Document:

Exhibit 10.4

 

THIS WARRANT
AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT COVERING
SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL
FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION
IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT. THIS WARRANT AND THE SECURITIES ISSUABLE
UPON EXERCISE OF THIS WARRANT MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

Warrant No. WC-35

 

AUDIOEYE, INC.

COMMON STOCK WARRANT

 

This Common Stock Warrant
(this “Warrant”) is issued as of August 14, 2019 (the “Original Issue Date”),
by AudioEye, Inc., a Delaware corporation (the “Company”), to Sero Capital LLC, a Delaware limited liability
company (the “Holder”), in connection with that certain Loan Agreement, dated as of August 14, 2019,
by and between the Company and the Holder (as the same may from time to time be amended, modified, extended, renewed or restated,
the “Loan Agreement” and, together with this Warrant, the “Transaction Agreements”).

 

1.       Number
of Warrant Shares; Exercise Price. Subject to the terms and conditions set forth herein, the Holder is entitled, upon surrender
of this Warrant at the principal office of the Company, to purchase from the Company 146,667 shares of common stock, $0.00001 par
value per share (the “Common Stock”), of the Company (as adjusted from time to time, “Warrant
Shares”) at a price of $6.00 per Warrant Share (as adjusted pursuant to Section 9, the “Exercise
Price”).

 

2.       Exercise
Period. This Warrant is exercisable as to the Warrant Shares covered hereby during the period commencing on the Original Issue
Date and continuing until 5:00 p.m. Arizona Time on August 14, 2020 (the “Expiration Date”); provided
that, if the Fair Market Value (as defined in Section 4 below) on the Expiration Date exceeds the Exercise Price on the
Expiration Date, then this Warrant shall be deemed to have been exercised in full (to the extent not previously exercised) on a
“cashless exercise” basis at 5:00 p.m. Arizona Time on the Expiration Date.

 

3.       Method
of Exercise. Subject to Sections 1 and 2 above, the Holder may exercise, in whole or in part, the purchase rights
evidenced by this Warrant. Such exercise shall be effected by: (a) the surrender of this Warrant, together with a duly executed
copy of the form of exercise notice attached hereto as Annex I (the “Exercise Notice”), to the
secretary of the Company at its principal office, accompanied by (b) either (x) the payment to the Company by cash, check
or wire transfer of an amount equal to the product of (i) the Exercise Price multiplied by (ii) the number of Warrant Shares being
purchased (such product, the “Purchase Price”) or (y) the payment of the Purchase Price through a “cashless
exercise” in accordance with Section 4. The date on which the Exercise Notice is delivered to the secretary of the
Company is an “Exercise Date.”

 

     

     

    

  

4.       Cashless
Exercise. In the event the Holder elects to satisfy its obligation to pay the Purchase Price through a “cashless”
exercise, the Company shall issue to the Holder the number of Warrant Shares determined as follows:

 

X = Y [(A-B)/A]

 

where:

 

“X” equals the number of Warrant
Shares to be issued to the Holder;

 

“Y” equals the total number
of Warrant Shares with respect to which this Warrant is being exercised;

 

“A” equals the arithmetic average
of the Closing Sale Price of the shares of Common Stock (as reported by Bloomberg Financial Markets) for the five (5) consecutive
Trading Days ending on the date immediately preceding the Exercise Date (the “Fair Market Value”); and

 

“B” equals the Exercise Price
then in effect for the applicable Warrant Shares at the time of such exercise.

 

For purposes of this Warrant, “Closing
Sale Price” means, for any security as of any date, the last trade price for such security on the Principal Trading
Market for such security, as reported by Bloomberg Financial Markets, or, if such Principal Trading Market begins to operate on
an extended hours basis and does not designate the last trade price, then the last trade price of such security prior to 4:00 P.M.,
New York City time, as reported by Bloomberg Financial Markets, or if the foregoing do not apply, the last trade price of such
security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg Financial Markets,
or, if no last trade price is reported for such security by Bloomberg Financial Markets, the average of the bid prices, or the
ask prices, respectively, of any market makers for such security as reported in the “pink sheets” by OTC Markets. “Trading
Day” means a day on which exchanges in the United States are open for the buying and selling of securities. “Principal
Trading Market” means the OTC Bulletin Board, the OTC Markets, NASDAQ or a national securities exchange. If the Closing
Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such
security on such date shall be the fair market value as determined in good faith by the Board of Directors of the Company. The
Board of Directors’ determination shall be binding upon all parties absent demonstrable error. All such determinations shall
be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable
calculation period.

 

5.       Rule
144. For purposes of Rule 144 promulgated under the Securities Act of 1933, as amended (the “Act”),
it is intended, understood and acknowledged that the Warrant Shares issued in a “cashless exercise” transaction shall
be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced,
on the Original Issue Date of this Warrant (provided that the Securities and Exchange Commission continues to take the position
that such treatment is proper at the time of such exercise).

 

    	 	-2-	 

     

    

 

6.       Certificates
for Warrant Shares. If the shares of the Company are certificated, upon the exercise of the purchase rights evidenced by this
Warrant, one or more certificates for the number of Warrant Shares so purchased shall be issued and delivered to the Holder as
soon as practicable thereafter, with a legend substantially similar to the legend set forth below (in addition to any legend required
under applicable state securities laws):

 

“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER UNITED STATES FEDERAL OR STATE SECURITIES LAWS AND MAY
NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED OR ASSIGNED FOR VALUE, DIRECTLY OR INDIRECTLY, NOR MAY THE SECURITIES BE
TRANSFERRED ON THE BOOKS OF THE COMPANY, WITHOUT REGISTRATION OF SUCH SECURITIES UNDER ALL APPLICABLE UNITED STATES FEDERAL OR
STATE SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE EXEMPTION THEREFROM, SUCH COMPLIANCE, AT THE OPTION OF THE COMPANY, TO BE
EVIDENCED BY AN OPINION OF THE HOLDER’S COUNSEL, IN A FORM ACCEPTABLE TO THE COMPANY, THAT NO VIOLATION OF SUCH REGISTRATION
PROVISIONS WOULD RESULT FROM ANY PROPOSED TRANSFER OR ASSIGNMENT.”

