UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): December 9, 2015

 

TRUNITY HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware 000-53601 87-0496850
(State or other jurisdiction of incorporation or organization) (Commission File Number) (I.R.S. Employer Identification Number)

   

12555 Orange Drive

Davie, Florida 33330

(Address of principal executive offices, including zip code)

 

(866) 723-4114

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

  

 

 

 

Unless otherwise indicated in this Current Report or the context otherwise requires, all references in this Current Report to “Trunity Holdings,” “Trunity,” the “Company, ”us,” “our” or “we” are to Trunity Holdings, Inc.

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On December 9, 2015, the Company entered into a Securities Exchange Agreement (the “Agreement”) with Newco4Pharmacy, LLC, a Georgia limited liability company (“N4P”). Pursuant to the terms of the Agreement, the Company acquired 100% of the membership interests of N4P in exchange for newly authorized preferred stock, which will be issued to the N4P members and be convertible into a number of shares of common stock of the Company equal to approximately 90% of the shares outstanding at the time (the “Acquisition”). Per the Agreement, the Company will acquire all of the assets, goodwill and the business plan of N4P, including a letter of intent for a potential acquisition.

 

N4P’s business plan contemplates a roll-up of businesses in the compounding pharmacy industry. The plan envisions multiple acquisitions of businesses who have traditionally operated locally, but who have specialty formulations that may have a larger market, nationally or internationally, with a significant sales and marketing presence. N4P also intends to seek compounding pharmacies that serve the veterinary markets, as well as for humans. To achieve its goals, it intends to acquire a number of pharmacies across the US with the eventual objective of establishing a national online pharmacy. The online pharmacy will be named, True Nature Pharmacy and will be a wholly owned subsidiary, which will sell the product mix nationally through online and mail order marketing distribution channels. Lastly, N4P intends to change the name of the Company to True Nature Holdings, Inc., but will maintain the current stock symbol, TNTY.

 

A condition of the closing of the Acquisition was conversion of at least 90% of the Company’s debts into equity at a price of $.03 per share. It has received commitments from a majority of the debt holders to complete this conversion, and is in the process of communicating with the remaining debt holders. After conversion of debts, there will be approximately 190 million shares outstanding, with the debt holders receiving around 70% of outstanding shares issued, and existing equity holders having around 30% shares outstanding. All of these shareholders will be subject to the effect of a planned restructuring of Trunity’s equity, to include a reverse split of the common stock in a range that is estimated to be approximately 19 to 1, such that when completed each holder of 19 shares will have one outstanding share and total shares outstanding for the Company will be approximately 12,000,000. As the restructuring plan is implemented over the next few weeks, details regarding the conversions will be communicated.

 

The foregoing description of the Agreement is qualified in its entirety by reference to the Securities Exchange Agreement attached hereto as Exhibit 10.1 to this Form 8-K and incorporated herein by reference.

 

Shortly after closing of the Acquisition, pursuant to the Agreement, the Company’s legacy business, which is currently held in a wholly owned subsidiary, will be spun out into a separate privately held company (“New Trunity”) owned by the legacy Trunity shareholders (including those who acquired shares by debt conversion) proportionate to their shares of Trunity (the “Spin Out”). The N4P holders will not participate in the ownership of the Spin Out and each shareholder of the Company on the effective date will receive one share of the Spin-Out, or a pro-rata percentage depending on the ultimate share structure adopted by the Spin-Out.

 

 

2
 

 

Following the Acquisition, Nicole Fernandez-McGovern, the Company’s Chief Executive Officer will resign from her current position in order to allow the new owners, N4P, to manage the Company as they will retain the responsibility for paying certain of its debts. Ms. Fernandez-McGovern will remain as the Chief Executive Officer of the operating subsidiary that is intended to be spun out and any remaining debts of the operating subsidiary will be the responsibility of New Trunity following the Spin Out.

 

In conjunction with the Spin Out, the Company intends to a) reduce its shares outstanding through a reverse split of its common stock, estimated at 19 to one, depending on the amount of debt converted into stock, and b) increase its authorized shares to 500 million common, and 100 million shares of preferred, with the rights of the preferred stock to be established at the discretion of the Board of Directors. Upon completion, the Company intends to have approximately 12,000,000 shares outstanding, with N4P holders owning 10,000,000 upon conversion of the Preferred X issued to it in the acquisition, and the legacy shareholders (along with the converting debt holders) owning not less than 1,000,000, and as much as 1,750,000 common shares, with the final number to be determined based on the amount of debt converted. Final details will be published in subsequent Form 8k filings as these actions are completed.

 

The Board of Directors of the Company (the “Board”) believes the Acquisition and the Spin Out are in the best interest of the stockholders and the creditors of the Company. While considering the approval of the Acquisition and the Spin Out, the Board considered the following factors:

 

·  

The Company currently had over $4 million in debt obligations, including accounts payable, debenture obligations and other commitments, many of which are, or soon will, be in default. As such, the Board considered the need to address the interests of these creditors and their ability to enforce rights that could result in material adverse consequences to the Company;

 

·

The Board, after making substantial efforts to raise capital over many months, was unable to find the funding needed to continue to operate the legacy Trunity business, and believed that no such funding could be secured until the Company substantially improved its balance sheet, primarily by a sizable reduction in its debt obligations;

 

·

The Board, after a review of the Company’s business plan and expenses, current and projected, concluded that operating the Company as a public company, with the associated accounting, legal and administrative expenses, would make it difficult to allow it to achieve profitably or repay its obligations to creditors;

 

·

The other financing options considered by the Board did not result in letters of intent or viable offers primarily because of the financial condition of the Company;

 

·

The N4P Acquisition and Spin Out plan was approved by the majority of the Company’s creditors and allows the stockholders of the Company the opportunity to continue to benefit from the legacy Trunity business activity as owners of the private entity while also participating in the value proposition associated with the N4P business plan and acquisition strategy that will hold the business going forward.

 

 

The Board considered these and other factors when considering the Transaction and the Spin Out. There can be no assurance that the Spin Out will be completed successfully, or that the legacy Trunity business will be more successful without the costs associated with being a public company. In addition, Newco4Pharmacy, LLC does not have an operating history, and there can be no assurance that it will be able to successfully implement its business plan, execute the planned acquisitions or operate profitably.

 

 

3
 

 

Accounting Treatment of the Transaction

 

Notwithstanding the fact that the Company was the legal acquirer under the Transaction and remains the registrant for Securities and Exchange Commission ("SEC") reporting purposes, N4P is considered the accounting acquirer.  Thus, the Transaction will be accounted for in accordance with the acquisition method of accounting.

   

Item 2.01 Completion of Acquisition or Disposition of Assets.

 

The Transaction was completed on December 9, 2015. No Company stockholder approval was required by Delaware law or other rules or regulations. The information set forth in Item 1.01 above is hereby incorporated by reference.

 

Item 3.02 Unregistered Sales of Equity Securities.

 

As described in Item 1.01 above, pursuant to the Securities Exchange Agreement, the Company issued shares of Series X Preferred Stock to the Newco4Pharmacy, LLC unit holders. The offer and sale of the shares of Series X Preferred Stock in connection with the Securities Exchange Agreement were made in reliance on an exemption from registration under the Securities Act, pursuant to Section 4(2) thereof. The terms of the Series X Preferred Stock are set forth in Item 5.03 below.

 

Item 5.01 Changes in Control of Registrant.

 

Upon the closing of the Transaction, a change of control of the Company occurred, with Newco4Pharmacy acquiring shares that resulted in control of the Company by NewCo4Pharmacy members. As of December 10, 2015 and after giving effect to the Transaction, Newco4Pharmacy held approximately 90% of the outstanding voting rights of the Company’s capital stock, though this percentage may be reduced to 85% if all debt holders of the Company and its operating subsidiary were to convert into common stock at $.03 per share.

 

Item 5.02 Election of Directors; Appointment of Officers; Compensatory Arrangements of Certain Officers.

 

(c) Appointment of Executive Officers

 

On December 9, 2015, Stephen Keaveney became the Chairman of the Board of Directors, Chief Executive Officer and Chief Financial Officer

 

Mr. Keaveney is a career executive working in entrepreneurial organizations experiencing high growth or change. From August 2014 to present, Mr. Keaveney was the Chief Financial Officer of Connectivity Wireless. From March 2013 to April 2014, Mr. Keaveney was CFO of Innotrac Corporation, a $125 million rapidly growing ecommerce fulfillment business (NASDAQ: INOC). While at Innotrac, Mr. Keaveney helped engineer the $114 million take private leveraged buy-out. Prior to that, from September 2010 to March 2013, Mr. Keaveney was the Chief Financial Officer of BeavEx, Inc., a $300 million Logistics business, with 5,000 drivers in 100 locations serving 47 states. While there, Mr. Keaveney led a restructuring of the business changing IT strategy, bonus structures, financial reporting and budgeting to increase EBITDA from $4M to $10M EBITDA. BeavEx achieved a successful exit for the founder selling to a private equity buyer. Mr. Keaveney secured $45M of debt financing and completed four acquisitions growing revenue by 50%.

 

 

4
 

 

He began his career working in his family cable television business. He worked with Deloitte in NYC and earned a CPA and MBA. Spending 16 years of his career in Europe, Keaveney was one of the Founders of Cable Management Ireland (CMI). CMI rolled up 28 cable television businesses and exited through a successful trade sale to Liberty Media for $100 million after 10 years of building the business. CMI employed 150 people, was backed by Advent International.

 

Mr. Keaveney was a founder of eTel Group, a private equity backed rollup that acquired 13 telecom businesses in Eastern Europe and exited through a trade sale to Telecom Austria for $130 million. Mr. Keaveney managed the fundraising of $175 million of equity for Airtricity, a successful European renewable energy business, which exited through a trade sale to SSE and Eon for $4.2 Billion.

 

He resides in Atlanta and holds an MBA in Finance from Pepperdine University (1989), a BA in Accounting from Villanova University (1986) and is a Certified Public Accountant (CPA) in the State of Pennsylvania.

 

Consulting Agreement

 

On December 1, 2015, N4P entered into a consulting agreement with Stephen Keaveney to provide Chief Executive Officer services to N4P. The consulting agreement has a term of twelve months and provides for compensation of $10,000 per month. The Company has agreed to assume the obligations associated with this consulting agreement as compensation for Mr. Keaveney until such time as the new Board of Directors can consider a new agreement. The consulting agreement is attached hereto as Exhibit 10.2 to this Form 8-K and incorporated herein by reference.

