Document:

Exhibit 1011

		

			 

		

		
			AMENDED AND RESTATED 
		

		
			SONIC CORP. EXECUTIVE SEVERANCE PLAN
		

		
			 
		

			
	
			
				Section 1.  
			Establishment, Objectives, and Duration

			
	
			
				1.1.  
			Establishment of the Amended and Restated Plan.  Sonic initially established the Plan effective April 22, 2009 (the “Effective Date”), which was amended effective November 1, 2012 and which is hereby amended and restated in its entirety by this Amended and Restated Sonic Corp. Executive Severance Plan effective September 1, 2014.  

			
	
			
				1.2.  
			Objective of the Plan.  The objective of the Plan is to enhance the long-term financial security of selected executives of the Corporation through the provision of severance benefits, including enhanced benefits following a Change in Control.  The Plan is further intended to provide flexibility to the Corporation in its ability to motivate, attract, and retain the services of Participants who make significant contributions to the Corporation’s success.

			
	
			
				1.3.  
			Duration of the Plan.  The Plan shall remain in effect until such time as the Committee amends or terminates the Plan pursuant to Section 7 hereof.

			
	
			
				Section 2.  
			Definitions.  Whenever used in the Plan, the following terms shall have the meanings set forth below, and when the meaning is intended, the initial letter of the word shall be capitalized: 

			
	
			
				2.1.  
			“Affiliate” means any corporation that is included in a controlled group of corporations (within the meaning of Section 414(b) of the Code) that includes Sonic and any trade or business (whether or not incorporated) that is under common control with Sonic (within the meaning of Section 414(c) of the Code); provided,  however, that in applying Section 1563(a)(1), (2), and (3) of the Code for purposes of determining a controlled group of corporations under Section 414(b) of the Code, the language “at least 50 percent” shall be used instead of “at least 80 percent” each place it appears in Section 1563(a)(1), (2) and (3) of the Code, and in applying Section 1.414(c)-2 of the Treasury Regulations, for purposes of determining trades or businesses (whether or not incorporated) that are under common control for purposes of Section 414(c) of the Code, “at least 50 percent” shall be used instead of “at least 80 percent” each place it appears in Section 1.414(c)‐2 of the Treasury Regulations. 

			
	
			
				2.2.  
			“Annual Base Salary” means a Participant’s annual base salary from the Corporation, including any compensation reduction contributions made with respect to the Corporation’s 401(k) Plan and any plan maintained by the Corporation pursuant to Section 125 of the Code, but excluding all bonuses, incentive compensation, expense reimbursements and severance pay.

			
	
			
				2.3.  
			“Board” means the Board of Directors of Sonic.

			
	
			
				2.4.  
			“Cause” means a determination by the Plan Administrative Committee of:

		
			 
		

		
			(a)the willful and intentional failure by a Participant to substantially or satisfactorily perform the Participant’s duties hereunder, other than any failure resulting from the Participant’s incapacity due to physical or mental incapacity;
		

		
			(b)the commission by a Participant, in connection with the Participant’s employment by the Corporation, of an illegal act or any act (though not illegal) which is not in the ordinary course of the Participant’s responsibilities and exposes the Corporation to a significant level of undue liability;  
		

		

		

		 

		

			 

		

 

		

			 

		

		(c)any act or omission that constitutes a material breach by a Participant of any of the Participant’s obligations as an employee of the Corporation; 
		

		
			 
		

		
			(d)a Participant’s conviction of, or plea of nolo contendere to, any felony or another crime involving dishonesty or moral turpitude or which could reflect negatively upon the Corporation or otherwise impair or impede its operations; 
		

		
			 
		

		
			(e)a Participant’s engaging in any act of dishonesty, violence or threat of violence (including any violation of federal securities laws) that is injurious to the Corporation or any of its subsidiaries or affiliates; or
		

		
			 
		

		
			(f)a Participant’s material breach of a written policy of the Corporation or the rules of any governmental or regulatory body applicable to the Corporation, or (vi) any other willful misconduct by a Participant which is materially injurious to the financial condition or business reputation of the Corporation or any of its subsidiaries or affiliates. 
		

		
			 
		

			
	
			
				2.5.  
			“Change in Control” means:

		
			(a)any consolidation or merger of Sonic in which Sonic is not the continuing or surviving corporation or pursuant to which shares of Sonic’s capital stock would convert into cash, securities or other property, other than a merger of Sonic in which the holders of Sonic’s capital stock immediately prior to the merger have the same proportionate ownership of capital stock of the surviving corporation immediately after the merger;
		

		
			(b)any sale, lease, exchange or other transfer (whether in one transaction or a series of related transactions) of all or substantially all of the assets of Sonic;
		

		
			(c)the stockholders of Sonic approve any plan or proposal for the liquidation or dissolution of Sonic;
		

		
			(d)any person (as used in Section 13(d) and 14(d)(2) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”)) becomes the beneficial owner (within the meaning of Rule 13D-3 under the Exchange Act) of 50% or more of Sonic’s outstanding capital stock;
		

		
			(e)during any period of two consecutive years, individuals who at the beginning of that period constitute the entire Board cease for any reason to constitute a majority of the Board, unless the election or the nomination for election by Sonic’s stockholders of each new director received the approval of the Board by a vote of at least two-thirds of the directors then and still in office and who served as directors at the beginning of the period; or
		

		
			(f)the Corporation becomes a subsidiary of any other corporation (the “Subsidiary Transaction”), other than a corporation in which the holders of the Corporation’s capital stock immediately prior to the Subsidiary Transaction have the same proportionate ownership of capital stock of the parent corporation immediately after the Subsidiary Transaction.
		

			
	
			
				2.6.  
			“Change in Control Termination” means an Eligible Termination or a Separation from Service due to a Participant’s resignation for Good Reason, occurring within the first 12 months subsequent to a Change in Control. 

			
	
			
				2.7.  
			“Claims Reviewer” means the Vice President of People of Sonic or such individual’s delegate.

		 

		

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				2.8.  
			“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rulings and regulations issued thereunder.

			
	
			
				2.9.  
			“Committee” means the Compensation Committee of the Board, as it is constituted from time to time, or any successor committee.

			
	
			
				2.10.  
			“Comparable Employment” means employment with a Purchaser that, if accepted, would provide a Participant with substantially equivalent Annual Base Salary and a substantially equivalent bonus opportunity.   

			
	
			
				2.11.  
			“Confidential Information” means the unique, proprietary and confidential information of the Corporation, consisting of: (a) confidential financial information regarding the Corporation, (b) confidential recipes for food products; (c) confidential and copyrighted plans and specifications for interior and exterior signs, designs, layouts and color schemes; (d) confidential methods, techniques, formats, systems, specifications, procedures, information, trade secrets, sales and marketing programs; (e) knowledge and experience regarding the operation and franchising of Sonic drive-in restaurants; (f) the identities and locations of Sonic’s franchisees, Sonic drive-in restaurants, and suppliers to Sonic’s franchisees and drive-in restaurants; (g) knowledge, financial information, and other information regarding the development of franchised and company-store restaurants; (h) knowledge, financial information, and other information regarding potential acquisitions and dispositions; and (i) any other confidential business information of the Corporation. 

			
	
			
				2.12.  
			“Corporation” means Sonic and all of its Affiliates.

			
	
			
				2.13.  
			“Director” means any individual who is a member of the Board.

			
	
			
				2.14.  
			“Disability” means the inability of a Participant to render the services required of him or her, with or without reasonable accommodations, as a result of physical or mental incapacity.  

			
	
			
				2.15.  
			“Effective Date” has the meaning set forth in Section 1.1.

			
	
			
				2.16.  
			“Eligible Termination” means a Separation from Service by the Corporation for any reason other than death or Cause, and shall specifically include a Separation from Service as a result of Disability.  

			
	
			
				2.17.  
			“Employee” means any individual who is an employee of the Corporation.

			
	
			
				2.18.  
			“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

			
	
			
				2.19.  
			“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor thereto.

			
	
			
				2.20.  
			“FAA” has the meaning set forth in Section 11.3(a).

			
	
			
				2.21.  
			“Good Reason” means:

		
			(a)the assignment to a Participant of duties materially inconsistent with the Participant’s position, office, duties, responsibilities and status with the Corporation immediately prior to a Change in Control, except in connection with the Participant’s Separation from Service by the Corporation for Disability or Cause or as a result of the Participant’s death or by the Participant other than for Good Reason as set forth herein;
		

		 

		

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			(b)a  material reduction by the Corporation in a Participant’s Annual Base Salary as in effect as of the date the Participant becomes subject to this Plan or as the same may be increased from time-to-time during the term of the Participant’s employment by the Corporation, except for a reduction that generally applies to all other officers;
		

		
			(c)the failure of the Corporation to provide a Participant with substantially the same fringe benefits (including, without limitation, life insurance plans, medical or disability plans, retirement plans, incentive plans, stock option plans, stock purchase plans, stock ownership plans, or bonus plans) that were provided to the Participant immediately prior to the Change in Control, or with a package of fringe benefits that, if one or more of such benefits varies from those in effect immediately prior to such Change in Control, is substantially comparable in all material respects to such fringe benefits taken as a whole;
		

		
			(d)a Participant’s relocation to any place more than 50 miles from the location at which the Participant performed the Participant’s duties prior to a Change in Control, except for required travel by the Participant on the Corporation’s business to an extent substantially consistent with the Participant’s business travel obligations at the time of the Change in Control;
		

		
			(e)any failure by the Corporation to provide a Participant with the same number of paid vacation days to which the Participant is entitled at the time of the Change in Control; or
		

		
			(f)the failure of a successor to the Corporation to assume the obligation of this Plan.
		

			
	
			
				2.22.  
			“Ineligible Termination” means a Separation from Service (i) by the Corporation for Cause; (ii) by a Participant for any reason (other than for Good Reason in connection with a Change in Control Termination); or (iii) by reason of a Participant’s death.

			
	
			
				2.23.  
			“Participant” means an Employee selected to participate in the Plan pursuant to Section 4 hereof.

			
	
			
				2.24.  
			“Payment Date” shall have the meaning ascribed to such term in Section 5.6 hereof.

			
	
			
				2.25.  
			“Plan” means the Sonic Corp. Executive Severance Plan, as amended and restated by this Amended and Restated Sonic Corp. Executive Severance Plan effective September 1, 2014.  

			
	
			
				2.26.  
			“Plan Administrative Committee” has the meaning set forth in Section 3.1 hereof.

			
	
			
				2.27.  
			“Purchaser” shall have the meaning ascribed to such term in Section 5.1(c) hereof.

			
	
			
				2.28.  
			“Release” shall have the meaning ascribed to such term in Section 5.6 hereof. 

			
	
			
				2.29.  
			“Rules” has the meaning set forth in Section 11.3(a).

			
	
			
				2.30.  
			“Senior Management” means the Chief Executive Officer, President and any other Sonic officers designated by the Board as Senior Management for purposes of this Plan. 

			
	
			
				2.31.  
			“Separates from Service” or “Separation from Service” means a “separation from service” with the Corporation for purposes of Section 409A of the Code, determined using the default provisions set forth in Treasury Regulation Section 1.409A‐1(h) or the successor regulation thereto.

			
	
			
				2.32.  
			“Severance Benefits” means the benefits payable to a Participant under Section 5.2.

			
	
			
				2.33.  
			“Sonic” means Sonic Corp., a Delaware corporation, and any successor thereto.

		 

		

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				2.34.  
			“Specified Employee” means a “specified employee” within the meaning of the default rules of Section 409A(a)(2)(B)(i) of the Code, unless and until Sonic establishes a methodology for determining specified employees, in which case that methodology shall govern.

			
	
			
				Section 3.  
			Administration

			
	
			
				3.1.  
			The Administrator.  The Plan shall be administered by the Plan Administrative Committee.  The Plan Administrative Committee shall consist of the General Counsel, the Vice President of People, and at least one other Employee appointed by the General Counsel.

			
	
			
				3.2.  
			Authority of the Administrator.  Except as limited by law and subject to the provisions of the Plan, the Plan Administrative Committee shall have full power and authority, in its sole discretion, to: 

		
			(a)determine a Participant’s eligibility for Severance Benefits and the amount of such Severance Benefits; 
		

		
			(b)construe and interpret the Plan, determine all questions arising in connection with the Plan, and to resolve ambiguities, inconsistencies and omissions in the text of the Plan; 
		

		
			(c)adopt, implement, amend, waive or rescind such rules and regulations as the Plan Administrative Committee may deem appropriate for the proper administration or operation of the Plan; 
		

		
			(d)make all factual or other determinations and take all other actions as may be necessary, appropriate or advisable for the administration or operation of the Plan; and 
		

		
			(e)employ and rely on legal counsel, actuaries, accountants and other agents as may be deemed advisable to assist in the administration of the Plan. 
		

		
			As permitted by law, the Plan Administrative Committee may delegate to any individual its authority, or any part thereof, as it deems necessary, appropriate or advisable for proper administration or operation of the Plan.  If any member of the Plan Administrative Committee is a Participant, such member shall not resolve, or participate in the resolution of, any matter relating specifically to such member’s eligibility to participate in the Plan or the calculation or determination of such member’s Severance Benefits under the Plan.
		

			
	
			
				3.3.  
			Decisions Binding.  All determinations, interpretations, decisions or other actions made or taken by the Plan Administrative Committee pursuant to the provisions of the Plan and all related orders and resolutions of the Committee and the Plan Administrative Committee shall be final, conclusive and binding for all purposes and upon all persons, including without limitation Sonic, Sonic’s shareholders, Directors, Employees, Participants, and Participants’ estates and beneficiaries.

			
	
			
				Section 4.  
			Eligibility and Participation

			
	
			
				4.1.  
			Eligibility.  All Employees of the Corporation who are at the level of Vice President or above and who do not have a written employment contract with the Corporation that provides for severance benefits, including Employees who are also Directors, are eligible to participate in this Plan.

			
	
			
				4.2.  
			Participation.  Participation in the Plan is expressly conditioned on the eligible Employee signing and returning to Sonic an agreement acknowledging his or her voluntary consent to the terms and conditions of the Plan (including, but not limited to, the arbitration provisions of Section 11.3) substantially in the form set forth in Annex A hereto.

		 

		

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				4.3.  
			Termination of Participation.  A Participant shall cease to be a Participant upon the earliest to occur of:

		
			(a)the Participant’s receipt of all Severance Benefits to which he or she is entitled under the Plan;
		

		
			(b)the Participant’s Ineligible Termination;
		

		
			(c)the effective date of an employment agreement or other written agreement that provides for severance benefits between the Participant and the Corporation; 
		

		
			(d)subject to Section 7, termination of the Plan; or
		

		
			(e)the Participant ceases to be at the level of Vice President or above.
		

			
	
			
				Section 5.  
			Severance Benefits

			
	
			
				5.1.  
			Eligibility for Severance Benefits.

		
			(a)If a Participant Separates from Service with the Corporation in an Eligible Termination or a Change in Control Termination, the Participant shall receive Severance Benefits in the amount determined under Section 5.2.
		

		
			(b)If a Participant Separates from Service with the Corporation in an Ineligible Termination, the Participant shall not be entitled to receive Severance Benefits.
		

		
			(c)Notwithstanding anything herein to the contrary, a Participant’s Separation from Service shall constitute an Ineligible Termination rather than an Eligible Termination if the Participant, prior to his or her Separation from Service, (i) is employed by or otherwise provides services for compensation to an Affiliate or a division or business unit of the Corporation that is sold in whole or in part to an entity that is not an Affiliate of Sonic or otherwise affiliated with Sonic (such as a joint venture of which Sonic or an Affiliate is a member, owner or partner) (the “Purchaser”), whether by sale of stock or assets, and (ii) is offered Comparable Employment with such Purchaser, whether or not the Participant actually accepts such Comparable Employment with the Purchaser.  
		

		
			(d)Participants who are offered and accept a position with a Purchaser shall be deemed to have Separated from Service in an Ineligible Termination, even if such position does not constitute Comparable Employment.  Upon initial employment with a Purchaser, whether or not in Comparable Employment, all rights of the Participant under this Plan shall terminate, and no Severance Benefits shall be payable hereunder.
		

			
	
			
				5.2.  
			Amount of Severance Benefits.

		
			(a)If a Participant incurs an Eligible Termination, the Corporation shall provide to such Participant the following Severance Benefits:
		

		
			(i)For Senior Management, the Corporation shall continue to be obligated to pay 12 months’ of the Participant’s Annual Base Salary, payable in 24 equal installments.  The Corporation shall not be obligated to provide any other compensation or benefits, except to the extent required by law.
		

		
			(ii)For all Participants other than Senior Management, the Corporation shall continue to be obligated to pay six months’ of the Participant’s Annual Base Salary, 
		

		 

		

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		payable in 12 equal installments; provided,  however, upon Disability, each installment shall be reduced by any benefit payment the Participant is entitled to receive under Sonic’s group disability insurance plan during the corresponding payroll period, on a tax-adjusted basis.  The Corporation shall not be obligated to provide any other compensation or benefits, except to the extent required by law. 
		

		
			(iii)If a Participant incurs a Change in Control Termination, then the Corporation shall be obligated to pay to the Participant an amount equal to two times the Participant’s Severance Benefits payable under paragraph 5.2(a) above. 
		

		
			(b)Notwithstanding anything to the contrary, a Participant hereunder shall be ineligible to participate in or receive benefits under any other severance or termination plan, program or arrangement of the Corporation.  The amount of a Participant’s Severance Benefits hereunder shall not be reduced by the amount or value of any compensation or benefits payable to the Participant with respect to services performed after an Eligible Termination, and the Participant shall be under no obligation to seek subsequent employment or to mitigate the damages resulting from such Eligible Termination.  Notwithstanding the previous sentence, all payments required to be made under the terms of this Plan, other than payments due in the event of a Change in Control Termination under Section 5.2(b), shall cease 30 days after the acceptance by the Participant of employment by another employer.  The Participant shall be obligated to provide written notification in a timely manner to the Plan Administrative Committee of Participant’s acceptance of subsequent employment.  
		

		
			(c)Limitation on Severance Payments.
		

		
			(i)Notwithstanding any provision of this Plan, if any portion of the severance payments under this Section V or other payment under this Plan together with any other payments or compensation which a Participant has a right to receive from the Corporation or its affiliates (in the aggregate, “Total Payments”) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and,  but for this Section 5.2(d), would be subject to excise tax imposed by Section 4999 of the Code, the Total Payments shall be reduced to the largest amount as will result in no portion of the severance payment being subject to the excise tax imposed by Section 4999 of the Code.
		

		
			(ii)If a reduction is required pursuant to Section 5.2(d)(i), the Total Payments shall be reduced or eliminated by applying the following principles, in order: (1) the payment or benefit with the later possible payment date shall be reduced or eliminated before a payment or benefit with an earlier payment date; and (2) cash payments shall be reduced prior to non-cash benefits; provided that if the foregoing order of reduction or elimination would violate Code Section 409A, then the reduction shall be made pro rata among the payments or benefits included in the Total Payments (on the basis of the relative present value of the parachute payments).
		

		
			(iii)The determinations to be made with respect to this Section 5.2(d) shall be made by a certified public accounting firm designated by the Company (which may be the Corporation’s independent auditors) and reasonably acceptable to the Participant (the “Accounting Firm”).  For purposes of the determination by the Accounting Firm, the value of any noncash benefits or any deferred payment or benefit shall be determined in accordance with the principles of Code Sections 280G(d)(3) and (4).
		

		 

		

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				5.3.  
			Time and Form of Payment.  

		
			(a)Upon an Eligible Termination, the Severance Benefits pursuant to Section 5.2(a) shall be paid in the form of installments, with the first installment occurring on the first regularly scheduled payroll date  no later than 30 days following the date of the Participant’s Separation from Service, and the remaining installments occurring on a semi-monthly basis thereafter until all installments have been paid, provided that the Participant execute a Release pursuant to Section 5.6 hereof and that any applicable revocation period has expired prior to the time the first payment is due.  
		

		
			(b)Upon a Change in Control Termination: 
		

		
			(i)If the Change in Control implicated by Section 5.2(b) is also a “change in control event” within the meaning of the default rules of the final regulations promulgated under Section 409A(a)(2)(A)(v) of the Code, then the Severance Benefits due under Section 5.2(b) shall be made in a lump sum, payable no later than the 15th day of the third month following the later of the end of the Corporation’s tax year or the Participant’s tax year in which occurs the Participant’s effective date of Separation from Service under Section 5.2(b), provided that the Participant execute an irrevocable Release pursuant to Section 5.6 hereof prior to the time the payment is due.   
		

		
			(ii)If the Change in Control is not a “change in control event” within the meaning of the default rules of the final regulations promulgated under Section 409A(a)(2)(A)(v) of the Code, the Severance Benefits contemplated by Section 5.2(b) shall be made in 12 semi-monthly installment payments, with the first installment occurring on the first regularly scheduled payroll date following the effective date of the Participant’s Change in Control Termination; provided that the Participant execute an irrevocable Release pursuant to Section 5.6 hereof prior to the time the payment is due.  For purposes of this Section 5.3(b)(ii), the effective date of a Participant’s Change in Control Termination shall mean, as applicable, (x) the effective date of the Eligible Termination or (y) the effective date of the Participant’s resignation for Good Reason, which date shall be stated in the Participant’s written notice to the Corporation of his resignation for Good Reason and shall be no later than 60 days following the date of such notice.  If the Participant believes Good Reason exists for terminating his or her employment, then the Participant shall give the Corporation written notice of the acts or omissions constituting Good Reason within 30 days after learning of such acts or omissions constituting Good Reason (the “Good Reason Notice”).  No termination of employment for Good Reason shall be effective unless (i) within 30 days after receiving the Good Reason Notice, the Corporation fails to either cure such acts or omissions or notify the Participant of the intended method of cure, and (ii) the Participant delivers a written notice of termination to the Corporation and subsequently resigns within 30 days after the Corporation’s deadline in (i) above expires. 
		

		
			5.4Section 409A Compliance.  If, at the time of a Participant’s Eligible Termination or Change in Control Termination with the Corporation, the Participant is a Specified Employee, then any Severance Benefits payable to the Participant prior to the six-month anniversary of the Participant’s date of Eligible Termination, which constitute deferred compensation subject to Section 409A of the Code, shall be delayed and not paid to the Participant until the first business day following the six‐month anniversary of the effective date of the Eligible Termination or Change in Control Termination, as applicable, at which time such delayed amounts will be paid to the Participant in a cash lump sum.  If a Participant dies on or after the Participant’s date of Eligible Termination or Change in Control Termination and prior to the payment of the delayed amounts pursuant to this Section 5.4, any amount delayed pursuant to this Section 5.4 shall be paid to the Participant’s estate within 30 days following the 
		

		 

		

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		Participant’s death.  The Corporation shall not accelerate any payment or the provision of any benefits under this Plan or make or provide any such payment or benefits if such payment or provision of such benefits would, as a result, be subject to tax under Section 409A of the Code.  It is understood that each installment is a separate payment, and that the timing of payment is within the control of the Corporation.  To the extent this Plan is subject to Section 409A of the Code, the Corporation and the Participants intend all payments under this Plan to comply with the requirements of such section, and this Plan shall, to the extent reasonably practicable, be operated and administered to effectuate such intent.   If, in the good faith judgment of the Corporation, any provision of this Plan could cause the Participant to be subject to adverse or unintended tax consequences under Section 409A of the Code, such provision shall be modified by the Corporation in its sole discretion to maintain, to the maximum extent practicable, the original intent of the applicable provision without violating the requirements of Section 409A of the Code.  
		

		
			5.5Clawback Provisions.  Notwithstanding any other provisions in this Plan to the contrary, any incentive-based compensation, or any other compensation, paid or payable to a Participant pursuant to this Plan or any other agreement or arrangement with the Corporation which is subject to clawback (recovery) under any law, government regulation, order or stock exchange listing requirement, will be subject to such deductions and clawback (recovery) as may be required to be made pursuant to law, government regulation, order, stock exchange listing requirement (or any policy of the Corporation adopted pursuant to any such law, government regulation, order or stock exchange listing requirement). Participant specifically authorizes the Corporation to withhold from his or her future wages any amounts that may become due under this provision. This Section 5.5 shall survive the termination of the Participant’s employment with the Corporation for a period of three years.
		

		
			 
		

		
			5.6Agreement and Release.  Notwithstanding any provision of this Plan to the contrary, the obligation of the Corporation to pay any Severance Benefits to a Participant is expressly conditioned upon the Participant’s timely execution of an agreement by the Participant to (a) comply with the terms and conditions of Section 9 below and (b) be bound by a release of any and all claims arising out of or relating to the Participant’s employment and termination of employment (a “Release”), that is or becomes irrevocable not later than the date the first (or only) payment is due pursuant to Section 5.3 (the “Payment Date”).  The Corporation shall have no obligation to pay any Severance Benefits to a Participant who fails to execute a Release that is or becomes irrevocable after the Payment Date.  Such Release shall be made in a form satisfactory to the Corporation, substantially in the form set forth in Annex B hereto, and shall be for the benefit of the Corporation, its respective affiliates, and their respective officers, employees, directors, shareholders, agents, successors and assigns.  
		

		
			 
		

			
	
			
				 5.7
			Non-transferability of Severance Benefits.  No right to Severance Benefits may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution.

			
	
			
				Section 6.  
			Beneficiary Designation.  The beneficiary or beneficiaries of the Participant to whom any benefit under the Plan is to be paid in case of his or her death before he or she receives any or all of such benefit shall be determined under the Corporation’s Group Life Insurance Plan.  A Participant under the Plan may, from time to time, name any beneficiary or beneficiaries to receive any benefit in case of his or her death before he or she receives any or all of such benefit.  Each such designation shall revoke all prior designations by the same Participant, including the beneficiary designated under the Corporation’s Group Life Insurance Plan, and will be effective only when filed by the Participant in writing (in such form or manner as may be prescribed by the Plan Administrative Committee) with the Corporation during the Participant’s lifetime.  In the absence of a valid designation under the Corporation’s Group Life Insurance Plan or otherwise, if no validly designated beneficiary survives the Participant or if each surviving validly designated beneficiary is legally impaired or prohibited from taking, the Participant’s beneficiary shall be the Participant’s estate.