 

Upon any partial exercise
of this Warrant, the Company shall forthwith issue and deliver to the Holder a new warrant or warrants of like tenor as this Warrant
for the remaining portion of the Warrant Shares for which this Warrant may still be exercised.

 

The legend set forth
in this Section 6 shall be removed and the Company shall issue a certificate (or issue in an uncertificated form) without
such legend or any other legend to the Holder if (a) such Warrants or Warrant Shares are sold pursuant to an effective registration
statement under the Act (provided that the Holder agrees to only sell such Warrant or Warrant Shares during such time that the
registration statement is effective and not withdrawn or suspended, and only as permitted by the registration statement), (b) such
Warrants or Warrant Shares are sold or transferred pursuant to, and in accordance with all requirements of, Rule 144 (including,
if applicable, the volume, manner-of-sale and notice filing provisions of Rule 144), or (c) such Warrants or Warrant Shares are
eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information
required under Rule 144 as to such securities and without volume or manner-of-sale restrictions. The Company shall bear all costs
incurred by it or a Holder relating to the removal of the legend in accordance with this Section 6, provided that the Company
shall not be liable for any transfer taxes relating to the issuance of a new certificate or statement in the name of any person
other than the relevant Holder and its affiliates.

 

7.       Issuance
of Warrant Shares. The Company covenants that the Warrant Shares, when issued pursuant to the exercise of this Warrant, will
be duly and validly issued, fully-paid and non-assessable and free from all taxes, liens, and charges with respect to the issuance
thereof (except for any applicable transfer taxes, which shall be paid by the Holder).

 

8.       Reservation
of Warrant Shares. From the date hereof until the Expiration Date, the Company shall at all times reserve and keep available
out of its authorized but unissued Common Stock of the Company or other securities constituting Warrant Shares, solely for the
purpose of issuance upon the exercise of this Warrant, the maximum number of Warrant Shares issuable upon the exercise of this
Warrant, and the par value per Warrant Share shall at all times be less than or equal to the applicable Exercise Price. The Company
shall not increase the par value of any Warrant Shares receivable upon the exercise of this Warrant above the Exercise Price then
in effect, and shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock of the Company upon the exercise of this Warrant.

 

    	 	-3-	 

     

    

 

9.       Adjustment
of Exercise Price and Number of Warrant Shares. The number of and kind of Warrant Shares purchasable upon exercise of this
Warrant and the Exercise Price shall be subject to adjustment from time to time as follows:

 

(a)       Subdivisions,
Combinations and Other Issuances. If the Company shall at any time or from time to time prior to the Expiration Date subdivide
the Warrant Shares, by forward stock split or otherwise, or combine such shares, or issue additional shares as a dividend with
respect to any such shares, the number of Warrant Shares issuable on the exercise of this Warrant shall forthwith be proportionately
increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination. Appropriate
adjustments shall also be made to the Exercise Price payable per Warrant Share, but the Purchase Price payable for the total number
of Warrant Shares purchasable under this Warrant (as adjusted) shall remain the same. The aggregate Exercise Price shall
be reduced by the aggregate amount of cash dividends paid to holders of equity securities in the Company prior to the date of the
Holder’s exercise of the Warrant. Any adjustment under this Section 9(a) shall
become effective as of the record date of such subdivision, combination, dividend, or other distribution, or in the event that
no record date is fixed, upon the making of such subdivision, combination or dividend.

 

(b)       Merger,
Consolidation, Reclassification, Reorganization, Etc. In case of any change in the Warrant Shares prior to the Expiration Date
(other than as a result of a subdivision, combination, or stock dividend provided for in Section 9(a) above), whether through
merger, consolidation, reclassification, reorganization, partial or complete liquidation, purchase of substantially all the assets
of the Company, or other change in the capital structure of the Company (any of the foregoing a “Sale Event”),
then, as a condition of such Sale Event, lawful and adequate provision will be made so that the Holder will have the right thereafter
to receive upon the exercise of the Warrant the kind and amount of shares of stock or other securities or property to which it
would have been entitled if, immediately prior to such Sale Event, the Holder had held the number of Warrant Shares obtainable
upon the exercise of the Warrant. In any such case, appropriate adjustment will be made in the application of the provisions set
forth herein with respect to the rights and interest thereafter of the Holder, to the end that the provisions set forth herein
will thereafter be applicable, as nearly as reasonably may be, in relation to any shares of stock or other property thereafter
deliverable upon the exercise of the Warrant. If the Company, at any time while this Warrant is outstanding, distributes to holders
of the Common Stock (i) evidences of its indebtedness, (ii) any security (other than a distribution of the Common Stock covered
by Section 9(a)), (iii) rights or warrants to subscribe for or purchase any security, or (iv) any other asset (in each case,
“Distributed Property”), then in each such case the Holder shall be entitled upon exercise of this Warrant
for the purchase of any or all of the Warrant Shares, to receive the amount of Distributed Property which would have been payable
to the Holder had such Holder been the holder of such Warrant Shares on the record date for the determination of stockholders entitled
to such Distributed Property.  The Company will at all times set aside in escrow and keep available for distribution to the
Holder upon exercise of this Warrant a portion of the Distributed Property to satisfy the distribution to which the Holder is entitled
pursuant to the preceding sentence.  The Company will not permit any change in its capital structure to occur unless the issuer
of the shares of stock or other securities to be received by the Holder, if not the Company, agrees to be bound by and comply with
the provisions of this Warrant.

 

(c)       Black
Scholes Value. Notwithstanding the foregoing and the provisions of Section 9(b) above, in the event of a Sale Event,
if the Holder has not exercised this Warrant in full prior to the consummation of such Sale Event, at the request of the Holder
delivered before the ninetieth (90th) day after the consummation of such Sale Event, the Company (or the successor entity
(as the case may be)) shall purchase this Warrant from the Holder on the date of such request by paying to the Holder cash in an
amount equal to the Black Scholes Value of the unexercised portion of this Warrant that remained on the date of the consummation
of such Sale Event. For purposes of this Warrant, the term “Black Scholes Value” means the value of this
Warrant based on the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as
of the day of consummation of the applicable Sale Event for pricing purposes and reflecting (i) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of the date of the Holder’s request
pursuant to Section 9(c), (ii) an expected volatility equal to the 100 day volatility obtained from the HVT function on
Bloomberg as of the Trading Day immediately following the public announcement of the applicable Sale Event (using 360 as the input
for the annualization factor and the Rogers-Satchell volatility estimator model), which volatility shall in no event be more than
150% or less than 80%, and, if applicable, (iii) the underlying price per share used in such calculation shall be the sum of the
price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in the applicable
Sale Event.

