anm_10q-ex1002.htm


    Exhibit
10.2

     

    EXECUTION
COPY

     

    THIS
WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE.  NEITHER THIS WARRANT OR SUCH SECURITIES MAY BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE
STATE SECURITIES LAWS, OR SOME EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
SUCH ACT AND LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR LAWS, OR UNLESS SOLD PURSUANT TO
RULE 144 UNDER SUCH ACT.

     

    ACCELERIZE
NEW MEDIA, INC.

    


    COMMON
STOCK WARRANT


    


    This
Warrant is issued effective as of January 1, 2007 (the “Warrant Issue Date”) to Damon
Stein (“Holder”), by
ACCELERIZE NEW MEDIA, INC., a Delaware corporation (the “Company”) in connection with
the Asset Purchase Agreement dated as of December __, 2006 by and among the
Company, Holder and the other parties thereto (the “Asset Purchase
Agreement”).


     

    1.           Purchase of
Shares.  Subject to the terms and conditions hereinafter set
forth, the Holder is entitled, upon surrender of this Warrant at the principal
office of the Company (or at such other place as the Company shall notify the
Holder in writing), to purchase from the Company up to 250,000 shares of the
Company’s Common Stock, par value $0.001 per share (the “Common Stock”), pursuant to
the terms of Section 2.  The number of shares of Common Stock issuable
pursuant to this Section 1 (the “Shares”) shall be subject to
adjustment pursuant to Section 8 hereof.

     

    2.           Term and Exerciseability of
Warrant.  This Warrant may be exercised only to the extent
vested from time to time.

     

    (a)           Subject
to the provisions below, this Warrant will vest 100% on the eighteen (18) month
anniversary of the date hereof (the “Warrant Vesting Date”), but
will only be exerciseable if, and to the extent, the Special Vesting Provisions
set forth on Schedule 1 have been met.

     

    (b)           This
Warrant shall fully vest and become exercisable immediately prior to the
effective date of a Change in Control (defined below).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c)           For
purposes of this Agreement, the term “Change in Control” shall mean (i) the sale
of all or substantially all of the assets of the Company, (ii) the sale of more
than 50% of the outstanding capital stock of the Company in a non-public sale,
(iii) the dissolution or liquidation of the Company, or (iv) any merger, share
exchange, consolidation or other reorganization or business combination of the
Company if immediately after such transaction of either (A) persons who were
directors of the Company immediately prior to such transaction do not constitute
at least a majority of the directors of the surviving entity, or (B) persons who
hold a majority of the voting capital stock of the surviving entity are not
persons who held a majority of the voting capital stock of the Company
immediately prior to the transaction; provided, however, that the
term “Change in Control” shall not include a public offering of capital stock of
the Company that is effected pursuant to a registration statement filed with,
and declared effective by, the Securities and Exchange Commission under the
Securities Act of 1933.

     

    (d)           If
the Holder dies before this Warrant has been exercised in full, the executor,
administrator or personal representative of the estate of the Holder may
exercise this Warrant as set forth in this paragraph; provided that such
exercise must be within twelve (12) months of Holder’s death.

     

    3.           Exercise
Price.  The exercise price per share for which the Shares may
be purchased pursuant to the terms of this Warrant shall be $.15 per share, and
shall be subject to adjustment pursuant to Section 8 hereof (such price, as
adjusted from time to time, is herein referred to as the “Exercise Price”).

     

    (a)           Exercise
Period.  This Warrant may be exercised to the extent vested, in
whole or in part, commencing on the Warrant Vesting Date and ending at 5:00
p.m., United States Eastern Time, on the fifth anniversary of the Warrant Issue
Date (the “Expiration
Date”).  For the avoidance of doubt, if any part of this
Warrant remains unvested or unexercised after the Expiration Date, the Holder’s
rights with respect to such shares shall extinguish and this Warrant shall no
longer be of any force or effect.

     

    4.           Method of
Exercise.  While this Warrant remains outstanding and
exercisable in accordance with Sections 2 and 3 above, the Holder may
exercise, in whole or in part, the purchase rights evidenced
hereby.  Such exercise shall be effected by:

     

    (a)           the
surrender of the Warrant, together with a duly executed copy of the form of
Notice of Election attached hereto, to the President of the Company at its
principal offices; and

     

    (b)           the
payment to the Company of an amount equal to the aggregate Exercise Price for
the number of Shares being purchased.  This Warrant can also be
exercised at Holder’s discretion, in whole or in part, in a “cashless”
exercise.  In a cashless exercise, the right to purchase each share of
Common Stock may be exchanged for that number of shares of Common Stock
determined by multiplying the number one (1) by a fraction, the numerator of
which will be the difference between (y) the then current Fair Market Value and
(z) the exercise price, and the denominator of which will be the then current
Fair Market Value.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    5.           Fair Market Value.
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 shares 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 that 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.

            


    

     

    6.           Certificates for
Shares.  Upon the exercise of the purchase rights evidenced by
this Warrant, one or more certificates for the number of Shares so purchased
shall be issued as soon as practicable thereafter (with appropriate restrictive
legends, if applicable), 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.

