Document:

Exhibit 10.1

 

SETTLEMENT AGREEMENT AND SITE RELEASE

 

This Settlement Agreement and Site Release
("Agreement”) is entered into by and between Boonton Electronics Corp., WTT Acquisition Corp. and Wireless Telecom Group,
Inc. and their respective predecessors, parents, subsidiaries, affiliated companies, successors in interest, and/or their shareholders,
directors, and officers (collectively “WTG”), and Century Indemnity Company, as successor to Insurance Company of North
America (“INA/Century”) and Federal Insurance Company (“Federal”) (collectively “Chubb Insurers”),
as of the date of the execution of this Agreement by all parties hereto, and in accordance with the terms and conditions set forth
below.

 

WHEREAS, Chubb Insurers allegedly issued to
WTG those policies of insurance identified on Schedule A annexed hereto affording insurance coverage to WTG subject to the terms,
conditions, exclusions and limits of liability applicable thereto (all policies of insurance, whether known or unknown, which were
or may have been issued by Chubb Insurers or any of the Chubb-related insurance affiliates identified on Schedule B annexed hereto
(hereafter the “Chubb Affiliates”), and under which WTG may be an insured or additional named insured are hereinafter
referred to collectively as "the Policies");

 

WHEREAS, WTG has been identified as being potentially
responsible for the investigation and remediation of contamination at the property located at 499 Pomeroy Road Parsippany, New
Jersey (the “Site”);

 

WHEREAS, WTG allegedly has incurred and may
continue to incur various costs and expenses associated with past, present and future investigation and remediation of contamination
at the Site allegedly caused by WTG’s historic manufacturing operations;

 

WHEREAS, WTG notified Chubb Insurers of the
costs and expenses arising from the contamination at the Site and requested that Chubb Insurers reimburse it for such costs and
expenses, along with any such costs and expenses as may be incurred in the future;

 

WHEREAS, after receiving notice of the claim,
disputes arose as to whether coverage was owed under any or all of the Policies and, if so, the proper allocation of defense costs
and indemnity payments as between Chubb Insurers and WTG;

 

WHEREAS, WTG and Chubb Insurers now desire
to compromise, settle and adjust fully and finally all disputes which now or hereafter may exist between them with respect to any
and all claims, known and unknown, past, present or future, which have arisen or may arise with respect to any and all alleged
injuries or damages of any kind or nature arising from or relating to the Site under any and all coverages of the Policies, including
without limitation any general liability, personal injury, products liability, completed operations, premises, operations, property,
automobile or contractual coverage which may be contained therein, (hereinafter collectively referred to as "all coverages”),
on the terms hereinafter set forth.

 

    

     

    

 

NOW, THEREFORE, in consideration of the foregoing
and the mutual promises and covenants set forth below, WTG and Chubb Insurers mutually agree as follows:

 

1. Chubb Insurers shall within thirty (30)
days of receipt of a signed copy of this Agreement from WTG, pay the total sum of Four Hundred Eighty-Five Thousand Dollars ($485,000.00)
(the “Settlement Amount”) to WTG, in full and final settlement of any and all claims, past, present and future, which
have been or hereafter may be asserted by WTG for defense and/or indemnification from Chubb Insurers and/or Chubb Affiliates with
respect to any and all alleged injuries or damages of any kind or nature arising from or relating to the Site under any and all
coverages of the Policies. The Settlement Amount shall be made payable to Boonton Electronics.

 

2. WTG acknowledges that in consideration of
the payment by Chubb Insurers of the Settlement Amount to WTG, any and all obligations which now or hereafter may exist on the
part of Chubb Insurers or any of the Chubb Affiliates arising from the claims which have been or which hereafter may be asserted
by WTG with respect to any and all alleged injuries or damages of any kind or nature arising from or relating to the Site, including
claims for natural resources damages, under any and all coverages of the Policies, will be deemed to have been extinguished. WTG
expressly accepts the payment by Chubb Insurers of the Settlement Amount to WTG in full and complete satisfaction of any and all
obligations which now or may exist on the part of Chubb Insurers or any of the Chubb Affiliates with respect to any request for
insurance coverage from WTG with respect to any and all alleged injuries or damages of any kind or nature arising from or relating
to the Site under any and all coverages of the Policies, including but not limited to any obligation on the part of Chubb Insurers
or any of the Chubb Affiliates to investigate, defend, pay legal fees or costs, or to pay administrative, engineering, or consulting
costs or fees, settle claims or suits, or to pay or contribute to settlements, judgments, damages to natural resources, investigative
or remedial costs pertaining thereto.

