Document:

Exhibit 10.8

 

PREFERRED STOCK CONVERSION AGREEMENT

 

This Preferred Stock Conversion
(this “Agreement”), dated as of this ___ day of November 2015 (the “Execution Date”), by
and among Drone Aviation Holding Corp.(the “Company”) and the holder of the Company’s Preferred Stock
(as defined below) (the “Holder”).

 

RECITALS

 

WHEREAS, on June 2, 2015,
the Company sold to the Holder pursuant to a subscription agreement (the “Subscription Agreement”) shares of
the Company’s newly designated Series G Convertible Preferred Stock (the “Preferred Stock”) with such
rights and preferences as set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series G Preferred
Stock (the “Certificate of Designation” and collectively with the Subscription Agreement and any related transaction
documents, the “Transaction Documents”));

 

WHEREAS, the Holder currently
holds the number of shares of Preferred Stock as set forth on Appendix A, attached hereto;

 

WHEREAS, the Company is
contemplating a financing transaction (the “Proposed Financing Transaction”) whereby the Company will sell shares
of its common stock, par value $0.0001 per share (the “Common Stock”) to certain accredited investors placed
by Dougherty & Company, LLC (“Dougherty”);

 

WHEREAS, as a condition
to the consummation of the Proposed Financing Transaction, the Company and Dougherty desire to restructure the Company’s
capitalization structure, as set forth herein;

 

WHEREAS, immediately after
the closing of the Proposed Financing Transaction (the “Conversion Time”), subject to the terms hereof, in
consideration for the execution and delivery of this Agreement, all shares of Preferred Stock held by the Holder shall be converted
into shares of Common Stock, based on the conversion price or ratio set forth in the Certificate of Designation then in effect,
without further action by the Holder (the “Preferred Stock Conversion”);

 

WHEREAS, pursuant to Section
8(b) of the Certificate of Designation and Section 2(d) of the Subscription Agreement, the Company is prohibited from issuing
any Common Stock or securities convertible into exercisable for shares of Common Stock at a price per share (or conversion or
exercise price per share) which is less than the per share price of the Preferred Stock sold pursuant to the Transactions Documents
(such issuance, a “Lower Priced Issuance”);

 

WHEREAS, the Proposed Financing
Transaction would qualify as a Lower Priced Issuance and the Company desires to obtain the consent therefore from the Holder in
consideration for the issuance of such additional securities of the Company such that the Holder would hold such number of shares
of Common Stock (on a post-conversion basis) had the Holder purchased the Preferred Stock for a per share price equal to the per
share price in the Proposed Financing (the “Proposed Financing Issuance”); and

 

WHEREAS, the Company and certain
investors (including the Holder) (the “Buyers”) previously acquired the shares of Preferred Stock and concurrently
herewith, Buyers (other than the Holder) (the “Other Buyers”) are executing preferred stock conversion agreements
similar to this Agreement (the “Other Agreements and, together with this Agreement, the “Agreements”).

 

     

     

    

 

NOW, THEREFORE, in consideration
of the foregoing, of the mutual agreements hereinafter set forth, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Holder hereby agree follows:

 

AGREEMENT

 

1.      
Recitals. The parties hereto agree that the Recitals set forth above are true and correct and are incorporated into this
Agreement by this reference.

 

2.     
Definitions. Unless otherwise defined herein, all terms used herein shall have the definitions specified in the Certificate
of Designation and the Subscription Agreement.

 

3.     
Holder Representations. The Holder hereby confirms and acknowledges that the aggregate number of shares of Preferred Stock
currently held by the Holder are set forth on Schedule A attached hereto. The Holder owns the Preferred Stock free and clear
of any and all liens, claims, encumbrances, preemptive rights, right of first refusal and adverse interests of any kind.
Holder has the requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby
and otherwise to carry out Holder’s obligations hereunder. No consent, approval or agreement of any individual or entity
is required to be obtained by the Holder in connection with the execution and performance by the Holder of this Agreement or the
execution and performance by the Holder of any agreements, instruments or other obligations entered into in connection with this
Agreement. There is no private or governmental action, suit, proceeding, claim, arbitration or investigation pending before any
agency, court or tribunal, foreign or domestic, or, to the Holder’s knowledge, threatened against the Holder or any of Holder’s
properties. There is no judgment, decree or order against the Holder that could prevent, enjoin, alter or delay any of the transactions
contemplated by this Agreement. There are no material claims, actions, suits, proceedings, inquiries, labor disputes or investigations
pending or, to the Holder’s knowledge, threatened against the Holder or any of its assets, at law or in equity or by or before
any governmental entity or in arbitration or mediation. No bankruptcy, receivership or debtor relief proceedings are pending or,
to the Holder’s knowledge, threatened against the Holder. The Holder is an “Accredited Investor” as defined in
Rule 501(a) under the Securities Act of 1933, as amended.

