ex4-1.htm


     

    
      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]

              


      

       

      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.

       

      2.           Terms of
Prepayment.

       

      (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).

       

      3.           Conversion.

       

      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 another transaction for other stock or securities, cash and/or
any other property pursuant to a merger, consolidation or other
combination.  The Borrower shall promptly provide the holder of this
Note with notice of any events mandating an adjustment to the conversion ratio,
or for any planned merger, consolidation, share exchange or sale of the
Borrower, signed by the President and Chief Executive Officer of
Borrower.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      4.           Representations
and Warranties.  The Borrower represents and warrants as
follows:  (i) the Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware; (ii) the
execution, delivery and performance by the Borrower of this Note are within the
Borrower's powers, have been duly authorized by all necessary action, and do not
contravene (A) the Borrower's certificate of incorporation or by-laws or (B) (x)
any law or (y) any agreement or document binding on or affecting the Borrower,
(iii) no authorization or approval or other action by, and no notice to or
filing with, any governmental authority, regulatory body or third person is
required for the due execution, delivery and performance by the Borrower of this
Note; (iv) this Note constitutes the legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms except
as enforcement hereof may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights generally and subject to the
applicability of general principles of equity; (v) the Borrower has all
requisite power and authority to own and operate its property and assets and to
conduct its business as now conducted and proposed to be conducted and to
consummate the transactions contemplated hereby; (vi)  the Borrower is
duly qualified to conduct its business and is in good standing in each
jurisdiction in which the character of the properties owned or leased by it, or
in which the transaction of its business makes such qualification necessary;
(vi) there is no pending or, to the Borrower's knowledge, threatened action or
proceeding affecting the Borrower before any governmental agency or arbitrator
which challenges or relates to this Note or which may otherwise have a material
adverse effect on the Borrower; and (viii) the Borrower has taken all required
action to reserve for issuance such number of shares of Common Stock as may be
issuable from time to time upon conversion of this Note.

       

      5.           Covenants.  So
long as any principal or interest is due hereunder and shall remain unpaid, the
Borrower will, unless the Lender shall otherwise consent in
writing:

       

      (a)           Maintain
and preserve its existence, rights and privileges;

       

      (b)           Not
incur any indebtedness other than: (i) bank financing (including without
limitation: revolving credit, asset-based borrowing, and note payable
obligations), (ii) debt financing provided by various Lenders under the terms of
this Note, and (iii) indebtedness incurred in the ordinary course of business or
outstanding on the date hereof, unless such indebtedness is subordinated to the
prior payment in full of this Note on terms reasonably satisfactory to the
Lender;

       

      (c)           Not
(i) directly or indirectly sell, lease or otherwise dispose of (A) any of its
property or assets other than in its ordinary course of business or (B)
substantially all of its properties and assets, in the aggregate, to any
person(s), whether in one transaction or in a series of transactions over any
period of time, (ii) merge into or with or consolidate with any other person or
(iii) adopt any plan or arrangement for the dissolution or liquidation of the
Borrower; and

       

      (d)           Comply
in all material respects with all applicable laws (whether federal, state or
local and whether statutory, administrative or judicial or other) and with every
applicable lawful governmental order (whether administrative or
judicial).

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      6.           Events of
Default.  Each and any of the following shall constitute a
default and, after expiration of the Grace Period, if any, shall constitute an
“Event of Default” hereunder:

       

      (a)           the
nonpayment of principal, late charges, or any other costs or expenses promptly
when due of any amount payable under this Note;

       

      (b)           any
other failure of the Borrower to observe or perform any covenant set forth in
this Note or in the Warrant dated the date hereof (other than a payment default
described above), which failure is not cured within thirty (30) days (the “Grace
period”) of Borrower’s receipt of a written notice that such failure exists and
is continuing, and should it not be cured within the Grace Period, it shall
constitute an Event of Default under this Note;

       