 

3. WTG and all other persons or entities identified
as named insureds, defined as insureds, or identified as additional insureds under the Policies hereby fully release and forever
discharge Chubb Insurers, their parents, subsidiaries, affiliated companies, predecessor companies, successors in interest and
all of their past and present officers, directors, employees, shareholders, representatives and attorneys of and from any and all
claims, actions, causes of action, rights, liabilities, obligations and demands of every kind and nature, known and unknown, past,
present, and future, for insurance coverage from Chubb Insurers or any of the Chubb Affiliates with respect to any and all alleged
injuries or damages of any kind or nature arising from or relating to the Site under all coverages of the Policies, including but
not limited to damages to the natural resources of any kind or nature. The foregoing release by WTG expressly includes, but is
not limited to, any claims for defense, indemnification, damages, punitive damages, equitable relief, any claims to recover experts’,
consultants’, engineering, administrative, or legal fees or other costs associated with the Site, or any other legal or administrative
proceeding, pre-judgment interest, post-judgment interest, or to recover for any alleged acts or omissions, if any, on the part
of Chubb Insurers or any of the Chubb Affiliates constituting unfair defense or settlement practices, insurance or other statutory
code violations, bad faith, breach of fiduciary duty, fraud, malice or oppression or any other extra-contractual theory of liability.
This release is intended to be a full site release for any and all suits or claims arising from or relating to the Site, and shall
be interpreted broadly to effectuate the intentions of the parties to this Agreement.

 

    

     

    

 

4. Chubb Insurers hereby releases WTG and all
other persons or entities identified as named insureds or additional named insureds under the Policies from all claims which Chubb
Insurers may have arising from WTG’s request for insurance coverage from Chubb Insurers with respect to any and all alleged
injuries or damages of any kind or nature arising from or relating to the Site, including but not limited to any claims for additional
premium or other payments or offsets that may be claimed by Chubb Insurers as a result of paying the Settlement Amount to WTG consistent
with the terms of this Settlement Agreement.

 

5. In furtherance of their express intent to
fully, forever and irrevocably release and discharge each other from all insurance coverage claims arising from or relating to
the Site, known and unknown, from the beginning of time until the end of time, WTG and Chubb Insurers expressly waive any and all
rights they may have under any statute, code, ordinance or the common law, which may limit or restrict the effect of the
general release as to insurance coverage claims arising from or relating to the Site which WTG and/or Chubb Insurers do not know
or suspect to exist in their respective favor at the time of the execution of this Agreement.

 

6. Upon actual receipt by WTG of the Settlement
Amount, all pending claims for coverage by WTG against Chubb Insurers and/or Chubb Affiliates with respect to any and all alleged
injuries or damages of any kind or nature arising from or relating to the Site, including without limitation any potential claims,
shall be deemed withdrawn.

 

7. In further consideration of Chubb Insurers’
payment of the Settlement Amount pursuant to this Agreement, WTG agrees to defend, indemnify, save and hold Chubb Insurers or any
of the Chubb Affiliates harmless from and against any and all past, present and future claims or suits which may arise against
Chubb Insurers or any of the Chubb Affiliates by or on behalf of WTG’s other insurance carriers, third-party claimants, and/or
any other entity, including but not limited to the Environmental Protection Agency (“EPA”), the New Jersey Department
of Environmental Protection (“NJ DEP”), or any similar state or federal agency, or any other individual against Chubb
Insurers or any of the Chubb Affiliates, which arise from or relate to the Site, including but not limited to any claims to treat,
monitor, cleanup, remediate or otherwise respond to pollutants or contamination on land or in the water, and for any contribution,
indemnification, subrogation, allocation, apportionment, reimbursement, coverage, declaratory judgment, direct action, or other
compensatory damages, based upon, arising out of, or relating in any way to the Policies and/or this Agreement (hereinafter collectively
referred to as “Indemnified Claims”). Chubb Insurers, the Chubb Affiliates, and WTG shall cooperate in the defense
of any Indemnified Claims. Should WTG fail to timely respond to the tender of any Indemnified Claims or fail to fully comply with
its obligations to defend and indemnify Chubb Insurers or any of the Chubb Affiliates as to such claims, Chubb Insurers and/or
any of the Chubb Affiliates shall be free to defend such claims as they, in their sole discretion, deem appropriate and to settle
any such claims as they see fit, the cost of which will be borne by WTG pursuant to this paragraph. Notwithstanding any of the
foregoing or anything else contained in this Agreement, WTG’s liability under this provision shall be capped at the amount
of the Settlement Amount, or in any one matter by the cumulative limits of the Policies placed at issue in that matter, whichever
is less.

