Document:

Exhibit 10.1

 

CONTRACT N°
001-2009-MEXTIPETROPERU

 

SUPPLY OF 17’000,000
BARRELS OF CRUDE OIL FOR TALARA REFINERY

 

Let
it be known by this document, the Agreement of “Supply of 17’000000 Barrels of
Crude Oil for Talara Refinery” (the Agreement), is entered into by and between
Petroleos del Perú-PETROPERU S.A. With Taxpayer
Registration No. 20100128218, having a principal place of business at Av
Enrique Canaval Moreyra No. 150 - San Isidro, Lima, duly represented by
its Commercial Operations Manager,Luis Lem Arce, with ID No. 10148345,
with Power of attorney recorded in the record C00070 and electronic certificate
No. 11014754, of the Juridical Persons Registry of Lima, who will herein
be known as PETROPERU and the company BPZ  EXPLORACIÓN &
PRODUCCION S.R.L. with Taxpayer Registration No. 20503238463,
having a principal place of business at Calle Manuel de Falla No. 297,District
of San Borja, Lima, duly represented by its General Manager, Luis Rafael Zoeger
Nuñez with ID No. 08212579, with Power of Attorney recorded in the record
A0001 and electronic certificate No. 11985400 of the Juridical Persons
Registry of Lima, who will herein be known as THE
CONTRACTOR; under terms and conditions
set forth in the following clauses:

 

PRELIMINARY CLAUSE:             ANTECEDENTS

 

By means of letter
DIR-0020-2008-MEXT/PP-005-2008 dated December 30th, 2008 the Ad-Hoc
Organism invited THE CONTRACTOR to the Direct
Acquisition Process (or Direct Purchase Procedure) No. DIR-0020-2008-MEX/PETROPERU,
for the supply of 17’000,000 Barrels of Crude Oil for Talara Refinery.

 

By means of letter
DIR-0020-2008-MEXT/PP-008-2008 dated January 5th, 2009, the Ad-Hoc Organism communicated to THE CONTRACTOR the granting of the “Buena Pro” (Award to the
bidder).

 

CLAUSE ONE:             GENERAL
POINTS

 

This Agreement is
governed by the Regulation of Acquisitions and Contractual Obligations of PETROPERU
SA, approved by Resolution N° 171-2008-CONSUCODE/PRE, referred herein as The
Regulation; and supplementary by the Civil Code and other rules which
may apply.

 

Parts of this Agreement
are:

 

· The basis of the
direct purchase N° DIR-0020-2008-MEXIPETROPERU

 

· The
technical-economic proposals submitted by THE CONTRACTOR.

 

CLAUSE TWO:            
REGULATIONS THAT RULE THE AQUISITION

 

This
acquisition is executed in accordance to what is established in paragraph 9.3.7
of the Regulation, which establishes the possibility to acquire natural gas,
oil crude oil or derivatives of both directly from the local market.

 

CLAUSE THREE:            
DEFINITIONS

 

The following
definitions, as agreed by the parties, aim to give the required meaning to the
concepts that are used in the Contract, so that such meaning will be the only
one accepted in interpreting the Contract, unless expressly and in writing, the
PARTIES agree otherwise:

 

a) API: American
Petroleum Institute

b) BL: Barrels of 42
gallons of the United States of North America

c) Dollars or US$: Dollars of the United States of America.

d) Parties: THE CONTRACTOR and PETROPERÚ.

e) Point of Delivery of
the Crude Oil: Liquid Freight Loading Dock at Talara Refinery.

 

 

f) Crude Oil
Fiscalization Point: Storage tank which receives the crude lot supplied by THE CONTRACTOR in the tank yard of PETROPERU
(Talara Refinery)

g)
Fiscalized Crude Oil Volume: Is the volume established in compliance with
numeral VI.8.1 of the Purchase and Sale Procedure.

 

CLAUSE FOUR:            
PURPOSE OF THE CONTRACT

 

With this contract, THE CONTRACTOR agrees (binds)to sale to PETROPERU
and this one agrees (binds) to buy the totality of its production of crude
originated from the Corvina Oilfield in Block Z-1, up to a volume of 17’000,000
barrels of crude oil, fulfilling the terms and quality conditions indicated in
clauses Five and Six of this contract.

