Exhibit
10.1
CERTIFICATE
TO SET FORTH DESIGNATIONS,
PREFERENCES,
AND RIGHTS OF
8%
SERIES B CONVERTIBLE PREFERRED STOCK
It
is hereby certified
that:
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I.
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The
name of the corporation is Accelerize New Media, Inc. (the “Corporation”),
a Delaware corporation.
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II.
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Set
forth hereinafter is a statement of the voting powers, preferences,
limitations, restrictions and relative rights of shares of 8% Series
B
Convertible Preferred Stock, hereinafter designated as contained
in a
resolution of the Board of Directors of the Corporation pursuant
to a
provision of the Certificate of Incorporation of the Corporation
permitting the issuance of said 8% Series B Convertible Preferred
Stock by
resolution of the Board of
Directors:
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Creation
of 8% Series B Convertible
Preferred Stock
. Pursuant to authority conferred upon the Board
of Directors by the Certificate of Incorporation, said Board of Directors
adopted a resolution providing for the designation and issuance of 144,000
shares of 8% Series B Convertible Preferred Stock pursuant to action by the
Board of Directors dated as of June 1, 2007, which resolution provides as
follows:
8%
Series B Convertible Preferred Stock
1.
Designation:
Number of Shares
. The designation of said series of preferred
stock shall be
8% Series B Convertible Preferred Stock
(the
"Series B Preferred Stock"). The number of shares of Series B Preferred Stock
shall be 144,000. Each share of Series B Preferred Stock shall have a
stated value equal to $35.00 (as adjusted for any stock dividends, combinations
or splits with respect to such shares) (the "Stated Value"), and $0.001 par
value. Unless otherwise resolved by the Board of Directors, the
Corporation will not issue more than 144,000 shares of Series B Preferred Stock
(“Original Issue”).
2.
Dividends
.
(a) The
rights of the holders of outstanding shares of Series B Preferred Stock
(“Holders”) with regard to the payment of dividends shall be junior and subject
to the rights of the holders of the Corporation’s 10% Series A Convertible
Preferred Stock (the “Series A Preferred Stock”).
(b) The
Holders of outstanding shares of Series B Preferred Stock shall be entitled
to
receive preferential dividends out of any assets of the Corporation at the
time
legally available therefor, after the holders of the Series A Preferred Stock
have received their preferential dividend amount in full, but before any
dividend or other distribution will be paid or declared and set apart for
payment on any shares of any Common Stock, or other class of stock presently
authorized or to be authorized (the Common Stock, and such other stock being
hereinafter collectively the "Junior Stock") dividends at the rate of 8% per
annum on the Stated Value, payable quarterly in arrears on each of September
1,
December 1, March 1 and June 1, commencing on December 1, 2007, which dividends
shall be paid, at the Corporation’s sole discretion in cash or in shares of the
Corporation's Common Stock. If the Corporation elects to pay any
dividend in shares of Common Stock, the number of shares of Common Stock to
be
issued to the Holder shall be an amount equal to the quotient of (i) the
dividend payment divided by (ii) $0.35 per share.
(c) Subject
to any rights and preferences of the Series A Preferred Stock, the dividends
on
the Series B Preferred Stock, at the rate provided above, shall be cumulative
whether or not declared, so that, if at any time full cumulative dividends
at
the rate aforesaid on all shares of the Series B Preferred Stock then
outstanding, from the date from and after which dividends thereon are cumulative
to the end of the quarterly dividend period next preceding such time shall
not
have been paid or declared and set apart for payment, or if the full dividend
on
all such outstanding Series B Preferred Stock for the then current dividend
period shall not have been paid or declared and set apart for payment, the
amount of the deficiency shall be paid or declared and set apart for payment
before any sum shall be set apart for or applied by the Corporation or a
subsidiary of the Corporation to the purchase, redemption or other acquisition
of any Junior Stock.
(d) Dividends
on all shares of the Series B Preferred Stock shall begin to accrue and be
cumulative from and after the earlier of the date on which the Company receives
the entire consideration for the issuance of the Series B Preferred Stock,
another date agreed by the Company with the Placement Agent, or October 31,
2007. A dividend period shall be deemed to commence on the day following a
dividend payment date herein specified and to end on the next succeeding
dividend payment date herein specified.
3.
Liquidation
.
(a) The
rights of the Holders of the Series B Preferred Stock with regard to payments
at
liquidation shall be junior and subject to the rights of the holders of the
Series A Preferred Stock.
(b) Subject
to the rights and preferences of the Series A Preferred Stock holders, upon
the
dissolution, liquidation or winding-up of the Corporation, whether voluntary
or
involuntary, the Holders of the Series B Preferred Stock shall be entitled
to
receive before any payment or distribution shall be made on Junior Stock, out
of
the assets of the Corporation available for distribution to stockholders, the
Stated Value per share of Series B Preferred Stock and all accrued and unpaid
dividends to and including the year-end of the year of
redemption. Upon the payment in full of all amounts due to Holders of
the Series B Preferred Stock, the holders of the Common Stock of the Corporation
and any other class of Junior Stock shall receive all remaining assets of the
Corporation legally available for distribution. If the assets of the
Corporation available for distribution to the Holders of the Series B Preferred
Stock shall be insufficient to permit payment in full of the amounts payable
as
aforesaid to the Holders of Series B Preferred Stock upon such liquidation,
dissolution or winding-up, whether voluntary or involuntary, then all such
assets of the Corporation shall be distributed to the exclusion of the holders
of shares of Junior Stock ratably among the Holders of the Series B Preferred
Stock.
(c) The
purchase or the redemption by the Corporation of shares of any class of its
stock, the merger or consolidation of the Corporation with or into any other
corporation or entity (other than a merger in which the Corporation is the
surviving or continuing corporation and which does not result in any
reclassification, conversion, or change of the outstanding shares of Common
Stock), or the sale or transfer by the Corporation of all or substantially
all
of its assets shall be deemed to be a liquidation, dissolution or winding-up
of
the Corporation for the purposes of this paragraph 3.
4.
Conversion
into Common Stock.
Holders of shares of Series B Preferred Stock
shall have the following conversion rights and obligations:
(a) Subject
to the further provisions of this paragraph 4 each Holder of shares of Series
B
Preferred Stock shall have the right at any time commencing after the issuance
to the Holder of Series B Preferred Stock, to convert such shares, accrued
and
unpaid dividends on such shares, (collectively “Obligation Amount”) into fully
paid and non-assessable shares of Common Stock of the Corporation determined
in
accordance with the Conversion Price provided in paragraph 4(b) below (the
"Conversion Price"). All issued or accrued but unpaid dividends may
be converted at the election of the Holder simultaneously with the conversion
of
principal amount of Stated Value of Series B Preferred Stock being converted
at
$0.35 per share, subject to adjustment as set forth in this
section.
(b) The
number of shares of Common Stock issuable upon conversion of the Obligation
Amount shall equal (i) the sum of (A) the Stated Value per share being
converted, and (B) at the Holder's election, accrued and unpaid dividends on
such share divided by (ii) the Conversion Price. The Conversion Price
shall be $0.35, subject to adjustment as described herein.
(c) Holder
will give notice of its decision to exercise its right to convert the Series
B
Preferred Stock or part thereof by telecopying an executed and completed Notice
of Conversion (a form of which is annexed as Exhibit A to this Certificate
of
Designations) to the Corporation via confirmed telecopier transmission or
otherwise pursuant to Section 5.5 of the Subscription Agreement (the
"Subscription Agreement") between the Holder and the Corporation which was
entered into under the terms of the Corporation's Confidential Private Placement
Memorandum dated June 1, 2007. The Holder will not be required to
surrender the Series B Preferred Stock certificate until the Series B Preferred
Stock has been fully converted. Each date on which a Notice of
Conversion is telecopied to the Corporation in accordance with the provisions
hereof shall be deemed a Conversion Date. The Corporation will itself
or cause the Corporation’s transfer agent to transmit the Corporation's Common
Stock certificates representing the Common Stock issuable upon conversion of
the
Series B Preferred Stock to the Holder via express courier for receipt by such
Holder within three (3) business days after receipt by the Corporation of the
Notice of Conversion (the "Delivery Date"). In the event the Common
Stock is electronically transferable, then delivery of the Common Stock
must
be made by electronic transfer provided request for such electronic
transfer has been made by the Holder. A Series B Preferred Stock
certificate representing the balance of the Series B Preferred Stock not so
converted will be provided by the Corporation to the Holder if requested by
Holder, provided the Holder has delivered the original Series B Preferred Stock
certificate to the Corporation. To the extent that a Holder elects
not to surrender Series B Preferred Stock for reissuance upon partial payment
or
conversion, the Holder hereby indemnifies the Corporation against any and all
loss or damage attributable to a third-party claim in an amount in excess of
the
actual amount of the Stated Value of the Series B Preferred Stock then owned
by
the Holder.
In
the case of the exercise of the
conversion rights set forth in paragraph 4(a), the conversion privilege shall
be
deemed to have been exercised and the shares of Common Stock issuable upon
such
conversion shall be deemed to have been issued upon the date of receipt by
the
Corporation of the Notice of Conversion. The person or entity
entitled to receive Common Stock issuable upon such conversion shall, on the
date such conversion privilege is deemed to have been exercised and thereafter,
be treated for all purposes as the record holder of such Common Stock and shall
on the same date cease to be treated for any purpose as the record holder of
such shares of Series B Preferred Stock so converted.
Upon
the conversion of any shares of
Series B Preferred Stock, no adjustment or payment shall be made with respect
to
such converted shares on account of any dividend on the Common Stock, except
that the holder of such converted shares shall be entitled to be paid any
dividends declared on shares of Common Stock after conversion
thereof.
The
Corporation shall not be required,
in connection with any conversion of Series B Preferred Stock, and payment
of
dividends on Series B Preferred Stock to issue a fraction of a share of its
Series B Preferred Stock or Common Stock and shall instead deliver a stock
certificate representing the nearest whole number.
