Exhibit 10.4

SETTLEMENT AGREEMENT


This Settlement Agreement
(“Agreement”) is effective as of the latest date set out on
the signature page hereof (the “Effective Date”), among
Andrea Electronics
Corporation, a New York
corporation having a place of business at 620 Johnson Ave., Suite 1B, Bohemia,
New York 11716 (“Andrea”); and
Waves Audio Ltd., an Israeli corporation having a place of
business at Azrieli Center 3, Tel-Aviv 6701101, Israel (“Waves”) (Andrea and
Waves may each be referred to as a “Party” or collectively be
referred to as the “Parties”).

RECITALS 

WHEREAS, the Parties wish to resolve the litigation
pending in the International Trade Commission, Investigation No. 337-TA-949
titled Certain Audio Processing
Hardware and Software and Products Containing the Same (the “ITC Investigation”), in which Waves
intervened; and 

WHEREAS, Andrea has granted Waves and its Subsidiaries a
license to the Asserted Patents (as defined below), the License Agreement (as
defined below) being attached hereto as Confidential Exhibit A.

In consideration of the mutual
promises and covenants herein contained, Andrea and Waves agree as follows:


AGREEMENT 

SECTION 1: DEFINITIONS


As used in this Agreement, the
following terms shall have the following meanings which shall include both
singular and plural forms in context. Additional terms may be defined elsewhere
in this Agreement. 

1.1. “Asserted Patents” means all patents asserted by Andrea in the ITC
Investigation, namely, the following U.S. Patents: 5,825,898; 6,049,607;
6,363,345; 6,483,923; and 6,377,637. 

1.2. “Control” (including its correlative meanings, “Controlled” and “Controlling”) means the
power to direct or cause the direction of the management and policies of an
Entity whether through ownership of voting securities, by contract or otherwise;
it being understood and agreed that with respect to a corporation, limited
liability company, partnership, and similar structures, “Control” through ownership of voting securities shall require (a) ownership of
more than fifty percent (50%) of the voting stock, limited liability interest,
partnership interest, or other voting interest (or equivalent interest), in any
such corporation, limited liability company, or partnership, or (b) in any
country where it is not permitted by law to own more than fifty percent (50%) of
the voting stock, limited liability interest, partnership interest, or other
voting interest (or equivalent interest) in a local corporation, limited
liability company, or partnership, ownership of the maximum legally allowed
ownership interest of the voting stock, limited liability interest, partnership
interest, or other voting interest (or equivalent interest) of the local
corporation, limited liability company, or partnership. 

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1.3. “Entity” means a natural person, corporation, association, joint venture,
partnership, company, limited liability company or other legal entity recognized
in any jurisdiction in the world. 

1.4. “License Agreement” shall mean the License Agreement between Andrea
and Waves, attached as Confidential Exhibit A.

1.5. “Subsidiary” shall mean any Entity directly or indirectly Controlled by a Party, as
of the Effective Date.

SECTION 2: DISMISSALS


2.1. Dismissals. Subject to the terms and conditions herein the Parties shall file the
following: 

	       	a.	       	Andrea and Waves
      shall jointly file a motion to terminate the ITC Investigation
      substantially in the form set forth in Exhibit B within five (5) days of
      the Effective Date.
		  
		b.		Within five (5)
      business days of the Effective Date, Waves agrees to and shall
      withdraw/terminate its Inter
      Partes Review requests Nos.
      2016-00459, 2016-00461, and 2016-00474, filing pleadings substantially in
      the form agreed upon by the Parties’ respective counsel. Waves agrees to
      take any and all actions to expedite the withdrawal/termination of the IPR
      requests.


2.2. Releases. Effective as of the date that Andrea receives the payment set forth in
Section 3.1 of the License Agreement, Andrea and its Subsidiaries and Waves and
its Subsidiaries release all claims, counterclaims and/or defenses against each
other relating to the Asserted Patents that were brought or could have been
brought of any kind and nature whatsoever, including but not limited to any
claims or defenses in the ITC Investigation, as of the Effective Date.


2.3. No Costs. The Parties agree that this Agreement is intended solely as a
compromise between the Parties and without any acknowledgment of liability,
fault, or damages. The Parties acknowledge and agree that each Party shall bear
its own attorneys’ fees, court costs, expenses, and any other related costs and
expenses that they have incurred in connection with any and all claims
previously filed against each other. The Parties also agree that they shall bear
their own costs and attorneys’ fees relating to or arising from the negotiation
and performance of this Agreement.

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SECTION
3
MISCELLANEOUS 

3.1. Term. The rights, benefits, obligations, and burdens set forth in this
Agreement shall commence upon the Effective Date. 

