Exhibit
10.6


 


CALL
OPTION AGREEMENT


 


THIS
CALL OPTION AGREEMENT (this Agreement”) is made and entered into as of August 1, 2013 (the “Effective Date”)
by and between AudioEye, Inc., a Delaware corporation (“AudioEye”), and CMG Holdings Group Inc., a Nevada corporation
(“Seller”).


 


W
I T N E S S E T H:


 


WHEREAS,
Seller is, as of the date hereof, the holder of record of 4,500,874 shares of AudioEye common stock, par value $.00001 per
share (the “Option Shares”); and


 


WHEREAS,
Seller hereby irrevocably grants to AudioEye and/or one or more designees of AudioEye (the designees and AudioEye are collectively,
“Purchaser”) an option to purchase up to all of the Optioned Shares during the term of this Agreement under the terms
and conditions set forth thereafter; and


 


WHEREAS,
Seller and AudioEye are the parties to that certain Royalty Agreement, dated as of August 15, 2012 (the “Royalty Agreement);
and


 


WHEREAS,
in exchange for a payment of $85,000 made by AudioEye to Seller during the term of this Agreement, Seller is willing to terminate
the Royalty Agreement.


 


NOW,
THEREFORE, in consideration of the agreements herein contained and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:


 


	1.	Termination
                                         of Royalty Agreement



 


1.1           Seller
hereby agrees, irrevocably and without any additional requirement, to grant AudioEye an exclusive option whereby, while this Agreement
is in effect and upon the fulfillment of all the conditions stipulated in Section 1.2, AudioEye shall be entitled, at its sole
discretion, to terminate the Royalty Agreement, automatically and with no further action required of the parties, upon the payment
of $85,000 (the “Termination Payment”) by AudioEye to Seller.


 


1.2           The
parties acknowledge that while this Agreement is in effect, AudioEye shall be entitled but not obligated to make the Termination
Payment, and that upon such Termination Payment being made while this Agreement is in effect, the parties agree that Royalty Agreement
shall be terminated mutually, automatically and with no further action of the parties required. If AudioEye decides to make the
Termination Payment, then, in accordance with the notice provisions of this Agreement, AudioEye shall issue to Seller a notice
to that effect accompanied by payment of the Termination Payment. The parties agree that the Termination Payment can only be made
in conjunction with the exercise of the option granted pursuant to Section 2.


 


	Call
    Option Agreement	AudioEye,
    Inc./CMG Holdings Group,
    Inc.


 




    	 



    	 



    

 


1.3          Upon
such Termination Payment being made while this Agreement is in effect, the parties agree that except for obligations assumed or
acknowledged under this Agreement, each of Seller and AudioEye, for itself and its affiliates, subsidiaries, successors and assigns,
hereby completely releases and forever discharges the other party, and its representatives, past and present shareholders, officers,
directors, agents, employees, attorneys, insurers, successors and assigns, from all claims, rights, demands, actions, obligations,
liabilities, and causes of action of any and every kind, nature or character, known or unknown, that they may now have or have
ever had arising from, or in any way related to, the Royalty Agreement.


 


	2.	Granting
                                         the Call Option



 


2.1          Seller
hereby agrees, irrevocably and without any additional requirement, to grant Purchaser an exclusive call option whereby, while
this Agreement is in effect and upon the fulfillment of all the conditions stipulated in Section 2.2, Purchaser shall be entitled
to purchase, at its sole discretion, in the manner and at the price prescribed in this Agreement, through a single or multiple
transactions, all, but not less than all, of the Option Shares held by Seller; and upon exercise of such call option, Seller
shall then transfer the purchased Option Shares to Purchaser in accordance with this Agreement.


 


2.2          The
parties acknowledge that while this Agreement is in effect, Purchaser shall be entitled but not obligated to exercise, at
any time (the timing is entirely at the discretion of Purchaser), the call option with Seller. If Purchaser decides to
purchase from Seller all of the Option Shares, then, in accordance with the notice provisions of this Agreement, Purchaser
shall issue to Seller an exercise notice (“exercise notice”). The exercise notice will include: (a) the number of
Option Shares to be acquired by each Purchaser, (b) the option exercise price to be paid for the Option Shares to be acquired
by each Purchaser, and (c) the full name (and jurisdiction of organization if other than a natural person), address and tax
identification number of each Purchaser.


