Item 1.01. Entry into a Material Definitive
Agreement.
Rescission Agreement
As previously disclosed, pursuant to the Amended
and Restated Merger Agreement dated as of April 7, 2022 (the “Merger Agreement”), by and among S-CC Merger Sub, Inc. (“S-CC
Merger Sub”), a previously a wholly owned subsidiary of Sollensys Corp (“Sollensys”); SSolutions Merger Sub, Inc., a
previously a wholly owned subsidiary of Sollensys (“S-Solutions Merger Sub”); SCARE Holdings, LLC, a wholly owned subsidiary
of Sollensys (“SCARE”); (iii) Celerit Corporation, a wholly owned subsidiary of Sollensys (“Celerit”); (iv) Celerit
Solutions Corporation, a wholly owned subsidiary of Sollensys (“Celerit Solutions”); (v) Terry Rothwell; and (vi) CRE Holdings,
LLC (“CRE”), the parties to the Merger Agreement undertook certain transactions, including the merger of Celerit with and into S-CC Merger Sub, with Celerit surviving,
and the merger of Celerit Solutions with and into S-Solutions Merger Sub, with Celerit Solutions surviving, in which transactions Ms.
Rothwell received certain consideration as set forth in the Merger Agreement, and in connection with which the parties entered into certain
other agreements and certain other transactions. Subsequent to entry into the Merger Agreement, the parties determined that they would
unwind the transactions as set forth in the Merger Agreement and in the other agreements entered into in connection therewith.
Accordingly, on August 22, 2022, the Company entered
into the Rescission, Termination and Release Agreement (the “Rescission Agreement”) by and among (i) the Company, (ii) SCARE;
(iii) Celerit; (iv) Celerit Solutions; (v) Ms. Rothwell; (vi) Ron Harmon; and (vii) CRE. Pursuant to the terms of the Rescission Agreement,
the parties agreed to unwind the transactions as set forth in the Merger Agreement and in the other agreements entered into in connection
therewith, so as to place each of the parties to the Merger Agreement in the position that they were as of immediately prior to the closing
of the transactions as set forth in and as contemplated by the Merger Agreement and the related agreements.
Pursuant to the terms of the Rescission Agreement,
among other things, the parties agreed as follows:
| (i) | Sollensys agreed to transfer to Ms. Rothwell one share of Celerit common stock; |
| (ii) | Sollensys agreed to transfer to Ms. Rothwell one share of Celerit Solutions common stock; |
| (iii) | Ms. Rothwell agreed to transfer to Sollensys 4,000,000 shares of Sollensys common stock; |
| (iv) | Ms. Rothwell agreed to resign from any and all positions with Sollensys, including as a member of Sollensys’
board of directors; |
| (v) | Donald Beavers agreed to resign as a director and officer of Celerit and Celerit Solutions; |
| (vi) | Anthony Nolte agreed to resign as a director and officer of Celerit and Celerit Solutions; and |
| (vii) | Sollensys agreed, in connection with its withdrawal from Celerit of an aggregate of $605,000 following
the closing of the Merger Agreement, to issue to Celerit a promissory note in the principal amount of $605,000, accruing interest at the
rate of 7% per annum and due on September 30, 2022 (the “Celerit Note”). |
In addition, pursuant to the terms of the Rescission
Agreement, the parties agreed to terminate:
| (i) | The Executive Employment Agreement, dated as of April 7, 2022, by and between Sollensys and Ms. Rothwell
(the “Rothwell Employment Agreement”), except as set forth in the Rescission Agreement; |
| (ii) | The Executive Employment Agreement, dated as of April 7, 2022, by and between Sollensys and Mr. Harmon
(the “Harmon Employment Agreement”), except as set forth in the Rescission Agreement; |
| (iii) | The Rothwell Sollensys Blockchain Archive Server Distributive Data Center Agreement (2 Units), dated as
of April 7, 2022, by and among Sollensys, Ms. Rothwell and George Benjamin Rothwell (the “Blockchain Archive Server Agreement”); |
| (iv) | The Promissory Note issued by Sollensys to Ms. Rothwell on April 7, 2022 (the “Rothwell Note”); |
| (v) | The Banking and Credit Union Services Agreement, dated as of April 7, 2022, by and between Sollensys and
Celerit (the “Banking Agreement”); |
| (vi) | The Real Estate Purchase Agreement, dated as of March 24, 2022, by and among Sollensys, SCARE, CRE, Ms.
Rothwell and Mr. Rothwell (the “Real Estate Purchase Agreement”). |
The Rescission Agreement contains certain mutual
releases, and covenants, representations and warranties customary for an agreement of this type.
The foregoing summary of the Rescission Agreement is qualified in its entirety
by the terms of the Rescission Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein
by reference.
Promissory Note
On August 22, 2022, Sollensys issued the Celerit
Note, in the principal amount of $605,000, to Celerit. The Celerit Note bears simple interest at a rate of 7% per annum to the maturity
date, September 30, 2022, or such earlier date as the Celerit Note may be paid pursuant to the terms of the Celerit Note. There is no
penalty or premium for prepayment. In the Event of Default (as defined in the Celerit Note), Celerit may, at its option, declare the entire
indebtedness under the Celerit Note immediately due and payable.
The foregoing summary of the Celerit Note is qualified
in its entirety by the terms of the Celerit Note, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated
herein by reference.
Item 1.02. Termination of a Material Definitive
Agreement.
On August 26, 2022, the following agreements were terminated, except
as set forth in the Rescission Agreement: (i) the Rothwell Employment Agreement, (ii) the Harmon Employment Agreement, (iii) the Blockchain
Archive Server Agreement, (iv) the Rothwell Note, (v) the Banking Agreement, and (vi) the Real Estate Purchase Agreement. The information
set forth under Item 1.01 hereof, to the extent applicable, is incorporated herein by reference.