 

    	 	-4-	 

     

    

  

(d)       Notice
of Adjustment. When any adjustment is required to be made in the number or kind of shares purchasable upon exercise of the
Warrant, or in the Exercise Price, the Company shall promptly notify the Holder of such event, the amount of the adjustment,
the method by which such adjustment was calculated, and the number of Warrant Shares or other
securities or property thereafter purchasable and/or the Exercise Price after giving effect to such adjustment upon
exercise of this Warrant.

 

(e)       Notice
of Sale Event or Distributed Property. The Company shall promptly notify the Holder (i) of any Sale Event and the kind and
amount of shares of stock or other securities or property to which the Holder will be entitled in accordance with Section 9(b),
and (ii) in the event there is any distribution of Distributed Property, the portion of the Distributed Property to which the Holder
is entitled in accordance with Section 9(b).

 

10.       Further
Limitations on Disposition. The Holder agrees not to dispose of all or any portion of the Warrant Shares or the Warrant (a)
unless and until there is then in effect a registration statement under the Act covering such proposed disposition and such disposition
is made in accordance with such registration statement, or (b) the proposed disposition is pursuant to a transaction exempt from
the registration requirements of the Act; provided, however, that the Holder may dispose or otherwise transfer the Warrant (or
the Warrant Shares) to an affiliate of the Holder, to a family member of the Holder, or to any trust, partnership, limited liability
company or custodianship established for estate-planning purposes for the primary benefit of the Holder or his or her family members,
in each case without the requirements set forth in this Section 10.

 

11.       No
Fractional Warrant Shares. Notwithstanding any provisions to the contrary in this Warrant, the Company shall not be required
to issue any Warrant Shares representing fractional Warrant Shares, but may instead make a payment in cash based on the Exercise
Price.

 

12.       No
Rights as Stockholders. Prior to the exercise of this Warrant, the Holder shall not be entitled to any rights of a stockholder
of the Company, including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any
pre-emptive rights, and the Holder shall not be entitled to receive any notice of any proceedings of the Company, in each case,
except as provided herein or as otherwise agreed. Upon exercise of this Warrant in accordance with Section 3 hereof, the
Holder shall immediately become the owner of the Warrant Shares so exercised and shall have all rights as a stockholder (including
voting rights) in respect of such Warrant Shares.

 

13.       Loss,
Etc. of Warrant. Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of this
Warrant, and of indemnity reasonably satisfactory to the Company if lost, stolen or destroyed, and upon surrender and cancellation
of this Warrant if mutilated, and upon reimbursement of the Company’s reasonable incidental expenses, the Company shall execute
and deliver to the Holder a new Warrant of like date, tenor and denomination.

 

    	 	-5-	 

     

    

 

14.       Miscellaneous.

 

(a)       Further
Acts. Each of the parties hereto agrees to perform any further acts and execute and deliver any documents that may be reasonably
necessary to carry out the provisions of this Warrant.

 

(b)       Notices.
Unless otherwise provided, all notices and other communications required or permitted under this Warrant shall be in writing and
shall be mailed by United States first-class mail, postage prepaid, sent by facsimile or delivered personally by hand or by a nationally
recognized courier addressed to the party to be notified at the address or facsimile number indicated for such person in the Loan
Agreement, or at such other address or facsimile number as such party may designate by ten (10) days’ advance written notice
to the other parties hereto. All such notices and other written communications shall be effective on the date of mailing, confirmed
facsimile transfer or delivery.

 

(c)       Amendment
and Modification; Waiver. Except as otherwise provided herein, this Warrant may only be amended, modified or supplemented by
an agreement in writing signed by the Company and the Holder and their successors and assigns. No waiver by the Company or the
Holder shall be effective unless explicitly set forth in writing and signed by such parties so waiving. No waiver by any party
shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written
waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise,
or delay in exercising, any rights, remedy, power or privilege arising from this Warrant shall operate or be construed as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.

 

(d)       Headings;
References. The headings of sections contained in this Warrant are included herein for reference purposes only, solely for
the convenience of the parties hereto, and shall not in any way be deemed to effect the meaning, interpretation or applicability
of this Warrant or any term, condition or provision hereof.

 

(e)       Successors
and Assigns. All of the covenants, stipulations, promises, and agreements in this Warrant shall bind and inure to the benefit
of the parties’ respective successors and assigns, whether so expressed or not.

 

(f)       Governing
Law. This Warrant any controversy arising out of or relating to this Agreement shall be governed by and construed in accordance
with the internal laws of the State of Delaware, without reference to the conflicts of law provisions.

 

(g)       Entire
Agreement. The terms and provisions of the Transaction Agreements supersede all written and oral agreements and representations
made by or on behalf of the Company. The Transaction Agreements contain the entire agreement of the parties.

 

(h)       Severability.
If one or more provisions of this Warrant are held to be unenforceable under applicable law, such provision shall be excluded from
this Warrant and the balance of the Warrant shall be interpreted as if such provision were so excluded and shall be enforceable
in accordance with its terms.

 

    	 	-6-	 

     

    

 

(i)       Execution
and Counterparts. This Warrant may be executed in counterparts, each of which when so executed and delivered shall be deemed
an original, and such counterparts together shall constitute only one instrument. Any one of such counterparts shall be sufficient
for the purpose of proving the existence and terms of this Warrant and no party shall be required to produce an original or all
of such counterparts in making such proof.

