Document:

ex10-1.htm

EXHIBIT 10.1

 

September 2, 2010

Attention: Mr. Brian Ross

Accelerize New Media Inc

12121 Wilshire Blvd., Suite 322

Los Angeles, CA 90025

Re.:           Finder’s Agreement

 

Dear Mr. Ross:

 

This is to acknowledge and confirm the terms of our finder’s agreement, which is subject to all of the terms and conditions stated in this letter.

 

	
1.

	
Services

 

Beginning and effective as of September 2, 2010 Accelerize New Media Inc. (the “Company”) hereby engages Sandgrain Securities, Inc. (“Sandgrain” or “Finder”) for a period of forty-five days (the “Term”) to act as a non-exclusive finder of investors for equity (the “Securities”) to be offered by the Company during the Term (the “Services”).  In connection with the foregoing, the Finder shall introduce the Company, upon its written request, to prospective investors.  Company and the prospective investors will consummate one or more financing transactions (each, a “Financing Transaction”).

 

	
2.

	
Compensation

 

In the event the Company consummates a Financing Transaction involving equity securities issued to an investor that was introduced to the Company within the Term as a result of Finder’s efforts made during the Term, the Company shall pay Finder the following fee (the “Finder’s Fee”):

 

	
  

	
(i)

	
Cash Fee: Within one (1) business day of the closing of a Financing Transaction (the “Closing”), the Company shall pay Sandgrain a fee equal to seven percent (7%) of the purchase price of Securities sold (the “Finder’s Fee”) by wire. In the event of multiple Closings, the Finder’s fee will be paid as the money is received by the Company.

 

Warrant: Upon the Closing (or each Closing, as the case may be) of a transaction, the Company shall deliver to Sandgrain (or Sandgrain’s designated nominee) warrants (the “Warrants”), for the issuance of such number of the Securities that equals five percent (5%) of the amount of the Securities sold at such Closing (or Closings). The Warrants shall be assignable by the holder to any person, including an employee of Sandgrain. The Warrants shall be exercisable for three (3) years from the date of grant with an exercise price of sixty-five cents ($0.65).  Additionally, all securities issued hereunder to Sandgrain shall have identical demand registration rights, co-sale rights and all other rights as given to investors under the financing transaction.

 

  

  

  

 

	
3.

	
Reliance on Information Supplied

 

In the performance of the Services, Sandgrain (i) will use and rely on the accuracy and completeness of the documents disclosed to the public by the Company pursuant to the Securities Exchange Act of 1934, as amended, or otherwise (collectively, “Public Information”), (ii) is not responsible for, and has no obligation to independently verify, the accuracy or completeness of any information furnished by the Company to it or to any third person introduced by Sandgrain to the Company in the course of performing the Services, or the Public Information, (iii) has no obligation to undertake an independent evaluation, appraisal, or physical inspection of any assets or liabilities of the Company, and (iv) will assume that any financial forecasts furnished to, or discussed with, Sandgrain by authorized representatives of the Company have been reasonably prepared and reflect the best then currently available estimates and judgment of the Company’s management.

 

	
4.

	
Covenants, Representations and Warranties

 

	
  

	
a.

	
The Company will reasonably promptly furnish Sandgrain, from time to time, such information concerning the Company, its business, financial condition, plans, and projections as Sandgrain reasonably requests in order to assist Sandgrain in the performance of the Services.

 

	
  

	
b.

	
If any event shall occur or condition exist as a result of which it is necessary or advisable, in the opinion of the Company or Sandgrain, to amend or supplement any information previously furnished by the Company in order that the information does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading, the Company will promptly prepare and furnish to Sandgrain and the public, if applicable, amendments or supplements to the information previously furnished.

 

	
  

	
c.

	
The Company will advise Sandgrain reasonably promptly of (i) the occurrence of any event or the existence of any condition known to the Company referred to in paragraph (b) of this Section 4, (ii) such other information concerning the business and financial condition of the Company as Sandgrain may from time to time reasonably request, (iii) the receipt by the Company of any communication from any regulatory authority concerning the Company, and (iv) the commencement of any lawsuit, proceeding or regulatory action to which the Company is a party or which might materially affect the business or condition of the Company or the performance by Sandgrain of the Services.

 

	
  

	
d.

	
In the event the Company shall enter into any Financing Transaction, it will deliver, or cause to be delivered, to Sandgrain a copy of each agreement (together with all exhibits and schedules attached thereto) that the Company proposes to enter into regarding a Financing Transaction.

 

  

  

  

 

	
  

	
e.