(d) The
Conversion Price determined pursuant to Paragraph 4(b) shall be subject to
adjustment from time to time as follows:
(i) In
case the Corporation shall at any time (A) declare any dividend or distribution
on its Common Stock or other securities of the Corporation other than the Series
A Preferred Stock and the Series B Preferred Stock, (B) split or subdivide
the
outstanding Common Stock, (C) combine the outstanding Common Stock into a
smaller number of shares, or (D) issue by reclassification of its Common Stock
any shares or other securities of the Corporation, then in each such event
the
Conversion Price shall be adjusted proportionately so that the Holders of Series
B Preferred Stock shall be entitled to receive the kind and number of shares
or
other securities of the Corporation which such Holders would have owned or
have
been entitled to receive after the happening of any of the events described
above had such shares of Series B Preferred Stock been converted immediately
prior to the happening of such event (or any record date with respect
thereto). Such adjustment shall be made whenever any of the events
listed above shall occur. An adjustment made to the Conversion Price pursuant
to
this paragraph 4(d)(i) shall become effective immediately after the effective
date of the event.
(ii) Subject
to the preferences of the Series A Preferred holders, for so long as
Series B Preferred Stock is outstanding, without the prior written consent
of
the holders of at least a majority of the outstanding shares of Series B
Preferred Stock the Corporation cannot (a) issue or sell, or deem to have issued
or sold, any shares of Common Stock (including the issuance or sale of shares
of
Common Stock owned or held by or for the account of the Corporation); or (b)
grant or sell or reprice any options or convertible securities (but excluding
shares of Common Stock, options or convertible securities issued or deemed
to
have been issued by the Corporation in connection with an Approved Stock Plan,
and shares of Common Stock issued as dividends to holders of Series A Preferred,
which can be issued for a consideration per share as low as $0.15) for a
consideration per share less than $0.35 per share. “Approved Stock
Plan” means any employee benefit plan which has been approved by the Board of
Directors of the Corporation, pursuant to which the Corporation’s securities may
be issued to any employee, officer or director for services provided to the
Corporation in that capacity.
(e) (i) In
case of any merger of the Corporation with or into any other corporation or
entity (other than a merger in which the Corporation is the surviving or
continuing corporation and which does not result in any reclassification,
conversion, or change of the outstanding shares of Common Stock) then unless
the
right to convert shares of Series B Preferred Stock shall have terminated as
part of such merger, lawful provision shall be made so that Holders of Series
B
Preferred Stock shall thereafter have the right to convert each share of Series
B Preferred Stock into the kind and amount of shares of stock and/or other
securities or property receivable upon such merger by a Holder of the number
of
shares of Common Stock into which such shares of Series B Preferred Stock might
have been converted immediately prior to such consolidation or
merger. Such provision shall also provide for adjustments which shall
be as nearly equivalent as may be practicable to the adjustments provided for
in
sub-paragraph (d) of this paragraph 4. The foregoing provisions of
this paragraph 4(e) shall similarly apply to successive mergers.
(ii) In
case of any sale or conveyance to another person or entity of the property
of
the Corporation as an entirety, or substantially as an entirety, in connection
with which shares or other securities or cash or other property shall be
issuable, distributable, payable, or deliverable for outstanding shares of
Common Stock, then, unless the right to convert such shares shall have
terminated, lawful provision shall be made so that the Holders of Series B
Preferred Stock shall thereafter have the right to convert each share of the
Series B Preferred Stock into the kind and amount of shares of stock or other
securities or property that shall be issuable, distributable, payable, or
deliverable upon such sale or conveyance with respect to each share of Common
Stock immediately prior to such conveyance.
(f) Whenever
the number of shares to be issued upon conversion of the Series B Preferred
Stock is required to be adjusted as provided in this paragraph 4, the
Corporation shall forthwith compute the adjusted number of shares to be so
issued and prepare a certificate setting forth such adjusted conversion amount
and the facts upon which such adjustment is based, and such certificate shall
forthwith be filed with the Transfer Agent for the Series B Preferred Stock
and
the Common Stock; and the Corporation shall mail to each Holder of record of
Series B Preferred Stock notice of such adjusted conversion price.
(g) In
case at any time the Corporation shall propose:
(i) to
pay any dividend or distribution payable in shares upon its Common Stock or
make
any distribution (other than cash dividends) to the holders of its Common Stock;
or
(ii) to
offer for subscription to the holders of its Common Stock any additional shares
of any class or any other rights; or
(iii) any
capital reorganization or reclassification of its shares or the merger of the
Corporation with another corporation or entity (other than a merger in which
the
Corporation is the surviving or continuing corporation and which does not result
in any reclassification, conversion, or change of the outstanding shares of
Common Stock); or
(iv) the
voluntary dissolution, liquidation or winding-up of the
Corporation;
then,
and
in any one or more of said cases, the Corporation shall cause at least fifteen
(15) days prior notice of the date on which (A) the books of the Corporation
shall close or a record be taken for such stock dividend, distribution, or
subscription rights, or (B) such capital reorganization, reclassification,
merger, dissolution, liquidation or winding-up shall take place, as the case
may
be, to be mailed to the Transfer Agent for the Series B Preferred Stock and
for
the Common Stock and to the Holders of record of the Series B Preferred
Stock.
(h) The
term “Common Stock” as used in this Certificate of Amendment shall mean the
$0.001 par value Common Stock of the Corporation as such stock is constituted
at
the date of issuance thereof or as it may from time to time be changed, or
shares of stock of any class or other securities and/or property into which
the
shares of Series B Preferred Stock shall at any time become convertible pursuant
to the provisions of this paragraph 4.
(i) The
Corporation shall pay the amount of any and all issue taxes (but not income
taxes) which may be imposed in respect of any issue or delivery of stock upon
the conversion of any shares of Series B Preferred Stock, but all transfer
taxes
and income taxes that may be payable in respect of any change of ownership
of
Series B Preferred Stock or any rights represented thereby or of stock
receivable upon conversion thereof, shall be paid by the person or persons
surrendering such stock for conversion.
(j) If
at any time after the Corporation's Common Stock is approved for listing on
an
exchange or quoted on the Nasdaq Stock Market, Inc. or in the over-the-counter
market, if ever, and the average closing price of the Corporation's Common
Stock
is $1.00 or more per share for 10 consecutive trading days, then, at the
Corporation's sole option, upon 30 days prior notice to the Holder in accordance
with Section 11 of the Subscription Agreement the shares of Series B Preferred
Stock are subject to mandatory conversion by the Corporation pursuant to the
provisions of this Section.
5.
Voting
Rights
. Except as otherwise provided by law, the Holders of all
outstanding shares of Series B Preferred Stock will vote together with holders
of Corporation's Series A Preferred Stock and the holders of the Corporation’s
Common Stock on all matters submitted to a vote of the Corporation's
stockholders. Each share of Series B Preferred Stock is entitled to
the number of votes which equals the number of shares of Common Stock into
which
it is then convertible.
6.
Restrictions
and Limitations
. The Corporation shall not amend its certificate of
incorporation without the approval by the Holders of at least a majority of
the
then outstanding shares of Series B Preferred Stock if such amendment
would:
(a) change
the relative seniority rights of the Holders of Series B Preferred Stock as
to
the payment of dividends in relation to the holders of any other capital stock
of the Corporation, or create any other class or series of capital stock
entitled to seniority as to the payment of dividends in relation to the Holders
of Series B Preferred Stock;
(b) reduce
the amount payable to the Holders of Series B Preferred Stock upon the voluntary
or involuntary liquidation, dissolution or winding up of the Corporation, or
change the relative seniority of the liquidation preferences of the Holders
of
Series B Preferred Stock to the rights upon liquidation of the holders of other
capital stock of the Corporation, or change the dividend rights of the Holders
of Series B Preferred Stock;
(c) cancel
or modify the conversion rights of the Holders of Series B Preferred Stock
provided for in Section 4 herein;
(d) reduce
or modify the voting rights of the Holders of Series B Preferred Stock provided
for in Section 5 herein; or
(e) cancel
or modify the rights of the Holders of the Series B Preferred Stock provided
for
in this Section 6.
7.
Redemption
. The
shares of Series B Preferred Stock are redeemable at the Corporation’s sole
discretion at any time after June 1, 2012, at a redemption price of fifty two
and one half dollars ($52.50) per share, plus all accrued and unpaid dividends
as of the redemption date.
8.
Status
of Converted or Redeemed Stock
. In case any shares of Series B
Preferred Stock shall be redeemed, converted or otherwise reacquired, the shares
so redeemed, converted or reacquired shall resume the status of authorized
but
unissued shares of preferred stock and shall no longer be designated as Series
B
Preferred Stock.
9.
Authority
to Amend
. This Certificate of Amendment was adopted by the
Corporation’s Board of Directors as of June 1, 2007, and no stockholder consent
was required for the adoption thereof pursuant to the authority conferred upon
the Board of Directors by the Certificate of Incorporation of said
Corporation.
10.
Registration
Rights
. The Company has agreed to use its best efforts to
obtain a ticker symbol under which its shares will be traded in the
Over-The-Counter Bulletin Board (“OTC.BB”) after the Offering
Period. At such time as trading commences on the OTC.BB, the Company
will use its best efforts to file within 120 days a registration statement
covering the common shares into which the Series B shares are convertible and
the shares subject to Common Stock Purchase Warrants.
IN
WITNESS WHEREOF, the undersigned, being the President of this Corporation,
has
executed this Certificate as of June 1, 2007.
ACCELERIZE
NEW MEDIA, INC.
By:
/s/ Brian Ross
Brian
Ross, President
EXHIBIT
A
NOTICE
OF CONVERSION
(To
Be
Executed By the Registered Holder in Order to Convert the Series B Convertible
Preferred Stock of Accelerize New Media, Inc.)
