**THE SECURITIES REPRESENTED BY THIS INSTRUMENTHAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED,SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLESTATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.**

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PROMISSORYNOTE

 

 

Loton, Corp., a Nevadacorporation (the “Company”), for value received, hereby promises to pay to the order of Trinad Capital Master Fund,Ltd. (“Holder”) on April 1, 2013 or when sooner declared due and payable in accordance herewith (the “MaturityDate”) the sum of US$150,000 (the “Principal Amount”). The unpaid principal balance of this Promissory Note (this“Note”) at any time, together with all accrued and unpaid interest thereon at such time, is referred to herein as the“Note Amount”.

 

1.           Interest.Interest shall accrue on the outstanding Principal Amount at the rate of 6% per annum from the date hereof. All such interest shallbe calculated on the basis of a 365-day year for actual days elapsed. Payment shall be made at 4751 Wilshire Boulevard, 3rdFloor, Los Angeles, California 90010.

 

2.           Maturity;Prepayment. The outstanding unpaid principal balance and accrued but unpaid interest shall be due and payable on the MaturityDate, unless such term is extended in the sole and absolute discretion of Holder. The Company may prepay all or part of the accruedbut unpaid interest or principal balance due under this Note, without premium or penalty.

 

3.           Event of Default.Upon the occurrence of any Event of Default (as defined herein), this Note, upon written notice to the Company, shall forthwithbe immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expresslywaived, and the Holder may exercise any and all rights and remedies available to it under this Note or as provided by law. Theacceptance of any payment by Holder after the time when it is due shall not be held to establish a custom, or to waive any rightsof Holder to enforce payments when due of any further payments, or any other rights, nor shall any failure or delay to exerciseany rights be held to waive the same. An “Event of Default” shall mean the occurrence of any of the following events:

 

(a)           Failure toPay. The Company shall fail to pay (i) when due any principal or interest payment on the due date hereunder or (ii) any otherpayment required under the terms of this Note on the date due and such payment shall not have been made within five (5) days ofthe Company’s receipt of Holder’s written notice to the Company of such failure to pay; or

 

(b)           Breaches ofCovenants. The Company shall fail to observe or perform any other covenant, obligation, condition or agreement contained inthis Note and the Loan (i) such failure shall continue for fifteen (15) days, or (ii) if such failure is not curable within suchfifteen (15) day period, but is reasonably capable of cure within thirty (30) days, either (A) such failure shall continue forthirty (30) days or (B) the Company shall not have commenced a cure in a manner reasonably satisfactory to Investor within theinitial fifteen (15) day period; or

 

 

(c)           Voluntary Bankruptcyor Insolvency Proceedings. The Company shall (i) apply for or consent to the appointment of a receiver, trustee, liquidatoror custodian of itself or of all or a substantial part of its property, (ii) be unable, or admit in writing its inability, to payits debts generally as they mature, (iii) make a general assignment for the benefit of its or any of its creditors, (iv) be dissolvedor liquidated, (v) become insolvent (as such term may be defined or interpreted under any applicable statute), (vi) commence avoluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts underany bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointmentof or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or (vii)take any action for the purpose of effecting any of the foregoing; or

 

(d)           InvoluntaryBankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator or custodian of theCompany of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation,reorganization or other relief with respect to the Company or the debts thereof under any bankruptcy, insolvency or other similarlaw now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed ordischarged within thirty (30) days of commencement.

 

4.           Waivers; ContinuedLiability. It is agreed that the granting to the Company or any other party of an extension or extensions of time for the paymentof any sum or sums due under this Note or the exercising or failure to exercise of any right or power under this Note, shall notin any way release or affect the liability of the Company evidenced by this Note.

 

5.           Waiver.The Maker expressly waives presentment, protest, demand, notice of dishonor, notice of nonpayment, notice of maturity, notice ofprotest, presentment for the purpose of accelerating maturity, and diligence in collection.

 

6.           Amendmentand Waiver. No term, condition or provision of this Note may be amended or waived except in a writing signed by both the Companyand Holder.

 

7.           GoverningLaw. This Note will be governed by and construed in accordance with the laws of the State of California applicable to contractsmade and to be performed entirely within such State. Each of the Company and Holder agrees to submit to the exclusive jurisdictionand venue of the United States District Court for the Southern District of California for any civil action, suit or proceedingarising out of or relating to this Note or the transactions contemplated hereby. To the extent permitted by applicable law, eachof the Company and Holder hereby unconditionally waives trial by jury in any civil legal action or proceeding relating to thisNote or the transactions contemplated hereby or thereby.

 

 

8.           Headings.The headings of the various paragraphs of this Note are for convenience of reference only and shall in no way modify any of theterms or provisions of this Note.

 

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IN WITNESS WHEREOF,the undersigned has executed and delivered this Note as of the day and year first above written.