		 

		

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				Section 7.  
			Amendment and Termination.

			
	
			
				7.1.  
			Amendment and Termination.  The Committee may at any time, and from time to time, in its sole discretion alter, amend, suspend or terminate the Plan in whole or in part for any reason or for no reason; provided,  however, that no alteration, amendment, suspension or termination of the Plan shall adversely affect in any material way the Severance Benefits of any Participant who has an Eligible Termination or Change in Control Termination prior to such action.

			
	
			
				7.2.  
			Section 409A Compliance.  If any provision of the Plan would, in the reasonable, good faith judgment of the Committee or the Plan Administrative Committee, result or likely result in the imposition on a Participant, beneficiary or any other person of additional taxes, penalties and interest under Section 409A of the Code, the Committee or the Plan Administrative Committee may modify the terms of the Plan, without the consent of any Participant or beneficiary, in the manner that the Committee or the Plan Administrative Committee may reasonably and in good faith determine to be necessary or advisable to comply with Section 409A of the Code; provided,  however, that any such reformation shall, to the maximum extent the Committee or the Plan Administrative Committee reasonably and in good faith determines to be possible, retain the economic and tax benefits to the affected Participant hereunder while not materially increasing the cost to the Corporation of providing such benefits to the Participant.

			
	
			
				Section 8.  
			Tax Withholding.  The Corporation shall have the power and the right to deduct or withhold, or require a Participant to remit to the Corporation, an amount sufficient to satisfy Federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this Plan.

			
	
			
				Section 9.  
			Prohibited Activity.  

			
	
			
				9.1.  
			The Participant shall use Confidential Information only to the Corporation’s benefit and shall not at any time during or after his or her employment with the Corporation  divulge or make accessible to any party any Confidential Information of the Corporation, except to the extent authorized in writing by the Corporation or otherwise required by law.  The Participant shall give the Corporation written notice of any circumstances in which the Participant has actual notice of any access, possession or use of the Confidential Information not authorized by this Section 9.1.

			
	
			
				9.2.  
			In consideration of his or her receipt of benefits under this Plan, the Participant shall not at any time after his or her Separation from Service, without the prior written consent of the Plan Administrative Committee, directly or indirectly, retain in or have any interest, directly or indirectly, in any business competing with the business being conducted by the Corporation.  For the six-month period immediately following the Participant’s Separation from Service for any reason (the “Non-Competition Period”), the Participant shall not engage in or have any interest, directly or indirectly, in any entity that competes in the hamburger quick service restaurant segment or that has a set of product offerings substantively similar to that of a material portion of the sales of a Sonic drive-in restaurant.

			
	
			
				9.3.  
			In consideration of his or her receipt of benefits under this Plan, during employment and during the Non-Competition Period, the Participant shall not directly or indirectly,  (i) recruit or hire or otherwise seek to induce any employee of the Corporation or of any of the Corporation’s affiliates to terminate his or her employment or violate any agreement with or duty to the Corporation or any of the Corporation’s affiliates; or (ii) solicit or encourage any franchisee or vendor of the Corporation or of any of the Corporation’s affiliates to terminate or diminish its relationship with any of them or to violate any agreement with any of them, or, in the case of a franchisee, to conduct with any person any business or activity that such franchisee conducts or could conduct with the Corporation or any of the Corporation’s affiliates. 

		 

		

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				9.4.  
			In consideration of his or her receipt of benefits under this Plan, the Participant shall not at any time during or after his or her employment with the Corporation make any negative or disparaging comments regarding the Corporation or its performance, operations, or business practices, or otherwise take any action that could reasonably be expected to adversely affect the Corporation or its professional reputation.  The Participant may truthfully respond to inquiries by government agencies or to inquiries by any person through a subpoena or other valid judicial process without violating this Section 9.3. 

			
	
			
				9.5.  
			In addition to any other relief to which the Corporation may be entitled, the Corporation will be entitled to seek and obtain injunctive relief (without the requirement of any bond) from a court of competent jurisdiction for the purposes of restraining a Participant from an actual or threatened breach of the above covenants.  In addition, and without limiting the Corporation’s other remedies, in the event of any breach by a Participant of such covenants, the Corporation will have no obligation to pay any of the amounts that continue to remain payable to the Participant after the date of such breach of the above covenants.

			
	
			
				Section 10.  
			Successors.  All obligations of Sonic and the Corporation under the Plan with respect to Severance Benefits shall be binding on any successor to Sonic and the Corporation as the case may be, whether the existence of such successor is the result of a direct or indirect purchase of all or substantially all of the business and/or assets of Sonic or the Corporation, merger, consolidation, or otherwise.

			
	
			
				Section 11.  
			Claims Procedure.  

			
	
			
				11.1.  
			Adoption.  The Plan Administrative Committee shall adopt and implement such rules and procedures as it may deem appropriate for the submission of claims for Severance Benefits under the Plan and shall communicate such rules and procedures as in effect from time to time to Participants.  

			
	
			
				11.2.  
			Claims Procedure.  

		
			(a)If a Participant disputes his or her ineligibility for Severance Benefits, the Participant shall submit a claim in writing to the Claims Reviewer who shall review and consider the merits of the claim.  Written notice of the Claims Reviewer’s decision regarding the application for benefits shall be furnished to the claimant or his or her authorized representative (“Claimant”) within 30 days after receipt of the claim; provided,  however, that, if special circumstances require an extension of time for processing the claim, an additional 30 days from the end of the initial period shall be allowed for processing the claim, in which event the Claimant shall be furnished with a written notice of the extension prior to the termination of the initial 30-day period indicating the special circumstances requiring an extension and the date by which it is anticipated that a decision will be made.  Any written notice denying a claim shall set forth the specific reasons for the denial, including specific reference to pertinent provisions of the Plan on which the denial is based; a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary; and a description of the review procedures set forth in this Section 11 and the time limits applicable to such procedures, including a statement that the Claimant may bring a civil action under Section 502(c) of ERISA if the claim is denied on appeal.
		

		
			(b)A Claimant may review all relevant documents and may request a review by the Plan Administrative Committee of a decision denying the claim.  Such a request shall be made in writing and filed with the Plan Administrative Committee within 60 days after delivery to the Claimant of written notice of the decision of the Claims Reviewer.  Such written request for review shall contain all additional information that the Claimant wishes the Plan Administrative Committee to consider.  The Plan Administrative Committee may hold a hearing or conduct an independent investigation, and the decision on review shall be made as soon as possible after the Plan Administrative Committee’s receipt of the request for review.  Written notice of the decision on 
		

		 

		

			11

		

 

		

			 

		

		review shall be furnished to the Claimant within 60 days after receipt by the Plan Administrative Committee of a request for review, unless special circumstances require an extension of time for processing, in which event an additional 60 days shall be allowed for review.  If such an extension of time for processing is required because of special circumstances, written notice of the extension shall be furnished prior to the commencement of the extension describing the reasons an extension is needed and the date when it is anticipated that the determination will be made.  Written notice of the decision on review shall include specific reasons for the decision, including the relevant information described in Section 11.2(a) with respect to the initial denial; a statement that the Claimant may review, upon request, copies of all documents relevant to the Claimant’s claim; and a statement that the Claimant is entitled to receive without charge reasonable access to any document (1) relied on in making the determination, (2) submitted, considered or generated in the course of making the benefit determination, (3) that demonstrates compliance with the administrative processes and safeguards required in making the determination, or (4) constitutes a statement of policy or guidance with respect to the Plan concerning the denied treatment without regard to whether the statement was relied on.  
		

			
	
			
				11.3.  
			Mandatory Arbitration.  

		
			(a)Any controversy or claim between the Claimant and the Corporation arising out of or relating to a claim for benefits payable by the Plan, including, but not limited to, all claims under ERISA, shall be settled by binding arbitration in the state of Oklahoma in accordance with the Rules of Commercial Arbitration (the “Rules”) of the American Arbitration Association.  The Federal Arbitration Act, as may be amended from time to time (the “FAA”), as supplemented by the Oklahoma Arbitration Act (to the extent not inconsistent with the FAA), shall apply to the arbitration and all procedural matters relating to the arbitration.  If any such arbitration is undertaken, the evidence presented shall be strictly limited to the evidence timely presented to the Plan Administrative Committee.  At the election of the Corporation, the provisions of this Section 11.3 shall not apply to any controversies relating to the enforcement of Section 9 regarding prohibited activity, and the Corporation shall have the right to apply to any court of competent jurisdiction for appropriate injunctive relief for the infringement of the Corporation’s rights under Section 9.
		

		
			(b)The parties shall select one arbitrator within 10 days after the filing of a demand and submission in accordance with the Rules.  If the parties fail to agree on an arbitrator within that 10-day period or fail to agree to an extension of that period, the arbitration shall take place before an arbitrator selected in accordance with the Rules.  
		

		
			(c)The arbitration shall take place in Oklahoma City, Oklahoma, and the arbitrator shall issue any award at the place of arbitration.  The arbitrator may conduct hearings and meetings at any other place agreeable to the parties or, upon the motion of a party, determined by the arbitrator as necessary to obtain significant testimony or evidence.  
		

		
			(d)The prevailing party shall have the right to enter the award of the arbitrator in any court having jurisdiction over one or more of the parties or their assets.  The parties specifically waive any right they may have to apply to any court for relief from the provisions of this Plan or from any decision of the arbitrator made prior to the award.    
		

		
			(e)The prevailing party to the arbitration shall have the right to an award of its reasonable attorneys’ fees and costs (including the cost of the arbitrator) incurred after the filing of the demand and submission.  If the Corporation prevails, the award shall include an amount for that portion of the administrative overhead reasonably allocable to the time devoted by the in-house legal staff of the Corporation.  
		

		 

		

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			(f)In the event any provision or application of this Section 11.3 shall be held illegal or invalid for any reason in any jurisdiction, the illegality or invalidity shall not affect the remaining parts of this Section 11.3, and shall not invalidate or render unenforceable such provision or application in any other jurisdiction.  
		

		
			(g)In the event mandatory arbitration pursuant to this Section 11.3 is specifically prohibited by applicable law, in the determination of the Plan Administrative Committee, arbitrator or court of law in connection with a dispute between the Claimant and the Corporation with respect to the issue, the Claimant may seek judicial review of an adverse benefit determination under the Plan, whether in whole or in part, by filing a suit or legal action, including, without limitation, a civil action under Section 502(a) of ERISA, within one year of the date the final decision on the adverse benefit determination on review is issued or lose any rights to bring such an action.  The venue of any such suit or legal action shall be Oklahoma City, Oklahoma.  If any such judicial proceeding is undertaken, the evidence presented shall be strictly limited to the evidence timely presented to the Plan Administrative Committee.  Notwithstanding anything in the Plan to the contrary, a Claimant must exhaust all administrative remedies available to such Claimant under the Plan before such Claimant may seek judicial review pursuant to Section 502(a) of ERISA.
		

			
	
			
				Section 12.  
			Legal Construction.

			
	
			
				12.1.  
			Gender and Number.  Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural.

			
	
			
				12.2.  
			Severability and Modifications.  In the event any provision or application of such provision of the Plan shall be held illegal or invalid for any reason in any jurisdiction, the illegality or invalidity shall not affect the remaining parts of the Plan, and shall not invalidate or render unenforceable such provision or application in any other jurisdiction.  Moreover, if at the time of enforcement of any provision hereof, a court of competent jurisdiction holds that the restrictions stated herein are unreasonable under circumstances then existing, the parties hereto agree that the maximum period, scope, or geographic area reasonable under such circumstances shall be substituted for the stated period, scope or geographical area and that such court shall be allowed to revise the restrictions contained herein to cover the maximum period, scope and geographical area permitted by law.

			
	
			
				12.3.  
			Requirements of Law.  The operation of the Plan and the payment of Severance Benefits hereunder shall be subject to all applicable laws, rules, and regulations, and to such approvals as may be required.

			
	
			
				12.4.  
			Governing Law.  To the extent not preempted by Federal law, the Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Delaware.

			
	
			
				12.5.  
			Special Compensation.  Except as otherwise required by law or as specifically provided in any plan or program maintained by the Corporation, no payment under the Plan shall be included or taken into account in determining any benefit under any pension, thrift, profit sharing, group insurance, or other benefit plan maintained by the Corporation.

			
	
			
				12.6.  
			Incompetent Payee.  If the Plan Administrative Committee shall find that any individual to whom any amount is payable under the Plan is found by a court of competent jurisdiction to be unable to care for his or her affairs because of illness or accident, or is a minor, or has died, then the payment due to him or her or to his or her estate (unless a prior claim thereof has been made by a duly appointed legal representative) may, if the Plan Administrative Committee so elects, be paid to his or her spouse, a child, a relative, an institution maintaining or having custody of such individual, or any other individual deemed by the Plan Administrative Committee to be a proper recipient on behalf of such individual otherwise 
		

		 

		

			13

		

 

		

			 

		

			entitled to payment. Any such payment shall constitute a complete discharge of all liability of the Plan thereof.

			
	
			
				12.7.  
			Plan Not an Employment Contract.  This Plan is not, nor shall anything contained herein be deemed to give any Employee, Participant or other individual any right to be retained in his or her employer’s employ or to in any way limit or restrict his or her employer’s right or power to discharge any Employee or other individual at any time and to treat such Employee without any regard to the effect which such treatment might have upon him or her as a Participant of the Plan.

		

		

		 

		

			14

		

 

		

			 

		

		
		

		
			ANNEX A
		

		
			 
		

		
			FORM OF ACKNOWLEDGEMENT AGREEMENT
		

		
			 
		

		
			By signing below, I acknowledge to Sonic Corp. (“Sonic”) that: 
		

		
			 
		

		
			(a)I have read the Sonic Corp. Executive Severance Plan (the “Plan”); 
		

		
			 
		

		
			(b)I understand the terms and conditions of the Plan, including, but not limited to, the covenants on prohibited activity in Section 9 of the Plan, as well as the mandatory arbitration provisions of Section 11.3 of the Plan; 
		

		
			 
		

		
			(c)I was advised by Sonic, and I am aware, of my right to consult with an attorney before signing this Agreement; 
		

		
			 
		

		
			(d)In consideration of the benefits I would receive under the Plan, I accept the terms and conditions of the Plan, including, but not limited to, the covenants on prohibited activity in Section 9 of the Plan, as well as the mandatory arbitration provisions of Section 11.3 of the Plan;
		

		
			 
		

		
			(e)I have signed this Agreement knowingly and voluntarily and without any duress or undue influence on the part or behalf of Sonic or any of its affiliates;
		

		
			 
		

		
			(f)I acknowledge that in signing this Agreement, I have not relied upon any representation or statement not set forth in this Agreement or the Plan made by Sonic or any of its representatives; and 
		

		
			 
		

		
			(g)I acknowledge that this Agreement sets forth the entire understanding between Sonic and me in connection with its subject-matter and supersedes and replaces any express or implied, written or oral, prior agreement of plans or arrangement with respect to the terms of my employment and the termination thereof which I may have had with Sonic or any of its affiliates.  
		

		
			 
		

		
			 
		

		
			
		

		
			 
		

		
			_________________________________
		

		
			[Employee Name] 
		

		
			 
		

		
			_________________________________
		

		
			Date
		

		
			
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		

		

		 

		

			15

		

 

		

			 

		

		ANNEX B
		

		
			 
		

		
			FORM OF RELEASE
		

		
			 
		

		
			In connection with my separation from service with Sonic Corp. (“Sonic”), I provide the following Release of Claims (the “Release”).
		

		
			 
		

		
			I.General Release.
		

		
			 
		

		
			I, and each of my respective heirs, executors, administrators, representatives, agents, successors and assigns (collectively, the “Releasors”) hereby irrevocably and unconditionally release and forever discharge Sonic, its subsidiaries and affiliates (the “Company Group”) and each of their respective officers, employees, directors, shareholders, agents, successors and assigns from any and all claims, actions, causes of action, rights, judgments, obligations, damages, demands, accountings or liabilities of whatever kind or character (collectively, “Claims”), including, without limitation, any Claims under any federal, state, local or foreign law, that the Releasors may have, or in the future may possess, arising out of (i) my employment relationship with and service as an employee or officer of the Company Group, and the termination of such relationship or service, or (ii) any event, condition, circumstance or obligation that occurred, existed or arose on or prior to the date hereof; provided,  however, that this Release shall not apply to any claims by me for benefits to which I am entitled as of the date of this Release under Sonic’s compensation and benefit plans, subject, in each case, to the applicable terms and conditions of each such plan.  Without limiting the scope of the foregoing provision in any way, I hereby release all claims relating to or arising out of any aspect of my employment with the Company Group, including but not limited to, all claims under Title VII of the Civil Rights Act, the Civil Rights Act of 1991 and the laws amended thereby; the Age Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act of 1990; the Americans with Disabilities Act; the Family and Medical Leave Act of 1993; the Fair Labor Standards Act of 1963; any contract of employment, express or implied; any provision of the Constitution of the United States or of any particular State; and any other law, common or statutory, of the United States, or any particular State; any claim for the negligent and/or intentional infliction of emotional distress or specific intent to harm; any claims for attorneys fees, costs and/or expenses; any claims for unpaid or withheld wages, severance pay, benefits, bonuses, commissions and/or other compensation of any kind; and/or any other federal, state or local human rights, civil rights, wage and hour, wage payment, pension or labor laws, rules and/or regulations; all claims growing out of any legal restrictions on the Company Group’s right to hire and/or terminate its employees, including all claims that were asserted and/or that could have been asserted by me and all claims for breach of promise, public policy, negligence, retaliation, defamation, impairment of economic opportunity, loss of business opportunity, fraud, misrepresentation, etc.  The Releasors further agree that the payments and benefits described in the Executive Severance Plan shall be in full satisfaction of any and all Claims for payments or benefits, whether express or implied, that the Releasors may have against the Company Group arising out of my employment relationship or my service as an employee or officer of the Company Group and the termination thereof. 
		

		
			 
		

		
			II.Specific Release of ADEA Claims.[IF APPLICABLE]
		

		
			 
		

		
			In consideration for, among other things, certain actions by Sonic in support of my Separation from Service, the Releasors hereby unconditionally release and forever discharge the Company Group from any and all Claims arising under the Federal Age Discrimination in Employment Act of 1967, as amended, and the applicable rules and regulations promulgated thereunder (“ADEA”) that I may have as of the date of my signature to this Agreement.  By signing this Release, I hereby acknowledge and confirm the following:
		

		
			 
		

		

		

		 

		

			16

		

 

		

			 

		

		(i)I was advised by Sonic in connection with my termination to consult with an attorney of my choice prior to signing this Release and to have such attorney explain to me  the terms of this Release, including, without limitation, the terms relating to my release of claims arising under ADEA;
		

		
			 
		

		
			(ii)I was given a period of not fewer than [21] / [45] days to consider the terms of this Release and to consult with an attorney of my choosing with respect thereto, and was given the option to sign the Release in fewer than [21] / [45] days if I desired;
		

		
			 
		

		
			(iii)I am providing the release and discharge set forth in this Release only in exchange for consideration in addition to anything of value to which I am already entitled; and
		

		
			 
		

		
			(iv)I knowingly and voluntarily accept the terms of this Release.
		

		
			 
		

		
			I acknowledge that I understand that I may revoke this specific ADEA release contained in this Section II of this Release within seven days following the date on which I sign this Release (the “Revocation Period”) by providing to the General Counsel of Sonic written notice of my revocation of the release and waiver contained in this Section II of this Release prior to the expiration of the Revocation Period.  This right of revocation relates only to the ADEA release set forth in this Section II of this Release and does not act as a revocation of any other term of this Release.  Any payments or benefits provided to me under the Executive Severance Plan shall not commence unless the Revocation Period has expired. 
		

		
			 
		

		
			III.Restrictive Covenants.  I acknowledge that I am subject to Section 9 of the Executive Severance Plan, and I shall comply with the provisions thereof.  
		

		
			 
		

		
			IV.Representations and Warranties
		

		
			 
		

		
			I agree that I have not instituted, assisted or otherwise participated in connection with, any action, complaint, claim, charge, grievance, arbitration, lawsuit, or administrative agency proceeding, or action at law or otherwise against any member of the Company Group or any of their respective officers, employees, directors, shareholders or agents.  I represent and warrant that I have not assigned any of the Claims being released under this Release.
		

		
			 
		

		
			I acknowledge that, except as expressly set forth herein, no representations of any kind or character have been made to me by Sonic or by any of its agents, representatives, or attorneys to induce the execution of this Release.  I understand and acknowledge the significance and consequences of this Release, that it is voluntary, that it has not been entered into as a result of any coercion, duress or undue influence, and expressly confirm that it is to be given full force and effect according to all of its terms, including those relating to unknown Claims.  I acknowledge that I had full opportunity to discuss any and all aspects of this Release with legal counsel, and have availed myself of that opportunity to the extent desired.  I acknowledge that I have carefully read and fully understand all of the provisions of this Release and have signed below only after full reflection and analysis.
		

		
			 
		

		
			V.Miscellaneous
		

		
			 
		

		
			This Release sets forth the entire understanding between Sonic and me in connection with its subject-matter and supersedes and replaces any express or implied, written or oral, prior agreement of plans or arrangement with respect to the terms of my employment and the termination thereof which I may have had with the Company Group.  I acknowledge that in signing this Release, I have not relied 
		

		 

		

			17

		

 

		

			 

		

		upon any representation or statement not set forth in this Release made by Sonic or any of its representatives.  
		

		
			 
		

		
			By signing this Release, I acknowledge that: (a) I have read this Release; (b) I understand this Release and know that I am giving up important rights; (c) [Section II of this Release shall not become effective or enforceable for a period of seven (7) days following its execution]; (d) I was advised by Sonic, and I am aware, of my right to consult with an attorney before signing this Release; and (e) I have signed this Release knowingly and voluntarily and without any duress or undue influence on the part or behalf of Sonic.
		

		
			 
		

		
			 
		

		
			
		

		
			
		

		
			 
		

		
			_________________________________
		

		
			[Employee Name] 
		

		
			 
		

		
			_________________________________
		

		
			Date
		

		
			 
		

		
			 
		

		
			 
		

		 

		

			18SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of October 20, 2014, by and between CROWDGATHER, INC., a Nevada corporation, with headquarters located at 20300 Ventura Boulevard - Suite 330, Woodland Hills, CA 91364 (the "Company"), and KBM WORLDWIDE, INC., a New York corporation, with its address at 80 Cuttermill Road, Suite 410, Great Neck, NY 11021 (the "Buyer").

WHEREAS:

A.            The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended (the "1933 Act");

B.            Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement an 8% convertible note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of $154,000.00 (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the "Note"), convertible into shares of common stock, $0.001 par value per share, of the Company (the "Common Stock"), upon the terms and subject to the limitations and conditions set forth in such Note.

C.            The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Note as is set forth immediately below its name on the signature pages hereto; and

NOW THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:

1.            Purchase and Sale of Note.

a.            Purchase of Note.  On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the Company such principal amount of Note as is set forth immediately below the Buyer's name on the signature pages hereto.

b.            Form of Payment.  On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note to be issued and sold to it at the Closing (as defined below) (the "Purchase Price") by wire transfer of immediately available funds to the Company, in accordance with the Company's written wiring instructions, against delivery of the Note in the principal amount equal to the Purchase Price as is set forth immediately below the Buyer's name on the signature pages hereto, and (ii) the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase Price.

c.            Closing Date.  Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and sale of the Note pursuant to this Agreement (the "Closing Date") shall be 12:00 noon, Eastern Standard Time on or about October  21, 2014, or such other mutually agreed upon time.  The closing of the transactions contemplated by this Agreement (the "Closing") shall occur on the Closing Date at such location as may be agreed to by the parties.

2.            Buyer's Representations and Warranties.  The Buyer represents and warrants to the Company that:

a.            Investment Purpose.  As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note (including, without limitation, such additional shares of Common Stock, if any, as are issuable (i) on account of interest on the Note, (ii) as a result of the events described in Sections 1.3 and 1.4(g) of the Note or (iii) in payment of the Standard Liquidated Damages Amount (as defined in Section 2(f) below) pursuant to this Agreement, such shares of Common Stock being collectively referred to herein as the "Conversion Shares" and, collectively with the Note, the "Securities") for its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided, however, that by making the representations herein, the Buyer 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 1933 Act.

b.            Accredited Investor Status.  The Buyer is an "accredited investor" as that term is defined in Rule 501(a) of Regulation D (an "Accredited Investor").

c.            Reliance on Exemptions.  The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer's compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

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d.            Information.  The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer or its advisors.  The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, afforded the opportunity to ask questions of the Company.  Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer.  Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or affect Buyer's right to rely on the Company's representations and warranties contained in Section 3 below.  The Buyer understands that its investment in the Securities involves a significant degree of risk. The Buyer is not aware of any facts that may constitute a breach of any of the Company's representations and warranties made herein.

e.            Governmental Review.  The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.

f.            Transfer or Re-sale.  The Buyer understands that (i) the sale or re-sale of the Securities has not been and is not being registered under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an "affiliate" (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) ("Rule 144")) of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule) ("Regulation S"), and the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such 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 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case).  Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.

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g.            Legends.  The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Securities):

"NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES."

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if, unless otherwise required by applicable federal and state securities laws, (a) such Security is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected.  The Buyer agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any, and subject to the provisions of Rule 144(i). In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.

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h.            Authorization; Enforcement. This Agreement has been duly and validly authorized.  This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.

 

i.            Residency.  The Buyer is a resident of the jurisdiction set forth immediately below the Buyer's name on the signature pages hereto.

3.            Representations and Warranties of the Company.  The Company represents and warrants to the Buyer that:

a.            Organization and Qualification.  The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted.  Schedule 3(a) sets forth a list of all of the Subsidiaries of the Company and the jurisdiction in which each is incorporated.  The Company and each of its Subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which its ownership or use of property or the nature of the business conducted by it makes such qualification necessary except where the failure to be so qualified or in good standing would not have a Material Adverse Effect.  "Material Adverse Effect" means any material adverse effect on the business, operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith.  "Subsidiaries" means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership interest.

b.            Authorization; Enforcement.  (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company's Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized representative is the true and official representative with authority to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

 

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c.            Capitalization.  As of the date hereof, the authorized capital stock of the Company consists of: (i) 975,000,000 authorized shares of Common Stock, $0.001 par value per share, of which 116,733,508 shares are issued and outstanding; and (ii) 25,000,000 authorized shares of Preferred Stock, $0.001 par value per share. There are 1,300,000 shares of Preferred Stock designated as Series A Preferred Stock, of which none are outstanding and 1,000,000 shares of Preferred Stock designated as Series B Preferred Stock that are issued and outstanding; 8,308,750 shares are reserved for issuance pursuant to the Company's stock option plans,35,983,182 shares are reserved for issuance pursuant to securities (other than the Note) exercisable for, or convertible into or exchangeable for shares of Common Stock and 11,500,000 shares are reserved for issuance upon conversion of the Note.  All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable.  No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company.  Except as specified above,, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, 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, (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares.  The Company has furnished to the Buyer true and correct copies of the Company's Articles of Incorporation as in effect on the date hereof ("Certificate of Incorporation"), 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 of the Company and the material rights of the holders thereof in respect thereto.  The Company shall provide the Buyer with a written update of this representation signed by the Company's Chief Executive on behalf of the Company as of the Closing Date.

d.            Issuance of Shares.  The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.

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e.            Acknowledgment of Dilution.  The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance of the Conversion Shares upon conversion of the Note.  The Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the Note in accordance with this Agreement, the Note is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

f.            No Conflicts.  The execution, delivery and performance of this Agreement, the Note by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license 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 regulations of any self-regulatory organizations to which the Company or its securities are subject) 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 (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect).  Neither the Company nor any of its Subsidiaries is in violation of its Certificate of Incorporation, By-laws or other organizational documents and neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time or both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has taken any action or failed to take any action that would 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 by which any property or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are not being conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law, ordinance or regulation of any governmental entity.  Except as specifically contemplated by this Agreement and as required under the 1933 Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency, regulatory agency, self regulatory organization or stock market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement, the Note in accordance with the terms hereof or thereof or to issue and sell the Note in accordance with the terms hereof and to issue the Conversion Shares upon conversion of the Note.  All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof.  If the Company is listed on the OTCQB, the Company is not in violation of the listing requirements of the OTCQB (the "OTCQB") and does not reasonably anticipate that the Common Stock will be delisted by the OTCQB in the foreseeable future.  The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

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g.            SEC Documents; Financial Statements.  The Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "1934 Act") (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter referred to herein as the "SEC Documents").  Upon written request the Company will deliver to the Buyer true and complete copies of the SEC Documents, except for such exhibits and incorporated documents.  As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, 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 light of the circumstances under which they were made, not misleading.  None of the statements made in any such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the date hereof).  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).  As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto.  Such financial statements have been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods involved  and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).  Except as set forth in the financial statements of the Company included in the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to July 31, 2014, and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be reflected in such financial statements, which, individually or in the aggregate, are not material to the financial condition or operating results of the Company. The Company is subject to the reporting requirements of the 1934 Act.

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h.            Absence of Certain Changes.  Since July 31, 2014, there has been no material adverse change and no material adverse development in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting status of the Company or any of its Subsidiaries.

i.            Absence of Litigation.  There is no action, suit, claim, 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 or any of its Subsidiaries, or their officers or directors in their capacity as such, that could have a Material Adverse Effect.  Schedule 3(i) contains a complete list and summary description of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard to whether it would have a Material Adverse Effect.  The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

j.            Patents, Copyrights, etc.  The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to use all patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks, service names, trade names and copyrights ("Intellectual Property") necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); there is no claim or action by any person pertaining to, or proceeding pending, or to the Company's knowledge threatened, which challenges the right of the Company or of a Subsidiary with respect to any Intellectual Property necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); to the best of the Company's knowledge, the Company's or its Subsidiaries' current and intended products, services and processes do not infringe on any Intellectual Property or other rights held by any person; and the Company is unaware of any facts or circumstances which might give rise to any of the foregoing.  The Company and each of its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of their Intellectual Property.

k.            No Materially Adverse Contracts, Etc.  Neither the Company nor any of its Subsidiaries is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company's officers has or is expected in the future to have a Material Adverse Effect.  Neither the Company nor any of its Subsidiaries is a party to any contract or agreement which in the judgment of the Company's officers has or is expected to have a Material Adverse Effect.

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l.            Tax Status.  The Company and each of its Subsidiaries has made or filed all federal, state and foreign 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 has set aside on its books provisions 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.  The Company has not executed a waiver with respect to the statute of limitations relating to the assessment or collection of any foreign, federal, state or local tax.  None of the Company's tax returns is presently being audited by any taxing authority.

m.            Certain Transactions.  Except for arm's length transactions pursuant to which the Company or any of its Subsidiaries makes payments in the ordinary course of business upon terms no less favorable than the Company or any of its Subsidiaries could obtain from third parties and other than the grant of stock options disclosed on Schedule 3(c), 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.

n.            Disclosure.  All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement and provided to the Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby is true and correct in all material respects and the Company has not omitted to state any material fact necessary in order to make the statements made herein or therein, in light of the circumstances under which they were made, not misleading.  No event or circumstance has occurred or exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed (assuming for this purpose that the Company's reports filed under the 1934 Act are being incorporated into an effective registration statement filed by the Company under the 1933 Act).

o.            Acknowledgment Regarding Buyer' Purchase of Securities.  The Company acknowledges and agrees that the Buyer is acting solely in the capacity of arm's length purchasers with respect to this Agreement and the transactions contemplated hereby.  The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of its respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely incidental to the Buyer' purchase of the Securities.  The Company further represents to the Buyer that the Company's decision to enter into this Agreement has been based solely on the independent evaluation of the Company and its representatives.

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p.            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 in any security or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act of the issuance of the Securities to the Buyer.  The issuance of the Securities to the Buyer will not be integrated with any other issuance of the Company's securities (past, current or future) for purposes of any shareholder approval provisions applicable to the Company or its securities.

q.            No Brokers.  Except as specified on Schedules 3(q), the Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction fees or similar payments relating to this Agreement or the transactions contemplated hereby.

r.            Permits; Compliance.  The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its properties and to carry on its business as it is now being conducted (collectively, the "Company Permits"), and there is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company Permits.  Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.  Since July 31, 2014, neither the Company nor any of its Subsidiaries has received any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.

s.            Environmental Matters.

(i)                There are, to the Company's knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the Company, no past or present violations of Environmental Laws (as defined below), releases of any material into the environment, actions, activities, circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law environmental liability or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar federal, state, local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice with respect to any of the foregoing, nor is any action pending or, to the Company's knowledge, threatened in connection with any of the foregoing.  The term "Environmental Laws" means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants contaminants, or toxic or hazardous substances or wastes (collectively, "Hazardous Materials") into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

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(ii)                Other than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are contained on or about any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous Materials were released on or about any real property previously owned, leased or used by the Company or any of its Subsidiaries during the period the property was owned, leased or used by the Company or any of its Subsidiaries, except in the normal course of the Company's or any of its Subsidiaries' business.

(iii)                There are no underground storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiaries that are not in compliance with applicable law.

t.            Title to Property.  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 are described in Schedule 3(t) or such as would not have a Material Adverse Effect.  Any real property and facilities held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as would not have a Material Adverse Effect.

u.            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 Subsidiary 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 have a Material Adverse Effect.  Upon written request the Company will provide to the Buyer true and correct copies of all policies relating to directors' and officers' liability coverage, errors and omissions coverage, and commercial general liability coverage.

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v.            Internal Accounting Controls.  The Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient, in the judgment of the Company's board of directors, 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 generally accepted accounting principles 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.

w.            Foreign Corrupt Practices.  Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee or other person acting on behalf of the Company or any Subsidiary has, in the course of his actions for, or on behalf of, the Company, used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

x.            Solvency.  The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e., its assets have a fair market value in excess of the amount required to pay its probable liabilities on its existing debts as they become absolute and matured) and currently the Company has no information that would lead it to reasonably conclude that the Company would not, after giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it intend to take any action that would impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature.  The Company did receive a qualified opinion from its auditors with respect to its most recent fiscal year end.

y.            No Investment Company.  The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement will not be an "investment company" required to be registered under the Investment Company Act of 1940 (an "Investment Company").  The Company is not controlled by an Investment Company.

z.            Breach of Representations and Warranties by the Company.  If the Company breaches any of the representations or warranties set forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of default under Section 3.4 of the Note.

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4.            COVENANTS.

a.            Best Efforts.  The parties shall use their best efforts to satisfy timely each of the conditions described in Section 6 and 7 of this Agreement.

b.            Form D; Blue Sky Laws.  The Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof to the Buyer promptly after such filing.  The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary to qualify the Securities for sale to the Buyer at the applicable closing pursuant to this Agreement under applicable securities or "blue sky" laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyer on or prior to the Closing Date.

c.            Use of Proceeds.  The Company shall use the proceeds for general working capital purposes.

d.            [INTENTIONALLY DELETED].

e.            Expenses.  At the Closing, the Company shall reimburse Buyer for expenses incurred by them in connection with the negotiation, preparation, execution, delivery and performance of this Agreement and the other agreements to be executed in connection herewith ("Documents"), including, without limitation, reasonable attorneys' and consultants' fees and expenses, transfer agent fees, fees for stock quotation services, fees relating to any amendments or modifications of the Documents or any consents or waivers of provisions in the Documents, fees for the preparation of opinions of counsel, escrow fees, and costs of restructuring the transactions contemplated by the Documents.  When possible, the Company must pay these fees directly, otherwise the Company must make immediate payment for reimbursement to the Buyer for all fees and expenses immediately upon written notice by the Buyer or the submission of an invoice by the Buyer. The Company's obligation with respect to this transaction is to reimburse Buyer' expenses shall not exceed $4,000.

f.            Financial Information.  Upon written request the Company agrees to send or make available the following reports to the Buyer until the Buyer transfers, assigns, or sells all of the Securities: (i) within ten (10) days after the filing with the SEC, a copy of its Annual Report on Form 10-K its Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within one (1) day after release, copies of all press releases issued by the Company or any of its Subsidiaries; and (iii) contemporaneously with the making available or giving to the shareholders of the Company, copies of any notices or other information the Company makes available or gives to such shareholders.

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g.            [INTENTIONALLY DELETED]

h.            Listing.  The Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange or automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as the Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Conversion Shares from time to time issuable upon conversion of the Note.  The Company will obtain and, so long as the Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the OTCQB or any equivalent replacement exchange or electronic quotation system (including but not limited to the Pink Sheets electronic quotation system) and will comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority ("FINRA") and such exchanges, as applicable.  The Company shall promptly provide to the Buyer copies of any notices it receives from the OTCQB and any other exchanges or electronic quotation systems on which the Common Stock is then traded regarding the continued eligibility of the Common Stock for listing on such exchanges and quotation systems.

i.            Corporate Existence.  So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence and shall not sell all of the Company's assets, except in the event of a merger or consolidation or sale of all of the Company's assets, where the surviving or successor entity in such transaction (i) assumes the Company's obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded corporation whose Common Stock is listed for trading on the Pink Sheets, OTCQX, OTCQB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX.

j.            No Integration.  The Company shall not make any offers or sales of any security (other than the Securities) under circumstances that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable to the Company or its securities.

k.            Breach of Covenants.  If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an event of default under Section 3.4 of the Note.

l.            Failure to Comply with the 1934 Act.  So long as the Buyer beneficially owns the Note, the Company shall comply with the reporting requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934 Act.

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m.            Trading Activities.  Neither the Buyer nor its affiliates has an open short position in the common stock of the Company and the Buyer agree that it shall not, and that it will cause its affiliates not to, engage in any short sales of or hedging transactions with respect to the common stock of the Company.

5.            Transfer Agent Instructions.  The Company shall issue irrevocable instructions to its transfer agent to issue certificates, registered in the name of the Buyer or its nominee, for the Conversion Shares in such amounts as specified from time to time by the Buyer to the Company upon conversion of the Note in accordance with the terms thereof (the "Irrevocable Transfer Agent Instructions").  In the event that the Borrower proposes to replace its transfer agent, the Borrower shall provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower. Prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold, all such certificates shall bear the restrictive legend specified in Section 2(g) of this Agreement.  The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5, and stop transfer instructions to give effect to Section 2(f) hereof (in the case of the Conversion Shares, prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold), will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing)(electronically or in certificated form) any certificate for Conversion Shares to be issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement; and (iii) it will not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement subject to the requirements of Rule 144(i).  Nothing in this Section shall affect in any way the Buyer's obligations and agreement set forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any, upon re-sale of the Securities.  If the Buyer provides the Company, at the cost of the Buyer, with (i) an opinion of counsel in form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration under the 1933 Act and such sale or transfer is effected or (ii) the Buyer provides reasonable assurances that the Securities can be sold pursuant to Rule 144, the Company shall permit the transfer, and, in the case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the Buyer.  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby.  Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5 may be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing economic loss and without any bond or other security being required.

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6.            Conditions to the Company's Obligation to Sell.  The obligation of the Company hereunder to issue and sell the Note to the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto, 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:

a.            The Buyer shall have executed this Agreement and delivered the same to the Company.

b.            The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.

c.            The representations and warranties of the Buyer shall be true and correct in all material respects 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 Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.

d.            No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

7.            Conditions to The Buyer's Obligation to Purchase.  The obligation of the Buyer hereunder to purchase the Note at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these conditions are for the Buyer's sole benefit and may be waived by the Buyer at any time in its sole discretion:

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a.            The Company shall have executed this Agreement and delivered the same to the Buyer.

b.            The Company shall have delivered to the Buyer the duly executed Note (in such denominations as the Buyer shall request) in accordance with Section 1(b) above.

c.            The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to a majority-in-interest of the Buyer, shall have been delivered to and acknowledged in writing by the Company's Transfer Agent.

d.            The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date.  The Buyer shall have received a certificate or certificates, 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 may be reasonably requested by the Buyer including, but not limited to certificates with respect to the Company's Certificate of Incorporation, By-laws and Board of Directors' resolutions relating to the transactions contemplated hereby.

e.            No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

f.            No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act reporting obligations.

g.            The Conversion Shares shall have been authorized for quotation on the OTCQB and trading in the Common Stock on the OTCQB shall not have been suspended by the SEC or the OTCQB.

h.            The Buyer shall have received an officer's certificate described in Section 3(c) above, dated as of the Closing Date.

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8.            Governing Law; Miscellaneous.

a.            Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws.  Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state and county of Nassau.  The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens.  The Company and Buyer waive trial by jury.  The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs.  In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.  Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.   Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

b.            Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.

c.            Headings.  The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

d.            Severability.  In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.  Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

e.            Entire Agreement; Amendments.  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 the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters.  No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.

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f.            Notices.  All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice.  Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.  The addresses for such communications shall be:

If to the Company, to:

CROWDGATHER, INC.

20300 Ventura Boulevard - Suite 330

Woodland Hills, CA 91364

Attn: SANJAY SABNANI, Chief Executive Officer

facsimile: [enter fax number]

With a copy by fax only to (which copy shall not constitute notice):

[enter name of law firm]

Attn: [attorney name]

[enter address line 1]

[enter city, state, zip]

facsimile: [enter fax number]

                   If to the Buyer:

KBM WORLDWIDE, INC.

80 Cuttermill Road – Suite 410

Great Neck, NY   11021

Attn: Seth Kramer, President

e-mail: info@kwbmlaw.com

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With a copy by fax only to (which copy shall not constitute notice):

Naidich Wurman Birnbaum & Maday LLP

Att: Judah A. Eisner, Esq.

Attn: Bernard S. Feldman, Esq.

facsimile: 516-466-3555

e-mail: dyork@nwbmlaw.com

Each party shall provide notice to the other party of any change in address.

g.            Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns.  Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other.  Notwithstanding the foregoing, subject to Section 2(f), the Buyer may assign its rights hereunder to any person that purchases Securities in a private transaction from the Buyer or to any of its "affiliates," as that term is defined under the 1934 Act, without the consent of the Company.

h.            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.

i.            Survival.  The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer.  The Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

j.            Publicity.  The Company, and the Buyer shall have the right to review a reasonable period of time before issuance of any press releases, SEC, OTCQB or FINRA filings, 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 the Buyer, to make any press release or SEC, OTCQB (or other applicable trading market) or FINRA filings with respect to such transactions as is required by applicable law and regulations (although the Buyer shall be consulted by the Company in connection with any such press release prior to its release and shall be provided with a copy thereof and be given an opportunity to comment thereon).

k.            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.

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l.            No Strict Construction.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

m.            Remedies.  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated hereby.  Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

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IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

CROWDGATHER, INC.

By:_ /s/ Sanjay Sabnani_________________________

SANJAY SABNANI

Chief Executive Officer

KBM WORLDWIDE, INC.

By:  /s/ Seth Kramer                                                                                                             

Name: Seth Kramer

Title:   President

80 Cuttermill Road – Suite 410

Great Neck, NY  11021

AGGREGATE SUBSCRIPTION AMOUNT:

	
Aggregate Principal Amount of Note:

	 	
$

	
154,000.00

	 
	
 

	 	 	 	 
	
Aggregate Purchase Price:

	 	
$

	
154,000.00

	 
	
 

	 	 	 	 
	
Tranche #1    K-1361 (CRWG)

October 20, 2014

sanjay@crowdgather.com

	 	 	 	 

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