Exhibit 10.31


 


INDEMNIFICATION
AGREEMENT


 


This
Indemnification Agreement (“Agreement”) is effective as of August 3, 2017, by and between Drone Aviation
Holding Corp., a Nevada corporation (the “Corporation”), and Jay H. Nussbaum (“Indemnitee”).


 


WHEREAS,
the Corporation is seeking to borrow up to $2,000,000, or so much thereof as shall be advanced to the Corporation (the “Loan”)
from City National Bank of Florida (the “Lender”); and


 


WHEREAS,
the Indemnitee is the Corporation’s Chief Executive Officer, and is required by the Lender to provide a personal Commercial
Guaranty of the Corporation’s payment and performance pursuant to the terms of the Note (the “Guaranty”); and


 


WHEREAS,
the Corporation and Indemnitee further recognize and wish to document, the Corporations’ obligation to repay the Loan, and
to indemnify the Indemnitee should the Lender seek to enforce the Guaranty; and


 


WHEREAS,
in view of the considerations set forth above, the Corporation desires that Indemnitee shall be indemnified and advanced expenses
by the Corporation as set forth herein.


 


NOW,
THEREFORE, the Corporation and Indemnitee hereby agree as set forth below.


 


1. Certain
Definitions.


 


(a) “Claim”
shall mean with respect to a Covered Event (as defined below): any payment made by Indemnitee under the Guaranty; any threatened,
pending or completed action, suit, proceeding or alternative dispute resolution mechanism, or any hearing, inquiry or investigation
that Indemnitee in good faith believes might lead to the institution of any such action, suit, proceeding or alternative dispute
resolution mechanism, whether civil, criminal, administrative, investigative or other.


 


(b) References
to the “Corporation” shall include, in addition to Drone Aviation Holding Corp., any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or merger to which Drone Aviation Holding Corp. (or any
of its wholly owned subsidiaries) is a party which, if its separate existence had continued, would have had power and authority
to indemnify its directors, officers, employees, agents or fiduciaries, so that if Indemnitee is or was a director, officer, employee,
agent or fiduciary of such constituent corporation, or is or was serving at the request of such constituent corporation as a director,
officer, employee, agent or fiduciary of another corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise, Indemnitee shall stand in the same position under the provisions of this Agreement with respect to the resulting or
surviving corporation as Indemnitee would have with respect to such constituent corporation if its separate existence had continued.


 


(c) “Covered
Event” shall mean any event or occurrence related to the Indemnitee’s personal guaranty of the Loan, and execution, as Guarantor of that certain Commercial Guaranty given to Lender in connection with the Loan, or any advances thereunder.


 






     


     


    

 


(d) “Expenses”
shall mean any and all expenses (including attorneys’ fees and all other costs, expenses and obligations incurred in connection
with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, to be a witness
in or to participate in, any action, suit, proceeding, alternative dispute resolution mechanism, hearing, inquiry or investigation),
judgments, fines, penalties and amounts paid in settlement, actually and reasonably incurred, of any Claim and any federal, state,
local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement.


 


(e) “Expense
Advance” shall mean a payment to Indemnitee pursuant to Section 3 of Expenses in advance of the settlement of
or final judgement in any action, suit, proceeding or alternative dispute resolution mechanism, hearing, inquiry or investigation
which constitutes a Claim.


 


(f) “Independent
Legal Counsel” shall mean an attorney or firm of attorneys, selected in accordance with the provisions of Section
2(d) hereof, who shall not have otherwise performed services for the Corporation or Indemnitee within the last three years (other
than with respect to matters concerning the rights of Indemnitee under this Agreement, or of other indemnitees under similar indemnity
agreements).


 


(g) “Reviewing
Party” shall mean, subject to the provisions of Section 2(c), any person or body appointed by the Board of Directors
in accordance with applicable law to review the Corporation’s obligations hereunder and under applicable law, which may include
a member or members of the Corporation’s Board of Directors, Independent Legal Counsel or any other person or body not a party
to the particular Claim for which Indemnitee is seeking indemnification.


 


(h) “Section”
refers to a section of this Agreement unless otherwise indicated.