 

4.     
Automatic Preferred Stock Conversion.

 

(a)   
Favored Nations Provision. The Company and the Holder acknowledge
that the Proposed Financing Transaction would be considered a Lower Priced Issuance that requires the consent of the Holder under
Section 8(b) of the Certificate of Designation and Section 2(d) of the Subscription Agreement. The Holder hereby consents to the
consummation of the Proposed Financing and in consideration therefore, the Company has agreed to issue the Holder such additional
securities such that the Holder would hold such number of shares of Common Stock (on a post-conversion basis) had the Holder paid
a per share price for the Preferred Stock equal to the per share price in the Proposed Financing Transaction. Notwithstanding
the foregoing, the Holder hereby waives any obligation of the Company to issue the Holder additional shares of Preferred Stock
(or to amend the Certificate of Designation in connection therewith) and the Company shall, at the Conversion Time, issue such
number of shares of Common Stock to the Holder that the Holder would have received had the Company consummated the Proposed Financing
Issuance in the form of Preferred Stock (such shares of Common Stock which are set forth on Annex A hereto, the “Adjustment
Shares”), subject to the provisions of Section 4(b) and 4(e) herein. 

 

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(b)  
Preferred Stock Conversion. At the Conversion Time, the Preferred Stock Conversion shall automatically take effect without
any action on the part of the Holder such that the Holder shall receive that number of shares of Common Stock (the “Conversion
Shares”) as stipulated therein and as stated on Schedule A attached hereto along with the Adjustment Shares and
the Holder acknowledges, accepts and authorizes the foregoing Preferred Stock Conversion. To the extent that full conversion of
all shares of Preferred Stock held by the Holder (including the Adjustment Shares) would result in the Holder exceeding the Beneficial
Ownership Limitation, then the Holder shall not be entitled to receive such number of Conversion Shares to such extent (or beneficial
ownership of such Conversion Shares as a result of such Preferred Stock Conversion to such extent) and such portion of such Preferred
Stock Conversion (or the issuance of such Adjustment Shares) to such extent shall be held in abeyance for the Holder until such
time, if ever, as its right thereto would not result in such Holder exceeding the Beneficial Ownership Limitation (as defined and
described below).

 

(c)   
Cancellation of the Preferred Stock. The Holder unconditionally acknowledges, affirms and agrees that simultaneously with
the Preferred Stock Conversion and delivery to the Holder of the Conversion Shares and the Adjustment Shares, the Preferred Stock
shall be deemed canceled, null and void, and the Company shall have no further obligation to the Holder with respect to the Preferred
Stock or the Certificate of Designation (except, with respect to the Certificate of Designation only to the extent such full Preferred
Stock Conversion or issuance of the Adjustment Shares is not limited pursuant to Sections 4(a) and 4(c) herein).

 

(d)   
Prospective Waiver of Favored Nations Provisions. At the Conversion
Time, other than with respect to the Proposed Financing Issuance, the Holder hereby irrevocably waives any obligation the Company
would have to obtain the consent of the Holder for a Lower Priced Issuance under Section 8(b) of the Certificate of Designation
and Section 2(d) of the Subscription Agreement with respect to any Preferred Stock not converted at the Conversion Time (or Adjustment
Shares not received) as a result of the restrictions set forth in Section 4(b) and 4(e) herein.