 

(j)       Jurisdiction.
EACH OF THE PARTIES AGREE THAT NEITHER IT NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A) SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING,
COUNTERCLAIM OR ANY OTHER ACTION BASED UPON, OR ARISING OUT OF, THIS WARRANT OR (B) SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED
BY THE PARTIES HERETO, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NONE OF THE PARTIES HERETO HAS AGREED WITH OR REPRESENTED
TO ANY OTHER THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES. EACH OF THE PARTIES HEREBY SUBMITS
TO THE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE AND THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE, AS
WELL AS TO THE JURISDICTION OF ALL COURTS FROM WHICH AN APPEAL MAY BE TAKEN OR OTHER REVIEW SOUGHT FROM THE AFORESAID COURTS, FOR
THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR WITH RESPECT TO THIS WARRANT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY, AND EXPRESSLY WAIVES ANY AND ALL OBJECTIONS IT MAY HAVE AS TO VENUE IN ANY OF SUCH COURTS.

 

(k)       Information
Rights. While  any  securities of the Company remain outstanding and  are “restricted securities”
within the meaning of Rule 144(a)(3) under the Act, the Company will, during any period in which the Company is not subject to
and in compliance with Section 13 or 15(d) of the of the Securities and Exchange Act of 1934, as amended (the “Exchange
Act”) and are not exempt from reporting under Rule 12g3-2(b) under the Exchange Act, furnish to the Holder, upon
request and at the Company’s expense, the information required to be delivered pursuant to Rule 144A(d)(4) under the Act.

 

(l)       No
Impairment. The Company shall not, by amendment of its Certificate of Incorporation or through a reorganization, transfer of
assets, consolidation, merger, dissolution, issue, or sale of securities or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms to be observed or performed under this Warrant by the Company, but shall at all
times in good faith assist in carrying out of all the provisions of this Warrant and in taking all such action as may be necessary
or appropriate to protect the Holder’s rights under this Warrant against impairment.

 

(m)       Maximum
Issuance. Notwithstanding the foregoing, without the prior approval of the Company’s stockholders as required pursuant
to the rules and regulations of the The Nasdaq Capital Market, the aggregate number of shares of Common Stock actually issued by
the Company under the Transaction Agreements shall not exceed 19.99% of the Common Stock outstanding as of the Original Issue Date,
for purposes of NASDAQ Listing Rule 5635(d), at a price, determined in accordance with the rules and regulations of The Nasdaq
Capital Market, that is less than the Minimum Price (as defined below).  The term “Minimum Price”
means a price that is the lower of (i) the Closing Sale Price of the Common Stock immediately preceding the signing of the Loan
Agreement; or (ii) the average Closing Sale Price of the Common Stock for the five (5) Trading Days immediately preceding the signing
of the Loan Agreement. 

 

[Remainder of page
intentionally left blank]

 

    	 	-7-	 

     

    

  

IN WITNESS WHEREOF,
this Warrant is executed as of the date first written above.

 

	 	COMPANY:
	 	 	 
	 	AUDIOEYE, INC.
	 	 	 
	 	By:	/s/ Carr
    Bettis
	 		Name: Carr Bettis
	 		Title:   Executive Chair

 

Signature page to

AudioEye, Inc.

Common Stock Warrant

 

     

     

    

 

IN WITNESS WHEREOF,
this Warrant is executed as of the date first written above.

 

	 	HOLDER:
	 	 
	 	SERO CAPITAL LLC
	 	 	 
	 	By:	/s/ David Moradi
	 	 	 
	 	Name: 	David Moradi
	 	 	 
	 	Title:	Owner

 

Signature page to

AudioEye, Inc.

Common Warrant

 

     

     

    

 

ANNEX I

 

NOTICE OF EXERCISE

 

	TO:	 	 
	 	 	 
	 	 	 

 

1.           The
undersigned Warrantholder (“Holder”) elects to acquire the Warrant Shares of AudioEye, Inc. (the “Company”),
pursuant to the terms of the Warrant dated August 14, 2019 (the “Warrant”). Capitalized terms used herein
and not otherwise defined herein have the respective meanings set forth in the Warrant.

 

2.           The
Holder elects to purchase _________ Warrant Shares as provided in Section 3 and (check one):

 

☐  tenders herewith a check in the amount of $_______ as payment of the Purchase Price

 

		☐	  intends that payment of the Purchase Price shall be made as a “cashless exercise’ under
Section 4 of the Warrant

 

3.           The
Holder surrenders the Warrant with this Notice of Exercise.

 

4.           The
Holder represents that it is acquiring the aforesaid Warrant Shares for investment and not with a view to, or for resale in connection
with, distribution and that the Holder has no present intention of distributing or reselling the Warrant Shares unless in compliance
with all applicable federal and state securities laws.

 

5.           Pursuant
to this Notice of Exercise, the Company shall deliver to the Holder Warrant Shares determined in accordance with the terms of the
Warrant.

  

	By:	 	 
	 	 	 
	Name:	 	 
	 	 	 
	Title:	 	 
	 	 	 
	Date:Exhibit

FOURTH PURCHASE AGREEMENT AMENDMENT 
This Fourth Purchase Agreement Amendment (this “Amendment”) dated as of August 15, 2019, is entered into by and between Tonogold Resources, Inc., a Delaware corporation (“Buyer”), and Comstock Mining Inc., a Nevada corporation (“Seller”). 
WHEREAS, Seller and Buyer entered into that certain Option Agreement, dated October 3, 2017 (the “Option Agreement”);
WHEREAS, Seller and Buyer entered into that certain Membership Interest Purchase Agreement, dated as of January 24, 2019, as amended by the Purchase Agreement Amendment dated April 30, 2019, as amended by the Second Purchase Agreement Amendment dated May 22, 2019, as amended by the Third Purchase Agreement Amendment dated June 21, 2019 (the “Purchase Agreement”); and 
WHEREAS, capitalized terms used herein but not defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.
NOW, THEREFORE in consideration of the mutual covenants and agreements herein and other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged by the parties, the parties agree as follows:
1.Amendment to Section 1.1. Section 1.1 of the Purchase Agreement is hereby amended and restated in its entirety as follows:
“1.1 Purchase and Sale of Membership Interests. Subject to the terms and conditions set forth in this Agreement, Buyer shall purchase from Seller, and Seller shall sell to Buyer, 100% of the membership interests of the Company (the “Membership Interests”), all of which are owned by Seller free and clear of any Liens, and restrictions on transfer, options, rights, calls, commitments, proxies or other contract or other rights (except with respect to restrictions on transfer imposed by federal and state securities laws and encumbrances securing the Debenture (as defined below). As used herein, “Lien” means any lien, security interest, charges, encumbrance, mortgage, pledge, security agreement, consignment or bailment for security purposes, reservation or exception, encroachment, purchase right, right of first refusal, adverse claim of any other person or entity or other encumbrance of any nature whatsoever.”