 


2. Indemnification.


 


(a) Indemnification
of Expenses. Subject to the provisions of Section 2(b) below, the Corporation shall indemnify Indemnitee for Expenses
to the fullest extent permitted by law if Indemnitee was or is or becomes a party to or witness or other participant in, or is
threatened to be made a party to or witness or other participant in, any Claim (whether by reason of or arising in part out of
a Covered Event), including all interest, assessments and other charges paid or payable in connection with or in respect of such
Expenses.


 


(b) Review
of Indemnification Obligations. Notwithstanding the foregoing, in the event any Reviewing Party shall have determined (in
a written opinion, in any case in which Independent Legal Counsel is the Reviewing Party) that Indemnitee is not entitled to be
indemnified hereunder under applicable law, (i) the Corporation shall have no further obligation under Section 2(a)
to make any payments to Indemnitee not made prior to such determination by such Reviewing Party, and (ii) the Corporation
shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Corporation) for all Expenses theretofore
paid in indemnifying Indemnitee; provided, however, that if Indemnitee has commenced or thereafter commences legal proceedings
in a court of competent jurisdiction to secure a determination that Indemnitee is entitled to be indemnified hereunder under applicable
law, any determination made by any Reviewing Party that Indemnitee is not entitled to be indemnified hereunder under applicable
law shall not be binding and Indemnitee shall not be required to reimburse the Corporation for any Expenses theretofore paid in
indemnifying Indemnitee until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom
have been exhausted or lapsed). Indemnitee’s obligation to reimburse the Corporation for any Expenses shall be unsecured and no
interest shall be charged thereon.


 






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(c) Indemnitee
Rights on Unfavorable Determination; Binding Effect. If any Reviewing Party determines that Indemnitee substantively is not
entitled to be indemnified hereunder in whole or in part under applicable law, Indemnitee shall have the right to commence litigation
seeking an initial determination by the court or challenging any such determination by such Reviewing Party or any aspect thereof,
including the legal or factual bases therefor, and, subject to the provisions of Section 15, the Corporation hereby consents
to service of process and to appear in any such proceeding. Absent such litigation, any determination by any Reviewing Party shall
be conclusive and binding on the Corporation and Indemnitee.


 


3. Expense
Advances.


 


(a) Obligation
to Make Expense Advances. The Corporation shall make Expense Advances to Indemnitee upon receipt of a written undertaking
by or on behalf of the Indemnitee to repay such amounts if it shall ultimately be determined that the Indemnitee is not entitled
to be indemnified therefor by the Corporation.


 


(b) Form
of Undertaking. Any written undertaking by the Indemnitee to repay any Expense Advances hereunder shall be unsecured and no
interest shall be charged thereon.


 


(c) Determination
of Reasonable Expense Advances. The parties agree that for the purposes of any Expense Advance for which Indemnitee has made
written demand to the Corporation in accordance with this Agreement, all Expenses included in such Expense Advance that are certified
by affidavit of Indemnitee’s counsel as being reasonable shall be presumed conclusively to be reasonable.


 


4. Procedures
for Indemnification and Expense Advances.


 


(a) Timing
of Payments. All payments of Expenses (including without limitation Expense Advances) by the Corporation to the Indemnitee
pursuant to this Agreement shall be made to the fullest extent permitted by law as soon as practicable after written demand by
Indemnitee therefor is presented to the Corporation, but in no event later than forty-five (45) business days after such written
demand by Indemnitee is presented to the Corporation, except in the case of Expense Advances, which shall be made no later than
twenty (20) business days after such written demand by Indemnitee is presented to the Corporation.


 


(b) Notice/Cooperation
by Indemnitee. Indemnitee shall, as a condition precedent to Indemnitee’s right to be indemnified or Indemnitee’s right to
receive Expense Advances under this Agreement, give the Corporation notice in writing as soon as practicable of any Claim made
against Indemnitee for which indemnification will or could be sought under this Agreement. Notice to the Corporation shall be
directed to the Chief Executive Officer of the Corporation at the address shown on the signature page of this Agreement (or such
other address as the Corporation shall designate in writing to Indemnitee). In addition, Indemnitee shall give the Corporation
such information and cooperation as it may reasonably require and as shall be within Indemnitee’s power.