 

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(e)   
Beneficial Ownership Limitation. The Company shall not effect conversion of any Preferred Stock or issue any Adjustment
Shares, and the Holder shall not have the right to exercise nor enforce any such right, pursuant this Section 4, to the extent
that after giving effect to the application of such rights, the Holder (together with the Holder’s Affiliates, and any other
persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of
the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common
Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon application
this Section 4 with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which
would be issuable upon exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company
subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder
or any of its Affiliates.  Except as set forth in the preceding sentence, for purposes of this Section 4, beneficial ownership
shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)
and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing
to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible
for any schedules required to be filed in accordance therewith. In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 4, in determining the number of outstanding shares of Common Stock, the Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with
the Securities and Exchange Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more
recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. 
Upon the written or oral request of the Holder, the Company shall within three trading days confirm orally and in writing to the
Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock
shall be determined after giving effect to the conversion or exercise of securities of the Company (subject to any beneficial ownership
limitations contained therein, by the Holder or its Affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99%, (unless the Holder elects on
its signature page hereto a different amount as its own Beneficial Ownership Limitation) of the number of shares of the Common
Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon application of this Section
4 which would not exceed at such time the Beneficial Ownership Limitation. The Holder, upon not less than 61 days’ prior
notice to the Company, may increase the Beneficial Ownership Limitation provisions of this Section 4 (for the avoidance of doubt,
the Holder may on its signature page hereto to waive such Beneficial Ownership Limitation in its entirety (which such waiver shall
be effective 61 days’ after the Closing Date) or set a different amount as its own Beneficial Ownership Limitation) of the
number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon
application of this Section 4 which would not exceed at such time the Beneficial Ownership Limitation and the provisions of this
Section 4 shall continue to apply. Any such decrease will be effective immediately and any such increase will not be effective
until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed
and implemented in a manner otherwise than in strict conformity with the terms of this Section 4 to correct this paragraph (or
any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or
to make changes or supplements necessary or desirable to properly give effect to such limitation. In the event the limitations
in this Section 4(e) would prevent the application of the Holder’s rights under Sections 4(a), 4(b) or 4(c), then such Holder
may exercise all such rights and comply with all obligations applicable thereto except that the delivery of Common Stock will be
deferred until such time as such Holder provides notice to the Company that such Holder may receive or beneficially own such Common
Stock which exceeds the Beneficial Ownership Limitation applicable to such Holder without exceeding such then applicable Beneficial
Ownership Limitation. “Affiliate” means any person that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a person, as such terms are used in and construed under Rule 405 under
the Securities Act of 1933, as amended.

 

5.      [omitted].

 

6.      Independent Nature of Holder's Obligations and Rights. The obligations of the Holder
under this Agreement are several and not joint with the obligations of any Other Buyers, and the Holder shall not be
responsible in any way for the performance of the obligations of any Other Buyer under any Other Agreement. Nothing contained
herein, any Other Agreement or the Transaction Documents, and no action taken by the Holder pursuant hereto, shall be deemed
to constitute the Holder and Other Buyers as a partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Holder and Other Buyers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by this Agreement any Other Agreement or the Transaction Documents, and the
Company acknowledges that the Holder and the Other Buyers are not acting in concert or as a group with respect to such
obligations or the transactions contemplated by this Agreement, any Other Agreement or the Transaction Documents. The Company
and the Holder confirm that the Holder has independently participated in the negotiation of the transactions contemplated
hereby with the advice of its own counsel and advisors. The Holder shall be entitled to independently protect and enforce its
rights, including, without limitation, the rights arising out of this Agreement, any Other Agreement or the
Transaction Documents, and it shall not be necessary for any Other Buyer to be joined as an additional party in any
proceeding for such purpose.

 

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7.     
No Third Party Beneficiaries. Except as expressly set forth herein, this Agreement is intended for the benefit of the parties
hereto 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.

 

8.      Non-Public
Information. The Company acknowledges and agrees that transactions and agreements contemplated hereby do not constitute material
modifications to the Transaction Documents or the Certificate of Designation and consequently, as of the date hereof, the Company
shall have disclosed all material, non-public information (if any) that it (including any of its subsidiaries or any of their
respective officers, directors, employees or agents) provided to the Holder.

 

9.     
Most Favored Nation. The Company hereby represents and warrants as of the date hereof and covenants and agrees from and
after the date hereof that none of the terms offered to any person with respect to the transactions contemplated hereby (the conversion
of the Company’s currently outstanding preferred stock), is or will be more favorable to such person than those of the Holder
under this Agreement. The provisions of this Section 9 shall apply similarly and equally to each Other Agreement.