	
During any period in which Sandgrain shall perform services hereunder, Sandgrain (i) will keep, and cause its officers, directors, shareholders, employees, agents and representatives to keep, all material non-public information concerning the Company and any of its affiliates confidential, (ii) shall not trade its stock in the Company based upon any material non-public information or take any short position in the Company’s stock or otherwise do anything that could have an adverse affect on the Company’s stock, and (iii) conduct itself in such a manner to be consistent with each exemption from registration under the Securities Act of 1933 and state blue sky laws that the Company intends to rely on for each Financing Transaction.

 

	
  

	
f.

	
 The Company hereby represents and warrants that the offering documents do not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

	
  

	
g.

	
The Company hereby warrants and agrees to hold all information received from Sandgrain in strict confidence and shall not (i) disclose any information to third parties or (ii) use any information after the expiration of this agreement or for any purpose other than the transaction contemplated by this agreement.

 

	
5.

	
Announcement

 

Upon consummation of any Financing Transaction, Sandgrain may, with the Company’s prior written approval, at Sandgrain’s expense, place an announcement in such print and/or electronic publication media as it may choose (including website posting), stating that it has acted as strategic and investment advisor to the Company. If not violative of applicable law, the Company will include a reference to Sandgrain as its finder in any press release or public announcement with respect to the Financing Transaction.

 

	
6.

	
Notices

 

All communications hereunder shall be in writing and shall be mailed or delivered (a) to the Company, at its offices at Accelerize New Media Inc, 12121 Wilshire Blvd., Suite 322, Los Angeles, CA 90025, Attention: Mr. Brian Ross, Chief Executive Officer, and (b) to Sandgrain, at its branch office at 377 Oak Street, Suite 410, Garden City, NY 11530, facsimile: (516)-280-4289, Attn.: Mr. Shajan Ninan. The Company will give Sandgrain notice of, and an opportunity to attend, periodic meetings with the Company’s investors.

 

	
7.

	
Indemnity

 

The Company shall indemnify Sandgrain and Sandgrain shall indemnify the Company in accordance with Annex- A attached hereto.

 

	
8.

	
Termination

 

The engagement of Sandgrain hereunder may be terminated at anytime by either the Company or Sandgrain, upon ten days’ prior written notice thereof to the other party. The provisions of sections 2 (Compensation), 7 (Indemnity Annex-A) and 9 (Miscellaneous) will survive any termination of this agreement.

 

  

  

  

 

	
9.

	
Miscellaneous

 

	
  

	
a.

	
Sandgrain is acting as a finder and is not an expert on, and shall not render opinions regarding, legal, accounting, regulatory or tax matters. The Company shall consult with its other professional advisors concerning these matters before undertaking any Financing Transaction.

 

	
  

	
b.

	
No waiver, amendment or other modification of this Agreement shall be effective unless in writing and signed by each party to be bound. This Agreement shall inure to the benefit of and be binding on the Company, Sandgrain and their respective successors and assigns.  This Agreement constitutes the entire agreement between the Company and Sandgrain with respect to the subject matter hereof and supersedes any and all other prior or contemporaneous agreements, either oral or written, between the Company and Sandgrain with respect to the subject matter hereof.

 

	
  

	
c.

	
In case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Agreement shall hereunder not in any way be affected or impaired thereby.

 

	
  

	
d.

	
The Company has retained Sandgrain to act as an independent contractor, and any duties of Sandgrain arising out of its engagement shall be owed solely to the Company and to no other party.

 

	
  

	
e.

	
This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York without regard to New York’s conflict of law principles.

 

	
  

	
f.

	
Each of Sandgrain and the Company waives all right to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort or otherwise) related to or arising out of this Agreement.

 

 

The balance of this page intentionally left blank

 

  

  

  

 

Please confirm that the foregoing correctly sets forth our agreement by signing and returning to Sandgrain the enclosed counterpart copy of this Agreement.

 

 

We are delighted to accept this engagement and look forward to working with you.

 

Very truly yours,

 

SANDGRAIN SECURITIES, INC.

By:      /s/ Peter Grassel

Name: Peter D. Grassel

Title:   President

Accepted as of the date first written above

Accelerize New Media Inc.