 

    

     

    

 

8. Chubb Insurers agree not to initiate any
claim or cross-claim for contribution or otherwise against any insurer with respect to any amounts paid pursuant to this Agreement,
unless such insurer pursues a claim for contribution against Chubb Insurers. In the event another insurer obtains a judgment or
binding award against Chubb Insurers or any of the Chubb Affiliates for Chubb Insurers’ or any of the Chubb Affiliates’
alleged allocable share, or enforces subrogation rights, if any, giving rise to an Indemnified Claim, WTG shall voluntarily reduce
any judgment, or claim against, or settlement with, such other insurer by the amount, if any, that a court or tribunal determines
that Chubb Insurers or any of the Chubb Affiliates would have been liable to pay such other insurer. The amount of any such reduction
shall be capped at the amount of the Settlement Amount, or in any one matter by the cumulative limits of the Policies placed at
issue in that matter, whichever is less. To ensure that such a reduction is accomplished, Chubb Insurers and/or any of the Chubb
Affiliates shall be entitled to assert this paragraph as a defense to any action against it for any such portion of the judgment
or claim and shall be entitled to have the court or appropriate tribunal issue such Orders as are necessary to effectuate the reduction
to protect Chubb Insurers or any of the Chubb Affiliates from any liability for the judgment or claim. WTG agrees it will not seek
to obtain payment from any other person or entity of any amount or portion of any amount that may be attributable or allocable
to Chubb Insurers or any of the Chubb Affiliates.

 

9. Nothing contained herein shall be construed
to be an admission of any kind by any signatory hereto. Specifically, and without limitation, nothing contained herein constitutes
an admission by Chubb Insurers or any of the Chubb Affiliates that WTG was or is entitled to any insurance coverage from Chubb
Insurers or any of the Chubb Affiliates under the Policies in connection with any suits or claims which have been or may be asserted
against WTG relating to the Site. In addition, and without limitation, nothing contained herein constitutes an admission by WTG
that it has any responsibility for the costs of the investigation and remediation of contamination at or from the Site.

 

10. This Agreement is the result of a compromise
and accord, is the product of arms-length negotiations, and is not intended to be, nor shall it be, construed as an insurance policy
interpretation. This Agreement is restricted and limited to the matters addressed herein, and shall not be used by either Chubb
Insurers or WTG in any court or dispute resolution proceeding to infer coverage or to create, prove, or interpret claims under
any insurance policy issued by Chubb Insurers. Nothing contained herein, however, shall be deemed or construed to prohibit Chubb
Insurers or any of the Chubb Affiliates, or WTG, from introducing this Agreement into evidence for the purpose of enforcing the
terms of this Agreement.

 

11. The parties to this Agreement each represent
and warrant that they have not and will not in any manner assign, transfer, convey or sell, or purport to assign, transfer, convey
or sell to any entity or person any cause of action, chose in action, or part thereof, arising out of or connected with the matters
released herein, and that they are the only persons or entities entitled to recover for damages under such claims, causes of action,
actions, and rights. The parties to this Agreement each also represent and warrant that no subrogation of any such causes of action,

 

    

     

    
 

chose in action, or part thereof, has taken place. The parties to this Agreement each further represent and warrant that they will
not in any way voluntarily assist any other person or entity in the establishment of any claim, cause of action, action, or right
against the other party to this Agreement arising out of, resulting from or in any way relating to the handling by Chubb Insurers
of WTG’s claim for insurance coverage from Chubb Insurers.

 

12. This Agreement prevails over prior communications
regarding the matters contained herein between the signatories hereto or their representatives. This Agreement has been reviewed
by counsel for the signatories hereto, and shall not be construed against any signatory, each signatory expressly waiving the doctrine
of contra proferentum.