 

10.    Governing
Law. This Agreement shall be governed and construed in accordance with the laws of the State of New York, regardless of the
laws that might otherwise govern under applicable principles of conflicts of law thereof. The undersigned agrees, on its behalf
and on behalf of its representatives, to submit to the jurisdiction of any court of competent jurisdiction located in the State
of New York, County of New York, to resolve any dispute relating to this agreement and waive any right to move to dismiss or transfer
any such action brought in any such court on the basis of any objection to personal jurisdiction or venue.

 

11.    Counterparts.
This Agreement may be executed by the Company and the Holder in any number of counterparts, each of which will be deemed an original,
but all of which together will constitute one and the same instrument.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the
Company and the Holder have executed this Agreement as of the Execution Date.

 

	 	COMPANY:
	 	 
	 	DRONE AVIATION HOLDING CORP.
	 	 
	 	By:	 
		Name:	 
	 	Title:	 

 

*           *            *           *           *

 

HOLDER:

 

	 	 
	(Entity Name – if applicable)	 
	 	 	 
	By:	 	 
	Name:	 	 
	Title:	 	 

 

Beneficial Ownership Limitation (if not 4.99%): ______%Exhibit 10.9

 

EXCHANGE
AGREEMENT

 

THIS
EXCHANGE AGREEMENT (the “Agreement”), dated as of November [ ], 2015, is made by and between Drone Aviation
Holding Corporation, a Nevada corporation (“Company”), and the holder of the Company’s Series B-1 Preferred
Stock signatory hereto (“Holder”).

 

WHEREAS,
on April 17, 2014, the Company entered in an exchange agreement (the “Exchange Agreement”) with the Holder whereby
the Holder exchanged a portion of a convertible promissory note previously issued by the Company on September 30, 2012 (the “Note”)
and acquired by the Holder on April 16, 2014 (the “Note Purchase Date”) for shares of the Company’s newly designated
Series D-1 Convertible Preferred Stock (the “Series D-1 Shares”);

 

WHEREAS,
on April 30, 2014, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with its wholly
owned subsidiary for the sole purpose of changing its state of incorporation from Oklahoma to Nevada (the “Reincorporation”);

 

WHEREAS,
in connection with the Reincorporation and in exchange for the Series D-1 Shares, the Company issued the Holder shares of the
Company’s newly designated Series B-1 Preferred Stock (the “Preferred Stock”), with such rights and preferences
as set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series B-1 Preferred Stock (the “Certificate
of Designation” and collectively with the Exchange Agreement, the Merger Agreement and any related transaction documents,
the “Transaction Documents”) and the Holder currently holds 68,731 shares of Preferred Stock (the “Exchange
Securities”)

 

WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 3(a)(9) of the Securities Act of 1933,
as amended (the “Securities Act”), the Company desires to exchange with the Holder, and the Holder desires to exchange
with the Company, the Exchange Securities for shares of the Company’s common stock, par value $0.0001 per share (the “Common
Stock”);

 

NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration
the receipt and adequacy of which are hereby acknowledged, the Company and Holder agree as follows:

 

1.           Terms
of the Exchange. The Company and Holder agree that the Holder will exchange the Exchange Securities and will relinquish any
and all other rights he may have under the Exchange Securities and the relate Transaction Documents in exchange for 55,000 shares
of Common Stock (the “Shares” or the “Securities”). Additionally, the Holder hereby waives any and all
unpaid dividends accrued, if any, on the Exchange Securities, including, without limitation, the obligation of the Company to
pay any payment upon the occurrence of any Fundamental Transaction (as such terms are defined in the Certificate of Designation)
pursuant to Section 3 of the Certificate of Designation, as of the date of issuance and releases the Company from any payment
thereof or obligation in connection therewith.

 

2.            Closing.
Upon satisfaction of the conditions set forth herein, a closing (the “Closing”) shall occur at the principal offices
of the Company, or such other location as the parties shall mutually agree. At Closing, Holder shall deliver certificates (or
book entry statements) representing the Exchange Securities to the Company and the Company shall deliver to such Holder a certificate
(or book entry statement) evidencing the Shares. Upon Closing, any and all obligations of the Company to Holder under the Exchange
Securities and the Transaction Documents shall be fully satisfied, the certificates evidencing the Exchange Securities shall be
cancelled and Holder will have no remaining rights, powers, privileges, remedies or interests under the Exchange Securities (including,
without limitation, Section 3 of the Certificate of Designation) or the Transaction Documents.

