ex4-1.htm


Exhibit 4.1







THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF OR IN ACCORDANCE WITH APPLICABLE LAW.


WARRANT TO PURCHASE STOCK


 




	
Corporation:

	
ACCELERIZE NEW MEDIA, INC.


	
Number of Shares:

	
See below.


	
Class of Stock:

	
Common


	
Initial Exercise Price:

	
See below.


	
Issue Date:

	
August 23, 2011


	
Expiration Date:

	
August 23, 2016









 


THIS WARRANT CERTIFIES THAT AGILITY CAPITAL II, LLC or registered assignee (“Holder”) is entitled to purchase the number of fully paid and nonassessable shares (the “Shares”) of Common Stock of ACCELERIZE NEW MEDIA, INC. (the “Company”), in the number, at the price, and for the term specified above.  The number of Shares that may be purchased is equal to 600,000.  The Warrant Price is equal to the lower of (i) $0.35 and (ii) the price per share at which the Company sells or issues its capital stock after the Issue Date in a transaction or series of transactions in which the Company receives at least $500,000, provided that such price per
share shall in no case be less the price per share of the Company’s Series B Preferred Stock including any adjustments provided for therein.


 


ARTICLE 1.                      EXERCISE


 


1.1           Method of Exercise.  Holder may exercise this Warrant by delivering this Warrant and a duly executed Notice of Exercise in substantially the form attached as Appendix 1 to the principal office of the Company.  Unless Holder is exercising the conversion right set forth in Section 1.2, Holder shall also deliver to the Company a check for the aggregate Warrant Price for the Shares being purchased.


 


1.2           Conversion Right.  In lieu of exercising this Warrant as specified in Section 1.1, Holder may from time to time convert this Warrant, in whole or in part, into a number of Shares determined by dividing (a) the aggregate fair market value of the Shares or other securities otherwise issuable upon exercise of this Warrant minus the aggregate Warrant Price of such Shares by (b) the fair market value of one Share.  The fair market value of the Shares shall be determined pursuant to Section 1.3.


 


1.3           Fair Market Value.  The fair market value of the Shares shall be the closing price of the Shares reported for the business day immediately before Holder delivers its Notice of Exercise to the Company.


 


1.4           Delivery of Certificate and New Warrant.  Promptly after Holder exercises or converts this Warrant, the Company shall deliver to Holder certificates for the Shares acquired and, if this Warrant has not been fully exercised or converted and has not expired, a new Warrant representing the Shares not so acquired.


 


1.5           Replacement of Warrants.  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of mutilation, or surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor.


 


ARTICLE 2.                      ADJUSTMENTS TO THE SHARES.


 


2.1           Stock Dividends, Splits, Etc.  If the Company declares or pays a dividend on its common stock payable in common stock, or other securities, subdivides the outstanding common stock into a greater amount of common stock, then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without cost to Holder, the total number and kind of securities to which Holder would have been entitled had Holder owned the Shares of record as of the date the dividend or subdivision occurred.


 




  





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2.2           Reclassification, Exchange or Substitution.  Upon any reclassification, exchange, substitution, or other event that results in a change of the number and/or class of the securities issuable upon exercise or conversion of this Warrant, Holder shall be entitled to receive, upon exercise or conversion of this Warrant, the number and kind of securities and property that Holder would have received for the Shares if this Warrant had been exercised immediately before such reclassification, exchange, substitution, or other event.


 


2.3           Adjustments for Combinations, Etc.  If the outstanding Shares are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased.


 


2.4           Price Adjustment.  If the Company issues additional common shares (including shares of common stock ultimately issuable upon conversion of a security convertible into common stock) after the date of the Warrant and the consideration per additional common share is less than the Warrant Price in effect immediately before such issue, the Warrant Price shall be reduced, concurrently with such Issue, to such lower price.  Upon each adjustment of the Warrant Price, the number of Shares issuable upon exercise of the Warrant shall be increased to equal
the quotient obtained by dividing (a) the product resulting from multiplying (i) the number of Shares issuable upon exercise of the Warrant and (ii) the Warrant Price, in each case as in effect immediately before such adjustment, by (b) the adjusted Warrant Price.  Notwithstanding any provision of this Section 2.4, neither the Warrant Price nor the number of Shares shall be adjusted for any options issued to employees, directors, or officers under any stock option plan of the Company.


 


2.5           Loan Default.  Upon the occurrence of an Event of Default under the Loan Agreement between the Company and the Holder dated as of January 3, 2011, as amended (the “Loan Agreement”) and notice to the Company, the number of Shares that Holder may acquire under this Warrant shall increase by 50,000, and shall increase by an additional 75,000 Shares on the thirtieth day thereafter, and on each thirtieth day after that for so long as the Event of Default is continuing, up to a maximum additional Shares of 350,000.  The Warrant Price
from and after the occurrence of an Event of Default shall be the lesser of (a) the Warrant Price that would otherwise be applicable and (b) the average closing price of Borrower’s common stock for the 15 day period immediately prior to such occurrence.


 


2.6           No Impairment.  The Company shall not, by amendment of its Certificate of Incorporation or through a reorganization, transfer of assets, consolidation, merger, dissolution, issue, or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed under this Warrant by the Company, but shall at all times in good faith assist in carrying out all the provisions of this Article 2 and in taking all such action as may be necessary or appropriate to protect
Holder’s rights under this Article against impairment.  If the Company takes any action affecting the Shares or its common stock other than as described above that adversely affects Holder’s rights under this Warrant, the Warrant Price shall be adjusted downward and the number of Shares issuable upon exercise of this Warrant shall be adjusted upward in such a manner that the aggregate Warrant Price of this Warrant is unchanged.