 

CLAUSE FIVE:            
TERM

 

The term of this
contract is approximately seven (7) years, counted from the Effective
subscription date or until the delivery of the volume of 17’000,000 barrels of
crude is completed, whichever occurs first.

 

For the delivery of each
one of the partial lots of 28,000 barrels minimum, starting in January 2009,
THE CONTRACTOR shall give notice to PETROPERU at least one week in advance

 

CLAUSE SIX:            
QUALITY

 

THE CONTRACTOR agrees (binds)
to sale the crude oil in accordance with the established in numeral 4 of the
Procedure of Purchase and Sale of Crude Oil between THE CONTRACTOR and
PETROPERU S.A., attached to the Technical Bases.

 

Technical Characteristics

 

	
  API Gravity

  	
   

  	
  Minimum 22.0°

  	
   

  	
  ASTM D-1298

  	
   

  
	
  Sulphur

  	
   

  	
  Max. 0.3% in mass

  	
   

  	
  ASTM-D-4294

  	
   

  
	
  % Vol.
  BS & W

  	
   

  	
  Max. 0.25%

  	
   

  	
  ASTM-D-4007

  	
   

  
	
  Salt Content

  	
   

  	
  Max. 10 Lb per 1000 Bls.

  	
   

  	
  ASTM-D-3230

  	
   

  

 

The
crude to be supplied should have a minimum yield efficiency of medium
distillates of 49.0% in volume.

 

This percentage will be
tested on a monthly basis, according to the guidelines included in the
Hydrocarbons Properties Manual Chapter III “Calculation of Physical-Chemical
Properties of Hydrocarbons “pages 55 and 56 prepared by Planning and
Production Area Management – Version 1.0 dated October 2006.

 

If the crude supplied
does not meet the minimum yield efficiency of medium distillates, the Parties
will proceed to revise the price agreed on Clause Seven, to determine
corresponding adjustments.

 

CLAUSE
SEVEN:             PRICE AND METHOD OF PAYMENT

 

The price that PETROPERU
shall pay THE CONTRACTOR for each barrel of Crude Oil delivered at the Point of
Delivery shall be as follows:

 

Unitary
Price (US$/Bbl) = (Basket + D) + IGV

 

Where:

 

Basket is the simple
arithmetic average of the crude prices that form the Crudes Basket comprised by
OMAN, FORTIES and SUEZ BLEND, expressed in US$ / Barrel.

 

The average price of
each type of oils that comprise the basket will be calculated on the basis of
arithmetic median of the quotations that are published regularly, averaged out
in turn, during valuation period for which the basket average price is
calculated, the same that will be for the first half of the month, from the 1st to the 15th and for the
second half of the month, from the 16th to the last day
of the corresponding month. Only the days in which all crude oils that comprise
the basket have been quoted will be considered.

 

 

The resultant average
prices according to the above, for each type of oil that comprises the basket,
will be in the same manner averaged among each other to obtain the price of the
oil.

 

The bi-monthly average
price of each type of oil that comprises the basket and the Price of the
baskets will be rounded to four (4) decimal places.

 

Oil prices that comprise
the basket, will be the ones published daily by the “Spot Crude Price
Assessments” of “Platt’s Crude Oilgram Price Report”, with adjustments agreed
by the Parties and necessary due to quality and other differences.

 

D:            -1.00 US$/Barrel Discount
offered by THE CONTRACTOR

 

IGV:        Value according to the law in force at
the time of billing.

 

The total amount (US$)
will be rounded with two (02) decimals.

 

If PETROPERU
agrees to receive from THE  CONTRACTOR the crude with a higher content of salt, up to a
maximum of 25.0 PTB, the following Price adjustment will be applied to cover
the operating costs of treatment:

 

Penalty (US$) = 84.642 x
(PTB -10.0) x Vcr where:

 

PTB = Salt content of
the Volume supplied (Pounds/ Thousands of Barrels)

Vcr = Volume of
crude supplied (Thousands of Barrels)

Penalty Factor = 84.642
US$/(Thousands of Barrels x PTB)

 

PETROPERU will not accept
volume of crude with a content of salt higher than 25.0 PTB.