2.Amendment to Section 1.2. Section 1.2 of the Purchase Agreement is hereby amended and restated in its entirety as follows:

“(a) In consideration of the sale of the Membership Interests and the agreements of Seller herein, Buyer shall pay Seller a total purchase price of $15,000,000 (the “Purchase Price”) of which:

(i) Buyer has made non-refundable cash deposits of $3,350,000 toward the Purchase Price prior to July 9, 2019, and Buyer has made a non-refundable 

deposit of $3,500,000 in the form of Series D Convertible Junior Participating Non-Cumulative Perpetual Preferred Stock (“CP Shares”) of Buyer that was delivered to Seller on or about June 5, 2019; and

(ii) in consideration for Seller’s agreement to change the Termination Date to August 30, 2019, Buyer will make an additional non-refundable deposit of $875,000 no later than August 16, 2019, it being agreed and understood that Buyer shall wire funds received by Buyer from any source to Seller within 24 hours of receipt, and Buyer shall make a payment to Seller of $580,000 paid in the form of CP Shares due by August 30, 2019, which shall not apply to the Purchase Price; and

(iii) Buyer will make a payment of $3,317,500 on or before the Closing Date; and

(iv) the remainder of the Purchase Price, $3,957,500, will be deferred (the “Loan”) with terms and minimum payments as indicated below.

(v) In addition to the amounts indicated above, Buyer will make a cash reimbursement of approximately $125,000 for previously invoiced reimbursable expenses no later than August 16, 2019, it being agreed and understood that Buyer shall wire funds received by Buyer from any source to Seller within 24 hours of receipt, and Buyer shall make a cash reimbursement payment of $482,500 to Seller for payments required for Northern Comstock LLC by the Closing Date, and Buyer shall upon receipt of each monthly invoice from Seller be obligated to reimburse Seller for all reimbursement obligations surviving the termination of the Option Agreement, plus all interest payable by Seller under the Debenture from May 31, 2019 and thereafter, plus all amounts payable by Seller to Northern Comstock LLC (excluding, for purposes of clarity, the $482,500 referenced above that must be paid by the Closing Date), plus amounts payable by Buyer under the Transaction Documents (which is defined hereunder to include the Agreement, the Deed of Trust, the NSR Royalty Agreement, the Lease Option Agreement, the Mineral Exploration and Mining Lease, and the Termination Agreement).  All cash received by Seller from Buyer shall be applied first toward the reimbursement of outstanding invoices prior to any application toward the minimum payments on the Loan. 

(b) The Membership Interests will be delivered to Buyer proportionately to the cash consideration. 

(i) At Closing, Seller will deliver a 50.28% Membership Interest to Buyer, reflecting $7,542,500 total cash consideration through Closing; and

(ii) additional Membership Interest percentages will be proportionately delivered to Buyer for each cash payment made on the Loan, as shown in the schedule below or prepaid as permitted hereunder; and

(iii) the final 23.33% of the Membership Interests will be delivered at the earlier to occur of (A) the Loan has been paid in full and subject to Buyer’s compliance with all other obligations under this Agreement and (B) time that Seller is able to sell such CP Shares for cash without restriction (whether under Rule 144 under the Securities Act or otherwise) and subject to Buyer’s compliance with all other obligations under this Agreement.
 
(iv) For the period until the Loan is paid in full, the Company’s Operating Agreement will be amended to reflect that while Buyer’s membership interest is less than 100%, their share of costs will be 100% from the Closing Date.

(c) Terms of the Loan are as follows:

(i) The maturity date for the Loan is May 15, 2020. Buyer shall make the following minimum cash payments toward the Loan principal on the dates indicated below and for the amounts indicated below:

	
						
	Actual Payment Date or Payment Due Date
	Minimum Payment Due
	Buyer’s Cumulative Ownership Percentage

	November 15, 2019
	

	$500,000
	

	53.62
	%

	December 13, 2019
	

	$500,000
	

	56.95
	%

	January 17, 2020
	

	$500,000
	

	60.28
	%

	February 14, 2020
	

	$500,000
	

	63.62
	%

	March 13, 2020
	

	$550,000
	

	67.28
	%

	April 17, 2020
	

	$657,500
	

	71.67
	%

	May 15, 2020
	

	$750,000
	

	76.67
	%

	June 5, 2020
	Expected date that $3,500,000 of CP Shares can be sold for cash
	

	100.00
	%

(ii) All unpaid payments under the Loan or amounts reimbursable under clause (a)(v) above shall be secured by a security interest in the Membership Interests owned by Buyer and all assets owned by the Company (including any and all rights under contracts such as the operating agreement for Northern Comstock LLC, the Lease Option Agreement, and the Mineral Exploration and Mining Lease Agreement), in accordance with the Deed of Trust attached hereto as 

Exhibit C (the “Deed of Trust”). Once the Debenture has been repaid, Seller shall have the right to record the Deed of Trust as a first priority security interest. 

(iii) As long as the Loan is outstanding, Buyer shall not, create, incur, assume or permit to exist any Indebtedness (as defined below) other than convertible notes issued by Buyer prior to the Closing Date with aggregate principal amount of $14 million or less. “Indebtedness” means, without duplication, (a) all obligations for borrowed money or with respect to deposits or advances of any kind, (b) all obligations evidenced by bonds, debentures, notes or similar instruments, (c) all obligations upon which interest charges are customarily paid, (d) all obligations under conditional sale or other title retention agreements relating to property acquired, (e) all obligations in respect of the deferred purchase price of property or services (excluding current accounts payable and accrued expenses incurred in the ordinary course of business), (f) all obligations secured by any Lien on property owned or after acquired, (g) all guarantees of obligations of others, (h) all capital lease obligations, (i) all obligations, contingent or otherwise, as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, in respect of bankers’ acceptances, (k) all obligations under any swap agreement or under any similar type of agreement, (l) all obligations under sale and leaseback transactions. Notwithstanding the preceding, Buyer shall be permitted to incur Indebtedness described in clauses (c) through (l) above not to exceed $1,000,000 in the aggregate (such Indebtedness, “Permitted Debt”). 

