Exhibit 10.1

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), NOR UNDER ANY STATE SECURITIES LAW AND MAY NOT BE SOLD,
PLEDGED, OFFERED FOR SALE, ASSIGNED OR TRANSFERRED UNLESS (a) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT, AND ANY
APPLICABLE STATE SECURITIES LAW REQUIREMENTS HAVE BEEN MET OR (B) EXEMPTIONS
FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND THE REGISTRATION
OR QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS ARE AVAILABLE.

 

CONVERTIBLE PROMISSORY NOTE

 

$20,000 April 6, 2017   New York, New York

 

FOR VALUE RECEIVED, Truli Media Group, Inc., a Delaware corporation (the
“Company”), promises to pay to the order of ___________ (“Holder”), at the
offices of ___________________ the principal sum of Twenty Thousand U.S. Dollars
(U.S. $20,000) with interest thereon at the rate of ten percent (10%) per annum.
Any amounts that remain unpaid when due shall thereafter bear interest at the
rate of twelve percent (12%) per annum. Interest as aforesaid shall be
calculated on the basis of actual number of days elapsed over a year of 360
days.

 

The principal amount and all accrued interest of this Note are due on August 6,
2017 (the “Maturity Date”).

 

This Note is subject to the following additional provisions:

 

Section 1.       Definitions. For the purposes hereof the following terms shall
have the following meanings:

 

“Business Day” means any day except Saturday, Sunday and any day which shall be
a federal legal holiday in the United States or a day on which banking
institutions in the State of New York are authorized or required by law or other
government action to close.

 

“Common Stock” means the common stock, par value $0.001 per share, of the
Company and stock of any other class into which such shares may hereafter have
been reclassified or changed.

 

“Conversion Date” shall have the meaning set forth in Section 5(a) hereof.

 

“Conversion Price” shall have the meaning set forth in Section 5(b).

 

“Conversion Shares” means the shares of Common Stock issuable upon conversion of
this Note or as payment of interest, all in accordance with the terms hereof.

 

“Event of Default” shall have the meaning set forth in Section 7.

 

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

 

 

 

 

“Fundamental Transaction” shall have the meaning set forth in Section 3.

 

“Original Issue Date” means the date of the first issuance of this Note
regardless of the number of transfers of any Note and regardless of the number
of instruments which may be issued to evidence such Note.

 

“Person” means a corporation, an association, a partnership, organization, a
business, an individual, a government or political subdivision thereof or a
governmental agency.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

 

“Subsidiary” means any Person in which the Company owns more than 50% of the
outstanding equity.

 

“Transaction Documents” means this Note and any related agreements executed
contemporaneously herewith.

 

Section 2.        Registration of Transfers and Exchanges.

 

a)       Different Denominations. This Note is exchangeable for an equal
aggregate principal amount of Notes of different authorized denominations as
requested by the Holder surrendering the same, No service charge will be made
for such registration of transfer or exchange.

 

b)       Investment Representations. This Note has been issued subject to
certain investment representations of the original Holder set forth herein and
may be transferred or exchanged only in compliance with applicable federal and
state securities laws and regulations.

 

c)       Reliance on Note Register. Prior to due presentment to the Company for
transfer of this Note, the Company and any agent of the Company may treat the
Person in whose name this Note is duly registered on the Note Register as the
owner hereof for the purpose of receiving payment as herein provided and for all
other purposes, whether or not this Note is overdue, and neither the Company nor
any such agent shall be affected by notice to the contrary.

 

Section 3.       Acceleration of Maturity Date.

 

If, at any time while this Note is outstanding the Company or any of its
Subsidiaries, (A) effects any merger or consolidation of the Company with or
into another Person or (B) acquires assets of a business from any Person (in any
such case, a “Fundamental Transaction”), then, immediately prior to the
occurrence of such Fundamental Transaction the principal and accrued but unpaid
interest payable hereunder shall automatically become, at the Holder’s election,
immediately due and payable in cash.

 

Section 4.       Use of Proceeds.

 

The Company will use the proceeds of the loan represented by this Note only for
working capital and not for the payment of outstanding liabilities as of
September 21, 2016 (excluding two convertible notes) nor for liabilities related
to the Company’s legacy business (the “Assumed Liabilities”).

 

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Section 5.       Conversion.