     

    7.           Issuance of
Shares.  The Company covenants that the Shares, when issued
pursuant to the exercise of this Warrant, will be duly and validly issued, fully
paid and nonassessable and free from all taxes, liens, and charges with respect
to the issuance thereof.  The Company further covenants and agrees
that during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and reserved, for
the purpose of issue or transfer upon exercise of the rights evidenced by this
Warrant, a sufficient number of shares of authorized but unissued capital stock,
or other securities and property, when and as required to provide for the
exercise of the rights represented by this Warrant.  The Company will
take all such action as may be necessary to assure that such shares of capital
stock may be issued as provided herein without violation of any applicable law
or regulation, or of any requirements of any domestic securities exchange upon
which the capital stock may be listed.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    8.           Adjustment of Exercise Price
and Number of Shares.  The number of and kind of securities
purchasable upon exercise of this Warrant shall be subject to adjustment from
time to time as follows:

     

    (a)           In
the event that the outstanding shares of Common Stock are hereafter exchanged
for a different number or kind of shares or other securities of the Company, by
reason of a reorganization, recapitalization, exchange of shares, stock split,
combination of shares or dividend payable in shares or other securities, a
corresponding adjustment shall be made by the board of directors of the Company
(the “Board”) in the
number and kind of shares or other securities covered by this
Warrant.  Any such adjustment shall be made without change in the
total price applicable to the unexercised portion of the Warrant, but the price
per share specified in this Agreement shall be correspondingly
adjusted.

     

    (b)           If,
while this Warrant is unexercised and remains outstanding, the Company merges or
consolidates with a wholly-owned Subsidiary for the purpose of reincorporating
itself under the laws of another jurisdiction, the Holder will be entitled to
acquire shares of common stock of the reincorporated Company upon the same terms
and conditions as were in effect immediately prior to such reincorporation
(unless such reincorporation involves a change in the number of shares or the
capitalization of the Company, in which case proportional adjustments shall be
made as provided above).

     

    (c)           Except
as expressly provided to the contrary in this Section 8, the issuance by the
Company of shares of stock of any class for cash or property or for services,
either upon direct sale or upon the exercise of rights or warrants, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect the number, class or price of shares of
Common Stock then subject to outstanding Warrants.

     

    (d)           Notice of
Adjustment.  When any adjustment is required to be made in the
number or kind of shares purchasable upon exercise of the Warrant, or in the
Exercise Price, the Company shall promptly notify the Holder of such event and
of the number of Shares or other securities or property thereafter purchasable
upon exercise of this Warrant.

     

    9.           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 (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 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 relieved of its obligation to register any 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 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.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    10.           Nonassignability of
Rights.  This Warrant shall not be assignable or transferable
by the Holder except by will or by the laws of descent and distribution and
during the life of the Holder, this Warrant shall be exercisable only by
him.

     

    11.           Confidentiality.  The
Holder hereby agrees that the entire contents of this Agreement are confidential
at all times, and that the Warrant’s exercisability is conditioned on his
compliance with this covenant; provided, however, that the
Holder may disclose the contents of this Agreement to his spouse and to his
legal and financial advisors.

     

    12.           Compliance with Securities
Act.  The Company shall not be obligated to sell or issue any
shares of Common Stock or other securities pursuant to the exercise of this
Warrant unless the shares of Common Stock or other securities with respect to
which this Warrant is being exercised are at that time effectively registered or
exempt from registration under the Securities Act and applicable state
securities laws.  In the event shares or other securities shall be
issued that shall not be so registered, the Holder hereby represents, warrants
and agrees that he will receive such shares or other securities for investment
and not with a view to their resale or distribution, and will execute an
appropriate investment letter satisfactory to the Company and its
counsel.

     

    13.           Legends.  The
Holder hereby acknowledges that the stock certificate or certificates evidencing
shares of Common Stock or other securities issued pursuant to any exercise of
this Warrant may bear a legend setting forth the restrictions on their
transferability described in Section 12 hereof.

     

    14.           Rights as
Stockholder.  The Holder shall have no rights as a stockholder
with respect to any shares of Common Stock or other securities covered by this
Warrant until the date of issuance of a certificate to him or her for such
shares or other securities.  No adjustment shall be made for dividends
or other rights for which the record date is prior to the date such stock
certificate is issued, except as required or permitted by Section 8
hereof.

     

    15.           Amendment;
Waivers.  This Agreement, contains the full and complete
understanding and agreement of the parties hereto as to the subject matter
hereof and, except as otherwise permitted by the express terms of this
Agreement, it may not be modified or amended, nor may any provision hereof be
waived, except by a further written agreement duly signed by each of the
parties; provided, however, that a
modification or amendment that does not adversely affect the rights of the
Holder hereunder, as they may exist immediately before the effective date of the
modification or amendment, shall be effective upon written notice of its
provisions to the Holder.  The waiver by either of the parties hereto
of any provision hereof in any instance shall not operate as a waiver of any
other provision hereof or in any other instance.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    16.           Binding
Effect.  This Agreement shall inure to the benefit of and be
binding upon the parties hereto and, to the extent provided herein, their
respective heirs, executors, administrators, representatives, successors and
assigns.

     

    17.           Construction.  The
titles of the sections of this Agreement are included for convenience only and
shall not be construed as modifying or affecting their
provisions.  The masculine gender shall include both sexes; the
singular shall include the plural and the plural the singular unless the context
otherwise requires.

     

    18.           Governing
Law.  This Agreement shall be governed by and construed and
enforced in accordance with the applicable laws of the State of New York (other
than the law governing conflict of law questions).

     

    19.           Notices.  Any
notice in connection with this Agreement shall be deemed to have been properly
delivered if it is in writing and is delivered by hand or facsimile or sent by
registered mail to the party addressed as follows, unless another address has
been substituted by notice so given:

     

    
      	
              To
      the Holder:

            	
              To
      his address as listed on the books of the
  Company

            


    

     

    
      	
              To
      the Company:

            	
              Accelerize
      New Media, Inc.

            
	
               

            	

              1280
      Helms Road

              Columbia
      Falls, MT 59912

              Attention:  Brian
      Ross

              Facsimile:  (406)
      862-2162

            
	 	 
	 	

              and

            
	 	 
	with
      a copy to:	

              Sullivan
      & Worcester LLP

              1290
      Avenue of the Americas

              New
      York, NY  10104

              Attention:  J.
      Truman Bidwell, Jr., Esq.

            


    

    
       

    

     

    [SIGNATURE
PAGE FOLLOWS]

    


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    


    IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by an
officer thereunto duly authorized.

    


    ACCELERIZE NEW MEDIA,
INC.

    


    


    By:           ________________________

    Brian
Ross

    Title:

    


    ACKNOWLEDGED:

    


    


    


    
      	
              By: 

            	
              ______________________________

            


    

    Damon
Stein

    


    
      	
              Address: 

            	
              ________________________

            


    

    ________________________

    ________________________

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
1 to Warrant Agreement

     

    Special
Vesting Provisions:  This Warrant shall only vest and be exercisable
if, and to the extent, one of the Performance Targets set forth below have been
met on the Warrant Vesting Date.

     

    (1)           If,
by the Warrant Vesting Date, the Tier 1 DRG Performance Target has been met,
this Warrant shall be exercisable as to 250,000 Shares (and the provisions of
(2) and (3) below shall be null and void);

     

    (2)           If,
by the Warrant Vesting Date, the Tier 2 DRG Performance Target has been met,
this Warrant shall be exercisable as to 225,000 Shares (and the provisions of
(3) below shall be null and void); or

     

    (3)           If,
by the Warrant Vesting Date, the Tier 3 DRG Performance Target has been met,
this Warrant shall be exercisable as to 200,000 Shares.

     

    For
purposes of this Special Vesting Provision:

     

    (i)           “Tier
1 DRG Performance Target” means aggregate revenues of $1,100,000 and aggregate
Gross Profit of $330,000 produced by the Business between the Warrant Issue Date
and the Warrant Vesting Date.

     

    (ii)           “Tier
2 DRG Performance Target” means aggregate revenues of $1,000,000 and aggregate
Gross Profit of $300,000 produced by the Business between the Warrant Issue Date
and the Warrant Vesting Date.

     

    (iii)           “Tier
3 DRG Performance Target” means aggregate revenues of $900,000 and aggregate
Gross Profit of $270,000 produced by the Business between the Warrant Issue Date
and the Warrant Vesting Date.

     

    (iv)           “Gross
Profit” means revenues of the Business minus expenses of the Business (including
but not limited to taxes, depreciation and amortization but specifically
excluding the salary expense of Goldberg and Stein under their respective
contracts referred to in Section 4.2).

     

    (v)           Gross
Profit and revenues shall be determined pursuant to the methods described in
Section 3.1 of the Asset Purchase Agreement.  Capitalized terms used
herein and not otherwise defined shall have the meanings ascribed to them in the
Asset Purchase Agreement.

     

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NOTICE OF
EXERCISE

     

    To:  [Company
Name].

     

    The
undersigned hereby elects to [check applicable
subsection]:

     

    
      	
              ________

            	
              Purchase
      _________________ of Accelerize New Media, Inc., Common Stock pursuant to
      the terms of the attached Warrant and payment of the Exercise Price per
      share required under such Warrant accompanies this
  notice;

            


    

     

    The
undersigned hereby represents and warrants that the undersigned is acquiring
such shares for its own account for investment purposes only, and not for resale
or with a view to distribution of such shares or any part thereof.

     

    WARRANT
HOLDER:

    


    [NAME OF
HOLDER]

    


    By:           ______________________________

    Name:      ______________________________

    Title:        ______________________________

    


    Date:    __________________

    


    


    Name in
which shares should be registered:

    


    _____________________________________

    


    Address:                _________________________

    _________________________

    _________________________