EXHIBIT 99.1
AMENDMENTS TO MERGER & INVESTMENT TERM SHEET
AUGUST 31, 2007
This agreement modifies and amends the Merger & Investment Term Sheet
dated July 24, 2007, between the parties, and, to the extent there is a conflict
in the terms, this modification agreement will prevail over the original Term
Sheet.
TIME AND TERMINATION:
(1) EXCLUSIVITY AND TERM. The Term Sheet exclusivity remains in effect
through September 30, 2007, but only as to Infinity's shell entity and
it is understood that REGS will continue to raise other equity capital
investment. That is, REGS will be precluded from utilizing an
alternative entity with which to merge during the exclusivity period.
On or before August 31, 2007, Infinity will provide a loan to REGS in
the amount of $50,000 having the terms and conditions set forth in the
loan documentation attached ("Commercial Promissory Note"), (providing
for, among other things, a conversion option, all or nothing, into
150,000 restricted shares or an equivalent number of partnership units
that would correspond to the ownership percentage equivalent to
150,000 shares based on the number of shares that would be issued to
REGS on September 30, 2007, according to this Amendments to Merger &
Investment Term Sheet. The conversion option is good for a term
equivalent to the terms of the Commercial Promissory Note. The
conversion option may only be exercised in the event there is no
closing. Infinity will only agree to waive the conversion option in
the event there is no closing as a result of Infinity's inability to
provide the required initial Capital Funding (under paragraphs 3
through 5, the Capital Funding is reduced to $250,000). If there is a
closing under the terms of this Amendment and the Original Term Sheet,
then the $50,000 loan will be treated as an advance against the total
of $750,000 (or $250,000, under paragraphs 3 and 5) required to be
paid at the close and the note will be marked paid and become null and
void. In the event there is no closing, Infinity will have no further
obligation to REGS and REGS will be subject only to the terms and
conditions of the Commercial Promissory Note. All other shares and
warrants contemplated in the Term Sheet will be cancelled.
INTERIM FUNDING:
(2) IF REGS RAISES AN ADDITIONAL $250,000 (AT $1.00 OR BETTER), this
funding will replace and supercede the short-term warrants that
Infinity was to exercise and which are labeled "A" and "B" warrants in
the Term Sheet. In lieu of the A and B warrants replaced by $1.00
share sales, Infinity will receive re-priced warrants, good for 6
months, at $1.00, up to a total of 750,000 warrants.
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(3) IF REGS RAISES $750,000 AFTER THE $250,000 (AT $1.00 OR BETTER),
Infinity shall provide an initial $250,000 of Capital Funding to SOZG
as follows:
Infinity shall acquire newly issued Convertible (Debenture or
Preferred Stock to be determined) from SOZG in accordance with the
Price Formula or Share Calculation, as applicable, for cash
consideration, secured by a lien and pledge agreement on all of the
unencumbered assets of the Company (Infinity to be reasonable in
granting security waiver for additional senior debt). The pledge
agreement shall be assignable to both the parent and all subsidiaries.
At any time after Closing, Infinity shall have the right, subject to
certain Beneficial Ownership Restrictions, to convert such Convertible
into 250,000 Common Shares (at $1.00 per share, subject to adjustment
under the debenture terms). The coupon rate on the Debenture or
Preferred shall be 7.5% per annum. The Company shall have the right to
force mandatory conversion of the Convertible upon an effective
Registration including the underlying shares in the Convertible.
At Closing the Company will issue to Infinity warrants to purchase 1,
500,000 shares as follows;
Warrant A - Warrants to purchase 500,000 shares at $1.00 per
share for a total of $500,000 that shall expire six months after
closing.
Warrant B - Warrants to purchase 1,000,000 shares at $1.00 per
share for a total of $1,000,000 that shall expire 2 years after
closing.
