CONSULTING AGREEMENT

 

THIS CONSULTING AGREEMENT (“Agreement”) is made and entered into effective as of
November 1, 2012 (the “Effective Date”) by and between Loton Corp., a Nevada
Corporation (the “Company”) and Andrew Schleimer (“Consultant”). Company and
Consultant are sometimes referred to individually as a “Party” or collectively
as the “Parties.”

 

1.          Term of the Agreement. This Agreement will begin on the Effective
date and shall continue for a period of one (1) year, unless terminated sooner
as provided herein. Thereafter, the Agreement will continue on a month-to-month
basis, during which the Company can terminate the Agreement by giving Consultant
not less than one (1) month written notice (collectively, the “Term”).

 

2.          Independent Consultant Status. Company hereby engages Consultant as
a consultant, and Consultant accepts such engagement to provide Consulting
Services to Company in accordance with the terms and conditions of this
Agreement in the capacity of a consultant. Company and Consultant agree that
Consultant is solely an independent contractor for all purposes including, but
not limited to, payroll and tax purposes, and that Consultant shall not
represent himself to be an employee, and/or officer of Company, and Consultant
shall have no power, express or implied, to bind the Company in any manner.

 

3.          Potential Conflict of Interest. Company acknowledges that Consultant
is an employee of Trinad Capital Management, a substantial stockholder of the
Company, which is owned by Robert Ellin, the Executive Chairman of the Company.
Neither the Company nor the Consultant believes that any actual conflict of
interest exists on the Effective Date, but if an actual conflict of interest
arises Consultant will promptly notify the Company.

 

4.          Consulting Services. Consultant agrees to perform all duties and
responsibilities, as and when reasonably requested, related to the Company’s
general corporate activities, as well as possible merger and acquisition
activities, including, without limitation, negotiating business terms, managing
outside advisors, reviewing and negotiating transaction documents and
implementing the transactions, and such other services that may be requested by
the Board from time to time, all in accordance with the terms and conditions of
this Agreement (collectively, the “Consulting Services”). In performing the
Consulting Services, Consultant agrees to travel domestically and/or
internationally, as and when reasonably requested. Consultant agrees to devote
all commercially reasonable efforts in the performance of the Consulting
Services.

 

5.          Compensation.

 

5.1          Consulting Fee. In consideration for the Consulting Services
provided by Consultant herein, Company shall pay Consultant a consulting fee of
$30,000, payable in equal monthly increments (the “Consulting Fee”). On an
annual basis, the Board of Directors will review the Consulting Fee. Any
increases to the Consulting Fee will be within the discretion of the Board,
taking into account Company performance, CPI and other related factors.

 

5.2          Bonus Payment. The Company shall pay Consultant a bonus payment, as
determined by the Board in its discretion, subject to the completion by the
Company of each material acquisition with respect to which Consultant has
provided Consulting Services requested by the Company’s Board of Directors. In
addition, the Company may, but is not required to, award the Consultant
additional bonuses in its complete discretion.

 

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5.3          Stock Grant. The Company shall grant Consultant 100,000 shares of
restricted common stock, which shall vest in its entirety on January 15, 2013
provided this Agreement remains in effect. The stock grant will be evidenced by
a separate restricted stock grant agreement to be executed by the Parties. The
Company may, but is not required to, award Consultant additional equity in its
complete discretion relating to the successful completion of a material
acquisition, as defined by the Company’s Board of Directors.

 

6.          Tax Reporting and Filing. Consultant acknowledges and agrees that he
shall be responsible (as a self-employed individual) for filing all tax returns,
tax declarations, and tax schedules, and for the payment of all taxes required,
when due, with respect to any and all compensation earned by Consultant under
this Agreement. The Company will not withhold any employment taxes from
compensation it pays Consultant. Rather, the Company will report the amount it
pays Consultant on IRS Form 1099, to the extent required to do so under
applicable Internal Revenue Code provisions and state or local law.

 

7.          Expense Reimbursement. Company shall reimburse Consultant for all
out-of-pocket expenses actually incurred by Consultant to the extent such
expenses are reasonable and necessary for the performance of the Consulting
Services under this Agreement (“Expenses”). As a prerequisite for Company’s
reimbursement of any Expenses, Consultant shall complete and submit to Company
an expense report, in the form requested by Company, for all Expenses
reimbursable under this Section, which shall list such Expenses in reasonable
detail and have attached, for each Expense, a receipt or other documentation
reasonably establishing such Expense and the amount thereof (“Expense Report”).
Upon request, Consultant shall provide Company with other documents and
information regarding any Expenses. Company shall pay any and all Expenses due
and owning to Consultant as soon as practicable following Company’s receipt of
the aforementioned expense report.

