--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Exhibit 10.1
 
SECURITIES PURCHASE AGREEMENT
 
 
THIS SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of October __,
2013, is made by and among CrowdGather, Inc., a Nevada corporation (the
“Company”), and the purchasers identified on the signature page hereto (the
“Purchaser”).
 
WHEREAS, the Company and the Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the Securities Act of 1933, as amended (the “Securities Act”) and Regulation
S promulgated thereunder;
 
WHEREAS, the Company has authorized a new series of its Preferred Stock, par
value $.001 per share, which shall be called the Company’s Series B Convertible
Preferred Stock (the “Preferred Stock”), which shall be convertible into shares
of the Company’s common stock, par value $.001 per share (the “Common Stock”)
(as so converted, the “Conversion Shares”) in accordance with the terms of the
Company’s Certificate of Designation in the form attached hereto as Exhibit A
(the “Certificate of Designation”); and
 
WHEREAS, the Purchaser wishes to purchase, upon the terms and conditions stated
in this Agreement, an aggregate of four hundred thousand (400,000) shares of the
Preferred Stock (the “Preferred Shares”) and (ii) common stock purchase warrants
to purchase ten (10) shares of Common Stock (as exercised collectively, the
“Warrant Shares”) for every one (1) share of Preferred Stock purchased by the
Purchaser on the Closing Date (as defined below) with an exercise term equal to
five (5) years (the “Warrants”), and such Warrants to be substantially in the
form attached hereto as Exhibit B;
 
 
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 the Purchaser hereby
agree as follows:
 
SECTION 1.
PURCHASE AND SALE OF PREFERRED SHARES AND WARRANTS
 
1.1. Purchase and Sale. Subject to satisfaction (or waiver) of the conditions
set forth in Sections 5 and 6, the Company shall issue and sell to the Purchaser
and the Purchaser agrees to purchase from the Company four hundred thousand
(400,000) Preferred Shares and the Warrants (the “Closing”). The purchase price
(the “Purchase Price”) of the 400,000 Preferred Shares and the related Warrants
shall be Four Hundred Thousand Dollars ($400,000.00).
  
1.2. The Closing Date. The date and time of the Closing (the “Closing Date”)
shall be 10:00 a.m., California Time, October __, 2013, subject to satisfaction
(or waiver) of the conditions to the Closing set forth in Sections 5 and 6 (or
such later date as is mutually agreed to by the Company and the Purchaser in
writing), provided that either party may terminate this Agreement in the event
that the Closing shall not have occurred within thirty (30) days of the date of
this Agreement (or such later date as is mutually agreed to by the Company and
the Purchaser in writing). The Closing shall occur on the Closing Date at the
offices of the Company.
 
1.3. Form of Payment.  On the Closing Date the Purchaser shall pay the Purchase
Price in cash to the Company, via wire transfer or a certified check, for the
Preferred Shares to be issued and sold to the Purchaser, and the Company shall
deliver to the Purchaser stock certificates (in the denominations as the
Purchaser shall request) (the “Stock Certificates”) representing the number of
the Preferred Shares which the Purchaser is then purchasing duly executed on
behalf of the Company and registered on the books of the Company in the name
of  the Purchaser, and all Warrants that the Purchaser shall have purchased in
connection with the Closing.
 

 
1

--------------------------------------------------------------------------------

 
SECTION 2.
PURCHASERS’ REPRESENTATIONS AND WARRANTIES
 
2.1 Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants as of the date hereof and as of the Closing Date to the
Company as follows (unless as of a specific date therein):
 
(a) Investment Purpose. The Purchaser (i) is acquiring the Preferred Shares and
Warrants (ii) upon conversion of the Preferred Shares, will acquire the
Conversion Shares  then issuable, (iii) upon exercise of the Warrants, will
acquire the Warrant Shares issuable upon exercise thereof (the Preferred Shares,
the Warrants, the Conversion Shares and the Warrant Shares, collectively are
referred to herein as the “Securities”), for its own account for investment only
and not with a view towards, or for resale in connection with, the public sale
or distribution thereof, except pursuant to sales registered or exempted under
the Securities Act; provided, however, that by making the representations
herein, the Purchaser does not agree to hold any of the Securities for any
minimum or other specific term and reserves the right to dispose of the
Securities at any time in accordance with or pursuant to a registration
statement or an exemption under the Securities Act.
 
