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WARRANT TO PURCHASE SHARES OF COMMON STOCK

Warrant Agreement

WARRANT TO PURCHASE SHARES OF COMMON STOCK | Document Parties: CROWDGATHER, INC. You are currently viewing:
This Warrant Agreement involves

CROWDGATHER, INC.

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Title: WARRANT TO PURCHASE SHARES OF COMMON STOCK
Governing Law: Nevada     Date: 5/27/2009

WARRANT TO PURCHASE SHARES OF COMMON STOCK, Parties: crowdgather  inc.
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EXHIBIT 10.6

 

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR QUALIFIED UNDER ANY APPLICABLE SECURITIES LAWS.  THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND QUALIFICATION UNDER SUCH STATE SECURITIES LAWS OR AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND/OR QUALIFICATION IS NOT REQUIRED.

 

CROWDGATHER, INC.

 

WARRANT TO PURCHASE SHARES OF COMMON STOCK

 

No.  __________ 

May __, 2009

 

THIS CERTIFIES THAT , for value received, _____________________, a ________________________ (the “ Investor ”), or Investor’s assigns (Investor and Investor’s assigns being the “ Holder ”), is entitled to subscribe for and purchase at any time during the Exercise Period from CrowdGather, Inc., a Nevada corporation, with its principal office at 20300 Ventura Blvd., Suite 330, Woodland Hills, California 91364 (the “ Company ”), a number of shares of Common Stock equal to the Share Number at a per share price equal to the Exercise Price in effect at such time.  This Warrant is issued in conjunction with the 8% Secured Straight Convertible Debenture, dated of even date herewith (the “ Debenture ”) by and between the Company and the investor listed on the Debenture.

 

DEFINITIONS.  As used herein, the following terms shall have the following respective meanings:

 

“Aggregate Warrant Price” shall mean the dollar value obtained by multiplying $0.70 by _______.

 

“Common Stock” shall mean the common stock of the Company.

 

“Exercise Period” shall mean the period commencing on the original date of issuance of this Warrant and terminating on the Maturity Date of the Debenture (as that term is defined therein), unless (i) said Maturity Date has been extended by the Holder or (ii) all of the initial principal thereunder has been converted to Common Stock in accordance with the terms and conditions thereof.  In the event that the Maturity Date has been extended, the Exercise Period hereof shall terminate as of such extended Maturity Date, unless all of the initial principal thereunder has been converted to Common Stock in accordance with the terms and conditions thereof.  In the event that all of the initial principal thereunder has been converted to Common Stock in accordance with the terms and conditions under the Debenture, the Exercise Period hereof shall terminate two years after the Maturity Date, or extended Maturity Date, of the Debenture.

 

“Exercise Price” shall mean $0.70 per share of Common Stock.

 

“Exercise Shares” shall mean any Common Stock acquired upon exercise of this Warrant.

 

“Share Number,” at any time, shall mean (i) the Aggregate Warrant Price minus the aggregate exercise price previously paid upon exercise of this Warrant, divided by (ii) the Exercise Price then in effect.

 

1


 

EXERCISE OF WARRANT.

 

The rights represented by this Warrant may be exercised as a whole or in part at any time during the Exercise Period, by delivery of the following to the Company at its address set forth above (or at such other address as it may designate by notice in writing to the Holder):

 

An executed Notice of Exercise in the form attached hereto;

 

Payment of the Exercise Price either in cash or by check; and

 

This Warrant.

 

Upon the exercise of the rights represented by this Warrant, a certificate or certificates for the Exercise Shares so purchased, registered in the name of the Holder or persons affiliated with the Holder, if the Holder so designates (and such designation is in compliance with applicable securities laws and any stockholders, investor rights or similar agreement), shall be issued and delivered to the Holder as promptly as practicable after the rights represented by this Warrant shall have been so exercised.

 

The person in whose name any certificate or certificates for Exercise Shares are to be issued upon exercise of this Warrant shall be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Exercise Price was made, irrespective of the date of delivery of such certificate or certificates, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open.

 

Notwithstanding anything to the contrary set forth in this Warrant, at no time may the Holder exercise this Warrant if the number of shares of Common Stock to be issued pursuant to such exercise would exceed, when aggregated with all other shares of Common Stock owned by such Holder at such time, the number of shares of Common Stock that would result in such Holder beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules thereunder) in excess of 4.99% of the then-issued and outstanding shares of Common Stock; provided , however , that, upon the Holder providing the Company with sixty-one (61) days notice (the “ Waiver Notice ”) that such Holder would like to waive this Section 2(d) with regard to any or all shares of Common Stock issuable upon exercise of this Warrant, this Section 2(d) will be of no force or effect with regard to all or a portion of the Warrant referenced in the Waiver Notice; provided , further , that this provision shall be of no further force or effect during the sixty-one (61) days immediately preceding the expiration of the term of this Warrant.

 

COVENANTS OF THE COMPANY.

 

Covenants as to Exercise Shares .  The Company covenants and agrees that all Exercise Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued and outstanding, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issuance thereof.  The Company further covenants and agrees that the Company will at all times during the Exercise Period have authorized and reserved, free from preemptive rights, a sufficient number of shares of its Common Stock to provide for the exercise of the rights represented by this Warrant.  If at any time during the Exercise Period the number of authorized but unissued shares of Common Stock shall not be sufficient to permit exercise of this Warrant, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes.

 

2


 

No Impairment .  Except and to the extent as waived or consented to by the Holder, the Company will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may be necessary or appropriate in order to protect the exercise rights of the Holder against impairment.

 

Notices of Record Date .  In the event of any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend which is the same as cash dividends paid in previous quarters) or other distribution, the Company shall mail to the Holder, at least ten (10) days prior to the date specified herein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution.

 

REPRESENTATIONS OF HOLDER.

 

Acquisition of Warrant for Personal Account .  The Holder represents and warrants that it is acquiring the Warrant and any shares of capital stock issued or issuable upon exercise or conversion of the Warrant for investment purposes only and not with a view to or for resale in connection with any distribution or public offering thereof within the meaning of the Act (as defined below).  The Holder also represents that the entire legal and beneficial interests of the Warrant and Exercise Shares the Holder is acquiring is being acquired for, and will be held for, the account of the Holder only.

 

Accredited Investor Status .  The Holder represents and warrants that it is either (a) an “accredited investor” as such term is defined in Rule 501 under the Securities Act of 1933, as amended (the “ Act ”) or (b) not a U.S. Person and the offer or sale of the Debentures and this Warrant were made in an “ offshore transaction ,” as that term is defined in Rule 902(h), as promulgated under the Act.  In either event, if required by the Company, the Holder shall provide the Company with such additional information as the Company may reasonably request with respect to this representation and warranty.

 

Securities Are Not Registered .

 

The Holder understands that the Warrant and the Exercise Shares have not been registered under the Act, on the basis that no distribution or public offering of the stock of the Company is to be effected, or registered or qualified under any applicable state securities laws.  The Holder realizes that the basis for the exemption may not be present if, notwithstanding its representations, the Holder has a present intention of acquiring the securities for a fixed or determinable period in the future, selling (in connection with a distribution or otherwise), granting any participatio


 
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