 

a)       Voluntary Conversion. At all times after the Original Issue Date until
this Note is no longer outstanding, the principal and accrued interest due and
payable under this Note shall be convertible into shares of Common Stock at the
option of the Holder, in whole or in part at any time and from time to time, so
long and only to the extent that after taking into consideration all issued and
outstanding common stock shares and the maximum number of shares issuable under
all issued and outstanding convertible securities at the time of conversion,
there remain enough authorized but unissued shares under the Company’s
Certificate of Incorporation that are not previously reserved for issuance under
such convertible securities to effect conversion of this Note. The Holder shall
effect conversions by delivering to the Company the form of Notice of Conversion
attached hereto as Annex A (a “Notice of Conversion”), specifying therein the
principal amount of Note to be converted and the date on which such conversion
is to be effected (a “Conversion Date”). If no Conversion Date is specified in a
Notice of Conversion, the Conversion Date shall be the date that such Notice of
Conversion is provided hereunder. To effect conversions hereunder, the Holder
shall not be required to physically surrender the Note to the Company unless the
entire principal amount of this Note plus all accrued and unpaid interest
thereon has been so converted. Conversions hereunder shall have the effect of
lowering the outstanding principal amount of this Note in an amount equal to the
applicable conversion. The Holder and the Company shall maintain records showing
the principal amount converted and the date of such conversions. The Company
shall deliver any objection to any Notice of Conversion within 3 Business Days
of receipt of such notice. In the event of any dispute or discrepancy, the
records of the Holder shall be controlling and determinative in the absence of
manifest error. The Holder and any assignee, by acceptance of this Note,
acknowledge and agree that, by reason of the provisions of this paragraph,
following conversion of a portion of this Note, the unpaid and unconverted
principal amount of this Note may be less than the amount stated on the face
hereof. However, at the Company’s request, the Holder shall surrender the Note
to the Company within five (5) trading days following such request so that a new
Note reflecting the correct principal amount may be issued to Holder.

 

b)       Conversion Price. The conversion price in effect on any Conversion Date
(subject to adjustment herein) shall initially be equal to $0.02 per share.

 

c)       Mechanics of Conversion

 

i.       Conversion Shares Issuable Upon Conversion of Principal Amount. The
number of shares of Common Stock issuable upon a conversion hereunder shall be
determined by the quotient obtained by dividing (x) the amount of this Note
(whether principal or accrued but unpaid interest) to be converted by (y) the
Conversion Price.

 

ii.       Delivery of Certificate Upon Conversion. Not later than five (5)
trading days after any Conversion Date, the Company will deliver to the Holder
at an address in the United States (A) a certificate or certificates
representing the Conversion Shares representing the number of shares of Common
Stock being acquired upon the conversion of Notes (including, if so timely
elected by the Company, shares of Common Stock representing the payment of
accrued interest and (B) a bank check or wire transfer in the amount of accrued
and unpaid interest (if the Company is required to pay accrued interest in
cash).

 

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iii.       Reservation of Shares Issuable Upon Conversion. The Company covenants
that it will at all times reserve and keep available out of its authorized and
unissued shares of Common Stock solely for the purpose of issuance upon
conversion of this Note (after taking into account all existing issued and
outstanding shares of Common Stock and all shares reserved for issuance under
the Company’s issued and outstanding convertible securities), free from
preemptive rights or any other actual contingent purchase rights of persons
other than the Holder, not less than such number of shares of the Common Stock
as shall be issuable (taking into account the adjustments and restrictions of
Section 6) upon the conversion of the outstanding principal amount and accrued
interest under this Note. The Company covenants that all shares of Common Stock
that are issuable upon conversion of this Note shall, upon issuance, be duly and
validly authorized, issued and fully paid and non-assessable.

 

iv.       Fractional Shares. Upon a conversion hereunder the Company shall not
be required to issue stock certificates representing fractions of shares of the
Common Stock, but may if otherwise permitted, make a cash payment in respect of
any final fraction of a share based on the fair market value of a share at such
time. If the Company elects not, or is unable, to make such a cash payment, the
Holder shall be entitled to receive, in lieu of the final fraction of a share,
one whole share of Common Stock.

 

v.       Transfer Taxes. The issuance of certificates for shares of the Common
Stock on conversion of this Note shall be made without charge to the Holder for
any documentary stamp or similar taxes that may be payable in respect of the
issue or delivery of such certificate.

 

d)        Holder’s Representations.