      (c)           if
Borrower shall commence any case, proceeding or other action: (i) under any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
liquidation, dissolution, composition or other relief with respect to it or its
debts; or (ii) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its property, or
the Borrower shall make a general assignment for the benefit of its creditors;
or (iii) there shall be commenced against the Borrower any case, proceeding or
other action of a nature referred to above or seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its property, which case, proceeding or other action results
in the entry of any order for relief or remains undismissed, undischarged or
unbonded for a period of one hundred twenty (120) days;

       

      (d)           any
representation or warranty made by the Borrower or any other person or entity
under this Note shall prove to have been incorrect in any material respect when
made;

       

      (e)           the
sale of all or substantially all of the assets, or change in controlling
ownership (i.e., change in excess of 50% Common Stock voting interest) or the
dissolution, liquidation, merger, consolidation, or reorganization of Borrower
without the Lender’s prior written consent; or

       

      (f)           the
Borrower’s shares of Common Stock are suspended from trading or delisted from
trading on the OTCBB for a period of more than sixty (60) consecutive
days.

       

      7.           Lender’s
Rights Upon Default.  Upon the occurrence of any Event of
Default, the Lender may, at its sole and exclusive option, do any or all of the
following, either concurrently or separately: (a) accelerate the maturity of
this Note and demand immediate payment in full, whereupon the outstanding
principal amount of the Note and all obligations of Borrower to Lender, together
with accrued interest thereon, shall become immediately due and payable; and (b)
exercise all legally available rights and privileges.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      8.           Commission.
The Borrower may engage various persons (each a “Finder”), on a non-exclusive
basis, to introduce Borrower to potential Lenders. Borrower, at its sole
discretion, may pay to each Finder up to 10% of the Principal amount made
available to Borrower under the terms of this Note by Lenders introduced to the
Borrower by such Finder.

       

      9.           Usury.  In
no event shall the amount of interest paid or agreed to be paid hereunder exceed
the highest lawful rate permissible under applicable law.  Any excess
amount of deemed interest shall be null and void and shall not interfere with or
affect the Borrower’s obligation to repay the principal of and interest on the
Note.  This confirms that the Borrower and, by its acceptance of this
Note, the Lender intend to contract in strict compliance with applicable usury
laws from time to time in effect.  Accordingly, the Borrower and the
Lender stipulate and agree that none of the terms and provisions contained
herein shall ever be construed to create a contract to pay, for the use or
forbearance of money, interest in excess of the maximum amount of interest
permitted to be charged by applicable law from time to time in
effect.

       

      10.           Assignment.   This
Note shall be binding upon and inure to the benefit of the Borrower and the
Lender and their respective successors and assigns; provided that
neither  Borrower nor Lender may assign this Note, in whole or in
part, by operation of law or otherwise, without the prior written consent of the
other party, which consent will not be unreasonably withheld or
delayed.

       

      11.           Governing
Law.  This Note, and any claims arising out of relating to this
Note, whether in contract or tort, statutory or common law, shall be governed
exclusively by, and construed in accordance with the laws of the State of New
York without regard to principles of conflicts of laws.

       