 

(d) Board of Directors

 

Pursuant to the Securities Exchange Agreement, each of the following former members of the Board will continue to serve on the Board (in the now indicated classes of the Board):

 

Richard H. Davis, 58; and

Ivan Berkowitz, 68

 

Pursuant to the Securities Exchange Agreement and as a result of Board action on December 9, 2015, the following individuals were appointed to the Board:

 

Steven Keaveney, 51;

Jeff S. Cosman, 44; and

William L. Ross, Ph.D., 69

 

Messrs. Cosman and Ross will not receive compensation for their services on the Board of Directors at this time. Their biographies are set forth below.

 

 

5
 

 

Jeff S. Cosman, Director

 

Mr. Cosman joined the Board on December 9, 2015. He has more than 10 years’ experience in the solid waste industry from local operations up to corporate accounting and finance.

 

From December 2010 to May 2015, Mr. Cosman was the Founder of Legacy Waste Solutions, LLC. From May 2014 to Present, Mr. Cosman is the CEO and Chairman of Meridian Waste Management, (Ticker: MRDN). Mr. Cosman has a history of entrepreneurial adventures starting with Market Street Capital, JC Waste Solutions, Legacy Waste Solutions and Dynamic Molecular Solutions. In 2010, Mr. Cosman began formally working on creating mobile apps with the development of cConnects.

 

Mr. Cosman holds a B.B.A. in Managerial Finance and Banking & Finance, as well as a Bachelors of Accountancy from the University of Mississippi. Mr. Cosman was drafted by the New York Mets and played professional baseball in the minor leagues from 1993-1996. From February 1997 to February 1999, Jeff Cosman played an active role in the consolidation efforts when Republic Services acquired 168 companies in 30 months, going from $500MM in Revenue to over $2.1BN.

  

William L. Ross, Ph.D.

 

Dr. Ross joined the Board on December 9, 2015. Dr. Ross currently serves as a Consultant to various client companies. He has served as an advisor to corporations with regard to staffing, conflict resolution and has provided training on corporate development. Over the last 40 years he ran a professional multidisciplinary mental health practice. He has been a licensed psychologist for the past 35 years, including service with the US Health Service, and the Department of Defense, providing consulting services to soldiers and their families as a Military Family Life Consultant from 2008 to 2012. He has authored numerous online courses related to Social and Emotional Learning (SEL), and has advised investors, including both publicly traded and not-for-profit entities, on potential acquisitions and mergers. He completed a bachelor’s degree in psychology from Miami University of Ohio in 1967; he received a master’s degree in psychology from Howard University in 1969, and a PhD in psychology in 1977.

 

Item 5.03 Amendment to Articles of Incorporation.

 

Certificate of Designation - Series X Preferred Stock

 

On December 10, 2015, the Company filed with the Secretary of State of the State of Delaware a Certificate of Designation of Series X Preferred Stock designating 1,000 shares of Series X Preferred Stock.

 

Rank. With respect to the distribution of assets upon liquidation, dissolution or winding up of the Company, the Series X Preferred Stock ranks pari passu with the Company’s Common Stock.

 

Dividends. The Company may not declare, pay, or set aside for payment any dividend payable in cash, property, or evidences of indebtedness, on shares of common stock unless and until the Company shall have declared and paid a dividend on the Series X Preferred Stock in an amount at least equal to an amount at least equal to the product of (A) the amount proposed to be paid in common stock, multiplied by (B) the Series X Preferred Stock conversion rate.

 

 

6
 

 

Voting Rights. Except for certain matters delineated in the Certificate of Designation, Holders of Series X Preferred Stock shall vote together with holders of common stock as a single class on all matters submitted for consideration by holders of voting securities. Each share of Series X Preferred Stock shall entitle the holder thereof to a number of votes equal to the conversion rate, rounded to the next highest share. The conversion rate will allow the Series X Preferred Stock holders to control approximately 90% of the vote of the Company.

 

It is expected that all of the Series X Preferred Stockholders will convert their shares into common stock upon the filing of an Amended Certificate of Incorporation which will, among other things, increase the number of authorized shares of the Company to permit the conversion. The Company believes this will occur prior to December 31, 2015. The foregoing description of the Series X Preferred Stock is qualified in its entirety by reference to the Series X Certificate of Designation attached hereto as Exhibit 3.1 to this Form 8-K and incorporated herein by reference.

 

Item 7.01 Regulation FD Disclosure .

 

On December 14, 2015 the Company issued a press release outlining the actions taken to restructure the Company, generally as described in this filing. A copy of the Company’s press release is attached hereto as Exhibit 99.1.

 

Item 9.01 Financial Statements and Exhibits.

 

(a) Financial Statements of Business Acquired.

 

The financial statements required by this Item are not being filed herewith. To the extent such information is required by this Item, it will be filed by amendment to this Current Report on Form 8-K not later than 71 days after the date on which this Current Report on Form 8-K is required to be filed.

 

(d) The following exhibits are filed with this report:

 

Exhibit Number                                             Description

 

3.1  

Certificate of Designation

     
10.1   Securities Exchange Agreement, dated December 9, 2015, between the Company and members of Newco4Pharmacy, LLC.
     
10.2   Consulting Agreement, dated December 1, 2015, between Newco4Pharmacy, LLC and Steven Keaveney.
     
99.1  

Press Release of Trunity Holding, Inc., dated December 15, 2015

  

7
 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  TRUNITY HOLDINGS, INC .
   
Date: December 15, 2015 By:  /s/ Stephen Keaveney
    Stephen Keaveney
Chief Executive Officer & Chief Financial Officer

 

 

 

Exhibit 3.1

CERTIFICATION OF

DESIGNATION

of

 

S E R I ES X PR E F E R R ED S TO C K

 

of

 

TRUNITY HOLDINGS, INC.

 

P u r su a nt t o S ec ti on 151 of t he G e n e ra l Corporation L a w of t he St a t e of D e l a w a r e

 

Trunity Holdings, Inc. , a corporation o r g a n i z e d a nd e x i s ti ng und e r t he General Corporation Law of t he St a t e of Delaware ( t he Company ”) , D OES HE R E B Y C E R T I F Y:

 

Th a t pu r su a nt t o t he a u t ho r i t y v e s t e d i n t he B o ar d of D i rec t o r s of t he Company ( t he “B o ar d of D i rec t o r s ) i n acc o r d a n c e w it h t he p r ov i s i ons of t he Articles of Incorporation, Bylaws, and governing documents of t he Company , t he B o ar d of D i rec t o r s on December 4 , 2015 a dop t e d t he f o ll ow i ng r e so l u ti on c r e a ti ng a s er i e s of 1,000 s h are s o f p re f er r e d st o c k d e s i g n a t e d a s S er i e s X P ref e rre d St o c k :

 

R E S O L VED, t h a t pu r s ua nt t o t he a u t h o r i t y v e s t e d i n t he B o ar d of D i rec t o r s of t h i s Company i n acc o r d a n c e w it h t he p r ov i s i ons of t he Articles of Incorporation , a s er i e s of p refer r e d st o c k, p a r v a l ue $.001 p e r sh a re , o f t he Company be a nd h e re b y i s cr e a t e d, a nd t h a t t h e d e s i g n a ti on a nd nu m b e r of sh are s t h ere o f a nd t he vo ti ng a nd o t h e r pow er s, p re f ere n ce s, a nd re l a ti v e p ar ti c i p a ti n g , o p ti on a l, or o t h e r r i g h t s o f t he sh are s of s u c h s e r i e s a nd t he qu a li f i c a ti ons, limit a ti o n s, a nd re s t r i c ti ons t h ere o f a r e a s f o ll ows:

 

S er i e s X P re f e r re d S t o c k

 

1. D e s i gna ti on and Amoun t . Th er e sh a l l be a s er i e s of p refe r re d st o c k t h a t sh a l l be d e s i g n a t e d a s Series X Preferred Stock ,” a nd t he nu m b e r of sh a re s c ons tit u ti ng su c h s er i e s sh a l l be 1,000.

 

2. Conversion .

 

(A) The Series X Preferred Stock shall be convertible at the option of the holders thereof into the aggregate number of shares of common stock determined as follows:

 

 

 

 

Where: 

 

"C" is the number of shares of common stock issuable upon conversion of the outstanding preferred stock

 

"A" is the number of shares of common stock outstanding immediately prior to the conversion of the Series X Preferred Stock, after giving effect to (1) the exercise of all outstanding options and warrants and the conversion into common stock of then outstanding convertible securities (excluding the Series X Preferred Stock), as well as all other debts and obligations, and (2) any anti-dilution adjustments occasioned by the conversion of the Series X Preferred Stock.

 

"B" is 90%

 

(B) The "Conversion Rate" shall be equal to:

 

 

Where:

 

"C" has the meaning set forth above

 

"D" is the number of shares of Series X Preferred Stock

 

3. D i v i d e nd Preference . The Company may not declare, pay, or set aside for payment any dividend payable in cash, property, or evidences of indebtedness, on shares of common stock unless and until the Company shall have declared and paid a dividend on the Series X Preferred Stock in an amount at least e qu a l t o an amount at least equal to the product of (A) the amount proposed to be paid in common stock, multiplied by (B) the Series X Preferred Stock Conversion Rate.

 

4. Vo ti ng R i gh t s . Except as provided in paragraphs “Board of Directors” and “Class Voting” below, holders of Series X Preferred Stock shall vote together with holders of common stock as a single class on all matters submitted for consideration by holders of voting securities. Each share of Series X Preferred Stock shall entitle the holder thereof to a number of votes equal to the Conversion Rate, rounded to the next highest share.

 

 

 

 

 

5. Board of Directors . Holders of Series X Preferred Stock voting as a separate class shall be entitled to elect two (2) directors to the Board of Directors if there is a three (3) member board, or three (3) directors if the Board of Directors shall have more than three (3) members.

 

6. Class Voting . Holders of Series X Preferred Stock shall vote together as a separate class on each of the following matters:

 

(A) Any amendment to the Articles of Incorporation which alters, in any material respect, the rights, privileges, and preferences of Series X Preferred Stock;

 

(B) Any amendment to the Bylaws which alters, in any material respect, the rights, privileges, and preferences of Series X Preferred Stock;

 

(C) Any sale of all or substantially all of the assets of the Company, any merger, consolidation, or reorganization, in which the Company is not the survivor, or any share exchange in which the Company is not the parent entity;

 

(D) Creation or authorization of the creation of any additional class or series of shares of stock;

 

(E) Creation or authorization of the creation of any class or series of indebtedness which is convertible into or exchangeable for any class or series of equity securities of the Company or which is issued with warrants or rights to purchase any class or series of equity securities of the Company;

 

(F) The purchase or setting aside of any sums for the purchase of, or payment of any dividend or of any distribution on, any shares of stock other than the Series X Preferred Stock, except for dividends or other distributions payable on the common stock solely in the form of additional shares of common stock; or

 

(G) Redemption or other acquisition of any shares of Series X Preferred Stock or any other class or series of shares except pursuant to a purchase offer made pro rata to all holders of Series X Preferred Stock on the basis of the aggregate number of outstanding shares of Series X Preferred Stock then held by each such holder.

