Document:

Exhibit 4.2

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of August 26, 2015, by and among Overstock.com, Inc., a Delaware corporation (the “Issuer”), and each of the holders listed on Schedule I hereto, each of which is referred to in this Agreement as a “Holder”, and shall become effective as of the Closing (as defined in the Purchase Agreement, defined below).

 

RECITALS

 

A.                                    This Agreement is being entered into pursuant to the Purchase Agreement between Cirrus Services LLC, a Utah limited liability and an indirect majority-owned subsidiary of the Issuer, and Cirrus Technologies, LLC, a New Jersey limited liability company, dated as of August 26, 2015 (the “Purchase Agreement”).

 

AGREEMENT

 

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 Issuer and the Holders agree as follows:

 

ARTICLE I
 DEFINITIONS

 

Capitalized terms used and not otherwise defined herein shall have the meanings given such terms in the Purchase Agreement.  As used in this Agreement, the following terms shall have the following meanings:

 

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls or is controlled by or under common control with such Person.  For the purposes of this definition, “control,” when used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “affiliated,” “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Board” means the Board of Directors of the Issuer.

 

“Business Day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the state of Utah generally are authorized or required by law or other government actions to close.

 

“Closing Date” means the date of the closing of the acquisition and issuance of the Issuer Shares pursuant to the Purchase Agreement.

 

“Commission” means the Securities and Exchange Commission.

 

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“Effectiveness Date” the 120th calendar day following the Closing Date; provided, however, that if the Effectiveness Date falls on a day that is not a Business Day, then the Effectiveness Date shall be extended to the next Business Day.

 

“Effectiveness Period” shall have the meaning set forth in Article II.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Filing Date” means the 15th Business Day following the Closing Date; provided, however, that if the Filing Date falls on a day that is not a Business Day, then the Filing Date shall be extended to the next Business Day.

 

“Indemnified Party” shall have the meaning set forth in Section 5.2(a).

 

“Indemnifying Party” shall have the meaning set forth in Section 5.2(a).

 

“Issuer Common Stock” means the Issuer’s Common Stock, par value $0.0001 per share.

 

“Issuer Shares” means the shares of Issuer Common Stock.

 

“Losses” shall have the meaning set forth in Section 5.1.

 

“Person” means an individual or a corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind.

 

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

“Prospectus” means any prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to any such Prospectus, including post-effective amendments, and all material incorporated by reference in such Prospectus.

 

“Registrable Securities” means all of the Issuer Shares issued to the Holders pursuant to the Purchase Agreement and any securities issued with respect to, or in exchange for or in replacement of such shares of Issuer Common Stock upon any stock split, stock dividend, recapitalization, subdivision, merger or similar event; provided, however, that such securities shall no longer be deemed Registrable Securities if (i) such securities have been sold pursuant to a Registration Statement, (ii) such securities have been sold in compliance with Rule 144, or (iii) such securities may be sold pursuant to Rule 144.

 

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“Registration Statement” means the registration statements and any additional registration statements contemplated by Article II, including (in each case) the related Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference in such registration statement.

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Transaction Documents” means this Agreement, the Purchase Agreement, and the schedules and exhibits attached hereto and thereto.

 

ARTICLE II
 REGISTRATION

 

2.1                               Registration Obligations; Filing Date Registration.  On or prior to the Filing Date, the Issuer shall prepare and file with the Commission a Registration Statement covering the resale of the Registrable Securities as would permit the sale and distribution of all the Registrable Securities from time to time pursuant to Rule 415 in the manner reasonably requested by the Holders.  The Registration Statement shall be on Form S-3 (except if the Issuer is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance with the Securities Act and the rules promulgated thereunder and the Issuer shall undertake to register the Registrable Securities on Form S-3 as soon as practicable following the availability of such form, provided that the Issuer shall use reasonable best efforts to maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the Commission).  The Issuer shall use reasonable best efforts to cause the Registration Statement filed by it to be declared effective under the Securities Act as promptly as practicable after the filing thereof but in any event on or prior to the Effectiveness Date, and, subject to Section 3.1(m) hereof, to keep such Registration Statement continuously effective under the Securities Act until such date as all Registrable Securities covered by such Registration Statement have ceased to be Registrable Securities (the “Effectiveness Period”).  By 5:30 p.m. Eastern Time on the Business Day following the effective date of the Registration Statement, the Issuer shall file with the Commission in accordance with Rule 424 under the Securities Act the final prospectus to be used in connection with sales pursuant to such Registration Statement.

 

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ARTICLE III
 REGISTRATION PROCEDURES

 

3.1                               Registration Procedures.  In connection with the Issuer’s registration obligations hereunder, the Issuer shall:

 

(a)                                 Prepare and file with the Commission on or prior to the Filing Date, a Registration Statement on Form S-3 (or if the Issuer is not then eligible to register for resale the Registrable Securities on Form S-3 such Registration Statement shall be on another appropriate form in accordance with the Securities Act and the rules and regulations promulgated thereunder), and use reasonable best efforts to cause the Registration Statement to become effective and remain effective as provided herein.

