ex_10-1.htm


    
      

      

    

    Exhibit
10.1

     

     

    
      THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.  IT
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITY UNDER SUCH ACT OR
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.

       

      CROWDGATHER,
INC.

       

      CONVERTIBLE
PROMISSORY NOTE

       

      
        	$500,000	
                Woodland Hills,
      California

              
	 	
                 Dated as of
      July 8, 2008

              


      

       

      
        CrowdGather,
Inc., a Nevada corporation (the “Company”), for value
received, hereby promises to pay to Smart Goal
Investment Limited (“Holder”), the sum of
Five Hundred Thousand Dollars ($500,000) on the terms and conditions set forth
in this Convertible Promissory Note (“Note”).  Payment
for all amounts due hereunder shall be made by mail to the registered address of
Holder.

        


        The
following is a statement of the rights of Holder of this Note and the conditions
to which this Note is subject, and to which Holder hereof, by the acceptance of
this Note, agrees:

        


        1.           Maturity.  The
principal hereof and any unpaid accrued interest hereon, as set forth below,
shall be due and payable on the earlier to occur of:  (i) July 8, 2009
(“Maturity
Date”); and (ii) when declared due and payable by Holder upon the
occurrence of an Event of Default (as defined below).

         

        2.           Interest.  This
Note shall accrue interest on the principal at a rate of eight percent (8%) per
annum (the “Interest
Rate”).  Interest shall be calculated on the basis of a 360-day
year for the actual number of days elapsed.  Interest accruing on this
Note shall be subject to mandatory conversion as provided in Section 5 below,
except that upon an occurrence of an Event of Default, the Company shall be
obligated to pay the interest due on this Note by delivering to Holder cash
equal to the outstanding principal amount of the Note plus any due and unpaid
interest.  If there occurs an acceleration or prepayment of the Note
prior to the Maturity Date in accordance with the terms hereof, all interest due
and payable at such time on the principal amount due shall be paid in
full.  All payments hereunder are to be applied first to reasonable
costs and fees referred to herein, second to the payment of accrued interest,
and the remaining balance to the payment of principal.

        


        3.           Events of
Default.  If any of the events specified in this Section 3
shall occur (herein individually referred to as an “Event of Default”),
Holder may, so long as such condition exists, declare the entire principal and
unpaid accrued interest hereon immediately due and payable, by notice in writing
to the Company:

         

        
          
            
            

          

          
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        (a)           Default
in the payment of the principal or unpaid accrued interest of this Note when due
and payable; or

        


        (b)           The
institution by the Company of proceedings to be adjudicated as bankrupt or
insolvent, or the consent by it to institution of bankruptcy or insolvency
proceedings against it or the filing by it of a petition or answer or consent
seeking reorganization or release under the Federal Bankruptcy Act, or any other
applicable Federal or state law, or the consent by it to the filing of any such
petition or the appointment of a receiver, liquidator, assignee, trustee or
other similar official of the Company, or of any substantial part of its
property, or the making by it of an assignment for the benefit of creditors, or
the taking of corporate action by the Company in furtherance of any such action;
or

        


        (c)           If,
within 60 calendar days after the commencement of an action against the Company,
without the consent or acquiescence of the Company (and service of process in
connection therewith on the Company) seeking any bankruptcy, insolvency,
reorganization, liquidation, dissolution or similar relief under any present or
future statute, law or regulation, such action shall not have been resolved in
favor of the Company or all orders or proceedings thereunder affecting the
operations or the business of the Company stayed, or if the stay of any such
order or proceeding shall thereafter be set aside, or if, within 60 calendar
days after the appointment without the consent or acquiescence of the Company of
any trustee, receiver or liquidator of the Company or of all or any substantial
part of the properties of the Company, such appointment shall not have been
vacated.

         

        4.           Holder’s Rights Upon Event
of Default.  Upon the occurrence and continuance of any Event
of Default, Holder in his sole and absolute discretion shall have the right
to:

        


        (i)           convert
all of the principal amount and unpaid accrued interest attributable to this
Note into shares of the Company’s $.001 par value common stock (“Common Stock”)
at a conversion price of $1.00 per share; or

        


        (ii)          declare
all unpaid interest and principal immediately due and payable and exercise all
other legal rights in connection therewith.

        


        5.           Conversion.

         

        (a)           Mandatory
Conversion.  The outstanding principal balance and unpaid
accrued interest on this Note shall automatically convert into shares of Common
Stock immediately prior to the closing of the Company’s next transaction or
series of related transactions in which the Company sells equity securities and
in which the gross proceeds to the Company equal or exceed $2,000,000 (the
“Next Equity
Financing”). The number of shares of Common Stock to be issued upon such
conversion shall be equal to the quotient obtained by dividing (a) the
outstanding principal and unpaid accrued interest due on this Note on the date
of conversion, by (b) the conversion price which shall equal eighty five percent
(85%) of the negotiated and agreed upon per share price set forth in the Next
Equity Financing. The Common Stock received by Holder pursuant to the conversion
of the Note shall be referred to as the “Conversion
Shares.”

         

        
          
            
            

          

          
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        (b)           Identical
Terms.  The Common Stock received by Holder pursuant to the
conversion of the Note hereunder shall have identical rights, preferences and
privileges as those shares received by investors currently holding or
subscribing for Common Stock.

        


        (c)           Conversion
Procedure.  If this Note is to be converted, written notice
shall be delivered by the Company to the Holder, at its address set forth on the
signature page hereto, notifying the Holder of the conversion to be effected,
specifying the principal amount of the Note to be converted and the amount of
accrued interest to be converted.  Holder will surrender this Note to
the Company within five (5) business days after receiving such notice and the
Conversion Shares will be delivered to the Holder after receipt of the Note by
the Company.

        


        (d)           Delivery of Stock
Certificates.  As promptly as practicable after the conversion
of this Note, the Company at its expense will issue and deliver to Holder a
certificate or certificates for the number of full shares of the Common Stock
issuable upon such conversion.  Upon conversion of the Note, the
Company shall take all such actions as are necessary in order to insure that the
Conversion Shares issuable with respect to such conversion shall be validly
issued, fully paid and nonassessable.

        


        (e)           Stockholders’
Agreement.  As a condition of any issuance of Common Stock upon
conversion of this Note, the Company may require Holder to execute any
stockholders’ agreement, documents or other agreements that may be in effect
between the Company and all of the holders of the Common Stock or that are
executed by investors subscribing for the Company’s securities in connection
with a Next Equity Financing.

        


        (f)           Mechanics and Effect of
Conversion.  No fractional shares of Common Stock shall be
issued upon conversion of this Note.  In lieu of the Company issuing
any fractional shares to Holder upon the conversion of this Note, the Company
shall pay to Holder the amount of outstanding principal and interest that is not
so converted, such payment to be in the form as provided below.  Upon
conversion of this Note, the Company shall be forever released from all of its
obligations and liabilities under this Note (to the extent of the amounts
converted), except that the Company shall be obligated to pay Holder, within 10
business days after the date of such conversion, any interest accrued and unpaid
or unconverted to and including the date of such conversion, and no
more.

        


        (g)           Reservation of Stock
Issuable Upon Conversion.  The Company shall, before the
conversion of this Note into Common Stock pursuant to the terms set forth
herein, increase the number of authorized but unissued shares of Common Stock as
necessary, and at all times reserve and keep available out of such duly
authorized but unissued shares of Common Stock, such number of its duly
authorized Common Stock as shall be sufficient to effect the conversion of the
Note pursuant to the terms set forth herein.  If at any relevant time
the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of the entire outstanding principal amount
of this Note, in addition to such other remedies as shall be available to
Holder, the Company will use its best efforts to forthwith take such corporate
action as may be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such
purposes.

         

        
          
            
            

          

          
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        6.           Successors and Assigns;
Assignment.  Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties
hereto.  Nothing in this Note, express or implied, is intended to
confer upon any party, other than the parties hereto and their successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Note, except as expressly provided herein.  The Company may not
assign this Note or any of the rights or obligations referenced herein without
the prior written consent of Holder.

        


        7.           Waiver and
Amendment.  Any provision of this Note may be amended, waived
or modified upon the written consent of the Company and Holder.

        


        8.           Waiver of
Notice.  The Company hereby waives notice, presentment, demand,
protest and notice of dishonor.

        


        9.           Treatment of
Note.  To the extent permitted by generally accepted accounting
principles, the Company will treat, account and report the Note as debt and not
equity for accounting purposes and with respect to any returns filed with
Federal, state or local tax authorities.

        


        10.         Notices.  Any
notice, request or other communication required or permitted hereunder shall be
in writing and shall be deemed to have been duly given if personally delivered
or if sent by nationally recognized courier service or mailed by registered or
certified mail, postage prepaid, to the respective addresses of the parties as
set forth on the signature page hereof or if sent by facsimile to the respective
facsimile numbers of the parties set forth on the signature page
hereof.  Any party hereto may by notice so given change its address
for future notice hereunder.  Notice shall conclusively be deemed to
have been given and received when personally delivered or 3 business days after
deposited in the mail or one business day after sent by courier or upon
confirmation of facsimile delivery in the manner set forth above.

        


        11.         No Stockholder
Rights.  Nothing contained in this Note shall be construed as
conferring upon Holder or any other person the right to vote or to consent or to
receive notice as a stockholder in respect of meetings of stockholders for the
election of directors of the Company or any other matters or any rights
whatsoever as a stockholder of the Company; and no dividends or interest shall
be payable or accrued in respect of this Note or the interest represented hereby
or the securities into which this Note is convertible hereunder until, and only
to the extent that, this Note shall have been converted.

        


        12.         Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of California, excluding that body of law
relating to conflict of laws.

        


        13.         Heading;
References.  All headings used herein are used for convenience
only and shall not be used to construe or interpret this Note.  Except
as otherwise indicated, all references herein to Sections refer to Sections
hereof.

         

        
          
            
            

          

          
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        IN WITNESS WHEREOF, the
Company has caused this Note to be issued as of the date first written
above.

         

        
          
            	 	 	CrowdGather,
      Inc.	 
	 	 	 	 	 
	
                     

                  	 	By: 	
                    /s/
      Sanjay
      Sabnani

                  	 
	
                     

                  	 	Name:	
                    Sanjay
      Sabnani

                  	 
	
                     

                  	 	Its: 	
                    President

                  	 
	 	 	 	 	 
	 	 	20300
      Ventura Blvd., Suite 330	 
	 	 	Woodland
      Hills, CA 91364	 


          

        

         

        
          
            
              	Holder: 	Smart
      Goal Investment Limited
	Address: 	6/F.,
      Kwan Chart Tower,
	 	
                      6
      Tonnochy Road

                    
	 	
                      WanChai,
      Hong Kong

                    
	 	
                       

                    
	Telephone:	852-2832-2831
	Facsimile:	______________________


            

          

          
            
            

          

        

      

    

     

     

     

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