 

     

     

    

 

3.            Further
Assurances

 

Each
party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

4.            Representations
and Warranties of the Holder. The Holder represents and warrants as of the date hereof and as of the Closing to the Company
as follows:

 

a.           Authorization; Enforcement. The Holder has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of this Agreement by the Holder and the consummation by it of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action on the part of the Holder and no further action is required by the Holder. This Agreement
has been (or upon delivery will have been) duly executed by the Holder and, when delivered in accordance with the terms hereof,
will constitute the valid and binding obligation of the Holder enforceable against the Holder in accordance with its terms, except:
(i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions
may be limited by applicable law.

 

b.           Tax Advisors. The Holder has reviewed with its own tax advisors the U.S. federal, state, local and foreign tax consequences
of this investment and the transactions contemplated by this Agreement. With respect to such matters, the Holder relies solely
on such advisors and not on any statements or representations of the Company or any of its agents, written or oral. The Holder
understands that it (and not the Company) shall be responsible for its own tax liability that may arise as a result of this investment
or the transactions contemplated by this Agreement.

 

c.
           Information Regarding Holder. Holder is an “accredited investor”, as such term is defined in Rule 501 of
Regulation D promulgated by the United States Securities and Exchange Commission (the “Commission”) under the Securities
Act, is experienced in investments and business matters, has made investments of a speculative nature and has purchased securities
of companies in private placements in the past and, with its representatives, has such knowledge and experience in financial,
tax and other business matters as to enable the Holder to utilize the information made available by the Company to evaluate the
merits and risks of and to make an informed investment decision with respect to the proposed purchase, which represents a speculative
investment. Holder has the authority and is duly and legally qualified to purchase and own the Securities. Holder is able to bear
the risk of such investment for an indefinite period and to afford a complete loss thereof.

 

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d.            Legend.
The Holder understands that the Securities have been issued pursuant to an exemption from registration or qualification under
the Securities Act and applicable state securities laws, and except as set forth below, the Securities shall bear any legend as
required by the “blue sky” laws of any state and a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of such stock certificates):

 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL
TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.

 

e.           Removal
of Legends. Certificates evidencing Securities shall not be required to contain the legend set forth in Section 4(d)
above or any other legend (other than a “lock-up” legend, if applicable) (i) while a registration statement covering
the resale of such Securities is effective under the Securities Act, (ii) following any sale of such Securities pursuant to Rule
144 (assuming the transferor is not an affiliate of the Company), (iii) if such Securities are eligible to be sold, assigned or
transferred under Rule 144 and the Subscriber is not an affiliate of the Company (provided
that the Holder provides the Company with reasonable assurances that such Securities are eligible for sale, assignment or transfer
under Rule 144 which shall not include an opinion of the Holder’s counsel), (iv) in connection with a sale, assignment or
other transfer (other than under Rule 144), provided that the Holder provides the Company with an opinion of counsel to the Holder,
in a generally acceptable form, to the effect that such sale, assignment or transfer of the Securities may be made without registration
under the applicable requirements of the Securities Act or (v) if such legend is not required under applicable requirements of
the Securities Act (including, without limitation, controlling judicial interpretations and pronouncements issued by the Commission).
If a legend is not required pursuant to the foregoing, the Company shall no later than three (3) business days following the delivery
by the Holder to the Company or the transfer agent (with notice to the Company) of a legended certificate representing such Securities
(endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or
transfer, if applicable), together with any other deliveries from the Holder as may be required above in this Section 4(e),
as directed by the Holder, either: (A) provided that the Company’s transfer agent is participating in the DTC Fast Automated
Securities Transfer Program, credit the aggregate number of shares of Common Stock to which the Holder shall be entitled to the
Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system or (B) if the
Company’s transfer agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via
reputable overnight courier) to the Holder, a certificate representing such Securities that is free from all restrictive and other
legends, registered in the name of the Holder or its designee. The Company shall be responsible for any transfer agent fees or
DTC fees with respect to any issuance of Securities or the removal of any legends with respect to any Securities in accordance
herewith, including, but not limited to, fees for the opinions of counsel rendered to the transfer agent in connection with the
removal of any legends.

