Exhibit 10.8
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
| [$________] |
New York, New
York
[March
1, 2008]
|
FOR
VALUE RECEIVED, the undersigned, Accelerize New Media, Inc. a
Delaware corporation (referred to herein as the
“Borrower”), with offices at 12121 Wilshire Blvd.,
Suite 322, Los Angeles, CA 90025, hereby unconditionally
promises to pay to the order of
[_____________________] (the “Lender”),
in lawful money of the United States, at
[__________________________________], or such other address as
the Lender may from time to time designate, the principal sum
of [___________ Dollars ($________)] (the
“Principal”). This Note shall mature
and become due and payable in full on [March 15, 2011] (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 (10%) 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,
2008]. 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.
2.
Terms
of Prepayment .
(a) At
any time on or prior to July 30, 2008, 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 July 30, 2008, 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).
3.
Conversion
.
The Lender shall have the
option, at any time on or after July 30, 2008, 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, the lesser of: (i) seventy five cents ($0.75) per
share of Common Stock; or (ii) the average Closing Price of
the Common Stock on the last five (5) Trading Days prior to
the relevant Conversion Date; but in no event less than fifty
cent ($0.50); or (iii) 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) and Section 3(ii) above, respectively. 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 ano