 

(b)                                 Prepare and file with the Commission such amendments, including post-effective amendments, to the Registration Statement as may be necessary to keep the Registration Statement continuously effective (subject to Section 3.1(m)) as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements, if necessary, in order to register for resale under the Securities Act all of the Registrable Securities; cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; respond promptly to any comments received from the Commission with respect to the Registration Statement or any amendment thereto and promptly provide the Holders true and complete copies of all correspondence from and to the Commission relating to such Registration Statement; and comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by the Registration Statement during the applicable period in accordance with the intended methods of disposition by the Holders thereof set forth in the Registration Statement as so amended or in such Prospectus as so supplemented.

 

(c)                                  At the time the Commission declares the Registration Statement effective, to the extent required by applicable regulations, each Holder shall be named as a selling stockholder in the Registration Statement and the related Prospectus in such a manner as to permit such Holder to deliver such Prospectus to purchasers of Registrable Securities included in the Registration Statement in accordance with applicable law, subject to the terms and conditions hereof.

 

(d)                                 Promptly notify the Holders of Registrable Securities (i)(A) when a Registration Statement, a Prospectus or any Prospectus supplement or pre- or post-effective amendment to the Registration Statement is filed, and (B) with respect to the Registration Statement or any post-effective amendment filed by the Issuer, when the same has become effective; (ii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iii) of the receipt by the Issuer of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities of the Issuer for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (iv) of the occurrence of any event that makes any statement

 

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made in the Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(e)                                  Use reasonable best efforts to avoid the issuance of, and, if issued, to obtain the withdrawal of, (i) any order suspending the effectiveness of the Registration Statement or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any U.S. jurisdiction.

 

(f)                                   Promptly deliver to each Holder, without charge, as many copies of the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request; and the Issuer hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto.

 

(g)                                  Cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities of the Issuer to be sold pursuant to a Registration Statement.

 

(h)                                 Upon the occurrence of any event contemplated by Section 3.1(d)(iv), as promptly as practicable provide notice to the Holders that no further sales of Registrable Securities will be permitted until further notice and, if necessary, prepare a supplement or amendment, including a post-effective amendment, to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither the Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(i)                                     The Issuer may require each selling Holder to furnish to the Issuer information regarding such Holder and the distribution of such Registrable Securities as is required by law to be disclosed in the Registration Statement, and the Issuer may exclude from such registration the Registrable Securities of any such Holder who fails to furnish such information within 15 days after receiving such request.

 

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(j)                                    If (i) there is material non-public information regarding the Issuer which the Issuer reasonably determines not to be in the Issuer’s best interest to disclose and which the Issuer is not otherwise required to disclose, or (ii) there is a significant business opportunity (including, but not limited to, the acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or other similar transaction) available to the Issuer which the Issuer reasonably determines not to be in the Issuer’s best interest to disclose, then the Issuer may postpone or suspend filing or effectiveness of a Registration Statement for a period (a “Deferral Period”) not to exceed 90 consecutive days, provided that the Issuer may not postpone or suspend its obligation under this Section 3.1(j) for more than 180 days in the aggregate during any 12-month period.

 

(k)                                 The Issuer shall use reasonable best efforts to register or qualify, or cooperate with the Holders of the Registrable Securities included in the Registration Statement in connection with the registration or qualification of, the resale of the Registrable Securities under applicable securities or “blue sky” laws of such states of the United States as any such Holder requests in writing and to do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the Registrable Securities covered by the Registration Statement;  provided, however, that the Issuer shall not be required to (i) qualify generally to do business in any jurisdiction where it is not then so qualified or (ii) take any action that would subject it to general service of process or to taxation in any jurisdiction to which it is not then so subject.

 

(l)                                     The Issuer will comply with all rules and regulations of the Commission to the extent and so long as they are applicable to the Registration Statement and will make generally available to its security holders (or otherwise provide in accordance with Section 11(a) of the Securities Act) an earning statement (which need not be audited) satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder, no later than 45 days after the end of a 12-month period (or 90 days, if such period is a fiscal year) beginning with the Issuer’s first fiscal quarter commencing after the effective date of the Registration Statement.

 

3.2                               Holder Covenants.  Each Holder covenants and agrees by its acquisition of such Registrable Securities that:

 

(a)                                 (i) it will not sell any Registrable Securities under the Registration Statement until it has received copies of the Prospectus as then amended or supplemented as contemplated in Section 3.1(f) and notice from the Issuer that such Registration Statement and any post-effective amendments thereto have become effective as contemplated by Section 3.1(d) and (ii) it and its officers, directors or Affiliates, if any, will comply with the prospectus delivery requirements of the Securities Act as applicable to them in connection with sales of Registrable Securities pursuant to the Registration Statement.

 

(b)                                 Upon receipt of a notice from the Issuer of the occurrence of any event of the kind described in Section 3.1(d)(ii), 3.1(d)(iii), 3.1(d)(iv), 3.1(d)(v) or 3.1(j), such Holder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until such Holder’s receipt of the copies of the supplemented Prospectus and/or amended Registration Statement contemplated by Section 3.1(h), or until it is advised in writing by the Issuer that the use of the applicable Prospectus may be resumed, and, in either case, has

 

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received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement.

 

ARTICLE IV
 REGISTRATION EXPENSES

 

4.1                               Registration Expenses.  All reasonable fees and expenses incident to the performance of or compliance with this Agreement by the Issuer (excluding any underwriters’ discounts and commissions and any fees and expenses of legal counsel and other advisors for any Holder) shall be borne by the Issuer whether or not a Registration Statement is filed by the Issuer or becomes effective and whether or not any Registrable Securities are sold pursuant to a Registration Statement.

 

ARTICLE V
 INDEMNIFICATION

 

5.1                               Indemnification by the Issuer.  The Issuer shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, its permitted assignees, officers, directors, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Issuer Common Stock), underwriters, investment advisors and employees, each Person who controls any such Holder or permitted assignee (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, and the respective successors, assigns, estate and personal representatives of each of the foregoing, to the fullest extent permitted by applicable law, from and against any and all claims, losses, damages, liabilities, penalties, judgments, costs (including, without limitation, costs of investigation) and expenses (including, without limitation, reasonable attorneys’ fees and expenses) (collectively, “Losses”), arising out of or relating to any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any Prospectus, as supplemented or amended, if applicable, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, except (i) to the extent, but only to the extent, that such untrue statements or omissions or alleged untrue statements or omissions are based upon information regarding such Holder furnished in writing to the Issuer by such Holder expressly for use in such Registration Statement, such Prospectus or in any amendment or supplement thereto; or (ii) in the case of an occurrence of an event of the type specified in Section 3.1(d)(ii)-(v), the use by a Holder of an outdated or defective Prospectus, but only if and to the extent that following such receipt the misstatement or omission giving rise to such Loss would have been corrected; provided, however, that the indemnity agreement contained in this Section 5.1 shall not apply to amounts paid in settlement of any Losses if such settlement is effected without the prior written consent of the Issuer, which consent shall not be unreasonably withheld.  The Issuer shall notify such Holder promptly of the institution, threat or assertion of any Proceeding of which the Issuer is aware in connection with the transactions contemplated by this Agreement.  Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of an Indemnified Party (as defined in Section 5.2(a) hereof) and shall survive the transfer of the Registrable Securities by the Holder.

 

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5.2                               Conduct of Indemnification Proceedings.

 

(a)                                 If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party promptly shall notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party.

 

(b)                                 An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; or (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel (which shall be reasonably acceptable to the Indemnifying Party) that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, the Indemnifying Party shall be responsible for reasonable fees and expenses of no more than one counsel (together with appropriate local counsel) for the Indemnified Parties).  The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed.  No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is or could have been a party, unless such settlement (i) includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any Indemnified Party.

 

(c)                                  All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within 20 Business Days of written notice thereof to the Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder).

 

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5.3                               Contribution.

 

(a)                                 If a claim for indemnification under Section 5.1 is unavailable to an Indemnified Party because of a failure or refusal of a governmental authority to enforce such indemnification in accordance with its terms (by reason of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations.  The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying, Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission.  The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 5.2, any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.

 

(b)                                 The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5.3 were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph.  No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

 

(c)                                  The indemnity and contribution agreements contained in this Article V are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.

 

ARTICLE VI
 MISCELLANEOUS

 

6.1                               Effectiveness.  The Issuer’s obligations hereunder shall be conditioned upon the occurrence of the Closing under the Purchase Agreement, and this Agreement shall not be effective until such Closing.  If the Purchase Agreement shall be terminated prior to the Closing, then this Agreement shall be void and of no further force or effect (and no party hereto shall have any rights or obligations with respect to this Agreement).

 

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6.2                               Remedies.  In the event of a breach by the Issuer or by a Holder, of any of their obligations under this Agreement, each non-breaching Holder and Issuer, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement.  The Issuer and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

 

6.3                               Entire Agreement; Amendment.  This Agreement and the other Transaction Documents contain the entire understanding and agreement of the parties with respect to the matters covered hereby and, except as specifically set forth herein or therein, neither the Issuer nor any Holder make any representation, warranty, covenant or undertaking with respect to such matters, and they supersede all prior understandings and agreements with respect to said subject matter, all of which are merged herein.  This Agreement and any term hereof may be amended, terminated or waived only with the written consent of the Issuer and the Holders of at least a majority of all Registrable Securities then outstanding.  Any amendment or waiver effected in accordance with this Section 6.3 shall be binding upon each Holder (and their permitted assigns).

 

6.4                               Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile or email at the facsimile number or email address specified in this Section 6.5 prior to 4:00 p.m. (Salt Lake City time) on a Business Day, (b) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile or email at the facsimile number or email address specified in this Section on a day that is not a Business Day or later than 4:00 p.m. (Salt Lake City time) on any Business Day, (c) the Business Day following the date of deposit with a nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given.  The addresses, facsimile numbers and email addresses for such notices and communications are those set forth below, or such other address or facsimile number as may be designated in writing hereafter, in the same manner, by any such Person:

 

	
If to the Issuer:
    	
 
    	
Overstock.com, Inc.
    
	
 
    	
 
    	
6350 South 3000 East
    
	
 
    	
 
    	
Salt Lake City, Utah 84121
    
	
 
    	
 
    	
Attention: General Counsel
    
	
 
    	
 
    	
 
    
	
with copies (which copies
    	
 
    	
Bracewell & Giuliani LLP
    
	
shall not constitute notice
    	
 
    	
111 Congress Avenue, Suite 2300
    
	
to the Issuer) to:
    	
 
    	
Austin, Texas 78701
    
	
 
    	
 
    	
Attention: Thomas Adkins
    
	
 
    	
 
    	
Email: Thomas.Adkins@bgllp.com
    
	
 
    	
 
    	
Fax No.: 800.404.3970
    

 

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If to the Holders:
    	
 
    	
To Joseph Cammarata, as agent for the Holders, at   the address as set forth beneath his signature below, or to such other   address or email address or facsimile number as may otherwise be provided
    

 

6.5                               Waivers.  No waiver by either party of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter.

 

6.6                               Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns and shall inure to the benefit of each Holder and its successors and assigns.  The Issuer may not assign this Agreement or any of its rights or obligations hereunder without the prior written consent of the Holders of at least a majority of all Registrable Securities then outstanding.

 

6.7                               Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Counterparts may be delivered via facsimile, email (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

6.8                               Termination.  This Agreement shall terminate at the end of the Effectiveness Period, except that Articles IV and V and this Article VI shall remain in effect in accordance with their terms.

 

6.9                               Governing Law.  This Agreement will be governed by the laws of the State of Texas without regard to conflict of law principles.

 

6.10                        Dispute Resolution.

 

WAIVER OF JURY TRIAL: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS.  EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND

 

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VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

Except as otherwise provided in this Agreement, any unresolved controversy or claim arising out of or relating to this Agreement shall be submitted to arbitration by one arbitrator mutually agreed upon by the parties, and if no agreement can be reached within 30 days after names of potential arbitrators have been proposed by the American Arbitration Association (the “AAA”), then by one arbitrator having reasonable experience in corporate finance transactions of the type provided for in this Agreement and who is chosen by the AAA.  The arbitration shall take place in Salt Lake City, Utah, in accordance with the AAA rules then in effect, and judgment upon any award rendered in such arbitration will be binding and may be entered in any court having jurisdiction thereof.  There shall be limited discovery prior to the arbitration hearing as follows: (a) exchange of witness lists and copies of documentary evidence and documents relating to or arising out of the issues to be arbitrated, (b) depositions of all party witnesses and (c) such other depositions as may be allowed by the arbitrators upon a showing of good cause.  Depositions shall be conducted in accordance with the Utah Code of Civil Procedure, the arbitrator shall be required to provide in writing to the parties the basis for the award or order of such arbitrator, and a court reporter shall record all hearings, with such record constituting the official transcript of such proceedings.

 

The prevailing party shall be entitled to reasonable attorney’s fees, costs, and necessary disbursements in addition to any other relief to which such party may be entitled.

 

6.11                        Cumulative Remedies.  The remedies provided herein are cumulative and not exclusive of any remedies provided by law.

 

6.12                        Severability.  The provisions of this Agreement are severable and, in the event that any court of competent jurisdiction shall determine that any one or more of the provisions or part of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement and this Agreement shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of such provision, had never been contained herein, so that such provisions would be valid, legal and enforceable to the maximum extent possible.

 

6.13                        Headings.  The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

 

[SIGNATURE PAGES TO FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be duly executed by their respective authorized officers as of the date first above written.

 

	
 
    	
ISSUER:   
    
	
 
    	
 
    
	
 
    	
OVERSTOCK.COM, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert Hughes
    
	
 
    	
Name:
    	
Robert   Hughes
    
	
 
    	
Title:
    	
Senior   Vice President
    

 

SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be duly executed by their respective authorized officers as of the date first above written.

 

	
 
    	
HOLDERS:
    
	
 
    	
 
    
	
 
    	
EACH   OF THE HOLDERS LISTED ON SCHEDULE I ATTACHED HERETO
    
	
 
    	
 
    
	
 
    	
By:   Joseph Cammarata, as attorney-in-fact pursuant to the Power of Attorney   executed by each of the Holders
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Joseph Cammarata
    
	
 
    	
 
    	
Joseph   Cammarata
    
	
 
    	
 
    	
 
    

 

SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

 

 

Schedule I

 

	
Holder
    	
 
    	
Address
    
	
Joseph Cammarata
    	
 
    	
 
    
	
SpeedRoute Technologies Inc. (Barbados)
    	
 
    	
 
    
	
Tommy McSherry
    	
 
    	
 
    
	
Max Melmed
    	
 
    	
 
    
	
Rob Collucci
    	
 
    	
 
    