 


	3.	Exercising
                                         the Call Option



 


3.1           In
the event Purchaser chooses to exercise the call option as prescribed in Section 2, Purchaser may, at its sole discretion, exercise
the call option in multiple transactions during the term of this Agreement so that all the Option Shares have been obtained.


 


3.2           When
exercising the call option as prescribed in Section 3.1, Purchaser may, at its sole discretion, choose the number of Option Shares
that the exercise of the call option shall require of Seller to transfer to each Purchaser; and Seller shall transfer to
each Purchaser the number of Option Shares as specified for each Purchaser. In return for the Option Shares transferred upon each
exercise of the call option, Purchaser shall pay to Seller the option exercise price as stipulated in Section 4.1 of this Agreement.


 





	Call
    Option Agreement	AudioEye,
    Inc./CMG HoldingsGroup,
    Inc.


 




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3.3           Each
time it decides to exercise the call option, Purchaser shall issue an exercise notice to Seller; and upon receiving the exercise
notice and the attendant option exercise price as prescribed in Section 4.1, and in compliance with the provisions of this Agreement,
Seller shall proceed immediately to transfer to Purchaser, all at once and as soon as practically possible, the number of Option
Shares specified in the exercise notice.


 


3.4           Upon
Purchaser issuing an exercise notice, Seller hereby undertakes to: (1) take any and all necessary corporate measures to
ensure that Seller approves the transfer to Purchaser of the Option Shares specified in the exercise notice; (2) ensure
that Seller’s board of directors takes any necessary actions to approve the transfer by Seller to Purchaser of the
Option Shares specified in the exercise notice; (3) proceed to promptly instruct AudioEye’s transfer agent to
transfer to Purchaser the Option Shares specified in the exercise notice and execute all other relevant legal documents so
that the Option Shares specified in the exercise notice are legally and validly transferred to Purchaser.


 


	4.	Share
                                         Transfer Price and Payment



 


4.1           In
accordance with this Agreement, to purchase the Option Shares held by Seller, Purchaser shall pay the option exercise price
as follows: (a) If Purchaser decides to purchase the Option Shares, then the total option exercise price for purchasing the
Option Shares shall be $1,415,000; and (b) the Termination Payment of $85,000 in Section 1.1 above must accompany the
option exercise price. The parties agree that this is an all or none transaction and that the Seller must receive $1,500,000
in aggregate, consisting of the option exercise price and the Termination Payment, from Purchaser in order to terminate the
Royalty Agreement and purchase the Option Shares.


 


	5.	Representations
                                         and Warranties



 


5.1           Seller
hereby provides the following representations and warranties to Purchaser:


 


(a)           Seller
is a duly established corporation registered and subsisting under the laws of the State of Nevada with full capacity to enter
into and execute this Agreement as well as all other documents to be executed in connection with the transactions contemplated
in this Agreement, full legal rights and capacity to undertake the legal obligations and responsibilities as set forth in this
Agreement, and full capacity to enter legal proceedings as an independent subject.


 


(b)           Seller
has legally and duly executed and delivered this Agreement, which constitutes a legal, valid and binding agreement of Seller,
enforceable in accordance with the terms hereof.


 


(c)           The
Option Shares have been fully, timely and legally paid for by Seller.


 





	Call
    Option Agreement	AudioEye,
    Inc./CMG Holdings Group,
    Inc.


 






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(d)           Seller
is the only person that has the ultimate legal title to the Option Shares free and clear of any trusts, custodies, liens, pledges,
claims or other guarantees and third party encumbrances, except for this Agreement and the pledge of Option Shares hereunder;
and as set forth in this Agreement, upon exercise of the call option, Purchaser shall have valid and complete title to the Option
Shares free and clear of any trusts, custodies, liens, pledges, claims or other guarantees and third party encumbrances.


 


(e)           The
execution and delivery of this Agreement by Seller and the performance by Seller of the provisions in this Agreement do not violate
or contravene any applicable law, any contracts that Seller is party to and that are legally binding on its assets, any court
orders, any judgments of arbitration tribunals, or any decisions by administrative authorities.


 


(f)           To
the best knowledge of Seller, the Option Shares are not a subject of any pending or threatened suit, legal proceeding or claim
by any court or arbitration tribunal, or of any administrative proceeding, measure or claim by any government agency; and
there is no suit, arbitration, judicial action, administrative measures or other situations that have a material adverse effect
on Seller’s capacity to undertake the obligations hereunder such that Seller will be unable to maintain its legal holding
of the Option Shares.