 






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(c) No
Presumptions; Burden of Proof. For purposes of this Agreement, the termination of any Claim by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court
has determined that indemnification is not permitted by this Agreement or applicable law. In addition, neither the failure of
any Reviewing Party to have made a determination as to whether Indemnitee has met any particular standard of conduct or had any
particular belief, nor an actual determination by any Reviewing Party that Indemnitee has not met such standard of conduct or
did not have such belief, prior to the commencement of legal proceedings by Indemnitee to secure a judicial determination that
Indemnitee should be indemnified under this Agreement or applicable law, shall be a defense to Indemnitee’s claim or create a
presumption that Indemnitee has not met any particular standard of conduct or did not have any particular belief. In connection
with any determination by any Reviewing Party or otherwise as to whether the Indemnitee is entitled to be indemnified hereunder,
the burden of proof shall be on the Corporation to establish that Indemnitee is not so entitled.


 


(d) Notice
to Insurers. If, at the time of the receipt by the Corporation of a notice of a Claim pursuant to Section (b) hereof,
the Corporation has liability insurance in effect which may cover such Claim, the Corporation shall give prompt notice of the
commencement of such Claim to the insurers in accordance with the procedures set forth in the respective policies. The Corporation
shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts
payable as a result of such Claim in accordance with the terms of such policies.


 


(e) Selection
of Counsel. In the event the Corporation shall be obligated hereunder to provide indemnification for or make any Expense Advances
with respect to the Expenses of any Claim, the Corporation, if appropriate, shall be entitled to assume the defense of such Claim
with counsel approved by Indemnitee (which approval shall not be unreasonably withheld) upon the delivery to Indemnitee of written
notice of the Corporation’s election to do so. After delivery of such notice, approval of such counsel by Indemnitee and the retention
of such counsel by the Corporation, the Corporation will not be liable to Indemnitee under this Agreement for any fees or expenses
of separate counsel subsequently employed by or on behalf of Indemnitee with respect to the same Claim; provided, however,
that (i) Indemnitee shall have the right to employ Indemnitee’s separate counsel in any such Claim at Indemnitee’s expense
and (ii) if (A) the employment of separate counsel by Indemnitee has been previously authorized by the Corporation, (B) Indemnitee
shall have reasonably concluded that there may be a conflict of interest between the Corporation and Indemnitee in the conduct
of any such defense, or (C) the Corporation shall not continue to retain such counsel to defend such Claim, then the fees and
expenses of Indemnitee’s separate counsel shall be Expenses for which Indemnitee may receive indemnification or Expense Advances
hereunder.


 






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5. Additional
Indemnification Rights; Nonexclusivity.


 


(a) Scope.
The Corporation hereby agrees to indemnify the Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification
is not specifically authorized by the other provisions of this Agreement, the Corporation’s certificate of incorporation, the
Corporation’s bylaws or by statute. In the event of any change after the date of this Agreement in any applicable law, statute
or rule which expands the right of a Delaware corporation to indemnify a member of its board of directors or an officer, employee,
agent or fiduciary, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits
afforded by such change. In the event of any change in any applicable law, statute or rule which narrows the right of a Nevada
corporation to indemnify a member of its board of directors or an officer, employee, agent or fiduciary, such change, to the extent
not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or
the parties’ rights and obligations hereunder except as set forth in Section 10(a) hereof.


 


(b) Non-exclusivity.
The indemnification and the payment of Expense Advances provided by this Agreement shall be in addition to any rights to which
Indemnitee may be entitled under the Corporation’s certificate of incorporation, its bylaws, any other agreement, any vote of
stockholders or disinterested directors, the general corporation law of the State of,Nevada or otherwise. The indemnification
and the payment of Expense Advances provided under this Agreement shall continue as to Indemnitee for any action taken or not
taken while serving in an indemnified capacity even though subsequent thereto Indemnitee may have ceased to serve in such capacity.


 


6. No
Duplication of Payments. The Corporation shall not be liable under this Agreement to make any payment in connection with any
Claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, provision
of the Corporation’s certificate of incorporation, bylaws or otherwise) of the amounts otherwise payable hereunder.