 

i.       Own Account. Holder understands that the Conversion Shares are
“restricted securities” and have not been registered under the Securities Act or
any applicable state securities law and upon Conversion will acquire the
Conversion Shares as principal for its own account and not with a view to or for
distributing or reselling the Conversion Shares or any part thereof in violation
of the Securities Act or any applicable state securities law, has no present
intention of distributing the Conversion Shares in violation of the Securities
Act or any applicable state securities law and has no direct or indirect
arrangement or understandings with any other persons to distribute or regarding
the distribution of the Conversion Shares in violation of the Securities Act or
any applicable state securities law (this representation and warranty not
limiting Holder’s right to sell the Conversion Shares otherwise in compliance
with applicable federal and state securities laws).

 

ii.       Holder Status. On the date hereof and on each date on which Holder
elects to convert all or a portion of this Note, it will be either: (i) an
“accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or
(a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as
defined in Rule 144A(a) under the Securities Act.

 

iii.       Experience of Holder. Holder, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in this Note and the Conversion Shares, and has so
evaluated the merits and risks of such investment. Such Purchaser is able to
bear the economic risk of an investment in this Note and the Conversion Shares
and, at the present time, is able to afford a complete loss of such investment.

 

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Section 6.       Certain Adjustments.

 

a)       Adjustment Triggers.

 

i.       Stock Dividends and Stock Splits. If the Company, at any time after the
Original Issue Date while the Note is outstanding: (A) shall pay a stock
dividend or otherwise make a distribution or distributions on shares of its
Common Stock or any other equity or equity equivalent securities payable in
shares of Common Stock to all stockholders of the Company (which, for avoidance
of doubt, shall not include any shares of Common Stock issued by the Company
pursuant to this Note, including as interest thereon), (B) subdivide outstanding
shares of Common Stock into a larger number of shares, or (C) combine (including
by way of reverse stock split) outstanding shares of Common Stock into a smaller
number of shares, then the Conversion Price shall be multiplied by a fraction of
which the numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding before such event and of which the
denominator shall be the number of shares of Common Stock outstanding after such
event. Any adjustment made pursuant to this Section shall become effective
immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or
re-classification.

 

ii.       Voluntary Adjustment By Company. The Company may at any time reduce
the then current Conversion Price to any amount and for any period of time
deemed appropriate and approved by the Board in accordance with Nevada law,
provided that the same voluntary adjustment shall be made to the then current
Conversion Price of all outstanding Notes having substantially the same form as
this Note.

 

b)       Calculations. All calculations under this Section 6 shall be made to
the nearest cent or the nearest 1/100th of a share, as the case may be. The
number of shares of Common Stock outstanding at any given time shall not include
shares of Common Stock owned or held by or for the account of the Company, and
the description of any such shares of Common Stock shall be considered an issue
or sale of Common Stock. For purposes of this Section 6, the number of shares of
Common Stock deemed to be issued and outstanding as of a given date shall be the
sum of the number of shares of Common Stock (excluding treasury shares, if any)
issued and outstanding.

 

c)       Notice to Holder.

 

i.       Adjustment to Conversion Price. Whenever the Conversion Price is
adjusted pursuant to any of this Section 6, the Company shall promptly mail to
each Holder a notice setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment.

 

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ii.       Notice to Allow Conversion by Holder. If (A) the Company shall declare
a dividend (or any other distribution) on the Common Stock; (B) the Company
shall declare a special nonrecurring cash dividend on or a redemption of the
Common Stock; (C) the Company shall authorize the granting to all holders of the
Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights; (D) the approval of any
stockholders of the Company shall be required in connection with any
reclassification of the Common Stock, any consolidation or merger to which the
Company is a party, any sale or transfer of all or substantially all of the
assets of the Company, of any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property; (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Company; then, in each case, the Company shall cause to
mailed to the Holder at its last address as it shall appear upon the stock books
of the Company, at least 20 calendar days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall
be entitled to exchange their shares of the Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided, that the failure to mail such notice
or any defect therein or in the mailing thereof shall not affect the validity of
the corporate action required to be specified in such notice. The Holder shall
be entitled to convert this Note during the 20-day period commencing the date of
such notice to the effective date of the event triggering such notice.

 

d)       Limitation on Beneficial Ownership.