By:           /s/ Brian Ross

Name:      Mr. Brian Ross

Title:        Chief Executive Officer

  

  

  

ANNEX-A

 

Either party shall indemnify the other party and its affiliates and their respective directors, officers, employees, representatives, agents and controlling persons (Both parties and each such person being an “Indemnified Party”) from and against any and all losses, claims, damages and liabilities, joint or several, to which such Indemnified Party may become subject under any applicable law, or otherwise, and related to, arising out of, or in connection with any untrue statement or alleged untrue statement of a material fact contained in any document furnished or made available by the party from and after March 10, 2010 (directly, through the party, or otherwise), or the omission or the alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and will reimburse each Indemnified Party for all reasonable expenses (including counsel fees and expenses) incurred in connection with the investigation of, preparation for or defense of any pending or threatened claim or any action or proceeding arising therefrom, whether or not such Indemnified Party is a party and whether or not such claim, action or proceeding is initiated or brought by or on behalf of the parties.

 

The parties will not settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding in respect of which indemnification could be sought under this Annex A (whether or not the parties or any other Indemnified Party is an actual or potential party to such claim, action or proceeding), unless such settlement, compromise or consent includes an unconditional release of each Indemnified Party from all liability arising out of such claim, action or proceeding.

 

If either party or any other Indemnified Party is requested or required to appear as a witness in any action brought by or on behalf of or against the other party not resulting from the acts/omissions of the other party, the parties will reimburse the other party for all reasonable expenses incurred in connection with such party’s appearing and preparing to appear as such a witness, including, without limitation, the reasonable fees and disbursements of its legal counsel.

 

Unless expressly modified, the provisions of this Annex-A shall continue to apply and shall remain in full force and effect regardless of any modification or termination of this Agreement or the completion of Sandgrain’s Services hereunder.ex10-2.htm

EXHIBIT 10.2

 

ESCROW AGREEMENT

This Escrow Agreement (the “Agreement”) is made as of August 27, 2010, by and among Accelerize New Media, Inc., a Delaware corporation (the “Company”), Anslow & Jaclin, LLP (the “Escrow Agent”), and Ankap Partners LP (the “Subscriber Representative”).

W I T N E S E T H:

WHEREAS, the Company is offering to the subscribers to purchase up to 6,000 individual units (“Units”), at a price of $100 per Unit, each Unit consisting of (i) 250 shares of the Company’s common stock, par value $0.001 per share and (ii) a three-year warrant to purchase up to 250 shares of the Company’s common stock at an exercise price of $0.65 per share, in reliance upon an exemption from securities registration afforded by the provisions of Section 4(2), Section 4(6), Regulation D and/or Regulation S as promulgated by the United States Securities and Exchange Commission  under the Securities Act of 1933, as amended (the “Offering”);

WHEREAS, the Company proposes to establish an escrow account (the “Escrow Account”), to which subscription monies which are received by the Escrow Agent from the prospective subscribers in connection with the Offering are to be credited, and the Escrow Agent is willing to establish the Escrow Account on the terms and subject to the conditions hereinafter set forth;

WHEREAS, the Escrow Agent has an agreement with Wachovia Bank (the “Bank”) to establish a special bank account into which the subscription monies, which are received by the Escrow Agent and credited to the Escrow Account, are to be deposited (the “Escrow Funds”);

WHEREAS, the subscribers have appointed Ankap Partners LP as the Subscriber Representative to act on behalf of the subscribers in designating the disbursement of the Escrow Funds to the Company at such time as all of the terms and conditions under this Agreement and that certain subscription agreement (the “Subscription Agreement”) have been met;

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto hereby agree as follows:

1. Appointment of Escrow Agent.  The Company and the Subscriber Representative hereby appoint Anslow & Jaclin, LLP as escrow agent to act in accordance with the terms and conditions set forth in this Agreement, and the Escrow Agent hereby accepts such appointment and agrees to establish the Bank Account on the terms and subject to the conditions hereinafter set forth.

2. Establishment of the Bank Account.  The Escrow Agent shall establish a non-interest-bearing bank account at the branch of the Bank selected by the Escrow Agent (heretofore defined as the “Bank Account”).  The purpose of the Bank Account is for (a) the deposit of the Escrow Funds by the subscribers, and (b) the disbursement of collected funds, all as described herein.

  

  

  

 

3. Delivery of the Escrow Funds.  The Company hereby directs the Escrow Agent to hold the Escrow Funds received in the Offering, only to be disbursed by the Escrow Agent as provided in this Agreement and the terms of the Subscription Agreement.  The Escrow Funds shall be held by the Escrow Agent in the Bank Account as follows:

Bank Address:                     Wachovia Bank NA

800 West Main Street

Freehold, New Jersey 07726

ABA No.:                               031201467

Account:                                Anslow & Jaclin LLP Attorney Trust Account

Account No.:                         2000013292968

Attn:                                       Matthew C. Carroll, Esq.