 


5.2           Seller
hereby assures Purchaser that the above representations and warranties of Seller are and shall remain all true, complete and accurate,
without any omissions, misleading information or errors, as of the date of this Agreement and during the term of this Agreement.


 


		5.3	AudioEye
                                         hereby provides the following representations and warranties to Seller:



 


(a)           AudioEye
is a duly established corporation registered and subsisting under the laws of the State of Delaware with full capacity to enter
into and execute this Agreement as well as all other documents to be executed in connection with the transactions contemplated
in this Agreement, full legal rights and capacity to undertake the legal obligations and responsibilities as set forth in this
Agreement, and full capacity to enter legal proceedings as an independent subject.


 


(b)           AudioEye
has legally and duly executed and delivered this Agreement, which constitutes a legal, valid and binding agreement of AudioEye,
enforceable in accordance with the terms hereof.


 


5.4           AudioEye
hereby assures Seller that the above representations and warranties of AudioEye are and shall remain all true, complete and accurate,
without any omissions, misleading information or errors, as of the date of this Agreement and during the term of this Agreement.


 





	Call
    Option Agreement	AudioEye,
    Inc./CMG Holdings Group,
    Inc.


 




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	6.	Covenants



 


6.1           While
this Agreement is in effect, without obtaining in advance the written consent of AudioEye, Seller shall not proceed to dispose
in any manner of all or a portion of the Option Shares or to involve any of the Option Shares in any trust, custody, pledge or
third party encumbrance.


 


	7.	Confidentiality



 


7.1           Each
party shall keep this Agreement and its terms confidential and shall not disclose to any third party the content herein or make
any press release or public disclosure in any form regarding the transactions contemplated herein; provided, however, that
the foregoing shall not prohibit any disclosure: (i) required by law or regulations; (ii) of any information that has entered
the public domain not as a result of a breach of contract by the party making the disclosure; (iii) to attorneys, accountants,
investment consultants or other agents of the parties assisting the parties in connection with the transactions contemplated herein;
or (iv) for which a written consent by the other party has been obtained in advance.


 


7.2           Notwithstanding
other provisions herein, the validity of this section shall survive the cessation or termination of this Agreement.


 


	8.	Liability
                                         for Breach



 


8.1           Other
than the breach of contract by Seller in the event of default on the covenants, representations, warranties or undertakings as
set forth in this Agreement, Seller shall also be deemed in violation of this Agreement if the following occurs:


 


(a)           a
material adverse change has occurred in the business or assets of Seller such that AudioEye has reason to believe that it constitutes
a material adverse effect or a threat thereof on the capacity of Seller to fulfill its obligations under this Agreement;
or


 


(b)           bankruptcy,
dissolution, split-up, reorganization, liquidation, suspension of business license for Seller have been imposed from outside or
initiated from within, or there is a material threat thereof.


 


8.2           Should
any party (“the breaching party”) fail to fulfill its obligations under this Agreement, on the condition that the
other party’s (“non-defaulting party”) other rights under this Agreement are not affected, the breaching party
shall assume the responsibilities for breach of contract in accordance with the provisions of this Agreement and applicable laws,
including but not limited to actual performance, providing remedies and compensating the non-defaulting party for damages.


 


8.3           The
termination or dissolution of this Agreement does not absolve any party from the liabilities that were assumed under this Agreement
prior to or at the time of the termination or dissolution, nor does it affect the rights of any party to seek compensation from
the other party for breach of contract prior thereto.


 





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    Option Agreement	AudioEye,
    Inc./CMG Holdings Group,
    Inc.


 




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	9.	Effectiveness,
                                         Term and Termination



 


9.1           Upon
execution by all the parties or their authorized agent, this Agreement shall come into force on the Effective Date.


 


9.2           Unless
otherwise provided herein, this Agreement shall automatically terminate at 5:00 P.M. Tucson time on that date which is thirty
(30) calendar days from the Effective Date.


 


	10.	Taxes
                                         and Expenses



 


10.1           The
parties hereto shall each bear their respective expenses and costs in connection with the consultation, drafting and finalization
of this Agreement as well as all the transactions contemplated herein or any related legal, financial, business or other affairs.