 

8.          Confidentiality Agreement.

 

8.1          Acknowledgments. Consultant acknowledges and agrees that during the
course of performing services for the Company, the Company will furnish,
disclose or make available to him confidential and proprietary information
related to the Company’s business. Consultant also acknowledge that such
confidential information has been developed and will be developed by the Company
through the expenditure by the Company of substantial time, effort and money and
that all such confidential information could be used by you to compete with the
Company.

 

8.2          Confidentiality; Protected Information. Consultant shall at all
times, both during and after any termination of this Agreement by either the
Company or Consultant, maintain in confidence and shall not, without the prior
written consent of the Company, and except in the course of performance of your
duties for the Company as a consultant hereunder or in any manner related
thereto, use in any way, disclose, or give to others for any purpose any fact or
information which was disclosed to or developed by you during the course of
performing services for the Company hereunder, and which is not generally
available to the public, including but not limited to information and facts
concerning business plans, business targets, customers, future customers,
suppliers, Licensors, licensees, partners, investors, affiliates or other,
training methods and materials, financial information, sales prospects, client
lists, Inventions (as defined in Section 9.1), or any other scientific,
technical, trade or business secret or product development plan or confidential
or proprietary information of the Company or of any third party provided to you
in the course of your consultancy to the Company (sometimes herein referred to
as “Confidential Information”). Consultant also agrees not to file patent
applications based on the Company’s technology or confidential information, nor
seek to make improvements thereon, without the Company’s prior written approval.
Consultant further agrees not to make any copies of such confidential or
proprietary information of the Company (except when appropriate for the
furtherance of the business of the Company or duly and specifically authorized
to do so) and promptly upon request, whether during or after the term of this
Agreement, to return to the Company any and all documentary, machine--readable
or other elements or evidence of such confidential or Proprietary information,
and any copies that may be in Consultant’s possession or control.

 

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9.          Ownership of Ideas, Copyrights and Patents.

 

9.1          Consultant agrees that all ideas, discoveries, creations,
materials, compounds, manuscripts and properties, innovations, improvements,
know-how, inventions, designs, developments, apparatus, techniques, algorithms,
software, mask works, methods, and formulae made, developed or improved by
Consultant in the Company’s Field of Interest, as defined in Section 10.1,
whether or not reduced to practice and whether patentable, copyrightable,
protectable as mask works or not, which Consultant may conceive, reduce to
practice or develop during the Term (as defined in Section 1) alone or in
conjunction with another, or others, and whether at the request or upon the
suggestion of the Company, or otherwise, which Consultant develops as a direct
result of performing consulting services for the Company under this Agreement
(the foregoing being hereinafter referred to as the “Inventions”), shall be the
sole and exclusive property of the Company, and that Consultant shall not
publish any of the Inventions without the prior written consent of the Company.
Consultant hereby assigns to the Company any right, title and/or interest in and
to all Inventions. Consultant agrees to maintain and furnish to the Company
complete and current records of all such Inventions and disclose to the Company
in writing any such Inventions. Upon termination of this Agreement, Consultant
shall provide to the Company in writing a full, signed statement of all
Inventions in which Consultant participated prior to termination of this
Agreement. Consultant further represents and agrees that to the best of his
knowledge and belief none of the Inventions will violate or infringe upon any
right, patent, copyright, trademark or right of privacy, or constitute libel or
slander against or violate any other rights of any person, firm or corporation,
and that Consultant will use your best efforts to prevent any such violation.

 

9.2          At any time during or after the Term, Consultant agrees to fully
cooperate with the Company, its attorneys and agents, in the preparation and
filing of all papers and other documents as may be required to perfect and
protect the Company’s rights in and to any of such Inventions, including, but
not limited to, joining in any proceeding to obtain and enforce letters patent,
copyrights, mask work registrations, trademarks or other legal rights of the
United States and of any and all other countries on such Inventions, provided
that the Company will bear the expense of such proceedings, and that any patent,
copyright, mask work registration, trademark, or other legal right so issued to
Consultant, personally, shall be assigned by Consultant to the Company without
charge. Consultant hereby designates the Company as his agent for, and grants to
the Company a power of attorney with full power of substitution, which power of
attorney shall be deemed coupled with an interest, for the purpose of effecting
the foregoing assignments from Consultant to the Company.

