OTC Stock News

[Mick Dodge]

EPAZ ~ PROPOSED TERMS FOR THE PRIVATE PLACEMENT OF REVENUE SHARING AGREEMENTS OF Epazz, Inc.

The following is a description of a proposed offering of securities, is of a summary nature, does not purport to be complete, and will be qualified in its entirety by reference to the Final Offering Materials (the "Final Offering Materials"), if created, which will fully provide for the final terms of the Revenue Sharing Agreements. These terms are subject to change and are negotiable with potential investors.

Proposed Terms
Issuer: Epazz, Inc. an Illinois Corporation (the "Company").


Securities to be Issued: Revenue Sharing Agreements (each an "RSA" and together the "RSAs"). The RSAs shall be unsecured general obligations of the Issuer.


Amount of Financing: Up to a total of $1 million with a minimum individual investment amount of $5,000 unless otherwise agreed to by the Company in limited circumstances.


Purchasers: The RSAs will be offered and sold only to persons who are "accredited investors" ("Accredited Investors") as defined in Rule 501(a) of Regulation D promulgated by the United States Securities and Exchange Commission under the federal Securities Act of 1933, as amended (the "Securities Act"), and who meet certain other qualifications. In addition, the Company must take reasonable steps to verify that investors are Accredited Investors, which reasonable steps are likely to require investors' provision of financial and tax records, as well as certain other information deemed necessary by the Company. Accredited Investors meeting these requirements will herein be referred to as qualified investors ("Qualified Investors").


Use of Proceeds: The Company intends to use the net proceeds for marketing, sales, development, general working capital purposes and other necessary expenditures as determined in the discretion of management.


Commencement Date: Commencing with the first full calendar month following the Closing, within thirty (60) calendar days following the end of each calendar month, the Company will begin making cash payment (collectively, the "Monthly Revenue Share Amount") to the holders of the Revenue Sharing Agreements (each, a "Revenue Sharing Investor" and collectively, the "Revenue Sharing Investors").


Revenue Share Percentage: The Monthly Revenue Share Amount will be in an amount equal to up to 5% of Company Gross Revenues for such calendar month. Each Revenue Sharing Investor's pro rata share of the Monthly Revenue Share Amount shall be determined by dividing such Revenue Sharing Investor's investment amount by the investment amounts of all Revenue Sharing Investors as of the first day of the calendar month applicable to such Monthly Revenue Share Amount.


Maximum Revenue Share Amount: Thee Monthly Revenue Share Amount will continue to be paid until each Revenue Sharing Investor has received aggregate payments in an amount equal to 1.5 times such Revenue Sharing Investor's investment amount (each such Revenue Sharing Investor's "Maximum Revenue Share Amount").


Revenue Definition: For any applicable calendar month, Company Gross Revenues will be an amount equal to all gross revenues from the sale of products or services by the Company or any parent, subsidiary or affiliate of the Company during such calendar month as determined under U.S. generally accepted accounting principles, consistently applied.


Termination Date: In the event the Investor has not received the Maximum Revenue Share Amount prior to December 31, 2021 (the "Maturity Date"), the Company shall pay to the Revenue Sharing Investor, on or before the Maturity Date, an amount equal to the Maximum Revenue Share Amount less the sum of all previous payments made by the Company to the Revenue Sharing Investor.


Manner of Payment: All such payments to the Investor shall be deposited into a bank account of the investor's choosing at the time of investment, or any successor account thereto which may be established by the Investor, or provided via check to the Investor.


Overdue Payments: The Company shall be assessed a late payment charge at an annual rate equal to five percent (5%) of any Monthly Revenue Share Amount not paid within five (5) business days of becoming due. This late payment charge is cumulative and assessed once per month from the due date until the date of payment thereof and shall accrue and be added to any balance of unpaid amounts subject to late payment.


Information Rights: The Company will provide the Revenue Sharing Investor with the following information as to any period during which such Revenue Sharing Investor's RSA is outstanding: (a) unaudited quarterly financial statements of the Company within forty-five (45) days after the end of each calendar quarter; (b) management commentary on the Company's operations, sales and financial condition within forty-five (45) days after the end of each calendar quarter; (c) annual financial statements of the Company within ninety (90) days after the end of each fiscal year, which may or may not be audited, as determined in the sole discretion of the Management Committee of the Company; and (d) as soon as reasonably practicable, but in any event within thirty (30) days after its filed, a copy of the Company's federal tax return filed with the Internal Revenue Service for each fiscal year of the Company.


Expenses: Each party shall be responsible for its own costs and expenses incurred in connection with the transactions contemplated hereby.


Not an offer: This Term Sheet is not a complete description of the financing and does not constitute either an offer to sell or an offer to purchase securities.

http://finance.yahoo.com/news/epazz-launches-1-million-revenue-121500858.html