(iv) The following events or circumstances shall be events of default under the Loan: (a) the Buyer shall fail to pay any principal under the Loan when due and payable thereunder; or (b) the Buyer shall fail to pay any interest or any other amount under the Loan when due and payable thereunder; or (c) a receiver, trustee or other similar official shall be appointed over the Buyer or a material part of its assets and such appointment shall remain uncontested for twenty (20) days or shall not be dismissed or discharged within sixty (60) days; or (d) the Buyer shall become insolvent or generally fails to pay, or admits in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any; or (e) the Buyer shall make a general assignment for the benefit of creditors; or (f) the Buyer shall file a petition for relief under any bankruptcy, insolvency or similar law (domestic or foreign); or (g) an involuntary proceeding shall be commenced or filed against the Buyer; or (h) the Buyer shall fail to convert CP Shares within 30 days of Seller requesting for a conversion thereof; or (i) the Buyer shall breach or fail to comply with its other obligations, commitments, covenants, representations or warranties for more than 20 days under the Loan, reimbursement obligations surviving the termination of the Option Agreement, obligations to reimburse any interest payable under Seller’s debenture, obligations to reimburse amounts payable by Seller to Northern Comstock LLC or the Transaction Documents.  If an event of default occurs 

under the Loan and Buyer fails to remedy such violation within thirty (30) days following notice from Seller, then Seller shall have and be entitled to exercise, in its sole discretion, any of the remedies available to a secured lender under Nevada law and any of the remedies set forth below. In case of any such event of default, the Loan shall thereafter bear interest at a rate of twelve percent (12%) per annum, compounding on a monthly basis until paid in full. The Seller may foreclose and sell any or all of the Membership Interests theretofore owned by Buyer and any or all assets owned by the Company in order to pay off the Loan. In addition, the Seller shall have a right to terminate any of the Transaction Documents.

(v) Buyer shall be permitted to prepay all or any part of the balance outstanding under the Loan at any time without penalty or premium. Buyer and Seller hereby agree that Buyer shall pay the cash required to make payments hereunder from the proceeds of equity raises, royalty sales and/or other third party funding agreements, whether in one transaction or a series of transactions (collectively, a “Capital Raise”). Buyer covenants and agrees that if Buyer receives any proceeds from any Capital Raise in excess of $6.5 million, then Buyer shall cause 50% of such proceeds to be immediately paid to Seller and used to prepay the Loan. Except for Permitted Debt, Buyer covenants and agrees that Buyer shall not use the proceeds of any Capital Raise for any other purpose other than making payments to Seller, permitting, exploration drilling, a preliminary economic assessment and costs directly attributable to such Capital Raise. Buyer covenants and agrees that Buyer shall not commence production until the Loan is repaid in full.

(vi) As long as the Loan is outstanding, Buyer and Seller covenant and agree to keep the Lucerne Properties at all times free and clear of all Liens, except for Liens securing the Debenture or otherwise described in the Schedules to this Agreement. Seller covenants and agrees to use Loan payments received to pay off amounts under the Debenture, per the terms of the Debenture, until the Debenture is repaid in full.
(d) In addition, on the Closing Date, if permitted, Seller will assign all of its interest (the ”Northern Comstock Interest“) in Northern Comstock LLC, a Nevada limited liability company (“Northern Comstock“) to the Company. If such assignment is not approved by the members and manager of Northern Comstock on or prior to Closing, then Buyer hereby agrees to forever assume and unconditionally guarantee the full and punctual payment, fulfilment and performance of all obligations and benefits of Seller under the current Northern Comstock LLC Operating Agreement (the “Existing NC Operating Agreement”). The guarantee in the preceding sentence (the “Guarantee”) shall be an absolute and continuing guarantee of performance and payment and shall not in any way be conditional or contingent upon any demand of Northern Comstock or its members to collect or require anything from Seller or any stated obligations of Seller under the Existing NC Operating Agreement (including, without limitation, section 13.5 of such agreement) or upon any other action, occurrence or circumstance whatsoever. Without limiting 

the generality of the foregoing, the Guarantee shall not be released, discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of any party under the Existing NC Operating Agreement, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to the Existing NC Operating Agreement;
(iii) any change in the organizational existence, structure or ownership of Buyer or the Company, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting Buyer, the Company or their respective assets or any resulting release or discharge of any obligation of Buyer or the Company;
(iv) the existence of any claim, set-off or other rights which Buyer or Company may have at any time against Seller or Northern Comstock or its members or its manager;
(v) any invalidity or unenforceability relating to or against Buyer for any reason of this Agreement, the Existing NC Operating Agreement or any provision of applicable law or regulation purporting to prohibit the payment by Buyer of any amounts payable pursuant to the Guarantee; or
(vi) any other act or omission to act or delay of any kind by Buyer, the Company, Seller, Northern Comstock or any other person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of or defense to Buyer’s obligations pursuant to the Guarantee.
For so long as Buyer fulfills its obligations with respect to the Guarantee, Seller hereby agrees to (i) hold legal ownership of the Northern Comstock Interest, (ii) convey all economic or other benefits associated with the Northern Comstock Interest to Buyer (or Company, at Buyer's election) and (iii) exercise its rights with respect to the Northern Comstock Interest under Existing NC Operating Agreement at Buyer's direction.
 (e) The Company owns (or will following the Closing will own) fee property, patented mining claims, and unpatented mining claims, and through the Seller’s membership in Northern Comstock LLC, has indirect ownership of additional fee property, patented mining claims, unpatented mining claims, and leasehold interests, collectively known as the Lucerne project, as detailed in Exhibit A (the “Lucerne Properties”). Effective as of the Closing Date, each of the Parties hereby agree that the Company will pay Seller a 1.5% NSR royalty on all minerals produced from the Lucerne Properties, as detailed in Exhibit B (the “NSR Royalty Agreement”).
(f) Effective as of the Closing Date, the Company will assume all current reclamation liability on the Lucerne Properties and all future liability from the Company’s operations on the Lucerne 