      12.           Jurisdiction.  EACH
OF BORROWER AND LENDER HEREBY CONSENTS THAT ANY LEGAL ACTION OR PROCEEDING
AGAINST IT UNDER, ARISING OUT OF OR IN ANY MANNER RELATING TO THIS NOTE, OR ANY
OTHER INSTRUMENT OR DOCUMENT EXECUTED AND DELIVERED IN CONNECTION HEREWITH SHALL
BE BROUGHT EXCLUSIVELY IN ANY COURT OF THE STATE OF NEW YORK OR IN THE UNITED
STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK, IN EACH CASE, IN THE
COUNTY OF NEW YORK.  EACH OF BORROWER AND LENDER HEREBY EXPRESSLY AND
IRREVOCABLY CONSENTS AND SUBMITS TO THE PERSONAL JURISDICTION OF ANY OF SUCH
COURTS IN ANY SUCH ACTION OR PROCEEDINGS.  EACH OF BORROWER AND LENDER
HEREBY AGREES THAT PERSONAL JURISDICTION OVER IT MAY BE OBTAINED BY THE DELIVERY
OF A SUMMONS BY PERSONAL DELIVERY OR OVERNIGHT COURIER AT THE ADDRESS PROVIDED
IN SECTION 15 OF THIS NOTE OR ANY OTHER ADDRESS AS SHALL BE PROVIDED BY SUCH
PARTY IN WRITING.  ASSUMING DELIVERY OF THE SUMMONS IN ACCORDANCE WITH
THIS PROVISION, EACH OF BORROWER AND LENDER HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES ANY ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OF FORUM NON
CONVENIENS OR ANY SIMILAR BASIS.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      13.           Miscellaneous.
(a) If any provision of this Note shall for any reason be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision hereof, but this Note shall be construed as if such invalid or
unenforceable provision had never been contained herein.  (b) The
waiver of any Event of Default or the failure of Lender to exercise any right or
remedy to which it may be entitled shall not be deemed a waiver of any
subsequent Event of Default or Lender’s right to exercise that or any other
right or remedy to which Lender is entitled.  No delay or omission by
Lender in exercising, or failure by Lender to exercise on any one or more
occasions, shall be construed as a waiver or novation of this Note or prevent
the subsequent exercise of any or all such rights.  (c) This Note may
not be waived, changed, modified, or discharged orally, but only in writing
signed by each of Borrower and Lender.

       

      14.           Notice,
Etc.  Any notice required by the provisions of this Note will
be in writing and will be deemed effectively given:  (a) upon personal
delivery to the party to be notified; (b) when sent by confirmed telex or
facsimile if sent during normal business hours of the recipient; if not, then on
the next business day; (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (d) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt, and delivered as
follows:

       

      If to the
Borrower:

      


      Accelerize
New Media

      12121
Wilshire Blvd., Suite 322

      Los
Angeles, CA 90025

      Attention:  Brian
Ross, President and Chief Executive Officer

      Facsimile
Number:  310-820 3220

      


      If to
Lender:

      


      NAME:       ________________________

      ADDRESS:
________________________

                    
      ________________________

      ATTN:        ________________________

      FAX:           ________________________

      


      or, as to
each party, at such other address as shall be designated by such party in a
written notice to the other parties

       

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IN WITNESS WHEREOF, the
undersigned has executed this Note as of the date first set forth
above.

       

      


      ACCELERIZE NEW MEDIA,
INC.

      


      


      By:_______________________________

      Name: Brian Ross

      Title: President and Chief Executive
Officer

      


      


      STATE OF
_______________                        )

      )  ss:

      COUNTY OF
_______________                    )

      


      On this
___ day of __________, 2009, before me, personally came Brian Ross, to me known,
who being by me duly sworn, did depose and say, that he is the President and
Chief Executive Officer of Accelerize New Media, Inc. the corporation described
in and which executed the above instrument; and that he signed his name by
authority of the board of directors of said corporation.

      


      


      


      _______________________________

      Notary Public

       

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      EXHIBIT
A

      


      LENDER’S
CONVERSION NOTICE

      


      


      TO
ACCELERIZE NEW MEDIA, INC.

      ATTN:
BRIAN ROSS, PRESIDENT

      


       

      Please take notice that in accordance
with Section 3 of the foregoing Note, Lender hereby requires the Borrower to
convert __________ dollars ($________) of its remaining Principal and interest
due and owing to Lender under the Note into shares of Common Stock at the
Lender’s Conversion Price of $___ per share.

       

      Enclosed
herewith please find the original Note. Upon receipt of this notice together
with the original Note please issue to the undersigned stock certificate
representing ________ (______) shares of Common Stock.

       

      


      


      By:_____________________                                                                           Dated:
______________

      [LENDER’S
NAME]

      [LENDER’S
ADDRESS]