 


7. Partial
Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Corporation for
some or a portion of Expenses incurred in connection with any Claim, but not, however, for all of the total amount thereof, the
Corporation shall nevertheless indemnify Indemnitee for the portion of such Expenses to which Indemnitee is entitled.


 


8. Mutual
Acknowledgment. Both the Corporation and Indemnitee acknowledge that in certain instances, federal law or applicable public
policy may prohibit the Corporation from indemnifying its directors, officers, employees, agents or fiduciaries under this Agreement
or otherwise. Indemnitee understands and acknowledges that the Corporation has undertaken or may be required in the future to
undertake with the Securities and Exchange Commission to submit the question of indemnification to a court in certain circumstances
for a determination of the Corporation’s right under public policy to indemnify Indemnitee.


 


9. Liability
Insurance. To the extent the Corporation maintains liability insurance applicable to directors, officers, employees, agents
or fiduciaries, Indemnitee shall be covered by such policies in such a manner as to provide Indemnitee the same rights and benefits
as are provided to the most favorably insured of the Corporation’s directors, if Indemnitee is a director; or of the Corporation’s
officers, if Indemnitee is not a director of the Corporation but is an officer; or of the Corporation’s key employees, agents
or fiduciaries, if Indemnitee is not an officer or director but is a key employee, agent or fiduciary.


 






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10. Exceptions.
Notwithstanding any other provision of this Agreement, the Corporation shall not be obligated pursuant to the terms of this Agreement:


 


(a) Excluded
Action or Omissions. To indemnify Indemnitee for Expenses resulting from acts, omissions or transactions for which Indemnitee
is prohibited from receiving indemnification under this Agreement or applicable law; provided, however, that notwithstanding
any limitation set forth in this Section 10(a) regarding the Corporation’s obligation to provide indemnification, Indemnitee
shall be entitled under Section 3 to receive Expense Advances hereunder with respect to any such Claim unless and until a
court having jurisdiction over the Claim shall have made a final judicial determination (as to which all rights of appeal therefrom
have been exhausted or lapsed) that Indemnitee has engaged in acts, omissions or transactions for which Indemnitee is prohibited
from receiving indemnification under this Agreement or applicable law.


 


(b) Claims
Initiated by Indemnitee. To indemnify or make Expense Advances to Indemnitee with respect to Claims initiated or brought voluntarily
by Indemnitee and not by way of defense, counterclaim or cross claim, except (i) with respect to actions or proceedings brought
to establish or enforce a right to indemnification under this Agreement or any other agreement or insurance policy or under the
Corporation’s certificate of incorporation or bylaws now or hereafter in effect relating to Claims for Covered Events, (ii) in
specific cases if the Board of Directors has approved the initiation or bringing of such Claim, or (iii) as otherwise required
under Nevada law, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification or insurance
recovery, as the case may be.


 


(c) Lack
of Good Faith. To indemnify Indemnitee for any Expenses incurred by the Indemnitee with respect to any action instituted (i) by
Indemnitee to enforce or interpret this Agreement, if a court having jurisdiction over such action determines as provided in Section 13
that each of the material assertions made by the Indemnitee as a basis for such action was not made in good faith or was frivolous,
or (ii) by or in the name of the Corporation to enforce or interpret this Agreement, if a court having jurisdiction over
such action determines as provided in Section 13 that each of the material defenses asserted by Indemnitee in such action
was made in bad faith or was frivolous.


 


11. Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall constitute an original.


 


12. Binding
Effect; Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the
parties hereto and their respective successors, assigns (including any direct or indirect successor by purchase, merger, consolidation
or otherwise to all or substantially all of the business or assets of the Corporation), spouses, heirs and personal and legal
representatives. The Corporation shall require and cause any successor (whether direct or indirect, and whether by purchase, merger,
consolidation or otherwise) to all, substantially all, or a substantial part, of the business or assets of the Corporation, by
written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in
the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place.
This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as a director, officer, employee,
agent or fiduciary (as applicable) of the Corporation or of any other enterprise at the Corporation’s request.