 

i.       Except as provided otherwise in this Section 6(d)(i), the number of
Conversion Shares that may be acquired by the Holder shall be limited to the
extent necessary to insure that, after giving effect to such conversion (or
deemed conversion for voting purposes), the number of shares of Common Stock
then beneficially owned by the Holder and its affiliates and any other persons
or entities whose beneficial ownership of Common Stock would be aggregated with
the Holder’s for purposes of Section 13(d) of the Exchange Act (including shares
held by any “group” of which the Holder is a member, but, for avoidance of
doubt, excluding shares of Common Stock issuable upon conversion or exercise of
securities or rights to acquire securities that have limitations on the right to
convert, exercise or purchase similar to the limitation set forth herein) does
not exceed 4.99% (the “Maximum Percentage”) of the total number of shares of
Common Stock of the Company issued and outstanding immediately after giving
effect to such conversion (or deemed conversion for voting purposes) (the
“Beneficial Ownership Cap”). Upon delivery of a written notice to the Company,
the Holder may from time to time increase or decrease the Maximum Percentage to
any other percentage not in excess of 9.99% as specified in such notice;
provided that (i) any such increase in the Maximum Percentage will not be
effective until the sixty-first (61st) day after such notice is delivered to the
Company and (ii) any such increase or decrease will apply only to the Holder and
its Affiliates and not to any other holder of contemporaneously issued Notes
that is not an Affiliate. For purposes hereof, “group” has the meaning set forth
in Section 13(d) of the Exchange Act and applicable regulations of the
Securities and Exchange Commission, and the percentage held by the Holder shall
be determined in a manner consistent with the provisions of Section 13(d) of the
Exchange Act. As used herein, the term “Affiliate” means any person or entity
that, directly or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with a person or entity, as such terms
are used in and construed under Rule 144 under the Securities Act. With respect
to the Holder, any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as the Holder will be deemed
to be an affiliate of the Holder. In the event the Company is prohibited from
issuing shares of Common Stock as a result of any restrictions or prohibitions
under applicable law or the rules or regulations of any stock exchange,
interdealer quotation system or other self-regulatory organization, the Company
shall as soon as possible seek the approval of its stockholders and take such
other action to authorize the issuance of the full number of shares of Common
Stock issuable upon the full conversion of this Note.

 

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ii.       For purposes of the foregoing, the number of shares of Common Stock
beneficially owned by the Holder and its affiliates shall include the number of
shares of Common Stock issuable upon conversion of this Note with respect to
which the determination is being made, but shall exclude the number of shares of
Common Stock which would be issuable upon (A) conversion of the remaining,
non-converted shares under this Note beneficially owned by such Person or any of
its affiliates and (B) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company (including, without limitation,
any other notes or warrants) subject to a limitation on conversion or exercise
analogous to the limitation contained in this Section beneficially owned by
Holder or any of its affiliates. Except as set forth in the preceding sentence,
for purposes of this Section 6(d), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act. For purposes of
this Section 6(d), in determining the number of outstanding shares of Common
Stock, Holder may rely on the number of outstanding shares of Common Stock as
reflected in (1) the Company’s most recent Form 10-K, Form 10-Q, or Form 8-K, as
the case may be, (2) a more recent public announcement by the Company, or (3)
any other notice by the Company or the Transfer Agent setting forth the number
of shares of Common Stock outstanding. For any reason at any time, upon the
written request of Holder, the Company shall within one (1) Business Day
following the receipt of such notice, confirm orally and in writing to any such
Holder the number of shares of Common Stock then outstanding. In any case, the
number of outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company, including
conversions under this Note (or deemed conversion, as applicable), by Holder and
its affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. In the event that the Company cannot issue any shares
of Common Stock to a Holder solely by reason of this Section 6(d) (such shares,
the “Limited Shares”), notwithstanding anything to the contrary contained
herein, the Company shall hold any such Limited Shares in abeyance for such
Holder until such time, if ever, that the delivery of such Limited Shares shall
not cause the Holder to exceed the Beneficial Ownership Cap, at which time such
Holder shall be delivered such Limited Shares to the extent as if there had been
no such limitation. The provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with the terms of
this Section 6(d) to correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended beneficial ownership limitation
herein contained or to make changes or supplements necessary or desirable to
properly give effect to such limitation.

 

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Section 7.       Events of Default.