The
undersigned hereby irrevocably elects to convert $______________ of the Stated
Value of the above 8% Series B Convertible Preferred Stock into shares of Common
Stock of Accelerize New Media, Inc. according to the conditions hereof, as
of
the date written below.
Date
of
Conversion:________________________________________________________________________
Applicable
Conversion Price Per
Share:__________________________________________________________
Number
of
Common Shares Issuable Upon This
Conversion:__________________________________________
An
8%
Series B Convertible Preferred Stock certificate is being delivered
herewith. The unconverted portion of such certificate, if any, should
be reissued and delivered to the undersigned.
Signature:________________________________________________________________________________
Print
Name:_______________________________________________________________________________
Address:_________________________________________________________________________________
Deliveries
Pursuant to this Notice of Conversion Should Be Made to:
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
Exhibit
10.2
EXHIBIT
A
SUBSCRIPTION
AGREEMENT AND INVESTOR QUESTIONNAIRE
ACCELERIZE
NEW MEDIA, INC.
UNIT
OFFERING
REGULATION
D SUBSCRIPTION AGREEMENT
YOU
SHOULD MAKE YOUR OWN DECISION WHETHER THIS OFFERING MEETS YOUR INVESTMENT
OBJECTIVES AND RISK TOLERANCE LEVEL. THESE SECURITIES HAVE NOT BEEN APPROVED
OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION APPROVED, DISAPPROVED, ENDORSED, OR RECOMMENDED THIS
OFFERING, OR PASSED UPON THE ACCURACY OR ADEQUACY OF THE CONFIDENTIAL PRIVATE
PLACEMENT MEMORANDUM DATED JUNE 1, 2007 OR THIS SUBSCRIPTION
AGREEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO STATE ADMINISTRATOR IN ANY JURISDICTION HAS REVIEWED THE DISCLOSURE IN THIS
DOCUMENT. ACCELERIZE NEW MEDIA, INC. IS RELYING ON AN EXEMPTION FROM
REGISTRATION OR QUALIFICATION IN OFFERING THE SECURITIES. NO INDEPENDENT PERSON
HAS CONFIRMED THE ACCURACY OR TRUTHFULNESS OF THIS DISCLOSURE, NOR WHETHER
IT IS
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS ILLEGAL.
THESE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY
NOT
BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION
OR EXEMPTION THEREFROM. SUBSCRIBERS SHOULD BE AWARE THAT THEY MAY BE REQUIRED
TO
BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF
TIME.
THIS
SUBSCRIPTION AGREEMENT (this “Subscription Agreement”) is made as of the ______
day of ____________, 2007, between Accelerize New Media, Inc. a corporation
organized under the laws of the State of Delaware (the “COMPANY”), and
____________________, the Subscriber (“SUBSCRIBER”), as set forth on the
execution pages hereof.
RECITALS
The
Subscriber has offered to purchase Units from the Company and the Company
desires to accept the Subscriber’s offer to purchase the Units based solely upon
the representations made by the Subscriber set forth herein.
The
Company and the Subscriber are executing and delivering this Subscription
Agreement in reliance upon the exemptions from securities registration under
the
Securities Act of 1933, as amended (the “Securities Act”).
The
Company desires to sell, and the Subscriber desires to purchase, upon the terms
and conditions stated in this Subscription Agreement, up to 48 Units (the
"Units") at the price of $105,000 each. Each Unit consists of 3,000 shares
of 8%
Series B Convertible Preferred Stock (“Series B Preferred Stock”) and seven year
Common Stock Purchase Warrants to purchase 105,000 shares of common stock at
an
exercise price of $0.35 per share ("Warrants") which together are referred
to as
the “Offering”). The minimum subscription is one Unit; however, in
the Company's sole discretion it may accept subscriptions for fractional
Units. The shares of common stock issuable upon the conversion of the
Series B Preferred Stock are referred to herein as the "Preferred Common Shares"
and the shares of common stock issuable upon exercise of the Warrants are
referred to herein as the “Warrant Shares.” The Units, Preferred
Common Shares, Warrants, and the Warrant Shares are collectively referred to
herein as the “Securities” and each of them may individually be referred to
herein as a “Security”. The shares of common stock underlying the Series B
Preferred Securities and the Warrants are collectively referred to herein as
the “Registrable Securities.”
The
Company reserves the right to increase the amount of the Offering and amend
the
Offering terms without notice or approval from prior subscribers in the Offering
and we reserve the right to accept fractional units. The Units are
offered solely to Accredited Investors (as hereinafter defined) by Skyebanc,
Inc. as our exclusive Placement Agent on a “best-efforts”
basis. There is no minimum offering.
The
Subscriber understands and acknowledges that the Company is relying upon the
representations and warranties of the Subscriber set forth in this Subscription
Agreement without limitation.
NOW,
THEREFORE, the Company and the Subscriber hereby agree as follows:
1.
Recitals
.
The
above
recitals are true and correct and constitute the terms of this Subscription
Agreement where applicable.
2.
Subscription
.
Subject
to the terms and conditions of this Subscription Agreement, the Subscriber
hereby irrevocably subscribes for and agrees to purchase the number of Units
set
forth on the signature page hereto and, as full payment therefore, agrees to
pay
to the Company, concurrently with the Subscriber’s execution and delivery of
this Subscription Agreement, the sum of $105,000 in cash for each Unit
purchased.
The
Offering may be modified by the Company’s management at its discretion without
approval from or notice to Subscriber, including but not limited to, increases
or reductions in the Unit price, Offering terms, and number and type of
Securities contained within the Unit. At the sole discretion of the
Company’s management, the Company may conduct other Offerings of its securities
while it is conducting this Offering with terms that may not be similar or
comparable to this Offering.
3.
Subscriber's
Representations and Warranties
. As a material inducement for the
Company to enter into this Subscription Agreement, the Subscriber represents
and
warrants to the Company as follows:
3.1
Purchase
for Subscriber’s Own Account
. The Subscriber is purchasing the
Securities for the Subscriber's own account and not with a view towards the
public sale or distribution thereof, except pursuant to sales that are exempt
from the registration requirements of the Securities Act and/or sales registered
under the Securities Act. The Subscriber understands that Subscriber
must bear the economic risk of this investment indefinitely, unless the
Securities are registered pursuant to the Securities Act and any applicable
state securities or blue sky laws or an exemption from such registration is
available, and that the Company has no present intention of registering the
resale of any such Securities. The Subscriber understands that there
is no public market for any of the Securities and no public market may ever
be
established in the future.
3.2
Investment
Intention of Subscriber
. The Subscriber understands that the
Securities have not been registered under the Securities Act by reason of a
claimed exemption under the provisions of the Securities Act that depends,
in
part, upon the Subscriber’s investment intention. In connection with
this, the Subscriber understands that it is the position of the Securities
and
Exchange Commission (“SEC”) that the statutory basis for such exemption would
not be present if the Subscriber’s representation merely meant that its present
intention was to hold such securities for a short period, such as the capital
gains period of tax statutes, for a deferred sale, for a market rise, assuming
that a market develops, or for any other fixed period. The Subscriber
realizes that, in the view of the SEC, a purchase now with an intent to resell
would represent a purchase with an intent inconsistent with its representation
to the Company, and the SEC might regard such a sale or disposition as a
deferred sale to which such exemptions are not available.
3.3
Reliance
on Exemptions from Registration
. The Subscriber understands that
the Securities are being offered and sold in reliance upon specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and the
Subscriber's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Subscriber set forth herein without
limitation in order to determine the availability of such exemptions and the
eligibility of the Subscriber to acquire the Securities.
3.4
Lack
of Governmental Approval or Review
. The Subscriber
understands that the Securities have not been approved or disapproved by the
SEC
or any State Securities Commission or any foreign governmental authority of
any
country nor has the SEC or any State Securities Commission or foreign
governmental authority of any jurisdiction passed upon the accuracy of any
information provided to the Subscriber or passed upon, or made any
recommendation or endorsement of the securities or made any finding or
determination as to the fairness of the Offering. The Subscriber will furnish
evidence satisfactory to the Company of compliance with the laws of any
jurisdiction that, in the opinion of the Company, may be applicable, and the
Company shall be entitled to require and rely upon an opinion of counsel at
the
expense of Subscriber which must be satisfactory to the Company with respect
to
compliance with laws of any jurisdiction deemed applicable by the
Company.
3.5
Accredited
Investor Status, and Suitability
. The Subscriber has read and
understands Rule 501(a) of Regulation D of the Securities Act and represents
that he is an “Accredited Investor” as that term is defined by Rule
501(a). The Subscriber further represents that he is knowledgeable,
sophisticated and experienced in making, and is qualified to make decisions
with
respect to a variety of sophisticated and complex investments that present
investment decisions like those involved in the purchase of the
Securities. The Subscriber, in reaching a decision to subscribe, has
such knowledge and experience in financial and business matters that the
Subscriber is capable of reading, interpreting and understanding financial
statements and evaluating the merits and risks of an investment in the
Securities and has the net worth to undertake such risks. Subscriber
has invested in securities offered by the Company and/or investments in the
securities of companies comparable to the Company that involve non-trading,
and/or thinly traded securities and penny stocks, unregistered securities,
restricted securities, high risk investments, operating losses and securities
which are not listed or quoted on any national securities
exchange. The Subscriber represents that in addition to its own
ability to evaluate the investment, it has employed the services of an
investment advisor, attorney or accountant to read all of the documents
furnished or made available by the Company to it to evaluate the merits and
risks of such an investment on its behalf, and that he recognizes the highly
speculative nature of an investment in the Securities. The Subscriber
is familiar with the business operations and financial affairs of the
Company.
3.6
Financial
Suitability
. Subscriber understands that Subscriber may be unable
to liquidate the Securities and any transfer of the Securities is limited.