Reference:                             Accelerize New Media

4. Disbursements from the Bank Account.   The Escrow Agent shall hold the Escrow Funds in accordance with the terms of this Agreement and the Subscription Agreement. The Escrow Agent shall receive a disbursement approval form signed by the Subscriber Representative for any disbursements made from the Escrow Account, provided, however, that the Subscriber Representative shall not give such approval if the funds in the Escrow Account never reach the Minimum Purchase Offering (as defined in the Subscription Agreement) of $300,000. If the entire Escrow Funds are not disbursed within six months from the date hereof, the balance of the Escrow Funds will be returned to the subscribers accordingly.

5. Duration. This Agreement shall terminate upon the disbursement of the entire Escrow Funds in accordance with Section 4.

6. Interpleader.  Should any controversy arise among the parties hereto with respect to this Agreement or with respect to the right to receive the Escrow Funds, the Escrow Agent shall have the right to consult counsel and/or to institute an appropriate interpleader action to determine the rights of the parties.  The Escrow Agent is also hereby authorized to institute an appropriate interpleader action upon receipt of a written letter of direction executed by the parties so directing Escrow Agent.  If the Escrow Agent is directed to institute an appropriate interpleader action, it shall institute such action not prior to thirty (30) days after receipt of such letter of direction and not later than sixty (60) days after such date.  Any interpleader action instituted in accordance with this Section 6 shall be filed in any court of competent jurisdiction in New York, New York, and the Escrow Funds in dispute shall be deposited with the court and in such event Escrow Agent shall be relieved of and discharged from any and all obligations and liabilities under and pursuant to this Agreement with respect to the Escrow Funds.

7. Exculpation and Indemnification of Escrow Agent.

  

  

  

 

(a) The Escrow Agent is not a party to, and is not bound by or charged with notice of any agreement out of which this escrow may arise. The Escrow Agent acts under this Agreement as a depositary only and is not 

responsible or liable in any manner whatsoever for the sufficiency, correctness, genuineness or validity of the subject matter of the escrow, or any part thereof, or for the form or execution of any notice given by any other party hereunder, or for the identity or authority of any person executing any such notice. The Escrow Agent will have no duties or responsibilities other than those expressly set forth herein.  The Escrow Agent will be under no liability to anyone by reason of any failure on the part of any party hereto (other than the Escrow Agent) or any maker, endorser or other signatory of any document to perform such person’s or entity’s obligations hereunder or under any such document.  Except for this Agreement and instructions to the Escrow Agent pursuant to the terms of this Agreement, the Escrow Agent will not be obligated to recognize any agreement between or among any or all of the persons or entities referred to herein, notwithstanding its knowledge thereof.

(b) The Escrow Agent will not be liable for any action taken or omitted by it, or any action suffered by it to be taken or omitted, in good faith and in the exercise of its own best judgment, and may rely conclusively on, and will be protected in acting upon, any order, notice, demand, certificate, or opinion or advice of counsel (including counsel chosen by the Escrow Agent), statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is reasonably believed by Escrow Agent to be genuine and to be signed or presented by the proper person or persons. The duties and responsibilities of the Escrow Agent hereunder shall be determined solely by the express provisions of this Agreement and no other or further duties or responsibilities shall be implied, including, but not limited to, any obligation under or imposed by any laws of the State of New York upon fiduciaries.

(c) The Escrow Agent will be indemnified and held harmless, jointly and severally, by the Company and the subscribers, from and against any expenses, including reasonable attorneys’ fees and disbursements, damages or losses suffered by the Escrow Agent in connection with any claim or demand, which, in any way, directly or indirectly, arises out of or relates to this Agreement or the services of Escrow Agent hereunder; except, that if the Escrow Agent is guilty of willful misconduct, fraud or gross negligence under this Agreement, then the Escrow Agent will bear all losses, damages and expenses arising as a result of such willful misconduct, fraud or gross negligence. Promptly after the receipt by the Escrow Agent of notice of any such demand or claim or the commencement of any action, suit or proceeding relating to such demand or claim, the Escrow Agent will notify the other parties hereto in writing.  For the purposes hereof, the terms “expense” and “loss” will include all amounts paid or payable to satisfy any such claim or demand, or in settlement of any such claim, demand, action, suit or proceeding settled with the express written consent of the parties hereto, and all costs and expenses, including, but not limited to, reasonable attorneys’ fees and disbursements, paid or incurred in investigating or defending against any such claim, demand, action, suit or proceeding.  The provisions of this Section 7 shall survive the termination of this Agreement.