(b) Purchaser Status. The Purchaser is an “accredited investor” as that term is
defined in Rule 501(a) of Regulation D as promulgated by the United States
Securities and Exchange Commission under the Act or (ii) a “qualified
institutional buyer” as defined in Rule 144A(a) under the Securities Act.  The
Purchaser is not required to be registered as a broker-dealer under Section 15
of the Exchange Act.

(c) Experience of the Purchaser.  The Purchaser, either alone or together with
its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities, and has so evaluated the
merits and risks of such investment.  The Purchaser is able to bear the economic
risk of an investment in the Securities and, at the present time, is able to
afford a complete loss of such investment.

(d) General Solicitation.  The Purchaser 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.

(e) Reliance on Regulation S

(i) The Purchaser understands and acknowledges that (A) the Securities acquired
pursuant to this Agreement have not been registered under the Securities Act and
are being sold in reliance upon an exemption from registration afforded by
Regulation S; and that such Securities have not been registered with any state
securities commission or authority; (B) the Securities are and will be
“restricted securities”, as said term is defined in Rule 144 of the Rules and
Regulations promulgated under the Securities Act; (C) pursuant to the
requirements of Regulation S, the Securities may not be transferred, sold or
otherwise exchanged unless in compliance with the provisions of Regulation S
and/or pursuant to registration under the Securities Act, or pursuant to an
available exemption thereunder; and (D) other than as set forth in this
Agreement, the Company is under no obligation to register the Securities under
the Securities Act or any state securities law, or to take any action to make
any exemption from any such registration provisions available.

(ii) (A) The Purchaser is not a U.S. person and is not acquiring the Securities
for the account of any U.S. person; (B) if a corporation, it is not organized or
incorporated under the laws of the United States; (C) if a corporation, no
director or executive officer is a national or citizen of the United States; and
(D) it is not otherwise deemed to be a “U.S. Person” within the meaning of
Regulation S.

(iii) The Purchaser is purchasing the Securities for its own account and risk
and not for the account or benefit of a U.S. Person as defined in Regulation S
and no other person has any interest in or participation in the Securities or
any right, option, security interest, pledge or other interest in or to the
Securities. The Purchaser understands, acknowledges and agrees that it must bear
the economic risk of its investment in the Securities for an indefinite period
of time and that prior to any such offer or sale, the Company may require, as a
condition to effecting a transfer of the Securities, an opinion of counsel,
acceptable to the Company, as to the registration or exemption therefrom under
the Securities Act and any state securities acts, if applicable.

 
2

--------------------------------------------------------------------------------

 
(iv) The Purchaser acknowledges that the Securities will bear a legend in
substantially the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN OFFERED AND SOLD IN AN
“OFFSHORE TRANSACTION” IN RELIANCE UPON REGULATION S AS PROMULGATED BY THE
SECURITIES AND EXCHANGE COMMISSION. ACCORDINGLY, THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
“SECURITIES ACT”) AND MAY NOT BE TRANSFERRED OTHER THAN IN ACCORDANCE WITH
REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM REGISTRA­TION UNDER THE SECURITIES ACT, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY.  THE SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE THE SUBJECT
OF HEDGING TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN COMPLIANCE
WITH THE SECURITIES ACT.

The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped, if (i) such Securities are registered for sale under the Securities
Act, (ii) in connection with a sale transaction, such holder provides the
Company with an opinion of counsel, in a form reasonably satisfactory to the
Company, to the effect that a public sale, assignment or transfer of such
Securities may be made without registration under the Securities Act, or (iii)
such holder provides the Company with reasonable assurances that such Securities
can be sold pursuant to Rule 144. The Purchaser acknowledges, covenants and
agrees to sell Securities represented by a certificate(s) from which the legend
has been removed, only pursuant to (i) a registration statement effective under
the Securities Act, or (ii) advice of counsel to such holder that such sale is
exempt from the registration requirements of Section 5 of the Securities Act.

(f) Access to Information. The Purchaser acknowledges that it has had the
opportunity to review the SEC Reports (as defined below) 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
Subsidiaries (as defined below) 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.  The Purchaser acknowledges that the Company was
previously an issuer described in paragraph (i)(1)(i) of Rule 144 under the
Securities Act and is subject to the provisions of Rule 144(i).

(g) No Governmental Review. The Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.
 