The
Subscriber’s overall commitment to investments which are not readily marketable
is not disproportionate to Subscriber’s net worth, and the investment in the
Securities will not cause the Subscriber’s overall investment in illiquid
high-risk investments to become excessive in proportion to Subscriber’s assets,
liabilities and living standards. The Subscriber can bear the
economic risk of an investment for an indefinite period of time and can bear
a
loss of the entire investment in the Securities without financial hardship
or a
change in its living conditions.
3.7
Company
Information
. The Subscriber understands that this Offering has
not been registered under the Securities Act and is being made in reliance
upon
exemptions therefrom. Subscriber must rely upon the Subscriber’s own access to
information about the Company and the Offering. The Subscriber has requested,
received, reviewed, understands and considered all information it deems relevant
in making an informed decision to purchase the Securities, including but not
limited to the Company’s financial information, and the Subscriber has conducted
independent due diligence in matters involving the Company. Subscriber has
consulted with Subscriber’s legal, tax, and investment advisors regarding its
investment in the Securities and has received their approval to invest in the
Securities. The Subscriber hereby represents that, in Subscriber’s opinion, it
has received information equivalent to that which would be provided to an
Investor in a registration statement filed under the Securities
Act. The Subscriber understands that the Subscriber or the
Subscriber's representatives have been and will continue to be provided with
access to the Company's financial records. The Subscriber has
furnished the Subscriber’s legal, tax and financial advisors with all materials
relating to the business, finances and operations of the Company and materials
relating to the offer and sale of the Securities, and the Subscriber has advised
the Company that the Offering, according to its terms, will, in the opinion
of
the Subscriber, be made in compliance with applicable state and federal
securities laws.
3.8
Representations
of Income or Profit
. The Subscriber is not investing in the
Securities based upon any representation, oral or written, by any person with
respect to the future value of, if any, or the income from, if any, the
Securities. Neither the Company, the Placement Agent, nor any of
their respective officers, directors, stockholders, partners, employees or
agents, or any other persons have represented, guaranteed or warranted, whether
expressly or by implication, that: (i) the Company or the Subscriber will
realize any given percentage of profits and/or amount or type of consideration,
profit or loss as a result of the Company’s activities or the Subscriber’s
investment in the Company; or (ii) the past performance or experience of the
Company’s management, or of any other person, will in any way indicate
predictable results regarding the ownership of the Company’s securities, the
future value of the Company’s securities, or of the Company’s
activities.
3.9
Use
of Proceeds
. Subscriber acknowledges that the Company's
management has the sole discretion over the use of proceeds of the Offering
and
there are no assurances that the Company will use the proceeds as the Company
currently intends. As a result, the Company's management may spend
the proceeds on a broad variety of items including, without limitation,
operating expenses, loans, salaries, joint ventures, partnerships, or other
business arrangements formed now or to be formed in the future, any or all
of
which may never be successful. Subscriber acknowledges that it will
have no control or ability to influence or participate in the determination
of
how the proceeds from this offering will be utilized and the use of the proceeds
by management cannot currently be predicted with any accuracy.
3.10
No Public Market
. The Company’s shares are not quoted and not
traded on any stock exchange, and Subscriber understands and acknowledges that
there is no guaranty that there will ever be a public market for the Company’s
shares.
3.11
Transfer,
Resale and/or Pledge
. The Subscriber understands that the offer
and sale of the Securities have not been and are not being registered under
the
Securities Act or any state securities laws, and the Securities may not be
transferred unless:
(a) the
transfer is made pursuant to and as set forth in an effective registration
statement under the Securities Act covering the Securities; or
(b) the
Subscriber shall have delivered to the Company at the Subscriber’s expense an
opinion of counsel (which opinion shall be in form, substance, scope and law
firm acceptable to the Company) to the effect that the Securities to be sold
or
transferred may be sold or transferred pursuant to an exemption from such
registration; or
(c) sold
under and in compliance with Rule 144 promulgated under the Securities Act
(or a
successor rule) (“Rule 144”); or
(d) sold
or transferred in accordance with applicable securities laws to an affiliate
of
the Subscriber who agrees to sell or otherwise transfer the Securities only
in
accordance with the provisions of this Section and who is an Accredited
Investor; and neither the Company nor any other person is under any obligation
to register such Securities under the Securities Act or any state securities
laws.
Notwithstanding
the foregoing or anything else contained herein to the contrary, the Securities
may not be pledged as collateral in connection with a bona fide margin account
or other lending arrangement, unless such pledge is consistent with applicable
laws, rules and regulations and at the Company’s option, the pledgor provides
the Company with a legal opinion (which opinion shall be in form, substance,
scope and law firm acceptable to the Company) that the pledge or other lending
agreement is in compliance with applicable state and federal securities
laws.
3.12
Rule
144 Resales
. The Subscriber has read and understands that Rule
144 promulgated under the Securities Act requires, among other conditions,
a
one-year holding period prior to the resale (in limited amounts) of securities
acquired in a non-public offering without having to satisfy the registration
requirements under the Securities Act. The Subscriber understands that the
Company makes no representation or warranty regarding its fulfillment in the
future of any reporting requirements under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), or its dissemination to the public of any
current financial or other information concerning the Company, as is required
by
Rule 144 as one of the conditions of its availability. The Subscriber is aware
that the safe harbor provided by Rule 144 of the Securities Act is not now
available for Subscriber’s resale of the Securities and Rule 144 may never
become available for Subscriber’s resale of the Securities or any portion
thereof.
3.13
Certificate
Legends
. The Subscriber understands that the certificates
representing the Units, the Preferred Common Shares and/or the Warrant Shares
shall bear a restrictive legend, until such time as the securities are subject
to an effective registration statement or otherwise may be sold by the
Subscriber under Rule 144(k), in substantially the following form:
“The
securities represented by this certificate have not been registered under the
Securities Act of 1933, as amended, or the securities laws of any state of
the
United States or in any other jurisdiction. The securities represented hereby
may not be offered, sold or transferred in the absence of an effective
registration statement for the securities under applicable securities laws
unless offered, sold or transferred pursuant to an available exemption from
the
registration requirements of those laws.”
3.14
Authorization;
Enforcement
. This Subscription Agreement has been duly and
validly authorized, executed and delivered on behalf of the Subscriber and
is a
valid and binding agreement of such Subscriber enforceable against the
Subscriber in accordance with its terms. If the Subscriber is a
corporation, the corporation is duly incorporated or organized and validly
existing in the jurisdiction of its incorporation or organization and has all
requisite power and authority to purchase and hold the
Securities. The decision to invest and the execution and delivery of
this Subscription Agreement by a corporate Subscriber, the performance of the
obligations hereunder and the consummation of the transactions contemplated
hereby have been duly authorized and require no other proceedings on the part
of
the Subscriber. The individual signing this Subscription Agreement
has all right, power and authority to execute and deliver this Subscription
Agreement on behalf of the corporate Subscriber.
3.15
Inconsistent
Information
. No oral or written representations have been made
other than as stated in this Subscription Agreement, and no oral or written
information furnished to the Subscriber or the Subscriber’s advisor(s) in
connection with the Offering were in any way inconsistent with the information
stated in this Subscription Agreement.
3.16
Residency
. The
Subscriber is a resident of the jurisdiction set forth under the Subscriber's
name on the Execution Page hereto executed by such Subscriber.
3.17
Affirmation
. The
Subscriber affirms that all information that the Subscriber has provided to
the
Company, either directly or indirectly, concerning the Subscriber, the
Subscriber’s financial position and the Subscriber’s knowledge of financial and
business matters is accurate and complete as of the date of this Subscription
Agreement. The Subscriber understands that the Company's determination that
exemptions from the registration and qualification provisions of the Securities
Act and applicable state securities laws exist for the offer and sale of the
Securities is based, in part, upon the representations, warranties, agreements
and statements made by the Subscriber herein.
3.18
Remuneration
and Commissions
. The Subscriber is not aware of any remuneration or
commission that is to be paid to any person, directly or indirectly, in
connection with the offer, sale or purchase of the Securities other than fees
payable to the Placement Agent, Skyebanc, Inc. (“Skyebanc”), who will receive
10% of the gross proceeds from the Offering and Placement Agent Warrants to
purchase up to 10% of the shares of common stock underlying Units sold in the
Offering.
3.19
Survival
of Representations
. The Subscriber acknowledges that the
representations, warranties and agreements made by the Subscriber herein shall
survive the execution and delivery of this Subscription Agreement, the purchase
of the Units, the conversion of the Series B Preferred Stock and the exercise
of
the Warrants.
3.20
Acceptance
by Company
. The Subscriber understands that the Company reserves
the unrestricted right within 48 hours of acceptance of the signed subscription
agreement, to reject or limit any subscription at its sole discretion, even
if
the Subscriber is an Accredited Investor and meets all of the requirements
and
made all required representations.
3.21
Address
. The
Subscriber hereby represents that the address of Subscriber furnished by it
at
the end of this Subscription Agreement is the Subscriber’s principal residence
if it is an individual or its principal business address if it is a corporation
or other entity and that the Company is relying upon this information to ensure
compliance with applicable federal securities and state Blue Sky
Laws.
3.22
NASD
Subscribers
. The Subscriber acknowledges that if he or she is a
Registered Representative of a National Association of Security Dealers (“NASD”)
member firm, he or she must give such firm the notice required by the NASD’s
Rules of Fair Practice, receipt of which must be acknowledged by such firm
on
the signature page hereof.
3.23
Applicability
of State Securities Laws
. The Subscriber acknowledges that at
such time, if ever, as the Securities or any portion thereof are registered,
sales of such Securities will be subject to state securities laws, including
those of states which may require any shares sold therein to be sold through
a
registered broker-dealer or in reliance upon an exemption from
registration.