 

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9.3          Severability. If any part of this Section should be determined by a
court of competent jurisdiction to be unreasonable in duration, geographic area,
or scope, then this Section is intended to and shall extend only for such period
of time, in such area and with respect to such activity as is determined to be
reasonable,

 

10.          Representations And Warranties Regarding Confidential Information.
Consultant represents and warrants that his relationship with the Company does
not and will not breach any agreement or duty Consultant has to anyone else,
including any agreement or duty to keep in confidence confidential information
belonging to others. Consultant represents and warrants that he has not been
asked to disclose and has not provided information which would be considered
“confidential information” belonging to any of Consultant’s former employer(s)
to the Company, other than to the limited extent that a limited disclosure of
such information is necessary to identify whether related issues may exist.
Consultant represents and warrants that he is not aware of any current or prior
employment agreements between Consultant and a former employer or third party,
including but not limited to any employee code of conduct, non-competition,
non-solicitation or non-disclosure agreements, which would restrict or otherwise
may adversely affect Consulting providing the Consulting Services for the
Company under this Agreement. To the extent Consultant has identified any such
agreement, Consultant agrees to provide copies to the Company before the
execution of this Agreement so that they can be reviewed for this purpose.
Consultant further represents and warrants that Consultant providing the
Consulting Services under this Agreement will not breach any of these
agreements, including as to any agreement to keep in confidence confidential,
proprietary and trade secret information that Consultant may have acquired
during his the Company any items of confidential information” form his former
employer(s) or third parties, and will not engage in any activities that would
violate any employment or other agreements Consultant may have with such
employer(s) or third parties. Consultant represents and acknowledges that he has
not been asked by the Company to solicit any of his former employer(s) employees
to consider employment with the Company. Consultant agrees that he will not,
while providing Consulting Services for the Company, improperly use or disclose
any proprietary information of any concurrent employer or other person or entity
with which Consultant has an agreement or duty to keep in confidence information
acquired by Consultant.

 

11.          Injunctive Relief. The Consultant agrees that it would be difficult
to measure any damages caused to the Company which might result from any breach
by the Consultant of the promises set forth in this Sections 8, 9 and 10 of this
Agreement, and that in any event money damages may be an inadequate remedy for
any such breach. Accordingly, the Consultant agrees that if the Consultant
breaches, or proposes to breach, any portion of this Agreement, the Company
shall be entitled, in addition to all other remedies that it may have, to an
injunction or other appropriate equitable relief to restrain any such breach
without showing or proving any actual damage to the Company and without the need
to post a bond or other security.

 

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12.          Continuing Cooperation. During and after the Consultant’s
consulting for the Company, the Consultant shall cooperate reasonably with
requests from the Company, or the Company’s legal counsel, in the defense or
prosecution of any claims or actions now in existence or which may be brought in
the future against or on behalf of the Company which relate to events or
occurrences that transpired while the Consultant was consulting for the Company.
The Consultant’s cooperation in connection with such claims or actions shall
include, but not be limited to, being available to meet with counsel to prepare
for discovery or trial and to act as a witness on behalf of the Company at
mutually convenient times. During and after the Consultant’s consulting for the
Company, the Consultant also shall cooperate fully with the Company in
connection with any investigation or review of any federal, state or local
regulatory authority as any such investigation or review relates to events or
occurrences that transpired while the Consultant was consulting for the Company,
The Company shall reimburse the Consultant for any reasonable out-of-pocket
expenses incurred in connection with the Consultant’s performance of obligations
pursuant to this Section.

 

13.          Termination of Agreement During Initial Term.

 

13.1          Termination “For Cause”. During the term of the Agreement, Company
may terminate this Agreement on a “for cause” basis which shall mean any of the
following: (i) Consultant’s commission of a significant material act involving
dishonesty to the detriment of Company, (ii) material failure of Consultant to
perform the Consulting Services defined in Section 3 of this Agreement, which
have not been corrected within fifteen (15) days of Consultant being notified in
writing by Company of such material failure, (iii) commission of a misdemeanor
which causes material injury to the business, reputation or financial condition
of Company, (iv) commission of a felony, (v) Consultant’s disability which
prevents him from performing the Consulting Services for a period of sixty (60)
consecutive days, (vi) Consultant’s death. In the event of a termination “for
cause”, Company shall pay consultant for services rendered until the date of the
termination of this Agreement.