 


2.7           Certificate as to Adjustments.  Upon each adjustment of the Warrant Price, the Company at its expense shall promptly compute such adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forth such adjustment and the facts upon which such adjustment is based.  The Company shall, upon written request, furnish Holder a certificate setting forth the Warrant Price in effect upon the date thereof and the series of adjustments leading to such Warrant Price.


 


ARTICLE 3.                      REPRESENTATIONS AND COVENANTS OF THE COMPANY.


 


3.1           Representations and Warranties.  The Company hereby represents and warrants to the Holder that all Shares that may be issued upon the exercise of the purchase right represented by this Warrant, shall, upon issuance, be duly authorized, validly issued, fully paid and nonassessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws.


 




  





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3.2           Notice of Certain Events.  If the Company proposes at any time (a) to declare any dividend or distribution upon its common stock, whether in cash, property, stock, or other securities and whether or not a regular cash dividend; (b) to offer for subscription pro rata to the holders of any class or series of its stock any additional shares of stock of any class or series or other rights; (c) to effect any reclassification or recapitalization of common stock; (d) to merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate, dissolve or wind up unless the Company shall be the Surviving Entity; or (e) offer holders of registration rights the opportunity to participate in an underwritten public offering of the company’s securities for cash (except to the extent such offer occurs within 30 days of the Issue Date of this Warrant), then, in connection with each such event, the Company shall give Holder (1) at least 20 days prior written notice of the date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of common stock will be entitled thereto) or for determining rights to vote, if any, in respect of the matters referred to in (a) and (b) above; (2) in the case of the matters referred to in (c) and (d) above at least
20 days prior written notice of the date when the same will take place (and specifying the date on which the holders of common stock will be entitled to exchange their common stock for securities or other property deliverable upon the occurrence of such event); and (3) in the case of the matter referred to in (e) above, the same notice as is given to the holders of such registration rights.


 


3.3           Registration Rights. The Shares, or the common stock into which the Shares are convertible, shall be “Registrable Securities”, and Holder shall have the rights of a “Holder” in respect of piggyback and S-3 registrations under such registration rights agreement or investor rights agreement as may be entered into from time to time among the Company and the Purchasers named therein.


 


3.4           Information Rights.  So long as the Holder holds this Warrant and/or any of the Shares, the Company shall deliver to the Holder (a) within one hundred twenty (120) days after the end of each fiscal year of the Company, the annual audited financial statements of the Company certified by independent public accountants of recognized standing and (b) within forty-five (45) days after the end of each of the first three quarters of each fiscal year, the Company’s quarterly, unaudited financial statements, provided Company need not provide such
information for any period in which Company has filed Form 10Q with the Securities and Exchange Commission.


 


ARTICLE 4.                      MISCELLANEOUS.


 


4.1           Term.  This Warrant is exercisable, in whole or in part, at any time and from time to time on or before the Expiration Date set forth above.


 


4.2           Legends.  This Warrant and the Shares (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) shall be imprinted with a legend in substantially the following form:


 


THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR IN ACCORDANCE WITH APPLICABLE LAW.


 


4.3           Compliance with Securities Laws on Transfer.  This Warrant and the Shares issuable upon exercise this Warrant (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) may not be transferred or assigned in whole or in part without compliance with applicable federal and state securities laws by the transferor and the transferee.


 


4.4           Transfer Procedure.  Subject to the provisions of Section 4.3, Holder may transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant (or the securities issuable, directly or indirectly, upon conversion of the Shares, if any) by giving the Company notice of the portion of the Warrant being transferred setting forth the name, address and taxpayer identification number of the transferee and surrendering this Warrant to the Company for reissuance to the transferee(s) (and Holder, if applicable), provided that no such notice
shall be required for a transfer to an affiliate of Holder.


 




  





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4.5           Notices.  All notices and other communications from the Company to the Holder, or vice versa, shall be deemed delivered and effective when given personally or mailed by first-class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company or the Holder, as the case may be, in writing by the Company or such Holder from time to time.


 


4.6           Waiver.  This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.


 


4.7           Attorneys’ Fees.  In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees.


 


4.8           Governing Law.  This Warrant shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its principles regarding conflicts of law.


 



	  	  	
ACCELERIZE NEW MEDIA, INC.


	  	  	  
	  	  	  
	  	  	
By: /s/ Brian Ross                                                             


	  	  	  
	  	  	
Name: Brian Ross                                                             


	  	  	  
	  	  	
Title: CEO                                                                          


	  	  	  





 




  





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APPENDIX 1


 


NOTICE OF EXERCISE


 


1.           The undersigned hereby elects to purchase ______________ shares of the Common Stock of ACCELERIZE NEW MEDIA, INC. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full.


 


1.           The undersigned hereby elects to convert the attached Warrant into Shares in the manner specified in the Warrant.  This conversion is exercised with respect to ______________ of the Shares covered by the Warrant.


 


[Strike paragraph that does not apply.]


 


2.           Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name as is specified below:


 


Agility Capital II, LLC


____________________


____________________


Or Registered Assignee


 


3.           The undersigned represents it is acquiring the shares solely for its own account and not as a nominee for any other party and not with a view toward the resale or distribution thereof except in compliance with applicable securities laws.


 



	
Agility Capital II, LLC or Registered Assignee

	  	  
	  	  	  
	  	  	  
	  	  	  
	
(Signature)

	  	  
	  	  	  
	  	  	  
	  	  	  
	
(Date)