ex10-3.htm


    Exhibit 10.3

     

    Security
Research Associates, Inc.


    
 

    November
23, 2009

    


    Brian
Ross

    CEO

    Accelerize
New Media, Inc.

    12121
Wilshire Blvd.,  Suite 322

    Los
Angeles, CA 90025

    


    Dear Mr.
Ross:

    


               We are pleased to confirm the terms
under which Security Research Associates, Inc. (“SRA”) is engaged by Accelerize
New Media, Inc. (OTCBB:
ACLZ.OB) (the “Company”)
as non-exclusive placement agent on a
“best-efforts” basis in connection with a proposed private placement of
securities to be issued by the Company in accordance with the proposed terms set
forth in the Term Sheet attached hereto as Annex
A (the
“Financing”).  Unless otherwise terminated in
accordance with the terms of this Agreement, the term of this letter agreement
(“Agreement”) shall commence on the date first written above and extend through
February 28, 2010.  In the event a placement occurs in which the
Company accepts funds from sources other than SRA, the Company agrees to
allocate a minimum of one million dollars ($1,000,000) to the said SRA Investors
to participate in the financing.

    


               During
the term of this Agreement, and upon your written request, we will provide you
with assistance in connection with the Financing, which may include performing
valuation analyses and assisting you in negotiating the financial aspects of the
transaction.  During the term of this Agreement, we will also identify
and contact potential investors and review the Term Sheet, the Subscription
Agreement and Investor Questionnaire, the Common Stock Purchase Warrant and
other documents related to the Financing, which are prepared by the
Company.

    


    In the
event the Financing is consummated, the Company agrees to pay to SRA a
transaction fee (the “Transaction Fee”) consisting of (i) eight percent (8%) of
the gross proceeds from the Financing received by the Company from investors
initially introduced to the Company by SRA (the “SRA Investors”), and (ii) five
(5) year warrants to acquire a number of shares of the Company’s Common Stock
equal to eight percent (8%) of the gross proceeds from the Financing received by
the Company from SRA Investors, divided by the effective price per share of the
Company's Common Stock (on an as-if converted basis in the event of a
convertible security) (the “SRA Warrants”).

    


    Upon
execution of this agreement, the Company will pay to SRA a non-refundable
upfront retainer of $5,000, which will be applied against any future Transaction
Fee.

     

    If the
Company, in lieu of or in addition to a Financing, enters into a transaction,
during the term of this Agreement or within twelve (12) months of the
termination of this Agreement, pursuant to which the Company sells or licenses
to SRA Investors any of the Company’s divisions, business segments or material
assets, (“Asset Sale”) the Company will, pay to SRA an Asset Sale Fee equal to
three percent (3.0%) of the value attributable to the deal as reasonably
determined using traditional methods of valuation (the “Acquisition Price”). The
Asset Sale Fee shall be paid upon consummation of the Asset Sale.

     

    
       

      
        	

                

                  Security
      Research Associates, Inc.

                

                

                  80
      East Sir Francis Drake Blvd., Suite 3F, Larkspur, CA  94939 /
      Phone: 415-925-0346 / Fax: 415-925-0264

                

              
	 	 	 
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      Security
Research Associates, Inc.

       

       

      If the
Company, due to a change of control (merger or buy out of more than fifty
percent (50%) of the total issued and outstanding shares of the Company on an
as-converted basis), elects not to consummate any transaction with SRA Investors
during the term of this agreement, the Company shall pay a total amount of
twenty thousand dollars ($20,000) as break up fee to SRA upon consummation of
the change of control transaction.