SHELL ACQUISITION:
(4) At this point (after raising $1,000,000 at $1.00 or better), the value
of REGS has substantially increased over that utilized to evaluate
REGS for the original closing. Therefore, SOZG would accomplish a
4-for-1 reverse stock split, then acquire REGS for 15,782,630 shares,
plus any shares sold at $1.00 (presumably at least 1,500,000
additional shares) and the then-existing SOZG shareholders would own
876,813 shares of the after-merger entity (one-half of that currently
contemplated in the Term Sheet). 659,515 additional shares would be
set aside for future issuance to resolve Debt Settlement issues. It is
expressly understood that Infinity will be issued 500,000 restricted
shares for business development services at the close of the Merger.
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ADDITIONAL FINANCING:
(5) IF REGS RAISES ANY EQUITY EQUAL TO OR IN EXCESS OF $2,000,000 (AT
$1.00 OR BETTER), Infinity shall provide an initial $250,000 of
Capital Funding to SOZG as follows:
Infinity shall acquire newly issued Convertible (Debenture or
Preferred Stock to be determined) from SOZG in accordance with the
Price Formula or Share Calculation, as applicable, for cash
consideration, secured by a lien and pledge agreement on all of the
unencumbered assets of the Company (Infinity to be reasonable in
granting security waiver for additional senior debt). The pledge
agreement shall be assignable to both the parent and all subsidiaries.
At any time after Closing, Infinity shall have the right, subject to
certain Beneficial Ownership Restrictions, to convert such Convertible
into 250,000 Common Shares (subject to adjustment under the debenture
terms). The coupon rate on the Debenture or Preferred shall be 7.5%
per annum. The Company shall have the right to force mandatory
conversion of the Convertible upon an effective Registration including
the underlying shares in the Convertible. At Closing the Company will
issue to Infinity warrants to purchase 750,000 shares as follows;
Warrant A - None Warrant B - Warrants to purchase 750,000 shares at
$1.00 per share for a total of $750,000 that shall expire 2 years
after closing
It is expressly understood that Infinity will be issued 500,000
restricted shares for business development services at the close of
the Merger.
(6) EARLY CLOSING. Infinity can arrange to close at any time prior to
September 30 and the above stipulations shall be terminated as of the
date of closing except to the extent third-party equity has been
invested or subscribed to as of the close and allowing 10 days for
completion of those funding subscriptions.
ACCEPTED AND AGREED this 31st day of August, 2007
INFINITY CAPITAL GROUP, INC. REGS, LLC
By: /s/Xxxxxxx X. Xxxxxxx By: /s/ X. Xxxx Xxxxx, III
President Vice President
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COMMERCIAL PROMISSORY NOTE
$50,000 Dated: August 31, 2007
FOR VALUE RECEIVED, the undersigned, REGS, LLC, d/b/a Resource
Environmental Group, a Colorado corporation (hereinafter "Maker"), promises to
pay to Infinity Capital Corp. (hereinafter "Holder"), at such place as the
Holder may designate in writing, the principal sum of FIFTY THOUSAND DOLLARS
($50,000), together with interest at 10% thereon, due 90 days from date hereof.
In event Maker shall (i) default in the performance of any of the
obligations, covenants or agreements legally imposed by the terms of this Note,
or (ii) apply for or consent in writing to the appointment of a receiver,
trustee, or liquidator of Maker or (iii) file a voluntary petition in
bankruptcy, or admit in writing Maker's inability to pay Maker's debts as they
come due, or (iv) make general assignments for the benefit of creditors, or (v)
file a petition or answer seeking reorganization or rearrangement with creditors
or taking advantage of any insolvency law, or (vi) file an answer admitting the
material allegations of a petition filed against Maker in any bankruptcy,
reorganization, insolvency or similar proceedings, at the option of the Holder,
the whole indebtedness evidenced hereby may be declared due and payable
whereupon the entire unpaid principal balance of this Note and all interest
accrued thereon from last payment date shall thereupon at once mature and become
due and payable without presentment or demand for payment or notice of the
intent to exercise such option or notice of the exercise of such option by the
Holder, or notice of any kind, all of which are hereby expressly waived by Maker
and may be collected by suit or other legal proceedings.
