EXHIBIT 10.1
NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT ("Agreement") is made and entered into on
April 13, 2015, by and between CrowdGather, Inc., a Nevada corporation (the
"Company"), and Xxxxxx Xxxxxxx (the "Lender").
WHEREAS, the Lender understands that a number of other lenders will
lend up to Two Million Dollars ($2,000,000) to the Company pursuant to
agreements substantially similar to this Agreement.
WHEREAS, in exchange for a loan from the Lender, the Company will issue
a Secured Promissory Note, in the form attached hereto as Exhibit A (the
"Note").
WHEREAS, in connection with the issuance of the Note, the Company and
the Lender will enter into a Security Agreement, in the form attached hereto as
Exhibit C (the "Security Agreement") which shall secure the performance of the
obligations of the Company hereunder.
NOW THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and Lender hereby agree
as follows:
1. Amount and Terms of the Note.
1.1 Promissory Note. The Lender will lend to the Company Fifty
Thousand Dollars ($50,000) in exchange for the Note.
1.2 Closing. The closing (the "Closing") of the purchase of the
Note for the consideration shall take place at the offices of the Company on the
date and time when this Agreement has been signed by both parties. At the
Closing, the Lender shall deliver the consideration to the Company and the
Company shall deliver to the Lender an executed Note in return for the
consideration provided to the Company.
2. Representations and Warranties of the Company. In connection with the
transactions provided for herein, the Company hereby represents and warrants to
the Lender that:
2.1 Organization, Good Standing, and Qualification. The Company is
a corporation duly organized, validly existing, and in good standing under the
laws of the State of Nevada and has all requisite corporate power and authority
to carry on its business as now conducted and as proposed to be conducted.
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2.2 Authorization. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
the Agreement and otherwise to carry out its obligations hereunder. The
execution and delivery of the Agreement by the Company and the consummation by
it of the transactions contemplated thereby have been duly authorized by all
necessary action on the part of the Company and no further action is required by
the Company, its board of directors or its shareholders in connection therewith.
3. Representations and Warranties of the Lender. In connection with the
transactions provided for herein, the Lender hereby represents and warrants to
the Company that:
3.1 Authorization. This Agreement constitutes the Lender's valid
and legally binding obligation, enforceable in accordance with its terms. Lender
represents that it has full power and authority to enter into and to consummate
the transactions contemplated by the Agreement and otherwise to carry out its
obligations hereunder.
3.2 Purchase Entirely for Own Account. Lender acknowledges that
this Agreement is made with Lender in reliance upon Lender's representation to
the Company that the Note will be acquired for investment for Lender's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that Lender has no present intention of
selling, granting any participation in, or otherwise distributing the same. By
executing this Agreement, Lender further represents that Lender does not have
any contract, undertaking, agreement, or arrangement with any person to sell,
transfer, or grant participation to such person or to any third person, with
respect to the Note.
3.3 Access to Information. Lender acknowledges that it has had the
opportunity to review the all reports, schedules, forms, statements and other
documents required to be filed by the Company under the Securities Exchange Act
of 1934, as amended, and has been afforded (i) the opportunity to ask such
questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and its subsidiaries
and their respective financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information that
the Company possesses or can acquire without unreasonable effort or expense.
Lender acknowledges that it has received all the information it considers
necessary or appropriate for deciding whether to acquire the Securities.
3.4 Investment Experience. Lender is an investor in securities of
companies in the early stage and acknowledges that it can bear the economic risk
of its investment, is able to afford a complete loss of such investment, and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Securities.
Lender also represents it has not been organized solely for the purpose of
acquiring the Securities.
3.5 Accredited Investor. At the time Lender was offered the
Securities, it was, and at the date hereof it is, and it will be, an "accredited
investor" as defined in Rule 501(a) of Regulation D promulgated pursuant to the
Securities Act of 1933, as amended (the "Act").
3.6 Restricted Securities. Lender understands that the Securities
are characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering based upon the exemption from such registration
requirements for non-public offerings pursuant to Rule 506 of Regulation D under
the Act; and that such Securities may not be sold or otherwise transferred
unless they have been first registered under the Act and all applicable state
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securities laws, or unless exemptions from such registration provisions are
available with respect to said resale or transfer of such securities. In this
connection, Lender represents that it is familiar with SEC Rule 144, as
presently in effect, and understands the resale limitations imposed thereby and
by the Act. The Lender acknowledges that the Company was previously an issuer
described in paragraph (i)(1)(i) of Rule 144 under the Act and is subject to the
provisions of Rule 144(i).
3.7 Further Limitations on Disposition. Without in any way limiting
the representations set forth above, Lender further agrees not to make any
disposition of all or any portion of the Securities unless and until the
transferee has agreed in writing for the benefit of the Company to be bound by
this Section 3 and:
(a) There is then in effect a registration statement under the
Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or (b) (i) Lender shall have
notified the Company of the proposed disposition and shall have furnished the
Company with a detailed statement of the circumstances surrounding the proposed
disposition, and (ii) Lender shall have furnished the Company with an opinion of
counsel, satisfactory to the Company that such disposition will not require
registration of such shares under the Act.
3.8 Legends. Lender understands that the Securities will bear a
legend in substantially the following form:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT
TO RULE 144 UNDER SUCH ACT."
3.9 No Review. Lender understands that no federal or state agency
has approved or disapproved the Securities, passed upon or endorsed the merits
of the Company's offering, or made any finding or determination as to the
appropriateness of the Securities for investment.
3.10 General Solicitation. Lender is not purchasing the Securities
as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media
or broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.
3.11 Residency. Lender is a resident of that jurisdiction specified
on the signature page hereto.
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4. Miscellaneous.
4.1 Successors and Assigns. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties. Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
4.2 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of California, excluding that body of law
relating to conflict of laws.
4.3 Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other parties; provided that a facsimile or portable
document format ("PDF") signature shall be considered due execution and shall be
binding upon the signatory thereto with the same force and effect as if the
signature were an original, not a facsimile or PDF signature.
4.4 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
4.5 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to such party at the address set forth on the
signature page hereto.
4.6 Finder's Fee. Each party represents that it neither is nor
will be obligated for any finder's fee or commission in connection with this
transaction.
4.7 Entire Agreement; Amendments and Waivers. This Agreement and
the Note, constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof and thereof. Any term of the
Agreement may be amended and the observance of any term of the Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and the Holder.
4.8 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized signatories as of the date first
indicated above.
COMPANY
CrowdGather, Inc.
By:
Name: Xxxxxx Xxxxxxx
Its: President
00000 Xxxxxxx Xxxx. Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000
LENDER
Xxxxxx Xxxxxxx
By:
Name:
Its:
Address for Notice to Lender:
00000 Xxxxxxx Xxxx. Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000
Email Address: _________________________
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