 

a)       Event of Default. Wherever used herein, means any one of the following
events (whatever the reason and whether it shall be voluntary or involuntary or
effected by operation of law or pursuant to any judgment, decree or order of any
court, or any order, rule or regulation of any administrative or governmental
body):

 

i.       any default in the payment of (A) the principal, or (B) interest on
this Note or any other note of the Company held by the Holder when the same
shall become due and payable (whether on the Maturity Date or by acceleration or
otherwise) which default is not cured within ten (10) Business Days after
written notice from the Holder;

 

ii.       a breach of any of the covenants or agreements made by the Company
herein;

 

iii.       (A) there is commenced against the Company or any Subsidiary thereof
a case under any applicable bankruptcy or insolvency laws as now or hereafter in
effect or any successor thereto, or any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to the Company or any Subsidiary thereof which
remains undismissed for a period of 60 days; or (B) the Company or any
Subsidiary thereof is adjudicated by a court of competent jurisdiction insolvent
or bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or (C) the Company or any Subsidiary thereof suffers any
appointment of any custodian or the like for it or any substantial part of its
property which continues undischarged or unstayed for a period of 60 days; or

 

iv.       Assumed liabilities as they come due.

 

b)       Remedies Upon Event of Default. If any Event of Default occurs, the
full principal amount of this Note, together with interest and any other amounts
owing in respect hereof, to the date of acceleration shall become, at the
Holder’s election, immediately due and payable in cash. The Holder need not
provide and the Company hereby waives any presentment, demand, protest or other
notice of any kind, and the Holder may immediately and without expiration of any
grace period enforce any and all of its rights and remedies hereunder and all
other remedies available to it under applicable law. Such declaration may be
rescinded and annulled by Holder at any time prior to payment hereunder and the
Holder shall have all rights as a Note holder until such time, if any, as the
full payment under this Section shall have been received by it. No such
rescission or annulment shall affect any subsequent Event of Default or impair
any right consequent thereon.

 

c)       Alternate Conversion Price.

 

i.       General. Subject to Section 6(d), at any time at any time after the
occurrence of an Event of Default (regardless of whether such Event of Default
has been cured), the Holder may, at the Holder’s option, convert (each, an
“Alternate Conversion”, and the date of such Alternate Conversion, each, an
“Alternate Conversion Date”) all, or any part of, the amounts then outstanding
under this Note (such portion of this Note subject to such Alternate Conversion,
the “Alternate Conversion Amount”) into shares of Common Stock at the Alternate
Conversion Price.

 

ii.       Mechanics of Alternate Conversion. Subject to Section 6(d), on any
Alternate Conversion Date, the Holder may voluntarily convert any Alternate
Conversion Amount pursuant to Section 7(c) (with “Alternate Conversion Price”
replacing “Conversion Price” for all purposes hereunder with respect to such
Alternate Conversion by designating in the Conversion Notice delivered pursuant
to this Section 5 of this Note that the Holder is electing to use the Alternate
Conversion Price for such conversion. Notwithstanding anything to the contrary
in this Section 7(c), but subject to Section 6(d), until the Company delivers
shares of Common Stock representing the applicable Alternate Conversion Amount
to the Holder, such Alternate Conversion Amount may be converted by the Holder
into shares of Common Stock pursuant to Section 5 without regard to this Section
7(c).

 

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iii.       Definitions. For the purpose of this Section 7(c), (A) “Alternate
Conversion Price” means, with respect to any Alternate Conversion that price
which shall be the lowest of (x) the applicable Conversion Price as in effect on
the applicable Conversion Date of the applicable Alternate Conversion, and (y)
80% of the price computed as the quotient of (I) the sum of the VWAP of the
Common Stock for each of the three (3) Business Days with the lowest VWAP of the
Common Stock during the twenty (20) consecutive Business Day period ending and
including the Business Day immediately preceding the delivery or deemed delivery
of the applicable Conversion Notice, divided by (II) three (3) (such period, the
“Alternate Conversion Measuring Period”). All such determinations to be
appropriately adjusted for any stock dividend, stock split, stock combination,
reclassification or similar transaction that proportionately decreases or
increases the Common Stock during such Alternate Conversion Measuring Period and
(B) “VWAP” means, for any security as of any date, the dollar volume-weighted
average price for such security on the principal securities exchange or
securities market on which such security is then traded during the period
beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York
time, as reported by Bloomberg, LP through its “HP” function (set to weighted
average) or, if the foregoing does not apply, the dollar volume-weighted average
price of such security in the over-the-counter market on the electronic bulletin
board for such security during the period beginning at 9:30:01 a.m., New York
time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg, LP,
or, if no dollar volume-weighted average price is reported for such security by
Bloomberg. LP for such hours, the average of the highest closing bid price and
the lowest closing ask price of any of the market makers for such security as
reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets
LLC). If the VWAP cannot be calculated for such security on such date on any of
the foregoing bases, the VWAP of such security on such date shall be the fair
market value as mutually determined by the Company and the Holder. All such
determinations shall be appropriately adjusted for any stock dividend, stock
split, stock combination, recapitalization or other similar transaction during
such period.