3.24
Foreign
Subscribers
. If Subscriber is not a U.S. Person (as defined
herein), such Subscriber hereby represents that such Subscriber is satisfied
as
to full observance of the laws of such Subscriber's jurisdiction in connection
with any invitation to subscribe for the Securities or any use of this
Subscription Agreement, including: (i) the legal requirements of such
Subscriber’s jurisdiction for the purchase of the Securities, (ii) any foreign
exchange restrictions applicable to such purpose, (iii) any governmental or
other consents that may need to be obtained, and (iv) the income tax and other
tax consequences, if any, which may be relevant to the purchase, holding,
redemption, sale, or transfer of the Securities. Such Subscriber’s
subscription and payment for, and such Subscriber’s continued beneficial
ownership of, the Securities will not violate any applicable securities or
other
laws of such Subscriber's jurisdiction. The term “U.S. Person” as
used herein shall mean any person who is a citizen or resident of the United
States or Canada, or any state, territory or possession thereof, including
but
not limited to any estate of any such person, or any corporation, partnership,
trust or other entity created or existing under the laws thereof, or any entity
controlled or owned by any of the foregoing.
3.25
No
General Solicitation or Advertisement
. The Subscriber is not
purchasing the Securities as a result of or subsequent to any advertisement,
article, notice or other communication published in any newspaper, magazine
or
similar media or broadcast over television or radio, posted on the Internet,
or
presented at any seminar or meeting, or any solicitation of a subscription
by a
person other than a representative of the Company with which the subscriber
had
a pre-existing relationship in connection with investments in securities
generally.
3.26
No
Escrow and Refundability
. Subscriber acknowledges that all subscriptions for
the Units are non-refundable except where prohibited by law. The
minimum amount that the Company will accept from any Subscriber is $105,000
for
one Unit, subject to its right to accept subscriptions for fractional Units
in
its sole discretion. The Subscriber understands that there is no minimum
offering amount that the Company must receive from the sale of the Units prior
to utilizing Offering proceeds and no Offering funds will be held in
escrow. As a result, all proceeds of the offering will be deposited
into the operating account of the Company and utilized by the Company upon
receipt, at its discretion.
3.27.
Nomine
e. The
Subscriber represents that it is not a nominee for any other
person. No one other than Subscriber has any interest in or any right
to acquire the Securities subscribed for by Subscriber. Subscriber
understands and acknowledges that the Company will have no obligation to
recognize the ownership, beneficial or otherwise, of such Securities by anyone
but Subscriber. Subscriber is purchasing the Units from funds legally
obtained and belonging to Subscriber and has not borrowed or otherwise received
the funds used to purchase the Securities, or any portion thereof from any
third
party.
3.28
Binding
Agreement; Assignment
. Subscriber acknowledges that this
Subscription Agreement is irrevocable and may not be withdrawn, except as
required by applicable law, and upon the signing of this Subscription Agreement,
the Subscriber is obligated to purchase the Securities for the amount of
consideration set forth above. The Subscriber understands it may not
assign this Subscription Agreement or any of the Subscriber’s rights or delegate
any of the Subscriber’s obligations under this Subscription Agreement without
the prior written consent of the Company.
3.29
Due
Diligence
. The Subscriber understands and acknowledges that the
Company may be subject to unforeseen and other material risks not set in the
Confidential Private Placement Memorandum dated June 1, 2007 and, as such,
Subscriber must rely upon its own independent due diligence investigation of
the
Company in making an investment in the Units.
3.30
Risk
Factors
. The Subscriber understands that the Securities are a
highly speculative investment involving a high degree of risk and are suitable
only for persons or entities of substantial means who have no need for liquidity
with respect to their investment in the Securities and who can afford a total
loss of their entire investment without hardship or any change in living
conditions.
4.
Listing
.
The
Company has agreed to use its best efforts to obtain a ticker symbol under
which
its shares will be traded in the Over-The-Counter Bulletin Board (“OTC.BB”)
after the Offering Period.
5.
Registration
Statement Requirements
.
At
such
time as trading commences on the OTC.BB, the Company will use its best efforts
to file within 120 days a registration statement covering the common shares
into
which the Series B shares are convertible and the shares subject to Common
Stock
Purchase Warrants.
6.
Indemnification
. Subscriber
will indemnify and hold harmless the Company, the Placement Agent, and each
of
their respective directors, officers, employees, agents, counsels and
controlling persons from and against, and will reimburse the Company, the
Placement Agent, and each of its respective directors, officers, employees,
agents, counsels and controlling persons with respect to, any and all loss,
damage, liability, cost or expense to which the Company, the Placement Agent
or
any such person may become subject under the Securities Act or otherwise,
insofar as such losses, damages, liabilities, costs or expenses are caused
by
any untrue statement or alleged untrue statement of any fact made by Subscriber,
or which arises therefrom or which is based upon the omission or
alleged omission to state therein a fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in
which
they were made, not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission
or
alleged omission was so made in reliance upon information furnished by or on
behalf of the Subscriber.
The
Subscriber shall indemnify and hold harmless the Company, the Placement Agent,
and each of their respective directors, officers, stockholders, employees,
counsel, agents, successors and assigns from and against all losses, damages,
liabilities or expenses (including, without limitation, attorneys’ fees), as and
when incurred, due to or arising out of, in whole or in part, any breach of
any
representation or warranty made by the Subscriber set forth herein or in any
other agreement or document furnished by the Subscriber to any of the foregoing
in connection with this Subscription Agreement, arising out of the resale or
distribution by the Subscriber of the Securities or any portion thereof in
violation of the Securities Act or any applicable state securities
laws.
Promptly
after receipt by the Company and/or Placement Agent of notice of the
commencement of any action involving the subject matter of the indemnity
provisions of this Subscription Agreement, the receiving party will notify
the
Subscriber of the commencement thereof; but the omission to so notify the
Subscriber will not relieve it from any liability that it may have to the
Company and/or Placement Agent otherwise than hereunder. In case such action
is
brought against the Company and/or Placement Agent and it/they notifies the
Subscriber of the commencement thereof, the Subscriber shall retain counsel
selected by the Company and pay all fees associated therewith including
retainers securing the payment of future legal fees.
7.
Miscellaneous
.
7.1
Counterparts
. This
Subscription 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
counterparts have been signed by each party and delivered to the other
party. This Subscription Agreement, once executed by a party, may be
delivered to the other parties hereto by facsimile transmission of a copy of
this Subscription Agreement bearing the signature of the party so delivering
this Subscription Agreement. In the event any signature is delivered
by facsimile transmission, the party using such means of delivery shall cause
the manually executed Execution Page(s) hereof to be physically delivered to
the
other party within five (5) days of the execution hereof, provided that the
failure to so deliver any manually executed Execution Page shall not affect
the
validity or enforceability of this Subscription Agreement.
7.2
Headings
. The
headings of this Subscription Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Subscription
Agreement.
7.3
Severability
. If
any provision of this Subscription Agreement shall be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Subscription Agreement
or
the validity or enforceability of this Subscription Agreement in any other
jurisdiction.
7.4
Entire
Agreement; Amendments
. This Subscription Agreement and the
instruments referenced herein contain the entire understanding of Subscriber
and
the Company, their affiliates and persons acting on their behalf with respect
to
the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor any Subscriber makes any
representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Subscription Agreement may be waived other than by an
instrument in writing signed by the party to be charged with enforcement and
no
provision of this Subscription Agreement may be amended other than by an
instrument in writing signed by the Company and Subscriber.
7.5
Notices
. Any
notices required or permitted to be given under the terms of this Subscription
Agreement shall be sent by certified or registered mail (return receipt
requested) or delivered personally, by responsible overnight carrier or by
confirmed facsimile, and shall be effective five (5) days after being placed
in
the mail, if mailed, or upon receipt or refusal of receipt, if delivered
personally or by responsible overnight carrier or confirmed facsimile, in each
case addressed to a party. The addresses for such communications shall
be:
|
|
If
to the Company:
|
Accelerize
New Media, Inc.
|
|
|
|
6477
Highway 93 South
Suite:
303
Whitefish,
MT 59937
Telephone:
(406) 892-2161
Facsimile:
(406) 892-2162
Attention: President
|
|
|
If
to any Subscriber:
|
To
such address set forth under the Subscriber's name on the Execution
Page
hereto executed by the Subscriber.
|
7.6
Successors
and Assigns
. This Subscription Agreement shall be binding upon
and inure to the benefit of the parties and their successors and assigns. Except
as provided herein or therein, the Subscriber may not assign this Subscription
Agreement or any rights or obligations hereunder.
7.7
Third
Party Beneficiaries
. This Subscription Agreement is intended for
the benefit of the parties hereto and their respective permitted successors
and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
7.8
Publicity
. The
Company shall have the right to approve, before issuance, any press releases,
SEC statements, or any other public statements, with respect to the transactions
contemplated hereby; the Company shall be entitled, without the prior approval
of the Subscriber, to make any press release or SEC or NASD filings with respect
to such transactions as is required by applicable law and
regulations.
7.9
Further
Assurances
. The Subscriber shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other Subscription Agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out
the
intent and accomplish the purposes of this Subscription Agreement and the
consummation of the transactions contemplated hereby.
7.10
Additional
Acknowledgement
. The Subscriber acknowledges that it has
independently evaluated the merits of the transactions contemplated by this
Subscription Agreement, reviewed and understood the terms of this Subscription
Agreement, as well as Confidential Private Placement Memorandum dated June
1,
2007, and the Subscriber Questionnaire. Subscriber represents that it has
independently made a decision to enter into the transactions contemplated by
the
foregoing documents and agreements and it is not relying on any advice from
or
evaluation by any other person including other Subscribers, and is not acting
in
concert with any other person in making its purchase of Securities
hereunder.
7.11
Law
and Arbitration
.
This Subscription Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts executed and performed in such State, without giving effect to
conflict of law principles. All controversies, claims and matters of
difference arising between the parties under this Subscription Agreement shall
be submitted to binding arbitration in New York County, New York under the
Commercial Arbitration Rules of the American Arbitration Association ("the
AAA")
from time to time in force (to the extent not in conflict with the provisions
set forth herein). The agreement to arbitrate shall be specifically
enforceable under applicable law in any court of competent
jurisdiction. Notice of the demand for arbitration shall be filed in
writing with the other parties to this Subscription Agreement and with the
AAA. Once the arbitral tribunal has been constituted in full, a
hearing shall be held and an award rendered as soon as
practicable. The demand for arbitration shall be made within a
reasonable time after the claim, dispute or other matter in question has arisen,
and the parties are not making progress toward a resolution. In no
event shall it be made after the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter would be barred by
the
applicable contractual or other statutes of limitations. The parties
shall have reasonable discovery rights as determined by the
arbitration. The award rendered by the arbitrators shall be final and
judgment may be entered in accordance with applicable law and in any court
having jurisdiction thereof. The decision of the arbitrators shall be
rendered in writing and shall state the manner in which the fees and expenses
of
the arbitrators shall be borne.
7.12
Waivers
. No
delay on the part of any party in exercising any right, power, or privilege
hereunder shall operate as a waiver thereof. Nor shall any waiver on the part
of
any party of any such right, power or privilege, nor any single or partial
exercise of any such right, power or privilege, preclude any further exercise
thereof or the exercise of any other such right, power or privilege. The rights
and remedies of any party based upon, arising out of or otherwise in respect
of
any inaccuracy in or breach by any other party of any representation, warranty,
covenant or agreement contained in this Subscription Agreement shall in no
way
be limited by the fact that the act, omission, occurrence or other state of
facts upon which any claim of any such inaccuracy or breach is based may also
be
the subject matter of any other representation, warranty, covenant or agreement
contained in this Subscription Agreement (or in any other agreement between
the
parties) as to which there is no inaccuracy or breach.
7.13
Variations
in Pronouns
. Wherever the context shall so require, all words
herein in the male gender shall be deemed to include the female or neuter gender
and vice versa, all singular words shall include the plural, and all plural
words shall include the singular. All pronouns and any variations thereof refer
to the masculine, feminine or neuter, singular or plural, as the context may
require.
7.14
Presumption
Against Scrivener
. Each party waives the presumption that this
Subscription Agreement is presumed to be in favor of the party which did not
prepare it, in case of a dispute as to interpretation.
BLUE
SKY LEGENDS
NASAA
LEGEND
IN
MAKING
AN INVESTMENT DECISION, SUBSCRIBERS MUST RELY ON THEIR OWN EXAMINATION OF THE
PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE OFFERING,
INCLUDING THE MERITS AND RISKS INVOLVED. THE SECURITIES OFFERED HEREBY HAVE
NOT
BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE
ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO
THE
CONTRARY IS A CRIMINAL OFFENSE.
NOTICE
TO RESIDENTS OF ALL STATES
THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OR
THE SECURITIES LAWS OF CERTAIN STATES AND ARE BEING OFFERED AND SOLD IN RELIANCE
ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH
LAWS. THE SECURITIES ARE SUBJECT IN VARIOUS STATES TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER
REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON
OR
ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS
CONFIDENTIAL TERM SHEET. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
IN
WITNESS WHEREOF, the Subscriber and the Company have caused this Subscription
Agreement to be duly executed as of the date first above written.
SUBSCRIBER:
By:______________________________
(signature)
Name:____________________________
(print
name)
Title:_____________________________
AGGREGATE
SUBSCRIPTION AMOUNT
Total
Number of Units being purchased: _____________________
Purchase
Price (@ $105,000 per Unit):
_____________________
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RESIDENCE:
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(State,
Province, Country)
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ADDRESS:
STREET
OR PO BOX:
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CITY:
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STATE
OR PROVINCE
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COUNTRY:
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POSTAL
ZIP CODE:
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Accepted
by ACCELERIZE NEW MEDIA, INC.
this
_________ day of ________________, 2007.
By:__________________________
Brian
Ross, President
SUBSCRIBER
QUESTIONNAIRE AND STATEMENT
ACCELERIZE
NEW MEDIA, INC. UNIT OFFERING
Questionnaire
Before
any sale of securities in Accelerize New Media, Inc. (the “Company”) can be made
to you, this Subscriber Questionnaire and Statement (the “Questionnaire”) must
be completed by you. The purpose of this Questionnaire is to
determine whether you are an “accredited investor” as defined in Rule 501 of
Regulation D promulgated by the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the “Securities Act”).
1. Name: _______________________________________________________________
2. Address:
Home: _________________________________________________________
_________________________________________________________
Telephone:________________________
Business:
______________________________________________________
___________________________________________________
Telephone:________________________
3. Social
Security Number or Taxpayer ID Number:_______________________
4. Occupation:
__________________________________________________________
5. Age:_________________
6. The
following information is required to ascertain whether you would be deemed
an
“accredited investor” as defined in Rule 501 of Regulation D under the
Securities Act. Please check whether you are any of the following:
a. A
bank as defined in Section 3(a)(2) of the Securities Act, or any savings and
loan association or other institution as defined in Section 3(a)(5)(A) of the
Securities Act whether acting in its individual or fiduciary capacity; any
broker or dealer registered pursuant to Section 15 of the Securities Exchange
Act of 1934; any insurance company as defined in Section 2(13) of the Securities
Act; any investment company registered under the Investment Company Act of
1940
or a business development company as defined in Section 2(a)(48) of that Act;
any Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment
Act
of 1958; any plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets
in
excess of $5,000,000; any employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974 if the investment decision
is
made by a plan fiduciary, as defined in Section 3(21) of such Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with investment decisions made solely
by persons that are accredited investors.
b. A
private business development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940.
c. An
organization described in Section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose of acquiring the securities offered, with total assets
in excess of $5,000,000.
d. A
director or executive officer of the Company.
e. A
natural person whose individual net worth, or joint net worth with your spouse,
at the time of your purchase exceeds $1,000,000.
f. A
natural person who had an individual income in excess of $200,000 in each of
the
two most recent years or joint income with your spouse in excess of $300,000
in
each of those years and has a reasonable expectation of reaching the same income
level in the current year.
g. A
trust, with total assets in excess of $5,000,000 not formed for the specific
purpose of acquiring the securities offered, whose purchase is directed by
a
sophisticated person as described in Rule 506(b)(2)(ii) (i.e., directed by
a
person who has such knowledge and experience in financial and business matters
that he or she is capable of evaluating the merits and risks of the prospective
investment).
h. An
entity in which all of the equity owners are accredited investors.
i. Please
indicate the amount of the current net worth, which relates to your home,
furnishings and automobiles.$____________________
7. Investment,
business, and educational experience:
a.
Educational background:___________________________________________
______________________________________________________________________
b.
Principal employment positions held during last five
years:__________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
c.
Frequency of prior investments (check one in each column):
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Stocks
and/or
Bonds
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Venture
Capital Investments
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Frequently
__________
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__________
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Occasionally
__________
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__________
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Never
__________
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__________
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8. If
you do not require the assistance or advice of a Subscriber representative,
please indicate below whether you believe you have sufficient knowledge and
experience in financial and business matters generally to be capable of
evaluating the merits and risks of this investment and, if so, please sign
the
Subscriber Statement below:
Subscriber
Statement
I
represent that the foregoing information is true and correct, and that I will
notify the Company immediately if any material change in any of such
information, which occurs prior to the closing of the purchase of the Company's
securities by me. I agree to furnish to the Company additional
information requested by it in connection with its determination of whether
an
offer and sale of the Company securities may be made to me.
In
connection with the proposed purchase of securities, the undersigned represents
that he has sufficient knowledge and experience in financial and business
matters to be capable of evaluating the merits and risks of this proposed
investment.
The
undersigned has considered that he might have to hold the proposed investment
for an indefinite period of time, and might have to bear a complete economic
loss. The undersigned represents that the information contained in
the Questionnaire, which has been completed by the undersigned and delivered
to
the Company, is true and correct.
The
purchase of the securities of the Company by the undersigned will be solely
for
the account of the undersigned and not for the account of any other person
and
will not be made with a view to any resale or distribution thereof.
The
undersigned recognizes that the proposed investment is being offered in a manner
that is intended to comply with the requirements of Regulation D under the
Securities Act of 1933, as amended, and that any acceptance of the undersigned's
Subscription Agreement by the Company will have been induced by the reliance
of
the Company on the correctness of the representations contained therein and
herein.
The
undersigned acknowledges his, her or its understanding of the contents of the
Subscription Agreement.
EXECUTION
BY AN INDIVIDUAL
(
Not applicable to entities
)
I
represent that the foregoing information is true and correct.
Dated:
________________, 2007
_____________________________________________
(Name
of
Investor - Please Print)
_____________________________________________
(Signature)
_____________________________________________
(Name
of
Co-Investor - Please Print)
_____________________________________________
(Signature
of Co-Investor)
EXECUTION
BY AN ENTITY
(Not applicable to
individuals
)
I
represent that the foregoing information is true and correct.
Dated:
________________, 2007
_____________________________________________
(Print
Name of Company/Partnership)
By:__________________________________________
(Signature
of authorized corporate officer/partner)
_____________________________________________
(Print
Name and Capacity)
Exhibit
A
- Page 19
Exhibit
10.3
EXHIBIT
D
FORM
OF COMMON STOCK PURCHASE WARRANT
THIS
WARRANT AND THE COMMON STOCK SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“
SECURITIES ACT”
). THIS WARRANT AND THE COMMON
STOCK
SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO ACCELERIZE NEW
MED
I
A, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED
.
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Right
to Purchase ________ shares of Common Stock of Accelerize New Media,
Inc.
(subject to adjustment as provided
herein)
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FORM
OF COMMON STOCK PURCHASE WARRANT
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No. ____
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Issue
Date: ___________, 2007
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ACCELERIZE
NEW MEDIA, INC., a corporation organized and existing under the laws of the
State of Delaware (the “Company”), hereby certifies that, for value received,
________________________ or its assigns (the “Holder”) is entitled, subject to
the terms set forth below, to purchase from the Company at any time after the
issue date (the “Issue Date”) until 5:00 p.m., E.S.T on the seventh (7th)
anniversary of the Issue Date (the “Expiration Date”), ________ fully paid and
nonassessable shares of Common Stock at a per share purchase price of
$0.35. The aforedescribed purchase price per share, as adjusted from
time to time as herein provided, is referred to herein as the “Purchase
Price.” The number and character of such shares of Common Stock and
the Purchase Price are subject to adjustment as provided herein. The
Company may reduce the Purchase Price without the consent of the
Holder. Capitalized terms used and not otherwise defined herein shall
have the meanings set forth in that certain Subscription Agreement (the
“Subscription Agreement”) entered into by the Company and Holder of the
Warrant.
As
used
herein the following terms, unless the context otherwise requires, have the
following respective meanings:
(a) The
term “Company” shall include Accelerize New Media, Inc. and any corporation
which shall succeed or assume the obligations of Accelerize New Media, Inc.
hereunder.
(b) The
term “Common Stock” includes (a) the Company’s Common Stock, $0.001 par value
per share, as authorized on the date of the Subscription Agreement, and (b)
any
other securities into which or for which any of the securities described in
(a)
may be converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
(c) The
term “Other Securities” refers to any stock (other than Common Stock) and
other securities of the Company or any other person (corporate or otherwise)
which the holder of the Warrant at any time shall be entitled to receive, or
shall have received, on the exercise of the Warrant, in lieu of or in addition
to Common Stock, or which at any time shall be issuable or shall have been
issued in exchange for or in replacement of Common Stock or Other Securities
pursuant to Section 4 herein or otherwise.
(d) The
term “Warrant Shares” shall mean the Common Stock issuable upon exercise of this
Warrant.
1.
Exercise
of Warrant
.
1.1.
Number
of Shares Issuable upon Exercise
. From and after the Issue Date
through and including the Expiration Date, the Holder hereof shall be entitled
to receive, upon exercise of this Warrant in whole in accordance with the terms
of subsection 1.2 or upon exercise of this Warrant in part in accordance with
subsection 1.3, [NUMBER] of shares of Common Stock of the Company, subject
to
adjustment pursuant to Section 4.
1.2.
Full
Exercise
. This Warrant may be exercised in full by the Holder
hereof by delivery of an original or facsimile copy of the form of subscription
attached as Exhibit A hereto (the “Subscription Form”) duly executed by such
Holder and surrender of the original Warrant within four (4) days of exercise,
to the Company at its principal office or at the office of its Warrant Agent
(as
provided hereinafter), accompanied by payment, in cash, wire transfer or by
certified or official bank check payable to the order of the Company, in the
amount obtained by multiplying the number of shares of Common Stock for which
this Warrant is then exercisable by the Purchase Price then in
effect.
1.3.
Partial
Exercise
. This Warrant may be exercised in part (but not for a
fractional share) by surrender of this Warrant in the manner and at the place
provided in subsection 1.2 except that the amount payable by the Holder on
such
partial exercise shall be the amount obtained by multiplying (a) the number
of
whole shares of Common Stock designated by the Holder in the Subscription Form
by (b) the Purchase Price then in effect. On any such partial
exercise, the Company, at its expense, will forthwith issue and deliver to
or
upon the order of the Holder hereof a new Warrant of like tenor, in the name
of
the Holder hereof or as such Holder (upon payment by such Holder of any
applicable transfer taxes) may request, the whole number of shares of Common
Stock for which such Warrant may still be exercised.
1.4.
Fair
Market Val
ue
. Fair Market Value of a share of Common Stock as of a
particular date (the “Determination Date”) shall mean:
(a) If
the Company’s Common Stock is traded on an exchange or is quoted on the Nasdaq
Stock Market, Inc., then the last sale price reported for the last business
day
immediately preceding the Determination Date;
(b) If
the Company’s Common Stock is not traded on an exchange or quoted on the Nasdaq
Stock Market, Inc. but is traded in the over-the-counter market, then the
average of the closing bid and ask prices reported for the last business day
immediately preceding the Determination Date;
(c) Except
as provided in clause (d) below, if the Company’s Common Stock is not publicly
traded, then as the Holder and the Company agree, or in the absence of such
an
agreement, by arbitration in accordance with the rules then standing of the
American Arbitration Association, before a single arbitrator to be chosen from
a
panel of persons qualified by education and training to pass on the matter
to be
decided; or
(d) If
the Determination Date is the date of a liquidation, dissolution or winding
up,
or any event deemed to be a liquidation, dissolution or winding up pursuant
to
the Company’s charter, then all amounts to be payable per share to holders of
the Common Stock pursuant to the charter in the event of such liquidation,
dissolution or winding up, plus all other amounts to be payable per share in
respect of the Common Stock in liquidation under the charter, assuming for
the
purposes of this clause (d) that all of the shares of Common Stock then
issuable upon exercise of all of the Warrants are outstanding at the
Determination Date.
1.5.
Company
Acknowledgment
. The Company will, at the time of the exercise of the
Warrant, upon the request of the Holder hereof acknowledge in writing its
continuing obligation to afford to such Holder any rights to which such Holder
shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such Holder any such rights.
1.6.
Delivery
of Stock Certificates, etc. on Exercise
. The Company agrees that
the shares of Common Stock purchased upon exercise of this Warrant shall be
deemed to be issued to the Holder hereof as the record owner of such shares
as
of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares as aforesaid. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within three (3) business days thereafter, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder hereof, or as such Holder
(upon payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable shares
of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such Holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share of Common Stock, together with any other stock
or
other securities and property (including cash, where applicable) to which such
Holder is entitled upon such exercise pursuant to Section 1 or
otherwise.
1.7
Cashless
Exercise
.
(a) Except
as described below, if a Registration Statement (as herein after defined) is
effective and the Holder may sell its Warrant Shares upon exercise hereof
pursuant to the Registration Statement, this Warrant may be exercisable in
whole
or in part for cash only as set forth in this Section 1. If no such
Registration Statement is available during the time that such Registration
Statement is required to be effective pursuant to the terms of Section 8
hereof,, then payment upon exercise may be made at the option of the Holder
either in (i) cash, wire transfer or by certified or official bank check payable
to the order of the Company equal to the applicable aggregate Purchase Price,
(ii) by cashless exercise in accordance with Section (b) below or (iii) by
a
combination of any of the foregoing methods, for the number of Warrant Shares
specified in such form (as such exercise number shall be adjusted to reflect
any
adjustment in the total number of shares of Common Stock issuable to the holder
per the terms of this Warrant) and the holder shall thereupon be entitled to
receive the number of duly authorized, validly issued, fully-paid and
non-assessable shares of Common Stock (or Other Securities) determined as
provided herein.
(b) If
the Fair Market Value of one share of Common Stock is greater than the Purchase
Price (at the date of calculation as set forth below), in lieu of exercising
this Warrant for cash, the holder may elect to receive shares equal to the
value
(as determined below) of this Warrant (or the portion thereof being cancelled)
by surrender of this Warrant at the principal office of the Company together
with the properly endorsed Subscription Form in which event the Company shall
issue to the holder a number of shares of Common Stock computed using the
following formula:
X=
Y
(A-B)
A
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Where
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X=
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the
number of shares of Common Stock to be issued to the
holder
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Y=
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the
number of shares of Common Stock purchasable under the Warrant or,
if only
a portion of the Warrant is being exercised, the portion of the Warrant
being exercised (at the date of such
calculation)
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A=
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the
Fair Market Value of one share of the Company’s Common Stock (at the date
of such calculation)
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B=
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Purchase
Price (as adjusted to the date of such
calculation)
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a.
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For
purposes of Rule 144 promulgated under the Securities Act, it is
intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the
Holder,
and the holding period for the Warrant Shares shall be deemed to
have
commenced, on the date this Warrant was originally issued pursuant
to the
Subscription Agreement.
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2.
Adjustments.
2.1.
Reorganization,
Consolidation, Merger, etc
. In case at any time or from time to
time, the Company shall (a) effect a reorganization, (b) consolidate with or
merge into any other person or (c) transfer all or substantially all of its
properties or assets to any other person under any plan or arrangement
contemplating the dissolution of the Company, then, in each such case, as a
condition to the consummation of such a transaction, proper and adequate
provision shall be made by the Company whereby the Holder of this Warrant,
on
the exercise hereof as provided in Section 1, at any time after the consummation
of such reorganization, consolidation or merger or the effective date of such
dissolution, as the case may be, shall receive, in lieu of the Common Stock
(or
Other Securities) issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash)
to
which such Holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such Holder had so
exercised this Warrant, immediately prior thereto, all subject to further
adjustment thereafter as provided in Section 3.
2.2.
Dissolution
. In
the event of any dissolution of the Company following the transfer of all or
substantially all of its properties or assets, the Company, prior to such
dissolution, shall at its expense deliver or cause to be delivered the stock
and
other securities and property (including cash, where applicable) receivable
in
accordance with Section 2.1 by the Holder of the Warrants upon their exercise
after the effective date of such dissolution pursuant to this Section
2.
2.3
Adjustment
of Warrant Exercise Price and Number of Shares upon Issuance of Common Stock
or
Common Stock Derivatives
. So long as this Warrant is outstanding,
if Company (a) issues or sells, or is deemed to have issued or sold, any shares
of Common Stock (including the issuance or sale of shares of Common Stock owned
or held by or for the account of the Company); or (b) issues or sells or
reprices any options or convertible securities (but excluding shares of Common
Stock, options or convertible securities issued or deemed to have been issued
by
the Company in connection with an Approved Stock Plan) for a consideration
per
share less than a price (the “Applicable Price”) equal to
the Purchase Price in effect immediately prior to such issuance or
sale or repricing, then immediately after such issue or sale the Purchase Price
shall be reduced to the Applicable Price. “Approved Stock Plan” means
any employee benefit plan which has been approved by the Board of Directors
of
the Company, pursuant to which the Company’s securities may be issued to any
employee, officer or director for services provided to the Company in that
capacity.
2.4.
Continuation
of Terms
. Upon any reorganization, consolidation, merger or
transfer (and any dissolution following any transfer) referred to in this
Section 2, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the Other Securities and property receivable
on
the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any
such
transfer, as the case may be, and shall be binding upon the issuer of any Other
Securities, including, in the case of any such transfer, the person acquiring
all or substantially all of the properties or assets of the Company, whether
or
not such person shall have expressly assumed the terms of this Warrant as
provided in Section 3. In the event this Warrant does not continue in
full force and effect after the consummation of the transaction described in
this Section 2, then only in such event will the Company’s securities and
property (including cash, where applicable) receivable by the Holder of the
Warrants be delivered to the Trustee as contemplated by Section
2.2.
3.
Extraordinary
Events Regarding Common Stock
. In the event that the Company
shall (a) issue additional shares of Common Stock as a dividend or other
distribution on outstanding Common Stock, (b) subdivide its outstanding shares
of Common Stock, or (c) combine its outstanding shares of the Common Stock
into
a smaller number of shares of the Common Stock, then, in each such event, the
Purchase Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Purchase Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such event, and the
product so obtained shall thereafter be the Purchase Price then in effect.
The
Purchase Price, as so adjusted, shall be readjusted in the same manner upon
the
happening of any successive event or events described herein in this
Section 3. The number of shares of Common Stock that the Holder of this Warrant
shall thereafter, on the exercise hereof as provided in Section 1, be entitled
to receive shall be adjusted to a number determined by multiplying the number
of
shares of Common Stock that would otherwise (but for the provisions of this
Section 3) be issuable on such exercise by a fraction of which (a) the numerator
is the Purchase Price that would otherwise (but for the provisions of this
Section 3) be in effect, and (b) the denominator is the Purchase Price in effect
on the date of such exercise.
4.
Certificate
as to Adjustments
. In each case of any adjustment or readjustment
in the shares of Common Stock (or Other Securities) issuable on the exercise
of
the Warrants, the Company at its expense will promptly cause its Chief Financial
Officer or other appropriate designee to compute such adjustment or readjustment
in accordance with the terms of the Warrant and prepare a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon
which
such adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares
of
Common Stock (or Other Securities) issued or sold or deemed to have been
issued or sold, (b) the number of shares of Common Stock (or Other Securities)
outstanding or deemed to be outstanding, and (c) the Purchase Price and the
number of shares of Common Stock to be received upon exercise of this Warrant,
in effect immediately prior to such adjustment or readjustment and as adjusted
or readjusted as provided in this Warrant. The Company will forthwith mail
a
copy of each such certificate to the Holder of the Warrant and any Warrant
Agent
of the Company (appointed pursuant to Section 9 hereof).
5.
Reservation
of Stock, etc. Issuable on Exercise of Warrant; Financial
Statements
. The Company will at all times reserve and keep
available, solely for issuance and delivery on the exercise of the Warrants,
all
shares of Common Stock (or Other Securities) from time to time issuable on
the
exercise of the Warrant. This Warrant entitles the Holder hereof to
receive copies of all financial and other information distributed or required
to
be distributed to the holders of the Company’s Common Stock.
6.
Assignment;
Exchange of Warrant
. Subject to compliance with applicable
securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a “Transferor”). On the surrender
for exchange of this Warrant, with the Transferor’s endorsement in the form of
Exhibit B attached hereto (the “Transferor Endorsement Form”) and together with
an opinion of counsel reasonably satisfactory to the Company that the transfer
of this Warrant will be in compliance with applicable securities laws, the
Company at its expense, twice, only, but with payment by the Transferor of
any
applicable transfer taxes, will issue and deliver to or on the order of the
Transferor thereof a new Warrant or Warrants of like tenor, in the name of
the Transferor and/or the transferee(s) specified in such Transferor Endorsement
Form (each a “Transferee”), calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face or
faces
of the Warrant so surrendered by the Transferor. No such transfers
shall result in a public distribution of the Warrant.
7.
Replacement
of Warrant
. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and,
in
the case of any such loss, theft or destruction of this Warrant, on delivery
of
an indemnity agreement or security reasonably satisfactory in form and amount
to
the Company or, in the case of any such mutilation, on surrender and
cancellation of this Warrant, the Company at its expense, twice only, will
execute and deliver, in lieu thereof, a new Warrant of like tenor.
8. Piggyback
Registration Rights
. If at any time, or from time to
time, during the five year period following the issuance of the Warrant the
Company shall determine to prepare and file with the Securities and Exchange
Commission (“SEC”), a registration statement relating to an offering for its own
account or the account of others under the Act of any of its equity securities
or debt or their then equivalents (not including a registration statement of
Form S-4 or Form S-8 or other special purpose forms) (the “Registration
Statement”), then the Company shall send to the Holder a written notice of such
determination and, if within ten (10) days after receipt by the Holder, the
Company shall receive a request in writing from the Holder, the Company shall
include in such Registration Statement all or any part of such Warrant Shares
such Holder requests to be registered, provided however, that (a) if, at any
time after giving written notice of its intention to register any securities
and
prior to the effective date of the Registration Statement filed in connection
with such registration, the Company determines for any reason not to proceed
with such registration, the Company shall be relived of its obligation to
register any Warrant Shares in connection with such registration, and (B) in
case of a determination by the Company to delay registration of its securities,
the Company will be permitted to delay the registration of the Warrant Shares
for the same period as the delay in registering such other securities, in any
such case without any obligation or liability to the
Holder.
9.
Warrant
Agent
. The Company may, by written notice to the Holder of the
Warrant, appoint an agent (a “Warrant Agent”) for the purpose of issuing Common
Stock (or Other Securities) on the exercise of this Warrant pursuant to Section
1, exchanging this Warrant pursuant to Section 6, and replacing this
Warrant pursuant to Section 7, or any of the foregoing, and thereafter any
such
issuance, exchange or replacement, as the case may be, shall be made at such
office by such Warrant Agent.
10.
Transfer
on the Company
’
s Books
. Until this Warrant is
transferred on the books of the Company, the Company may treat the registered
holder hereof as the absolute owner hereof for all purposes, notwithstanding
any
notice to the contrary.
11.
Notices
. All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice
is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice
is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur or (c) three
business days after deposited in the mail if delivered pursuant to subsection
(ii) above. The addresses for such communications shall be: (i) if to
the Company to: 6477 Highway 93 South, Suite 303, Whitefish,
MT 59937, telecopier: (406) 892-2162, and (ii) if to the
Holder, to the addresses and telecopier number set forth in the first paragraph
of this Warrant. The Company may change its address for notices but
only to an address and fax number located in the United States.
12.
Miscellaneous
. This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of such change, waiver, discharge or termination is sought. This Warrant shall
be construed and enforced in accordance with and governed by the laws of New
York. Any dispute relating to this Warrant shall be adjudicated in
New York County in the State of New York. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof. The invalidity or unenforceability of
any provision hereof shall in no way affect the validity or enforceability
of
any other provision.
IN
WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.
ACCELERIZE
NEW MEDIA,
INC.
By:_________________________
Name:_______________________
Title:________________________
Witness:
_____________________________
Exhibit
A
FORM
OF
SUBSCRIPTION
(to
be
signed only on exercise of Warrant)
TO: ACCELERIZE
NEW MEDIA, INC.
The
undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase (check applicable
box):
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________
shares of the Common Stock covered by such Warrant;
or
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the
maximum number of shares of Common Stock covered by such Warrant
pursuant
to the cashless exercise procedure set forth in Section
1.
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The
undersigned herewith makes payment of the full purchase price for such shares
at
the price per share provided for in such Warrant, which is
$___________. Such payment takes the form of (check applicable box or
boxes):
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$__________
in lawful money of the United States;
and/or
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the
cancellation of the Warrant to the extent necessary, in accordance
with
the formula set forth in Section 1, to exercise this Warrant with
respect
to the maximum number of shares of Common Stock purchasable pursuant
to
the cashless exercise procedure set forth in Section
1.
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The
undersigned requests that the certificates for such shares be issued in the
name
of, and delivered to _______________________________________ whose address
is________________________________________________
The
undersigned represents and warrants that the representations and warranties
in
Section 4 of the Subscription Agreement (as defined in this Warrant) are true
and accurate with respect to the undersigned on the date hereof.
The
undersigned represents and warrants that all offers and sales by the undersigned
of the securities issuable upon exercise of the within Warrant shall be made
pursuant to registration of the Common Stock under the Securities Act, or
pursuant to an exemption from registration under the Securities
Act.
Dated:___________________________
_________________________________
(Signature
must conform to name of holder as
specified
on the fact of the
Warrant.)
_________________________________
_________________________________
(Address)
Exhibit
B
FORM
OF
TRANSFEROR ENDORSEMENT
(To
be
signed only on transfer of Warrant)
For
value
received, the undersigned hereby sells, assigns, and transfers unto the
person(s) named below under the heading “Transferees” the right represented by
the within Warrant to purchase the percentage and number of shares of Common
Stock of ACCELERIZE NEW MEDIA, INC. to which the within Warrant relates
specified under the headings “Percentage Transferred” and “Number Transferred,”
respectively, opposite the name(s) of such person(s) and appoints each such
person Attorney to transfer its respective right on the books of ACCELERIZE
NEW
MEDIA, INC. with full power of substitution in the premises.
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Transferees
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Percentage
Transferred
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Number
Transferred
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Dated: ______________,
___________
Signed
in the presence of:
___________________________________
(Name)
ACCEPTED
AND AGREED:
[TRANSFEREE]
______________________________
(Name)
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_____________________________________________
(Signature
must conform to name of holder as
specified
on the face of the warrant)
__________________________________________
__________________________________________
(address)
__________________________________________
__________________________________________
(address)
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