(h) Transfer or Resale. The Purchaser understands that: (i) the Securities have
not been and are not being registered under the Securities Act or any state
securities laws, and may not be offered for sale, sold, assigned or transferred
unless (A) subsequently registered thereunder, (B) the Purchaser shall have
delivered to the Company an opinion of counsel, in a form reasonably
satisfactory to the Company, to the effect that such Securities to be sold,
assigned or transferred may be sold, assigned or transferred pursuant to an
exemption from such registration, or (C) the Purchaser provides the Company with
reasonable assurance that such Securities can be sold, assigned or transferred
pursuant to Rule 144 promulgated under the Securities Act (or a successor rule
thereto) (“Rule 144”); (ii) any sale of the Securities made in reliance on Rule
144 may be made only in accordance with the terms of Rule 144 and further, if
Rule 144 is not applicable, any resale of the Securities under circumstances in
which the seller (or the person through whom the sale is made) may be deemed to
be an underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules and
regulations of the SEC thereunder. Notwithstanding the foregoing, the Securities
may be pledged in connection with a bona fide margin account or other loan
secured by the Securities.
 
 
3

--------------------------------------------------------------------------------

 
(i) Authorization; Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Purchaser and are valid and
binding agreements of the Purchaser enforceable against the Purchaser in
accordance with their terms, subject as to enforceability to general principles
of equity and to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the
enforcement of applicable creditors’ rights and remedies.
 
(j) Residency. The Purchaser is a resident of that jurisdiction specified on the
signature page hereto.
 
SECTION 3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
3.1 Representations and Warranties of the Company. Except as set forth in the
Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof
and shall qualify any representation or otherwise made herein to the extent of
the disclosure contained in the corresponding section of the Disclosure
Schedules, the Company hereby makes the following representations and warranties
to the Purchaser:
 
(a) Organization and Qualification. The Company and its “Subsidiaries” (which
for purposes of this Agreement means any entity in which the Company, directly
or indirectly, owns the capital stock or holds an equity or similar interest) (a
complete list of which is set forth in Schedule 3.1(a)) are corporations duly
organized and validly existing in good standing under the laws of the
jurisdiction in which they are incorporated, and have the requisite corporate
power and authorization to own properties and to carry on their business as now
being conducted. Each of the Company and its Subsidiaries is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which its ownership of property or the nature of the business conducted by it
makes such qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not have a Material Adverse Effect. As
used in this Agreement, “Material Adverse Effect” means any material adverse
effect on the business, properties, assets, operations, results of operations,
financial condition or prospects of the Company and its Subsidiaries taken as a
whole, or on the transactions contemplated hereby or by the agreements and
instruments to be entered into in connection herewith, or on the authority or
ability of the Company to perform its obligations under the Transaction
Documents (as defined below) or the Certificate of Designation.
 
(b) Authorization; Enforcement; Compliance with Other Instruments. (i) The
Company has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement, the Warrants and each of the other
agreements entered into by the parties hereto in connection with the
transactions contemplated by this Agreement (collectively, the “Transaction
Documents”), and to issue the Securities in accordance with the terms hereof and
thereof, (ii) the execution and delivery of the Transaction Documents by the
Company and the execution and filing of the Certificate of Designation by the
Company and the consummation by it of the transactions contemplated hereby and
thereby, including without limitation the issuance of the Preferred Shares and
the Warrants and the reservation for issuance and the issuance of the Conversion
Shares and the Warrant Shares issuable upon conversion or exercise thereof, have
been duly authorized by the Company’s Board of Directors and no further consent
or authorization is required by the Company, its Board of Directors or its
stockholders, (iii) the Transaction Documents have been duly executed and
delivered by the Company, and (iv) this Agreement and, when executed and
delivered, the other Transaction Documents, constitute the valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except as such enforceability may be limited by general principles
of equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement
of creditors’ rights and remedies.
 
(c) Capitalization. The authorized capital stock of the Company consists of (i)
975,000,000 shares of Common Stock, of which as of the date
hereof 58,372,708 shares are issued and outstanding; 12,000,000 shares are
issuable and reserved for issuance pursuant to Company stock option and/or
purchase plans; 12,578,513 shares are issuable and reserved for issuance
pursuant to outstanding warrants; 12,000,000 shares for issuance upon the
conversion of outstanding Preferred Stock and no shares are issuable and
reserved for issuance pursuant to securities (other than the Preferred Shares
and the Warrants) exercisable or exchangeable for, or convertible into, shares
of Common Stock and (ii) 25,000,000 shares of preferred stock, of which as of
the date hereof, 600,000 shares of the Preferred Stock are issued and
outstanding. All of such outstanding shares have been and are, or upon issuance
will be, validly issued, fully paid and nonassessable.
 
