle Period	24
	Section 8.07 Contests	24
	Section 8.08 Cooperation	25
	Section 8.09 Tax Refunds	26
	Section 8.10 Disputes	26
	Section 8.11 Survival	26
	Section 8.12 Overlap	26

 

 

ARTICLE IX CONDITIONS TO FUNDING		26
	Section 9.01 Conditions to Obligation of Buyer	26
ARTICLE X CONDITIONS TO CLOSING		28
	Section 10.01 Conditions to Obligations of All Parties	29
	Section 10.02 Conditions to Obligations of Buyer	29
ARTICLE XI INDEMNIFICATION		30
	Section 11.01 Survival of Representations, Warranties, and Covenants	30
	Section 11.02 Indemnification by Seller	31
	Section 11.03 Certain Limitations	31
	Section 11.04 Indemnification Procedures	31
	Section 11.05 Payments	33
	Section 11.06 Treatment of Indemnification Payments	33
	Section 11.07 Effect of Investigation	33
	Section 11.08 Indemnification as Exclusive Remedy	34
	Section 11.09 Tax Claims	34
ARTICLE XII MISCELLANEOUS		34
	Section 12.01 Expenses.	34
	Section 12.02 Notices.	34
	Section 12.03 Severability.	35
	Section 12.04 Entire Agreement.	35
	Section 12.05 Successors and Assigns.	35
	Section 12.06 No Third-Party Beneficiaries.	36
	Section 12.07 Amendment and Waiver.	36
	Section 12.08 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.	36
	Section 12.09 Specific Performance.	36
	Section 12.10 Non-Recourse.	36
	Section 12.11 Counterparts.	37

 

EXHIBITS

 

Exhibit A         Definitions

 

Exhibit B         Ryvyl EU Share Pledge Agreement

 

Exhibit C         Form of Shares Transfer Endorsement

 

Exhibit D         Escrow Agreement

 

 

STOCK PURCHASE AGREEMENT

 

This Stock Purchase Agreement (this “Agreement”) entered into as of January 23, 2025, is by and between RYVYL, Inc., a corporation incorporated in the State of Nevada of the United States with a registered office located at 3131 Camino Del Rio North, Suite 1400, San Diego, California 92108, United States (the “Company”), Transact Europe Holdings EOOD, a sole owner limited liability company, registered with the Bulgarian Commercial Register and Register of Non-profit Legal Entities with the Registry Agency under UIC (ЕИК) 203296816, organized under the laws of the Republic of Bulgaria, with a registered office located at Perform Business Center, Sofia Center, Pozitano Sq 2, 3^rd floor, 1000 Sofia, Bulgaria (the “Seller”) and Hampstead Holdings Ltd, a limited liability company, organized under the laws of the Republic of Bulgaria, registered with the Bulgarian Commercial Register and Register of Non-profit Legal Entities with the Registry Agency under UIC (ЕИК) 208105806, with a registered office located at 19, Maragidik Str., 2^nd floor, office 1, Burgas, Bulgaria (the “Buyer”).

 

RECITALS

 

WHEREAS, the Seller, a wholly owned subsidiary of the Company, owns all of the issued and outstanding shares of capital stock of Ryvyl (EU) EAD (the “Shares”), registered with the Bulgarian Commercial Register and Register of Non-profit Legal Entities with the Registry Agency under UIC (ЕИК) 121554961, a sole owner joint stock company, organized under the laws of the Republic of Bulgaria, with a registered office located at Perform Business Center, Sofia Center, Pozitano Sq 2, 3^rd floor, 1000 Sofia, Bulgaria (the “Ryvyl EU”);

 

WHEREAS, Ryvyl EU is an EU regulated payment and electronic money institution, located in Sofia, Bulgaria, offering innovative payment services with a global footprint (the “Business”); and

 

WHEREAS, the Seller wishes to sell to Buyer, and Buyer wishes to purchase from the Seller, the Shares, subject to the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and of the representations, warranties, covenants, and agreements contained in this Agreement, the parties hereto, intending to be legally bound, agree as follows:

 

ARTICLE I
DEFINITIONS AND INTERPRETATION

 

Section 1.01    Defined Terms. Capitalized terms used in this Agreement have the meanings specified in Exhibit A to this Agreement.

 

Section 1.02    Interpretation. For purposes of this Agreement:

 

(a)    Headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

 

(b)    References to Articles, Sections, and Schedules are to the Articles, Sections, and Schedules in or attached to this Agreement.

 

 

(c)    The Schedules are part of this Agreement and shall have effect as if set out in full in the body of this Agreement. Any reference to this Agreement includes the Schedules.

 

(d)    References to any agreement or other document means such agreement or document as amended or supplemented from time to time, unless specifically stated otherwise.

 

(e)    References to a law or statute means such law or statute as in force as of the date of this Agreement and includes any successor legislation thereto and any regulations promulgated thereunder.

 

(f)    The words “including” and “includes” shall be deemed to be followed by the words “without limitation.” Any words following the terms “including” and “includes” (or similar words, such as “for example”) shall be construed as illustrative and shall not limit the sense of the words or term preceding those terms.

 

(g)    The words “herein,” “hereof,” “hereby,” “hereto,” and “hereunder” refer to this Agreement as a whole.

 

(h)    Unless the context otherwise requires, words in the singular shall include the plural and the plural shall include the singular.

 

(i)    No rule of construction shall apply to the disadvantage of a party because the party was responsible for the preparation of this Agreement or any part of it.

 

ARTICLE II
PURCHASE AND SALE

 

Section 2.01    Purchase and Sale of Shares. On the terms and subject to the conditions set forth in this Agreement, on the Closing Date, the Seller shall sell to Buyer, and Buyer shall purchase from Seller, the Shares, free from any Encumbrances. The title transfer of the Shares shall be considered completed at the Closing.

 

Section 2.02    Escrow Agent. Seller, Ryvyl EU, Buyer and Sichenzia Ross Ference LLP as escrow agent (“Escrow Agent”) shall enter into an escrow agreement, in the form attached at Exhibit D (the “Escrow Agreement”), for the purpose of Escrow Agent serving in connection with this Agreement and the other Transaction Documents, and the transactions contemplated hereby and thereby.

 

ARTICLE III
PURCHASE PRICE AND TERMINATION

 

Section 3.01    Purchase Price. Deposit of Escrow Funds.

 

 

(a)    Purchase Price. The aggregate consideration for the purchase of the Shares to be paid by Buyer shall be USD Fifteen Million Dollars ($15,000,000) (the “Purchase Price”).

 

(b)    Deposit of Escrow Funds. Within three (3) Business Days following the execution of this Agreement, Buyer shall deposit the Purchase Price by wire transfer of immediately available funds into an escrow account (“Escrow Funds”) pursuant to the Escrow Agreement, which shall be delivered in accordance with Section 4.02.

 

Section 3.02    If Closing does not occur.

 

(a)     If Buyer determines, on or after the Closing Preparation Period, in its sole and absolute discretion, that, other than as a result of a breach of this Agreement by any Company Group member, Closing will not occur, whether because the Regulatory Approvals have not been obtained or for any other reason, it shall notify the Seller Group and, within five Business Days of receipt of such notice, the Seller Group jointly and severally agree to repay to Buyer US$16.5 million by wire transfer of immediately available funds.

 

(b)    If, on or after the Closing Preparation Period, Closing does not occur as a result of a breach of this Agreement by any Company Group member, Buyer shall, using commercially reasonable procedures, determine the fair value of the Shares (in US$ dollars) (the “Fair Value Amount”) and notify the Seller Group of such amount. Within five Business Days of receipt of such notice, the Seller Group jointly and severally agree to pay to Buyer the stated Fair Value Amount in such notice by wire transfer of immediately available funds.

 

ARTICLE IV
FUNDING; CLOSING

 

Section 4.01    Funding Deliverables. Prior to the Funding Date, the Company Group shall deliver to Buyer or the Escrow Agent as required hereunder, unless any such deliverable is waived by Buyer:

 

(a)    If, prior to the Funding Date,                             executes documentation obligating                       , upon receipt of USD13,000,000 (the “                      13m Payment”), to the repurchase of all shares of Company’s Series B Preferred Stock held by                        and the reduction of the outstanding balance of the Note to US$4,000,000 (or $4,050,000 in the event of a payment extension in the sole discretion of the Company) (“                       Share Repurchase and Paydown Agreement”), then Company shall deliver to Buyer copies of (x) all such executed documentation underlying the                        Share Repurchase and Paydown Agreement, (y) the fully executed waiver (in a form acceptable to the Buyer) whereby                       , Wilmington Savings Fund Society, FSB, as trustee of the Indenture dated November 2, 2021, as supplemented on November 2, 2021 (“                       Indenture”), and Company agree (A) to waive all provisions of the                       Indenture necessary to enable all transactions contemplated hereunder, including Section 801 and Section 802 thereunder, and (B) that Buyer shall not become successor, in part or whole, to the Indenture; and (z) written confirmation (in a

 

 

form acceptable to the Buyer) from                        addressed to both the Company and the Buyer that the                       13m Payment will reduce the outstanding amount due under the Note, inclusive of interest and any fees, to US$4,000,000 (or $4,050,000 in the event of a payment extension in the sole discretion of the Company);

 

(b)     If, prior to the Funding Date,                        executes documentation obligating                       , upon receipt of US$17,000,000 (the “                       17m Payment”), to the repurchase of all shares of Company’s Series B Preferred Stock held by                       , the full repayment of all outstanding amounts due under the Note and the immediate discharge of the                        Indenture (“                       Share Repurchase and Payoff Agreement”), then Company Shall deliver to Buyer copies of (x) all such executed documentation underlying the                        Share Repurchase and Payoff Agreement and (y) written confirmation (in a form acceptable to the Buyer) from                        addressed to both the Company and the Buyer that the                       17m Payment will fully repay all outstanding amounts due under the Note, inclusive of interest and any fees, to zero.

 

(c)    Company Group Disclosure Schedules;

 

(d)    each Transaction Document executed by the companies in the Company Group which are a party thereto;

 

(e)    all other agreements, documents, instruments, or certificates required to be delivered by the Company Group at or prior to the Funding Date pursuant to Section 9.01 of this Agreement;

 

(f)    a capacity opinion of Company’s legal counsel addressed to Buyer, dated as of the Funding Date, in the form and substance acceptable to Buyer, in respect of the Company’s entry into the Transaction Documents to which it is a party;

 

(g)    capacity opinions of Seller’s legal counsel addressed to Buyer, dated as of the Funding Date, in the form and substance acceptable to Buyer, in respect of Seller’s entry into the Transaction Documents to which it is a party and ensuring Perfection of the Pledge in relation to the Ryvyl EU Share Pledge Agreement, including that the share pledge endorsement[/s] required under the Ryvyl EU Share Pledge Agreement [is/are] duly signed by the authorized signatory of the Seller;

 

(h)    a capacity opinion of Ryvyl EU’s Bulgarian legal counsel addressed to Buyer, dated as of the Funding Date, in the form and substance acceptable to Buyer, in respect of the Ryvyl EU’s entry into the Transaction Documents to which it is a party and confirming that the Shareholders Book of Ryvyl EU is the only copy available; and

 

(i)    such other documents as Buyer may reasonably request to give effect to this Agreement and the transactions contemplated hereby.

 

Section 4.02    Transactions to be Effected at Funding.

 

(a)    Upon the satisfaction of all conditions under this Agreement, including those specified under ARTICLE IX, for funding by Buyer, or Buyer has waived any of such conditions, Buyer shall cause the Escrow Funds to be delivered in accordance with

 

 

either subsection (i) or (ii) below of this Section 4.02(a) within five (5) Business Days following such time (the “Funding Date”):

 

(i)    If the                     Share Repurchase and Paydown Agreement is executed, (i) US$13,000,000 to ___  by wire transfer of immediately available funds to an account designated in writing by                   and (ii) US$2,000,000 (less any applicable payments and other expenses to be deducted from the Purchase Price, including, without limitation, US$50,000 in legal costs) to Company by wire transfer of immediately available funds to an account designated in writing by Company; or

 

(ii)    If the                    Share Repurchase and Payoff Agreement is executed, the Purchase Price to ___ by wire transfer of immediately available funds to an account designated in writing by                   .

 

(b)    Within ten (10) Business Days after the payment pursuant to Section 4.02(a)(ii), Company shall deliver to Buyer copies of (i) a payoff letter issued by                    as to the repayment and full satisfaction of the Note and (ii) a discharge letter issued by Wilmington Savings Fund Society, FSB, as trustee of the                    Indenture confirming the satisfaction and discharge of the                    Indenture.

 

Section 4.03    Closing. (a) The Closing is conditioned upon the fulfillment and receipt of all necessary Regulatory Approvals by the Buyer and (b) shall take place on the Closing Date, or on such later date or at such other place as Buyer may determine in its sole and absolute discretion. On the end date of the Closing Preparation Period, Buyer shall cause the Escrow Agent to release the remaining Escrowed Property (as defined in the Escrow Agreement) to Buyer, and Closing shall take place by signing on behalf and at the account of the Seller of the Shares Transfer Endorsement[/s] as defined below for unconditional and final transfer of the Shares from Seller to Buyer, which shall be attached to the Interim Shares Certificate[/s] (in Bulgarian: Временно[/и] удостоверение[/я]) as defined below, evidencing the Shares, and registration on behalf and at the account of Ryvyl EU of the transfer of the Shares from Seller to Buyer in the Shareholders Book of Ryvyl EU as defined below, as well as by submission of the necessary registration applications, along with the necessary Transaction Formalities, to the Bulgarian Commercial Register and Register of Non-profit Legal Entities with the Registry Agency and completing all other formalities for the transfer of the Shares and registration thereof as required by applicable Bulgarian law.

 

Section 4.04    Closing Deliverables. At the Closing, the Company Group shall deliver to Buyer the following, as applicable:

 

(a)    the certificate of the Secretary (or equivalent officer) of Company required by Section 10.02(e);

 

(b)    good standing certificates required by Section 10.02(f);

 

(c)    the certificate of an officer of Company required by Section 10.02(g); and

 

(d)    such other documents as Buyer may reasonably request to give effect to this Agreement.

 

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF COMPANY GROUP

 

 

Except as disclosed in the documents filed by the Company with the SEC, since December 31, 2022 (the “Company SEC Documents”) at least five (5) Business Days prior to the date hereof or as set forth in the correspondingly numbered Sections of the Company Group Disclosure Schedules, each member of the Company Group, jointly and severally, represents and warrants to Buyer that the statements contained in this ARTICLE V are true and correct as of the date hereof and, subject to Section 7.09, on the Funding Date and the Closing Date.

 

Section 5.01    Organization; Standing and Authority; Charter Documents of Company. Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has full corporate power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its business as currently conducted. Company has full corporate power and authority to enter into this Agreement and the other Transaction Documents to which it is a party, to carry out its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Company of this Agreement and the other Transaction Documents, the performance by Company of its obligations hereunder and thereunder, and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Company and no other corporate proceedings on the part Company are necessary to authorize the execution and delivery of this Agreement and the other Transaction Documents and the other transactions contemplated hereby and thereby. This Agreement has been duly executed and delivered by Company, and (assuming due authorization, execution and delivery by Buyer) constitutes a legal, valid and binding obligation of Company enforceable against Company in accordance with its terms except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law. When the other Transaction Documents to which Company is or will be a party have been duly executed and delivered by Company (assuming due authorization, execution and delivery by Buyer), such Transaction Documents will constitute the legal and binding obligation of Company enforceable against it in accordance with their terms. The copies of the amended and restated articles of incorporation and amended and restated bylaws of Company as most recently filed with the Company SEC Documents are true, correct, and complete copies of such documents as in effect as of the date of this Agreement.

 

Section 5.02    Organization; Standing and Authority; Charter Documents; Capitalization of the Seller.

 

(a)    The Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the Republic of Bulgaria, and has full corporate power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its business as it has been and is currently conducted. The Seller has full corporate power and authority to enter into the Transaction Documents to which it is a party, to carry out its obligations thereunder, and to consummate the

 

 

transactions contemplated thereby. Schedule 5.02 of the Company Group Disclosure Schedules sets forth each jurisdiction in which the Seller is licensed or qualified to do business, and the Seller is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its business as currently conducted makes such licensing or qualification necessary. All corporate actions taken by the Seller in connection with this Agreement and the other Transaction Documents to which it is a party have been duly authorized. The copies of the Seller’s good standing certificate and articles of association provided to Buyer prior to the date of this Agreement are true, correct, and complete copies of such documents as in effect as of the date of this Agreement.

 

(b)    The authorized capital stock of the Seller consists of 4,044 shares, each of them with a value of BGN 1 (one), all of which have been duly authorized, are validly issued, fully paid and non-assessable, and are owned of record and beneficially by Company, free and clear of all Encumbrances. None of the shares were issued in violation of any agreement, arrangement or commitment to which Company or the Seller is a party or is subject to or in violation of any preemptive or similar rights of any Person.