 

Section 8.       Miscellaneous.

 

a)       Notices. Any and all notices or other communications or deliveries to
be provided by the Holder hereunder shall be in writing and delivered personally
or sent by a nationally recognized overnight courier service, addressed to the
Company at 201 South Laurel, Luling, TX 78648, attention: Chief Executive
Officer, or such other address or facsimile number as the Company may specify
for such purposes by notice to the Holder delivered in accordance with this
Section. Any and all notices or other communications or deliveries to be
provided by the Company hereunder shall be in writing and delivered personally,
by facsimile, sent by a nationally recognized overnight courier service
addressed to the Holder at the facsimile, telephone number or address of such
Holder appearing on the books of the Company, or if no such facsimile telephone
number or address appears, at the principal place of business of the Holder. Any
notice or other communication or deliveries hereunder shall be deemed given and
effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Section prior to 5:30 p.m. (New York City time), (ii) the date
after the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Section later than
5:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York
City time) on such date, (iii) the second Business Day following the date of
mailing, if sent by nationally recognized overnight courier service, or (iv)
upon actual receipt by the party to whom such notice is required to be given.

 

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b)       Absolute Obligation. Except as expressly provided herein, no provision
of this Note shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, interest and other amounts
provided for herein (if any) on, this Note at the time, place, and rate, and in
the coin or currency, herein prescribed. This Note is a direct debt obligation
of the Company.

 

c)       Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen
or destroyed, the Company shall execute and deliver, in exchange and
substitution for and upon cancellation of a mutilated Note, or in lieu of or in
substitution for a lost, stolen or destroyed Note, a new Note for the principal
amount of this Note so mutilated, lost, stolen or destroyed but only upon
receipt of evidence of such loss, theft or destruction of such Note, and of the
ownership hereof; and indemnity, if requested, all reasonably satisfactory to
the Company.

 

d)       Additional Issuances of Securities.

 

i.       For purposes of this Section 8(d), the following definitions shall
apply.

 

(1)"Convertible Securities" means any stock or securities (other than Options)
convertible into or exercisable or exchangeable for shares of Common Stock.

 

(2)"Options" means any rights, warrants or options to subscribe for or purchase
Common Stock or Convertible Securities.

 

(3)"Common Stock Equivalents" means, collectively, Options and Convertible
Securities.

 

ii.       From the date hereof until the earlier of (x) the time that this Note
is no longer outstanding or (y) such time as all of the shares underlying this
Note may be sold without restriction or limitation pursuant to Rule 144 and
without the requirement to be in compliance with Rule 144(c)(1), the Company
shall not, directly or indirectly, file any registration statement with the SEC,
or file any amendment or supplement thereto, or grant any registration rights to
any person that can be exercised prior to the earlier of such time as set forth
above, other than any registration statement for the issuance of securities
pursuant to an employee benefit plan or securities award, as registered on Form
S-8.

 

iii.       From the date hereof until the two (2) year anniversary of the
issuance of this Note, the Company shall not, (i) directly or indirectly, offer,
sell, grant any option to purchase, or otherwise dispose of (or announce any
offer, sale, grant or any option to purchase or other disposition of) any of its
or its Subsidiaries' equity or equity equivalent securities, including without
limitation any debt, preferred stock or other instrument or security that is, at
any time during its life and under any circumstances, convertible into or
exchangeable or exercisable for Common Stock or Common Stock Equivalents (any
such offer, sale, grant, disposition or announcement being referred to as a
"Subsequent Placement") unless the Company shall have first complied with this
Section 4(n)(iv).d

 

 10 

 

 

(1)The Company shall deliver to the holder of this Note an irrevocable written
notice (the "Offer Notice") of any proposed or intended issuance or sale or
exchange (the "Offer") of the securities being offered (the "Offered
Securities") in a Subsequent Placement, which Offer Notice shall (w) identify
and describe the Offered Securities, (x) describe the price and other terms upon
which they are to be issued, sold or exchanged, and the number or amount of the
Offered Securities to be issued, sold or exchanged, (y) identify the persons or
entities (if known) to which or with which the Offered Securities are to be
offered, issued, sold or exchanged and (z) offer to issue and sell to or
exchange with such holder fifty percent (50%) of the Offered Securities.