 

I N W I TNE S S W HE R EO F , t he und e r s i g n e d h a s e x ec u t e d t h i s C e r ti f i ca t e t h i s 9th d a y o f December , 2015.

 

   Trunity Holdings, Inc.
     
B y :  
N a m e :  
T itl e:  

 

 

 

 

Exhibit 10.1

 

 

SECURITIES EXCHANGE AGREEMENT

 

BY AND AMONG

 

TRUNITY HOLDINGS, INC.,

 

and

 

THE MEMBERS OF NEWCO4PHARMACY, LLC

 

Dated as of December 9, 2015

 

 

 

 
 

 

TABLE OF CONTENTS

 

Article 1 Purchase and Sale of Shares 1
Section 1.1 Agreement to Sell. 1
Section 1.2 Purchase Price. 1
Section 1.3 Certain Definitions. 2
     
Article 2 Procedure for Closing 3
Section 2.1 Closing. 3
Section 2.2 Deliveries at Closing. 3
Section 2.3 Further Assurances. 3
     
Article 3 Representations and Warranties of N4P and the N4P Members 4
Section 3.1 Title to Shares, Authority, Investment Intent. 4
Section 3.2 Organization and Qualification. 5
Section 3.3 Subsidiaries and Joint Ventures. 5
Section 3.4 Authority. 5
Section 3.5 Capitalization. 5
Section 3.6 Personal Property. 6
Section 3.7 Intellectual Property. 6
Section 3.8 Insurance. 6
Section 3.9 Environmental Matters. 6
Section 3.10 Litigation. 7
Section 3.11 Brokers and Finders. 7
Section 3.12 Taxes. 7
Section 3.13 Labor Matters. 7
Section 3.14 Governmental Approval and Consents. 7
Section 3.15 Compliance with Laws. 8
Section 3.16 Correctness of Representations. 8
     
Article 4 Representations and Warranties of TNTY 8
Section 4.1 Organization and Qualification. 8
Section 4.2 Subsidiaries and Joint Ventures. 8
Section 4.3 Authority. 8
Section 4.4 TNTY Capitalization. 9
Section 4.5 Books and Records. 9
Section 4.6 SEC Filings. 9
Section 4.7 Assets. 10
Section 4.8 Liabilities. 10
Section 4.9 Employees and Employee Benefit Plans. 10
Section 4.10 Insurance. 10
Section 4.11 Environmental Matters. 10
Section 4.12 Litigation. 10
Section 4.13 Taxes. 11
Section 4.14 Compliance with Laws. 11
Section 4.15 Brokers and Finders. 11
Section 4.16 Governmental Approval and Consents. 11
Section 4.17 Investment Intent. 12
Section 4.18 Correctness of Representations. 12
     
Article 5 Conditions Precedent to Obligations of TNTY 12
Section 5.1 Representations and Warranties of N4P and the N4P Members. 12

 

ii
 

 

Section 5.2 Compliance by N4P and the N4P Members. 12
Section 5.3 No Injunction, Etc. 12
Section 5.4 No Adverse Change. 13
Section 5.5 Proceedings. 13
Section 5.6 Closing Documents. 13
Section 5.7 N4P Shareholders. 13
     
Article 6 Conditions Precedent to Obligations of the N4P Members 13
Section 6.1 Designation of Series Common Stock. 13
Section 6.2 Debt Settlement. 13
Section 6.3 Elimination of Certain Obligations. 13
Section 6.4 Surviving Liabilities. 14
Section 6.5 Board of Directors. 14
Section 6.6 Appointment of Officers. 14
Section 6.7 Certificate Regarding Representations and Warranties. 14
Section 6.8 Compliance by TNTY. 14
Section 6.9 No Injunction, Etc. 14
Section 6.10 Certificates. 14
     
Article 7 Post-Closing Spin Out 14
Section 7.1 Post-Closing Spin Out 14
     
Article 8 General Provisions 14
Section 8.1 The N4P Member Representative. 14
Section 8.2 Public Announcements. 15
Section 8.3 Fees and Expenses. 15
Section 8.4 Notices. 15
Section 8.5 Assignment and Binding Effect. 16
Section 8.6 No Benefit to Others. 16
Section 8.7 Headings, Gender, and Person. 16
Section 8.8 Counterparts. 16
Section 8.9 Integration of Agreement. 16
Section 8.10 Governing Law. 17
Section 8.11 Severability. 17

 

iii
 

 

CROSS-REFERENCE TO DEFINED TERMS

 

Defined Term

Page

Affiliate 2
Agreement 2
Benefit Plans 10
Business 1
Closing 3
Closing Date 3
Code 2
Common Stock 8
Contract 2
Debentures 13
Debt Resolution LLC 13
Debt Settlement 13
Environmental Claim 6
Environmental Laws 6
ERISA 2
Exchange Act 1
Hazardous Materials 6
Intellectual Property 2
Lock-Up Agreement 3
N4P 1
N4P Member 1
N4P Member Representative 14
N4P Members 1
N4P Shares 1
Ownership Percentage 1
person 16
Records 2
Regulation D 1
Requesting Party 3
SEC 1
Securities Act 1
TNTY 1
TNTYShares 1
Surviving Liabilities 13
Tax Returns 2
Taxes 2
Trade Secrets 2

 

iv
 

 

Securities Exchange Agreement

 

THIS SECURITIES EXCHANGE AGREEMENT is made and entered into as of this 9 th day of December, 2015, by and among TRUNITY HOLDINGS, INC., a Delaware corporation ( “TNTY” ), NEWCO4PHARMACY, LLC, a Georgia limited liability company ( “N4P” ), and all of the members of N4P (each of whom is a “N4P Member” and all of whom together are collectively, the “N4P Members” ). The name, address, and percentage membership interest (the “Ownership Percentage” ) of each N4P Member is set forth on Exhibit A . The N4P Members collectively hold all of the outstanding limited liability company membership interests of N4P.

 

Background

 

N4P owns certain business plans and proprietary information regarding the acquisition of pharmacy related organizations and the management and operation of compounding pharmacy operations (the “ Business” ). After Closing of the transactions contemplated by this Agreement, TNTY will exit its pre-existing education business as contemplated in Section 3.1(c)(vi) and Article 7 and have no business activities or assets other than those relating to the Business. TNTY is a public company that files reports pursuant to the Securities and Exchange Act of 1934 (the “Exchange Act” ) and its common stock is traded on the OTC under the symbol TNTY. TNTY and the N4P Members desire to make this Agreement for the purpose of setting forth certain representations, warranties, covenants, and agreements in connection with the transactions contemplated hereby. TNTY is issuing the TNTY Shares to the N4P Members in reliance upon the exemption from securities registration pursuant to Section 4(2) and/or Regulation D ( “Regulation D” ) as promulgated by the U.S. Securities and Exchange Commission (the “SEC” ) under the Securities Act of 1933, as amended (the “Securities Act” ). The N4P Members are selling and delivering the N4P Shares to TNTY in reliance upon an exemption from the registration provisions of the Securities Act referred to as the 4(1)½ exemption. It is the intent of the parties that (a) the contribution of the N4P shares to TNTY in exchange for the TNTY Shares will qualify as a tax-free exchange under of the Internal Revenue Code of 1986 and (b) the transaction is expected to be accounted for as a reverse acquisition.

 

Agreement

 

For and in consideration of the premises and the mutual representations, warranties, covenants, and agreements contained herein, the parties hereto, intending to be legally bound, agree:

 

Article 1 Purchase and Sale of Shares

 

Section 1.1 Agreement to Sell. For the consideration hereinafter provided, and upon and subject to the terms and conditions set forth in this Agreement, at the Closing, the N4P Members shall sell, assign, transfer, convey, and deliver to TNTY and TNTY shall purchase and acquire all of the outstanding limited liability company membership interests of N4P (the “ N4P Shares ”), with each N4P Member selling the number of N4P Shares set forth adjacent to the name of such N4P Member on Exhibit A . The N4P Members shall sell and deliver the N4P Shares free and clear of all liens, claims, charges, encumbrances, and security interests whatsoever, other than restrictions on transfer imposed by federal and state securities laws.

 

Section 1.2 Purchase Price. The purchase price for the N4P Shares purchased from each N4P Member shall be paid solely by issuance of shares of Preferred Stock Series X, par value $.0001 of TNTY (the “TNTY Shares” ) having the rights, privileges, and preferences described on Exhibit B , with each N4P Member receiving the number of TNTY Shares set forth adjacent to the name of such N4P member on Exhibit A . TNTY shall issue and deliver the TNTY Shares free and clear of all liens, claims, charges, encumbrances, and security interests whatsoever, other than restrictions on transfer imposed by federal and state securities laws.

 

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Section 1.3 Certain Definitions. The capitalized terms set forth below, are used herein with the meanings thereafter ascribed.

 

Affiliate ” means a person controlling, controlled by, or under common control with a person. As used in the preceding sentence, “control” means ownership of at least five percent of the outstanding equity securities or, the ability by contract or otherwise to direct the affairs of such person. Each officer and director of a person is an Affiliate of that person.

 

Agreement ” means this Securities Exchange Agreement, the TNTY Disclosure Letter, and the N4P Members Disclosure Letter, together with any amendments or modifications hereto and thereto.

 

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

 

Contract ” or “ Contracts ” means all contracts, agreements, arrangements, or understandings, written or oral, by which N4P or TNTY, as the case may be, receives any right or benefit or undertakes any liability or obligation.

 

ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended.

 

Intellectual Property ” means N4P’s business plan, know-how, and proprietary information regarding the acquisition, management, and operation of pharmacies.

 

Records shall mean information inscribed on a tangible medium (such as paper) or a magnetic or digital medium (such as a disk drive or tape) including, without limitation, files and records, including correspondence with clients, books of account, employment records, records pertaining to suppliers, and other written materials.

 

“Tax Returns” means any return (including any information return), report, statement, schedule, notice, form, declaration, claim for refund, or other document or information filed with or submitted to, or required to be filed with or submitted to, any governmental entity in connection with the determination, assessment, collection, or payment of any Tax or in connection with the administration, implementation, or enforcement of or compliance with any legal requirement relating to any Tax.

 

“Taxes” means any income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental, windfall profit, customs, vehicle, airplane, boat, vessel or other title or registration, capital stock, franchise, employees’ income withholding, foreign or domestic withholding, Social Security, unemployment, disability, real property, personal property, sales, use, transfer, value added, concession, alternative, add-on minimum and other tax, fee, assessment, levy, tariff, charge, or duty of any kind whatsoever and any interest, penalty, addition, or additional amount thereon imposed, assessed, or collected by or under the authority of any governmental entity or payable under any tax-sharing agreement or any other Contract.