    

     

    The SRA
Warrants issued by the Company pursuant to this Agreement will have an exercise
price which will be the same as the price of such warrants issued to the SRA
Investors in the Financing or, if the SRA Investors receive a convertible
security, the lowest common stock conversion price of such
security.  If SRA Investors do not receive warrants or a convertible
security, the exercise price of the SRA Warrants shall be the fair market value
of one share of the Company’s common stock on the day the transaction causing
the SRA Warrants to be issued is consummated. SRA Warrants issued pursuant to
this Agreement shall have piggyback registration rights, will include customary
adjustments in the event of stock dividends and/or stock splits,
reclassifications, reorganizations and/or business combinations involving the
Company, will have a “cashless exercise” provision and, in the event SRA
Investors receive warrants, will contain such additional rights as are contained
in the warrants issued to the SRA Investors.

     

    The
Company agrees to provide all information and documents reasonably required to
permit the SRA Investors to make an informed investment decision with respect to
an investment in the Company. Such information and documents shall be provided
at the cost of the Company.

     

    The
Company also agrees to reimburse SRA periodically, upon request, or upon
termination of our services pursuant to this Agreement, for our expenses
incurred in connection with our financial advisory services and the Financing,
including fees and expenses of legal counsel, travel expenses and printing. All
such non-accountable fees and expenses shall not exceed a combined aggregate
amount of ten thousand dollars ($10,000).  SRA must obtain written
approval from Company for any individual non-accountable fees or expenses
exceeding $2000 in one or a series of transactions or expenses.

     

    Please
note that any written or oral opinion or advice provided by SRA in connection
with our engagement is exclusively for the information of the Board of Directors
and senior management of the Company, and may not be disclosed to any third
party (other than the Company’s legal, accounting or other advisors, who shall
have been instructed with respect to the confidentiality of such advice) or
circulated or referred to publicly without our prior written consent, except as
to the extent required by law, judicial or administrative process or regulatory
demand.

    


    Each of
the Company or SRA shall be entitled to terminate this Agreement for any reason
upon a thirty (30) days prior written notice to the other party at the address
set forth for such party on the signature page hereof.  In the event
of the termination of this Agreement, SRA shall be entitled to be paid its
expenses subject to the terms and up to the maximum amount described
above.  The confidentiality provisions of this Agreement shall be
unaffected by the termination of this Agreement.  The Company shall
not be obligated to reimburse any expenses incurred by SRA or its advisors with
respect to activities undertaken after notification of termination is
given.  In the event this Agreement is terminated and prior to the
expiration of twelve (12) months from the date of such termination, an agreement
is entered into by the Company with respect to any transaction contemplated by
this Agreement with investors initially introduced to the Company by SRA (the
“Introduced Parties”), SRA will be entitled to the Transaction Fee set forth
above.  Upon the termination or expiration of this Agreement, SRA
shall provide the Company with a list of Introduced Parties with respect to the
Financing.

     

     

    
      	

              

                Security
      Research Associates, Inc.

              

              

                80
      East Sir Francis Drake Blvd., Suite 3F, Larkspur, CA  94939 /
      Phone: 415-925-0346 / Fax: 415-925-0264

              

            
	 	 	 
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    Security
Research Associates, Inc.

     

     

               SRA
is an independent contractor and placement agent of the Company. SRA will not
have any right or authority to bind the Company or otherwise create any
obligations of any kind on behalf of the Company and will make no representation
to any third party to the contrary.

     

    The
Company and SRA each agree to keep confidential and not disclose to any third
party any confidential information of the other party, and to use such
confidential information only in connection with the engagement hereunder;
provided, however, the foregoing will not prohibit disclosures (i) to the
parties’ employees, agents, representatives, and others to the extent necessary
to enable the Company or SRA to perform its responsibilities under this
Agreement, (ii) to the extent required by law, judicial or administrative
process or regulatory demand, or (iii) with respect to matters which become
public other than by the actions of the disclosing party hereunder. The
confidentiality provisions of this Agreement shall survive the termination of
this Agreement for a period of five (5) years.