 

To date and for effects
of implementation of the Regulation of Acquisitions and Contracting of
PETROPERU, the contractual amount is US$1,313’736,200.00 (One Billion, Three
Hundred and thirteen Million, Seven Hundred and Thirty Six Thousand, Two
Hundred and 00/100 American Dollars), including lawful taxes for the sale of 17’000,000
Barrels of Crude Oil.

 

CLAUSE EIGHT:            
INVOICING AND FORM OF PAYMENT

 

Invoicing of crude oil
supply delivered will be bi-monthly, from the first to the fifteenth and from
the sixteenth to the last calendar day of each month THE
CONTRACTOR will submit the invoice and the Conformity of Receipt of
Crude Oil Act to PETROPERU the business day
following the corresponding ending 15 day period which will be paid by PETROPERU in favor of the contractor within ten (10) days
following the correct presentation of THE CONTRACTOR (the
date of presentation will be day zero).

 

Invoices not properly
submitted will be returned at the appropriate time to THE
CONTRACTOR for correction, governing the term from the date of
accurate presentation

 

Invoices mentioned
above, will be submitted to the Office of Document Processing of the Operations
Management Talara – PETROPERU, and will only be received during business days
and within opening hours schedule of such office

 

Payment will be made in
American Dollars, provided that the Law does not prohibit it, in which case
payment will be made according to what regulations dictate or its equivalent in
national currency at the exchange rate, actual average sale price of the day
previous to the corresponding payment date published by the Superintendence of
Banking and Insurance.

 

 

If there is a delay in
payment, THE CONTRACTOR will have the right to
payment of interest, being applicable the legal interest rate.

 

Interest will be
calculated as of the day following the due date indicated on the invoice until
its payment date.

 

This payment will be
made by means of a wire transfer according to THE CONTRACTOR’S instructions

 

If eventually the
invoice due date falls on a Saturday, Sunday or non-working Holiday, payment of
such invoice will be made the day following the due date without any surcharge.

 

CLAUSE
NINE:             DELIVERY
POINT AND RISK

 

Will take place
according to the Procedure of Purchase and Sale of Crude Oil between THE
CONTRACTOR and PETROPERU S.A., attached to the Technical Bases.

 

Transfer of risk and
ownership of each one of the deliveries of Crude Oil from THE
CONTRACTOR to PETROPERU occurs
when the Act of conformity of receipt (Delivery Slip or Final Measurement
Ticket).

 

CLAUSE
TEN:            
VOLUME OF DELIVERY

 

The
volume of crude oil that THE CONTRACTOR
will deliver to PETROPERU during any calendar
month will be the totality of production available for sale from the Corvina
oilfield in Block Z-1.

 

PETROPERU will have the
right to establish that the volume of crude oil supply be reduced or
temporarily suspended in case of operative emergencies that impede to receive
and/or store the crude oil, with an immediate release within twenty four (24)
hours of such emergency. In this case THE CONTRACTOR
will not be able to claim nor demand any compensation from PETROPERU for
the reduction or temporary suspension of supply of crude oil.

 

Solely for the purpose
of planning, THE CONTRACTOR will communicate in
writing to PETROPERU on the twentieth (20) of
each calendar month, the volume of crude oil that it will sell and deliver during
the following quarter.

 

To stop deliveries due
to scheduled repairs of the facilities, THE CONTRACTOR shall
notify to PETROPERU. And PETROPERU
to THE CONTRACTOR, as appropriate, with no
less than ten (10) days advance notice.

 

If there is maintenance
scheduled at Talara Refinery that prevents refining or storage of crude oil, PETROPERU will have the right to establish that the supply
be reduced or temporarily suspended until a maximum term of ten (10) calendar
days. PETROPERU, previous coordination with THE CONTRACTOR may receive the crude oil once the maximum
term indicated above is expired. In these cases, THE
CONTRACTOR may not claim or demand any compensation from PETROPERU, for temporary suspension of crude oil supply.