 

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Trade Secrets ” means information which derives economic value, actual or potential, from not being generally known and not being readily ascertainable to other persons who can obtain economic value from its disclosure or use and which is the subject of efforts that are reasonable under the circumstances to maintain its secrecy or confidentiality. Trade Secrets includes, without limitation, (a) any application, operating system, communication system, or other computer software (whether in source or object code) and the documentation related thereto, whether or not copyrighted, patented or patentable, related to or used in the Business; and (b) information concerning the customers, services, pricing strategies, personnel assignments, and policies of TNTY and N4P or any parent or subsidiary, or matters concerning the financial affairs and management of TNTY or N4P or any parent, subsidiary, or affiliate of TNTY; provided however , that Trade Secrets shall not include any Excluded Information.

 

Article 2 Procedure for Closing

 

Section 2.1 Closing. The closing (the “ Closing ”) of the transactions contemplated by this Agreement shall take place at Hoboken, New Jersey, at 4:30 a.m. EST, on the third (3 rd ) business day immediately following the date on which the last of the conditions set forth in hereof is fulfilled or waived, or at such other time, date, and place as the N4P Members and TNTY shall mutually agree. The date on which the Closing actually occurs is hereinafter referred to as the “ Closing Date .”

 

Section 2.2 Deliveries at Closing. At the Closing, each of the following items shall be delivered:

 

(a) The N4P Members shall deliver to TNTY the following:

 

(i) a schedule evidencing all N4P Shares held by owners of N4P before the Closing and after the Closing;

 

(ii) the minute book, the Certificate of Organization and Operating Agreement of N4P, and a certificate of existence of N4P; and

 

(iii) such other evidence of the performance of all covenants and the satisfaction of all conditions required of the N4P Members by this Agreement at or prior to the Closing Date as TNTY or its counsel may reasonably require.

 

The documents and certificates to be delivered hereunder by or on behalf of the N4P Members on the Closing Date shall be in form and substance reasonably satisfactory to TNTY and its counsel.

 

(b) TNTY shall deliver to the N4P Members the following:

 

(i) the TNTY Shares to be issued to the N4P Members in payment of the Purchase Price, registered in the names of the N4P Members set forth in Exhibit A ;

 

(ii) evidence of the performance of all covenants and the satisfaction of all conditions required of TNTY by this Agreement at or prior to the Closing Date as the N4P Members or its counsel may reasonably require.

 

The documents and certificates to be delivered hereunder by or on behalf of TNTY on the Closing Date shall be in form and substance reasonably satisfactory to the N4P Members and their counsel.

 

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Section 2.3 Further Assurances. At the request of a party to this Agreement (a “ Requesting Party ”), the other parties hereto, from time to time after the Closing, will execute, acknowledge, and deliver to the Requesting Party such instruments of conveyance and transfer and will take such other actions and execute and deliver such other documents, certifications, and further assurances as the Requesting Party may reasonably request to carry out, evidence, and confirm the intended purposes of this Agreement.

 

Article 3 Representations and Warranties of N4P and the N4P Members

 

For the purpose of inducing TNTY to enter into this Agreement, N4P and the N4P Members represent and warrant to TNTY that:

 

Section 3.1 Title to Shares, Authority, Investment Intent.

 

(a) The N4P Members shall collectively own of record and beneficially, all outstanding N4P Shares. The N4P Members have and on the Closing Date will have good title to the N4P Shares to be delivered to TNTY as provided in Section 2 hereof, free and clear of all claims, liens, charges, encumbrances, and options, whatsoever, including any rights of N4P or of any third parties whatsoever with respect thereto.

 

(b) The N4P Members have duly and validly executed and delivered this Agreement. The N4P Members have the full legal capacity and the full legal right, power, capacity, and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby without the consent or approval of any other person or entity. This Agreement constitutes a binding obligation of the N4P Members and is enforceable against the N4P Members in accordance with its terms.

 

(c) Each N4P Member represents and warrants as to such N4P Member only that:

 

(i) The TNTY Shares are being acquired for such N4P Member’s own account without the participation of any other person, with the intent of holding the TNTY Shares for investment and without the intent of participating, directly or indirectly, in a distribution of the TNTY Shares and not with a view to, or for resale in connection with, any distribution of the TNTY Shares;

 

(ii) Such N4P Member is able to bear the economic risks of the investment in the TNTY Shares, including the risk of a complete loss of such N4P Member’s investment therein;

 

(iii) Such N4P Member understands and agrees that the TNTY Shares will be issued and sold to such N4P Member without registration under any state law relating to the registration of securities for sale, and will be issued and sold in reliance on the exemptions from registration under the Securities Act provided by Sections 3(b) and/or 4(2) thereof and the rules and regulations promulgated thereunder;

 

(iv) The TNTY Shares cannot be offered for sale, sold, or transferred by such N4P Member other than pursuant to: (A) an effective registration under the Securities Act or in a transaction otherwise in compliance with the Securities Act; and (B) evidence satisfactory to TNTY of compliance with the applicable securities laws of other jurisdictions. TNTY shall be entitled to rely upon an opinion of counsel satisfactory to it with respect to compliance with the above laws;

 

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(v) Such N4P Member is an accredited investor, and such N4P Member acknowledges that N4P Member has had the opportunity to ask questions of and receive answers from TNTY and any person acting on its behalf, and to obtain all material information reasonably available with respect to TNTY and its affairs.

 

(vi) Such N4P Member, after receiving the Series X Preferred Stock, shall vote such stock in favor of, and shall cooperate with, and not disrupt, vote against, or otherwise impede the plan of the legacy TNTY shareholders to spin out substantially all of the pre-existing assets, operations and business of TNTY (collectively, the “ Trunity Business ”) into a separate company solely owned by such legacy shareholders and other investors approved by them as soon as possible after the Closing Date contemplated by this Agreement (the “Spin Out”) after taking into consideration all relevant state and federal laws and regulations related to the Spin Out.

 

Section 3.2 Organization and Qualification. N4P is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Georgia. N4P is duly qualified and is in good standing as a foreign limited liability company in each jurisdiction in which the nature of the property or assets owned by N4P or the nature of the operations or business conducted by N4P requires such qualification and where the failure to be so qualified would have a material adverse effect on N4P.

 

Section 3.3 Subsidiaries and Joint Ventures. No shares of any corporation or any ownership or other investment interest, either of record, beneficially, or equitably, in any association, partnership, joint venture, or other legal entity are owned or controlled by N4P.

 

Section 3.4 Authority. The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby by N4P and the N4P Members have been duly and validly authorized and approved by all necessary action on the part of N4P and the N4P Members. This Agreement is the legal, valid, and binding obligation of N4P, enforceable against N4P in accordance with its terms. Neither the execution and delivery of this Agreement by N4P and the N4P Members nor the consummation of the transactions contemplated hereby will (c) violate the Certificate of Organization or Operating Agreement of N4P, (d) violate any provisions of law or any order of any court or any governmental unit to which either N4P or the N4P Members are a party or by which it or any of their properties or assets may be bound, (e) (i) conflict with, result in a breach of, or constitute a default under, any indenture, mortgage, lease, agreement, or other instrument to which either N4P or the N4P Members are a party or by which it or they or any of its or their assets or properties may be bound, or (ii) result in the creation of any lien, charge, or encumbrance upon any of the assets or properties of N4P or result in the acceleration of the maturity of any payment date of any of the liabilities of N4P, or increase or adversely affect the obligations of N4P thereunder, (f) violate any material term or provision of, result in a default, give rise to any right of termination, cancellation, or acceleration, or cause the loss of any right or option, under any Contracts, the breach of which would have a material adverse effect on N4P or the Business or the consummation of the transactions contemplated hereby, or (g) result in any encumbrance upon any of the assets or properties of N4P.

 

Section 3.5 Capitalization. All outstanding N4P Shares are duly and validly issued, fully paid and non-assessable, and were issued in full compliance with all federal, state, and local laws, rules, and regulations, and at closing will be owned, of record and beneficially, by the N4P Members. There is no subscription right, option, warrant, convertible security, or other right (contingent or other) presently outstanding, for the purchase, acquisition, or sale of N4P Shares or any other securities of N4P, or any securities convertible into or exchangeable for N4P Shares or other securities of N4P. There are no accrued distributions, accumulated distributions, N4P Share appreciation rights, phantom N4P Shares, or similar rights in existence. Other than the N4P Operating Agreement, at Closing there will be no agreements purporting to restrict the transfer of the outstanding N4P Shares, no voting agreements, voting trusts, or other arrangements restricting or affecting the voting of the N4P Shares, and none of the N4P Shares are currently pledged or held as security by any person or entity.

 

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Section 3.6 Personal Property. N4P owns or has the right to use all of its assets free and clear of all liens, claims, charges, security interests, and other encumbrances of any kind and of any nature.

 

Section 3.7 Intellectual Property. N4P is the sole and exclusive owner of all right, title, and interest in and to the Intellectual Property free and clear of all liens, security interests, charges, encumbrances, equities, or other adverse claims (including without limitation undisclosed distribution rights). N4P has not received notice of, and to the best knowledge of both N4P and the N4P Members there is no basis for, any claim, charge, action, suit, or preceding against N4P involving: (h) unfair competition with respect to any intangible property right of any third person or entity; (i) infringement by the Intellectual Property of any patent, trademark, trade name, copyright, trade secret, or other intellectual property right of any third party; (j) the improper use of the trade secrets, formulae, or intellectual property of others; or (k) a claim that any trademark, trade name, service mark, or logo in use or proposed for use by N4P is likely to be confused with a trademark, trade name, service mark, or logo of a third party. There are no outstanding, nor to the best knowledge of N4P and the N4P Members are there any threatened, disputes or other disagreements with respect to (l) ownership of the Intellectual Property, (m) any licenses or similar agreements or arrangements, or (n) infringement by a third party of any of the Intellectual Property. N4P has taken all steps reasonably necessary to protect its right, title, and interest in and to the Intellectual Property and the continued use of the Intellectual Property. N4P has used commercially reasonable efforts to protect the confidentiality of all of its other confidential and proprietary information and that of third parties which is or has been in its possession.

 

Section 3.8 Insurance. N4P currently has no insurance covering its properties and business.

 

Section 3.9 Environmental Matters.

 

(a) N4P has not received notice of any Environmental Claim filed or threatened against it or against any other person or entity whose liability for any Environmental Claim has been retained or assumed either contractually or by operation of law;

 

(b) N4P has not disposed of, emitted, discharged, handled, stored, transported, used, or released any Hazardous Materials (or arranged for any of the foregoing), or exposed any employee or other individual to any Hazardous Materials or condition so as to give rise to any liability or corrective or remedial obligation under any Environmental Laws;

 

(c) No Hazardous Materials are, to the knowledge of N4P, present in, on, or under any properties owned, leased, or used at any time (including both land and improvements thereon) by N4P, and, to the knowledge of N4P, no reasonable likelihood exists that any Hazardous Materials will come to be present in, on, or under any properties owned, leased, or used at any time (including both land and improvements thereon) by N4P so as to give rise to any material liability or corrective or remedial obligation under any Environmental Laws.