    


               Each
of the Company and SRA hereby agrees, warrants and represents to conduct the
Financing in a manner intended to qualify for the exemption from the
registration requirements of the Securities Act of 1933, as amended (the “Act”),
provided by Section 4(2) of the Act.  Each of the Company and SRA
hereby agrees, warrants and represents to limit offers to sell, and
solicitations of offers to buy, securities of the Company in connection with the
Financing to persons reasonably believed by it to be “qualified institutional
buyers” as such term is defined in Rule 144A under the Act and “accredited
investors” as such term is defined in Rule 501(a) of Regulation D promulgated
under the Act.  SRA represents and warrants that it is a registered
broker/dealer and understands that the availability of a securities law
exemption for the Financing may depend on such status.  Accordingly,
SRA hereby indemnifies and holds harmless the Company and its affiliates,
controlling persons, directors, officers, representatives and agents against any
and all losses, claims, damages or liabilities (including, without limitation,
reasonable attorneys fees and expenses) to which the Company and such persons
may become subject arising out of or in connection with SRA’s failure to be so
registered or any breach of warranties or representations made by SRA in this
Agreement.

    


               Each
of the Company and SRA hereby agrees warrants and represents that any offers
made in connection with the Financing will be made only to prospective
purchasers on an individual basis and that no form of general solicitation or
general advertising (within the meaning of Rule 502 under the Act) will be used
in connection with the Financing.  Each of the Company and SRA hereby
agrees, warrants and represents to conduct the Financing in a manner intended to
comply with the registration or qualification requirements, or available
exemptions there from, under applicable state “blue sky” laws and applicable
securities laws of other jurisdictions.

    


               The
Company may decline to consummate the Financing with any prospective purchaser
introduced by SRA or otherwise, in the Company’s sole and absolute
discretion.

    

      The
Company agrees to:

      


      
        	
                 
      

              	
                (a)

              	
                Indemnify
      and hold SRA harmless against any and all losses, claims, damages or
      liabilities to which SRA may become subject arising out of or in
      connection with any breach of any warranties or representations made by
      the Company pursuant to this Agreement, unless such losses, claims,
      damages or liabilities are finally judicially determined to have resulted
      directly from the gross negligence or willful misconduct of SRA;
      and

              


      

       

       

      
        
          	

                  

                    Security
      Research Associates, Inc.

                  

                  

                    80
      East Sir Francis Drake Blvd., Suite 3F, Larkspur, CA  94939 /
      Phone: 415-925-0346 / Fax: 415-925-0264

                  

                
	 	 	 
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        Security
Research Associates, Inc.

         

      

      
        	
                 
      

              	
                (b)

              	
                Reimburse
      SRA periodically for reasonable legal fees or other reasonable expenses
      incurred by SRA in connection with investigating, preparing to defend or
      defending, or providing evidence in or preparing to serve or serving as a
      witness with respect to, any lawsuits, investigations, claims or other
      proceedings arising in any manner out of or in connection with any breach
      of any warranties or representations made by the Company pursuant to this
      Agreement (including, without limitation, in connection with the
      enforcement of this Agreement and the indemnification obligations set
      forth herein); it being understood however that the Company shall have no
      obligation to reimburse SRA for any such expenses and SRA shall
      immediately repay any such reimbursements by the Company in the event any
      losses, claims, damages or liabilities are finally judicially determined
      to have resulted directly from the gross negligence and willful misconduct
      of SRA.

              


      

       

      The
Company agrees that the indemnification and reimbursement commitments set forth
in this Agreement shall apply whether or not SRA is a formal party to any
lawsuits, arbitrations, claims or other proceedings and that such commitments
shall extend upon the terms set forth in this paragraph to any controlling
person, affiliate, director, officer, employee or agent of SRA (each, with SRA,
an “Indemnified Person”).  In the event an Indemnified Person is made
a formal party to a lawsuit, claim or other proceeding arising out of or in
connection with any of the services rendered by SRA pursuant to this Agreement,
and the Company takes over the defense of such action for an Indemnified Person,
the Company further agrees that it will not, without such Indemnified Person’s
prior written consent, which consent shall not be unreasonably withheld, enter
into any settlement of a lawsuit, claim or other proceeding arising out of or in
connection with the Financing unless such settlement includes an express and
unconditional release from the party bringing the lawsuit, claim or other
proceeding of all Indemnified Persons.  With respect to the
immediately preceding sentence, in the event an Indemnified Person reasonably
withholds their consent to a settlement, the Indemnified Person shall be
responsible for all subsequent costs and expenses arising out of the defense of
the Indemnified Person.