 

(2)To accept an Offer, in whole or in part, such holder must deliver a written
notice to the Company prior to the end of the tenth (10th) Business Day after
such holder's receipt of the Offer Notice (the "Offer Period"), setting forth
the amount that such holder elects to purchase (the "Notice of Acceptance").
Notwithstanding anything to the contrary contained herein, if the Company
desires to modify or amend the terms and conditions of the Offer prior to the
expiration of the Offer Period, the Company may deliver to the holder a new
Offer Notice and the Offer Period shall expire on the tenth (10th) Business Day
after the holder's receipt of such new Offer Notice.

 

(3)If any holders of other notes similar to this Note and issued on the same
date as this Note have similar rights as those set forth in this Section 8(d)
but choose not to exercise such rights in full, then the holder of this Note
shall be given an option to exercise such rights to purchase any remaining
Offered Securities based on an offer period including deadlines at least as long
as those contained in this Section 8(d).

 

(4)The Company shall have five (5) Business Days from the expiration of the
Offer Period above to offer, issue, sell or exchange all or any part of such
Offered Securities as to which a Notice of Acceptance has not been given by the
holder (the "Refused Securities") pursuant to a definitive agreement (the
"Subsequent Placement Agreement") but only to the offerees described in the
Offer Notice (if so described therein) and only upon terms and conditions
(including, without limitation, unit prices and interest rates) that are not
more favorable to the acquiring person or persons or less favorable to the
Company than those set forth in the Offer Notice and (ii) to publicly announce
(a) the execution of such Subsequent Placement Agreement, and (b) either (x) the
consummation of the transactions contemplated by such Subsequent Placement
Agreement or (y) the termination of such Subsequent Placement Agreement, which
shall be filed with the SEC on a Current Report on Form 8-K with such Subsequent
Placement Agreement and any documents contemplated therein filed as exhibits
thereto.

 

 11 

 

 

(5)In the event the Company shall propose to sell less than all the Refused
Securities (any such sale to be in the manner and on the terms specified in
Section 8(d)(iii)(3) above), then the holder of this Note may, at its sole
option and in its sole discretion, reduce the number or amount of the Offered
Securities specified in its Notice of Acceptance to an amount that shall be not
less than the number or amount of the Offered Securities that such Holder
elected to purchase pursuant to Section 8(d)(iii)(2) above multiplied by a
fraction, (i) the numerator of which shall be the number or amount of Offered
Securities the Company actually proposes to issue, sell or exchange (including
Offered Securities to be issued or sold to holders of other notes pursuant to
Section 8(d)(iii)(3) above prior to such reduction) and (ii) the denominator of
which shall be the original amount of the Offered Securities. In the event that
the holder of this Note so elects to reduce the number or amount of Offered
Securities specified in its Notice of Acceptance, the Company may not issue,
sell or exchange more than the reduced number or amount of the Offered
Securities unless and until such securities have again been offered to the
holder in accordance with Section 8(d)(iii)(1) above.

 

(6)Upon the closing of the issuance, sale or exchange of all or less than all of
the Refused Securities, the holder of this Note shall acquire from the Company,
and the Company shall issue to the holder, the number or amount of Offered
Securities specified in the Notices of Acceptance, as reduced pursuant to
Section 8(d)(iii)(5) above if the holder has so elected, upon the terms and
conditions specified in the Offer. The purchase by the holder of this Note of
any Offered Securities is subject in all cases to the preparation, execution and
delivery by the Company and the holder of a purchase agreement relating to such
Offered Securities reasonably satisfactory in form and substance to the holder
and its counsel.

 

(7)Any Offered Securities not acquired by the holder of this Note or other
persons in accordance with Section 8(d)(iii)(3) above may not be issued, sold or
exchanged until they are again offered to the holder under the procedures
specified in this Note.

 

(8)The Company and the holder of this Note agree that if the holder elects to
participate in the Offer, (x) neither the Subsequent Placement Agreement with
respect to such Offer nor any other transaction documents related thereto
(collectively, the "Subsequent Placement Documents") shall include any term or
provisions whereby the holder shall be required to agree to any restrictions in
trading as to any securities of the Company owned by such holder prior to such
Subsequent Placement, and (y) any registration rights set forth in such
Subsequent Placement Documents shall be similar in all material respects to the
registration rights contained in the Registration Rights Agreement.