 

(d) As used herein, “ Environmental Claim ” means any notice, claim, act, cause of action or investigation by any Person alleging potential liability arising out of, based on or resulting from the presence, or release into the environment, of any Hazardous Materials or any violation, or alleged violation, of any Environmental Law. As used herein, “ Environmental Laws ” means all federal, state, local and foreign laws and regulations relating to pollution or protection of the environment or the protection of human health. As used herein, “ Hazardous Materials ” means chemicals, pollutants, contaminants, wastes, toxic substances, radioactive and biological materials, asbestos-containing materials (ACM), hazardous substances, petroleum and petroleum products or any fraction thereof, excluding, however, any chemicals used or waste generated as a result of typical office and janitorial activities.

 

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Section 3.10 Litigation. There are no claims, charges, arbitrations, grievances, actions, suits, proceedings, or investigations pending against, or affecting N4P at law or in equity or admiralty, or before or by any federal, state, municipal, or other governmental department, commission, board, bureau, agency, or instrumentality, domestic or foreign. N4P is not in default under or in violation of any order, writ, injunction, or decree of any federal, state, municipal court, or other governmental department, commission, board, bureau, agency, or instrumentality, domestic or foreign, affecting N4P.

 

Section 3.11 Brokers and Finders. Neither N4P, the N4P Members, nor any Affiliate has incurred any obligation or liability, contingent or otherwise, for any brokerage or finder’s fee or agent’s commission or other similar payment in connection with this Agreement or the transactions contemplated by this Agreement.

 

Section 3.12 Taxes.

 

(a) N4P has filed or caused to be filed on a timely basis all Tax Returns required to be filed by or with respect to N4P, either separately or as a member of a group of corporations. N4P has not requested any extension of time within which to file any Tax Return, except as to Tax Returns that have since been timely filed. All Tax Returns filed by (or that include on a consolidated basis) N4P are complete and correct and comply with applicable legal requirements. N4P has paid, or made provision for the payment of, all taxes that have or could have become due for all periods covered by any Tax Return or otherwise, including pursuant to any assessment received by N4P. N4P has withheld or collected and paid to the proper authority all taxes required to be withheld, collected, or paid by it.

 

(b) No claim has ever been made by any governmental entity in a jurisdiction where N4P does not file Tax Returns that it is or could be subject to taxation by that jurisdiction, nor is there any reasonable basis for such a claim. No Tax Return of N4P is under audit by the IRS or other governmental entity, and no notice of such an audit has been received by N4P. There are no threatened proceedings for, or relating to, Taxes, and there are no matters under discussion with the IRS or other governmental entity with respect to Taxes. No issues relating to Taxes have been raised in writing by the IRS or other governmental entity during any pending audit, and no issues relating to Taxes have been raised in writing by the IRS or other governmental entity in any audit that could recur in a later taxable period. There is no proposed Tax assessment against N4P. N4P has not given, or been requested to give, waivers or extensions (or is or would be subject to a waiver or extension given by any other Person) of any statute of limitations relating to the payment of Taxes of N4P or for which N4P could be liable. No lien or encumbrance for Taxes exists with respect to any assets of N4P, except statutory liens for Taxes not yet due.

 

(c) N4P is not, and has been, a member of any affiliated group of corporations (other than a group of which N4P is the common parent) which has filed a combined, consolidated, or unitary income Tax Return with any governmental entity. N4P is not liable for the Taxes of any Person under Treasury Regulation Section 1.1502-6 or any similar provision of any applicable legal requirement, as a transferee or successor, by contract, or otherwise.

 

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Section 3.13 Liabilities. N4P has no material liabilities.

 

Section 3.14 Labor Matters. N4P has never had employees and has never maintained or contributed to any plan that is an employee benefit plan as defined in Section 3(3) of ERISA, nor any other pension, profit sharing, retirement, deferred compensation, disability, hospitalization, medical, life insurance, or other similar employee benefit plan, program, policy, or arrangement.

 

Section 3.15 Governmental Approval and Consents. No authorization, consent, approval, designation, order, declaration by, or filing with, any public body, governmental authority, bureau, or agency is necessary or required as a condition to the validity of this Agreement or the consummation of the transactions contemplated hereby.

 

Section 3.16 Compliance with Laws. N4P, to the best of its knowledge, is not engaging in any activity or omitting to take any action that is or creates a violation of any law, statute, ordinance, or regulation applicable to N4P or the Business, which violation would have a material adverse effect on N4P or the Business. N4P is not subject to any judgment, order, writ, injunction, or decree issued by any court or any governmental or administrative body or agency which materially affects N4P, the Business, or any of the assets and properties of the Business.

 

Section 3.17 Correctness of Representations. No representation or warranty or other statement made by the N4P Members in this Agreement, the N4P Members Disclosure Letter, or otherwise in connection with the transactions contemplated by this Agreement contains any untrue statement of material fact or omits to state a material fact necessary to make the statements in this Agreement or therein, in light of the circumstances in which they were made, not misleading.

 

Article 4 Representations and Warranties of TNTY

 

TNTY hereby represents and warrants to N4P and the N4P Members as follows:

 

Section 4.1 Organization and Qualification. TNTY is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, and has all corporate power and authority to conduct its business, to own, lease, or operate its properties in the places where such business is conducted and such properties are owned, leased, or operated. TNTY is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the in which the nature of the property or assets owned by TNTY or the nature of the operations or business conducted by TNTY requires such qualification and where the failure to be so qualified would have a material adverse effect on TNTY.

 

Section 4.2 Subsidiaries and Joint Ventures. Except as disclosed in TNTY’s periodic Securities & Exchange Commission reports, no shares of any corporation or any ownership or other investment interest, either of record, beneficially, or equitably, in any association, partnership, joint venture, or other legal entity are owned or controlled by TNTY.

 

Section 4.3 Authority. TNTY has full power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement and the delivery of the TNTY Shares have been duly and validly authorized and approved by all necessary action on the part of TNTY. This Agreement is the legal, valid, and binding obligation of TNTY and is enforceable against TNTY in accordance with its terms, except as enforceability may be limited by applicable equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting creditors’ rights generally, and by the exercise of judicial discretion in accordance with equitable principles. Neither the execution and delivery of this Agreement by TNTY, nor the consummation by TNTY of the transactions contemplated hereby, will (o) violate TNTY’s Certificate of Formation or Bylaws, as amended, (p) violate any provisions of law or any order of any court or any governmental unit to which TNTY is subject, or by which its assets are bound, or (q) conflict with, result in a breach of, or constitute a default under any indenture, mortgage, lease, agreement, or other instrument to which TNTY is a party or by which its assets or properties are bound.

 

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Section 4.4 TNTY Capitalization. Immediately prior to Closing, the authorized capital stock of TNTY will consist of 250,000,000 shares of Common Voting Equity Stock, par value $.0001 per share ( “Common Stock” ), of which 50,000,000 are authorized as preferred stock. Immediately prior to the Closing, TNTY shall have (i) 63,628,821 shares of Common Stock issued and outstanding, (ii) 1,000 shares of Series X Preferred Stock authorized, (iii) stock options to purchase 6,855,766 shares of common stock outstanding (as of September 30, 2015) and (iv) warrants to purchase 7,924,589 shares of common stock outstanding (as of September 30, 2015). All outstanding shares of Common Stock have been duly and validly issued, fully paid and non-assessable, and were issued in full compliance with all federal, state, and local laws, rules, and regulations. Upon issuance in accordance with the term of this Agreement, the TNTY Shares will be duly and validly issued, fully paid and non-assessable, and issued in full compliance with all federal, state, and local laws, rules, and regulations. Other than the obligation of TNTY to issue the TNTY Shares pursuant to this Agreement and the warrants listed in the TNTY Disclosure Letter, there is no subscription right, option, warrant, convertible security, or other right (contingent or other) outstanding, for the purchase, acquisition, or sale of Common Stock or any other securities of TNTY, or any securities convertible into or exchangeable for Common Stock or other securities of TNTY. There are no stock appreciation rights, phantom stock, or similar rights in existence. There are no agreements purporting to restrict the transfer of the Common Stock or the TNTY Shares, no voting agreements, voting trusts, or other arrangements restricting or affecting the voting of the Common Stock or the TNTY Shares.

 

Section 4.5 Books and Records.

 

(a) The books of account and other records of TNTY are in all material aspects complete and correct and have been maintained in accordance with generally accepted accounting principles consistently applied throughout the periods involved.

 

(b) The minute books of TNTY contain complete and correct records of all meetings held of, and actions taken by written consent of, the holders of voting securities of TNTY, the board of directors, and committees of the board of directors of TNTY. No meeting of any such holders, board of directors, committee has been held, and no other action has been taken, for which minutes or other evidence of action have not been prepared and are not contained in such minute books. At the Closing, all such minute books and records will be in the possession of TNTY and shall be delivered to N4P.

 

(c) the Certificate of Formation of TNTY, and all amendments thereto, certified by the Secretary of State of Delaware;

 

(d) the Bylaws of TNTY and all amendments thereto, certified as true, correct, and complete by the Secretary of TNTY; and

 

(e) The stockholder records maintained by VStock Transfer, LLC, the stock transfer agent of TNTY contain an accurate record of the holders of all outstanding shares of Common Stock of TNTY.

 

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Prior to Closing, TNTY provided the N4P Members true, complete, and correct copies of all of the materials described above.

 

Section 4.6 SEC Filings. TNTY has filed all reports required to be filed with the Securities and Exchange Commission. Each report filed with the Securities and Exchange Commission is complete and accurate in all material respects.

 

Section 4.7 Assets. Upon completion of the Spin Out, TNTY will have no business activities or assets (including Contracts and accounts receivable), other than TNTY’s corporate franchise, the books and records described in 5, tax returns and similar records, books of account and ledgers, and other similar records related to TNTY’s organization and outstanding Common Stock. TNTY has no bank account, brokerage account, or other deposit account except as set forth on the TNTY Disclosure Letter.

 

Section 4.8 Liabilities. After giving effect to the Debt Settlement, TNTY has no Contracts, liabilities, obligations, or debts of any nature whatsoever (whether known or unknown and whether absolute, accrued, contingent, or otherwise) other than the trade payables, liabilities, obligations and debts listed in the TNTY Disclosure Letter.