    

     

    The
Company further agrees that the Indemnified Persons are entitled to retain
separate counsel of their selection in connection with any of the matters in
respect of which indemnification, reimbursement or contribution may be sought
under this Agreement, provided that, in connection with any one action or
proceeding, the Company shall not be responsible for the fees and expenses of
more than one separate law firm or individual attorney in any one jurisdiction
for all Indemnified Persons.

     

    This
Agreement and any claim or dispute of any kind or nature whatsoever arising out
of or in any way relating to this Agreement, directly or indirectly, shall be
governed by and construed in accordance with the laws of California applicable
to contracts executed and to be wholly performed therein without giving effect
to its conflicts of laws, principles or rules.  The Company and SRA
agree that any claim or dispute arising out of this Agreement shall be resolved
in an arbitration conducted in San Francisco, California pursuant to the rules
of the Financial Industry Regulatory Authority.

     

    This
Agreement, together with Annex A hereto, contains the entire agreement
between SRA and the Company with respect to the subject matter of this
Agreement, and supersedes any prior understanding or agreement.  The
Company and SRA each acknowledge that no representations, inducements, promises
or agreements (oral or written), have been made by the Company or SRA, or anyone
acting on behalf of the Company or SRA, which are not contained in this
Agreement, and any prior agreements, promises, negotiations, or representations
with respect to the subject matter of this Agreement (whether written or oral),
not expressly set forth in this Agreement, are of no force or
effect.  This Agreement may be amended or modified only by writing
signed by the parties hereto.

     

    
       

      
        	

                

                  Security
      Research Associates, Inc.

                

                

                  80
      East Sir Francis Drake Blvd., Suite 3F, Larkspur, CA  94939 /
      Phone: 415-925-0346 / Fax: 415-925-0264

                

              
	 	 	 
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      Security
Research Associates, Inc.



               Please
confirm that the foregoing is in accordance with your understanding by signing
and returning to us the enclosed copy of this Agreement, which shall become a
binding agreement upon our receipt. We are delighted to accept this engagement
and look forward to working with you on this assignment.

    


    Very
truly yours,

    


    


    Brian G.
Swift, Chairman and CEO

    


    Agreement
Confirmed by:

     

    
      
        	
                Security Research Associates,
      Inc.

                80
      E. Sir Francis Drake Boulevard, Suite 3F

                Larkspur,
      CA 94939 

              	 	 	
                Accelerize New Media,
      Inc.

                12121
      Wilshire Blvd.,  Suite 322

                Los
      Angeles, CA 90025

              	 
	 	 	 	 	 
	
                /s/
      Brian G. Swift

              	 	 	
                /s/
      Brian Ross

              	 
	
                Brian
      G. Swift

                Chairman
      and
      CEO                                                                                

                Date:
      November 23, 2009 

              	 	 	
                Brian
      Ross

                Chief
      Executive Officer

                Date:
      November 23, 2009

              	 


      

    

     

                                                                   

     

    
      	

              

                Security
      Research Associates, Inc.

              

              

                80
      East Sir Francis Drake Blvd., Suite 3F, Larkspur, CA  94939 /
      Phone: 415-925-0346 / Fax: 415-925-0264

              

            
	 	 	 
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    Security
Research Associates, Inc.

     

    Annex A

    CONFIDENTIAL

    Term Sheet for Private Placement of
Accelerize New Media,
Inc. Securities

    


    


    
    

    CONFIDENTIAL
TERM SHEET

    


    Accelerize
New Media, Inc.