 

 12 

 

 

(9)Notwithstanding anything to the contrary in this Section 8(d) and unless
otherwise agreed to by the holder of this Note, the Company shall either confirm
in writing to the holder that the transaction with respect to the Subsequent
Placement has been abandoned or shall publicly disclose its intention to issue
the Offered Securities, in either case in such a manner such that the holder
will not be in possession of material non-public information, by the fifteenth
(15th) Business Day following delivery of the Offer Notice. If by the fifteenth
(15th) Business Day following delivery of the Offer Notice no public disclosure
regarding a transaction with respect to the Offered Securities has been made,
and no notice regarding the abandonment of such transaction has been received by
the holder, such transaction shall be deemed to have been abandoned and the
holder shall not be deemed to be in possession of any material, non-public
information with respect to the Company. Should the Company decide to pursue
such transaction with respect to the Offered Securities, the Company shall
provide each holder with another Offer Notice and each holder will again have
the right of participation set forth in this Section 8(d)(iii). The Company
shall not be permitted to deliver more than one such Offer Notice to the holder
of this Note in any 60 day period.

 

e)       Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Note, and any claim, controversy or
dispute arising under or related to this Note, the relationship of the parties,
and/or the interpretation and enforcement of the rights and duties of the
parties hereunder shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by any of the Transaction Documents (whether brought
against a party hereto or its respective affiliates, directors, officers,
shareholders, employees or agents) shall be commenced in the state or federal
courts sitting in the City of New York, Borough of Manhattan (the “New York
Courts”).

 

Each party hereto hereby irrevocably submits to the exclusive jurisdiction of
the New York Courts for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, or such New York Courts are improper or
inconvenient venue for such proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding 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 Note 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 manner permitted by law. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this Note or
the transactions contemplated hereby. If either party shall commence an action
or proceeding to enforce any provisions of this Note, then the prevailing party
in such action or proceeding shall be reimbursed by the other party for its
attorney’s fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.

 

f)       Waiver. Any waiver by the Company or the Holder of a breach of any
provision of this Note shall not operate as or be construed to be a waiver of
any other breach of such provision or of any breach of any other provision of
this Note. The failure of the Company or the Holder to insist upon strict
adherence to any term of this Note on one or more occasions shall not be
considered a waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Note. Any waiver must be
in writing.

 

 13 

 

 

g)       Severability. If any provision of this Note is invalid, illegal or
unenforceable, the balance of this Note shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances. If it shall be found
that any interest or other amount deemed interest due hereunder violates
applicable laws governing usury, the applicable rate of interest due hereunder
shall automatically be lowered to equal the maximum permitted rate of interest.
The Company covenants (to the extent that it may lawfully do so) that it shall
not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law or other law which
would prohibit or forgive the Company from paying all or any portion of the
principal of or interest on this Note as contemplated herein, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants or the
performance of this indenture, and due Company (to the extent it may lawfully do
so) hereby expressly waives all benefits or advantage of any such law, and
covenants that it will not, by resort to any such law, binder, delay or impeded
the execution of any power herein granted to the Holder, but will suffer and
permit the execution of every such as though no such law has been enacted.

 

h)       Next Business Day. Whenever any payment or other obligation hereunder
shall be due on a day other than a Business Day, such payment shall be made on
the next succeeding Business Day.

 

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

 

[SIGNATURE PAGE TO CONVERTIBLE NOTE FOLLOWS]

 

 14 

 

 

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a
duly authorized officer as of the date first above indicated.

 

  TRULI MEDIA GROUP, INC.         By:     Elliot Maza, CEO

  

 15 

 

 

ANNEX A

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert principal under the Convertible Note of
Truli Media Group, Inc., a Delaware corporation (the “Company”), due on April 8,
2017, into shares of common stock, par value $0.001 per share (the “Common
Stock”), of the Company according to the conditions hereof, as of the date
written below. If shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith such certificates and opinions as reasonably
requested by due Company in accordance therewith. No fee will be charged to the
Holder for any conversion, except for such transfer taxes, if any.

 

The undersigned agrees to comply with the prospectus delivery requirements under
the applicable securities laws in connection with any transfer of the aforesaid
shares of Common Stock.

 

Conversion calculations:

 

  Date to Effect Conversion:       Principal Amount of Note to be Converted:    
  Payment of Interest in Common Stock_ yes _ no
If yes, $______ of Interest Accrued on Account of Conversion at Issue.      
Number of shares of Common Stock to be issued:       Signature:       Name:    
  Address: