EXHIBIT 4.1
Form of Convertible Promissory
Note
THIS
CONVERTIBLE PROMISSORY NOTE (THIS “NOTE”) AND THE
SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR ANY STATE SECURITIES LAWS AND THIS NOTE, THE
SECURITIES AND ANY INTEREST THEREIN MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR SUCH LAWS OR AN
EXEMPTION FROM REGISTRATION UNDER THE ACT AND SUCH LAWS, WHICH, IN
THE OPINION OF COUNSEL FOR THE LENDER, WHICH COUNSEL AND OPINION
ARE REASONABLY SATISFACTORY TO COUNSEL FOR THIS CORPORATION, IS
AVAILABLE.
ACCELERIZE NEW MEDIA,
INC.
CONVERTIBLE PROMISSORY
NOTE
|
[$________]
|
New York, New York
[February 1, 2009]
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FOR VALUE RECEIVED, the undersigned, Accelerize
New Media, Inc. a Delaware corporation (referred to
herein as the “Borrower”), with offices at 12121
Wilshire Blvd., Suite 322, Los Angeles, CA 90025, hereby
unconditionally promises to pay to the order of
[_____________________] (the “Lender”), in
lawful money of the United States, at
[__________________________________], or such other address as the
Lender may from time to time designate, the principal sum of
[___________ Dollars ($________)] (the
“Principal”). This Note shall mature and
become due and payable in full on [February 15, 2012] (the
“Maturity Date”).
1.
Terms of Repayment . Principal of and
interest on this Note shall be paid by the Borrower as
follows:
(a) Interest
at the rate of ten percent (12%) per annum from the date hereof
through the Maturity Date shall be payable quarterly on each of
June 1, September 1, December 1 and March 1 (each an
“Interest Payment Date”), commencing [June 1,
2009]. Subject to certain limitations detailed within
this Note, interest shall be payable at the option of the Lender in
cash or shares common stock, par value $0.001 of the Borrower (the
“Common Stock”), provided, however, that in the case of
interest distributions to retirement based accounts held at
National Financial Services (NFS), interest will be paid only in
cash.
(b) If
interest is payable in shares of Common Stock, the number of shares
of Common Stock to be issued to the Lender as payment of interest
shall be determined by dividing the interest dollar amount due on
the respective Interest Payment Date by the Closing Price (as
defined below) of the Common Stock on the last Trading Day (as
defined below) before the respective Interest Payment Date, and
rounding it to the nearest whole number (no fractional shares shall
be issued). As used herein, the term "Trading Day" means
a day on which trades are effected on the Over-The-Counter Bulletin
Board (“OTCBB”), NASDAQ or any other stock exchange on
which the Common Stock trades. As used herein, the term
“Closing Price” for each Trading Day shall be: (i) if
shares of Common Stock are listed or admitted for trading on any
national securities exchange, or the NASDAQ Stock Market, Inc., the
last sale price of the Common Stock, or the closing bid price
thereof if no such sale occurred, in each case as officially
reported on the principal securities exchange on which such
security is listed, or (ii) if quoted on the OTCBB or any similar
system of automated dissemination of quotations of securities
prices then in common use the closing high bid quotation of such
security in the over-the-counter market as shown by OTCBB or such
similar system of automated dissemination of quotations of
securities prices.
(c) All
computations of interest shall be made on the basis of a year of
360 days for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such
interest is payable. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a business
day, such payment shall be made on the next succeeding business
day.
(d) Principal
shall be due and payable on the Maturity Date, at which time the
Principal shall be payable at the option of the Lender in cash or
shares of Common Stock. If then at the Lender’s
election the Principal is payable in shares of Common Stock, the
number of shares of Common Stock to be issued to the Lender shall
be determined by dividing the principal amount outstanding on the
Maturity Date by the average Closing Price of the Common Stock on
the last five (5) Trading Days prior to the Maturity
Date.
(a) At
any time on or prior to June 30, 2009, the Borrower may at its sole
election prepay all or any portion of the outstanding Principal and
any interest amount accrued thereon of the Note solely in cash,
provided that the Borrower shall then additionally pay to the
Lender in cash a prepayment penalty (the “Penalty”),
which Penalty shall be calculated as the product of (I) sum of one
half of one percent (0.5%, or 50 basis points) for each open full
month remaining on the Note between the prepayment date and the
Maturity date, times (II) the Principal amount then
prepaid.
(b)
At any time on or after June 30, 2009, but prior to the Maturity
Date, the Borrower may prepay all or any portion of the outstanding
Principal and any interest amount accrued thereon of the Note
without any premium or penalty, provided however, that if the
Borrower then elects to prepay the Principal or any part thereof,
the Lender shall have the option to convert any such prepaid
Principal amount to shares of Common Stock at the Lender’s
Conversion Price (as defined in Section 3, here below).
The Lender
shall have the option, at any time on or after July 01, 2009, but
before the Maturity Date, to convert the outstanding Principal of
this Note into fully-paid and nonassessable shares of Common Stock
at the Lender’s Conversion Price (as defined below) described
below by providing the Borrower with a written notice
(“Lender’s Conversion Notice”) in the form
attached hereto as Exhibit A . As used herein,
the term “Lender’s Conversion Price” means, as
applicable,: (i) fifty cents ($0.50) per share of Common Stock; or
(ii) if at any time prior to the Maturity Date the Borrower enters
into a New Transaction (as defined below), the Lender’s
Conversion Price shall be the New Transaction Price, if lower than
the prices provided in Section 3(i). As used herein, the term
“New Transaction Price” means the lowest effective
purchase price, conversion price or exercise price, as the case may
be, in a New Transaction. As used herein, the term
“New Transaction” means any transaction entered into,
directly or indirectly, by or for the benefit of the Borrower after
the date hereof and before the Maturity Date, pursuant to which
shares of Common Stock, or securities convertible or exercisable
into shares of Common Stock, are issued by the Borrower, except
shares of Common Stock issued under the Accelerize New Media Stock
Option Plan.
(a)
To exercise any conversion, the holder of this Note, either upon
receiving Borrower’s Conversion Notice or upon delivering
Lender’s Conversion Notice, shall surrender this Note to the
Borrower during usual business hours at the offices of the
Borrower, accompanied by a notice in the form attached hereto as
Exhibit A.
(b) As
promptly as practicable after the surrender of this Note by the
Lender, the Borrower shall deliver or cause to be delivered to the
Lender, certificates for the full number of shares of Common Stock
issuable upon conversion of the Principal and interest accrued
thereon under this Note, or any portion thereof, in
accordance with the provisions of this Note, together with a duly
executed new Note of the Borrower in the form of this Note for any
principal amount not so converted. Such conversion shall
be deemed to have been made at the time that this Note was
surrendered for conversion and the notice specified herein shall
have been received by the Borrower.
(c) The
number of shares of Common Stock issuable upon conversion of this
Note or repayment by the Borrower in shares of Common Stock shall
be proportionately adjusted if the Borrower shall declare a
dividend of capital stock on its capital stock (except the
Pay-In-Kind dividends payable to the holders of the
Borrower’s 10% Series A Preferred Convertible Stock and the
8% Series B Preferred Convertible Stock), or subdivide its
outstanding capital stock into a larger number of shares by
reclassification, stock split or otherwise, which adjustment shall
be made effective immediately after the record date in the case of
a dividend, and immediately after the effective date in the case of
a subdivision. The number of shares of Common Stock issuable upon
conversion of this Note or any part thereof shall be
proportionately adjusted in the amount of securities for which the
shares of Common Stock have been changed or exchanged in
anothe