 

13. This Agreement is an integrated Agreement
and contains the entire Agreement regarding the matters herein between the signatories hereto, and no representations, warranties,
or promises have been made or relied on by any signatory hereto other than as set forth herein.

 

14. This Agreement is intended to confer rights
and benefits only on the signatories hereto and the Chubb Affiliates, as described in this Agreement, and is not intended to confer
any right or benefit upon any other person or entity. No person or entity other than the signatories hereto and the Chubb Affiliates
shall have any legally enforceable right under this Agreement. All rights of action for any breach of this Agreement are hereby
reserved to the signatories herein and the Chubb Affiliates.

 

15. This Agreement is not a policy of insurance
and the signatories do not intend this Agreement to be interpreted as such.

 

16. The parties represent and warrant:

 

a. That they are corporations duly
organized and validly existing in good standing under the laws of one of the States of the United States;

b. That they have taken all necessary
corporate and legal actions to duly approve the making and performance of this Agreement and that no further corporate or other
approval is necessary;

c. That the making and performance
of this Agreement will not violate any provision of law or of their respective Articles of Incorporation or Bylaws;

d. That they have read this Agreement
and know the contents hereof, that the terms hereof are contractual and not by way of recital, and that they have signed this Agreement
of their own free acts; and

e. That in making this Agreement,
they have obtained the advice of legal counsel.

 

17. Each of the terms of this Agreement is
binding upon each signatory hereto, and their respective predecessors, successors, parents, subsidiaries, affiliated companies,
transferees, assigns, representatives, principals, agents, officers, directors, and employees.

 

    

     

    
 

18. The parties acknowledge and agree that
the terms and conditions of this Agreement shall remain confidential and shall not be disclosed to any person or firm except as
may be required by law, provided, however, that either party may disclose the terms of this Agreement: (1) to any reinsurer(s)
which may have an interest in the aforementioned matters; (2) in response to any valid subpoena, discovery demand, or court order,
issued in an action pending in a court of competent jurisdiction, which may hereafter be served by a third party upon Chubb Insurers
or any of the Chubb Affiliates, or WTG, and which requires the disclosure of this Agreement under penalty of sanctions for non-compliance
therewith; or (3) with the prior written consent of the other party. In the event either party to this Agreement or a Chubb Affiliate
may be served with a valid subpoena, discovery demand or court order, the entity served shall immediately notify the parties to
this Agreement, which shall be given the opportunity to intervene or to otherwise set forth opposition prior to the disclosure
of this Agreement. Notwithstanding anything to the contrary, the parties acknowledge and agree that WTG shall be permitted to make
such public filings and/or disclosures concerning and/or including this Agreement as are required by federal and state securities
laws, including without limitation a Form 8K filing.

 

19. All notices or other communications which
either party to this Agreement or a Chubb Affiliate desires or is required to give shall be given in writing and shall be deemed
to have been given if hand-delivered, sent by telecopier or mailed by depositing in the United States mail, prepaid to the parties
at the addresses noted below or such other address as a party may designate in writing from time to time:

 

Chubb Insurers Company: 

 

Ms. Celeste Pisano

Brandywine Holdings Group of Insurance and
Reinsurance Companies

510 Walnut Street – WB11E

Philadelphia, PA 19106

Email: Celeste.Pisano@brandywineholdings.com

 

with copy to:

 

Lawrence A. Serlin, Esq.

Siegal & Park

533 Fellowship Road

Mount Laurel, NJ 08054

Email: 1awrence.serlin@mclolaw.com

 

    

     

    
 

WTG Inc.: 

 

Paul Genova, CEO (with a copy to Joanne Calandra,
Director of Human Resources)

c/o Wireless Telecom Group

25 Eastmans Road

Parsippany, NJ 07054

Email: pgenova@wtcom.com

 

With a copy to:

 

Wanda Chin Monahan, Esq.

Law Offices of Wanda Chin Monahan, LLC

50 Cardinal Drive

Suite 102

Westfield, NJ 07090

Email: wmonahan@monahanlawnj.com

 

 

20. The parties to this Agreement hereby agree
that this Agreement may be executed in counterparts, and that all such counterparts shall constitute a single binding instrument,
notwithstanding that all signatories are not signatories to the original or the same counterpart.