	
John Gilchrist
    	
 
    	
 
    
	
John Paul DeVito
    	
 
    	
 
    
	
Jason Heckler
    	
 
    	
 
    
	
Dohi Ang
    	
 
    	
 
    
	
Brian Capuano
    	
 
    	
 
    
	
Jimmy Ambrose
    	
 
    	
 
    
	
Alex Vlastakis
    	
 
    	
 
    
	
Olalekan Abebefe
    	
 
    	
 
    
	
Samson Arubuola
    	
 
    	
 
    
	
Ryan Mitchell
    	
 
    	
 
    
	
Juan Pablo Gomez
    	
 
    	
 
    
	
Raymond Doyle
    	
 
    	
 
    
	
Yu Huang
    	
 
    	
 
    
	
Zachary Wilezol
    	
 
    	
 
    
	
Anthony BoveEXHIBIT 10.1

Note: September 21, 2015

 

NEITHER THESE SECURITIES NOR THE SECURITIES INTO
WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES
AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.  

THIS NOTE DOES NOT REQUIRE PHYSICAL SURRENDER OF
THE NOTE IN THE EVENT OF A PARTIAL REDEMPTION OR CONVERSION.  AS A RESULT,
FOLLOWING ANY REDEMPTION OR CONVERSION OF ANY PORTION OF THIS NOTE, THE
OUTSTANDING PRINCIPAL SUM REPRESENTED BY THIS NOTE MAY BE LESS THAN THE
PRINCIPAL SUM AND ACCRUED INTEREST SET FORTH BELOW.

 8%
CONVERTIBLE PROMISSORY NOTE 

OF

CROWDGATHER, INC.

Issuance Date:  September 21, 2015

Total Face Value of Note: $162,000

This Note is a duly authorized
Convertible Promissory Note of CrowdGather, Inc. a corporation duly organized
and existing under the laws of the State of Nevada (the "Company"), designated as the Company's 8%
Convertible Promissory Note due September 21, 2016 ("Maturity Date") in the principal amount of $162,000
(the "Note").

For Value Received, the Company hereby promises to pay to
the order of Iconic Holdings, LLC or its registered assigns or
successors-in-interest (the "Holder") the Principal Sum of $162,000 (the
"Principal Sum") and to pay "guaranteed" interest on the principal
balance hereof at an amount equivalent to 8% of the Principal Sum, to the
extent such Principal Sum and "guaranteed" interest and any other interest,
fees, liquidated damages and/or items due to Holder herein have been repaid or
converted into the Company's Common Stock (the "Common Stock"), in
accordance with the terms hereof. The sum of $150,000 shall be remitted and
delivered to the Company, and $12,000 shall be retained by the Purchaser
through an original issue discount (the "OID") for due diligence and
legal 

-1- 

bills related to this transaction.  The OID is set at 8% of any
consideration paid.  In the event of partial payment by the Holder, the
principal sum due to the Holder shall be prorated based on the consideration
actually paid by Holder such that the company is only required to repay the
amount funded and the company is not required to repay any unfunded portion of
this note. 

In addition to the
"guaranteed" interest referenced above, and in the Event of Default pursuant to
Section 2(a), additional interest will accrue from the date of the Event of
Default at the rate equal to the lower of 20% per annum or the highest rate
permitted by law (the "Default Rate").  

This Note will become
effective only upon the execution by both parties, including the execution of
Exhibits B, C and D and the Irrevocable Transfer Agent Instructions and
delivery of the initial payment of consideration by the Holder (the "Effective
Date").

This Note may be
prepaid by the Company, in whole or in part, according to the following
schedule:

  

	
  Days
  Since Effective Date

  	
  Prepayment
  Amount

  
	
  Under
  45

  	
  105%
  of Principal Sum plus Accrued Interest

  
	
  46-90

  	
  115%
  of Principal Sum plus Accrued Interest

  
	
  91-135

  	
  125%
  of Principal Sum plus Accrued Interest

  
	
  136-180

  	
  135%
  of Principal Sum plus Accrued Interest

  

  

After 180 days from the
Effective Date this Note may not be prepaid without written consent from
Holder, which consent may be withheld, delayed, denied, or conditions in
Holder's sole and absolute discretion.  Whenever any amount expressed to be due
by the terms of this Note is due on any day which is not a Business Day (as
defined below), the same shall instead be due on the next succeeding day which
is a Business Day.

For purposes hereof the
following terms shall have the meanings ascribed to them below:

"Business Day"
shall mean any day other than a Saturday, Sunday or a day on which commercial
banks in the City of New York are authorized or required by law or executive
order to remain closed.

-2- 

"Conversion
Price" shall be equal to 60% of the lowest trading price of the
Company's common stock during the 15 consecutive trading days prior to the date
on which Holder elects to convert all or part of the Note.  For the purpose of
calculating the Conversion Price only, any time after 4:00 pm Eastern Time (the
closing time of the Principal Market) shall be considered to be the beginning
of the next Business Day.  If the Company is placed on "chilled" status with
the Depository Trust Company ("DTC"), the discount shall be increased by
10%, i.e., from 40% to 50%, until such chill is remedied.  If the
Company is not Deposits and Withdrawal at Custodian ("DWAC") eligible
through their Transfer Agent and DTC's Fast Automated Securities Transfer ("FAST")
system, the discount will be increased by 5%, i.e., from 40% to 45%,. 
In the case of both, the discount shall be a cumulative increase of 15%, i.e.,
from 40% to 55%.  Any default of this Note not remedied within the applicable
cure period will result in a permanent additional 10% increase, i.e.,
from 40% to 50%, in addition to any other discount, as provided above, to the
Conversion Price discount.

"Principal Amount"
shall refer to the sum of (i) the original principal amount of this Note
(including the original issue discount, prorated if the Note has not been
funded in full), (ii) all guaranteed and other accrued but unpaid interest
hereunder, (iii) any fees due hereunder, (iv) liquidated damages, and (v) any
default payments owing under the Note, in each case previously paid or added to
the Principal Amount.

"Principal
Market" shall refer to the primary exchange on which the Company's
common stock is traded or quoted.

"Trading Day"
shall mean a day on which there is trading or quoting for any security on the
Principal Market.

"Underlying
Shares" means the shares of common stock into which the Note is
convertible (including interest, fees, liquidated damages and/or principal
payments in common stock as set forth herein) in accordance with the terms hereof.

The following terms and
conditions shall apply to this Note:

Section
1.00    Conversion.

(a)               
Conversion Right.  Subject to the terms hereof and restrictions
and limitations contained herein, the Holder shall have the right, at the
Holder's sole option, at any time and from time to time to convert in whole or
in part the outstanding and unpaid Principal Amount under this Note into shares
of Common Stock as per the Conversion Formula.  The date of any conversion
notice ("Conversion Notice") hereunder shall be referred to herein as
the "Conversion Date".  

(b)        Stock
Certificates or DWAC.  The Company will deliver to the Holder, or Holder's
authorized designee, no later than 2 Trading Days after the Conversion Date, a
certificate or certificates (which certificate(s) shall be free of restrictive
legends and trading restrictions if the shares of Common Stock underlying the
portion of the Note being converted are eligible under a resale exemption
pursuant to Rule 144(b)(1)(ii) and Rule 144(d)(1)(ii) of the Securities Act of
1933, as amended) representing the number of shares of Common Stock being
acquired upon the conversion of this Note.  In lieu of delivering physical
certificates  

-3- 

representing the shares of Common Stock issuable upon conversion
of this Note, provided the Company's transfer agent is participating in DTC's
FAST program, the Company shall instead use commercially reasonable efforts to
cause its transfer agent to electronically transmit such shares issuable upon
conversion to the Holder (or its designee), by crediting the account of the
Holder's (or such designee's) broker with DTC through its DWAC program
(provided that the same time periods herein as for stock certificates shall
apply).   

(c)        Charges
and Expenses.  Issuance of Common Stock to Holder, or any of its assignees,
upon the conversion of this Note shall be made without charge to the
Holder for any issuance fee, transfer tax, postage/mailing charge or any
other expense with respect to the issuance of such Common Stock.  Company shall
pay all Transfer Agent fees incurred from the issuance of the Common stock to
Holder.  Any such charges related to the issuance of Common Stock required to
be paid by the Holder (whether from the Company's delays or outright refusal to
pay) will be automatically added to the Principal Sum of the Note and tack back
to the Effective Date for purposes of Rule 144.   

(d)        Delivery
Timeline.  If the Company fails to deliver to the Holder such certificate
or certificates (or shares through the DWAC program) pursuant to this Section
(free of any restrictions on transfer or legends, if eligible) prior to 3
Trading Days after the Conversion Date, the Company shall pay to the Holder as
liquidated damages an amount equal to $2,000 per day, until such certificate or
certificates are delivered.  The Company acknowledges that it would be
extremely difficult or impracticable to determine the Holder's actual damages
and costs resulting from a failure to deliver the Common Stock and the
inclusion herein of any such additional amounts are the agreed upon liquidated
damages representing a reasonable estimate of those damages and costs.  Such
liquidated damages will be automatically added to the Principal Sum of the Note
and tack back to the Effective Date for purposes of Rule 144.   

(e)        Reservation of Underlying
Securities.  The Company covenants that it will at all times reserve and
keep available for Holder, out of its authorized and unissued Common Stock solely
for the purpose of issuance upon conversion of this Note, free from preemptive
rights or any other actual contingent purchase rights of persons other than the
Holder, initially five times the number of shares of Common Stock as
shall be issuable (taking into account the adjustments under this Section 1,
but without regard to any ownership limitations contained herein) upon the
conversion of this Note (consisting of the Principal Amount) to Common Stock
(the "Required Reserve"), provided, however, that the Required Reserve
shall be reduced to not less than four times the number of shares of
Common Stock (as calculated above) upon one or more such conversions as shall
have caused the Required Reserve to be reduced to such "four times" level.  The
Company covenants that all shares of Common Stock that shall be issuable will,
upon issue, be duly authorized, validly issued, fully-paid, non-assessable and
freely-tradable (if eligible).  If the amount of shares on reserve in
Holder's name at the Company's transfer agent for this Note shall drop below the
Required Reserve, the Company will, within 2 Trading Days of notification from
Holder, instruct the transfer agent to increase the number of shares so that the
Required Reserve is met. In the event 

-4- 

that the Company does not instruct the
transfer agent to increase the number of shares so that the Required Reserve is
met, the Holder will be allowed, if applicable, to provide this instruction as
per the terms of the Irrevocable Transfer Agent Instructions attached to this
Note. The Company agrees that the maintenance of the Required Reserve is a
material term of this Note and any breach of this Section 1.00(e) will result in
a default of the Note.

 The Company agrees that this is a
material term of this Note and any breach of this Section 1.00(e) will result
in a default of the Note.

(f)         Conversion Limitation. 
The Holder will not submit a conversion to the Company that would result in the
Holder owning more than 9.99% of the then total outstanding shares of the Company
("Restricted Ownership Percentage").

(g)        Conversion
Delays.  If the Company fails to deliver shares in accordance with the
timeframe stated in Section 1.00(b), the Holder, at any time prior to selling
all of those shares, may rescind any portion, in whole or in part, of that
particular conversion attributable to the unsold shares.  The rescinded
conversion amount will be returned to the Principal Sum with the rescinded
conversion shares returned to the Company, under the expectation that any
returned conversion amounts will tack back to the Effective Date.

(h)        Shorting
and Hedging.  Holder may not engage in any "shorting" or "hedging"
transaction(s) in the Common Stock prior to conversion.

(i)         Conversion
Right Unconditional.  If the Holder shall provide a Conversion Notice as
provided herein, the Company's obligations to deliver Common Stock shall be
absolute and unconditional, irrespective of any claim of setoff, counterclaim,
recoupment, or alleged breach by the Holder of any obligation to the Company.

Section
2.00    Defaults and Remedies.

(a)        Events of Default.  An
"Event of Default" is:  (i) a default in payment of any amount due
hereunder which default continues for more than 5 Trading Days after the due
date; (ii) a default in the timely issuance of underlying shares upon and in
accordance with terms of Section 2.00, which default continues for 2 Trading
Days after the Company has failed to issue shares or deliver stock certificates
within the 3rd Trading Day following the Conversion Date; (iii) failure by the
Company for 3 days after notice has been received by the Company to comply with
any material provision of this Note; (iv) failure of the Company to remain
compliant with DTC, thus incurring a "chilled" status with DTC; (v) if the
Company is subject to any Bankruptcy Event; (vi) any failure of the Company to
satisfy its "filing" obligations under Securities Exchange Act of 1934, as
amended (the "1934 Act") and the rules and guidelines issued by OTC Markets
News Service, OTCMarkets.com and their affiliates; (vii) any failure of the
Company to provide the Holder with information related to its corporate
structure including, but not limited to, the number of authorized and
outstanding shares, public float, etc. within 1 Trading Day of request by
Holder; (viii) failure by the Company to maintain the 

-5- 

Required Reserve in
accordance with the terms of Section 1.00(e); (ix) failure of Company's Common
Stock to maintain a closing bid price in its Principal Market for more than 3
consecutive Trading Days; (x) any delisting from a Principal Market for any
reason; (xi) failure by Company to pay any of its Transfer Agent fees in excess
of $2,000 or to maintain a Transfer Agent of record; (xii) any trading
suspension imposed by the Securities and Exchange Commission ("SEC")
under Sections 12(j) or 12(k) of the 1934 Act; or (xiii) failure by the Company
to meet all requirements necessary to satisfy the availability of Rule 144 to
the Holder or its assigns, including but not limited to the timely fulfillment
of its filing requirements as a fully-reporting issuer registered with the SEC,
requirements for XBRL filings, and requirements for disclosure of financial
statements on its website.

(b)              
Remedies.  If an event of default occurs, and is not remedied
within 5 days after the occurrence, the outstanding Principal Amount of this
Note owing in respect thereof through the date of acceleration, shall become,
at the Holder's election, immediately due and payable in cash at the "Mandatory
Default Amount".  The Mandatory Default Amount means 150% of the
outstanding Principal Amount of this Note.  Commencing 5 days after the
occurrence of any Event of Default that results in the eventual acceleration of
this Note, this Note shall accrue additional interest, in addition to the
Note's "guaranteed" interest, at a rate equal to the lesser of 18% per annum or
the maximum rate permitted under applicable law.  Finally, commencing 5 days
after the occurrence of any Event of Default that results in the eventual
acceleration of this Note, an additional permanent 10% increase to the
Conversion Price discount will go into effect.  In connection with such
acceleration described herein, the Holder need not provide, and the Issuer
hereby waives, any presentment, demand, protest or other notice of any kind,
and the Holder may immediately and without expiration of any grace period
enforce any and all of its rights and remedies hereunder and all other remedies
available to it under applicable law.  Such acceleration may be rescinded and
annulled by the Holder at any time prior to payment hereunder and the Holder
shall have all rights as a holder of the note until such time, if any, as the
Holder receives full payment pursuant to this Section 2.00(b).  No such
rescission or annulment shall affect any subsequent event of default or impair
any right consequent thereon.  Nothing herein shall limit the Holder's right to
pursue any other remedies available to it at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief
with respect to the Issuer's failure to timely deliver certificates
representing shares of Common Stock upon conversion of the Note as required
pursuant to the terms hereof.

Section
3.00    General.

(a)        Payment of Expenses. 
The Company agrees to pay all reasonable charges and expenses, including
attorneys' fees and expenses, which may be incurred by the Holder in
successfully enforcing this Note and/or collecting any amount due under this
Note.

(b)        Assignment,
Etc.  The Holder may assign or transfer this Note to any transferee at
its sole discretion.  This Note shall be binding upon the Company 

-6- 

and its successors and shall inure to the
benefit of the Holder and its successors and permitted assigns.

(c)        Funding
Window.  The Company agrees that it will not enter into a convertible debt
financing transaction, including any "3(a)9" or "3(a)10" debt exchanges, with
any party other than the Holder for a period of 20 Trading Days following the
Effective Date.  The Company agrees that this is a material term of this Note
and any breach of this will result in a default of the Note.

(d)        Piggyback
Registration Rights.  The Company shall include on the next registration
statement that the Company files with the SEC (or on the subsequent
registration statement if such registration statement is withdrawn) all shares
issuable upon conversion of this Note.  Failure to do so will result in
liquidated damages of 30% of the outstanding Principal Sum of this Note, but
not less than $20,000, being immediately due and payable to the Holder at its
election in the form of a cash payment or an addition to the Principal Sum of
this Note.

(e)        Terms
of Future Financings.  So long as this Note is outstanding, upon any
issuance by the Company or any of its subsidiaries of any convertible debt
security (whether such debt begins with a convertible feature or such feature
is added at a later date) with any term more favorable to the holder of such
security or with a term in favor of the holder of such security that was not
similarly provided to the Holder in this Note, then the Company shall notify
the Holder of such additional or more favorable term and such term, at the
Holder's option, shall become a part of this Note and its supporting
documentation. The types of terms contained in the other security that may be
more favorable to the holder of such security include, but are not limited to,
terms addressing conversion discounts, conversion look back periods, interest
rates, original issue discount percentages and warrant coverage.

(f)         Governing
Law; Jurisdiction.

(i)                 Governing Law. 
This
Note will be governed by and construed in accordance with the laws of the state
of California without regard to any conflicts of laws or provisions thereof
that would otherwise require the application of the law of any other
jurisdiction.

(ii)        Jurisdiction and Venue.  Any
dispute or claim arising to or in any way related to this Note or the rights
and obligations of each of the parties shall be brought only in the state
courts of California or in the federal courts located in San Diego County,
California.

(iii)       No Jury Trial.  The Company hereto knowingly and voluntarily
waives any and all rights it may have to a trial by jury with respect to any
litigation based on, or arising out of, under, or in connection with, this
Note.

(iv)       Delivery
of Process by the Holder to the Company.  In the event of an action or
proceeding by the Holder against the Company, and only by the Holder against the
Company, service of copies of summons and/or complaint and/or any other process
that may be served in any such action or 

-7- 

proceeding may be made by the
Holder via U.S. Mail, overnight delivery service such as FedEx or UPS, email,
fax, or process server, or by mailing or otherwise delivering a copy of such
process to the Company at its last known attorney as set forth in its most
recent SEC filing.

(v)        Notices. 
Any notice required or permitted hereunder (including Conversion Notices) must
be in writing and either personally served, sent by facsimile or email
transmission, or sent by overnight courier.  Notices will be deemed effectively
delivered at the time of transmission if by facsimile or email, and if by
overnight courier the business day after such notice is deposited with the
courier service for delivery.

(g)        No
Bad Actor.  No officer or director of the Company would be disqualified
under Rule 506(d) of the Securities Act of 1933, as amended, on the basis of
being a "bad actor" as that term is established in the September 13, 2013 Small
Entity Compliance Guide published by the SEC.

(h)        Usury. 
If it shall be found that any interest or other amount deemed interest due
hereunder violates any applicable law governing usury, the applicable rate of
interest due hereunder shall automatically be lowered to equal the maximum rate
of interest permitted under applicable law.  The Company covenants (to the
extent that it may lawfully do so) that it will not seek to claim or take
advantage of any law that would prohibit or forgive the Company from paying all
or a portion of the principal, fees, liquidated damages or interest on this
Note.

IN WITNESS WHEREOF, the Company has caused this Convertible
Promissory Note to be duly executed on the day and in the year first above
written.

CROWDGATHER,
INC.

By:                                                                                            

Name:   

Title: 
    

Email:

Address:

This Convertible Promissory Note
of September 21, 2015 is accepted this ____ day of ______, 2015 by

-8-

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