 
4

--------------------------------------------------------------------------------

 
Except as disclosed in Schedule 3.1(c) and in the SEC Reports, (i) no shares of
the Company’s capital stock are subject to preemptive rights or any other
similar rights or any liens or encumbrances suffered or permitted by the
Company; (ii) there are no outstanding debt securities issued by the
Company; (iii) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
Subsidiaries; (iv) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of
their securities under the Securities Act; (v) there are no outstanding
securities of the Company or any of its Subsidiaries which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to redeem a security of the Company or any of its
Subsidiaries; (vi) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities as described in this Agreement; and (vii) the Company does not
have any stock appreciation rights or “phantom stock” plans or agreements or any
similar plan or agreement. The Company has furnished to the Purchaser true and
correct copies of the Company’s Articles of Incorporation, as amended and as in
effect on the date hereof (the “Articles of Incorporation”), and the Company’s
By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all
securities convertible into or exercisable for Common Stock and the material
rights of the holders thereof in respect thereto.
 
(d) Issuance of Securities. The Preferred Shares are duly authorized and, upon
issuance in accordance with the terms hereof, shall be (i) validly issued, fully
paid and non-assessable, (ii) free from all taxes, liens and charges with
respect to the issuance thereof and (iii) entitled to the rights and preferences
set forth in the Certificate of Designation. At least 30,000,000 shares of
Common Stock (subject to adjustment pursuant to the Company’s covenant set forth
in Section 4(c) below) have been duly authorized and reserved for issuance upon
conversion of the Preferred Shares and exercise of the Warrants. Upon conversion
or exercise in accordance with the Certificate of Designation or the Warrants,
as the case may be, the Conversion Shares and the Warrant Shares will be validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issuance thereof, with the holders being entitled to all
rights accorded to a holder of Common Stock. The issuance by the Company of the
Securities is exempt from registration under the Securities Act. The offer and
sale by the Company of the Preferred Shares and the Warrants is being made in
reliance upon the exemption from registration set forth in Rule 506 of
Regulation D and/or Regulation S under the Securities Act and is only being made
to “accredited investors” that meet the requirements of Rule 501(a) of
Regulation D and similar exemptions under state law.
 
(e) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company, the performance by the Company of its obligations
under the Certificate of Designation and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the
reservation for issuance and issuance of the Conversion Shares and the Warrant
Shares) will not (i) result in a violation of the Certificate of Incorporation,
any certificate of designation of any outstanding series of preferred stock of
the Company or the By-laws; (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its Subsidiaries is a party; or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations and the rules and regulations of the principal
market or exchange on which the Common Stock is traded or listed) applicable to
the Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected.
 
(f) SEC Documents. The Company has filed all reports, schedules, forms,
statements and other documents required to be filed by the Company under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), including
pursuant to Section 13(a) or 15(d) thereof, for the twelve (12) months preceding
the date hereof (or such shorter period as the Company was required by law or
regulation to file such material) (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Reports”) on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension. As of their respective
dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act, as applicable, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The Company was previously an issuer
described in paragraph (i)(1)(i) of Rule 144 under the Securities Act and is
subject to the provisions of Rule 144(i).
  
 
5

--------------------------------------------------------------------------------

 
(g) Financial Statements. The financial statements of the Company included in
the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been
prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated Subsidiaries as of and
for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
 
(h) Absence of Certain Changes. Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in
a subsequent SEC Report filed prior to the date hereof, there has been no
material adverse change and no material adverse development in the business,
properties, operations, financial condition, liabilities, results of operations
or prospects of the Company or its Subsidiaries, taken as a whole. The Company
has not taken any steps, and does not currently expect to take any steps, to
seek protection pursuant to any bankruptcy law nor does the Company or any of
its Subsidiaries have any knowledge that its creditors intend to initiate
involuntary bankruptcy proceedings or any knowledge of any fact which would
reasonably lead a creditor to do so.
 
(i) Absence of Litigation. Except as set forth in the SEC Reports, there is no
action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending
or, to the knowledge of the Company or any of its Subsidiaries, threatened
against or affecting the Company, the Common Stock or any of the Company’s
Subsidiaries or any of the Company’s or the Company’s Subsidiaries’ officers or
directors in their capacities as such. To the knowledge of the Company none of
the directors or officers of the Company have been involved in securities
related litigation during the past five (5) years.
 