 

(c)    There are no outstanding or authorized options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any kind relating to the capital stock of the Seller or obligating the Company or the Seller to issue or sell any shares of capital stock of, or any other interest in, the Seller. The Seller does not have outstanding or authorized any stock appreciation, phantom stock, profit participation or similar rights. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Shares.

 

Section 5.03    Organization; Standing and Authority; Charter Documents; Capitalization of Ryvyl EU.

 

(a)    Ryvyl EU is a joint stock company duly organized, validly existing and in good standing under the laws of the Republic of Bulgaria, and has full corporate power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on the Business as it has been and is currently conducted. Ryvyl EU has full corporate power and authority to enter into the Transaction Documents to which it is a party, to carry out its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. Schedule 5.03 of the Company Group Disclosure Schedules sets forth each jurisdiction in which Ryvyl EU is licensed or qualified to do business, and Ryvyl EU is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its business as currently conducted makes such licensing or qualification necessary. All corporate actions taken by Ryvyl EU in connection with this Agreement and the other Transaction Documents to which it is a party have been duly authorized. The copies of Ryvyl EU’s good standing certificate and articles of association provided to Buyer prior to the date of this Agreement are true, correct, and complete copies of such documents as in effect as of the date of this Agreement.

 

 

(b)    The authorized capital stock of Ryvyl EU consists of 500 ordinary materialized registered shares with voting rights, with par value of BGN 21,471.90, which constitute the Shares, all of which have been duly authorized, are validly issued, fully paid and non-assessable, and are owned of record and beneficially by the Seller, free and clear of all Encumbrances. Upon consummation of the transactions contemplated by this Agreement, Buyer shall own all of the Shares, free and clear of all Encumbrances. None of the shares from the capital of Ryvyl EU were issued in violation of any agreement, arrangement or commitment to which the Seller or Ryvyl EU is a party or is subject to or in violation of any preemptive or similar rights of any Person.

 

(c)    There are no outstanding or authorized options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any kind relating to the capital stock of Ryvyl EU or obligating Seller or Ryvyl EU to issue or sell any shares of capital stock of, or any other interest in, Ryvyl EU. Ryvyl EU does not have outstanding or authorized any stock appreciation, phantom stock, profit participation or similar rights. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the shares from the capital of Ryvyl EU.

 

(d)    The Shareholders Book of Ryvyl EU as defined below is the only copy available and that it will be the only copy thereof until this Agreement is in force.

 

Section 5.04    No Conflicts; Approvals; Consents. The execution, delivery and performance by each member of the Company Group of this Agreement and the other Transaction Documents, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) conflict with or result in a violation or breach of, or default under, any provision of the certificate of incorporation, by-laws, or other organizational documents of any member of the Company Group; (b) subject to the Regulatory Approvals, conflict with or result in a violation or breach of any provision of any Law or any Governmental Order applicable to any member of the Company Group, the Business, or the Shares; (c) require the consent, notice or other action by any Person or (d) conflict with, result in a violation or breach of, constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default under, result in the acceleration of or create in any party the right to accelerate, terminate, modify or cancel (i) any Contract to which any member of the Company Group is a party or by which any member of the Company Group is bound, or to which any of their respective properties and assets are subject, or (ii) any Permit affecting the Business or the properties, assets or business of the Seller or Ryvyl EU; or (d) result in the creation or imposition of any Encumbrance, other than Permitted Encumbrances, over any properties or assets of the Seller or Ryvyl EU. No consent, approval, Permit, Governmental Order, or declaration or filing with or notice to any Governmental Authority is required by or with respect to any member of the Company Group in connection with the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, except for the Regulatory Approvals and as set forth in Schedule 5.04(c) of the Company Group Disclosure Schedules. The transfer of the Shares by Seller to Buyer does not require the approval of Company’s stockholders pursuant to applicable Law or the rules and regulations of NASDAQ, and Company has received written advice from its outside counsel and accountants that such approval is not required.

 

Section 5.05    SEC Filings; Financial Statements; NASDAQ.

 

 

(a)    Company has timely filed with or furnished to, as applicable, the SEC all Company SEC Documents required to be filed or furnished by it with the SEC. True, correct, and complete copies of all Company SEC Documents are publicly available on EDGAR. As of their respective filing dates or, if amended or superseded by a subsequent filing prior to the date hereof, as of the date of the last such amendment or superseding filing (and, in the case of registration statements and proxy statements, on the dates of effectiveness and the dates of the relevant meetings, respectively), each of the Company SEC Documents complied as to form in all material respects with the applicable requirements of the Securities Act, the Exchange Act, and the Sarbanes-Oxley Act, and the rules and regulations of the SEC thereunder applicable to such Company SEC Documents. None of the Company SEC Documents, including any financial statements, schedules, or exhibits included or incorporated by reference therein at the time they were filed (or, if amended or superseded by a subsequent filing prior to the date hereof, as of the date of the last such amendment or superseding filing), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. To the Knowledge of Company, none of the Company SEC Documents is the subject of ongoing SEC review or outstanding SEC investigation and there are no outstanding or unresolved comments received from the SEC with respect to any of the Company SEC Documents. None of Company’s Subsidiaries is required to file or furnish any forms, reports, or other documents with the SEC and neither Company nor any of its Subsidiaries is required to file or furnish any forms, reports, or other documents with any securities regulation (or similar) regime of a non-United States Governmental Authority.

 

(b)    Each of the consolidated financial statements (including, in each case, any notes and schedules thereto) contained in or incorporated by reference into the Company SEC Documents (“Company Financial Statements”): (i) complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto as of their respective dates; (ii) was prepared in accordance with GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto and, in the case of unaudited interim financial statements, as may be permitted by the SEC for Quarterly Reports on Form 10-Q or other rules and regulations of the SEC); and (iii) fairly presented in all material respects the consolidated financial position and the results of operations and cash flows of Company and its consolidated Subsidiaries as of the respective dates of and for the periods referred to in such financial statements, subject, in the case of unaudited interim financial statements, to normal and year-end audit adjustments as permitted by the applicable rules and regulations of the SEC (but only if the effect of such adjustments would not, individually or in the aggregate, be material).

 

(c)    Company is in compliance in all material respects with all of the applicable listing and corporate governance rules of NASDAQ.

 

Section 5.06    Undisclosed Liabilities. No member of the Company Group has any Indebtedness, obligations or liabilities of any kind other than those (a) set forth on Schedule 5.06 of the Company Disclosure Schedules, (b) fully reflected in, reserved against or otherwise described in the Company Financial Statements, or (c) incurred in the ordinary course of business and not required to be reflected in the Company Financial Statements.

 

Section 5.07    Absence of Certain Events and Conditions. Since the unaudited balance sheet date of September 30, 2024 (the “Balance Sheet Date”), and other than in the ordinary course of business consistent with past practice, there has not been, with respect to the Business, the Shares, or the Seller or Ryvyl EU, any:

 

 

(a)    event, occurrence or development that has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

 

(b)    amendment of the charter, by-laws, or other organizational documents of the Seller or Ryvyl EU;

 

(c)    change in the Seller’s or Ryvyl EU’s capital structure, including any issuance, sale or other disposition of the Seller’s or Ryvyl EU’s capital stock, or grant of any options, warrants or other rights to purchase or otherwise obtain any of its capital stock, or split, combination or reclassification of any shares of its capital stock;

 

(d)    declaration or payment of dividends or other distributions from the Seller or Ryvyl EU, other than in the ordinary course of business consistent with past practice;

 

(e)    issuance, incurrence, assumption or guaranty of Indebtedness;

 

(f)    commitment for capital expenditures in excess of US$250,000;

 

(g)    mortgage, pledge or otherwise encumber any of the Shares or the assets of the Seller or Ryvyl EU, or acquisition of any assets of the Business, or sale, assignment or other transfer or disposition of any assets of the Business, except for Permitted Encumbrances or in the ordinary course of business;

 

(h)    change to the methods, principles or elections relating to accounting for the Business or Taxes for the Seller or Ryvyl EU;

 

(i)    change to employee compensation or status, including increasing employee compensation, implementing new bonus, benefit or other incentive plans, entering into new (or materially modifying existing) severance, pension, or senior level employment agreements, or entering into new (or materially modifying existing) collective bargaining agreements;

 

(j)    entry into any Contract that would constitute a Material Contract, or any material modification to or termination or cancellation of a Material Contract;

 

(k)    transfer or assignment of or grant of any license or sublicense under or with respect to any Intellectual Property or Intellectual Property Agreements; and

 

(l)    damage, destruction or loss, or any interruption in use, of any of the assets of the Seller or Ryvyl EU, whether or not covered by insurance.

 

Section 5.08    Material Contracts and Permits.

 

 

 

(a)    Schedule 5.08(a) of the Company Group Disclosure Schedules lists each of the Material Contracts in effect on the date of this Agreement to which either the Seller or Ryvyl EU is a party or any of their assets are bound. Each Material Contract is valid and binding the Seller or Ryvyl EU, as the case may be, in accordance with its terms and is in full force and effect. Neither the Seller nor Ryvyl EU is in breach of or default under, or has provided or received any notice of any intention to terminate, any such Material Contract. No event or circumstance has occurred that, with notice or lapse of time or both, would constitute an event of default under any Material Contract or result in a termination thereof or would cause or permit the acceleration or other changes of any right or obligation or the loss of any benefit thereunder. Seller and Ryvyl EU each has made available to Buyer complete and correct copies of each Material Contract.

 

(b)    Schedule 5.08(b) of the Company Group Disclosure Schedules lists all Permits required for the operation of the Business as presently conducted by the Company Group (collectively, “Material Permits”). The Company Group currently has all such Material Permits, each of which is valid and in full force and effect. No member of the Company Group has received written notice of any default or violation which remains uncured under any Material Permit. All Material Permits are transferable to Buyer without notice or consent from any Person or Governmental Authority.

 

Section 5.09    Leased Real Property. With respect to Leased Real Property, Seller has delivered or made available to Buyer complete and correct copies of each lease to which the Seller and Ryvyl EU is a party. The Seller and Ryvyl EU are not sublessors under any sublease or other instrument granting to any other Person any right to the possession, lease, occupancy or enjoyment of any Leased Real Property. The use and operation of the Leased Real Property in the conduct of the Seller’s or Ryvyl EU’s Business does not violate in any material respect any Law, covenant, condition, restriction, easement, license, permit, or agreement.

 

Section 5.10    Intellectual Property.

 

(a)    Section 5.10(a) of the Company Group Disclosure Schedules contains a true and complete list, as of the date hereof, of all: (i) Ryvyl EU IP that is the subject of any issuance, registration, certificate, application, or other filing by, to or with any Governmental Authority or authorized private registrar, including patents, patent applications, trademark registrations and pending applications for registration, copyright registrations and pending applications for registration, and internet domain name registrations (collectively, the “Ryvyl EU Registered IP”), specifying as to each, as applicable: the title, mark, or design; the record owner and inventor(s), if any; the jurisdiction by or in which it has been issued, registered, or filed; the patent, registration, or application serial number; the issue, registration, or filing date; and the current status; (ii) material unregistered trademarks; and (iii) all proprietary Software of Ryvyl EU.

 

(b)    Ryvyl EU is the sole and exclusive owner of all right, title, and interest in and to Ryvyl EU Registered IP, and has the valid and enforceable right to use all other Intellectual Property used in or necessary for the conduct of the Business as currently

 

 

conducted by Ryvyl EU (“Ryvyl EU IP”), in each case, free and clear of all Encumbrances other than Permitted Encumbrances, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Ryvyl EU has entered into binding, valid and enforceable, written Contracts with each current and former employee and independent contractor whereby such employee or independent contractor (i) acknowledges Ryvyl EU’s exclusive ownership of all Intellectual Property invented, created, or developed by such employee or independent contractor within the scope of his or her employment or engagement with Ryvyl EU; (ii) grants to Ryvyl EU a present, irrevocable assignment of any ownership interest such employee or independent contractor may have in or to such Intellectual Property; and (iii) irrevocably waives any right or interest, including any moral rights, regarding any such Intellectual Property, to the extent permitted by applicable Law. Seller has provided Buyer true and complete copies of all such Contracts. All assignments and other instruments necessary to establish, record, and perfect Ryvyl EU’s ownership interest in the Ryvyl EU Registered IP have been validly executed, delivered, and filed with the relevant Governmental Authority and authorized registrars.

 

(c)    The Ryvyl EU’s rights in Ryvyl EU IP are valid, subsisting, and enforceable, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Ryvyl EU has taken reasonable steps to maintain Ryvyl EU IP and to protect and preserve the confidentiality of all trade secrets included in Ryvyl EU IP, except where the failure to take such actions would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(d)    Except as would not be reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, to the Knowledge of Seller Group: (i) the conduct of the Business and the business of Ryvyl EU has not infringed, misappropriated, or otherwise violated, and is not infringing, misappropriating, or otherwise violating, any Intellectual Property of any other Person; and (ii) no third party is infringing upon, violating, or misappropriating any Ryvyl EU IP.

 

(e)    There are no Legal Actions pending or, to the Knowledge of Seller, threatened: (i) alleging any infringement, misappropriation, or violation by Ryvyl EU of the Intellectual Property of any Person; or (ii) challenging the validity, enforceability, or ownership of any Ryvyl EU IP or the Ryvyl EU’s rights with respect to any Ryvyl EU IP, in each case except for such Legal Actions that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Ryvyl EU is not subject to any outstanding Governmental Order that restricts or impairs the use of any Ryvyl EU IP, except where compliance with such Governmental Order would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(f)    Section 5.10(f) of the Company Group Disclosure Schedules contains a correct, current and complete list of all Ryvyl EU IP Agreements: (A) by Ryvyl EU to another Person or (B) by another Person to Ryvyl EU, in either case except any (1) Contract under which any Intellectual Property or technology is licensed on a non-exclusive basis to a contractor or vendor of Ryvyl EU for the benefit of and to provide services to Ryvyl EU; (2) non-exclusive license granted by Ryvyl EU to its customers in the ordinary course;

 

 

(3) off-the-shelf software licensed pursuant to a click-wrap or shrink wrap Contract or other unmodified standard contract form; or (4) Contract containing a non-exclusive license that is merely incidental to the transaction contemplated in such Contract, the commercial purpose of which is primarily for something other than such license, such as an equipment lease or distribution or marketing Contract that includes an incidental license to use the trademarks of either party thereto for the purposes of advertising or marketing.

 

Section 5.11    IT Systems; Privacy and Data Security.

 

(a)    In the past twelve (12) months, there has been no malfunction, failure, continued substandard performance, denial-of-service, or other cyber incident, including any cyberattack, or other impairment of Seller IT Systems or Ryvyl EU IT Systems, in each case except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The Seller and Ryvyl EU have taken all reasonable best effort steps to safeguard the confidentiality, availability, security, and integrity of Seller IT Systems and Ryvyl EU IT Systems respectively, including implementing and maintaining appropriate backup, disaster recovery, and software and hardware support arrangements, in each case except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(b)    The Seller and Ryvyl EU have complied with all applicable Laws and all internal or publicly posted policies, notices, and statements concerning the collection, use, processing, storage, transfer, and security of personal information in the conduct of the their businesses, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. In the past twelve (12) months, neither Seller nor Ryvyl EU have: (i) experienced any actual, alleged, or suspected data breach or other security incident involving personal information in their possession or control; or (ii) been subject to or received any notice of any audit, investigation, complaint, or other Legal Action by any Governmental Authority or other Person concerning the its collection, use, processing, storage, transfer, or protection of personal information or actual, alleged, or suspected violation of any applicable Law concerning privacy, data security, or data breach notification, and to the Knowledge of Seller Group, there are no facts or circumstances that could reasonably be expected to give rise to any such Legal Action, in each case except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

Section 5.12     Taxes. Except as set forth in Schedule 5.12 of the Company Group Disclosure Schedules:

 

(a)    All income and other material Tax Returns required to be filed on or before the Funding Date by the Seller and Ryvyl EU, all income Tax Returns required to be filed by any Affiliated Group for a taxable period during which the Seller or Ryvyl EU was a member of such Affiliated Group, and all income and other material Tax Returns required to be filed by Ryvyl EU or its Affiliates with respect to the Business, have been duly and timely filed with the appropriate taxing authority in all jurisdictions in which such Tax Returns are required to be filed, and all such Tax Returns are, or will be, true, complete and correct in all material respects. All Taxes due and payable by the Seller or Ryvyl EU,

 

 

all income Taxes due and payable by any Affiliated Group for each taxable period during which the Seller or Ryvyl EU was a member of such Affiliated Group, and all Taxes due and payable by Ryvyl EU or its Affiliates with respect to the Business, in each case whether or not shown on any Tax Return, have been, or will be, fully and timely paid when due.