8. Fees and Expenses. Upon closing of the Offering, the Company shall pay to the Escrow Agent a fee of $1,250 as reimbursement for agreeing to perform the services set forth in this Agreement.  In addition, the Company agrees to pay the Escrow Agent’s costs and expenses including reasonable attorney’s fees in the event of any dispute or litigation threatened or commenced which requires the Escrow Agent in its opinion to refer such matter to its attorneys.  Escrow Agent will incur no liability for any delay reasonably required to obtain such advice of counsel.

  

  

  

 

9. Resignation of Escrow Agent.  At any time, upon five (5) days’ written notice to the Company, the Escrow Agent may resign and be discharged from its duties as escrow agent hereunder.  As soon as practicable after its resignation, the Escrow Agent will promptly turn over to a successor escrow agent appointed by the Company the Escrow Funds held hereunder upon presentation of a document appointing the new escrow agent and evidencing its acceptance thereof.  If, by the end of the five day period following the giving of notice of resignation by the Escrow Agent, the Company shall have failed to appoint a successor escrow agent, the Escrow Agent may interplead the Escrow Funds into the registry of any court having jurisdiction.

10. Records.  The Escrow Agent shall maintain accurate records of all transactions hereunder.  Promptly after the termination of this Agreement or as may reasonably be requested by the parties hereto from time to time before such termination, the Escrow Agent shall provide the parties hereto, as the case may be, with a complete copy of such records, certified by the Escrow Agent to be a complete and accurate account of all such transactions.  The authorized representatives of each of the parties hereto shall have access to such books and records at all reasonable times during normal business hours upon reasonable notice to the Escrow Agent.

11. Notice.  All notices, communications and instructions required or desired to be given under this Agreement must be in writing and shall be deemed to be duly given if sent by registered or certified mail, return receipt requested, or overnight courier to the following addresses:

If to Escrow Agent:

Anslow & Jaclin, LLP

195 Route 9 South, 2nd Floor

Manalapan, NJ 07726

Attention: Matthew C. Carroll, Esq.

If to the Company:

Accelerize New Media, Inc.

12121 Wilshire Blvd., Suite 322

Los Angeles, CA 90025

Attention: Brian Ross, Chief Executive Officer

If to the Subscriber Representative:

 

Ankap Partners LP

570 Lexington Avenue, 12th Floor

New York, NY 10022

  

  

  

 

or to such other address and to the attention of such other person as any of the above may have furnished to the other parties in writing and delivered in accordance with the provisions set forth above.

12. Execution in Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile execution and delivery of this Agreement is legal, valid and binding for all purposes.

13. Assignment and Modification.  This Agreement and the rights and obligations hereunder of any of the parties hereto may not be assigned without the prior written consent of the other parties hereto. Subject to the foregoing, this Agreement will be binding upon and inure to the benefit of each of the parties hereto and their respective successors and permitted assigns. No other person will acquire or have any rights under, or by virtue of, this Agreement.  No portion of the Escrow Funds shall be subject to interference or control by any creditor of any party hereto, or be subject to being taken or reached by any legal or equitable process in satisfaction of any debt or other liability of any such party hereto prior to the disbursement thereof to such party hereto in accordance with the provisions of this Agreement. This Agreement may be changed or modified only in writing signed by all of the parties hereto.

14. Applicable Law. This Agreement shall be governed by and construed with the laws of the State of New York applicable to contracts made and to be performed therein.  Any litigation concerning the subject matter of this Agreement shall be exclusively prosecuted in the state or federal courts located in New York, New York, and all parties consent to the exclusive jurisdiction and venue of those courts.

15. Headings. The headings contained in this Agreement are for convenience of reference only and shall not affect the construction of this Agreement.

16. Attorneys’ Fees. If any action at law or in equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys’ fees from the other party (unless such other party is the Escrow Agent), which fees may be set by the court in the trial of such action or may be enforced in a separate action brought for that purpose, and which fees shall be in addition to any other relief that may be awarded.

[-Signature Page Follows-]

  

  

  

           IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year first above written.

ESCROW AGENT

ANSLOW & JACLIN LLP

By:  /s/ Matthew C. Carroll

        Name: Matthew C. Carroll

        Title:   Associate

COMPANY

ACCELERIZE NEW MEDIA, INC.

By:  /s/ Brian Ross

        Name: Brian Ross

        Title:   CEO

SUBSCRIBER REPRESENTATIVE

ANKAP PARTNERS LP

By:  /s/ Robert Anderson

        Name:  Robert Anderson

        Title:    Managing Member

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