LOCK-UP AGREEMENT
EXHIBIT
10.7
This
LOCK-UP AGREEMENT (the “Agreement”) is made
as of the ___ day of _____, 2009, by _______________ (the “Holder”), maintaining
an address at __________________________, in connection with his or its
ownership of shares of CrowdGather, Inc., a Nevada corporation (the “Company”).
WHEREAS,
the Company requires substantial additional funds to effectuate its business
plan; expand its online reach and presence; develop and enhance its
technological capabilities; file, prosecute, defend, and enforce its
intellectual property rights; and hire and retain key employees;
WHEREAS,
the Company has negotiated certain terms with one or more investors, who require
the execution of this Agreement as a condition precedent to their providing
funds to the Company;
WHEREAS,
the holder is willing to enter into this Agreement in connection with such
investment on the terms provided herein;
NOW,
THEREFORE, in consideration of these presents and for such other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, The Holder agrees as follows:
1. Background.
a. The
Holder is the beneficial owner of the amount of shares of the Common Stock,
$.001 par value, of the Company (the “Common Stock”)
designated on the signature page hereto.
b. The
Holder acknowledges that the Company has entered into or will enter into at or
about the date hereof (the “Offering”) one or
more agreements including one or more Subscription Agreements with one or more
subscribers (collectively, the “Subscribers”),
effective as of the date hereof for shares of the Company’s Series A Preferred Stock
(the “Series A Preferred”). The Holder understands that, as a
condition to closing the Offering, the Subscribers have required, and the
Company has agreed to obtain on behalf of the Subscribers, an agreement from the
Holder to refrain from selling any securities of the Company from the initial
Closing Date1 (as that term is defined in the Subscription Agreements)
until the first anniversary thereof. The Holder has entered into this
Agreement in order to induce the Subscribers to close the transactions
contemplated by such Subscription Agreements.
2. Sale
Restriction.
a. The
Holder hereby agrees that during the Restriction Period, without the consent of
the Required Holders (as that term is defined in the Subscription Agreements),
the Holder will not sell, transfer, or otherwise dispose of any shares of Common
Stock that the Holder owns or has a right to acquire as of the date hereof or
during the Restriction Period, other than in connection with an offer made to
all stockholders of the Company in connection with merger, consolidation, or
similar transaction involving the Company. The Holder further agrees
that the Company is authorized to and the Company agrees to place “stop orders”
on its books to prevent any transfer of shares of Common Stock or other
securities of the Company held by the Holder in violation of this
Agreement. The Company agrees to use commercially reasonable efforts
not to allow any transaction inconsistent with this Agreement.
1 The initial Closing Date shall be the
date that not less than $1,000,000 of gross subscription proceeds are
transmitted by wire transfer or otherwise credited to or for the benefit of the
Company and each such Subscriber shall have purchased, and the Company shall
have sold to each such Subscriber, that number of shares of Series A Preferred
as are set forth next to each such Subscriber’s name on its respective
Subscription Agreement at a per-share purchase price $.35.
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b. Notwithstanding
the foregoing restrictions on transfer, the Holder may, at any time and from
time to time during the Restriction Period, transfer all or a portion of the
shares of Common Stock (i) as bona fide gifts or transfers by will or intestacy
and (ii) to any trust for the direct or indirect benefit of the undersigned or
the immediate family of the Holder, provided that any such transfer shall not
involve a disposition for value; provided, that, in the case of any gift or
transfer described in clauses (i) and (ii), each donee or transferee agrees in
writing to be bound by the terms and conditions contained herein in the same
manner as such terms and conditions apply to the undersigned.
3. Miscellaneous.
a. At
any time, and from time to time, after the signing of this Agreement, the Holder
will execute such additional instruments and take such action as may be
reasonably requested by the Subscribers to carry out the intent and purposes of
this Agreement.
b. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Nevada without regard to principles of conflicts of
laws. Any action brought by either party against the other concerning
the transactions contemplated by this Agreement shall be brought only in the
state courts of Nevada or in the federal courts located in the state of
Nevada. The parties to this Agreement hereby irrevocably waive any
objection to jurisdiction and venue of any action instituted hereunder and shall
not assert any defense based on lack of jurisdiction or venue or based upon
forum non
conveniens. The parties executing this Agreement
and other agreements referred to herein or delivered in connection herewith
agree to submit to the in personam jurisdiction of such courts and hereby
irrevocably waive trial by jury. The prevailing party shall be
entitled to recover from the other party its reasonable attorney’s fees and
costs. In the event that any provision of this Agreement or any other
agreement delivered in connection herewith is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of any
agreement.
