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LOCK-UP AGREEMENT

Lockup Agreement

LOCK-UP AGREEMENT | Document Parties: CROWDGATHER, INC. You are currently viewing:
This Lockup Agreement involves

CROWDGATHER, INC.

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Title: LOCK-UP AGREEMENT
Governing Law: Nevada     Date: 5/27/2009
Law Firm: Baker Hostetler    

LOCK-UP AGREEMENT, Parties: crowdgather  inc.
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EXHIBIT 10.7

 

LOCK-UP AGREEMENT

 

This LOCK-UP AGREEMENT (the “ Agreement ”) is made as of the ___ day of _____, 2009, by _______________ (the “ Holder ”), maintaining an address at __________________________, in connection with his or its ownership of shares of CrowdGather, Inc., a Nevada corporation (the “ Company ”).

 

WHEREAS, the Company requires substantial additional funds to effectuate its business plan; expand its online reach and presence; develop and enhance its technological capabilities; file, prosecute, defend, and enforce its intellectual property rights; and hire and retain key employees;

 

WHEREAS, the Company has negotiated certain terms with one or more investors, who require the execution of this Agreement as a condition precedent to their providing funds to the Company;

 

WHEREAS, the holder is willing to enter into this Agreement in connection with such investment on the terms provided herein;

 

NOW, THEREFORE, in consideration of these presents and for such other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, The Holder agrees as follows:

 

1.            Background .

 

a.           The Holder is the beneficial owner of the amount of shares of the Common Stock, $.001 par value, of the Company (the “ Common Stock ”) designated on the signature page hereto.

 

b.           The Holder acknowledges that the Company has entered into or will enter into at or about the date hereof (the “ Offering ”) one or more agreements including one or more Subscription Agreements with one or more subscribers (collectively, the “ Subscribers ”), effective as of the date hereof for shares of the Company’s Series A Preferred Stock (the “Series A Preferred”).  The Holder understands that, as a condition to closing the Offering, the Subscribers have required, and the Company has agreed to obtain on behalf of the Subscribers, an agreement from the Holder to refrain from selling any securities of the Company from the initial Closing Date1 (as that term is defined in the Subscription Agreements) until the first anniversary thereof.  The Holder has entered into this Agreement in order to induce the Subscribers to close the transactions contemplated by such Subscription Agreements.

 

2.            Sale Restriction .

 

a.           The Holder hereby agrees that during the Restriction Period, without the consent of the Required Holders (as that term is defined in the Subscription Agreements), the Holder will not sell, transfer, or otherwise dispose of any shares of Common Stock that the Holder owns or has a right to acquire as of the date hereof or during the Restriction Period, other than in connection with an offer made to all stockholders of the Company in connection with merger, consolidation, or similar transaction involving the Company.  The Holder further agrees that the Company is authorized to and the Company agrees to place “stop orders” on its books to prevent any transfer of shares of Common Stock or other securities of the Company held by the Holder in violation of this Agreement.  The Company agrees to use commercially reasonable efforts not to allow any transaction inconsistent with this Agreement.

 


1           The initial Closing Date shall be the date that not less than $1,000,000 of gross subscription proceeds are transmitted by wire transfer or otherwise credited to or for the benefit of the Company and each such Subscriber shall have purchased, and the Company shall have sold to each such Subscriber, that number of shares of Series A Preferred as are set forth next to each such Subscriber’s name on its respective Subscription Agreement at a per-share purchase price $.35.

 

1


 

b.           Notwithstanding the foregoing restrictions on transfer, the Holder may, at any time and from time to time during the Restriction Period, transfer all or a portion of the shares of Common Stock (i) as bona fide gifts or transfers by will or intestacy and (ii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the Holder, provided that any such transfer shall not involve a disposition for value; provided, that, in the case of any gift or transfer described in clauses (i) and (ii), each donee or transferee agrees in writing to be bound by the terms and conditions contained herein in the same manner as such terms and conditions apply to the undersigned.

 

3.            Miscellaneous .

 

a.           At any time, and from time to time, after the signing of this Agreement, the Holder will execute such additional instruments and take such action as may be reasonably requested by the Subscribers to carry out the intent and purposes of this Agreement.

 

b.           This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws.  Any action brought by either party against the other concerning the transactions contemplated by


 
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