(j) Acknowledgment Regarding the Purchaser’s Purchase of Preferred Shares. The
Company acknowledges and agrees that the Purchaser is acting solely in the
capacity of arm’s length purchaser with respect to the Transaction Documents and
the Certificate of Designation and the transactions contemplated thereby. The
Company further acknowledges that Purchaser is not acting as a financial advisor
or fiduciary of the Company (or in any similar capacity) with respect to the
Transaction Documents and the Certificate of Designation and the transactions
contemplated thereby and any advice given by the Purchaser or any of its
respective representatives or agents in connection with the Transaction
Documents and the Certificate of Designation and the transactions contemplated
thereby is merely incidental to the Purchaser’s purchase of the Securities. The
Company further represents to the Purchaser that the Company’s decision to enter
into the Transaction Documents has been based solely on the independent
evaluation by the Company and its representatives.
 
(k) No Undisclosed Events, Liabilities, Developments or Circumstances. Except
for the issuance of the Preferred Shares and Warrants contemplated by this
Agreement, no event, liability, development or circumstance has occurred or
exists with respect to the Company or its Subsidiaries or their respective
businesses, properties, operations or financial condition, that would be
required to be disclosed by the Company under applicable securities laws on a
registration statement (including by way of incorporation by reference) filed
with the SEC relating to an issuance and sale by the Company of its Common Stock
and which has not been publicly disclosed.
 
(l) No General Solicitation. Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D under
the Securities Act) in connection with the offer or sale of the Securities.
 
(m) No Integrated Offering. Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security,
under circumstances that would require registration of any of the Securities
under the Securities Act or cause this offering of Securities to be integrated
with prior offerings by the Company for purposes of the Securities Act or any
applicable stockholder approval provisions, nor will the Company or any of its
Subsidiaries take any action or steps that would require registration of the
Securities under the Securities Act or cause the offering of the Securities to
be integrated with other offerings.
  
 
6

--------------------------------------------------------------------------------

 
(n) Employee Relations. Neither the Company nor any of its Subsidiaries is
involved in a union labor dispute or, to the knowledge of the Company or any of
its Subsidiaries, is any such dispute threatened. None of the Company’s or its
Subsidiaries’ employees is a member of a union, neither the Company nor any of
its Subsidiaries is a party to a collective bargaining agreement, and the
Company and its Subsidiaries believe that their relations with their employees
are good. No executive officer (as defined in Rule 501(f) of the Securities Act)
has notified the Company’s Board of Directors that such officer intends to leave
the Company or otherwise terminate such officer’s employment with the Company
and the Company does not expect to terminate any such officer during the six
months following the date of this Agreement.
 
(o) Intellectual Property Rights. The Company and its Subsidiaries own or
possess adequate rights or licenses to use all trademarks, trade names, service
marks, service mark registrations, service names, patents, patent rights,
copyrights, inventions, licenses, approvals, governmental authorizations, trade
secrets and rights necessary to conduct their respective businesses as now
conducted. None of the Company’s trademarks, trade names, service marks, service
mark registrations, service names, patents, patent rights, copyrights,
inventions, licenses, approvals, government authorizations, trade secrets or
other intellectual property rights have expired or terminated, or are expected
to expire or terminate within two (2) years from the date of this Agreement.
 
(p) Regulatory Permits. Except where the absence of which would not have a
Material Adverse Effect, the Company and its Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses. Neither the Company nor any such Subsidiary has received any notice
of proceedings relating to the revocation or modification of any such
certificate, authorization or permit.
 
(q) Internal Accounting Controls. The Company is in material compliance with the
Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing
Date. The Company and the Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
 
(r) Tax Status. The Company and each of its Subsidiaries has made or filed all
federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject (unless and only to the
extent that the Company and each of its Subsidiaries has set aside on its books
provisions reasonably adequate for the payment of all unpaid and unreported
taxes) and has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations, except those being contested in good faith and for
which the Company has set aside on its books provision reasonably adequate for
the payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Company know of no basis for any such claim.
 
(s) Transactions With Affiliates and Employees. Except as set forth in the SEC
Reports, none of the officers, directors or employees of the Company is
presently a party to any transaction with the Company or any of its Subsidiaries
(other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any corporation, partnership,
trust or other entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner.
  