Properties. The Company will assume all costs of maintaining the Federal, State, and County permits and reclamation bonds on the Lucerne Properties.
3.Amendment to Section 1.4.  Section 1.4 of the Purchase Agreement is hereby amended and restated in its entirety as follows:

“1.4 Closing. The closing of the purchase and sale of the Membership Interests (the “Closing”) will take place at a mutually acceptable time and place selected by the Parties. The date and time of the Closing are herein referred to as the “Closing Date”. At the Closing, Buyer and Seller shall deliver, or cause to be delivered, the following deliverables:
(a) Buyer shall have delivered the Closing Cash Consideration remaining to be paid after reduction by the amount of previously delivered non-refundable deposits into a bank account designated by Seller by wire transfer of immediately available funds, which shall not delivered to Seller until all other closing conditions have been met by the Parties; and

(b) Buyer shall execute and deliver to Seller each of:

(i) the Deed of Trust;
(ii) the NSR Royalty Agreement;
(iii) the Operating Agreement for the Company in the form attached hereto as Exhibit I (the “Operating Agreement”);
(iv) if consent for the assignment of the Northern Comstock Interest is received from the members and manager of Northern Comstock;
(1) an assignment of the Northern Comstock Interest (the “Assignment of Interest”); and
(2) an amended and restated operating agreement of Northern Comstock with the Company replacing Seller as a party to such operating agreement and assuming all of Seller’s former obligations thereunder (the “A&R Northern Comstock Agreement”);
(v) the Lease Option Agreement;
(vi) the Mineral Exploration and Mining Lease;
(vii) a certification naming Buyer’s representatives who authorize and consent to the Company’s entry into the agreements effective as of the Closing Date;
together, with this Agreement, the Deed of Trust, the NSR Royalty Agreement, the Lease Option Agreement, the Mineral Exploration and Mining Lease, and the Operating Agreement (the “Transaction Documents”), in each case duly executed by Buyer and/or the Company, as the case may be.

(c) If at the time of Closing, the A&R Northern Comstock Agreement cannot be assigned, Seller shall retain its membership interest, and have an obligation to Buyer to maintain all rights and agreements thereunder, for so long as Buyer fulfills its obligations with respect to the Guarantee, including, without limitation, Buyer’s obligation to reimburse Seller for any and all costs associated with the retention of membership and maintenance of any obligations of Seller under the Existing NC Operating Agreement, which costs of reimbursement are estimated on the attached Exhibit G, Table G.2.

(d) At the Closing, Seller shall deliver to Buyer, or cause to be delivered:

(i) each of the Transaction Documents (other than the Deed of Trust), duly executed by Seller;
(ii) evidence that, substantially concurrent with Seller’s receipt of the Closing Cash Consideration, Seller will make a payment on its 11% Senior Secured Debenture due 2021, issued to GF Comstock 2, LP, as amended, restated or otherwise modified from time to time (the “Debenture”);
(iii) evidence satisfactory to Buyer that the Seller has transferred any and all assets it currently owns that are listed on Exhibit A to the Company; and
(iv) evidence satisfactory to Buyer that the Company has transferred any and all assets it currently owns not listed on Exhibit A to Seller (and Seller and Company shall represent and warranted that at the Closing, the Company will own only the assets listed in Exhibit A).

(e) Effective as of the Closing Date, Buyer shall become the sole lawful owner of the Membership Interests proportionately delivered per section 1.2(b).”

4.Amendment to Section 4.9(a)(ii).  Section 4.9(a)(ii) of the Purchase Agreement is hereby amended and restated in its entirety as follows:
“(ii) at any time after August 30, 2019 (the “Termination Date”) and prior to the Closing, by Buyer, if (A) the Closing shall not have been consummated on or before the Termination Date and (B) the failure to consummate the Closing on or before the Termination Date did not result from the failure by Buyer to perform or comply with any covenant or agreement contained in this Agreement required to be performed or complied with prior to the Closing by Buyer, provided that Buyer may extend the Termination Date to September, 30, 2019 if Buyer delivers $250,000 of CP Shares to Seller on or prior to August 30, 2019;”
5.Supersedence of Amendments Related to Deposits. All provisions related to purchase price deposits set forth in each amendment to the Purchase Agreement are hereby superseded by the provisions of Section 1.2(a) of the Purchase Agreement, as amended hereby.

6.Expense Reimbursement Obligations. 

		
	a.
	Buyer hereby agrees to pay in full all existing unpaid invoices under the Option Agreement and the Purchase Agreement issued on or prior to July 3, 2019, it being agreed and understood that Buyer shall wire funds received by Buyer from any source to Seller within 24 hours of receipt

		
	b.
	Buyer acknowledges and agrees that Buyer is obligated to reimburse Seller for “Net Lease Maintenance Costs” (as defined in the Lease Option Agreement), as and when indicated in the Lease Option Agreement.

		
	c.
	Buyer hereby agrees to execute and deliver the Mineral Exploration and Mining Lease Agreement on the date hereof.  Buyer acknowledges and agrees that Buyer shall pay Seller a quarterly lease fee of $10,000 in advance (escalating 10% each year) under the Mineral Exploration and Mining Lease Agreement and Buyer shall assume all costs associated with the leased property estimated in Exhibit E3 of the Mineral Exploration and Mining Lease Agreement. The costs, including property taxes, annual claim fees, environmental compliance, third party lease payments and advance royalties shall be paid by Seller and timely reimbursed by Buyer.  Buyer shall be directly responsible for any drilling or spending commitments for the third party leases pursuant to the Mineral Exploration and Mining Lease Agreement.

		
	d.
	Buyer hereby agrees to pay all incremental additional cost of interest being incurred by Seller as a result of delaying the closing from May 31, 2019, until Seller’s debenture is paid in full or the Loan is paid in full, (which for the sake of clarity is equal to the number of days of interest divided by 360 * 11% multiplied by the then principal amount). 