 

Section 4.9 Employees and Employee Benefit Plans. As of the Closing, TNTY has no direct employees. No officer, director, or agent of TNTY is party to any agreement or arrangement which provides for the payment of any bonus, severance, or other compensation at or after Closing. TNTY does not have, and has never had any plan that is an employee benefit plan as defined in Section 3(3) of ERISA, nor any other pension, profit sharing, retirement, deferred compensation, disability, hospitalization, medical, life insurance, or other similar employee benefit plan, program, policy, or arrangement (collectively, “Benefit Plans” ). TNTY had not made and is not obligated to make any contribution to any Benefit Plan.

 

Section 4.10 Insurance. Except as disclosed in the Disclosure Letter, TNTY currently has no insurance covering its properties and business.

 

Section 4.11 Environmental Matters.

 

(a) TNTY has not received notice of any Environmental Claim filed or threatened against it or against any other person or entity whose liability for any Environmental Claim has been retained or assumed either contractually or by operation of law;

 

(b) TNTY has not disposed of, emitted, discharged, handled, stored, transported, used, or released any Hazardous Materials (or arranged for any of the foregoing), or exposed any employee or other individual to any Hazardous Materials or condition so as to give rise to any liability or corrective or remedial obligation under any Environmental Laws;

 

(c) No Hazardous Materials are, to the knowledge of TNTY, present in, on, or under any properties owned, leased, or used at any time (including both land and improvements thereon) by TNTY, and, to the knowledge of TNTY, no reasonable likelihood exists that any Hazardous Materials will come to be present in, on, or under any properties owned, leased, or used at any time (including both land and improvements thereon) by TNTY so as to give rise to any material liability or corrective or remedial obligation under any Environmental Laws.

 

Section 4.12 Litigation. Except as disclosed in TNTY’s SEC reports, there are no claims, charges, arbitrations, grievances, actions, suits, proceedings, or investigations pending against, or affecting TNTY at law or in equity or admiralty, or before or by any federal, state, municipal, or other governmental department, commission, board, bureau, agency, or instrumentality, domestic or foreign, nor, to the best of TNTY’s knowledge, is there any basis for the assertion of any such claim, charge, grievance, action, suit, proceeding, or investigation by or against TNTY. TNTY is not in default under or in violation of any order, writ, injunction, or decree of any federal, state, municipal court, or other governmental department, commission, board, bureau, agency, or instrumentality, domestic or foreign, affecting the Business or TNTY. There are no unsatisfied judgments or orders against TNTY.

 

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Section 4.13 Taxes. Except as set forth in 4 of the TNTY Disclosure Letter:

 

(a) TNTY has filed or caused to be filed on a timely basis all Tax Returns required to be filed by or with respect to TNTY, either separately or as a member of a group of corporations. TNTY has not requested any extension of time within which to file any Tax Return, except as to Tax Returns that have since been timely filed. All Tax Returns filed by (or that include on a consolidated basis) TNTY are complete and correct and comply with applicable legal requirements. TNTY has paid, or made provision for the payment of, all taxes that have or could have become due for all periods covered by any Tax Return or otherwise, including pursuant to any assessment received by TNTY. TNTY has withheld or collected and paid to the proper authority all taxes required to be withheld, collected, or paid by it.

 

(b) No claim has ever been made by any governmental entity in a jurisdiction where TNTY does not file Tax Returns that it is or could be subject to taxation by that jurisdiction, nor is there any reasonable basis for such a claim. No Tax Return of TNTY is under audit by the IRS or other governmental entity, and no notice of such an audit has been received by TNTY. There are no threatened proceedings for, or relating to, Taxes, and there are no matters under discussion with the IRS or other governmental entity with respect to Taxes. No issues relating to Taxes have been raised in writing by the IRS or other governmental entity during any pending audit, and no issues relating to Taxes have been raised in writing by the IRS or other governmental entity in any audit that could recur in a later taxable period. There is no proposed Tax assessment against TNTY. TNTY has not given, or been requested to give, waivers or extensions (or is or would be subject to a waiver or extension given by any other Person) of any statute of limitations relating to the payment of Taxes of TNTY or for which TNTY could be liable. No lien or encumbrance for Taxes exists with respect to any assets of TNTY, except statutory liens for Taxes not yet due.

 

(c) TNTY is not, and has been, a member of any affiliated group of corporations (other than a group of which TNTY is the common parent) which has filed a combined, consolidated, or unitary income Tax Return with any governmental entity. TNTY is not liable for the Taxes of any Person under Treasury Regulation Section 1.1502-6 or any similar provision of any applicable legal requirement, as a transferee or successor, by contract, or otherwise.

 

Section 4.14 Compliance with Laws. TNTY, to the best of its knowledge, is not engaging in any activity or omitting to take any action that is or creates a violation of any law, statute, ordinance, or regulation applicable to TNTY or the Business, which violation would have a material adverse effect on TNTY or the Business. TNTY is not subject to any judgment, order, writ, injunction, or decree issued by any court or any governmental or administrative body or agency which materially affects TNTY, the Business, or any of the assets and properties of the Business.

 

Section 4.15 Brokers and Finders. Neither TNTY nor any Affiliate has incurred any obligation or liability, contingent or otherwise, for any brokerage or finder’s fee or agent’s commission or other similar payment in connection with this Agreement or the transactions contemplated by this Agreement.

 

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Section 4.16 Governmental Approval and Consents. No consent, approval, or authorization of, or declaration, filing, or registration with, any governmental or regulatory authority is required in connection with the execution, delivery, and performance of this Agreement or the consummation of the transactions contemplated hereby.

 

Section 4.17 Investment Intent.

 

(a) The N4P Shares being acquired for TNTY’s own account without the participation of any other person, with the intent of holding the N4P Shares for investment and without the intent of participating, directly or indirectly, in a distribution of the N4P Shares and not with a view to, or for resale in connection with, any distribution of the N4P Shares;

 

(b) TNTY is able to bear the economic risks of the investment in the N4P Shares, including the risk of a complete loss of TNTY’s investment therein;

 

(c) TNTY understands and agrees that the N4P Shares will be issued and sold to TNTY without registration under any state law relating to the registration of securities for sale, and will be issued and sold in reliance on the exemptions from registration under the Securities Act provided by Sections 3(b) and/or 4(2) thereof and the rules and regulations promulgated thereunder;

 

(d) The N4P Shares cannot be offered for sale, sold, or transferred by TNTY other than pursuant to: (A) an effective registration under the Securities Act or in a transaction otherwise in compliance with the Securities Act; and (B) evidence satisfactory to N4P of compliance with the applicable securities laws of other jurisdictions. N4P shall be entitled to rely upon an opinion of counsel satisfactory to it with respect to compliance with the above laws; and

 

(e) TNTY has had the opportunity to ask questions of and receive answers from N4P and any person acting on its behalf, and to obtain all material information reasonably available with respect to N4P and its affairs, and has received satisfactory answers to all such questions and received all documents and other information requested of N4P.

 

Section 4.18 Correctness of Representations. No representation or warranty or other statement made by TNTY in this Agreement, the TNTY Disclosure Letter, or otherwise in connection with the transactions contemplated by this Agreement contains any untrue statement of material fact or omits to state a material fact necessary to make the statements in this Agreement or therein, in light of the circumstances in which they were made, not misleading.

 

Article 5 Conditions Precedent to Obligations of TNTY

 

The obligation of TNTY to consummate the transactions contemplated by this Agreement shall be subject to the satisfaction by N4P and the N4P Members on or before the Closing Date, of each of the following conditions, all or any of which may be waived in writing, in whole or in part, by TNTY:

 

Section 5.1 Representations and Warranties of N4P and the N4P Members. All information required to be furnished or delivered by the N4P Members pursuant to this Agreement shall have been furnished or delivered as of the date hereof and as of the Closing Date, as required hereunder; the representations and warranties made by the N4P Members and N4P in Section 3 hereof shall be true and correct on and as of the Closing Date.

 

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Section 5.2 Compliance by N4P and the N4P Members. N4P and the N4P Members shall have duly performed all of the covenants, agreements, and conditions contained in this Agreement to be performed by N4P and the N4P Members on or prior to the Closing Date.

 

Section 5.3 No Injunction, Etc. No action, proceeding, investigation, regulation, or legislation shall be pending or threatened which seeks to enjoin, restrain, or prohibit TNTY, or to obtain substantial damages from TNTY, in respect of the consummation of the transactions contemplated hereby, or which seeks to enjoin the Business, which, in the reasonable judgment of TNTY, would make it inadvisable to consummate the transactions contemplated by this Agreement.

 

Section 5.4 No Adverse Change. There shall not have been any material adverse change in the Business or condition, financial or otherwise, of N4P since September 30, 2015.

 

Section 5.5 Proceedings. The form and substance of all opinions, certificates, assignments, orders, and other documents and instruments, hereunder shall be satisfactory in all reasonable respects to TNTY and its counsel.

 

Section 5.6 Closing Documents. TNTY shall have received each of the agreements, instruments, and certificates described in (a), in each case executed by N4P, the N4P Members, or the other parties thereto.

 

Section 5.7 N4P Shareholders. The N4P Members shall hold all of the issued and outstanding N4P Shares.

 

Article 6 Conditions Precedent to Obligations of the N4P Members

 

The obligation of the N4P Members to consummate the transactions contemplated by this Agreement shall be subject to the satisfaction, on or before the Closing Date hereunder, of each of the following conditions, all or any of which may be waived, in whole or in part, by the N4P Members:

 

Section 6.1 Designation of Preferred Stock Series X. TNTY’s Board of Directors shall have adopted resolutions designating the Powers, Preferences, and Rights of Preferred Stock Series X and filed a Certificate of Designation of Powers, Preferences, and Rights of Preferred Stock Series X in the form of Exhibit A with the Secretary of State of Delaware.

 

Section 6.2 Debt Settlement. Except as set forth in the TNTY Disclosure Letter, all outstanding debt obligations of TNTY have been converted to equity in TNTY. The transactions contemplated by this Section 6 are sometimes referred to as the “ Debt Settlement ”.

 

Section 6.3 Elimination of Certain Obligations. TNTY shall have taken all necessary action to terminate all options, warrants, and rights to purchase Common Stock not disclosed on Schedule C and also pursuant to the Debt Settlement and, except for the Surviving Liabilities, there shall be no obligation of TNTY to pay:

 

(a) any accrued dividends, accumulated dividends, or make any other distribution in respect of the Common Stock;

 

(b) any accrued and unpaid salary, vacation time, benefits, expense reimbursements, or other amounts due to any past or present employee, officer, or director of TNTY;

 

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(c) any accounts payable or other amounts to any independent contractor, or any provider of supplies, products, or services;

 

(d) any fine, judgment, settlement, or similar obligation;

 

(e) any loan, advance, or other indebtedness whatsoever.