 

(b)    Ryvyl EU has, and with respect to the Business, complied in all material respects with all Laws relating to the payment and withholding of Taxes (including to any employee, independent contractor, creditor, customer, or shareholder) and have duly and timely withheld and paid over to the appropriate taxing authorities all material amounts required to be so withheld and paid over under all Laws.

 

(c)    No claim has been made or asserted by any taxing authority in any jurisdiction where the Seller or Ryvyl EU is or may be subject to taxation by that jurisdiction.

 

(d)    No extensions or waivers of statutes of limitations have been given or requested with respect to any Taxes of the Seller or Ryvyl EU, any income Taxes of any Affiliated Group for a taxable period during which the Seller was a member of such Affiliated Group, or any income Taxes or other material Taxes of the Seller and relating to the Business.

 

(e)    The Company Group has made available to the Buyer complete copies of all U.S. federal, state and local, as well as all non-U.S. income Tax Returns, and all other material Tax Returns (including property, sales and use, profits, and VAT) filed by or with respect to the Seller, the Company or Ryvyl EU for all tax periods ending after December 31, 2021, and all examination reports and statements of deficiencies assessed against, or agreed to by or with respect to the Seller, the Company or Ryvyl EU, for all tax periods ending after December 31, 2021.

 

(f)    Schedule 5.12(f) of the Company Group Disclosure Schedules sets forth: (i) the taxable years of the Seller as to which the applicable statutes of limitations on the assessment and collection of Taxes have not expired; (ii) those taxable years for which examinations by the taxing authorities have been completed; and (iii) those taxable years for which examinations by taxing authorities are presently being conducted.

 

(g)    Schedule 5.12(g) of the Company Group Disclosure Schedules sets forth: (i) all jurisdictions in which Ryvyl EU with respect to the Business, is subject to Tax, are engaged in business or have a permanent establishment; (ii) the types of Taxes paid and the types of Tax Returns filed by Ryvyl EU with respect to the Business, in any jurisdiction; (iii) all of the jurisdictions that impose such Taxes and/or the duty to file such Tax Returns; (iv) any gain recognition agreement pursuant to Treasury Regulations Section 1.367(a)-8 entered into by Ryvyl EU; (v) any transfer of an intangible asset which would be subject to the rules of Section 367(d) of the Code; and (vi) all powers of attorney with respect to any Tax matter related to Ryvyl EU that would, in any manner, bind, obligate, or restrict Buyer after the Closing.

 

 

(h)     The Seller is not a “controlled foreign corporation” as defined in Section 957(a) of the Code, has never been a “passive foreign investment company” as defined in Section 1297 of the Code, is not a “surrogate foreign corporation” as defined in Section 7874(a)(2)(B) of the Code, and is not subject to U.S. federal income Tax under any provision of the Code.

 

(i)    All material deficiencies asserted or assessments made as a result of any examinations by any taxing authority of the Tax Returns of or related to Ryvyl EU, with respect to its Business, have been fully paid.

 

(j)    There are no audits or other actions or investigations by any taxing authority of any Tax Returns in progress related to Ryvyl EU with respect to the Business, nor has Ryvyl EU received any notice from any taxing authority that it intends to conduct any such an audit, action, or investigation of or related to Ryvyl EU or its Business.

 

(k)    There are no Encumbrances for Taxes upon any assets of the Seller or Ryvyl EU, except for Encumbrances arising as a matter of Law relating to current Taxes not yet due.

 

(l)    As of the Closing Date, the Seller and Ryvyl EU are not parties to, or bound by, any Tax indemnity, Tax sharing or Tax allocation agreement.

 

(m)    No private letter rulings, technical advice memoranda or similar agreement or rulings have been requested, entered into or issued by any taxing authority with respect to Ryvyl EU and the Seller.

 

(n)    The Seller has not been a member of an affiliated, combined, consolidated or unitary Tax group for Tax purposes. The Seller has no liability for Taxes of any Person (other than the Seller) under Treasury Regulations Section 1.1502-6 (or any corresponding provision of state, local or foreign Tax Law), as transferee or successor, by contract or otherwise.

 

(o)    The Seller will not be required to include any item of income in, or exclude any item or deduction from, taxable income for any taxable period or portion thereof ending after the Closing Date as a result of:

 

(i)    any change in a method of accounting under Section 481 of the Code (or any comparable provision of state, local or non-US Tax Laws), or use of an improper method of accounting, for a taxable period ending on or prior to the Closing Date;

 

(ii)    an installment sale or open transaction occurring on or prior to the Closing Date;

 

(iii)    a prepaid amount received on or before the Closing Date;

 

(iv)    any closing agreement under Section 7121 of the Code, or similar provision of state, local or non-US Tax Law; or

 

 

(v)    any income under Section 965(a) of the Code, including as a result of any election under Section 965(h) of the Code with respect thereto.

 

(p)    The Seller has not been a “distributing corporation” or a “controlled corporation” in connection with a distribution described in Section 355 of the Code (or any similar provision of state, local or non-US Tax law).

 

(q)    The Seller is not, and has not been, a party to, or a promoter of, a “reportable transaction” within the meaning of Section 6707A(c)(1) of the Code and Treasury Regulations Section 1.6011-4(b).

 

(r)    There is currently no limitation on the utilization of net operating losses, capital losses, built-in losses, tax credits or similar items of the Seller under Sections 269, 382, 383, 384 or 1502 of the Code and the Treasury Regulations thereunder (and comparable provisions of state, local or non-U.S. Law).

 

Section 5.13    Employment Matters. Company has made available to Buyer a list of all employees of the Seller and Ryvyl EU as of the date hereof (including any employee who is on a leave of absence of any nature, paid or unpaid), which includes for each such individual the following: (i) name; (ii) title or position (including whether full or part time); (iii) hire date; (iv) current annual base compensation rate; (v) commission, bonus or other incentive-based compensation; and (vi) a description of the fringe benefits provided.

 

Section 5.14    Legal Actions; Governmental Orders. There are no Legal Actions pending or, to the Knowledge of the Seller Group, threatened: (i) against or by the Seller or Ryvyl EU affecting any of their properties or assets (or by or against Company or relating to the Seller or the Shares) or (ii) against or by any member of the Company Group that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. To the Knowledge of the Seller Group, no event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Legal Action. There are no outstanding Governmental Orders and no unsatisfied judgments, penalties or awards against or affecting the Shares, the Seller, Ryvyl EU or any of their properties or assets. No event has occurred or circumstance exists at the Seller that would constitute or result in (with or without notice or lapse of time) a violation of any such Governmental Order.

 

Section 5.15    Compliance with Laws. The Company Group members are each in material compliance with all Laws applicable to the Business and the Shares and none of them has received any written notice of, or been charged with, the material violation of any Laws applicable to the Business or the Shares nor is either under investigation with respect to a material violation of any Laws applicable to the Business or the Shares. None of the Company Group members (with respect to the Business) has committed any act or made any payment in violation of, or that requires disclosure under, any Anticorruption Law.

 

Section 5.16    Insurance. The Seller and Ryvyl EU maintain insurance policies covering the Business and their assets, which are in full force and effect for such coverages and in such amounts as are sufficient for all requirements of Law and all agreements of the Seller and Ryvyl EU. Schedule 5.16 of the Company Group Disclosure Schedules contains a list of all such

 

 

insurance policies, including with respect to each such policy, the policy name, policy number, carrier, term, type and amount of coverage, annual premium, and claim history.

 

Section 5.17    Material Customers. Schedule 5.17 of the Company Group Disclosure Schedules sets forth (a) each customer who has paid aggregate consideration to the Seller or Ryvyl EU for services rendered in an amount greater than or equal to USD250,000 for each of the two (2) most recent fiscal years (collectively, the “Material Customers”); and (b) the amount of consideration paid by each Material Customer during such periods. To the Knowledge of Seller Group, none of the Company Group members has received any notice from any Material Customer that any of the Seller’s or Ryvyl EU’s Material Customers intends to terminate or materially reduce or change the pricing or other terms of its business with the Seller or Ryvyl EU or has ceased, or intends to cease after the Closing, to use the Seller’s or Ryvyl EU’s services or to otherwise terminate or materially reduce its relationship with the Seller or Ryvyl EU, respectively. Since the Balance Sheet Date, no Material Customer has terminated its relationship with the Seller or Ryvyl EU or materially reduced or changed the pricing or other terms of its business with the Seller or Ryvyl EU, respectively.

 

Section 5.18    Full Disclosure. No representation or warranty by any member of the Company Group in this Agreement and no statement contained in the Company Group Disclosure Schedules or any certificate or other document furnished or to be furnished to Buyer pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.

 

ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER

 

Section 6.01    Organization and Qualification. Buyer is a limited liability company duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation. Buyer is duly qualified or licensed to do business as a foreign entity and is in good standing in each jurisdiction where such qualification or license is required, except where the failure to be so qualified or be so licensed would not have a material adverse effect on the ability of Buyer to consummate the transactions contemplated by, and discharge its obligations under, this Agreement and the other Transaction Documents to which Buyer is a party (a “Buyer Material Adverse Effect”).

 

Section 6.02    Authorization. Buyer has full corporate power and authority to enter into this Agreement and the other Transaction Documents to which it is a party and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the other Transaction Documents to which Buyer is a party and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary organizational action on the part of Buyer. This Agreement and each other Transaction Document to which Buyer is a party has been duly executed and delivered by Buyer and constitutes a legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and general principles of equity.

 

Section 6.03    Non-Contravention; Consents. Neither the execution and delivery of this Agreement or any other Transaction Document by Buyer, nor the consummation of the transactions contemplated hereby or thereby, will violate or conflict with (a) any provision of Buyer’s organizational documents, (b) any Law or Governmental Order to which Buyer or any of its business or assets are bound or subject, or (c) any Contract or Permit to which Buyer is a party or by which it or any of its properties may be bound or affected. Neither the execution and delivery of this Agreement or any other Transaction Document by Buyer, nor the consummation of the transactions contemplated hereby or thereby, will require the consent, notice or other action by any Person.

 

 

ARTICLE VII
COVENANTS

 

Section 7.01    Conduct of Business Prior to Closing. From the date of this Agreement until the Closing, except as otherwise provided in this Agreement or with the prior written consent of Buyer (which consent shall not be unreasonably withheld or delayed), the Company shall, and shall cause the Seller and Ryvyl EU to:

 

(a)    conduct the Business in the ordinary course of business consistent with past practice;

 

(b)    use commercially reasonable efforts to: (i) preserve the present operations, organization (including management) and goodwill of the Business; and (ii) preserve the present relationships with all Persons having business dealings with the Business (including customers and suppliers);

 

(c)    use commercially reasonable efforts to maintain: (i) all assets of the Seller and Ryvyl EU in their current condition, ordinary wear and tear excepted; and (ii) insurance upon all assets of the Seller and Ryvyl EU in such amounts and of such kinds comparable to that in effect on the date of this Agreement;

 

(d)    (i) maintain the books, accounts and records of each Company Group member in the ordinary course of business; (ii) continue to collect accounts receivable and pay accounts payable of the Business in the ordinary course of business consistent with past practice using normal procedures and without discounting or accelerating payment of such accounts; (iii) use commercially reasonable efforts to comply with all contractual and other obligations applicable to the operation of the Business; and (iv) cause the Seller and Ryvyl EU to pay their debts, Taxes and other obligations when due;

 

(e)    cause the Seller and Ryvyl EU to comply in all material respects with all Laws applicable to them and the Business; and

 

(f)    not take any action which would reasonably be expected to adversely affect the ability of the parties to consummate the transactions contemplated by this Agreement or cause any of the events or circumstances described in Section 5.07 to occur.

 

Section 7.02    Access to Information. From the date of this Agreement until the Closing, Company shall, and shall cause the Seller and Ryvyl EU to: (i) afford Buyer and its Representatives, upon at least 48 hours’ prior written notice, reasonable access to and the right to inspect the Real Property, properties, assets, premises, books and records, Contracts, and other documents and data related to the Seller and the Shares; (ii) furnish Buyer and its Representatives with such financial, operating and other data and information related to the Seller and Ryvyl EU and the Shares as Buyer and its Representatives may reasonably request; and (iii) instruct the Representatives of each Company Group member to cooperate with Buyer and its Representatives in their investigation of the Business. Any investigation pursuant to this Section 7.02 shall be conducted during normal business hours, upon reasonable advance notice to Seller and in a manner that does not interfere with the conduct of the Business. Company shall not be required to disclose any information to the Buyer if such disclosure would: (i) jeopardize any attorney-client or other privilege or (ii) contravene any applicable Law, fiduciary duty or binding agreement entered into prior to the date of this Agreement.

 

 

Section 7.03    Exclusive Dealings. From the date of this Agreement until the Closing, Company and the Seller shall not (and shall direct their Representatives not to): (a) solicit, initiate, entertain, consider, encourage or accept the submission of any proposal or offer from any third party relating to the acquisition (whether by merger, purchase of stock, purchase of assets, or otherwise) of all or substantially all or any significant part of the Business, the Shares, the Seller or Ryvyl EU; or (b) participate in any discussions or negotiations (and Company, Seller and their Representatives shall immediately cease any discussions or negotiations that are ongoing) regarding, furnish any information with respect to, or assist or participate in any effort or attempt by any third party, to do any of the foregoing.

 

Section 7.04    Confidentiality. The Company Group shall not disclose to any other Person any information provided to it by Buyer or any of its Representatives in connection with this Agreement, and the transactions contemplated hereby and thereby, except (a) to Company Group’s advisors, officers, directors, and employees, so long as such parties are informed of the confidential nature of such information, (b) as required by applicable Law, (c) in connection with the enforcement of any rights of Seller hereunder or otherwise related to the transactions contemplated herein and to the extent that such information can be shown to have been in the public domain through no fault of any Company Group member. Buyer shall not disclose to any other Person any information provided to it by Seller or any of its Representatives in connection with this Agreement, and the transactions contemplated hereby and thereby, except (a) to Buyer’s advisors, officers, directors, and employees, so long as such parties are informed of the confidential nature of such information, (b) as required by applicable Law, (c) in connection with the enforcement of any rights of Buyer hereunder or otherwise related to the transactions contemplated herein or (d) to the extent that such information can be shown to have been in the public domain through no fault of Buyer.

 

Section 7.05    Non-Competition; Non-Solicitation.

 

(a)    For a period of six (6) months commencing on the Closing Date (the “Restricted Period”), Company and the Seller shall not, and shall not permit any of their Affiliates to, directly or indirectly: (i) engage in or assist others in engaging in the Restricted Business in the Territory; (ii) have an interest in any Person that engages directly or indirectly in the Restricted Business in the Territory in any capacity, including as a partner, shareholder, member, employee, principal, agent, trustee or consultant; or (iii) intentionally interfere in any material respect with the business relationships (whether formed prior to or after the date of this Agreement) between the Seller, Ryvyl EU and customers or suppliers of the Seller or Ryvyl EU. Notwithstanding the foregoing, Company and the Seller may own, directly or indirectly, securities of any Person traded on any national securities exchange if Company, respectively the Seller is not a controlling Person of, or a member of a group which controls, such Person and do not, directly or indirectly, own forty percent (40%) or more of any class of securities of such Person.

 

 

(b)    During the Restricted Period, Company and the Seller shall not, and shall not permit any of their Affiliates to, directly or indirectly, hire or solicit for hire any employee of, respectively, the Seller or Ryvyl EU or encourage any such employee to leave his or her employment, except that nothing in this Section 7.05(b) shall prevent Company, the Seller or any of their Affiliates from hiring any individual: (i) pursuant to a general solicitation which is not directed specifically to any employee; (ii) whose employment has been terminated by, respectively, the Seller, Ryvyl EU or Buyer; or (iii) after thirty (30) days from the date of termination of employment, if his or her employment was terminated by the employee.

 

(c)    During the Restricted Period, Company and the Seller shall not, and shall not permit any of their Affiliates to, directly or indirectly, solicit or entice, or attempt to solicit or entice, any clients or customers of, respectively, the Seller or Ryvyl EU or potential clients or customers of the Seller or Ryvyl EU for purposes of diverting their business or services from the Seller or Ryvyl EU.

 

(d)    Company acknowledges that a breach of this Section 7.05 could cause irreparable harm to Buyer for which monetary damages may not be an adequate remedy, and hereby agree that in the event of a breach by Company or Seller of any such obligations Buyer shall, in addition to any other rights and remedies that may be available to them, be entitled to seek equitable relief (including a temporary restraining order, an injunction, or specific performance).