7.Remedies Upon Default of this Amendment. If Buyer fails to comply with its obligations under this Amendment or fails to make any payment required to be made under this Amendment and fails to remedy such violation within thirty (30) days following notice from Seller, then such failure  shall constitute a default by Buyer under this Amendment and, if and so long as such default shall continue uncured or unremedied, Seller shall have and be entitled to exercise, in its sole discretion, exercise any of the remedies available to a secured lender under Nevada law and any of the remedies set forth below. In case of any such default, the Seller shall have the right to treat such amounts as debt pursuant to promissory note (the “Deemed Promissory Note”) with a principal amount equal to the sum of the amounts unpaid, bearing interest rate of twelve percent (12%) per annum, compounding on a monthly basis until paid in full. The Deemed Promissory Note shall be secured by a deed of trust and/or other security interest in the Lucerne Properties, the Membership Interests and all rights of the Company. In addition, the Seller shall have a right to terminate any of the Transaction Documents. 

8.Termination of Option Agreement. Subject to Buyer complying with all other provisions hereunder, the Option Agreement and all obligations of Seller and Buyer under the Option Agreement are hereby terminated, canceled, null and void, as of the date hereof. Commencing on the date hereof, Buyer shall reimburse Seller for expenses or costs invoiced by Seller to Buyer for any and all support, services, goods and investment made on behalf or in furtherance of Buyer’s operations and other activities associated with exploring, assessing, engineering or developing the Lucerne Properties (estimated on Exhibit G of the Purchase Agreement), including reimbursement of costs for the Northern Comstock Operating Agreement.

9.Exhibit Amendments. 

		
	a.
	Table A.1 of Exhibit A of the Purchase Agreement is hereby amended to eliminate property 800-001-13, the portion of the St. Louis patent that extends into Lyon County. The description of property 800-001-09 shall be hereafter clarified to be only 

the portion of the Green patent in Storey County.  The portion of the Green patent extending into Lyon County is not included. 

		
	b.
	In addition, subject to an affiliate of Seller (e.g., Comstock Northern Exploration LLC) assuming the leases described in the contents of Exhibit A.5: Fee and Patented Properties Controlled by Northern Comstock LLC through Sutro Lease, such leases shall be added to the properties subject to the Mineral Exploration and Mining Lease.

10.Amendment to Certificate of Designations for CP Shares. Seller authorizes and consents and agrees, and Buyer agrees to cause Section 11(a) and Section 11(b) of the Certificate of Designations for the CP Shares to be amended and restated (and filed with the Secretary of State of Delaware) as follows:

“(a) [Intentionally omitted]

(b) Conversion Upon Time Lapsed Post-Closing. Shares of the Series D Preferred Stock shall, automatically and without the act of such Holder, be converted into Common Stock on May 22, 2020, with the number of shares of Common Stock (rounded up to the extent fractional shares of Common Stock would result) equal to the Conversion Rate in effect at the time of conversion.”

11.No Novation. Except as amended hereby, all of the terms and conditions of the Option Agreement and the Purchase Agreement shall remain in full force and effect. Except as otherwise provided herein, Buyer and Seller acknowledge and agree that this Amendment is not intended to constitute, nor does it constitute, a novation, interruption, suspension of continuity, satisfaction, discharge or termination of the obligations or liabilities under the Option Agreement or the Purchase Agreement.

12.Further Assurances.  Each of Buyer and Seller shall, upon request from the other Party, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Amendment and the documents to be delivered hereunder.

13.Due Execution. The execution, delivery and performance by Buyer and Seller of this Amendment has been duly authorized by all necessary action on the part of Buyer and Seller. This Amendment has been duly executed and delivered by Buyer and Seller. 

14.Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Amendment shall be governed by the internal laws of the State of Nevada, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Nevada or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Nevada. 

15.Venue. Each Party irrevocably submits to the exclusive jurisdiction of federal courts in the State of Nevada, for the purposes of any dispute or action arising out of this Amendment. Process in any action referred to in this Section 15 may be served on any Party anywhere in the world by national courier delivery sent to the address of such served Party set forth on the signature page of this Amendment. Each Party irrevocably and unconditionally waives any objection to the laying of venue of any action arising out of this Amendment in U.S. federal courts sitting in the State of Nevada, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action brought in any such court has been brought in an inconvenient forum. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF. 

16.Beneficiaries. This Amendment is intended for the benefit of the Parties and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. 

17.Counterparts. This Amendment may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective against an executing Party when a counterpart has been signed and delivered by such Party to another Party. This Amendment and any amendments hereto, to the extent signed and delivered by means of portable document format (“PDF”) or a facsimile machine, shall be treated in all manner and respects as an original contract and shall be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person. At the request of any Party or to any such contract, each other Party hereto or thereto shall re-execute original forms thereof and deliver them to all other Parties. No Party or to any such contract shall raise the use of PDF or a facsimile machine to deliver a signature or the fact that any signature or contract was transmitted or communicated through the use of PDF or a facsimile machine as a defense to the formation of a contract and each Party forever waives any such defense. 
[Signature Page To Follow] 

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first above written. 
 
	
				
	 
	 
	 

	TONOGOLD RESOURCES, INC.

	 
	 

	By:
	 
	/s/ Mark Ashley

	Name:
	 
	 Mark Ashley

	Title:
	 
	 Chief Executive Officer

	Address:  5666 La Jolla Boulevard, #315, La Jolla, CA 92037

	 

                                
	
				
	 
	 
	 

	COMSTOCK MINING INC.

	 
	 

	By:
	 
	 /s/ Corrado DeGasperis

	Name:
	 
	 Corrado DeGasperis

	Title:
	 
	Executive Chairman, President and CEO

	Address: 1200 American Flat Road, Virginia City, NV 89440

	 

	
				
	 
	 
	 

	COMSTOCK MINING LLC, by its manager Comstock Mining Inc.

	 
	 

	By:
	 
	 /s/ Corrado DeGasperis

	Name:
	 
	 Corrado DeGasperis

	Title:
	 
	Executive Chairman, President and CEO

	Address: 1200 American Flat Road, Virginia City, NV 89440

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