If all or any part of the amount of this Note be declared due in
accordance with the other provisions hereof, or if any installment herein
provided is not paid when due, the principal balance as the case may be, shall
bear interest at the lesser of (i) eighteen percent (18%) per annum, or (ii) the
Maximum Rate allowed under applicable law until paid in full or until the Note
is reinstated. Notice of Default shall be given, in writing, to Maker, after
five days after occurrence of default. Maker shall have 10 days after written
Notice of Default, within which to cure the default plus interest at default
rate, legal fees and costs incurred.
Except as otherwise provided herein, the undersigned and all sureties,
guarantors and endorsers of this Note severally waive all notices, demands,
presentments for payment, notices of non-payment, notice of intention to
accelerate the maturity, notices of acceleration, notices of dishonor, protest
and notice of protest, diligence in collecting or bringing suit as to this Note
and as to each, every and all installments hereof and all obligations hereunder
and against any party hereto and to the application of any payment on this
obligation, or as an offset hereto, and agree to all extensions, renewals,
partial payments, substitutions or evidence of indebtedness and the taking,
release or substitution of all or any part of the security or the release of any
party liable hereon with or without notice before or after maturity.
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It is the intention of the parties hereto to comply with the usury laws
applicable to this loan if any, accordingly it is agreed that notwithstanding
any provision to the contrary in this Note or in any of the documents securing
payment hereof no such provision shall require the payment or permit the
collection of interest in excess of the maximum permitted by law. If any excess
of interest is provided for, contracted for, charged for or received, then the
provisions of this paragraph shall govern and control and neither the Maker
hereof nor any other party liable for the payment hereof shall be obligated to
pay the amount of such excess interest. Any such excess interest which may have
been collected shall be, at the Holder's option, either applied as a credit
against the then unpaid principal amount hereof or refunded to Maker. The
effective rate of interest shall be automatically subject to reduction to the
maximum lawful contract rate allowed under the usury laws as now or hereafter
construed. It is further agreed that without limitation of the foregoing, all
calculations of the rate of interest contracted for, charged for, or received
under this Note which are made for the purposes of determining whether such rate
exceeds the maximum lawful rate, shall be made, to the extent permitted by law,
by amortizing, prorating, allocating and spreading in equal parts during the
full stated term of this Note, all interest contracted for, charged for or
received from the Maker or otherwise by the Note Holder.
At closing of the proposed Maker's merger with Satellite Organizing
Solutions, Inc., Xxxxxx agrees to convert the Note into a newly issued
Convertible Note from Satellite Organizing Solutions, Inc., in accordance with
the Price Formula detailed in the Term Sheet of July 19, 20007, as amended in an
Amended Term Sheet dated August 30, at which time the Note shall be deemed
released.
In the event the proposed Maker's merger fails to close, Holder will
have the option of demanding the note payment or Converting to Makers common
stock in the amount of 150,000 common shares or an equivalent number of
partnership units that would correspond to the ownership percentage equivalent
to 150,000 shares based on the number of shares that would be issued to REGS on
September 30, 2007 according to the executed Amendments to Merger & Investment
Term Sheet dated August 31, 2007. Holder will only agree to waive the conversion
option in the event there is no closing as a result of Infinity's inability to
provide the required initial Capital Funding as described in the Amended Term
Sheet dated August 30, 2007.
In the event this Note is placed in the hands of an attorney for
collection (whether or not suit is filed), or in the event it is collected by
suit or through bankruptcy, probate, receivership or other legal proceedings
(including foreclosure), the undersigned hereby agrees to pay to the Holder as
attorney's fees a reasonable amount in addition to the principal and interest
then due hereon, and all other costs of collection.
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IN WITNESS WHEREOF, Maker has fully executed this Note as of the date
first above written.
REGS, LLC, August 31, 2007
Corporate Seal
by:/s/X. Xxxx Xxxxx, III
President
Attest:
by:/s/X. Xxxx Xxxxx, III
Secretary
Agreed:
by: /s/Xxxxxxx X. Xxxxxxx
Xxxxxx
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