 

CLAUSE
ELEVEN:             ACT OF GOD OR FORCE MAJEURE

 

Neither party shall be
liable for failure to comply with an obligation, or for partial, late or
defective compliance of an obligation herewith, during any period in which that
Party is affected by an Act of God or Force Majeure, provided cause attributed
to an extraordinary event, unforeseeable and resistless, such as: fires,
temblors, earthquakes, tidal floods, avalanches, landslides floods, hurricanes,
storms, explosions, war, guerrillas, acts of terrorism, sabotage, civil disturbances,
blockades, uncontrollable

 

 

transport delays,
strikes, impossibility of provision(despite being
stocked), damage to facilities for the reception and transportation of Crude
Oil, emergency stops of the Refinery, or for any other reasons, whether similar
or different from those specifically mentioned here, which are beyond the
reasonable control and cannot be foreseen, or even being foreseen, cannot be
avoided, in accordance with article 1315 of the Civil Code.

 

PETROPERU may not claim
force majeure as suspension or terminative causal of its obligation to pay a
sum of money, if THE CONTRACTOR has fulfilled its
obligations under this Agreement.

 

If
there is an Act of God or Force Majeure, the affected party must give notice or
notification of the suspension to the other party within seven (7) calendar
days of the event, indicating the date, the extension of such suspension, the
cause and explain the manner that affects the execution of its obligation, the
other party shall respond in writing within seven (7) calendar days of
receipt of such notification.

 

In the event of partial,
late or defective fulfillment of the respective obligation, due to Acts of God
or Force Majeure, the parties shall continue to implement the contractual
obligations not affected by these circumstances. Similarly, the party obliged
to comply shall do its utmost to comply according to the common intentions of
all parties expressed in this agreement.

 

The party affected by
the above mentioned circumstances must resume compliance with contractual
obligations and conditions within a reasonable period of time, after the
reasons have disappeared, and must notify the other party within five (5) calendar
days of disappearance of the reason.

 

CLAUSE
TWELVE:             BREACH AND RESOLUTION OF CONTRACT

 

If
a Party fails to comply with its obligations, the aggrieved party should
request compliance from the other party, through Notarial Charter, within a
maximum term of fifteen (15) days. In case of continued breach, the aggrieved
party may terminate the contract by means of Notarial Charter.

 

The following causes of
resolution of Contract are imputable to THE CONTRACTOR:

 

a)              Unjustifiable breach of
contractual obligations, legal or regulatory, despite having been requested to
correct such situation; according to the indicated in the preceding paragraph.

 

b)               Accumulation of the
maximum penalty amount; and,

 

c)              Stop or reduce in
unjustifiable manner implementation of the provision, despite being required to
correct such situation according to the indicated in the preceding paragraph.

 

CLAUSE
THIRTEEN:             TAXES

 

Taxes and duties that
correspond to THE CONTRACTOR are its exclusive
responsibility and are not transferable to PETROPERU

 

CLAUSE
FOURTEEN:             CONTROVERSY SOLUTION AND ARBITRATION

 

The parties agree that
all disputes arising from the execution or interpretation of this contract,
including those relating to nullity or invalidity will be resolved through
conciliation and/or arbitration law. Arbitration will be settled under
organization and administration of the Center for Arbitration of the Chamber of
Commerce in Lima and according to its Regulation known to the Parties. The
Parties must petition initiation of these proceedings prior to the completion
of the contractual obligation. If the contract is resolved or PETROPERU  declares its annulment, the deadline to interpose
conciliation and/or arbitration shall be ten (10) business days after de
day of notification of such decision. These deadlines expire.

 

 

Arbitration shall take
place in Spanish and administered by an Arbitral Court. Each Party shall
appoint its arbitrator and they shall appoint a third one, who shall be the
President of the Court. In face of contempt or lack of appointing of an
arbitrator, the Arbitration Center indicated before will designate an
arbitrator. Arbitration shall take place in the city of Lima.

 

The arbitration award
pronounced is binding for the parties and will end the process definitively,
being the award unappealable before neither the Courts nor any Administrative
Instance, except for cases of annulment of an award under the Arbitration Act.