 

Section 6.4 Surviving Liabilities. After giving effect to the Debt Settlement and Section 6, the liabilities of TNTY (the “Surviving Liabilities” ) shall not exceed the amount set forth on Exhibit C.

 

Section 6.5 Board of Directors. At Closing, the number of directors on TNTY’s board of directors shall have been fixed at five (5) members. Ivan Berkowitz and Richard Davis (the “ Legacy Directors ”) shall be the only serving directors and there shall be three (3) vacancies. At the Closing, the Board of Directors shall have appointed Stephen Keaveney, Jeff S. Cosman, and Dr. William Ross, Ph.D. to fill 3 of the vacancies with a term of office to commence immediately following the Closing.

 

Section 6.6 Appointment of Officers. TNTY’s Board of Directors shall have elected the following officer with a term of office to commence immediately following the Closing: Stephen Keaveney, Chief Executive Officer.

 

Section 6.7 Certificate Regarding Representations and Warranties. All information required to be furnished or delivered by TNTY pursuant to this Agreement shall have been furnished or delivered as of the date hereof and the Closing Date as required hereunder; the representations and warranties made by TNTY in Section 4 shall be true and correct in all material respects.

 

Section 6.8 Compliance by TNTY. TNTY shall have duly performed all of the covenants, agreements, and conditions contained in this Agreement to be performed by TNTY on or before the Closing Date.

 

Section 6.9 No Injunction, Etc. No action, proceeding, investigation, regulation, or legislation shall be pending or overtly threatened which seeks to enjoin, restrain, or prohibit N4P or the N4P Members or to obtain substantial damages from N4P or the N4P Members in respect of the consummation of the transactions contemplated hereby, which, in the reasonable judgment of the N4P Members would make it inadvisable to consummate such transactions.

 

Section 6.10 Certificates. The N4P Members shall have received from TNTY all such certificates, dated as of the Closing Date, as N4P shall reasonably request to evidence the fulfillment by TNTY, or such other satisfaction as of the Closing Date, of the terms and conditions of this Agreement.

 

Article 7 Post-Closing Spinout

 

Section 7.1 The parties will cooperate in good faith and use their best efforts to complete the Spin Out as soon as reasonably possible after the Closing. Until closing of the Spin Out, TNTY will operate the Trunity Business consistent with past practice in accordance with the direction and business judgment of the Legacy Directors and TNTY’s CEO Nicole Fernandez-McGovern. All post-Closing liabilities in connection with the Trunity Business will be incurred only by TNTY’s wholly owned subsidiary Trunity, Inc. The N4P Members and their Affiliates will have no right, title, or interest directly, indirectly, or beneficially, in the Trunity Business before or after the Spin Out.

 

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Article 8 General Provisions

 

Section 8.1 The N4P Member Representative.

 

(a) In order to efficiently administer this Agreement, the N4P Members, by their signature to this Agreement hereby appoint Stephen Keaveney (the “N4P Member Representative” ) as the sole agent and attorney-in-fact of such N4P member to:

 

(i) give and receive notices required or permitted to be given to or by the N4P Members;

 

(ii) waive compliance by TNTY with any condition or covenant in this Agreement;

 

(iii) amend the terms and conditions of this Agreement after the Closing, provided that no amendment that materially increases the obligations of any N4P Member shall be effective with out the written consent of the affected N4P Member; and

 

(iv) prosecute and settle any claim of the N4P Members against TNTY arising under this Agreement.

 

(b) TNTY is hereby authorized to rely on the instructions and decisions of the N4P Member Representative, and no N4P Member shall have any cause of action against TNTY for any action taken by TNTY in reliance upon the instructions or decisions of the N4P Member Representative. All actions, decisions, and instructions of the N4P Member Representative taken pursuant to (a) shall be conclusive and binding upon the N4P Members, and no N4P Member shall have any cause of action against the N4P Member Representative for any action taken, decision made, or instruction given by the N4P Member Representative under this Agreement, except for fraud or a willful breach of the scope of (a) by the N4P Member Representative.

 

Section 8.2 Public Announcements. N4P, the N4P Members, and TNTY will consult with each other before issuing any press releases or otherwise making any public statements or filings with governmental entities with respect to this Agreement or the transactions contemplated hereby and shall not issue any press releases or make any public statements or filings with governmental entities prior to such consultation and shall modify any portion thereof if the other party objects thereto, unless the same may be required by applicable law.

 

Section 8.3 Fees and Expenses. Each party shall pay all fees and expenses incurred by it in connection with the transactions contemplated by this Agreement, including without limitation all legal, accounting, and professional advisor fees incurred; provided however, that N4P will pay up to $20,000 for bona fide and reasonable legal and accounting fees related to the transaction contemplated by this Agreement, upon the presentation of invoices setting forth the work performed in sufficient detail for N4P to confirm the services performed were directly related to such transaction..

 

Section 8.4 Notices. All notices, request, demands, and other communications hereunder shall be in writing and shall be effective when delivered (i) in person or by courier or when received by facsimile transmission, or (ii) five days after deposit, postage-prepaid, in the U.S. Mail, or mailed by registered first class or certified mail, in each case addressed as follows:

 

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If to the N4P Members and/or N4P:

 

    C/O Stephen Keaveney
    1355 Peachtree St., Suite 1150
    Atlanta, GA 30309:

 

With a copy of any notice to the N4P Members or N4P (which shall not constitute notice) to:

 

Nick Day Law
    95 River St., Suite 202
    Hoboken, NJ 07030
    Telephone: 267-290-8343
    Attn: Nicholas Day, Esq.

 

If to TNTY:

 

    TRUNITY HOLDINGS, INC.
    Nicole Fernandez
    12555 Orange Drive, Suite 202
    Davie, Florida 33330

 

With copies to (which shall not constitute notice):

 

Carlton Fields Jorden Burt
Attn: Robert Macaulay, Esq.
Miami Tower
100 S.E. Second St., Ste. 4200
Miami, Florida 33131-2113

 

or to such other address as the parties hereto may designate in writing to the other in accordance with this Section 8.4. Any party may change the address to which notices are to be sent to it by giving written notice of such change of address to the other parties in the manner above provided for giving notice.

 

Section 8.5 Assignment and Binding Effect. Prior to Closing, this Agreement shall not be assignable by any of the parties hereto without the written consent of the other.

 

Section 8.6 No Benefit to Others. The representations, warranties, covenants, and agreements contained in this Agreement are for the sole benefit of the parties hereto, and their heirs, executors, administrators, legal representatives, successors, and assigns and they shall not be construed as conferring any rights on any other persons, or limiting any rights of any party hereto against any other person or entity.

 

Section 8.7 Headings, Gender, and Person. All section headings contained in this Agreement are for convenience of reference only, do not form a part of this Agreement, and shall not affect in any way the meaning or interpretation of this Agreement. Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine, or neuter, as the context requires. Any reference to a “person” herein shall include an individual, firm, corporation, partnership, trust, governmental authority or body, association, unincorporated organization or any other entity.

 

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Section 8.8 Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when each counterpart has been signed by each party and delivered to the other party hereto.

 

Section 8.9 Integration of Agreement. This Agreement supersedes all prior agreements, oral and written, between the parties hereto with respect to the subject matter hereof. Neither this Agreement, nor any provision hereof, may be changed, waived, discharged, supplemented, or terminated orally, but only by an agreement in writing signed by the party against which the enforcement of such change, waiver, discharge, or termination is sought.

 

Section 8.10 Governing Law. This Agreement shall be construed under the laws of the State of Georgia, without giving effect to its conflict of laws. The parties agree that any appropriate state court sitting in Fulton County, Georgia or any Federal Court sitting in the Northern District of Georgia (Atlanta Division) (collectively, the “Permitted Courts” ), shall have exclusive jurisdiction of any case or controversy arising under or in connection with this Agreement and shall be a proper forum in which to adjudicate such case or controversy, and each party irrevocably: (i) consents to the jurisdiction of the Permitted Courts in such actions, (iir) agrees not to plead or claim that such litigation brought in the Permitted Courts has been brought in an inconvenient forum, and (iiis) waives the right to object, with respect to such suit, action, or proceeding, that such court does not have jurisdiction over such party. In any suit, arbitration, mediation, or other proceeding to enforce any right or remedy under this Agreement or to interpret any provision of this Agreement, the prevailing party will be entitled to recover its costs, including reasonable attorneys’ fees, and all costs and fees incurred on appeal or in a bankruptcy or similar action.

 

Section 8.11 Severability. Whenever possible, each provision hereof shall be interpreted in such manner as to be effective and valid under applicable law, but in case any one or more of the provisions contained herein shall, for any reason, be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision or provisions had never been contained herein unless the deletion of such provision or provisions would result in such a material change as to cause completion of the transactions contemplated hereby to be unreasonable. The court in its discretion may substitute for the deleted provision an enforceable provision which reasonably approximates the excluded provision.

 

IN WITNESS WHEREOF, each party hereto has caused this Agreement to be executed all as of the day and year first above written.

 

  TNTY:
     
  TRUNITY HOLDINGS, INC.
     
  By:                                                                                   
     
  Name: Nicole Fernandez                                             
     
  Title:  Chief Executive Officer                                        

 

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Signature Page of N4P Member (sign as EITHER individual or entity but not both):

 

If Individual :

 

Signature:_________________________________

 

Print Name:________________________________

 

 Print Address:______________________________

 

__________________________________________

 

If Entity:

 

Print Name of Entity:___________________________

 

Signature of Authorized Officer or Member:_____________________________

 

Print Name of Authorized Signatory:___________________________________

 

Print Address of Entity:______________________________________________

 

_________________________________________________________________

 

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Exhibit 10.2

 

CONSULTING AGREEMENT

 

THIS CONSULTING AGREEMENT is entered into as of December 1, 2015 between Newco4Pharmacy, LLC., a Georgia corporation (the “ Company ”) and Stephen Keaveney (“ Consultant ”).

 

WHEREAS, the Company desires to engage the services of Consultant to provide the Company with the services as more fully set forth in this Agreement; and WHEREAS, Consultant is desirous of performing such services on behalf of the Company.

 

NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties hereby agree as follows:

 

1.        Consulting Services. Upon the terms and subject to the conditions contained in this Agreement, Consultants hereby agrees that it shall, during the term of this Agreement, undertake the performance of the following services (the “Services”):

 

(a) CEO Services as directed by the Board of Directors.

 

2.        Consultant’s Fee and Expenses.

(a) Consultant’s Fee (“Fee”). The Company shall Consultant for providing the Services the following Consulting Fee: (i) pay to the Consultant a monthly cash fee of $10,000.

(b) Expenses. In addition to payment to Consultant of the compensation set forth in Section 2(a) hereof, the Company shall promptly upon request from time to time reimburse Consultant for all reasonable expenses (including, without limitation, travel office rental and other out-of-pocket expenses) incurred by Consultant in connection with its engagement hereunder.