    


    (OTCBB:
ACLZ.OB)

    


    November
20, 2009

    


    [$2,000,000]
of Common Stock and Warrants

    


    
      	 	 
	Issuer:	Accelerize
      New Media, Inc. (the “Company”), a Delaware
      Corporation (OTCBB: ACLZ.OB). The Company’s Common Stock is currently
      quoted on the OTC Bulletin Board under the symbol “ACLZ.OB”. The closing
      price of the Company’s Common Stock (the “Common Stock”) on
      November 20, 2009 was [$0.73] per share.
	 	 
	Capitalization:	The
      Company’s authorized capital stock consists of 100,000,000 shares of
      common stock, par value $0.001 per share and 2,000,000 shares of blank
      check preferred stock, par value $0.001 per share, of which 54,000 shares
      have been designated Series A Convertible Preferred Stock (the “Series A Preferred”) and
      144,000 shares have been designated Series B Convertible Preferred Stock
      (the “Series B
      Preferred”). As of November 11, 2009 the Company had an aggregate
      of 28,737,607 shares of Common Stock issued and outstanding, 54,000 shares
      of Series A Preferred issued and outstanding, and 118,875 shares of Series
      B Preferred issued 

              and
      outstanding.

            
	 	 
	Purchasers:	Financial
      institutions and other “accredited investors”.
	 	 
	Offering:	[twelve
      thousand (12,000)] units (the “Units”), each consisting
      of [two hundred and fifty (250)] shares of Common Stock, par value $0.001
      per share (the “Common
      Stock”) and a 3-year warrant (the “Warrant”) to purchase up
      to [two hundred and fifty (250)] shares of Common Stock with an exercise
      price of [$0.65] per share. The Company will have the right, in its sole
      discretion, to close the offering at a lower or higher number of Units in
      the event that the offering is undersubscribed or oversubscribed,
      respectively.
	 	 
	Price
      Per Unit:	[$100.00]
      per Unit.
	 	 
	Minimum
      Subscription:	[one
      thousand (1000) Units.]
	 	 
	Registration
      Rights:	None
	 	 
	Warrant
      Exercise Price:	[$0.65]
      per share.
	 	 


       

      
         

        
          	

                  

                    Security
      Research Associates, Inc.

                  

                  

                    80
      East Sir Francis Drake Blvd., Suite 3F, Larkspur, CA  94939 /
      Phone: 415-925-0346 / Fax: 415-925-0264

                  

                
	 	 	 
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        Security
Research Associates, Inc.

      

       

       

      	Additional
      Warrant Terms:	For
      every [two hundred and fifty (250)] shares of Common Stock issued to a
      Purchaser in this offering, the Purchaser will receive a Warrant to
      purchase up to an additional [two hundred and fifty (250)] shares of
      Common Stock exercisable at a purchase price of $0.65 per share, for a
      period of three (3) years from the Closing Date. The Warrants will have
      standard anti-dilution provisions.
	 	 
	 	The
      Company reserves the right to call the Warrants, at a redemption price of
      $.001 per Warrant, commencing on the first trading day after the Common
      Stock of the Company has traded for ten (10) consecutive trading days at
      an average closing price at or exceeding [$1.25] per share. Warrant
      holders will have ten (10) days from the date of such notice to exercise
      the Warrants, and in the event the Warrants are not exercised, the Company
      may cancel them, and holders will receive payment of $0.001 per Warrant.
      In the case holders failed to exercise the Warrants within the said 10-day
      period, the Company will also have the right to assign the right to
      exercise the Warrant to another person whether or not such person is an
      existing shareholder of the Company.  Holders will not receive
      any proceeds in the event such other person exercises the
      Warrant.
	 	 
	Proceeds:	Assuming
      [twelve thousand (12,000)] Units are sold, the net proceeds to be received
      by the Company from the sale of the Units will be [one million two hundred
      thousand dollars ($1,200,000)] less offering expenses and finder fees. In
      addition, the Company may receive an additional amount of [one million six
      hundred and twenty-five thousand dollars ($1,625,000)] from the exercise
      of the Warrants.
	 	 
