Item 1.01. Entry into Material Definitive Agreement.
As previously disclosed
in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on October 29, 2021 by Sollensys
Corp (the “Company”), on October 26, 2021, the Company entered into a Merger Agreement (“Merger Agreement”) by
and among (i) the Company; (ii) S-CC Merger Sub, Inc., a wholly owned subsidiary of the Company (“S-CC Merger Sub”); (iii)
S-Solutions Merger Sub, Inc., a wholly owned subsidiary of the Company (“S-Solutions Merger Sub”); (iv) Celerit Corporation
(“Celerit”); (v) Celerit Solutions Corporation (“Celerit Solutions”); and (vi) Terry Rothwell.
Pursuant to the terms
of the Merger Agreement, if the Merger did not close by January 31, 2022, the Merger Agreement would terminate.
As previously disclosed
in a Current Report on Form 8-K filed with the SEC on February 3, 2022 by the Company, on January 28, 2022, the parties to the Merger
Agreement entered into an Amendment to Merger Agreement, dated as of January 28, 2022, pursuant to which the parties agreed to extend
the closing deadline to March 31, 2022.
On March 31, 2022, the
parties to the Merger Agreement, as amended, entered into the Second Amendment to Merger Agreement, dated as of March 31, 2022 (the “Second
Amendment”), pursuant to which the parties agreed to extend the closing deadline to April 7, 2022. In addition, the parties agreed
that the following changes to the terms and conditions of the Merger Agreement, as amended, have been agreed to in principal and that
between March 31, 2022 and April 7, 2022, the parties would reasonably cooperate to agree on amendments to the Merger Agreement, as amended,
to reflect the same; provided, however, that the parties agreed that the following provisions would not be binding on the parties unless
and until a formal amendment of the Merger Agreement, as amended, reflecting such provisions is executed by the parties:
| (a) | The Merger Consideration (as such term is defined in the Merger Agreement,
as amended) shall be (i) 4,000,000 shares of Company common stock issued to Terry Rothwell on April 7, 2022, (ii) $2,705,000 in cash,
of which $10,000 shall be paid on the execution of the definitive amendment of the Merger Agreement reflecting the terms herein, and (iii)
one Sollensys Blockchain Server Distributive Data Center loaded with Sollensys Application Software (R4 Enterprise) (currently 32 Dell
units) or equivalent. |
| (b) | The remaining $2,695,000 of the cash Merger Consideration will be paid via
a promissory note between the Company and Terry Rothwell, which shall be due and payable on or before June 30, 2022, and if not repaid
at that time will bear interest thereafter at the rate of 6% annually. |
| (c) | The closing of the CRE Transactions (as such term is defined in the Merger
Agreement, as amended) and the repayment of the note will occur when the Company has obtained the $6,000,000 in financing from one or
more of its sources, and the CRE Transactions will be subject to a separate agreement (“CRE Agreement”) to be entered into
by the applicable parties. The purchase price for the real estate in the CRE Transactions will be $3,295,000. |
| (d) | In the event that the CRE Transactions do not close on or before June 30,
2022, rent on the facilities to be acquired in the CRE Transactions will increase by $50,000 per month and continue as provided in the
CRE Agreement. |
| (e) | At the closing, the Company will enter into an agreement with Terry Rothwell
and George Benjamin Rothwell for the use of two Sollensys Server Centers owned by the Rothwells for total payments of $100,000 per month
until the second to die of Terry Rothwell and George Benjamin Rothwell, with no costs or obligations for either Terry Rothwell or George
Benjamin Rothwell. |
| (f) | Immediately upon closing, the Company will assign to Celerit exclusive rights
and responsibility for sales, support and service of all Company products and services offered to banks and financial institutions (collectively,
the “Banking Industry”). Any Company contracts, agreements or arrangements of any nature that involve Company sales or services
to the Banking Industry will, immediately upon closing, be assigned to Celerit for administration and performance. |
| (g) | At the closing, Terry Rothwell will join the Company’s Board of Directors
and Anthony Nolte and Donald Beavers will join the Celerit Board of Directors and the Celerit Solutions Board of Directors. All current
Celerit and Celerit Solutions officers will remain in place unless otherwise agreement, and all Celerit and Celerit Solutions employees
shall initially remain employed. |
| (h) | Once the amendment to the Merger Agreement reflecting the above terms has
been executed, the parties will commence completion of the audit of Celerit and Celerit Solutions for 2021, and the Company will pay for
the costs of such audit. |
Except as set forth above,
all other terms of the Merger Agreement, as amended, remain in full force and effect.
The foregoing description
of the Second Amendment is qualified in its entirety by reference to the Second Amendment, filed as Exhibit 10.3 hereto, which is incorporated
herein by reference.