 


	11.	Notification



 


11.1           Any
notice herein required or permitted to be given shall be in writing and shall be deemed effectively given: (i) upon personal delivery
to the party notified, (ii) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if
not, then on the next business day, (iii) three days after having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (iv) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. Notices shall be addressed to the parties as follows:


 


If to Seller:


 


CMG Holdings
Group, Inc.


333 Hudson Street, Suite 303


New York, NY 10013


Attn: Jeffrey
Devlin, CEO


Fax: (___) ____-___


 


If to AudioEye:


 


AudioEye,
Inc.


9070 S Rita Rd.


Suite 1450


Tucson,
AZ 85747


Attn: Nathan
Bradley, CEO


Fax: (520) 844-2989


 





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    Option Agreement	AudioEye,
    Inc./CMG Holdings Group,
    Inc.


 




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	12.	Transfer



 


12.1           Seller
hereby acknowledges that AudioEye has the right to transfer, at its sole discretion, all or part of its rights and/or obligations
under this Agreement to one or more designees without having to obtain the written consent of Seller.


 


12.2           Without
the written consent in advance from Purchaser, Seller shall not transfer its rights and/or obligations under this Agreement.


 


	13.	Governing
                                         Law and Jurisdiction



 


13.1           This
Agreement shall be governed by and interpreted according to the laws of the State of Delaware, without giving effect to the choice
of law provisions of such State. Any actions for enforcement of this Agreement or interpretation of any of the provision of this
Agreement or otherwise arising out of or relating to this Agreement shall be brought only in the state courts of or in the federal
courts located in Pima County, State of Arizona. The parties agree to submit to the jurisdiction of such courts. The Parties herein
waive trial by jury and agree to submit to the personal jurisdiction and venue of a court of subject matter jurisdiction located
in Pima County, State of Arizona. In the event that litigation results from or arises out of this Agreement or the performance
thereof, the parties agree to reimburse the prevailing party’s reasonable attorney’s fees, court costs and all other
expenses, whether or not taxable by the court as costs, in addition to any other relief to which the prevailing party may be entitled.


 


	14.	General
                                         Provisions



 


14.1          Purchaser
and Seller agree to further complete, execute, deliver and perform what is reasonably requested by any party and to ensure that
related persons act likewise with regard to additional measures such as taking actions, executing documents or delivering documents,
in order that the transactions contemplated in this Agreement may be consummated smoothly.


 


14.2          The
waiver or failure of either party to exercise in any respect any right provided in this Agreement shall not be deemed a waiver
of any other right or remedy to which the party may be entitled.


 


14.3          The
terms and conditions set forth herein constitute the entire agreement between the parties and supersede any communications or
previous agreements with respect to the subject matter of this Agreement. There are no written or oral understandings directly
or indirectly related to this Agreement that are not set forth herein. No change can be made to this Agreement other than in writing
and signed by both parties.


 





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    Option Agreement	AudioEye,
    Inc./CMG HoldingsGroup,
    Inc.


 




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14.4         This
Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors and assigns. This Agreement shall
also inure to the benefit of the Purchasers, their successors and assigns


 


14.5         If
any term of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, then this Agreement, including
all of the remaining terms, will remain in full force and effect as if such invalid or unenforceable term had never been included.


 


14.6         All
section references refer to the sections of this Agreement.




 


14.7         In
this Agreement, unless expressly defined otherwise, reference to words importing a gender or neutral words include every gender
and references to “person”, “third party”, “third person” include natural person, societies
corporate or non-corporate (other organizations), including government agencies.


 


 14.8         Headings are for convenience only and shall not affect the interpretation of this Agreement.




 


14.9         This
Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together
shall be deemed to be one and the same instrument.


 


[Remainder
of page intentionally left blank; signature page follows.]


 





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    Option Agreement	AudioEye,
    Inc./CMG Holdings Group,
    Inc.


 




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IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.


 


	AUDIOEYE,
    INC.	 	CMG
    HOLDINGS GROUP, INC.
	 	 	 	 	 
	By:	 	 	By:	 



 


	 	 	 	 	 
	Print Name:	 	 	Print Name:	 



 


	 	 	 	 	 
	Title:	 	 	Title:	 


 





	Call
    Option Agreement	AudioEye,
    Inc./CMG Holdings Group,
    Inc.


 


 


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