VOLUNTARY CONVERSION AGREEMENT
Exhibit
10.1
THIS
VOLUNTARY CONVERSION
AGREEMENT dated as of this ___ day of July, 2007 (this "Agreement") is
entered by and between Accelerize New Media, Inc. (the "Company") and
_________________________ (the "Holder").
W I T N E S S E T H:
WHEREAS,
the Company
has issued to the Holder that certain 10% Promissory Note (the “Note”) due
[_______ __, 2007], in the total principal amount of [$__________];
and
WHEREAS,
Holder is
willing to voluntarily surrender the Note in exchange for unit(s) (each a
“Unit”) comprised of shares of the Company’s 8% Series B Convertible Preferred
Stock, par value $.001 per share (the “Series B Preferred Stock”) and warrants
(the “Warrants”) to purchase shares of the Company’s Common Stock,
par value $.001 per share (the “Common Stock”), all in accordance with the terms
of the private offering memorandum (the “Private Offering Memorandum”) attached
hereto; and
WHEREAS,
in order to
induce the Holder to surrender the Note and exchange it for the Units, the
Company is willing to issue to the Holder additional warrants (the “Additional
Warrants”, and together with the Warrants, the Series B Preferred Stock and the
Common Stock, the “Securities”) to purchase fifty thousand (50,000)
shares of Common Stock.
NOW,
THEREFORE, in
consideration of the promises and mutual covenants set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the Company and the Holder hereby agree as
follows:
1. Surrender
and Cancellation of Note. On or before the Closing Date (as
defined below), Holder shall surrender the Note (and all principal and interest
owing thereunder) to the Company for cancellation, and the Note shall be
deemed
cancelled and of no further force or effect on and as of [_______ __, 2007]
(the
"Closing Date").
2. Payment
of Balance. On or before the Closing Date, Holder shall pay to the Company,
by check or wire transfer, the total amount of [five] thousand
dollars [$5,000], which amount represents the difference between the principal
amount of the Note and the full price of [one (1)] Unit under the terms of
the
Private Offering Memorandum.
3. Issuance
of Units; Execution of Subscription Agreement. Simultaneously
with the Closing, the Company shall issue to the Holder [one (1)] Unit,
comprising of [3,000] shares of the Company's Series B Preferred Stock, and
Warrants to purchase up to [105,000] shares of the Company’s Common Stock, and
the Holder shall execute and deliver to the Company a copy of the Subscription
Agreement and Investor Questionnaire, in the form attached as Exhibit A to
the
Private Offering Memorandum (the “Subscription Agreement”).
4. Additional
Warrants. Simultaneously with the Closing, the Company shall
issue to the Holder Additional Warrants to purchase up to fifty thousand
(50,000) shares of the Company’s Common Stock.
1
5. Holder’s
Representations and Warranties. Holder
hereby represents and warrants as follows:
5.1 Purchase
for Holder’s Own Account. The Holder is purchasing the Securities
for the Holder'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 of 1933, as amended (the
“Securities Act”) and/or sales registered under the Securities
Act. The Holder understands that Holder 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. The Holder understands that
currently there is no public market for any of the Securities.
5.2 Investment
Intention of Holder. The Holder 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 Holder’s investment intention. In connection with this, the
Holder understands that it is the position of the Securities and Exchange
Commission (the “SEC”) that the statutory basis for such exemption would not be
present if the Holder’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 Holder 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.
5.3 Reliance
on Exemptions from Registration. The Holder 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 Holder's
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Holder set forth herein without limitation in order
to
determine the availability of such exemptions and the eligibility of the
Holder
to acquire the Securities.
5.4 Lack
of Governmental Approval or Review. The Holder 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 Holder or passed upon, or made any recommendation or endorsement
of the securities or made any finding or determination as to the fairness
of
this offering. The Holder 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 Holder which must be
satisfactory to the Company with respect to compliance with laws of any
jurisdiction deemed applicable by the Company.
2
5.5 Accredited
Investor Status, and Suitability. The Holder 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 Holder 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 Holder, in reaching a decision to subscribe, has such
knowledge and experience in financial and business matters that the Holder
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. Holder has invested in securities
offered by the Company and/or invested in the securities of companies comparable
to the Company that involve non-trading, and/or thinly traded securities
and
xxxxx stocks, unregistered securities, restricted securities, high risk
investments, operating losses and securities which are not listed or quoted
on
any national securities exchange. The Holder 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
Holder is familiar with the business operations and financial affairs of
the
Company.
5.6 Financial
Suitability. Holder understands that Holder may be unable to
liquidate the Securities and any transfer of the Securities is limited. The
Holder’s overall commitment to investments which are not readily marketable is
not disproportionate to Holder’s net worth, and the investment in the Securities
will not cause the Holder’s overall investment in illiquid high-risk investments
to become excessive in proportion to Holder’s assets, liabilities and living
standards. The Holder 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.
5.7 Company
Information. The Holder understands that this issuance has not
been registered under the Securities Act and is being made in reliance upon
exemptions therefrom. Holder must rely upon the Holder’s own access to
information about the Company and the issuance of the Securities. The Holder
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 Holder
has conducted independent due diligence in matters involving the Company.
Holder
has consulted with Holder’s legal, tax, and investment advisors regarding his
investment in the Securities and has received their approval to invest in
the
Securities. The Holder understands that the Holder or the Holder's
representatives have been and will continue to be provided with access to
the
Company's financial records.
6. Miscellaneous.
6.1 Notices. All
notices, requests, demands and other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given
if
delivered by hand or mailed, certified or registered mail with postage prepaid
or delivered by express delivery or facsimile transmission (with copy by
mail)
or electronic mail (with copy by mail) addressed as follows (or to such other
address as either party shall notify the other):
(a) If
to Company, to:
Accelerize
New Media,
Inc.
0000
Xxxxxxx 00 Xxxxx, Xxxxx
000
Xxxxxxxxx,
Xxxxxxx 00000
Telecopy:(000)
000-0000
Attn:
Xxxxx Xxxx
3
(b) If
to Holder, to:
[NAME]
[ADDRESS]
[FAX]
6.2 Section
Headings, Severability, Entire Agreement. Section and subsection
headings have been inserted herein for the convenience of the parties only
and
shall not be construed as part of this Agreement. Every provision of
this Agreement is intended to be severable. If any term or provision
of this Agreement shall be invalid, illegal, or unenforceable for any reason
whatsoever, the validity, legality, and enforceability of the remaining
provisions hereof or thereof shall not in any way be affected or impaired
thereby. This Agreement embody the entire agreement and understanding
between Company and Holder and supersede all prior agreements and understandings
relating to the subject matter hereof unless otherwise specifically reaffirmed
or restated herein.
6.3 Counterparts. This
Agreement may be executed in one or more counterparts, each of which, when
so
executed and delivered shall be an original, and it shall not be necessary
when
making proof of this Agreement to produce or account for more than one
counterpart.
6.4 Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial. This
Agreement and all transactions, assignments and transfers hereunder, and
all the
rights of the parties, shall be governed as to validity, construction,
enforcement and in all other respects by the laws of the State of New York
without regard to such State’s rules of conflicts of laws. The
parties agree that the United States District Court for the Southern District
of
New York or any New York State court shall have jurisdiction to hear and
determine any claims or disputes pertaining to the financing transactions
of
which this Agreement is a part and to any matter arising or in any way related
to this Agreement. The parties expressly submit and consent in
advance to such jurisdiction in any action or proceeding. EACH OF THE PARTIES
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES TRIAL BY JURY IN ANY
LITIGATION WITH RESPECT TO THIS AGREEMENT.
4
IN
WITNESS WHEREOF, the parties hereto have executed this
Consent on the date first set forth above.
ACCELERIZE
NEW MEDIA,
INC.
By:_______________________
Name:
Xxxxx Xxxx
Title:
President and Chief Executive Officer
[HOLDER’S
NAME]
____________________________
5