c. Notice to the
Company. All notices, demands, requests, consents, approvals,
and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery or facsimile, addressed as set
forth below or to such other address as such party shall have specified most
recently by written notice. Any notice or other communication
required or permitted to be given hereunder shall be deemed effective (a) upon
hand delivery or delivery by facsimile, with accurate confirmation generated by
the transmitting facsimile machine, at the address or number designated below
(if delivered on a business day during normal business hours where such notice
is to be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such
notice is to be received) or (b) on the second business day following the date
of mailing by express courier service, fully prepaid, addressed to such address,
or upon actual receipt of such mailing, whichever shall first occur. The
addresses for such communications shall be: (i) if to the Company,
to: CrowdGather, Inc., 00000 Xxxxxxx Xxxx., Xxxxx 000, Xxxxxxxx
Xxxxx, Xxxxxxxxxx 00000, attention: Xxxxxx Xxxxxxx, CEO, with a copy
by facsimile only to: Xxxxx & Xxxxxxxxx llp, 000 Xxxxx Xxxx.,
Xxxxx 000, Xxxxx Xxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxx,
Esq., facsimile: (000) 000-0000, (ii) if to the Holder, to: the address and
facsimile number indicated on first page of this Lock-up Agreement.
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d. Notice to the
Holder. The Holder hereby irrevocably waives personal service
of process and consents to process being served in any suit, action, or
proceeding in connection with this Agreement by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to the Holder at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any other manner permitted by
law. The Holder irrevocably appoints CrowdGather, Inc., as its true
and lawful agent for service of process upon whom all processes of law and
notices may be served and given in the manner described above; and such service
and notice shall be deemed valid personal service and notice upon the Holder
with the same force and validity as if served upon the Holder.
e. The
restrictions on transfer described in this Agreement are in addition to and
cumulative with any other restrictions on transfer otherwise agreed to by the
Holder or to which the Holder is subject to by applicable law.
f. This
Agreement shall be binding upon the Holder, its legal representatives,
successors, and assigns.
g. This
Agreement may be signed and delivered by facsimile and such facsimile signed and
delivered shall be enforceable.
h. The
Company agrees not to take any action or allow any act to be taken that would be
inconsistent with this Agreement.
i. The
Holder acknowledges that this Lock-up Agreement is being entered into for the
benefit of the Subscribers identified in the Subscription Agreements dated
between the date hereof and July 15, 2009, among the Company and the
Subscribers, may be enforced by the Subscribers and may not be amended without
the written consent of Subscribers then-holding a majority of the Series A
Preferred shares issued by the Company in the Offering, which consent may be
withheld, delayed, or denied for any reason or for no reason.
[Signatures
on following page.]
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IN WITNESS WHEREOF, and
intending to be legally bound hereby, the Holder has executed this Agreement as
of the day and year first above written.
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THE
HOLDER:
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| Name of the Holder | |||
| Number of Shares of Common Stock Actually Owned | |||
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Number
of Shares of Common Stock Beneficially Owned, if different than Number of
Shares Actually Owned (Describe such shares and related instruments on
next page.)
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THE
COMPANY:
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| CrowdGather, Inc., a Nevada corporation | |||
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By:
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Xxxxxx
Xxxxxxx, its Chief Executive Officer
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AMENDMENT
TO LOCK-UP AGREEMENT
This
AMENDMENT TO LOCK-UP AGREEMENT (the “Amendment”) is made
as of the ___ day of _____, 2009, by _______________ (the “Holder”), maintaining
an address at __________________________, in connection with the previously
executed Lock-Up Agreement (the “Lock-Up Agreement”)
relating to shares of CrowdGather, Inc., a Nevada corporation (the “Company”).
WHEREAS,
the Company has negotiated certain terms with one or more investors, which terms
relate to their purchase of debt instruments and warrants for the purchase of
equity of the Company, rather than a purchase of preferred equity of the
Company;
WHEREAS,
the Holder previously executed and delivered to the Company a Lock-Up Agreement
in contemplation of such preferred equity transaction;
NOW,
THEREFORE, in consideration of these presents and for such other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, The Holder agrees as follows:
1. Amendment. All references to
“shares of the Company’s Series A Preferred Stock” or “Series A Preferred”
contained in the Lock-Up Agreement shall be deemed to refer to the “Company’s 8%
Secured Straight Convertible Debentures” and all related conforming changes,
e.g., deletion of references to
per share purchase prices, shall also be deemed to be amended
hereby.
2. Miscellaneous.
a. All
miscellaneous provisions of the Lock-Up Agreement are incorporated herein as if
set forth in full hereat.
b. Except
as set forth herein, no other provisions of the Lock-Up Agreement are being
amended hereby.
c. This
Amendment shall be binding upon the Holder, its legal representatives,
successors, and assigns.
IN WITNESS WHEREOF, and intending to be
legally bound hereby, the Holder has executed this Amendment as of the day and
year first above written.
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THE
HOLDER:
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| Name of the Holder | |||
| Number of Shares of Common Stock Actually Owned | |||
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Number
of Shares of Common Stock Beneficially Owned, if different than Number of
Shares Actually Owned (Describe such shares and related instruments on
next page.)
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THE
COMPANY:
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CrowdGather,
Inc., a Nevada corporation
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By:
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Xxxxxx
Xxxxxxx, its Chief Executive Officer
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