 

(c) Payment After Termination. The Company shall commit to pay the total amount of fees outlined in this contract of $120,000 regardless of the Consultants performance except for negligence.

3.        Term. 12 months.

4.        No Obligation. Consultant agrees that it is not an agent of the Company and may not bind or obligate the Company. Neither the Company nor Consultant is obligated to deal exclusively with the other. The Company is not obligated nor required to accept any offer of investment from any investor introduced by Consultant, and the Company may refuse in its sole discretion to enter into, negotiate, execute, perform in whole or any part, conclude, or consummate any agreement for an investment in the Company, without liability to Consultant.

5.        Status of Consultant. Consultant is an independent contractor and is not and shall not be considered the Company's agent for any purposes whatsoever. Consultant is not granted any right or authority to assume or create any obligations or liability, express or implied, on the Company’s behalf, or to negotiate on behalf of or bind the Company in any manner whatsoever. Consultant is not licensed as a securities broker or dealer and cannot and will not engage in the sale of securities, or in any other activity for which such or any other license is required.

 

 

6.        Confidentiality.

(a) Confidential Information. In connection with activities hereunder, each party shall furnish the other with all reasonable information concerning itself and its operations deemed necessary or appropriate (the “Confidential Information”) and shall provide the other with reasonable access to relevant books, records, officers, directors, employees, accountants and counsel. The parties acknowledge and agree that, in connection with this Agreement, each party will be using and relying upon the Confidential Information without independent verification thereof or independent appraisal of any assets and may, in its sole discretion, use additional in-formation contained in public reports or other information furnished by the other party or third parties.

(b) Confidentiality. Each party agrees that the Confidential Information will be used solely for the purpose of performing the obligations hereunder. Subject to the limitations set forth in section 4(c) below, each party will keep the Confidential Information provided hereunder confidential and will not disclose such Confidential Information or any portion thereof, except: (a) to a third party with the prior written approval of the other party, which third party has executed a confidentiality agreement satisfactory in form and substance to the parties, or (b) to any other person for which the party’s consent to disclose such Confidential Information has been obtained.

(c) Exceptions. The confidentiality obligations under this Agreement shall not apply to any portion of the Confidential Information which: (a) at the time of disclosure to the party or thereafter is generally available to and known by the public (other than as a result of a disclosure directly or indirectly by a party in violation of this Agreement); (b) was available to the party on a non-confidential basis from a source other than the other party, provided that such source is not and was not bound by a confidentiality agreement with a party; (c) has been independently acquired or developed by a party without violating any of its obligations under this Agreement; or (d) the disclosure of which is legally compelled (whether by deposition, interrogatory, request for documents, subpoena, civil or administrative investigative demand or other similar process). In the event that a party becomes legally compelled to disclose any of the Confidential Information, each party shall provide the other party with prompt prior written notice of such requirement so that the other party may seek a protective order or other appropriate remedy and/or waive compliance with the terms of this Agreement.

7.        No Conflicting Agreements. Consultant represents and warrants that he is not a party to any agreement, contract or understanding, whether an employment contract or otherwise, that would restrict or prohibit him from undertaking or performing employment in accordance with the terms and conditions of this Agreement.

8.        Binding Agreement. The rights and obligations of the Company under this Agreement shall inure to the benefit of, and shall be binding on, the Company and its successors and assigns, and the rights and obligations (other than obligations to perform services) of Consultant under this Agreement shall inure to the benefit of, and shall be binding upon, Consultant and his heirs, personal and legal representatives, executors, successors and administrators.

 

 

9.        Notices. All notices and other communications pursuant to this Agreement shall be in writing and shall be deemed to be sufficient if contained in a written instrument and shall be deemed given if delivered personally, telecopied, sent by nationally-recognized, overnight courier or mailed by registered or certified mail (return receipt requested), postage prepaid, to the parties at their respective addresses (or at such other address for a party as shall be specified by like notice). All such notices and other communications shall be deemed to have been received (i) in the case of personal delivery, on the date of such delivery, (ii) in the case of a telecopy, when the party receiving such telecopy shall have confirmed receipt of the communication, (iii) in the case of delivery by nationally-recognized, overnight courier, on the Business Day following dispatch, and (iv) in the case of mailing, on the third Business Day following such mailing. For purposes of this Agreement, “Business Day” shall mean any day, other than a Saturday, Sunday or national legal holiday.

10.     Waiver. The failure of either party to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision as to any future violation thereof, or prevent that party thereafter from enforcing each and every other provision of this Agreement. The rights granted the parties herein are cumulative and the waiver of any single remedy shall not constitute a waiver of such party’s right to assert all other legal remedies available to it under the circumstances.

11.     Governing Law. This Agreement shall be governed by and construed according to the laws of the State of Georgia.

12.     Captions and Paragraph Headings. Captions and paragraph headings used herein are for convenience and are not a part of this Agreement and shall not be used in construing it.

13.     Enforcement Costs. If any legal action or other proceeding is brought for the enforcement of this Agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with any provision of this Agreement, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys' fees, court costs and all expenses even if not taxable as court costs (including, without limitation, all such fees, costs and expenses incident to arbitration, appellate, bankruptcy and post-judgment proceedings), incurred in that action or proceeding, in addition to any other relief to which such party or parties may be entitled. 

  COMPANY :     CONSULTANT :
By:     By  
Name: Stephen Keaveney   Name: Stephen Keaveney
Title: CEO   Title: Consultant

 

 

Exhibit 99.1  

 

 

 

 

TRUNITY ANNOUNCES RESTRUCTURING PLAN AND BUSINESS SPIN-OUT

Company Converts Debt, Creates Private Education Business, and New Pharmacy Focus

 

Davie, FL – (Marketwired) – December 14, 2015 Trunity Holdings, Inc. (OTCBB/OTCQB:TNTY) (“Trunity ”), a pioneer of eLearning technology solutions that transform the educational experience, today announced a comprehensive restructuring plan that will result in the spin-out of its education related businesses into a private company owned by its shareholders. In conjunction with the spin out, it intends to reshape its capital structure following a conversion of the majority of its $4 million in debt into equity. Lastly, it has acquired a new business start-up, Newco4Pharmacy, LLC, that intends to acquire a series of compounding pharmacy operations.

 

The restructuring plan was approved by Trunity’s Board of Directors after review of its financial condition, financing needs and alternatives. “We have invested heavily into our educational software platform, with over $16 million in investment in the business since inception. While we are beginning to get traction on our sales efforts, in order to get the business cash flow positive we will require additional funding, and capital is unlikely to be available until we restructure our debt,” said Nicole Fernandez-McGovern, the CEO of Trunity. “We have decided that the cost structure as a public company is not practical for our education business, and believe that a spin-out of the existing business into a private company will allow us to identify new funding, cut overhead and provide a potential future return to our shareholders. In support of the plan, the majority of our creditors, and shareholders, have approved this plan, and following conversion our shareholders will continue to own 100% of the private education business on completion of the spin out from Trunity Holdings, Inc.”

 

The restructuring plan allows creditors of the Company to convert their debt to equity using a $.03 per share rate, and that will apply to all creditors, including debenture holders, note holders, trade payables and all other obligations. If all creditors convert, debt service of over $700,000 will be eliminated. After conversion of debts, there will be approximately 190 million shares outstanding, with the debt holders receiving around 70% of outstanding shares issued, and existing equity holders having around 30% shares outstanding. All of these shareholders will be subject to the effect of a planned restructuring of Trunity’s equity, to include a reverse split of the common stock in a range that is estimated to be approximately 19 to 1, such that when completed each holder of 19 shares will have one outstanding share and total shares outstanding for the company will be approximately 12,000,000. As the restructuring plan is implemented over the next few weeks, details regarding the conversions will be communicated.

 

In conjunction with the restructuring, the Company has acquired 100% of the membership interests of Newco4pharmacy, LLC (“Newco”), a start-up operation that intends to acquire a number of compounding pharmacy operations, building a national network. In conjunction with the acquisition Newco was issued a new form of Preferred Stock that will convert to up to 90% of the common shares of the public Company. Newco holders will not participate in the ownership of the education business that is being spun-out. Existing shareholders of Trunity, including those who get shares as a result of the conversion of their debt, will have at 10% to 15% of the recapitalized public company, depending on the final amount of debt converted.

 

 

 

 

The share ownership of the education business, at the moment of its spin-out, will be the same as the ownership of the public company before giving effect to the acquisition of NewCo4Pharmacy. The target effective date for inclusion in the spin-out share distribution is December 18, 2015 at the end of business day. It is the intention that all holders of common stock will receive shares in the spin out company if the timetable and plan are executed on schedule.

 

The restructuring plan is expected to be completed by the end of 2015, including the spin-out of the education business into a separate private company and the restructuring of the equity of the public equity. Further updates will be provided on the Trunity.com web site, via press releases, as well as in Form 8-K filings as required.

  

About Trunity Holdings, Inc.

 

Founded in 2009, Trunity Holdings, Inc. ( OTCBB/OTCQB:TNTY ) (“ Trunity ”) has developed a collaborative knowledge management, publishing and education delivery platform which provides an end-to-end solution for the rapidly growing eTextbook, eLearning and enterprise training marketplaces. As a result of the platform’s innovative multi-tenant cloud-based architecture, Trunity allows content from multiple sources to be assembled into customized Trubooks ™ and courseware and delivered with real-time updates directly to the student on any Internet-enabled computer or mobile device. The content powered by Trunity is seamlessly integrated with learning management, social collaboration, standards alignment, real-time analytics and royalty-tracking functionality. Trunity currently hosts a growing global community of over 4,300 expert contributors made up of top scientists and educators, who create peer-reviewed educational content. The Company’s clients include leading colleges, universities, K-12 schools, corporate enterprises and government agencies worldwide. Headquartered in Davie, Florida, Trunity has operations in North America and internationally. For more information, visit www.trunity.com .

 

Statement Under the Private Securities Litigation Reform Act

 

As contemplated by the provisions of the Safe Harbor section of the Private Securities Litigation Reform Act of 1995, this news release contains forward-looking statements pertaining to future, anticipated, or projected plans, performances and developments, as well as other statements relating to future operations. All such forward-looking statements are necessarily only estimates or predictions of future results or events and there can be no assurance that actual results or events will not materially differ from expectations. Further information on potential factors that could affect Trunity Holdings Inc. is included in the Company's filings with the Securities and Exchange Commission. We expressly disclaim any intent or obligation to update any forward-looking statements .

 

FOR MORE INFORMATION ABOUT TRUNITY HOLDINGS,

PLEASE CONTACT:

Nicole Fernandez-McGovern, Chief Executive Officer and Chief Financial Officer

866-723-4114