 






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13. Expenses
Incurred in Action Relating to Enforcement or Interpretation. In the event that any action is instituted by Indemnitee under
this Agreement or under any liability insurance policies maintained by the Corporation to enforce or interpret any of the terms
hereof or thereof, Indemnitee shall be entitled to be indemnified for all Expenses incurred by Indemnitee with respect to such
action (including without limitation attorneys’ fees), regardless of whether Indemnitee is ultimately successful in such action,
unless as a part of such action a court having jurisdiction over such action makes a final judicial determination (as to which
all rights of appeal therefrom have been exhausted or lapsed) that each of the material assertions made by Indemnitee as a basis
for such action was not made in good faith or was frivolous; provided, however, that until such final judicial determination
is made, Indemnitee shall be entitled under Section 3 to receive payment of Expense Advances hereunder with respect
to such action. In the event of an action instituted by or in the name of the Corporation under this Agreement to enforce or interpret
any of the terms of this Agreement, Indemnitee shall be entitled to be indemnified for all Expenses incurred by Indemnitee in
defense of such action (including without limitation costs and expenses incurred with respect to Indemnitee’s counterclaims and
cross-claims made in such action), unless as a part of such action a court having jurisdiction over such action makes a final
judicial determination (as to which all rights of appeal therefrom have been exhausted or lapsed) that each of the material defenses
asserted by Indemnitee in such action was made in bad faith or was frivolous; provided, however, that until such final
judicial determination is made, Indemnitee shall be entitled under Section 3 to receive payment of Expense Advances
hereunder with respect to such action.


 


Notice.
All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given
(i) if delivered by hand and signed for by the party addressed, on the date of such delivery, or (ii) if mailed by domestic
certified or registered mail with postage prepaid, on the third business day after the date postmarked. Addresses for notice to
either party are as shown on the signature page of this Agreement or as subsequently modified by written notice.


 


14. Consent
to Jurisdiction. The Company and Holder each irrevocably agrees that any dispute arising under, relating to, or in connection
with, directly or indirectly, this Agreement or related to any matter which is the subject of or incidental to this Agreement
(whether or not such claim is based upon breach of contract or tort) shall be subject to the exclusive jurisdiction and venue
of the state and/or federal courts located in Palm Beach County, Florida; provided, however, Holder may, at the Holder’s
sole option, elect to bring any action in any other jurisdiction. This provision is intended to be a “mandatory” forum
selection clause and governed by and interpreted consistent with Florida law. The Corporation and Indemnitee each hereby consents
to the exclusive jurisdiction and venue of any state or federal court having its situs in said county, and each waives any objection
based on forum non conveniens. The Corporation hereby waives personal service of any and all process and consent that all such
service of process may be made by certified mail, return receipt requested, directed to the Corporation, as set forth herein in
the manner provided by applicable statute, law, rule of court or otherwise. Except for the foregoing mandatory forum selection
clause, all terms and provisions hereof and the rights and obligations of the Corporation and Indemnitee hereunder shall be governed,
construed and interpreted in accordance with the laws of the State of Nevada, without reference to conflict of laws principles.


 






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15. Severability.
The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within
a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable,
and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent
possible, the provisions of this Agreement (including without limitation each portion of this Agreement containing any provision
held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so
as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.


 


16. Subrogation.
In the event of payment under this Agreement, the Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to secure
such rights and to enable the Corporation effectively to bring suit to enforce such rights.


 


17. Amendment
and Termination. No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is
in writing signed by both the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed to be or shall
constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.


 


18. Integration
and Entire Agreement. This Agreement sets forth the entire understanding between the parties hereto and supersedes and merges
all previous written and oral negotiations, commitments, understandings and agreements relating to the subject matter hereof between
the parties hereto.


 


19. No
Construction as Employment Agreement. Nothing contained in this Agreement shall be construed as giving Indemnitee any right
to be retained in the employ of the Corporation or any of its subsidiaries or affiliated entities.


  


[Signatures
appear on next page]


 






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IN
WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement as of the date first above written.


 





	DRONE
    AVIATION HOLDING CORP.	 
	 	 
	By:	 	 
	 	Kendall
    Carpenter, Chief Financial Officer	 







 





	 	AGREED TO AND ACCEPTED BY:
	 	 
	 	INDEMNITEE
	 	 
	 	 
	 	Jay
H. Nussbaum




 


 


Signature
Page


Indemnification
Agreement