 

CLAUSE
FIFTEEN:            
NOTIFICATIONS AND COMMUNICATIONS

 

The notifications sent
among the parties will be valid provided that are delivered to the domiciles
indicated in the introduction of this Contract or delivered directly and
personally elsewhere by trust or notarial or transmitted via facsimile with
confirmation from the other party.

 

If any of the parties
shall change the domicile indicated in the introduction of this Contract, such
modification should be made known to the other party, in writing, at least
three (3) calendar days in prior to the date the change takes effect to be
considered valid for the purpose of the Contract.

 

CLAUSE
SIXTEEN:             PENALTY

 

In the event of
unjustifiable delay of implementation of deliveries by THE
CONTRACTOR, PETROPERU shall
apply a penalty established in numeral 10.10 of the Regulation of Acquisitions
and Contractual Obligations of PETROPERU S.A.

 

CLAUSE
SEVENTEEN:             ENVIRONMENTAL PROTECTION

 

The parties agree to
comply with the provisions of the environmental norms in force and other
relevant regulations that apply to this Contract.

 

Environmental Protection
activities include prevention, cleaning, damage repair and corresponding
rehabilitation, if possible, against the harm that could cause in the
environment operations subject to this contract, commitment assumed by the
contracting parties in accordance with the detailed in the next paragraph.

 

THE CONTRACTOR shall be
responsible for any ecological or environmental damage that could take place
before Delivery Point and after Delivery Point it is responsibility of PETROPERU.

 

Each one of the parties
shall be responsible, individually, of the penalties that could be imposed due
to violations or omission of the previously indicated norms as well as the
other laws, regulations or dispositions issued by the authority competent in
environmental matters.

 

CLAUSE
EIGHTEEN:             TRUSTEE

 

By means of this clause,
PETROPERU irrevocably:

 

1.               Acknowledges that THE CONTRACTOR, as Trustor, executed on September 18,
2008 a Trust Agreement with Banco Continental, herein known as Security Trustee
and with Banco de Crédito del Perú, herein known as the Guarantor (The “Trust
Agreement”), as guarantee of its obligation against International Finance
Corporation (IFC) and other money lending institutions (The “Additional Lenders”)
whereas THE CONTRACTOR has transferred to the
Trustee: (i) all collection

 

 

rights to all amounts
payable by PETROPERU to THE
CONTRACTOR under this Contract (the “Obligations”);  (ii) the price of the Obligations; (iii) the
amount of money THE CONTRACTOR perceives in case
of transferring its contractual position in this Contract; and (iv) the
right to collect such amount.  It also
acknowledges that the trust transfer covers the payment of disaster claims
related to this Contract; and all that in fact and by right belongs to THE
CONTRACTOR related to the transferred rights to the Trusted Patrimony.

 

2.               Obliges in irrevocable
manner to pay all Obligations of the Current Account in Dollars No. 0011-0603-01-00000170
of Banco Continental or before a written communication received from the
Trustee, in the account and bank indicated by the Trustee in such written
communication, without a need for any additional notification.

 

3.     Consents from now on to the cession by THE CONTRACTOR of its contractual position in this Contract
to any third party, cession that will only be valid as the amount of money that
THE  CONTRACTOR
should perceive from such cession be paid by the cessionary directly to the
Trustee.

 

4.               Acknowledges that in the
event that THE CONTRACTOR incurs in a breach
of lending contracts negotiated with IFC or Additional Lenders, the Trustee is
authorized to, following instructions from the Guarantor, transfer the totality
(100%) of the deposited Monetary Flows and that continue to be deposited in
each one of the Collection Accounts to the IFC Account and to each one of the
Additional Lenders Accounts for payment of guaranteed Obligations.

 

5.                 
Acknowledges that all references herein made to
Trustee shall be understood as the trustee that replaces the Trustee in the “Trust
Agreement”, if such replacement shall occur, so that all the statements,
recognitions and obligations of the Borrower contained in this clause will be
equally valid if the Trustee is replaced in the referred “Trust Agreement”.
Consequently, PETROPERU will accept validity of
any communication received from the entity acting as trustee in replacement of
the Trustee in the Trust Agreement, provided that it indicates that substitutes
or has substituted the Trustee.