	Signing
      and Closing Date:	Signing
      of definitive purchase agreements by the Company and the respective
      Purchasers, and closings with respect thereto is expected to take place
      between December, 2009 and February, 2010.  The final Closing
      will take place no later than March 15, 2010 or such other date as the
      Company may determine (the “Closing
  Date”).
	 	 
	Payment:	The
      price of [$100.00] per Unit will be payable in full by each Purchaser upon
      signing the respective Purchase Agreement.
	 	 
	Use
      of Proceeds:	Net
      proceeds will be used for research and development, marketing, working
      capital and general corporate purposes.
	 	 
	
              Type
      of Offering:

            	
              The
      shares of Common Stock offered herein, and the shares of Common Stock
      underlying the Warrants (collectively, the “Securities”) are being
      offered for sale directly by the Company to the Purchasers.  The
      Securities are being offered for sale on a private placement basis to the
      Purchasers as “accredited investors”, exempt from the prospectus and
      registration requirements of the United States. The
      Offering shall comply with all applicable securities laws to the
      satisfaction of the Company, and the Purchasers shall execute and deliver
      such subscription documents as may be necessary or customary in Regulation
      D private placements.

            


      
        
           

           

          
            	

                    

                      Security
      Research Associates, Inc.

                    

                    

                      80
      East Sir Francis Drake Blvd., Suite 3F, Larkspur, CA  94939 /
      Phone: 415-925-0346 / Fax: 415-925-0264

                    

                  
	 	 	 
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          Security
Research Associates, Inc.

        

      

       

       

      	 	The
      Securities will be issued by the Company at Closing pursuant to a
      Securities Purchase Agreement (the “Purchase Agreement”)
      between the Company and each of the Purchasers.  The Purchase
      Agreement will contain certain covenants, representations, warranties and
      indemnities of the Company for the benefit of the Purchasers of a nature
      and scope customary in private placements of this type, and certain covenants,
      representations, warranties and indemnities of the Purchasers for the
      benefit of the Company of a nature and scope customary in private
      placements of this type.
	 	 
	Finder
      Fees:	The
      Company engaged Securities Research Associates, Inc ("SRA") as
      non-exclusive placement agent, and will pay SRA fees consisting of (i)
      eight percent (8%) of the gross proceeds received from investors
      introduced initially by SRA (the “SRA Investors”), and (ii) issue five (5)
      year warrants to acquire a number of shares of the Company’s Common Stock
      equal to eight percent (8%) of the aggregate gross proceeds received from
      SRA Investors divided by the effective price per share of the Company's
      Common Stock (on an as-if converted basis in the event of a convertible
      security) at closing (the “SRA Warrants”). The Company will pay to SRA a
      non-refundable upfront retainer of $5,000, which will be applied against
      any future finder fees.
	 	 
	Risk
      Factors:	The
      Securities offered hereby are highly speculative and involve a high degree
      of risk and, therefore, should not be purchased by anyone who cannot
      afford the loss of their entire investment.  Prospective
      Purchasers should carefully review and consider the risk factors set forth
      in the Company’s quarterly and annual reports on Form 10-Q and Form 10-K,
      as filed with the Securities and Exchange Commission, as well as other
      information contained therein, before subscribing for any of the
      Securities.  In addition, early Purchasers cannot be assured
      that all or even most of the Units will be sold.
	 	 
	

              Financial
      and

              Other
      Public

              Information:

            	

              Financial
      and other public information as filed with the Securities and Exchange
      Commission will be provided by us upon demand and can also be found under
      the Company’s name at: www.sec.gov.

            


    

    
       

      75001\0\3

      
 

    

    
      
        
          	

                  

                    Security
      Research Associates, Inc.

                  

                  

                    80
      East Sir Francis Drake Blvd., Suite 3F, Larkspur, CA  94939 /
      Phone: 415-925-0346 / Fax: 415-925-0264

                  

                
	 	 	 
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