3.2. No Other Obligations. Neither Party shall have any other
responsibilities or obligations in connection with actions to enforce or defend
the Asserted Patents. 

3.3. Binding on Successors. This Agreement shall be binding upon and inure
to the benefit of the Parties, successors and assignees. Notwithstanding the
preceding, it is understood that no assignment will release either Party or
their Subsidiaries from any of their obligations hereunder.

SECTION 4
NOTICE


4.1. Written Notices. Any notices under this Agreement shall be in
writing and shall be delivered by facsimile transmission, electronic mail,
overnight express mail or express courier service to such Party at the address
given below, or such other address as provided by a Party by written notice in
accordance with this Section, and shall be effective on receipt. Notwithstanding
the foregoing, notices and other communications sent by facsimile transmission
or electronic mail shall be effective upon the sender’s receipt of an
acknowledgement from the intended recipient. This paragraph in no way
constitutes waiver of service of process in any litigation between the parties.


	     	For
      Andrea:         	Andrea
      Electronics Corporation
			620 Johnson Ave.,
      Suite 1B
			Bohemia, New York
      11716
		 
		 
		For
    Waves:	Waves Audio,
      Ltd.
			Azrieli Center
      3,
			Tel-Aviv 6701101,
      Israel



SECTION 5

GOVERNING LAW AND
JURISDICTION 

5.1. Governing Law. The Parties agree that this Agreement shall be
considered to have been made in, and construed and interpreted in accordance
with the substantive laws of the State of New York, without regard to its
conflict of laws principles. 

5.2. Jurisdiction. The Parties hereby submit to, and waive any
venue objections against, the sole and exclusive jurisdiction of the state and
federal courts located in the State of New York. 

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SECTION 6

WARRANTIES; COVENANTS;
LIMITATION OF LIABILITY 

6.1. Limited Warranty. Each Party represents and warrants that it has
the full authority to enter into and fully perform this Agreement; and that this
Agreement is valid and binding and enforceable in accordance with its terms.


SECTION
7
CONFIDENTIALITY 

7.1. Duty to Maintain Confidentiality. Either Party may publicly disclose this
Agreement, except that the License Agreement, Confidential Exhibit A, may only
be disclosed in accordance with the Confidentiality obligations contained
therein.

SECTION
8
MISCELLANEOUS 

8.1. Counterparts. This Agreement may be executed in counterparts in
the English language and each executed document shall be deemed an original
thereof. 

8.2. Entire Agreement; Construction. This Agreement constitutes the entire agreement
between the Parties concerning the subject matter hereof and supersedes all
written and oral prior agreements and understandings with respect
thereto.

8.3. Modification. No variation or modification of the terms of
this Agreement or any waiver of any of the terms or provisions hereof shall be
valid unless in writing and signed by an authorized representative of each of
the Parties.

8.4. Severability; Interpretation. This Agreement is subject to the restrictions,
limitations, terms and conditions of all applicable governmental regulations,
approvals and clearances. If any term or provision of this Agreement is held
invalid, illegal or unenforceable in any respect for any reason, that
invalidity, illegality or unenforceability shall not affect any other term or
provision hereof, and this Agreement shall be interpreted and construed as if
such term or provision, to the extent the same shall have been held to be
invalid, illegal or unenforceable, had never been contained herein, and instead
had been included in such manner as to lawfully effectuate the intent of such
term or provision. The Parties acknowledge that each Party was represented by
legal counsel in connection with this Agreement and that each of them and its
counsel have reviewed this Agreement, and that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be employed in the interpretation of this Agreement or any applicable amendments
or any exhibits. 

8.5. Waiver. Failure by either Party to enforce any rights under this Agreement for
any length of time shall not be construed as a waiver of such rights nor shall a
waiver by either Party in one or more instances be construed as constituting a
continuing waiver or as a waiver in other instances. 

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8.6. Remedies. In the event of a breach of this Agreement, in addition to the right to
enforce its rights under this Agreement, each Party shall retain any and all
rights and/or remedies, at law or in equity.

8.7. No Admission. The Parties agree that this Agreement or
anything contained herein shall not constitute an admission by Waves of
infringement, validity or enforceability of any of the Asserted
Patents.

IN WITNESS
WHEREOF, the Parties have caused
this Agreement to be executed by duly authorized officers effective on the
Effective Date. 

Andrea Electronics
Corporation 


	By:	          /s/ Douglas Andrea
	Name:  	          Douglas Andrea
	Title:	          CEO
	Date:	          3/3/2016







Waves Audio Ltd.


	By:	          
	Name:  	          Nir
Kozlovsky
	Title:	          CFO
	Date:	          3/3/2016



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