 

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f.           Restricted
Securities. The Holder understands that: (i) the Securities have not been and are not being registered under the Securities
Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered
thereunder, (B) the Holder shall have delivered to the Company (if requested by the Company) an opinion of counsel to the Holder,
in a form reasonably acceptable to the Company, to the effect that such Securities to be sold, assigned or transferred may be
sold, assigned or transferred pursuant to an exemption from such registration, or (C) the Holder provides the Company with reasonable
assurance that such Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the Securities
Act (or a successor rule thereto) (collectively, “Rule 144”); (ii) any sale of the Securities made in reliance on
Rule 144 may be made only in accordance with the terms of Rule 144, and further, if Rule 144 is not applicable, any resale of
the Securities under circumstances in which the seller (or the Person through whom the sale is made) may be deemed to be an underwriter
(as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the
rules and regulations of the Commission promulgated thereunder; and (iii) neither the Company nor any other Person is under any
obligation to register the Securities under the Securities Act or any state securities laws or to comply with the terms and conditions
of any exemption thereunder.

 

5.           Representations
and Warranties of the Company. The Company hereby makes the following representations and warranties to the Holder:

 

a.           Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other agreements entered into by the parties hereto in connection with the transactions
contemplated by this Agreement (collectively, the “Exchange Documents”) and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement by the Company and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action
is required by the Company, the Board of Directors of the Company or the Company’s stockholders in connection therewith,
including, without limitation, the issuance of the Shares and no further filing, consent, or authorization is required by the
Company, its Board of Directors or its stockholders. This Agreement has been (or upon delivery will have been) duly executed by
the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’
rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

b.           Organization
and Qualification. Each of the Company and its subsidiaries (the “Subsidiaries”) are entities duly organized and
validly existing and in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power
and authorization to own their properties and to carry on their business as now being conducted and as presently proposed to be
conducted. Each of the Company and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good
standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect.
As used in this Agreement, “Material Adverse Effect” means any material adverse effect on (i) the business, properties,
assets, liabilities, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or
any Subsidiary, individually or taken as a whole, (ii) the transactions contemplated hereby or in any of the other Exchange Documents
or (iii) the authority or ability of the Company to perform any of its obligations under any of the Exchange Documents. Other
than its Subsidiaries, there is no Person (as defined below) in which the Company, directly or indirectly, owns capital stock
or holds an equity or similar interest. “Person” means an individual, a limited liability company, a partnership,
a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any governmental entity or any department
or agency thereof.

 

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c.           No
Conflict. The execution, delivery and performance of the Exchange Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Shares) will not (i) (i)
result in a violation of the Articles of Incorporation (as defined below) or other organizational documents of the Company or
any of its Subsidiaries, any capital stock of the Company or any of its Subsidiaries or Bylaws (as defined below) of the Company
or any of its Subsidiaries, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including foreign, federal and state securities laws and regulations and the rules
and regulations of the OTC Markets (the “Principal Market”) applicable to the Company or any of its Subsidiaries or
by which any property or asset of the Company or any of its Subsidiaries is bound or affected except, in the case of clause (ii)
or (iii) above, to the extent such violations that could not reasonably be expected to have a Material Adverse Effect.

 

d.           No
Consents. Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make
any filing or registration with, any court, governmental agency or any regulatory or self-regulatory agency or any other Person
in order for it to execute, deliver or perform any of its respective obligations under or contemplated by the Exchange Documents,
in each case, in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations
which the Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been obtained or effected on
or prior to the date of this Agreement, and neither the Company nor any of its Subsidiaries is aware of any facts or circumstances
which might prevent the Company or any of its Subsidiaries from obtaining or effecting any of the registration, application or
filings contemplated by the Exchange Documents. The Company is not in violation of the requirements of the Principal Market and
has no knowledge of any facts or circumstances which could reasonably lead to delisting or suspension of the Common Stock in the
foreseeable future.