 

13.2          Termination Without Cause. During the term of this Agreement,
Company may terminate this Agreement on a “not for cause” basis by providing
Consultant with thirty (30) days written notice. Termination by Company of this
Agreement without cause prior to the expiration of the initial one year term
shall not affect the Company’s obligations to pay Consultant monthly
compensation pursuant to Section 5.1 of this Agreement, and Company shall be
required to pay Consultant (upon the date of termination) a sum equal to the
aggregate remaining monthly compensation through the end of the initial one year
term. During the term of this Agreement, Consultant may terminate this Agreement
by providing not less than thirty (30) days written notice to Company. Company
shall not be required to pay consultant any further monthly compensation
pursuant to Section 5.l of this Agreement as of the date of the termination of
this Agreement if Consultant terminates this Agreement other than due to a
breach by the Company of its obligations under this Agreement,

 

13.3          Responsibilities Upon Termination. Upon termination of the
Agreement, Consultant will deliver to Company all papers, drawings, models,
prototypes, contrivances, Confidential Information, and other materials in which
Company has exclusive rights, by virtue of Sections 8 and 9 of this Agreement,
or which were prepared or obtained by Consultant in connection with the
Consulting Services.

 

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13.4          Survival. The provisions of Sections 8, 9 and 10 of this Agreement
shall survive termination of this Agreement, for any reason whatsoever, whether
with cause or without cause.

 

14.          Indemnification. The Company shall defend and indemnify the
Consultant against and hold the Consultant harmless from any costs, liabilities,
losses and exposures for the Consultant’s performance of the Consulting Services
under this Agreement, including, but not limited to judgments, fines,
settlements and advancement of expenses incurred in the defense of actions,
proceedings and appeals therefrom, whether before or after the Effective Date,
to the maximum extent permitted under applicable law. If the Consultant is made
a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that the Consultant was performing services for the Company, the Company shall
indemnify the Consultant against all expenses (including reasonable attorneys’
fees), judgments, fines and amounts paid in settlement, as actually and
reasonably incurred by the Consultant in connection therewith, to the maximum
extent permitted under applicable law. If the Consultant is made a party to any
third-party action, complaint, suit or proceeding, the Consultant shall give
prompt notice thereof to the Company, and the Company shall have the right to
assume and control the defense of such action, complaint, suit or proceeding.
Notwithstanding the foregoing, the Consultant shall not have, and the Consultant
acknowledges and agrees that the Company does not have, any obligation to
indemnify the Consultant with respect to (a) any breach of representation,
warranty or covenant committed by Consultant under this Agreement, or (b) any
action or inaction by the Consultant where the Consultant failed to act in good
faith in a manner the Consultant reasonably believed to be in, or not opposed
to, the best interests of the Company, or (c) with respect to any criminal
action or proceeding, which the Consultant had reasonable cause to believe that
his conduct was unlawful. Consultant will take such steps as would be prudent to
minimize his liability and any liability of the Company.

 

15.          Arbitration of Disputes. In the event of any dispute or controversy
arising out of, or relating to, any interpretation, construction, performance,
termination or breach of this Agreement, the parties hereto agree to submit such
dispute or controversy to binding arbitration before one arbitrator at .LAMS in
Santa Monica, California, in accordance with the rules governing employment
disputes of JAMS then in effect. A link to the current JAMS Employment
Arbitration Rules & Procedures can be found at the following link:
http://www.jamsadr.com/rules-employment-arbitration!. Such arbitration shall be
conducted in accordance with Section 1280 et seq. of the California Code of
Civil Procedure. Each party hereby waives any right it may have to object to
JAMS having sole and exclusive jurisdiction to adjudicate any such dispute and
stipulates that the Arbitrator shall have personal jurisdiction over each party
for the purpose of litigating any dispute, controversy, or proceeding arising
out of or related to this Agreement.

 

The arbitrator shall be selected by the mutual agreement of the parties. If the
parties cannot agree on an arbitrator, the parties shall alternately strike
names from a list provided by the American Arbitration Association until only
one name remains.