 

CLAUSE
NINETEEN:             CONTRACT MODIFICATION

 

The parties may agree on
modifications to the contract; however such modifications shall be subject to
the requirements in the Regulation of PETROPERU.

 

The parties agree that
any variation, modification or change to this contract to be mandatory shall be
in writing and executed by the authorized representatives of PETROPERU and THE CONTRACTOR.

 

CLAUSE
TWENTY:             MISCELLANEOUS

 

This contract
constitutes the entire agreement and understanding by andbetween PETROPERU and
THE CONTRACTOR, for the same subject matters and supersedes any other and all
the agreements that may exists between the parties in relation to the sale of
Liquid Hydrocarbons

 

The renounce or any
other infringement or negligence in the execution of any of terms or conditions
contained in this contract, do not constitute a renounce, infringement or
negligence of the rest of the clauses, except that constitutes a causal
resolution of the same.

 

The contract may become
a Public Deed at request of any of the parties, that being the case, the
requestor shall pay the costs originated by such process. Subsequent
modifications shall have the same formality as this contract.

 

 

The parties in agreement
subscribe this contract, in the city of Lima, on the Eighth (8) day of the
month of January of 2009.

 

 

	
  /s/ Luis Lem
  Arce

  	
   

  	
  /s/ Luis Rafael Zoeger Nuñez

  
	
  LUIS LEM ARCE

  	
   

  	
  LUIS RAFAEL ZOEGER NUÑEZ

  
	
  MANAGER

  	
   

  	
  GENERAL
  MANAGER

  
	
  COMMERCIAL OPERATIONS

  	
   

  	
  BPZ EXPLORACIÓN & PRODUCCIÓN SRL

  
	
  PETROPERU S.A.ex_10-1.htm

    
      

      

    

    EXHIBIT
10.1

     

     

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

       

      CROWDGATHER,
INC.

       

      CONVERTIBLE
PROMISSORY NOTE

       

      
        	$90,000.00 	
                Woodland Hills,
      California

              
	 	
                Dated as of January
      9, 2009

              

      

       

      CrowdGather, Inc., a Nevada corporation
(the “Company”), for value
received, hereby promises to pay to __________________, or its registered
assigns (“Holder”), the sum of
Ninety Thousand Dollars ($90,000.00) on the terms and conditions set forth
hereinafter.  Payment for all amounts due hereunder shall be made by
mail to the registered address of Holder.

      

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

      

      1.          
  Maturity;
Partial Prepayment.  The principal hereof and any unpaid
accrued interest hereon, as set forth below, shall be due and payable on the
earlier to occur of:  (i) July 9, 2009 (“Maturity Date”); and
(ii) when declared due and payable by Holder upon the occurrence of an Event of
Default (as defined below).

      

       

      2.        
    Interest.  The
Company shall pay interest at the rate of the lower
of (i) 10 percent per annum; or (ii) the maximum allowable rate under applicable
laws (such rate, the “Interest Rate”) on
the principal of this Note outstanding during the period beginning on the date
of this Note and ending on the date that the principal amount of this Note is
repaid in full.  Interest shall be calculated on the basis of a
360-day year for the actual number of days elapsed.  Interest accruing
on this Note shall be due and payable at the Maturity Date or upon the
occurrence of an Event of Default.  The Company shall pay the interest
due on this Note by delivering to Holder cash equal to the outstanding principal
amount of the Note plus any due and unpaid interest.  If there occurs
an acceleration or prepayment of the Note prior to the Maturity Date in
accordance with the terms hereof, all interest due and payable at such time on
the principal amount due shall be paid in full.  All payments
hereunder are to be applied first to reasonable costs and fees referred to
herein, second to the payment of accrued interest, and the remaining balance to
the payment of principal.