(t) Application of Takeover Protections. The Company and its board of directors
have taken all necessary action, if any, in order to render inapplicable any
control share acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar anti-takeover provision
under the Certificate of Incorporation or the laws of the state of its
incorporation which is or could become applicable to the Purchaser as a result
of the Purchaser and the Company fulfilling their obligations under the
Transaction Documents and the Certificate of Designation, including, without
limitation, the Company’s issuance of the Securities and the Purchaser’s
ownership of the Securities.
 
 
7

--------------------------------------------------------------------------------

 
(u) Title. The Company and its Subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Company and its
Subsidiaries, in each case free and clear of all liens, encumbrances and defects
except such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and any of its Subsidiaries.
 
(v) Insurance. The Company and each of its Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as management of the Company believes to be prudent and customary in the
businesses in which the Company and its Subsidiaries are engaged. Neither the
Company nor any such Subsidiaries has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and adversely affect
the condition, financial or otherwise, or the earnings, business or operations
of the Company and its Subsidiaries, taken as a whole.
 
(w) Environmental Laws. The Company and its Subsidiaries (i) are in compliance
in all material respects with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants (“Environmental Laws”), (ii) have received all permits, licenses
or other approvals required of them under applicable Environmental Laws to
conduct their respective businesses, except where the failure to receive such
permits, licenses or approvals would not, individually or in the aggregate, have
a Material Adverse Effect and (iii) are in compliance in all material respects
with all terms and conditions of any such permit, license or approval, except
where the failure to be in compliance or receive such permits, licenses or
approvals would not, individually or in the aggregate, have a Material Adverse
Effect.
 
(x) No Other Agreements. The Company has not, directly or indirectly, made any
agreements with any Purchaser relating to the terms or conditions of the
transactions contemplated by the Transaction Documents except as set forth in
the Transaction Documents.
 
SECTION 4.
COVENANTS
 
4.1. Reservation of Shares. The Company shall take all action necessary to at
all times have authorized, and reserved for the purpose of issuance, no less
than the sum of (A) the number of shares of Common Stock needed to provide for
the issuance of the Conversion Shares, and (B) the number of shares of Common
Stock needed to provide for the issuance of the Warrant Shares.
  
4.2. Furnishing of Information. Until the earliest of the time that (i)
Purchaser no longer owns Securities or (ii) the Warrants have expired, the
Company covenants to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to the Exchange Act even if the Company
is not then subject to the reporting requirements of the Exchange Act.
 
4.3. Corporate Existence. So long as any Purchaser beneficially owns any
Preferred Shares or Warrants, the Company shall maintain its corporate existence
and shall not sell all or substantially all of the Company’s assets, except in
the event of a merger or consolidation or sale of all or substantially all of
the Company’s assets, where the surviving or successor entity in such
transaction assumes the Company’s obligations hereunder and under the agreements
and instruments entered into in connection herewith.
  
SECTION 5.
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL
 
5.1.  The obligation of the Company hereunder to issue and sell the Preferred
Shares to the Purchaser at the Closing is subject to the satisfaction of each of
the following conditions, provided that these conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole discretion
by providing the Purchaser with prior written notice thereof:
 
(a) The Purchaser shall have executed this Agreement and delivered the same to
the Company.
 
 
8

--------------------------------------------------------------------------------

 
(b) The Purchaser shall have delivered to the Company the Purchase Price for the
Preferred Shares and the related Warrants being purchased by the Purchaser at
the Closing by wire transfer of immediately available funds pursuant to the wire
instructions provided by the Company.
  
(c) The representations and warranties of the Purchaser contained herein shall
be true and correct as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date), and the Purchaser shall have performed, satisfied and
complied with the covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by the
Purchaser at the Closing Date.
 
(d) The Board of Directors of the Company shall have adopted resolutions
consistent with Section 3.1(b) above (the “Resolutions”).
 
(e) As of the Closing Date, the Company shall have reserved out of its
authorized and unissued Common Stock, solely for the purpose of effecting the
conversion of the Preferred Shares and exercise of the Warrants, at least
30,000,000 shares of Common Stock.
 
(f) The Purchaser shall have delivered to the Company such other documents
relating to the transactions contemplated by the Transaction Documents as the
Company or its counsel may reasonably request.
 
SECTION 6.
CONDITIONS TO THE PURCHASER’S OBLIGATION TO PURCHASE
 
6.1 The obligation of the Purchaser hereunder to purchase the Preferred Shares
and the Warrants at the Closing is subject to the satisfaction, at the Closing
Date of each of the following conditions, provided that these conditions are for
the Purchaser’s sole benefit and may be waived by the Purchaser at any time in
its sole discretion by providing the Company and the Purchaser with prior
written notice thereof:
 
(a) The Company shall have executed each of the Transaction Documents, and
delivered the same to the Purchaser.
 