 

Notwithstanding anything to the contrary in the rules governing employment
disputes of JAMS, the arbitration shall provide (i) for written discovery and
depositions as provided under California law, and (ii) for a written decision by
the arbitrator that includes the essential findings and conclusions upon which
the decision is based which shall be issued no later than thirty (30) days after
a dispositive motion is heard and/or an arbitration hearing has completed.

 

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The Consultant and the Company shall have the same amount of time to file any
claim against any other party as such party would have if such a claim had been
filed in state or federal court. In conducting the arbitration, the arbitrator
shall follow the rules of evidence of the State of California (including but not
limited to all applicable privileges), and the award of the arbitrator must
follow California and/or federal law, as applicable.

 

The decision of the Arbitrator shall be final and binding on all the parties to
the arbitration, shall be non-appealable and may be enforced by a court of
competent jurisdiction. The Company shall advance all fees and costs in
connection with the arbitration. The prevailing party shall be entitled to
recover from the non-prevailing party its reasonable attorney’s fees and costs,
as well as the costs and fees paid to the arbitrator or JAMS, to the extent
allowed by law. The Arbitrator may grant any legal or equitable remedy
appropriate including, without limitation, injunctive relief or specific
performance, but shall not have the power to grant any remedy that would not be
available in a state or federal court in California, By entering into this
arbitration provision, the Company and/or Consultant are not waiving the
attorney-client privilege.

 

16.          Miscellaneous.

 

16.1          No Conflicting Agreements. Consultant hereby represents and
warrants that he has no commitments or obligations inconsistent with this
Agreement. During the Term of this Agreement, Consultant will not enter into any
agreement either written or oral in conflict with this Agreement and will
arrange to provide Consultant’s services under this Agreement in such a manner
and at times that Consultant’s services will not conflict with Consultant’s
responsibilities under any other agreement, arrangement or understanding or
pursuant to any employment relationship you have at any time with any third
party. If Consultant is a party to any agreement which may be in conflict with
this Agreement, Consultant is required to so indicate by identifying that
agreement below his signature at the end of’ this Agreement and attaching a copy
hereto.

 

16.2          No Employment Created. This Agreement does not constitute, and
shall not be construed as constituting, an undertaking by the Company to hire
Consultant as an employee of the Company. Consultant acknowledges that he will
be working as a consultant only, and not as an employee. Consultant will not be
entitled to receive any of the benefits provided by the Company to its employees
and Consultant will be solely responsible for the payment of all federal, state
and local taxes and contributions imposed or required on income, unemployment
insurance, social security and any other law or regulation.

 

16.3          Governing Law. Except as otherwise expressly specified in this
Agreement, this Agreement shall be governed by and construed and enforced in
accordance with the laws of the New York, without application of the conflicts
of law provisions thereof.

 

16.4          Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto and supersedes all prior oral or
written agreements and understandings relating to the subject matter hereof. No
statement, representation, warranty, covenant or agreement of any kind not set
forth in this Agreement shall affect, or be used to interpret, change or
restrict, the express terms and provisions of this Agreement.

 

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16.5          Invalidity. This Agreement is intended to be performed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations. If any provision of this Agreement, or the
application thereof to any person or circumstance, shall, for any reason and to
any extent, be invalid or unenforceable, the remainder of this Agreement and the
application of such provisions to other persons or circumstances shall not be
affected thereby, but rather shall be construed, reformed and enforced to the
greatest extent permitted by law.

 

16.6          Assignment. The Company may assign its rights and obligations
hereunder to any person or entity that succeeds to, all or substantially all of
the Company’s business or that aspect of the Company’s business in which
Consultant is principally involved. Consultant’s rights and obligations under
this Agreement may not be assigned without the prior written consent of the
Company.

 

16.7          Modification and Amendment. This Agreement shall not be modified
or amended except by an instrument in writing signed by or on behalf of the
parties hereto.

 

16.8          Parties Benefited. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the Company and any parent,
subsidiary or other affiliate of the Company, and their respective successors
and assigns, and shall be binding upon and inure to the benefit of you and your
heirs, executors and administrators.

 

16.9          Counterparts. This Agreement may be executed in one or more
counterparts each of which will be deemed an original, but all of which together
shall constitute one and the same instrument.

 

[SIGNATURES ON FOLLOWING PAGE]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and
delivered as the day and year first above written.

 

LOTON CORP.   CONSULTANT                   BY:     BY:                 NAME:    
NAME:    

 

 

 

 

 

 

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