      

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

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      

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

      

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

      

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

      

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

      

      (i)           convert
all of the principal amount and unpaid accrued interest attributable to this
Note into shares of Common Stock at a conversion price the lower of (i) $1.25
per share (ii) the price per share of the Company’s next transaction or series
of related transactions in which the Company sells equity securities and in
which the gross proceeds to the Company equal or exceed $2,000,000 (the “Next Equity
Financing”); or

      

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

      

      5.         
   Conversion; Optional
Reinvestment.

      

      (a)           Optional
Conversion.  Holder may elect at its sole discretion to convert
the outstanding principal balance and unpaid accrued interest on this Note into
shares of Common Stock at any time.  The number of shares of Common
Stock to be issued upon such conversion shall be equal to the quotient obtained
by dividing (a) the outstanding principal and unpaid accrued interest due on
this Note on the date of conversion, by (b) the conversion price of the lower of
(i) $1.25 per share or (ii) the price per share of the Next Equity Financing
(“Conversion Price”). The Common Stock received by Holder pursuant to the
conversion of the Note shall be referred to as the “Conversion
Shares.”

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      

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

      

      (c)           Conversion
Procedure.  If this Note is to be converted, written notice
shall be delivered by Holder to the Company, at its address set forth on the
signature page hereto, notifying the Company of the conversion to be effected,
specifying the principal amount of the Note to be converted, the amount of
accrued interest to be converted, and a statement of commitment to surrender to
the Company, in the manner and at the place designated, the
Note.  Holder will surrender this Note within 10 business days after
receiving the Conversion Shares hereunder.  Promptly upon receipt of
this Note, the Company will issue a new note on the same terms as provided
herein for any amount of this Note not being converted.

      

      (d)           Delivery of Stock
Certificates.  As promptly as practicable after the conversion
of this Note but in no event later than 15 calendar days after the date of
delivery of the notice to the Company under Section 5(c), the Company at its
expense will issue and deliver to Holder a certificate or certificates for the
number of full shares of the Common Stock issuable upon such
conversion.  Upon conversion of the Note, the Company shall take all
such actions as are necessary in order to insure that the Conversion Shares
issuable with respect to such conversion shall be validly issued, fully paid and
nonassessable.

      

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

      

      (f)           Notices of Record Date,
etc.  In the event of:

      

      (i)           any
taking by the Company of a record of holders of any class of securities of the
Company for the purpose of determining holders thereof who are entitled to
receive any dividend (other than a cash dividend payable out of earned surplus
at the same rate as that of the last such cash dividend theretofore paid) or
other distribution, or any right to subscribe for, purchase or otherwise acquire
any shares of stock of any class or any other securities or property, or to
receive any other right; or

       

      (ii)           any
capital reorganization of the Company, any reclassification or recapitalization
of the capital stock of the Company or any transfer of all or substantially all
of the assets of the Company to any other person or any consolidation or merger
involving the Company; or

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      (iii)           any
voluntary or involuntary dissolution, liquidation or winding-up of the
Company;

       

      the
Company will mail to Holder at least 20 calendar days prior to the earliest date
specified therein, a notice specifying:

      

      (A)           The
date on which any such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such dividend,
distribution or right; and

      

      (B)           The
date on which any such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding-up is expected to
become effective and the record date for determining stockholders entitled to
vote thereon.

      

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

      

      6.            
Prepayment.  Upon
5 calendar days’ prior written notice to Holder, the Company may at any time
prepay in whole or in part, the principal sum, plus accrued interest to date of
such prepayment, of this Note; provided that, after the date of such notice and
prior to the proposed prepayment date, Holder may elect to convert such amounts
to the issued securities of the Company at the Conversion Price in accordance
with the terms of Section 5.

       

      7.           
 Subscription
Rights.  So long as this Note is outstanding, Holder shall have
the right to participate in any offering of the Company’s securities on the same
terms and conditions as the other subscribers to such offering.

      

      8.          
  Representations and
Warranties. The Company hereby represents and warrants:

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      (a)           Due Organization and
Qualification.  The Company is an entity duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the
requisite power and authority to own and use its properties and assets and to
carry on its business as currently conducted.  The Company is in no
violation or default of any of the provisions of its respective certificate or
articles of incorporation, bylaws or other organizational or charter
documents.  The Company is duly qualified to conduct business and is
in good standing as a foreign corporation or other entity in each jurisdiction
in which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be expected to result
in (i) a material adverse effect on the legality, validity or enforceability of
this Note, (ii) a material adverse effect on the results of operations, assets,
business, prospects or condition (financial or otherwise) of the Company, or
(iii) a material adverse effect on the Company’s ability to perform in any
material respect on a timely basis its obligations under the Note (any of (i),
(ii) or (iii), a “Material Adverse
Effect”) and to the Company’s knowledge no proceeding has been instituted
in any such jurisdiction revoking, limiting or curtailing or seeking to revoke,
limit or curtail such power and authority or qualification.

       

      (b)           Authorization;
Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by the
Note and otherwise to carry out its obligations hereunder and
thereunder.  The execution and delivery of the Note by the Company and
the consummation by it of the transactions contemplated thereby have been duly
authorized by all necessary action on the part of the Company and no further
action is required by the Company, its board of directors or its shareholders in
connection therewith.  The Note has been (or upon delivery will have
been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its terms except
(i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights
generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.

       

      (c)           No
Conflicts.  The execution, delivery and performance of the Note
by the Company, the issuance and sale of the securities and the consummation by
the Company of the other transactions contemplated hereby and thereby do not and
will not (i) conflict with or violate any provision of the Company’s certificate
or articles of incorporation, bylaws or other organizational or charter
documents, or (ii) conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company is subject (including
federal and state securities laws and regulations), or by which any property or
asset of the Company is bound or affected.

       

      (d)           Litigation.  There
is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the
Company before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of the
Note or (ii) could, if there were an unfavorable decision, have or reasonably be
expected to result in a Material Adverse Effect.  Neither the Company,
nor any director or officer thereof, is or has been the subject of any Action
involving a claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      9.            
Successors and
Assigns; Assignment.  Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.  Nothing in this Note, express or implied, is intended
to confer upon any party, other than the parties hereto and their successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Note, except as expressly provided herein.  The Company may not
assign this Note or any of the rights or obligations referenced herein without
the prior written consent of Holder.

      

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

      

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

      

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

      

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

      

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

      

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

      

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

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

       

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

       

      
        
          	 	 	 	CrowdGather,
      Inc.	 
	 	 	 	 	 
	
                   

                	 	By: 	
                   

                	 
	
                   

                	 	
                  Name:

                  Its: 

                	
                  Sanjay
      Sabnani

                  
                    President

                  

                	 
	 	 	 	 	 
	 	 	 	
                  20300
      Ventura Blvd., Suite 330

                  Woodland
      Hills, CA 91364

                	 

        

      

       

      
        
          	 	Holder:	
                   

                	 	 	
                   

                	 
	 	Address: 	
                   

                	 	 	
                   

                	 
	 	 	
                   

                	 	 	
                   

                	 
	 	 	 	 	 	 	 
	 	Telephone:	 	 	 	 	 
	 	Facsimile: 	 	 	 	 	 

        

      

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      

      NOTICE
OF CONVERSION

      (To be
Signed Only Upon Conversion of Note)

       

       

      To
CrowdGather, Inc.:

       

      The
undersigned, holder of the $90,000 Convertible
Note of CrowdGather, Inc., due _______________ (the “Note”), hereby agrees to
surrender the Note for conversion into ________________shares of Common Stock of
CrowdGather, Inc., to the extent of ________________________ dollars
($____________) unpaid principal amount of the Note, and________________________
dollars ($____________) unpaid accrued interest under the Note and requests that
the certificates for such shares be issued in the name of, and delivered to,
______________________________________________, whose address is
_____________________________________________________.  Conversion
should be effected as of ___________________.

       

      Dated:                                                      .

       

      
         

        
          
            	
                     

                  	 	 	
                     

                  	 
	
                     

                  	 	 	
                    
                      
                        (signature
      must conform in all respects to name

                        of
      holder as specified on the face of the Note)

                      

                    

                  	 
	
                     

                  	 	 	
                     

                  	 
	 	 	 	Address:

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