 

(e)    Company and Seller acknowledge that the restrictions contained in this Section 7.05 are reasonable and necessary to protect the legitimate business interests of Buyer and that they constitute a material inducement to Buyer to enter into this Agreement and consummate the transactions contemplated by this Agreement. If any covenant contained in this Section 7.05 should be determined to exceed the time, geographic, or other limitations permitted by applicable Law in any jurisdiction, then any court is expressly empowered to reform such covenant, and such covenant shall be deemed reformed, in such jurisdiction to the maximum time, geographic, or other limitations permitted by applicable Law. The covenants contained in this Section 7.05 and each provision hereof are severable and distinct covenants and provisions. The invalidity or unenforceability of any such covenant or provision as written shall not invalidate or render unenforceable the remaining covenants or provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such covenant or provision in any other jurisdiction.

 

Section 7.06    Preservation of Books and Records.

 

 

(a)    In order to facilitate the resolution of any claims made against or incurred by any member of the Seller Group prior to the Closing Date, or for any other reasonable purpose, for a period of six (6) months from the Closing Date, Buyer shall: (i) preserve and keep, or cause to be preserved and kept, the books and records of the Business relating to periods ending on or prior to the Closing Date; and (ii) upon reasonable notice, afford the Representatives of Company reasonable access (including the right to make, at Seller’s expense, photocopies), during normal business hours, to such books and records.

 

(b)    In order to facilitate the resolution of any claims made by or against or incurred by Buyer or the Seller or Ryvyl EU after the Closing Date, or for any other reasonable purpose, for a period of six (6) months following the Closing Date, Company and Seller shall: (i) preserve and keep, or cause to be preserved and kept, the books and records of Company and Seller which relate to the Business (including books and records of the Seller or relating to the Shares or Ryvyl EU) for periods prior to the Closing; and (ii) upon reasonable notice, afford the Representatives of Buyer or the Seller reasonable access (including the right to make, at the Buyer’s expense, photocopies), during normal business hours, to such books and records.

 

(c)    Any books and records related to Tax matters shall be retained in accordance with and for the periods set forth in ARTICLE VIII.

 

(d)    No party shall be obligated to provide the other party with access to any books or records pursuant to this Section 7.06 where such access would violate any Law.

 

Section 7.07    Public Announcements. Unless disclosure is required by Law or NASDAQ, neither the Company Group nor Buyer shall, and the Company Group and Buyer shall cause their respective Affiliates not to, issue any press release or public announcement concerning this Agreement or the transactions contemplated hereby without the prior written approval of the other party (which approval will not be unreasonably withheld or delayed), in which case the party required to make such disclosure shall allow the other party a reasonable opportunity to review and comment on such press release or public announcement in advance of such disclosure.

 

Section 7.08    Further Assurances. Following the Closing, each of the parties hereto shall, and shall cause their respective Affiliates to, execute and deliver such additional documents and instruments and take such further actions, as may be reasonably required to carry out the provisions of and give effect to the transactions contemplated by this Agreement.

 

Section 7.09    Supplemental Disclosure. From time to time prior to the date that is seven Business Days prior to the Closing Date, the Company Group shall have the right to supplement or amend the Company Group Disclosure Schedules (including adding new schedules) with respect to any matter arising, or of which it becomes aware, after the date of this Agreement (each a “Schedule Supplement”). Any disclosure in any such Schedule Supplement shall not be deemed to have cured any inaccuracy in or breach of any representation or warranty contained in this Agreement for purposes of determining whether or not the conditions set forth in Section 10.02(a) have been satisfied or for any indemnification or termination rights contained in this Agreement,

 

 

provided that if Buyer has the right, but does not elect within seven Business Days of its receipt of such Schedule Supplement, to terminate this Agreement, then Buyer shall be deemed to have irrevocably waived any right to terminate this Agreement with respect to such matter and, further, shall have irrevocably waived any right to indemnification under ARTICLE XI with respect to such matter.

 

Section 7.10    Best Efforts. Each Company Group member shall use its best efforts to take all action and to do all things necessary, proper, or advisable in order to consummate the transactions contemplated by this Agreement and the other Transaction Documents and shall cooperate with Buyer in good faith and assist Buyer in the performance of the provisions of this Agreement and the other Transaction Documents and in consummating the transactions contemplated hereunder and thereunder, including for obtaining the Regulatory Approvals, it being understood that obtaining the Regulatory Approvals is the sole responsibility of Buyer.

 

ARTICLE VIII
TAX MATTERS

 

Section 8.01    Tax Elections, Returns, and Practices. Without the prior written consent of Buyer (which shall not be unreasonably withheld or delayed), Company shall not, and shall cause the Seller not to, make, change, or rescind any Tax election, amend or take any position on any Tax Return, take any action that would have the effect of increasing the Tax liability or reducing any Tax asset of Buyer or the Seller, or (except as may be required by Law or GAAP) make any material change to its methods of accounting or reporting income or deductions for Tax purposes from those employed in the preparation of its most recent Tax Returns, in each case if and to the extent any such action involves an issue that will recur in taxable periods of the Seller ending after the Closing Date or otherwise could adversely affect Buyer or the Seller for any taxable period including or ending after the Closing Date.

 

Section 8.02    Termination of Tax Sharing Agreements. Any Tax sharing, allocation, indemnity, or similar agreement or arrangement relating to the Seller shall be terminated on or before the Closing Date and have no further effect for any taxable year (whether the current year, a future year, or a past year). After such date, neither the Company nor Seller shall have any further rights or liabilities under any such agreement.

 

Section 8.03    Transfer Taxes. Company and Buyer shall each pay one-half of all transfer, documentary, sales, use, stamp, registration, filing, recording, transfer, value added and other such Taxes and fees (including any penalties and interest) in connection with this Agreement and the other Transaction Documents (including any real property transfer Tax and other similar Tax).

 

Section 8.04    Filing of Tax Returns.

 

(a)    Company shall prepare and timely file or cause to be prepared and timely filed: (i) any combined, consolidated or unitary Tax Return that includes any Company or any Affiliate of Company and the Seller (a “Consolidated Tax Return”); (ii) all Tax Returns (“Seller Pre-Closing Tax Returns”) that are required to be filed by or with respect to the Seller on or before the Closing Date and shall timely pay all Taxes due in respect of such Tax Returns. All such Seller Pre-Closing Tax Returns shall be prepared in a manner

 

 

consistent with prior practice. At least thirty (30) days prior to the due date for filing, Company shall provide Buyer with copies of such Seller Pre-Closing Tax Returns relating specifically to the Seller, along with supporting workpapers, for Buyer’s review and comment, if and to the extent Buyer or the Seller are liable for the payment of Taxes pursuant thereto. Company shall consider in good faith any reasonable comments provided by Buyer. If Company and Buyer are unable to resolve any dispute regarding a Seller Pre-Closing Tax Return at least ten (10) Business Days prior to the due date for filing, either party may refer such dispute for resolution pursuant to Section 8.10, which resolution shall be binding on the parties.

 

(b)    Following the Closing, Buyer shall prepare and timely file or cause to be prepared and timely filed all Tax Returns that are required to be filed by or with respect to the Seller for taxable periods that end on or before the Closing Date and not described in Section 8.04(a) and for any Straddle Periods (“Straddle Period Tax Returns”) and shall timely pay all Taxes due in respect of such Tax Returns. At least thirty (30) days prior to the due date for filing, Buyer shall provide Company with copies of Straddle Period Tax Returns, along with supporting workpapers, for Company’s review and comment, if the Straddle Period Tax Return shows any Taxes subject to indemnification under Section 8.05. Buyer shall consider in good faith any reasonable comments provided by Company. If Company and Buyer are unable to resolve any dispute regarding a Straddle Period Return at least ten (10) days prior to the due date for filing, either party may refer such dispute for resolution pursuant to Section 8.10, which resolution shall be binding on the parties. Company shall pay to Buyer an amount equal to the portion of the Taxes with respect to any such Straddle Period Tax Return that relates to the Pre-Closing Tax Period (as determined pursuant to Section 8.06(a)), at the later of five (5) Business Days prior to the due date (including extensions) of such Straddle Period Tax Returns or upon written demand by Buyer therefore.

 

Section 8.05    Tax Indemnification.

 

(a)    Company agrees to indemnify and hold Buyer Indemnified Parties harmless from and against any and all Losses in respect of: (i) all Taxes of the Company and its Affiliates (other than the Seller) for any taxable period; (ii) all Taxes of the Seller and Ryvyl EU (A) for any taxable period ending on or before the Closing Date and (B) for the portion of any Straddle Period ending on the Closing Date; (iii) any Loss attributable to a breach of or inaccuracy in any representation or warranty made in Section 5.12; (iv) any Loss attributable to the failure of a Company Group member to perform any of its covenants or agreements contained in this ARTICLE VIII; (v) all Taxes of any member of an affiliated, consolidated, or combined group of which the Seller is or was a member on or prior to the Closing Date by reason of a liability under Treasury Regulation Section 1.1502-6 or any comparable provision of foreign, state or local Law; and (vi) all Taxes of any person imposed on the Seller arising under the principles of transferee or successor liability or by contract relating to an event or transaction occurring before the Closing Date.

 

 

(b)    Buyer agrees to indemnify and hold the Company Indemnified Parties harmless from and against any and all Losses in respect of: (i) all Taxes imposed on the Seller (A) for any taxable period beginning after the Closing Date and (B) for the portion of any Straddle Period beginning after the Closing Date; and (ii) any Loss attributable to the failure of Buyer or the Seller (after Closing) to perform any of their covenants or agreements contained in this ARTICLE VIII.

 

(c)    Any indemnification payments pursuant to this ARTICLE VIII shall be treated as an adjustment to the Purchase Price by the parties for Tax purposes, unless otherwise required by Law.

 

Section 8.06    Straddle Period.

 

(a)    With respect to a taxable period that begins before and ends after the Closing Date (a “Straddle Period”), all Taxes and Tax liabilities shall be allocated to the Pre-Closing Tax Period as follows:

 

(i)    in the case of Taxes (A) based upon, or measured by reference to, income, receipts, profits, wages, capital or net worth, (B) imposed in connection with the sale, transfer or assignment of property, or (C) required to be withheld, such Taxes shall be deemed equal to the amount which would be payable if the taxable year ended with the Closing Date, provided that exemptions, allowances or deductions that are calculated on an annual basis (including depreciation and amortization deductions) shall be allocated between the period ending on the Closing Date and the period after the Closing Date in proportion to the number of days in each such period; and

 

(ii)    in the case of other Taxes, such Taxes shall be deemed equal to the amount of such Taxes for the entire period multiplied by a fraction, the numerator of which is the number of days in the period ending on the Closing Date and the denominator of which is the number of days in the entire period.

 

The remainder of the Taxes for the Straddle Period shall be allocated to the Post-Closing Tax Period.

 

(b)    With respect to all real property taxes, personal property taxes, or ad valorem obligations and similar recurring taxes and fees of the Seller, the Company shall timely file all Tax Returns due on or before the Closing Date and Buyer shall prepare and timely file all Tax Returns due after the Closing Date. If one party remits to the appropriate Taxing Authority payment for such Taxes and such payment includes the other party’s share of such Taxes, such other party shall promptly reimburse the remitting party for its share of such Taxes.

 

Section 8.07    Contests.

 

(a)    If notice of any Legal Action with respect to Taxes (“Tax Proceeding”) relating to the Seller shall be received by either party for which the other party may reasonably be expected to be liable pursuant to Section 8.05 (a “Tax Claim”), the notified party shall promptly inform the other party in writing of such Tax Claim, provided that the failure of the notified party to give the other party such notice shall not relieve the failing

 

 

party of its obligations under Section 8.05 except to the extent that the other party is actually and materially prejudiced thereby.

 

(b)    Company shall have the right at its expense to represent the interests of Company or the Seller in any Tax Claim relating exclusively to taxable periods ending on or before the Closing Date, provided that: (i) Company shall allow Buyer and its counsel to participate in the defense of any such Tax Proceeding at Buyer’s sole expense; (ii) Company shall keep Buyer informed with respect to the status of any such Tax Proceeding; (iii) if any such Tax Proceeding involves an issue that recurs in taxable periods ending after the Closing Date or otherwise could adversely affect Buyer or the Seller for any taxable period ending after the Closing Date, then Company and Buyer shall jointly control the defense of any such Tax Proceeding, each party shall cooperate with the other party, and there shall be no settlement or closing or other agreement with respect to such Tax Proceeding without the consent of the other party, which consent shall not be unreasonably withheld; and (iv) if Company does not elect to represent the interests of Company or the Seller in any such Tax Proceeding, then Buyer or the Seller may contest such Tax Proceeding and may pay or compromise such Tax Claim with Company’s written consent, which consent shall not be unreasonably withheld.

 

(c)    Buyer shall represent at its expense the interests of the Seller in any Tax Claim relating to a Straddle Period, provided that: (i) Buyer shall allow Company and its counsel to participate in the defense of any such Tax Proceeding at Company’s sole expense; (ii) Buyer shall keep Company informed with respect to the status of any such Tax Proceeding; and (iii) if any such Tax Proceeding involves an issue which is the subject of indemnification by Company pursuant to Section 8.05, then Buyer and Company shall jointly control the defense of any such Tax Proceeding, each party shall cooperate with the other party, and there shall be no settlement or closing or other agreement with respect to such Tax Proceeding without the consent of the other party, which consent shall not be unreasonably withheld.

 

(d)    Notwithstanding anything in the Agreement to the contrary, Company shall be entitled to control in all respects, and neither Buyer nor any of their Affiliates shall be entitled to participate in, any Tax Proceeding with respect to: (i) any Tax Return of Company; or (ii) any Tax Return of a consolidated, combined, affiliated, or unitary group that includes Company or any of its Affiliates (including the Seller).

 

Section 8.08    Cooperation.

 

(a)    Buyer and each Company Group member shall furnish or cause to be furnished to each other, as promptly as practicable, such information and assistance relating to the Seller as either of them may reasonably request for the preparation and filing of any Tax Return or in connection with any audit, filing, or proceeding relating to Tax matters, including the prosecution or defense of any proceeding relating to Tax matters.

 

(b)    Each of Seller and Company Group member shall retain all Tax Returns, schedules, workpapers, records, and other documents in their possession relating to Tax matters of the Seller for any taxable period beginning before the Closing Date for the

 

 

greater of seven years or the expiration of the applicable statute of limitations (including any extensions). Prior to destroying or discarding any Tax Returns or other such documentation, Company or Buyer (as the case may be) shall provide the other party with reasonable written notice and the opportunity to take possession of such materials.

 

Section 8.09    Tax Refunds. Any Tax refunds related to the Seller that are received by Buyer or the Seller after the Closing for a taxable period ending on or prior to the Closing Date shall be for the account of Company. The amount of any such Tax refunds that are received by Company after the Closing that relate to taxable periods ending after the Closing Date shall be for the account of Buyer. The amount of any Tax refunds for a taxable period that includes but does not end on the Closing Date shall be equitably apportioned between Company and Buyer. Each party shall forward to the party entitled to receive the Tax refund pursuant to this Section 8.09 (net of any Taxes payable with respect thereto), the amount of such refund within thirty (30) days after its receipt.

 

Section 8.10    Disputes. Any dispute as to any matter covered by this ARTICLE VIII that is not resolved between the parties shall be resolved by the Independent Accountant. The determination by the Independent Accountant shall be final and binding on the parties. The fees and expenses of the Independent Accountant shall be borne equally by Company and Buyer. The Independent Accountant shall use its best efforts to resolve the disputed items within twenty (20) days of having the items referred to it. If any dispute is not resolved prior to the due date of the related Tax Return, such Tax Return may be filed by the party responsible for preparing the Tax Return in the manner it deems correct pending resolution of such dispute under this Section 8.10.

 

Section 8.11    Survival. Notwithstanding anything in this Agreement to the contrary, the provisions of this ARTICLE VIII shall survive for the full period of all applicable statutes of limitations (giving effect to any waiver, mitigation or extension thereof) plus sixty (60) days.

 

Section 8.12    Overlap. To the extent that any obligation or responsibility pursuant to ARTICLE XI may overlap with an obligation or responsibility pursuant to this ARTICLE VIII, the provisions of this ARTICLE VIII shall govern.

 

ARTICLE IX
CONDITIONS TO FUNDING

 

Section 9.01    Conditions to Obligations of Buyer. The obligations of Buyer to cause the Escrow Agent to deliver the Purchase Price in accordance with Section 4.02(a), shall be subject to the fulfillment, or the waiver by Buyer, of each of the following conditions on or prior to the seventh day after the execution of this Agreement (the “Funding Date”), which period may be extended by the Buyer, in its sole discretion, solely if all of the conditions have not been satisfied by the seventh day after execution of this Agreement:

 

(a)    The representations and warranties of each member of the Company Group set forth in this Agreement and in any other Transaction Document qualified as to materiality or Material Adverse Effect shall be true and correct, and those not so qualified shall be true and correct in all material respects: (i) as of the date of this Agreement; and (ii) as of the Funding Date as though made at and as of the Funding Date, except in either

 

 

case to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties qualified as to materiality and Material Adverse Effect shall be true and correct, and those not so qualified shall be true and correct in all material respects, on and as of such earlier date).

 

(b)    Each of Company Group member shall have performed and complied in all material respects with all obligations and agreements required by this Agreement and any other Transaction Document to be performed or complied with by each of Company Group member, as applicable, prior to the Funding Date; provided that with respect to obligations and agreements that are qualified by materiality, each of Company Group member, as applicable, shall have performed and complied in all respects.

 

(c)    From the date of this Agreement through and until the Funding Date, there shall not have occurred any Material Adverse Effect, nor shall any event or events have occurred that, individually or in the aggregate, with or without the lapse of time, could reasonably be expected to result in a Material Adverse Effect.

 

(d)    Either the                 Share Repurchase and Paydown Agreement or the                 Share Repurchase and Payoff Agreement has been entered into by the Seller and                 pursuant to documentation in a form acceptable to the Buyer.

 

(e)    The Transaction Formalities shall have been satisfied and all necessary Transaction Formalities’ documents (“Transaction Formalities Documents”) shall have been delivered to the Escrow Agent, to be held on escrow until expiration of the Closing Preparation Period.

 

(f)    The Ryvyl EU Share Pledge Agreement shall have been duly executed and delivered to Buyer.

 

(g)    The Perfection of Pledge shall have been made and sufficient evidence thereof in the sole and absolute discretion of the Buyer shall have been provided to the Buyer.

 

(h)    The original interim shares certificate[/s] (in Bulgarian: временно[/и] удостоверение[/я]) evidencing the Shares (“Interim Shares Certificate[/s]”), draft shares transfer endorsement[/s] for transfer of the Shares (“Shares Transfer Endorsement[/s]”) substantially in the form as per Exhibit C, and the original of the shareholders book of Ryvyl EU (“Shareholders Book of Ryvyl EU”) shall each have been delivered to the Escrow Agent, to be held on escrow until expiration of the Closing Preparation Period;

 

(i)    Notarized irrevocable power of attorneys executed in favor of (authorizing) Tsvetkova Bebov and Partners, member of Eversheds Sutherland, by (i) Seller as to the completing, signing and dating of the Share Transfer Endorsement[/s] on behalf of Seller and to attach the Share Transfer Endorsement[/s] to the Interim Shares Certificate[/s] (“Seller Irrevocable POA”) and (ii) by Ryvyl EU in order to update on behalf of Ryvyl EU the Shareholders Book of Ryvyl EU regarding the deletion of the pledge established over the Shares pursuant to the Ryvyl EU Share Pledge Agreement in accordance with the

 

 

terms and conditions of the Ryvyl EU Share Pledge Agreement and the registration of the transfer of the Shares from Seller to Buyer upon Closing (“Ryvyl EU Irrevocable POA”, together with Seller Irrevocable POA, the “Irrevocable POAs”), shall each have been delivered to the Escrow Agent, to be held on escrow until expiration of the Closing Preparation Period;

 

(j)    All necessary corporate resolutions of each of Company Group member for Seller to enter into the Ryvyl EU Share Pledge Agreement shall have been delivered to the Buyer, along with all other documents required under the Ryvyl EU Share Pledge Agreement relevant to the entering into the Ryvyl EU Share Pledge Agreement and for the due performance of the obligations thereof.

 

(k)    All consents, approvals (other than the Regulatory Approvals), and waivers that are listed on Schedule 5.04(c) of the Company Group Disclosure Schedules shall have been received.

 

(l)    Buyer shall have received a certificate, dated as of the Funding Date and signed by a duly authorized officer of the Company, that each of the conditions set forth in this Section 9.01 have been satisfied.

 

(m)    Buyer shall have received a certificate of the Secretary (or equivalent officer) of Company certifying that (i) attached thereto are true and complete copies of all resolutions adopted by the board of directors of Company, and all competent corporate bodies of the Seller and Ryvyl EU, authorizing the execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby, and (ii) Buyer shall have received a certificate of the Secretary (or equivalent officer) of the Company certifying the names and signatures of the officers of each of the Company Group members authorized to sign this Agreement, the Transaction Documents, and the other documents and instruments delivered hereunder and thereunder.

 

(n)    Company shall have delivered to Buyer a good standing certificate for the Seller and Ryvyl EU from the Bulgarian Commercial Register and Register of Non-profit Legal Entities with the Registry Agency.

 

(o)    Company shall have delivered to Buyer such other documents and instruments as the Buyer have reasonably requested and are reasonably necessary to consummate the transactions contemplated by this Agreement.

 

Section 9.02    Irrevocable POAs. For the avoidance of doubt, Seller and Ryvyl EU each agree and acknowledge that, for the benefit of Buyer, (a) upon Closing, pursuant to their respective Irrevocable POAs, each of the appointees thereunder are authorized by (i) Seller as to the completing, signing and dating of the Share Transfer Endorsement[/s] on behalf of Seller and to attach the Share Transfer Endorsement[/s] to the Interim Shares Certificate[/s] and (ii) by Ryvyl EU in order to update on behalf of Ryvyl EU the Shareholders Book of Ryvyl EU regarding the deletion of the pledge established over the Shares pursuant to the Ryvyl EU Share Pledge Agreement in accordance with the terms and conditions of the Ryvyl EU Share Pledge Agreement and the registration of the transfer of the Shares from Seller to Buyer upon Closing; and (b) neither the Seller Irrevocable POA nor the Ryvyl EU Irrevocable POA may be revoked at any time.

 

ARTICLE X
CONDITIONS TO CLOSING

 

 

Section 10.01    Conditions to Obligations of All Parties. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order which is in effect and has the effect of making the transactions contemplated by this Agreement illegal, otherwise restraining or prohibiting consummation of such transactions, or causing any of the transactions contemplated hereunder to be rescinded following completion thereof.

 

Section 10.02    Conditions to Obligations of Buyer. The obligations of Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or the waiver by Buyer, at or prior to the Closing, of each of the following conditions:

 

(a)    Buyer has obtained the necessary Regulatory Approvals.

 

(b)    The representations and warranties of each the Company Group member set forth in this Agreement and any other Transaction Document qualified as to materiality or Material Adverse Effect shall be true and correct, and those not so qualified shall be true and correct in all material respects: (i) as of the date of this Agreement; and (ii) as of the Closing Date as though made at and as of the Closing Date, except in either case to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties qualified as to materiality and Material Adverse Effect shall be true and correct, and those not so qualified shall be true and correct in all material respects, on and as of such earlier date).

 

(c)    Each Company Group member shall have performed and complied in all material respects with all obligations and agreements required by this Agreement and any other Transaction Document to be performed or complied with by each Company Group member, as applicable, prior to the Closing Date; provided that with respect to obligations and agreements that are qualified by materiality, each Company Group member, as applicable, shall have performed and complied in all respects.

 

(d)    From the date of this Agreement: (i) there shall not have occurred any Material Adverse Effect, nor shall any event or events have occurred that, individually or in the aggregate, with or without the lapse of time, could reasonably be expected to result in a Material Adverse Effect; and (ii) no Legal Actions shall have been instituted or threatened, or claim or demand made, against any of the Company Group members or Buyer seeking to restrain or prohibit, or to obtain material damages with respect to, the consummation of the transactions contemplated in this Agreement.

 

(e)    Buyer shall have received a certificate of the Secretary (or equivalent officer) of Company certifying that the resolutions provided by Company pursuant to Section 9.01(o) continue to be in full force and effect;

 

 

(f)    Company shall have delivered to Buyer a good standing certificate for the Seller and Ryvyl EU from the Bulgarian Commercial Register and Register of Non-profit Legal Entities with the Registry Agency dated within five (5) Business Days of the Closing Date;

 

(g)    Buyer shall have received a certificate, dated as of the Closing Date and signed by a duly authorized officer of the Company, that each of the conditions set forth in Sections 10.02(b)-(h) have been satisfied; and

 

(h)    Each of the Company Group members shall have delivered to Buyer such other documents and instruments as the Buyer have reasonably requested and are reasonably necessary to consummate the transactions contemplated by this Agreement.

 

ARTICLE XI
INDEMNIFICATION

 

Section 11.01    Survival of Representations, Warranties, and Covenants.

 

(a)    The representations and warranties of each Company Group member contained in ARTICLE V of this Agreement shall survive the Closing and shall remain in full force and effect until the date that is twelve (12) months from the Closing Date; provided that the representations and warranties in:

 

(i)    Section 5.01 (Organization; Standing and Authority; Charter Documents of Company), Section 5.02 (Organization; Standing and Authority; Charter Documents; Capitalization of the Seller), and Section 5.03 (Organization; Standing and Authority; Charter Documents; Capitalization of Ryvyl EU) (the “Company Fundamental Representations”) shall survive indefinitely;

 

(ii)    Section 5.10 (Intellectual Property) shall survive for a period of two years after the Closing; and

 

(iii)    Section 5.12 (Taxes) shall survive for the full period of all applicable statutes of limitations (giving effect to any waiver, mitigation or extension thereof) plus sixty (60) days.

 

(b)    All covenants and agreements contained in this Agreement, whether of Buyer or any Company Group member, shall survive the Closing Date until the applicable statute of limitations has expired or until the expiration date for such covenant or agreement specified in this Agreement, if sooner.

 

(b)    The obligations of Company to indemnify and defend the Buyer Group, respectively, shall terminate upon the expiration of the applicable survival periods set forth in this Section 11.01. The parties agree that the survival periods set forth in this Section 11.01 are contractual statutes of limitations and any claim brought by a party pursuant to this ARTICLE XI must be brought or filed prior to the expiration of the applicable survival

 

 

period; provided that any claim asserted in good faith in writing and with reasonable specificity (to the extent known at such time) by notice from the non-breaching party to the breaching party prior to expiration of the applicable survival period shall not thereafter be barred by the expiration of the relevant representation or warranty and such each claim shall survive until finally resolved.

 

Section 11.02    Indemnification by Company. Subject to the terms and conditions of this ARTICLE XI, from and after the Closing, Company shall indemnify and defend Buyer, its Affiliates, and each of their respective employees, directors, officers, stockholders, agents, and Representatives (collectively, the “Buyer Group”), against, and shall hold each of them harmless from, any and all Losses incurred or sustained by the Buyer Group based upon or arising out of:

 

(a)    any inaccuracy in or breach of any of the representations or warranties of any Company Group member contained in this Agreement, any other Transaction Document or in any certificate or instrument delivered by or on behalf of any Company Group member pursuant to this Agreement as of the date such representation or warranty was made or as if such representation or warranty was made on and as of the Closing Date (except for representations and warranties that expressly relate to a specified date, the inaccuracy in or breach of which will be determined with reference to such specified date); or

 

(b)    any breach or non-fulfillment of any covenant, agreement, or obligation to be performed by any Company Group member under this Agreement or any other Transaction Document.

 

Section 11.03    Certain Limitations. The indemnification provided for in Section 11.02 shall be subject to the following limitations:

 

(a)    Company shall not be liable to Buyer Group for indemnification under Section 11.02(a) until the aggregate amount of all Losses in respect of indemnification under Section 11.02(a) exceeds, on a cumulative basis, an amount equal to US$5,000 (the “Basket”), in which event Company shall be liable for all such Losses in excess of the Basket. The aggregate cumulative amount of all Losses for which Company may be liable pursuant to Section 11.02(a) shall not exceed one hundred percent (100)%) of the Purchase Price (the “Cap”).

 

(b)    For purposes of this ARTICLE XI, the representations and warranties of the parties set forth in this Agreement shall be considered without regard to any materiality, material adverse effect, or other similar qualification applicable to such representations or warranties.

 

Section 11.04    Indemnification Procedures. The party making a claim under this ARTICLE XI is referred to as the “Indemnified Party” and the party against whom a claim is asserted under this ARTICLE XI is referred to as the “Indemnifying Party.”

 

(a)    Third Party Claims. If any Indemnified Party receives notice of the assertion or commencement of any Legal Action made or brought by any Person who is not a party to this Agreement or an Affiliate of a party to this Agreement or a

 

 

Representative of the foregoing (a “Third Party Claim”) against the Indemnified Party, and the Indemnified Party intends to seek indemnification under this ARTICLE XI, the Indemnified Party shall give the Indemnifying Party prompt written notice of such Third Party Claim, but in any event not later than 30 calendar days after receipt of such notice of such Third Party Claim. Such notice by the Indemnified Party shall describe the Third Party Claim in reasonable detail, including the nature, basis, and amount thereof (to the extent known), along with copies of any relevant documents relating to the Third Party Claim. Failure to give such prompt written notice shall not relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses or is materially prejudiced by reason of such failure. The Indemnifying Party shall have the right to participate in, or by giving written notice to the Indemnified Party, to assume and control the defense of the Third Party Claim at the Indemnifying Party’s expense and by the Indemnifying Party’s own counsel, and the Indemnified Party shall cooperate in good faith in such defense; provided that the Indemnifying Party shall not have the right to assume the defense of any Third Party Claim that seeks an injunction or other equitable relief against the Indemnified Party. If the Indemnifying Party assumes the defense of the Third Party Claim, it shall have the right (subject to Section 11.04(b)) to take such action as it deems necessary to avoid, dispute, defend, appeal, or make counterclaims relating to the Third Party Claim in the name and on behalf of the Indemnified Party. The Indemnified Party shall have the right to participate in the defense of the Third Party Claim with its own counsel and at its own expense; provided that if in the reasonable opinion of the Indemnified Party’s counsel: (i) there are legal defenses available to an Indemnified Party that are different from or additional to those available to the Indemnifying Party; or (ii) there exists a conflict of interest between the Indemnifying Party and the Indemnified Party that cannot be waived, the Indemnifying Party shall be responsible for the reasonable fees and expenses of counsel to the Indemnified Party in each jurisdiction for which the Indemnified Party determines counsel is required. If the Indemnifying Party does not assume the defense of the Third Party Claim within 10 days after its receipt of the Indemnified Party’s written notice of the claim, or does not diligently pursue the defense of the Third Party Claim, the Indemnified Party shall have the right to assume and control the defense (subject to Section 11.04(b)). In such case, the Indemnifying Party shall have the right to participate in the defense of such Third Party Claim at its own expense. The Indemnifying Party and Indemnified Party shall reasonably cooperate with each other in the defense of any Third Party Claim, including making available to the other Party such relevant records and personnel (at no cost, other than reimbursement of actual out-of-pocket expenses) as may be reasonably necessary for the defense of the Third Party Claim.

 

(b)    Settlement of Third Party Claims. Without the prior written consent of the other party (which consent shall not be unreasonably withheld or delayed), neither party shall: (i) admit to any wrongdoing by the other party; (ii) consent to entry of any judgment, injunction or other equitable relief against the other party; or (iii) enter into any settlement agreement binding the other party that (A) provides for relief other than money damages or (B) does not include the giving by each claimant or plaintiff an irrevocable release of each Indemnified Party from all liability with respect to the Third Party Claim. If a firm settlement offer is made to settle a Third Party Claim without leading to liability or the creation of a financial or other obligation on the part of the Indemnified Party and provides,

 

 

in customary form, for the unconditional release of each Indemnified Party from all liabilities and obligations in connection with such Third Party Claim, and the Indemnifying Party desires to accept and agree to such offer, the Indemnifying Party shall give written notice to that effect to the Indemnified Party. If the Indemnified Party fails to consent to the firm offer within 5 days after its receipt of the written notice, the Indemnified Party must continue to contest or defend such Third Party Claim and, in such event, the maximum liability of the Indemnifying Party for that Third Party Claim shall not exceed the amount of the firm settlement offer.

 

(c)    Direct Claims. Any Action by an Indemnified Party with respect to a Loss not resulting from a Third Party Claim (a “Direct Claim”) shall be asserted by the Indemnified Party giving the Indemnifying Party prompt written notice of the claim, but in any event not later than 30 days after the Indemnified Party becomes aware of the Direct Claim. Failure to give prompt written notice shall not relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses or is materially prejudiced by reason of such failure. The written notice shall describe the Direct Claim in reasonable detail, include copies of all material written evidence of the claim, and indicate the estimated amount of the Loss that has been or may be sustained by the Indemnified Party, to the extent known. The Indemnifying Party shall have 30 days after its receipt of such notice to respond in writing to the Direct Claim. The Indemnified Party shall allow the Indemnifying Party and its advisors to investigate the matter or circumstance alleged to give rise to the Direct Claim and whether and to what extent any amount is payable in respect of the Direct Claim, and the Indemnified Party shall cooperate with the Indemnifying Party’s investigation by giving such information and assistance (including providing access to the Company’s premises, records, and personnel, and including the right to examine and copy any relevant documents or records) as the Indemnifying Party or its advisors may reasonably request. If the Indemnifying Party does not respond within such 30-day period, the Indemnifying Party shall be deemed to have rejected such claim, in which case the Indemnified Party shall be free to pursue any available remedies consistent with the terms of this Agreement.

 

Section 11.05    Payments. Once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable, the Indemnifying Party shall make payment within 10 Business Days by wire transfer of immediately available funds to the account designated in advance in writing by the Indemnified Party. If the Indemnifying Party does not make full payment within such 10 Business Day period, any amount past due shall accrue interest at a rate of 5% per annum, or the highest rate permitted by applicable law, whichever is less. Interest shall be calculated daily on the basis of a 365 day year and the actual number of days elapsed, from the due date until the date payment is received. The Indemnifying Party also agrees to pay reasonable attorneys’ fees and other costs of collection incurred by the Indemnified Party with respect to any past due amount. All amounts payable hereunder shall be paid in US dollars (USD), unless otherwise agreed in writing.

 

Section 11.06    Tax Treatment of Indemnification Payments. All indemnification payments made under this Agreement shall be treated by the parties as an adjustment to the Purchase Price for tax purposes, unless otherwise required by Law.

 

Section 11.07    Effect of Investigation. The representations, warranties, and covenants of the Indemnifying Party, and the Indemnified Party’s right to indemnification under this ARTICLE XI with respect thereto, shall not be affected or deemed waived by reason of any investigation made by or on behalf of the Indemnified Party (including by any of its Representatives) or by reason of the fact that the Indemnified Party or any of its Representatives knew or should have known that any such representation or warranty is, was, or might be inaccurate or by reason of the Indemnified Party’s waiver of any condition set forth in Section 10.02.

 

 

Section 11.08    Indemnification as Exclusive Remedy. Each party acknowledges and agrees that the sole and exclusive remedy with respect to any and all claims (other than claims arising from fraud, criminal activity, or intentional misconduct) arising under, out of, or related to this Agreement and the transactions contemplated by this Agreement shall be the rights to indemnification set forth in this ARTICLE XI and ARTICLE VIII. Accordingly, each Party waives, to the fullest extent permitted by applicable law, any and all other rights, remedies, entitlements, and recourse (whether in contract, tort, or otherwise). Nothing in this Section 11.08 shall limit any Person’s right to seek and obtain any equitable relief to which any Person shall be entitled on account of any Person’s fraudulent, criminal, or intentional misconduct.

 

Section 11.09    Tax Claims. This ARTICLE XI shall not apply to Tax Claims, which shall be governed exclusively by ARTICLE VIII.

 

ARTICLE XII
MISCELLANEOUS

 

Section 12.01    Expenses. Except as otherwise provided in this Agreement or other Transaction Documents, Company and Seller, on one hand, and Buyer, on the other hand, shall bear their own Transaction Expenses.

 

Section 12.02    Notices. All notices, requests, consents, claims, demands, waivers, and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered, if delivered personally to the intended recipient; (b) when received by the addressee, if sent by an internationally recognized overnight courier service; (c) on the date sent by email of a PDF document (with confirmation of receipt of the email and any attachments) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the fifth day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 12.02):

 

(a)    if to Company:

 

RYVYL Inc. 3131 Camino Del Rio North, Suite 1400 San Diego, California, United States Email: george@ryvyl.com Attention: George Oliva

 

with a copy (which shall not constitute notice) to:

 

Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas, 11th Floor New York, NY 10105 Email: smiller@egsllp.com Attention: Scott M. Miller, Esq.

 

 

(b)    if to Seller:

 

Transact Europe Holdings EOOD Perform Business Center, Sofia Center Pozitano Sq 2, 3rd floor 1000 Sofia, Bulgaria Email: george@ryvyl.com Attention: George Oliva

 

with a copy (which shall not constitute notice) to:

 

Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas, 11th Floor New York, NY 10105 Email: smiller@egsllp.com Attention: Scott M. Miller, Esq.

 

(c)    if to the Buyer:

 

Hampstead Holdings Ltd 19, Maragidik Str., 2nd floor, office 1 Burgas, Bulgaria Email: dcookson@washingtonminvest.com Attention: Daniel Cookson, Managing Director

 

with a copy (which shall not constitute notice) to:

 

Sichenzia Ross Ference Carmel LLP 1185 Avenue of the Americas, 31st Floor New York, New York, United States Email: mross@srfc.law Attention: Marc Ross, Esq.

 

Section 12.03    Severability. If any term or provision of this Agreement is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Agreement in such jurisdiction or invalidate or render unenforceable such term or provision in any other jurisdiction.

 

Section 12.04    Entire Agreement. This Agreement and the other Transaction Documents constitute the entire agreement, and supersedes all prior agreements and understandings (both written and oral), among the parties regarding the subject matter hereof. If there is an inconsistency between the statements in the body of this Agreement and those in the other Transaction Documents, the Exhibits and Schedules (other than an exception expressly set forth as such in the Company Group Disclosure Schedules), the statements in the body of this Agreement will control.

 

Section 12.05    Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. No Company Group member may assign its rights or obligations hereunder without the prior written consent of the Buyer, which consent shall not be unreasonably withheld or delayed. Buyer may assign its rights and obligations hereunder in its sole and absolute discretion.

 

 

Section 12.06    No Third-Party Beneficiaries. Except as provided in Section 8.05 and ARTICLE XI, this Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns. Nothing in this Agreement, express or implied, is intended to or shall confer on any other Person any legal or equitable right, benefit, or remedy of any nature whatsoever.

 

Section 12.07    Amendment and Waiver. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

Section 12.08    Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.  This Agreement shall be governed by and construed in accordance with the laws of New York. Each party agrees that the Supreme Court located in New York County or the Federal Court for the Southern District of New York, shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Agreement or its subject matter or formation. Each party submits to the jurisdiction of such courts in any such action or proceeding and waives any objection to such courts as the venue of any such action or any proceeding (including that any such action or proceeding was brought in an inconvenient forum). Each party irrevocably waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Agreement.

 

Section 12.09    Specific Performance. Each of Company and Seller, on the one hand, and Buyer, on the other hand, acknowledge and agree that the breach of this Agreement or other failure to perform any provision of this Agreement would cause irreparable damage to the other and such other parties will not have an adequate remedy at law. Therefore, the parties shall be entitled to specific performance of the terms of this Agreement in addition to any other remedy to which they are entitled at law or in equity.

 

Section 12.10    Non-Recourse. This Agreement may only be enforced against, and any claim, action, suit or other legal proceeding based upon, arising out of, or related to this Agreement, or the negotiation, execution or performance of this Agreement, may only be brought against the entities that are expressly named as parties hereto and then only with respect to the specific obligations set forth herein with respect to such party. No past, present or future director, officer, employee, incorporator, manager, member, partner, stockholder, Affiliate, agent, attorney or other Representative of any party hereto or of any Affiliate of any party hereto, or any of their successors or permitted assigns, shall have any liability for any obligations or liabilities of any party hereto under this Agreement or for any claim, action, suit or other legal proceeding based on, in respect of or by reason of the transactions contemplated hereby.

 

 

Section 12.11    Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, email, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above by their respective duly authorized officers.

 

COMPANY

 

RYVYL, INC.


By:         /s/ Fredi Nisan         
               Fredi Nisan
               Chief Executive Officer

 

SELLER

 

TRANSACT EUROPE HOLDINGS EOOD

 

By:         /s/ Ben Errez         
               Ben Errez         

               General Manager

 

BUYER

 

HAMPSTEAD HOLDINGS LTD


By:         /s/ Daniel Cookson         
               Daniel Cookson
               Managing Director

 

 

EXHIBIT A

 

DEFINITIONS

 

Affiliate of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “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 and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

Affiliated Group means any affiliated group within the meaning of Section 1504(a) of the Code or any combined, consolidated, unitary or affiliated tax group under a similar provision of state, local or non-U.S. Tax Law.

 

Agreement has the meaning set forth in the preamble.

 

Anticorruption Law means the U.S. Foreign Corrupt Practices Act (FCPA), the UK Bribery Act 2010 (Bribery Act 2010), the Bulgarian Counter-Corruption Act (published in State Gazette Volume 84/2023, as subsequently amended), and any other anti-corruption Law or regulation applicable to the Business or the Company.

 

Business has the meaning set forth in the recitals.

 

Business Day means any day other than a Saturday, Sunday, or other day on which commercial banks located in New York are authorized or required by Law to be closed for business.

 

Buyer has the meaning set forth in the preamble.

 

Buyer Group has the meaning set forth in Section 11.02.

 

Cap has the meaning set forth in Section 11.03(a).

 

Closing means the completion of the purchase and sale of the Shares on the Closing Date.

 

Closing Date means the Business Day immediately following the last day of the Closing Preparation Period or such later date determined by the Buyer in its sole and absolute discretion, in each case following obtaining the Regulatory Approvals necessary for Closing to take place.

 

Closing Preparation Period means the period from and including the date of this Agreement to but excluding the 90^th calendar day after such date as may be extended by mutual agreement between the Parties.

 

Code means the Internal Revenue Code of 1986, as amended.

 

Company has the meaning set forth in the recitals.

 

Company Financial Statements has the meaning set forth in Section 5.05(b).

 

 

Company Fundamental Representations has the meaning set forth in Section 11.01(a)(i).

 

Company Group means Company, Seller, and Ryvyl EU.

 

Company Group Disclosure Schedules means the disclosure schedules prepared by Company pursuant to this Agreement and delivered by Company to Buyer in accordance with this Agreement.

 

Company Pre-Closing Tax Returns has the meaning set forth in Section 8.04(a).

 

Company SEC Documents means registration statements, prospectuses, reports, schedules, forms, statements, and other documents (including exhibits and all other information incorporated by reference) filed or furnished by the Company with the SEC.

 

Consolidated Tax Return has the meaning set forth in Section 8.04(a).

 

Contracts means all contracts, leases, deeds, mortgages, licenses, instruments, notes, commitments, undertakings, indentures, joint ventures and all other agreements, commitments and legally binding arrangements, whether written or oral.

 

CPC Approval means the final and non-challengeable act by the Bulgarian Competition Protection Commission for clearance of the purchase of the Shares by the Buyer or final and non-challengeable confirmation by the Bulgarian Competition Protection Commission that the purchase of the Shares does not fall within the scope of the mandatory concentration clearance under the Bulgarian Competition Protection Act.

 

                          means                          , Inc., a holder of senior debt of the Company and all of the outstanding shares of Series B Preferred Stock.

 

                          Indenture has the meaning set forth in Section 4.01(a).

 

                          Share Repurchase and Paydown Agreement has the meaning set forth in Section 4.01(a).

 

                          Share Repurchase and Payoff Agreement has the meaning set forth in Section 4.01(a).

 

Direct Claim has the meaning set forth in Section 11.04(c).

 

Encumbrances means any charge, claim, community property interest, pledge, condition, equitable interest, lien (statutory or other), option, security interest, mortgage, easement, encroachment, right of way, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.

 

Escrow Agent has the meaning set forth in Section 3.01(b).

 

Escrow Agreement has the meaning set forth in Section 3.01(b).

 

Fair Value Amount has the meaning set forth in Section 3.02(b).

 

 

FDI No-objection means final and non-challengeable confirmation by the Interdepartmental Council on Screening of Foreign Direct Investments that the purchase of the Shares by the Buyer does not fall within the requirements of Chapter Six of the Bulgarian Investment Promotion Act, or, respectively final and non-challengeable no-objection (authorization) decision of the Interdepartmental Council on Screening of Foreign Direct Investments for the purchase of the Shares by the Buyer.

 

Funding Date has the meaning set forth in Section 9.01.

 

GAAP means United States generally accepted accounting principles in effect from time to time.

 

Governmental Authority means any federal, state, local or foreign government, or political subdivision thereof or any agency or instrumentality of any such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.

 

Governmental Order means any order, writ, judgment, injunction, decree, stipulation, determination, or award entered by or with any Governmental Authority.

 

Indebtedness means, without duplication and with respect to the Seller and Ryvyl EU: (a) the principal of and premium (if any) in respect of all indebtedness for borrowed money, including accrued interest and any cost associated with prepaying any such debt; (b) the principal of and premium in respect of obligations evidenced by bonds, debentures, notes or other similar instruments, including accrued interest; (c) the principal component of all obligations to pay the deferred and unpaid purchase price of property and equipment which have been delivered; (d) capital lease obligations; (e) negative balances in bank accounts; (f) amounts in respect of checks in transit; (g) net cash payment obligations under swaps, options, derivatives and other hedging agreements or arrangements; (h) all liabilities relating to securitization or factoring programs or arrangements; and (i) all indebtedness of another Person of the kinds referred to in clauses (a) through (h) above that are directly or indirectly, jointly or severally, guaranteed in any manner.

 

Indemnified Party has the meaning set forth in Section 11.04.

 

Indemnifying Party has the meaning set forth in Section 11.04.

 

Independent Accountant means Simon & Edward, LLP or, if unable to serve, an independent accounting firm mutually acceptable to Company and Buyer other than Company’s accountants or Buyer’s accountants.

 

Intellectual Property means any and all rights in, arising out of, or associated with any of the following in any jurisdiction throughout the world: (a) trademarks and service marks, including all applications and registrations and the goodwill connected with the use of and symbolized by the foregoing; (b) copyrights, including all applications and registrations, and works of authorship, whether or not copyrightable; (c) trade secrets and confidential know-how; (d) patents and patent applications; (e) websites and web pages, social media sites and pages, and internet domain name registrations; and (f) all other intellectual property and industrial property rights and assets, and all rights, interests and protections that are associated with, similar to, or required for the exercise of, any of the foregoing.

 

 

Interim Shares Certificate[/s] has the meaning set forth in Section 9.01(g).

 

Knowledge means the actual or constructive knowledge, after due inquiry, of any director or officer of Company or the Seller.

 

Law means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.

 

Leased Real Property means all real property leased or subleased by the Seller or Ryvyl EU that is used or held for use in the Business as lessee or lessor.

 

Legal Action means any legal, administrative, arbitral, or other proceedings, suits, actions, investigations, examinations, claims, audits, hearings, charges, complaints, indictments, litigations, or similar legal proceedings conducted or heard by or before any Governmental Authority, arbitrator, mediator, or other tribunal.

 

Losses means losses, damages, liabilities, Taxes, liens, judgments, interest, awards, penalties, fines, costs or expenses, including reasonable attorneys’ fees and the cost of enforcing any right to indemnification hereunder and pursuing any insurance providers, but excluding punitive damages, except in the case of fraud or to the extent actually awarded by to a Governmental Authority or other third party.

 

Material Adverse Effect means any event, occurrence, fact, condition or change that is, or could reasonably be expected to become, individually or in the aggregate, materially adverse to (a) the business, results of operations, condition (financial or otherwise) or assets of any Company Group member (with respect to the Business), or (b) the ability of any Company Group member to consummate the transactions contemplated hereby on a timely basis; provided that “Material Adverse Effect” shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions; (ii) conditions generally affecting the industries in which the Business operates; (iii) any changes in financial or securities markets in general; (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof; (v) any natural or man-made disaster or act of God; or (vi) any action required or permitted by this Agreement, except pursuant to Section 5.04; provided further, however, that any event, occurrence, fact, condition or change referred to in clauses (i) through (vi) immediately above shall be taken into account in determining whether a Material Adverse Effect has occurred or could reasonably be expected to occur to the extent that such event, occurrence, fact, condition or change has a disproportionate effect on the Business compared to other participants in the industries in which the Business operates.

 

Material Contracts means any written Contract that: (a) represents an aggregate future liability in excess of USD 250,000 in any one fiscal year with respect to the Business or Ryvyl EU; (b) contains covenants limiting the ability of Company, Ryvyl EU or the Seller to engage in any line of business or to compete with any Person; (c) involves the Business or Ryvyl EU and has as a counterparty any Governmental Authority; (d) relates to the establishment of a joint venture or partnership with respect to the Business or Ryvyl EU; (e) relates to capital expenditures and

 

 

involves future payments in excess of USD 250,000 in any one fiscal year with respect to the Business, Ryvyl EU, Seller or the Company; (f) relates to Indebtedness of the Business, Ryvyl EU or the Seller in excess of USD 250,000; (g) is a lease or similar Contract: (i) relating to any equipment, or other tangible personal property used in the Business or by Ryvyl EU involving payment of more than in excess of USD 250,000 (unless terminable without payment or penalty upon no more than 90 days’ notice) or (ii) relating to any real property on which the Business or Ryvyl EU is located; (h) relating to a material acquisition, divestiture, merger or similar transaction related to or affecting the Business, the Shares, Ryvyl EU or the Seller that has not been consummated, or that has been consummated but contains representations, covenants, indemnities or other obligations that are still in effect; (i) related to the purchase or sale of material real property used in the Business or Ryvyl EU; (j) relates to any Ryvyl EU Owned IP; or (k) is otherwise material to the Business or Ryvyl EU (other than those listed in (a) through (j) above).

 

Material Customers has the meaning set forth in Section 5.17.

 

Material Permits has the meaning set forth in Section 5.08(b).

 

NASDAQ means The Nasdaq Stock Market.

 

Note means the 8% Senior Convertible Promissory Note held by              .

 

Owned Real Property means all real property owned in fee by the Seller.

 

Perfection of the Pledge means all necessary registrations in all relevant registries and all other documents and actions which are necessary or desirable for the due perfection of the pledge in accordance with the Ryvyl EU Share Pledge Agreement.

 

Permitted Encumbrances means: (a) liens for Taxes not yet due and payable or being contested in good faith by appropriate procedures; (b) mechanics’, carriers’, workmen’s, repairmen’s or other like liens arising or incurred in the ordinary course of business; (c) easements, rights of way, zoning ordinances and other similar encumbrances affecting Real Property; (d) other than with respect to Owned Real Property, liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business; and (e) other imperfections of title or Encumbrances, if any, that have not had, and would not have, a Material Adverse Effect.

 

Permits means all permits, licenses, clearances, exemptions, franchises, approvals, authorizations, registrations, certificates, and similar rights obtained, or required to be obtained, from Governmental Authorities.

 

Person means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.

 

Pre-Closing Tax Period means any taxable period ending on or before the Closing Date and, with respect to any taxable period beginning before and ending after the Closing Date, the portion of such taxable period ending on and including the Closing Date.

 

Purchase Price has the meaning set forth in Section 3.01(a).

 

 

Real Property means the Owned Real Property and the Leased Real Property.

 

Regulatory Approvals means the Requisite BNB Approval, CPC Approval and FDI No-objection.

 

Release means any actual or threatened release, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, abandonment, disposing or allowing to escape or migrate into or through the environment (including, without limitation, ambient air (indoor or outdoor), surface water, groundwater, land surface or subsurface strata or within any building, structure, facility or fixture).

 

Representative means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

 

Requisite BNB Approval means the preliminary approval of the Bulgarian National Bank for the Buyer to purchase the Shares from the Seller obtained in accordance with the procedure set forth in the Bulgarian Payment Services and Payment Systems Act and Ordinance No 16 of the BNB of 29 March 2018 on Granting Licenses and Approvals, Entry into the Register under Article 19 of the Law on Payment Services and Payment Systems, and Requirements to the Activity of Operators of Payment Systems with Settlement Finality.

 

Restricted Business means commercial and retail payment processing and software-developer of applications for such transactional processing.

 

Restricted Period has the meaning set forth in Section 7.05(a).

 

Ryvyl EU IP has the meaning set forth at Section 5.10(b).

 

Ryvyl EU IP Agreements means all licenses, sublicenses, consent to use agreements, settlements, coexistence agreements, covenants not to sue, waivers, releases, permissions, and other Contracts, whether written or oral, relating to Intellectual Property and to which Ryvyl EU is a party, beneficiary, or otherwise bound.

 

Ryvyl EU Irrevocable POA has the meaning set forth in Section 9.01(h).

 

Ryvyl EU IT Systems means all software, computer hardware, servers, networks, platforms, peripherals, and similar or related items of automated, computerized, or other information technology networks and systems (including telecommunications networks and systems for voice, data, and video) owned, leased, licensed, or used (including through cloud-based or other third-party service providers) by Ryvyl EU.

 

Ryvyl EU Registered IP has the meaning set forth at Section 5.10(a).

 

Ryvyl EU Share Pledge Agreement means the share pledge agreement in respect of all outstanding shares from the capital of Ryvyl EU to be entered between the Seller, as pledgor, and the Buyer, as pledgee, in the form as per Exhibit B.

 

Schedule Supplement has the meaning set forth in Section 7.09.

 

 

SEC means the United States Securities and Exchange Commission.

 

Seller Group means Company and the Seller.

 

Seller Irrevocable POA has the meaning set forth in Section 9.01(h).

 

Series B Preferred Stock means the Company’s Series B Convertible Preferred Stock, par value $0.01 per share.

 

Shares has the meaning set forth in the recitals.

 

Shares Transfer Endorsement[/s] has the meaning set forth in Section 9.01(g).

 

Shareholders Book of Ryvyl EU has the meaning set forth in Section 9.01(g).

 

Straddle Period has the meaning set forth in Section 8.06(a).

 

Straddle Period Tax Returns has the meaning set forth in Section 8.04(b).

 

Taxes means all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties.

 

Tax Claim has the meaning set forth in Section 8.07(a).

 

Tax Proceeding has the meaning set forth in Section 8.07(a).

 

Tax Return means any return, declaration, report, claim for refund, information return or statement or other document relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

 

Territory means the European Union.

 

Third Party Claim has the meaning set forth in Section 11.04(a).

 

Transaction Documents means this Agreement, the Ryvyl EU Pledge Agreement, the Escrow Agreement and any other ancillary agreement entered into by the parties in connection with this Agreement.

 

Transaction Expenses means all fees and expenses incurred by a party in connection with the preparation, negotiation and execution of this Agreement, the other Transaction Documents, each other agreement, document and instrument contemplated by this Agreement, and the performance and consummation of the transactions contemplated hereby and thereby.

 

 

Transaction Formalities means a notary verified power of attorney by the executive director of Ryvyl EU, on behalf of Ryvyl EU, authorizing Tsvetkova Bebov and Partners, member of Eversheds Sutherland, to make all necessary filings with the Bulgarian Commercial Register and Register of Non-profit Legal Entities with the Registry Agency in relation to the sale and purchase of the Shares pursuant to this Agreement; and any other document and action which is necessary or desirable to be provided or taken or caused to be provided or taken by Company or Seller in relation to the due performance of their obligations under this Agreement and the proper registration of the sale and purchase of the Shares in all relevant registries.

 

Transaction Formalities Documents has the meaning set forth in Section 9.01(d).

 

 

 

 

Exhibit 10.3 

 

 

ESCROW AGREEMENT

 

This Escrow Agreement (the “Agreement”) entered into as of January 23, 2025 is by and among Transact Europe Holdings EOOD, registered with the Bulgarian Commercial Register and Register of Non-profit Legal Entities with the Registry Agency under UIC (ЕИК) 203296816, a sole owner limited liability company organized under the laws of the Republic of Bulgaria, with a registered office located at Perform Business Center, Sofia Center, Pozitano Sq 2, 3rd floor, 1000 Sofia, Bulgaria (“Seller”), Ryvyl (EU) EAD, registered with the Bulgarian Commercial Register and Register of Non-profit Legal Entities with the Registry Agency under UIC (ЕИК) 121554961, a sole owner joint stock company organized under the laws of the Republic of Bulgaria, with a registered office located at Perform Business Center, Sofia Center, Pozitano Sq 2, 3^rd floor, 1000 Sofia, Bulgaria (the “Ryvyl EU”), Hampstead Holdings Ltd, a limited liability company, organized under the laws of the Republic of Bulgaria, registered with the Bulgarian Commercial Register and Register of Non-profit Legal Entities with the Registry Agency under UIC (ЕИК) 208105806, with a registered office located at 19, Maragidik Str., 2^nd floor, office 1, Burgas, Bulgaria (“Buyer”), and Sichenzia Ross Ference Carmel LLP as escrow agent (“Escrow Agent”).

 

WHEREAS, Seller, RYVYL, Inc., a corporation incorporated in the State of Nevada of the United States with a registered office located at 3131 Camino Del Rio North, Suite 1400, San Diego, California 92108, United States (the “Company”) and Buyer are parties to that certain Stock Purchase Agreement dated January 23, 2025 (the “Purchase Agreement”), pursuant to which Seller shall sell to Buyer, and Buyer shall purchase from the Seller all of the issued and outstanding shares of capital stock of Ryvyl EU, and which provides for the deposit and the delivery of the Escrowed Property to the Escrow Agent and the release of such Escrowed Property by the Escrow Agent; and

 

WHEREAS, the Escrow Agent is willing to retain such Escrowed Property as escrow agent upon the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants, agreements, representations and warranties contained herein, the parties hereby agree as follows:

 

1.    All capitalized terms used in this Agreement but not otherwise defined herein are given the meanings set forth in the Purchase Agreement.

 

2.    Seller, Ryvyl EU and Buyer hereby appoint Escrow Agent to serve as the escrow agent under this Escrow Agreement, and Escrow Agent accepts such appointment subject to the terms and conditions hereof.

 

 

3.    Each of the following shall be deposited or delivered, as the case may be, to the Escrow Agent pursuant to the Purchase Agreement (collectively, the “Escrowed Property”):

 

(a)

the Transaction Formalities Documents;

(b)

Interim Shares Certificate[/s];

(c)

Shares Transfer Endorsement[/s];

(d)

Shareholders Book of Ryvyl EU;

(e)

Seller Irrevocable POA;

(f)

Ryvyl EU Irrevocable POA; and

(g)

the Purchase Price, which Buyer shall wire to the following account,

 

Citibank

153 East 53^rd Street

23^rd Floor

New York, NY 10022

 

A/C of Sichenzia Ross Ference Carmel LLP

A/C No.:         4974921703

ABA No.:        021000089

SWIFT Code:  CITIUS33

 

4.    Pending the deposit and the delivery of the Escrowed Property, Escrow Agent agrees to hold the Escrowed Property in accordance with the terms and conditions contained herein. The Escrow Agent shall not distribute or release any of the Escrowed Property except in accordance with the express terms and conditions of this Agreement.

 

5.    Pending the payment and/or delivery of the Escrowed Property out of escrow as provided herein, Escrow Agent shall retain all monies constituting the Escrowed Property in a non-interest-bearing account in accordance with the terms of this Escrow Agreement.

 

Upon the receipt by Escrow Agent of written instruction from Buyer to release any of the Escrowed Property (“Buyer Instruction”), then such Escrowed Property shall be released by Escrow Agent in accordance with the Buyer Instruction as soon as practicable, but no later than three (3) Business Days after receipt of such Buyer Instruction. For the avoidance of doubt, each of Seller and Ryvyl EU agree and confirm that pursuant to a Buyer Instruction delivered by Buyer to Escrow Agent, in connection with the Closing and in furtherance of Section 4.02(a) of the Purchase Agreement, that instructs Escrow Agent to release the Escrowed Property to Tsvetkova Bebov and Partners, member of Eversheds Sutherland, Escrow Agent shall deliver the Escrowed Property to such appointee in accordance with such Buyer Instruction.

 

6.    Escrow Agent shall not be under any duty to give the Escrowed Property any greater degree of care than it gives to similar property held in escrow, and it shall have no liability hereunder, except for the willful breach of its duties hereunder.

 

7.    Escrow Agent shall have no duties or responsibilities except those expressly set forth herein, and no implied duties or obligations should be read into this Escrow Agreement against Escrow Agent. Escrow Agent need not refer to, and will not be bound by, the provisions of any other agreement.

 

 

8.    Escrow Agent may consult with counsel and shall be fully protected with respect to any action taken or omitted by it in good faith on advice of counsel.

 

9.    Escrow Agent makes no representation as to the validity, value, genuineness or the collectability of any security or other document or instrument held by or delivered to it.

 

10.    Seller shall pay to Escrow Agent an agency fee in the aggregate amount of $7,500 for its services hereunder upon execution of this Agreement.

 

11.    In the event that Escrow Agent shall be uncertain as to its duties or rights hereunder, or shall receive instructions from Buyer with respect to the Escrowed Property, which, in its opinion, are in conflict with any of the provisions hereof (i) it shall be entitled to refrain from taking any action, and in doing so shall not become liable in any way or to any person for its failure or refusal to comply with such conflicting demands, and it shall be entitled to continue so to refrain from acting and so refuse to act until it shall be directed otherwise, in writing, jointly by Seller, Ryvyl EU and Buyer or until it shall receive a final determination of a court of law, arbitration panel, or similar adjudicative body, or (ii) it may commence as interpleader action in any court of competent jurisdiction to seek an adjudication of the rights of Seller, Ryvyl EU and Buyer.

 

12.    Escrow Agent may act in reliance upon any notice, instruction, certificate, statement, request, consent, confirmation, agreement or other instrument which it believes to be genuine and to have been signed by a proper person or persons, and may assume that any of the officers of Buyer purporting to act on behalf of Buyer in giving any such notice or other instrument in connection with the provisions hereof has been duly authorize to do so.

 

13.    In the event that Escrow Agent shall, by written notice, request of Seller, Ryvyl EU and Buyer instructions jointly executed by each of them regarding any matter arising in connection with this Escrow Agreement, and such parties shall not, within fifteen (15) days after the giving of such notice, deliver to Escrow Agent written instructions reasonably satisfactory to Escrow Agent in relation to such matter, Escrow Agent may retain counsel to advise it in such connection or act pro se.

 

14.    (a) In the event that Escrow Agent retains counsel or otherwise incurs any legal fees by virtue of any provision of this Escrow Agreement, the reasonable fees and disbursements of such counsel and any other liability, loss or expense which it may thereafter suffer or incur in connection with this Escrow Agreement or the performance or attempted performance in good faith of its duties hereunder shall be paid (or reimbursed to it) by Seller, Ryvyl EU and Buyer, jointly and severally. In the event that Escrow Agent shall become a party to any litigation in connection with its functions as Escrow Agent pursuant to this Escrow Agreement, whether such litigation shall be brought by or against it, the reasonable fees and disbursements of counsel to Escrow Agent and the amounts attributable to services rendered by members or associates of Escrow Agent at the then prevailing hourly rate charged by them and disbursements incurred by them, together with any other liability, loss or expense which it may suffer or incur in connection therewith, shall be paid (or reimbursed to it) by Seller, Ryvyl EU and Buyer, jointly and severally, unless such loss, liability or expense is due to the willful breach by Escrow Agent of its duties hereunder.

 

 

(b)         Seller, Ryvyl EU and Buyer jointly and severally hereby unconditionally agree to indemnify Escrow Agent and hold it harmless from and against any and all taxes (including federal, state and local taxes of any kind and other governmental charges), expenses, damages, actions, suits or other charges incurred by or brought or assessed against it for (i) anything done or omitted by it in the performance of its duties hereunder, or (ii) an account of its acting in its capacity as an Escrow Agent or stakeholder hereunder, except as a result of its willful breach of its duties under this Escrow Agreement.

 

(c)         All expenses incurred by Escrow Agent in connection with the performance of its duties hereunder shall be paid (or reimbursed to it) by Seller, Ryvyl EU and Buyer, jointly and severally.

 

(d)         The agreements contained in this Section 15 shall survive any termination of the duties of Escrow Agent hereunder.

 

15.    Escrow Agent may resign at any time and be discharged from its duties as Escrow Agent hereunder by giving Seller, Ryvyl EU and Buyer at least fifteen (15) days’ prior written notice thereof. As soon as practicable after its resignation, Escrow Agent shall turn over to the successor escrow agent appointed by Seller, Ryvyl EU and Buyer the Escrowed Property then held by Escrow Agent upon presentation of the document appointing the new Escrow Agent and its acceptance thereof. If no new Escrow Agent is so appointed within thirty (30) days following such notice of resignation, Escrow Agent may deposit the Escrowed Property with, and commence an inter-pleader or other appropriate action in, any court of competent jurisdiction.

 

16.    Seller, Ryvyl EU and Buyer may each terminate this Agreement by giving written notice to Escrow Agent and the other parties, by certified or registered mail, ten (10) Business Days prior to the effective date of termination, to the effect that any non-terminating party has failed to satisfy its obligations under the Purchase Agreement. Within three (3) Business Days after receiving notice of termination, each non-terminating party shall advise Escrow Agent, in writing, by certified or registered mail, if it disputes the termination. Upon receiving such advice, Escrow Agent shall take no action until it receives either (i) a letter signed by each of Seller, Ryvyl EU and Buyer jointly directing it to deliver the Escrowed Property to any of such parties in accordance with the terms set forth in such letter or (ii) a final determination by a court of law, arbitration panel or similar adjudicative body specifying the manner in which the Escrowed Property is to be turned over by Escrow Agent. If, on or prior to the effective date of termination, no non-terminating party advises Escrow Agent that it disputes the termination, Escrow Agent shall thereupon turn over the Escrowed Property to the original party that delivered such property to Escrow Agent.

 

For the purpose of this Escrow Agreement, a determination will be deemed final once Escrow Agent receives a written notification from counsel that no appeal of the determination is permitted, or that the time to appeal has expired.

 

 

17.    Escrow Agent shall have no responsibility for the contents of any writing of any arbitrator contemplated herein and may rely without liability upon the contents thereof.

 

18.    The terms and provisions of this Escrow Agreement may not be waived, discharged or terminated orally, but only by an instrument in writing signed by the person or persons against whom enforcement of the discharge, waiver or termination is sought.

 

19.    Escrow Agent shall not be bound by any modification of the provisions of this Escrow Agreement, unless such modification is in writing and signed by each of Seller, Ryvyl EU and Buyer, and, with respect to any modification in its duties or its rights of indemnification hereunder, it shall have given its prior written consent thereto.

 

20.    Buyer, Ryvyl EU and Seller shall, from time to time, execute such documents and perform such acts as Escrow Agent may reasonably request and as may be necessary to enable Escrow Agent to perform its duties hereunder or effectuate the transactions contemplated by thus Escrow Agreement.

 

21.    The rights created by this Agreement shall inure to the benefit of, and the obligations created hereby shall be binding upon, the heirs, successors, assigns and personal representatives of Escrow Agent, Buyer, Ryvyl EU and Seller.

 

22.    This Agreement shall be construed in accordance with and governed by the laws of the State of New York, without giving effect to its conflict of law principles. The parties hereby agree that any dispute which may arise between them arising out of or in connection with this Agreement shall be adjudicated before a court located in New York City, and they hereby submit to the exclusive jurisdiction of the courts of the State of New York located in New York, New York and of the federal courts in the Southern District of New York with respect to any action or legal proceeding commenced by any party, and irrevocably waive any objection they now or hereafter may have respecting the venue of any such action or proceeding brought in such a court or respecting the fact that such court is an inconvenient forum, relating to or arising out of this Agreement, and consent to the service of process in any such action or legal proceeding by means of registered or certified mail, return receipt requested.

 

****************

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be duly executed as of the day and year first above written.

 

 

TRANSACT EUROPE HOLDINGS EOOD, Seller

 

By: /s/ Ben Errez                                                      

Name:       Ben Errez

Title:         Manager

 

 

RYVYL (EU)

 

By: /s/ Daniela Stahilova Ivanova – Nikolova                           

Name:       Daniela Strahilova Ivanova - Nikolova

Title:         Executive Director

 

HAMPSTEAD HOLDINGS LTD, Buyer

 

By: /s/ Daniel Cookson                                             

Name:       Daniel Cookson

Title:         Managing Director

 

SICHENZIA ROSS FERENCE CARMEL LLP, Escrow Agent

 

By: /s/ Thomas Rose                                                      

Name:       Thomas Rose

Title:         Managing Partner

 

Exhibit 10.4

 

 

TERMINATION AGREEMENT

 

This Termination Agreement (the “Agreement”) entered into as of January 23, 2025, (the “Effective Date”), by and between RYVYL, Inc., a corporation incorporated in the State of Nevada of the United States with a registered office located at 3131 Camino Del Rio North, Suite 1400, San Diego, California 92108, United States (the “Company”), Transact Europe Holdings EOOD, a sole owner limited liability company, registered with the Bulgarian Commercial Register and Register of Non-profit Legal Entities with the Registry Agency under UIC (ЕИК) 203296816, organized under the laws of the Republic of Bulgaria, with a registered office located at Perform Business Center, Sofia Center, Pozitano Sq 2, 3^rd floor, 1000 Sofia, Bulgaria (the “Seller”) and Hampstead Holdings Ltd, a limited liability company, organized under the laws of the Republic of Bulgaria, registered with the Bulgarian Commercial Register and Register of Non-profit Legal Entities with the Registry Agency under UIC (ЕИК) 208105806, with a registered office located at 19, Maragidik Str., 2nd floor, office 1, Burgas, Bulgaria (the “Buyer”). Company, Seller and Buyer are sometimes individually referred to herein as a “Party” and collectively as the “Parties”. Capitalized terms used herein but not otherwise defined have the meanings ascribed to such terms in the Stock Purchase Agreement, dated as of even date herewith, between the Parties (the “SPA”).

 

RECITALS

 

WHEREAS, pursuant to the SPA, Seller has agreed to sell, and Buyer has agreed to purchase, all of the outstanding shares of Ryvyl (EU) EAD, registered with the Bulgarian Commercial Register and Register of Non-profit Legal Entities with the Registry Agency under UIC (ЕИК) 121554961, a sole owner joint stock company organized under the laws of the Republic of Bulgaria, and a wholly-owned subsidiary of the Company, with a registered office located at Perform Business Center, Sofia Center, Pozitano Sq 2, 3rd floor, 1000 Sofia, Bulgaria (the “Purchased Shares”);

 

WHEREAS, pursuant to the SPA, the Purchase Price will be paid on the Funding Date, if all conditions for the funding of the Purchase Price are satisfied, or Buyer has waived any of such conditions;

 

WHEREAS, pursuant to the SPA, the Purchased Shares are to be delivered to Buyer at the Closing and all right, title and interest in and to the Purchased Shares shall vest in Buyer upon the Closing; and

 

WHEREAS, the Parties desire to set forth herein the terms and conditions pursuant to which the Parties shall have the right to terminate the SPA on or before the Closing Date.

 

NOW, THEREFORE, in consideration of the undertakings of the Parties as set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:

 

1.    Termination Rights. Subject to Sections 2 and 3 hereof, the SPA may be terminated:

 

(a)    at any time by mutual written consent of the Company, Seller and Buyer;

 

 

(b)    Notwithstanding any rights of the Buyer under Section 3.02(b) of the SPA, which are hereby preserved, by the Buyer on our prior to the Funding Date, if any of the representations or warranties of any Company Group member set forth in Article V of the SPA shall not be true and correct or if, as of the Funding Date, any Company Group member has failed to perform any covenant, agreement or obligation required to be performed by any Company Group member set forth in the SPA, as of the Funding Date (including an obligation to consummate the Closing) such that the conditions to the Closing set forth in Section 10.02 of the SPA cannot or could not be satisfied; or

 

(c)    by Company or Seller, prior to the 90th calendar day following the date of the SPA (the “Termination Deadline”) for any reason or no reason; provided, that the Termination Deadline may be postponed by 30 calendar days at the election of the Company subject to the Company paying to the Buyer the sum of US$500,000 for value and in freely transferable funds prior to the original Termination Deadline. 

 

2.    Procedure for termination

 

Any termination of the SPA by a party (the “Terminating Party”) pursuant to Section 1 may only be effected by:

 

(a)    the Terminating Party giving at least seven days written notice to the other party substantially in the form set out in Annex A hereto (a “Termination Notice”) designating a date on which the SPA will be terminated (the “Termination Date”) (which, in the case of Section 1(c) above, must be at least one (1) Business Day prior to the Termination Deadline) and with such notice signed by two directors of the Terminating Party; and

 

(b)    where the Company or Seller is the Terminating Party under Section 1(c), by the Buyer receiving from the Seller Group, jointly and severally, the sum of US$16,500,000 (“Seller Termination Payment”) on the designated Termination Date by wire transfer of immediately available funds to an account designated in writing by Buyer.

 

3.    Effect of Termination; Termination Fees.

 

(a)    The Parties acknowledge and hereby agree that any amounts payable in respect of a termination of the SPA pursuant to this Agreement shall not constitute penalties but will be liquidated damages, in a reasonable amount that will compensate Buyer or its designees in the circumstances in which it is payable for the efforts and resources expended and opportunities foregone while negotiating the SPA and in reliance on the SPA and on the expectation of the consummation of the Transactions, which amount would otherwise be impossible to calculate with precision. Each of the Parties acknowledge that the agreements contained in Section 2 and Section 3 are an integral part of the Transactions and that, without these agreements, the Parties hereto would not enter into the SPA.

 

 

(b)    In the event of the termination of the SPA pursuant to Section 1, the SPA shall forthwith become void and there shall be no further liability or obligation thereunder on the part of the Parties and their respective Affiliates with the exception of those obligations set forth in Section 2 and Section 3 of this Agreement and in Section 7.04 Confidentiality, Section 7.07 Public Announcements and Article XII Miscellaneous of the SPA, each of which shall survive such termination and remain valid and binding obligations of the Parties in accordance with their respective terms. Notwithstanding the foregoing or anything to the contrary herein, the termination of the SPA pursuant to Section 1 shall not affect any liability on the part of any Party for any willful breach of any covenant or agreement set forth in this Agreement prior to such termination or fraud.

 

(c)    No later than two Business Days after the Termination Date, Buyer shall cause Escrow Agent to release the Escrowed Property (as defined in the Escrow Agreement) to Company with the exception of the Escrow Funds, which shall return to Buyer.

 

4.    Consent to Subsequent Financings. Notwithstanding any provision in the SPA to the contrary, Buyer’s consent shall not be required in connection with any financing entered into by the Company or Seller, after the Effective Date, provided that all or a portion of the proceeds of such financing is used to pay the Seller Termination Payment to Buyer.

 

5.    Representations. Each Party hereby represents and warrants that it has not assigned or otherwise conveyed or delegated, in whole or in part, any claim or right that it has or may have under the SPA to any third party or person. Each Party represents that the execution and delivery of this Agreement is the duly authorized and binding act of the Party, enforceable against such party in accordance with its terms, and that the Party’s signatory hereto is duly authorized to execute this Agreement on behalf of the Party.

 

6.    No Admission of Liability. The Parties expressly agree and acknowledge that any exercise of termination rights pursuant to this Agreement shall not be construed in any manner as an admission of any liability, obligation, or wrongdoing on the part of any other Party.

 

 

7.     Cooperation between the Parties. Each Party shall fully cooperate with the other Party with respect to the performance of this Agreement. Each Party will provide or make available to the other Party information and will execute, acknowledge and deliver such further documents that may reasonably be required in order to effectively perform this Agreement and, in the event that termination rights are exercised hereunder, to evidence the termination of the SPA and to release all obligations and liabilities of the Parties thereunder.

 

8.    Incorporation by Reference. Sections 12.02 through 12.11 of the SPA are hereby incorporated by reference into this Agreement and made a part hereof.

 

 

9.    Conflict. In the event of a conflict between any of the provisions of this Agreement and the SPA, the provisions of this Agreement shall prevail.

 

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

 

COMPANY:

 

RYVYL, INC.

 

By: /s/ Fredi Nisan                                    

 

Name: Fredi Nisan

 

Title: Chief Executive Officer

 

 

SELLER:

 

TRANSACT EUROPE HOLDINGS EOOD

 

By: /s/ Ben Errez                                    

 

Name: Ben Errez

 

Title: Manager

 

 

BUYER:

 

HAMPSTEAD HOLDINGS LTD

 

By: /s/ Daniel Cookson                           

 

Name: Daniel Cookson

 

Title: Managing Director

 

 

ANNEX A

 

FORM OF TERMINATION NOTICE

 

 

 

 

 

 

TERMINATION NOTICE

 

[Letterhead of Notifying Party]

 

[DATE]

 

[METHOD OF DELIVERY]

 

[NAME AND ADDRESS]

 

Re:          Notice of Termination of Stock Purchase Agreement

 

Dear [name of non-Terminating Parties]:

 

Reference is made to that certain Stock Purchase Agreement, dated as of January 23, 2025, by and among RYVYL, Inc., Transact Europe Holdings EOOD, and Hampstead Holdings Ltd (“SPA”) and that certain Termination Agreement, dated as of January 23, 2025, by and among the aforementioned Parties (“Termination Agreement”). Capitalized terms used but not defined herein have the meanings ascribed to them under the Termination Agreement.

 

We hereby notify you that [name of Terminating Party] has elected, pursuant to Section 1[(b)][(c)] of the Termination Agreement, to terminate the SPA, and in accordance with Section 2 of the Termination Agreement, such termination shall be effective on [DATE].

 

Very truly yours,

 

[NAME OF TERMINATING PARTY]

 

By:__________________________

 

Name: _______________________

 

Title: ________________________

 

Exhibit 99.1

 

 

 

RYVYL Executes Repurchase and Repayment Agreement with Securityholder to
Retire All Outstanding Series B Convertible Preferred Stock and Outstanding Balance of 8% Senior Convertible Note

 

SAN DIEGO, CA, January 24, 2025 -- RYVYL Inc. (NASDAQ: RVYL) ("RYVYL" or the "Company"), a leading innovator of payment transaction solutions leveraging electronic payment technology for diverse international markets, has executed a Preferred Stock Repurchase and Note Repayment Agreement for the full repayment and termination of an 8% Senior Convertible Note (the "Note) and the redemption of all shares of the Company's Series B Convertible Preferred Stock (the "Preferred Stock"). The Definitive Agreement provides for:

 

●

A first tranche payment of $13.0 million for the redemption of all of the shares of Preferred Stock held by the Securityholder, and payment of a portion of the outstanding balance of the Note so that the remaining outstanding principal balance will be $4.0 million.

●

Advancing the maturity date for the remaining balance of $4.0 million due under the Note, following payment of the first tranche, to April 30, 2025.

 

The Company is required to pay the first tranche payment of $13.0 million on or before January 27, 2025. The first tranche due date may be extended to February 3, 2025, at the sole option of the Company, in consideration for RYVYL’s payment of an additional $50,000.

 

●

Upon payment of the first tranche payment and execution of the Preferred Stock Repurchase and Note Repayment Agreement, certain restrictive covenants contained in the transaction documents pursuant to which the Note and the shares of Preferred Stock were issued will be waived and no additional interest will accrue and be payable, as long as the Company pays the remaining $4.0 million principal balance of the Note ($4,050,000, if the date of the first tranche payment date is extended) on or before April 30, 2025. If the Company fails to pay the remaining balance by such date, the Note will be restored to its terms prior to the first tranche payment, and interest will again accrue and be payable.

●

Prior to payment of the first tranche payment, the Securityholder shall retain the ability, subject to certain market limitations, to convert the Note and the Preferred Stock into common stock.

 

This communication is for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, any security and does not constitute an offer, solicitation or sale of any security in any jurisdiction in which such offer, solicitation or sale would be unlawful.

 

About RYVYL

 

RYVYL Inc. (NASDAQ: RVYL) was born from a passion for empowering a new way to conduct business-to-business, consumer-to-business, and peer-to-peer payment transactions around the globe. By leveraging electronic payment technology for diverse international markets, RYVYL is a leading innovator of payment transaction solutions reinventing the future of financial transactions. Since its founding as GreenBox POS in 2017 in San Diego, RYVYL has developed applications enabling an end-to-end suite of turnkey financial products with enhanced security and data privacy, world-class identity theft protection, and rapid speed to settlement. As a result, the platform can log immense volumes of immutable transactional records at the speed of the internet for first-tier partners, merchants, and consumers around the globe. www.ryvyl.com

 

 

Cautionary Note Regarding Forward-Looking Statements

 

This press release includes information that constitutes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on the Company's current beliefs, assumptions, and expectations regarding future events, which in turn are based on information currently available to the Company. Such forward-looking statements include statements regarding timely payment of the first and second tranches, the benefit to stockholders from the repayment of the note and repurchase of the preferred shares, and the timing and expectation of revenues from the license described herein and are charactered by future or conditional words such as "may," "will," "expect," "intend," "anticipate," "believe," "estimate" and "continue" or similar words. You should read statements that contain these words carefully because they discuss future expectations and plans, which contain projections of future results of operations or financial condition or state other forward-looking information. By their nature, forward-looking statements address matters that are subject to risks and uncertainties. A variety of factors could cause actual events and results to differ materially from those expressed in or contemplated by the forward-looking statements, including the risk that the licensee understands and complies with various banking laws and regulations that may impact the licensee's ability to process transactions. For example, federal money laundering statutes and Bank Secrecy Act regulations discourage financial institutions from working with operators of certain industries - particularly industries with heightened cash reporting obligations and restrictions - as a result of which, banks may refuse to process certain payments and/or require onerous reporting obligations by payment processors to avoid compliance risk. These and other risk factors affecting the Company are discussed in detail in the Company's periodic filings with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether because of the latest information, future events or otherwise, except to the extent required by applicable laws.

 

IR Contact:

David Barnard, Alliance Advisors Investor Relations, 415-433-3777, ryvylinvestor@allianceadvisors.com

v3.24.4

Document And Entity Information	Jan. 23, 2025
Document Information Line Items
Entity Central Index Key	0001419275
Document Type	8-K
Document Period End Date	Jan. 23, 2025
Entity Registrant Name	RYVYL Inc.
Entity Incorporation, State or Country Code	NV
Entity File Number	001-34294
Entity Tax Identification Number	22-3962936
Entity Address, Address Line One	3131 Camino Del Rio North, Suite 1400
Entity Address, City or Town	San Diego
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92108
City Area Code	(619)
Local Phone Number	631-8261
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	RVYL
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Amendment Flag	false

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