(b) The representations and warranties of the Company contained herein shall be
true and correct as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
specific date) and the Company shall have performed, satisfied and complied with
the covenants, agreements and conditions required by the Transaction Documents
or the Certificate of Designation to be performed, satisfied or complied with by
the Company at or prior to the Closing Date. The Purchaser shall have received a
certificate, executed by the Chief Executive Officer of the Company, dated as of
the Closing Date to the foregoing effect and as to such other matters as the
Purchaser may reasonably request.
  
(c) The Company shall have executed and delivered to the Purchaser the Stock
Certificates for the Preferred Shares and the Warrants being purchased by the
Purchaser at the Closing.
 
(d) The Board of Directors of the Company shall have adopted the Resolutions.
 
(e) As of the Closing Date, the Company shall have reserved out of its
authorized and unissued Common Stock, solely for the purpose of effecting the
conversion of the Preferred Shares and exercise of the Warrants, at least
30,000,000 shares of Common Stock.
 
(f) The Company shall have delivered to the Purchaser such other documents
relating to the transactions contemplated by the Transaction Documents as the
Purchaser or its counsel may reasonably request.
    
 
9

--------------------------------------------------------------------------------

 
SECTION 7. 
INDEMNIFICATION

7.1 In consideration of the Purchaser’s execution and delivery of the
Transaction Documents and acquiring the Securities thereunder and in addition to
all of the Company’s other obligations under the Transaction Documents and the
Certificate of Designation, the Company shall defend, protect, indemnify and
hold harmless the Purchaser and each other holder of the Securities and all of
their stockholders, officers, directors, employees and direct or indirect
investors and any of the foregoing persons’ agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by
any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or Certificate of Designation or any other
certificate, instrument or document contemplated hereby or thereby, (b) any
breach of any covenant, agreement or obligation of the Company contained in the
Transaction Documents or the Certificate of Designation or any other
certificate, instrument or document contemplated hereby or thereby or (c) any
cause of action, suit or claim brought or made against such Indemnitee (other
than a cause of action, suit or claim which is (x) brought or made by the
Company and (y) is not a shareholder derivative suit) and arising out of or
resulting from (i) the execution, delivery, performance or enforcement of the
Transaction Documents or the Certificate of Designation, (ii) any transaction
financed or to be financed in whole or in part, directly or indirectly, with the
proceeds of the issuance of the Securities or (iii) solely the status of the
Purchaser or holder of the Securities as an investor in the Company. To the
extent that the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.
 
SECTION 8.
GOVERNING LAW; MISCELLANEOUS
 
8.1. Governing Law; Jurisdiction; Jury Trial. The corporate laws of the State of
Nevada shall govern all issues concerning the relative rights of the Company and
its stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of California, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of California or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of California. Each party hereby irrevocably
submits to the non-exclusive jurisdiction of the state and federal courts
sitting in the City and County of Los Angeles for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address for such
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
manner permitted by law. TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH PARTY
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A
JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
 
8.2. 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.
 
8.3. Headings. The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement.
 
 
10

--------------------------------------------------------------------------------

 
8.4. Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
 
8.5. Entire Agreement; Amendments. This Agreement supersedes all other prior
oral or written agreements between the Purchaser, the Company, their affiliates
and persons acting on their behalf with respect to the matters discussed herein.
This Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor any Purchaser makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be
amended other than by an instrument in writing signed by the Company and the
Purchaser or its assigns or, if prior to the Closing Date, the Purchaser is
being obligated to purchase at least two-thirds (2/3) of the Preferred Shares.
No provision hereof may be waived other than by an instrument in writing signed
by the party against whom enforcement is sought. No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
Preferred Shares or Warrants then outstanding. No consideration shall be offered
or paid to any person to amend or consent to a waiver or modification of any
provision of any of the Transaction Documents or the Certificate of Designation
unless the same consideration also is offered to all of the parties to the
Transaction Documents or holders of the Preferred Shares, as the case may be.
 