 

e.           Securities
Law Exemptions. Assuming the accuracy of the representations and warranties of the Holder contained herein, the offer and
issuance by the Company of the Securities is exempt from registration under the Securities Act. The offer and issuance of the
Securities is exempt from registration under the Securities Act pursuant to the exemption provided by Section 3(a)(9) thereof.
The Company covenants and represents to the Holder that neither the Company nor any of its Subsidiaries has received, anticipates
receiving, has any agreement to receive or has been given any promise to receive any consideration from the Holder or any other
Person in connection with the transactions contemplated by the Exchange Documents.

 

f.           Issuance
of Securities. The issuance of the Shares are duly authorized and upon issuance in accordance with the terms of the Exchange
Documents shall be validly issued, fully paid and non-assessable and free from all taxes, liens, charges and other encumbrances
with respect to the issue thereof.

 

g.           Transfer
Taxes. As of the date of this Agreement, all share transfer or other taxes (other than income or similar taxes) which are
required to be paid in connection with the issuance of the Shares to be exchanged with the Holder hereunder will be, or will have
been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.

 

    	 	5	 

     

    

 

h.           Equity
Capitalization. Except as disclosed in the Company’s filings with the Commission: (i) none of the Company’s or
any Subsidiary’s capital stock is subject to preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company or any Subsidiary; (ii) there are no outstanding options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or
exchangeable for, any capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements
by which the Company or any of its Subsidiaries is or may become bound to issue additional capital stock of the Company or any
of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock of the Company or any of its
Subsidiaries; (iii) there are no outstanding debt securities, notes, credit agreements, credit facilities or other agreements,
documents or instruments evidencing indebtedness of the Company or any of its Subsidiaries or by which the Company or any
of its Subsidiaries is or may become bound; (iv) there are no financing statements securing obligations in any amounts filed in
connection with the Company or any of its Subsidiaries; (v) there are no agreements or arrangements under which the Company or
any of its Subsidiaries is obligated to register the sale of any of their securities under the Securities Act; (vi) there are
no outstanding securities or instruments of the Company or any of its Subsidiaries which contain any redemption or similar provisions,
and there are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or
may become bound to redeem a security of the Company or any of its Subsidiaries; (vii) there are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities; (viii) neither the Company
nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or
agreement; and (ix) neither the Company nor any of its Subsidiaries have any liabilities or obligations required to be disclosed
in the in the Company’s filings with the Commission (the “SEC Documents”) which are not so disclosed in the
SEC Documents, other than those incurred in the ordinary course of the Company’s or its Subsidiaries’ respective businesses
and which, individually or in the aggregate, do not or could not have a Material Adverse Effect. The Company has furnished to
the Holder true, correct and complete copies of the Company’s Articles of Incorporation, as amended and as in effect on
the date hereof (the “Articles of Incorporation”), and the Company’s bylaws, as amended and as in effect on
the date hereof (the “Bylaws”), and the terms of all securities convertible into, or exercisable or exchangeable for,
shares of Common Stock and the material rights of the holders thereof in respect thereto that have not been disclosed in the SEC
Documents.

 

(i)           Shell
Company Status. The Company is not and has never been an issuer identified in Rule 144(i)(1) of the Securities Act. The Company
is, and has been for a period of at least 90 days, subject to the reporting requirements of Section 13 or Section 15(d) of the
Exchange Act.

 

6.           Additional
Acknowledgments. The Holder and the Company confirm that the Company has not received any consideration for the transactions
contemplated by this Agreement. Pursuant to Rule 144 promulgated by the Commission pursuant to the Securities Act and the rules
and regulations promulgated thereunder as such Rule 144 may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such Rule 144, the holding period of the Shares tacks back to
April 16, 2014, the Note Purchase Date, the original issue date of the Note. The Company agrees not to take a position contrary
to this paragraph.

 

7.           Release
by the Holder; Termination of Transaction Documents.

 

a.           In
consideration of the foregoing, Holder releases and discharges Company, Company’s officers, directors, principals, control
persons, past and present employees, insurers, successors, and assigns (“Company Parties”) from all actions, cause
of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law,
admiralty or equity, which against Company Parties ever had, now have or hereafter can, shall or may, have for, upon, or by reason
of any matter, cause or thing whatsoever, whether or not known or unknown, arising under the Exchange Securities and/or the Transaction
Documents, including without limitation, the Certificate of Designation and any payments arising from Section 3 therein. It being
understood that this Section shall be limited in all respects to only matters arising under or related to the Exchange Securities
and the Transaction Documents and shall under no circumstances constitute a release, waiver or discharge with respect to the Securities
or any Exchange Documents or limit the Holder from taking action for matters with respect to the Securities, any Exchange Document
or events that may arise in the future.