 

    

     

    
 

IN WITNESS WHEREOF, the parties have executed
this Settlement Agreement and Release on the dates shown below:

 

 

BOONTON ELECTRONICS CORP., WTT
ACQUISITION CORP. AND WIRELESS TELECOM GROUP, INC. 

 

 

 

Dated: December 16, 2016

 

 

 

By: /s/ Paul Genova                                   

Name: Paul Genova

Title: Chief Operating
Officer and President

 

 

 

 

 

 

CENTURY INDEMNITY COMPANY AND
FEDERAL INSURANCE COMPANY 

 

 

 

Dated: December 16, 2016

 

 

 

 

By: /s/ Celeste R.
Pisano                                   

Name: Celeste R. Pisano

Title: Direct Claims Handler

 

    

     

    
 

SCHEDULE A

 

	Policy Period

	Insurer/Policy Number

	 	 
	04/10/75-04/10/78

	INA/Century #AGP137888

	04/10/78-04/10/79

	INA/Century #AGP432136

	04/10/79-04/10/80

	INA/Century #AGPD0244028

	04/10/80-04/10/81

	INA/Century #AGPD0320618

	04/10/84-04/10/85

	Federal #3524-62-47

	 	 

 

 

    

     

    
 

SCHEDULE B

 

CHUBB COMPANIES

 

ACE American Insurance Company (formerly known
as CIGNA Insurance Company, formerly known as INA Underwriters Insurance Company, formerly known as Allied Insurance Company, formerly
known as Allied Compensation Insurance Company) in its own capacity and in its capacity as successor by merger to (1) ACE Insurance
Company of Texas; (2) ACE American Insurance Company of Texas; (3) ACE Employers Insurance Company; (4) ACE Insurance Company of
Ohio; and (5) ACE Insurance Company of Illinois

 

ACE American Lloyds Insurance Company (formerly
known as CIGNA Lloyds Insurance Company, formerly known as American Lloyds Insurance Company)

 

ACE Employers Insurance Company (formerly known
as CIGNA Employers Insurance Company, formerly known as INA Employers Insurance Company, formerly known as INA Farmers Insurance
Company)

 

ACE European Group Limited, as successor to
ACE Insurance S.A. – N.V., as successor to CIGNA Insurance Company of Europe S.A. – N.V., as successor to Insurance
Company of North America

 

ACE Fire Underwriters Insurance Company (formerly
known as CIGNA Fire Underwriters Insurance Company, formerly known as Aetna Fire Underwriters Insurance Company)

 

ACE Indemnity Insurance Company (formerly known
as CIGNA Indemnity Insurance Company, formerly known as Alaska Pacific Assurance Company, formerly known as North State Insurance
Company)

 

ACE Insurance Company of Illinois (formerly
known as CIGNA Insurance Company of Illinois, formerly known as INA Insurance Company of Illinois)

 

ACE Insurance Company of Ohio (formerly known
as CIGNA Insurance Company of Ohio, formerly known as INA Insurance Company of Ohio, formerly known as Aetna Insurance Company
of Ohio)

 

ACE Insurance Company of Puerto Rico (formerly
known as CIGNA Insurance Company of Puerto Rico, formerly known as Aetna Insurance Company of Puerto Rico)

 

ACE Insurance Company of Texas (formerly known
as CIGNA Insurance Company of Texas, formerly known as INA of Texas, formerly known as Aetna Insurance Company of Texas)

 

ACE Insurance Company of the Midwest (formerly
known as CIGNA Insurance Company of the Midwest, formerly known as Aetna Insurance Company of the Midwest)

 

    

     

    
 

ACE Property & Casualty Insurance Company
(formerly known as CIGNA Property & Casualty Insurance Company, formerly known as Aetna Insurance Company)

 

Allied Insurance Company (formerly known as
California Food Industry Insurance Company)

 

American Insurance Company, Fireman’s
Fund Insurance Company, Hartford Fire Insurance Company, Home Insurance Company, St. Paul Fire and Marine Insurance Company, St.
Paul Mercury Insurance Company, and their affiliates, but only to the extent that AFIA (f/k/a American Foreign Insurance Association),
an unincorporated association, issued policies on their behalf, and not to the extent they issued policies on their own behalf
or to any other extent

 

Atlantic Employers Insurance Company

 

Bankers Standard Fire and Marine Company (formerly
known as Commercial Standard Fire and Marine Company)

 

Bankers Standard Insurance Company (formerly
known as All Risk Insurance Company)

