Exhibit 10.60

 

ST GEORGE INVESTMENTS LLC
303 EAST WACKER DRIVE, SUITE 1200
CHICAGO, IL 60601

 

 

September 24, 2014

 

VIA EMAIL

 

Epazz, Inc.

Attn: Shaun Passley

205 W. Wacker Dr., Suite 1320

Chicago, IL 60606

email: shaun@epazz.net

 

RE:       DEFAULT NOTICE

 

Dear Mr. Passley:

 

I write in connection with that certain Convertible Promissory Note dated
September 5,2013 issued by Epazz, Inc., an Illinois corporation (the
"Borrower"), in favor of St George Investments LLC, a Utah limited liability
company (the "Holder"), in the original principal amount of $56,900.00 (the
"Note"), and that certain Note Purchase Agreement dated September 5,2013 by and
between the Borrower and the Holder (the "Agreement"). Capitalized terms used in
this letter without definition shall have the meanings given to them in the
Note.

 

Events of Default

 

Section 3.10) of the Note requires the Borrower to comply with the reporting
requirements of the Securities Exchange Act of 1934. The Borrower was required
to file their Form 10-K for the period ending December 31,2013 on or before
March 31,2014 (the "Form 10-K Filing Due Date"). The Borrower did not file their
Form 10-K until July 18, 2014. As a result of the Borrower's failure to file
their Form 10-K for the period ending December 31, 2013 by the Form 10-K Filing
Due Date, an Event of Default has occurred under the Note as of March 31, 2014
(the "Filing Default Date").

 

Additionally, pursuant to Section 3.1(a) of the note, the Borrower was required
to pay the Outstanding Balance of the Note on June 5,2014 (the "Maturity Date").
The Borrower failed to pay the Outstanding Balance of the Note by the Maturity
Date, nor has it been paid as of the date of this letter. As a result of the
Borrower's failure to repay the Note on the Maturity Date, a second Event of
Default occurred under the Note as of June 5, 2014 (the "Payment Default Date").

 

Default Effects

 

In accordance with Section 3.2 of the Note, upon the occurrence of any Event of
Default, (a) the Outstanding Balance shall increase to 150% of the Outstanding
Balance immediately prior to the occurrence of the Event of Default (the
"Balance Increase"), and (b) this Note shall then accrue interest at the Default
Interest rate of 22% per annum; provided, however, that in no event shall the
Balance Increase be applied more than two times.

 

The Outstanding Balance of the Note immediately prior to the Filing Default Date
(before applying the first of two Balance Increases) was $44,488.14. After
applying the Balance Increase to the Outstanding Balance, the Outstanding
Balance increased to $66,732.21 ($44,488.14 x 150%). The Outstanding Balance of
the Note immediately prior to the Payment Default Date (before applying the
second of two Balance Increases) was $69,445.75. After applying the Balance
Increase to the Outstanding Balance, the

 

 

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ST GEORGE INVESTMENTS LLC
303 EAST WACICER DRIVE, SUITE 1200
CHICAGO, IL 60601

 

 

 

Outstanding Balance increased to $104,168.63 ($69,445.75 x 150%). Additionally,
the Outstanding Balance of the Note began accruing interest at 22% per annum on
April 1,2014.

 

Late Clearing Adjustment Amount

 

On March 7,2014 (the "Conversion Date"), the Holder delivered a Notice of
Conversion to the Borrower in which the Holder elected to convert $15,000.00 of
the Outstanding Balance of the Note into 125,000,000 shares of the Borrower's
Common Stock (the "Conversion Shares").

 

Pursuant to Section 1.6(g) of the Note, if the Holder delivers a Notice of
Conversion and the Conversion Shares are delivered to Holder or its broker, but
it takes longer than five (5) business days after such delivery for such
Conversion Shares to be electronically cleared for trading in Holder's brokerage
account, then the Late Clearing Adjustment Amount (as defined below) shall be
added to the Outstanding Balance of this Note. The "Late Clearing Adjustment
Amount" is the amount equal to the number of applicable Conversion Shares
multiplied by the excess, if any, of (1) the Trading Price of the Common Stock
on the Conversion Date, over (2) the Trading Price of the Common Stock on the
date the certificated DTC Eligible Conversion Shares are electronically cleared
for trading in the Holder's brokerage account.

 

The 125,000,000 Conversion Shares were not cleared for trading until September
10,2014 (the "Clearing Date"). The Trading Price of the Common Stock on the
Conversion Date was $0.0003, while the Trading Price of the Common Stock on the
Clearing Date was $0.0001. As a result of the Trading Price of the Common Stock
being lower on the Clearing Date than on the Conversion Date, the Outstanding
Balance of the Note increased by the Late Clearing Adjustment Amount of
$25,000.00 (125,000,000 Conversion Shares * ($0.0003 - $0.0001)) on September
10, 2014.

 

As of the date of this letter, the Outstanding Balance of the Note is
$136,737.76.

 

Notwithstanding anything to the contrary herein, the Holder reserves all rights
and remedies available to it under the Note and the other Transaction Documents
with respect to any Event of Default thereunder. Moreover, any failure or delay
by the Holder to exercise any right, power, or remedy shall not constitute a
waiver of such right, power, or remedy. If there are any inconsistencies between
this Notice and the Transaction Documents, the Transaction Documents shall
govern.

 

If you have any questions, please contact me at jfife@chicagoventure.com or at
(312) 297-7001 or Tina Saxton at tsaxton@chicagoventure.com or at (312)
297-7018.

 

 

 

[SIGNATURE PAGE TO FOLLOW]

 

 

 

 

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ST GEORGE INVESTMENTS LLC
303 EAST WACKER DRIVE, SUITE 1200
CHICAGO, IL 60601

 

 

 

  Sincerely,       ST GEORGE INVESTMENTS LLC       By: Fife Tradin Inc., Manager
      By: /s/ John M Fife                                  John M Fife,
President

 

 

cc:J. Hansen — Hansen Black Anderson Ashcraft PLLC (via email only)

 

 

 

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