8.6. Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered (i) upon receipt, when delivered
personally or by electronic mail; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one (1) Business Day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:
 
If to the Company:
 
CrowdGather, Inc.
c/o Sanjay Sabnani, President
20300 Ventura Blvd., Suite 330
Woodland Hills, CA 91364
Telephone: (818) 435-2472
Facsimile: (818) 435-2473
  
If to a Purchaser, to it at the business address, email or facsimile number set
forth on the signature page hereto or at such other address and/or facsimile
number and/or to the attention of such other person(s) as the recipient party
has specified by written notice given to each other party five (5) calendar days
prior to the effectiveness of such change. Written confirmation of receipt (A)
given by the recipient of such notice, consent, waiver or other communications,
(B) mechanically or electronically generated by the sender’s facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a nationally recognized overnight
delivery service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.
  
8.7. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns,
including any purchasers of the Preferred Shares. The Company shall not assign
this Agreement or any rights or obligations hereunder, including by merger or
consolidation, without the prior written consent of the Purchaser which
purchased at least two-thirds (2/3) of the Preferred Shares on the Closing Date,
or their assigns. The rights under this Agreement are assignable by a Purchaser
without the consent of the Company; provided, however, that any such assignment
shall not release the Purchaser from its obligations hereunder unless such
obligations are assumed by such assignee and the Company has consented to such
assignment and assumption, which consent shall not be unreasonably withheld.
Notwithstanding anything to the contrary contained in the Transaction Documents
or the Certificate of Designation, Purchaser shall be entitled to pledge the
Securities in connection with a bona fide margin account or other loan secured
by the Securities.
 
 
11

--------------------------------------------------------------------------------

 
8.8. No Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
person.
 
8.9. Survival. Unless this Agreement is terminated under Section 8.12, the
representations and warranties of the Company and the Purchaser contained in
Sections 2 and 3, the agreements and covenants set forth in Sections 4 and 8,
and the indemnification provisions set forth in Section 7, shall survive the
Closing. Each Purchaser shall be responsible only for its own representations,
warranties, agreements and covenants hereunder.
 
8.10. Publicity. The Company and the Purchaser shall have the right to approve
before issuance any press releases or any other public statements with respect
to the transactions contemplated hereby; provided, however, that the Company
shall be entitled, without the prior approval of any Purchaser, to make any
press release or other public disclosure with respect to such transactions as
the Company reasonably believes, after consulting with its counsel, to be
required by applicable law and regulations (although the Purchaser shall be
consulted by the Company in connection with any such press release or other
public disclosure prior to its release and shall be provided with a copy
thereof).
 
8.11. Further Assurances. Each party shall do and perform, or cause to be done
and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
 
8.12. Termination. In the event that the Closing shall not have occurred with
respect to a Purchaser on or before one (1) Business Day after the Closing Date
due to the Company’s or the Purchaser’s failure to satisfy the conditions set
forth in Sections 5 and 6 above (and the non-breaching party’s failure to waive
such unsatisfied condition(s)), the non-breaching party shall have the option to
terminate this Agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other party.
 
8.13. Placement Agent. The Company acknowledges that it has not engaged a
placement agent in connection with the sale of the Preferred Shares and the
Warrants.
 
8.14. Remedies. Each Purchaser and each holder of the Securities shall have all
rights and remedies set forth in the Transaction Documents and the Certificate
of Designation and all rights and remedies which such holders have been granted
at any time under any other agreement or contract and all of the rights which
such holders have under any law. Any person having any rights under any
provision of this Agreement shall be entitled to enforce such rights
specifically (without posting a bond or other security), to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law.
 
 
The remainder of this page is intentionally left blank.
 

 
12

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 

CROWDGATHER, INC.
 
 
Address for Notice:
By:__________________________________________
     Name:  Sanjay Sabnani
     Title:    President
 
Fax:
   

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 
13

--------------------------------------------------------------------------------

 

[PURCHASER SIGNATURE PAGE TO CRWG SECURITIES PURCHASE AGREEMENT]
 

 
IN WITNESS WHEREOF, the undersigned has caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:
 
Signature of Authorized Signatory of Purchaser:
__________________________________
 
Name of Authorized Signatory: _________________________________________________
 
Title of Authorized Signatory:
__________________________________________________
 
Email Address of Authorized Signatory:
___________________________________________
 
Facsimile Number of Authorized Signatory:
________________________________________
 
Address for Notice to Purchaser:
 

 

 
Address for Delivery of Securities to Purchaser (if not same as address for
notice):
 

 

 
Subscription Amount:
 
Shares:
 
EIN Number: _______________________
 

 
14

--------------------------------------------------------------------------------