 

Brandywine Holdings Corporation

 

Central National Insurance Company of Omaha
(only to the extent policies issued by Cravens, Dargan & Company, Pacific Coast, and its subsidiaries)

 

Century Indemnity Company in its own capacity
and in its capacity as: (1) successor to CIGNA Specialty Insurance Company (formerly known as California Union Insurance Company);
(2) successor to CCI Insurance Company, as successor to Insurance Company of North America; and (3) successor to CCI Insurance
Company, as successor to Insurance Company of North America, as successor to Indemnity Insurance Company of North America

 

Chubb Custom Insurance Company

 

Chubb Indemnity Insurance Company

 

Chubb Insurance Company of New Jersey

 

Chubb Lloyds Insurance Company of Texas

 

Chubb National Insurance Company

 

Chubb & Son

 

Eagle Star Insurance Company (only to the extent
policies issued by Cravens, Dargan & Company, Pacific Coast, and its subsidiaries)

 

 

    

     

    
 

Executive Risk Indemnity Inc.

 

Executive Risk Specialty Insurance Company

 

Federal Insurance Company

 

Great Northern Insurance Company

 

Highlands Insurance Company (only to the extent
policies issued by Cravens, Dargan & Company, Pacific Coast, and its subsidiaries)

 

Horace Mann Insurance Company

 

Illinois Union Insurance Company (formerly
known as GATX Insurance Company)

 

Imperial Casualty Company (only to the extent
policies were issued by GATX Underwriters, Inc.)

 

INA Surplus Insurance Company (formerly known
as Delaware Reinsurance Company)

 

Indemnity Insurance Company of North America,
in its own capacity and as successor in interest to INA Insurance Company, Connecticut General Fire & Casualty Insurance Company,
Indemnity Insurance Company of North America (New York)

Industrial Underwriters Insurance Company

 

Insurance Company of North America (UK) Limited

 

Insurance Company of North America (formerly
known as The President and Directors of the Insurance Company of North America)

 

Motor Vehicle Casualty Company (only to the
extent policies issued by Cravens, Dargan & Company, Pacific Coast, and its subsidiaries)

 

Northwestern Pacific Indemnity Company

 

Pacific Employers Insurance Company

 

Pacific Indemnity Company

 

Sea Insurance Company

 

Service Fire Insurance Company (only to the
extent policies issued by Cravens, Dargan & Company, Pacific Coast, and its subsidiaries)

 

    

     

    
 

Sun Insurance Company

 

Texas Pacific Indemnity Company

 

TIG Insurance Company, formerly known as International
Insurance Company, but only to the extent policies were assumed by Westchester Fire Insurance Company or Westchester Surplus Lines
Insurance Company

 

U.S. Fire Insurance Company, North River Insurance
Company, International Insurance Company, International Surplus Lines Insurance Company, Mount Airy Insurance Company, Viking Insurance
Company, Industrial Indemnity Insurance Company, Industrial Indemnity of Alaska Insurance Company, and Industrial Underwriters
Insurance Company of Dallas, but only to the extent policies were novated to or assumed by one of the other companies listed on
this Exhibit

 

Underwriters Insurance Company of Dallas

 

Vigilant Insurance Company

 

Westchester Fire Insurance Company (including
all policies issued by or novated to Westchester Fire Insurance Company, or under which Westchester Fire Insurance Company has
assumed liability)

 

Westchester Surplus Lines Insurance Company
(formerly known as Industrial Insurance Company of Hawaii, Ltd.)Exhibit 4.1

 

 

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.

 

Warrant No. []

 

AUDIOEYE, INC.

COMMON STOCK WARRANT

 

This
Common Stock Warrant (this “Warrant”) is issued as of December [__], 2016, by AudioEye, Inc., a Delaware
corporation (the “Company”), to [_______] (the “Holder”) in connection with
that certain Common Stock and Warrant Purchase Agreement, dated as of December 19, 2016, by and between the Company and the other
parties thereto  (as the same may from time to time be amended, modified, extended, renewed
or restated, the “Purchase Agreement”). Capitalized terms used and not otherwise defined herein shall
have the meanings assigned to such terms in the Purchase Agreement. 

 

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 [______] 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 $0.25 per Warrant Share (as adjusted
for splits and the like, the “Exercise Price”). 

 

2.                 
Exercise Period. This Warrant is exercisable as to the Warrant Shares covered
hereby during the period commencing on the date hereof and continuing until 5:00 p.m. Arizona Time on the fifth (5th) anniversary
hereof (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 Prices 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 Commission continues
to take the position that such treatment is proper at the time of such exercise).

 

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 SHAREHOLDER’S COUNSEL, IN A FORM ACCEPTABLE TO THE COMPANY, THAT NO VIOLATION OF SUCH REGISTRATION
PROVISIONS WOULD RESULT FROM ANY PROPOSED TRANSFER OR ASSIGNMENT.”

 

    -2-

     

    

 

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.

 

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.

 

    -3-

     

    

 

(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, he 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 the preceding paragraph), (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 such holder upon exercise of this Warrant a portion of the Distributed
Property to satisfy the distribution to which such 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)               
Dilution.

 

(i)                
In the event that the Company shall, at any time or from time to time, offer shares of Common Stock (other than (i)
Common Stock or options to purchase Common Stock issued, sold or granted pursuant to the Company’s equity incentive plans;
or (ii) securities of the Company issued pursuant to the exercise of any convertible or exercisable securities outstanding as of
the date of this Warrant (the securities set forth in clauses (i) and (ii), collectively, the “Excluded Securities”))
in a non-public offering (or in a public offering in which more than 50% of such public offering is subscribed to by affiliates
of the Company) in which the Common Stock is sold at a price less than the Exercise Price, then the Exercise Price shall be reduced
(but not increased) to an amount determined by multiplying the Exercise Price by a fraction (x) the numerator of which shall be
(A) the number of shares of Common Stock deemed outstanding (as determined in the following sentence) immediately prior to such
issue or sale, plus (B) the number of shares of Common Stock which the Aggregate Consideration (as defined below) received or deemed
received by the Company for the total number of additional shares of Common Stock so issued would purchase at such then-existing
Exercise Price, and (y) the denominator of which shall be the number of shares of Common Stock deemed outstanding (as determined
in the following sentence) immediately prior to such issue or sale plus the total number of additional shares of Common Stock so
issued.  For the purposes of the preceding sentence, the number of shares of Common Stock deemed to be outstanding as of a
given date shall be the sum of (I) the number of shares of Common Stock outstanding, (II) the number of Warrant Shares obtainable
upon exercise of the Warrant if the Exercise Date is the day immediately preceding the given date, and (III) the number of shares
of Common Stock which are issuable upon the exercise or conversion of all other rights, options and Warrant Shares outstanding
on the day immediately preceding the given date.

 

    -4-

     

    

 

(ii)              
An adjustment made pursuant to Section 9(c)(i) shall be made on the next Business Day following the date on
which any such issuance or sale is made and shall be effective retroactively to the close of business on the date of such issuance
or sale.

 

(iii)            
For the purpose of making any adjustment required under Section 9(c)(i), the aggregate consideration received
by the Company for any issue or sale of securities (the “Aggregate Consideration”) shall be computed
as: (A) to the extent it consists of cash, the gross amount of cash received by the Company before deduction of any underwriting
or similar commissions, compensation or concessions paid or allowed by the Company in connection with such issue or sale and without
deduction of any expenses payable by the Company, (B) to the extent it consists of property other than cash, the fair value of
that property as determined in good faith by the Board of Directors of the Company; provided, however, that to the extent the Board
of Directors determines the fair value of property other than cash is equal to or exceeds $1,000,000, then the Company shall have
such property appraised by a qualified independent appraiser, whose valuation shall conclusively determine the value, and (C) if
shares of Common Stock, Convertible Securities (as defined below) or rights or options to purchase either shares of Common Stock
or Convertible Securities are issued or sold together with other stock or securities or other assets of the Company for a consideration
which covers both, the portion of the consideration so received that may be reasonably determined in good faith by the Board of
Directors to be allocable to such shares of Common Stock, Convertible Securities or rights or options.

 

(iv)            
For the purpose of the adjustment required under Section 9(c)(i), if the Company issues or sells (x) preferred
shares or other stock, options, warrants, purchase rights or other securities convertible into, shares of Common Stock other than
Excluded Shares (such convertible stock or securities being herein referred to as “Convertible Securities”)
or (y) rights or options for the purchase of shares of Common Stock or Convertible Securities (other than Excluded Shares) and
if the Effective Price (defined below) of such shares of Common Stock is less than the Exercise Price, the Company shall be deemed
to have issued at the time of the issuance of such rights or options or Convertible Securities the maximum number of shares of
Common Stock issuable upon exercise or conversion thereof and to have received as consideration for the issuance of such shares
an amount equal to the total amount of the consideration, if any, received by the Company for the issuance of such rights or options
or Convertible Securities plus: (A) in the case of such rights or options, the minimum amounts of consideration, if any, payable
to the Company upon the exercise of such rights or options; and (B) in the case of Convertible Securities, the minimum amounts
of consideration, if any, payable to the Company upon the conversion thereof (other than by cancellation of liabilities or obligations
evidenced by such Convertible Securities); provided that if the minimum amounts of such consideration cannot be ascertained, but
are a function of anti-dilution or similar protective clauses, the Company shall be deemed to have received the minimum amounts
of consideration without reference to such clauses. The “Effective Price” of shares of Common Stock shall
mean the quotient determined by dividing the total number of shares of Common Stock issued or sold, or deemed to have been issued
or sold by the Company under Section 9(a)(i), into the Aggregate Consideration received, or deemed to have been received
by the Company for such issue under Section 9(a)(i), for such shares of Common Stock. In the event that the number of shares
of Common Stock or the Effective Price cannot be ascertained at the time of issuance, such shares of Common Stock shall be deemed
issued immediately upon the occurrence of the first event that makes such number of shares or the Effective Price, as applicable,
ascertainable.

 

    -5-

     

    

 

(v)              
If the minimum amount of consideration payable to the Company upon the exercise or conversion of rights, options
or Convertible Securities is reduced over time or on the occurrence or non-occurrence of specified events other than by reason
of anti-dilution adjustments, the Effective Price shall be recalculated using the figure to which such minimum amount of consideration
is reduced; provided further, that if the minimum amount of consideration payable to the Company upon the exercise or conversion
of such rights, options or Convertible Securities is subsequently increased, the Effective Price shall be again recalculated using
the increased minimum amount of consideration payable to the Company upon the exercise or conversion of such rights, options or
Convertible Securities.

 

(vi)            
If any option or warrant expires or is cancelled without having been exercised, then, for the purposes of the adjustments
set forth above, such option or warrant shall have been deemed not to have been issued and the Exercise Price shall be adjusted
accordingly.

 

(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 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.

 

    -6-

     

    

 

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, except as provided herein or as otherwise agreed. Upon exercise of this Warrant, the Holder
shall become a stockholder of the Company in accordance with the Company’s certificate of incorporation, to the extent such
Holder is not already a stockholder of the Company.

 

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.

 

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 Purchase 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 Holders of outstanding
Warrants exercisable for at least a majority of the aggregate number of Warrant Shares issued pursuant to the Purchase Agreement.
No waiver by the Company or the Holders of outstanding Warrants exercisable for at least a majority of such Warrant Shares, waiving
on behalf of all Holders, or the Holder, waiving on its own behalf, of any of the provisions hereof shall be effective unless explicitly
set forth in writing and signed by such parties so waiving. The Holder hereby acknowledges that any provision hereof may be amended,
modified, supplemented or waived on its behalf by the Holders of outstanding Warrants exercisable for at least a majority of such
Warrant Shares. 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.

 

    -7-

     

    

 

(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.

 

(i)                
Execution and Counterparts. This Warrant may be executed in any number of 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.

 

    -8-

     

    

 

(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.

 

 

 

[Remainder of page
intentionally left blank]

 

  

    -9-

     

    

 

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

 

	 	COMPANY:
	 	AUDIOEYE, INC.
	 	 
	 	 
	 	By:  	
	 	 	Name:
	 	 	Title:

 

 

 

Signature page to

AudioEye, Inc.

Common Warrant

     

     

    

 

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

 

	 	HOLDER:
	 	 
	 	 
	 	If Entity:
	 	 	 
	 	Entity Name:  	 
	 	 	 
	 	 	 
	 	By:  	 
	 	 	 
	 	Name:  	 
	 	 	 
	 	Title:  	 
	 	 	 
	 	 	 
	 	If Individual:
	 	 	 
	 	Name: 	 
	 	 	 
	 	Signature:  	 

 

 

 

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 December ___, 2016 (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:

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