 

    	 	6	 

     

    

 

b.           As
further consideration of the foregoing, Holder and the Company hereby acknowledge and agree that the Transaction Documents, and
all rights, covenants, agreements and obligations contained therein (including Section 3 of the Certificate of Designation), is
hereby terminated and of no further force or effect. The Holder and the Company hereby agree and confirm that the Holder’s
agreement to terminate the Company’s obligations under the Transaction Documents shall constitute an agreement to terminate
Section 3 of the Certificate of Designation.

 

		8.	Miscellaneous.

 

(a)           Lock-Up.
(i) During the 180 day period following the date of the Closing (the “Lock-Up Period”), the Holder shall not (i) sell,
transfer, assign, offer, pledge, contract to sell, transfer or assign, sell any option or contract to purchase, purchase any option
or contract to sell, transfer or assign, grant any option, right or warrant to purchase, or otherwise transfer, assign or dispose
of, directly or indirectly, any of the Shares (collectively, the “Lock-Up Securities”), or (ii) enter into any swap
or other arrangement that transfers or assigns to another person or entity, in whole or in part, any of the economic benefits,
obligations or other consequences of any nature of ownership of any Lock-Up Securities, whether any such transaction is to be
settled by delivery of the Lock-Up Securities, in cash or otherwise (the “Lock-Up”). The foregoing Lock-Up restrictions
may only be released or waived prior to the termination of the Lock-Up Period with the written consent of the Company and Dougherty
Capital Markets LLC (“Dougherty”). Notwithstanding anything to the contrary herein, the Lock-Up restrictions set forth
in this Section 8(a) shall only apply to the Shares and not with respect to any other securities of the Company held by the Holder.
Dougherty is an intended third-party beneficiary of this provision. The following restrictive “Lock-Up” legend shall
be affixed to the Lock-Up Securities which shall be governed the terms of this Lock-Up provision:

 

“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER PURSUANT TO THE LOCK UP PROVISIONS CONTAINED
IN THE EXCHANGE AGREEMENT, DATED AS OF __, 2015 BY AND BETWEEN THE COMPANY AND THE HOLDER, A COPY OF WHICH MAY BE INSPECTED AT
THE COMPANY’S PRINCIPAL OFFICE”.

 

(ii)           Permitted
Transfers. Notwithstanding the foregoing, the Holder (and any transferee of the Holder) may transfer any Lock-Up Securities:
(i) as a bona fide gift or gifts, provided that prior to such transfer the donee or donees thereof agree in writing to be bound
by the restrictions set forth herein, (ii) to any trust, partnership, corporation or other entity formed for the direct or indirect
benefit of the Holder or the immediate family of the Holder, provided that prior to such transfer a duly authorized officer, representative
or trustee of such transferee agrees in writing to be bound by the restrictions set forth herein, and provided further that any
such transfer shall not involve a disposition for value, (iii) to non-profit organizations qualified as charitable organizations
under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, or (iv) if such transfer occurs by operation of law,
such as rules of descent and distribution, statutes governing the effects of a merger or a qualified domestic order, provided
that prior to such transfer the transferee executes an agreement stating that the transferee is receiving and holding Lock-Up
Securities subject to the provisions of this lockup. For purposes hereof, “immediate family” shall mean any relationship
by blood, marriage or adoption, not more remote than first cousin. In addition, the foregoing shall not prohibit privately negotiated
transactions, provided the transferees agree, in writing, to be bound to the terms of this lockup for the balance of the Lock-Up
Period.

 

    	 	7	 

     

    

 

b.           Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors
and assigns.

 

c.           Governing
Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by and construed under the laws of the State of
New York without regard to the choice of law principles thereof. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in the State of New York located in The City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or therewith or with any transaction contemplated hereby or thereby,
and hereby irrevocably waives any objection that such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST,
A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.

 

d.           Severability.
If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability
shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability
of any provision of this Agreement in any other jurisdiction.

 

e.           Counterparts/Execution.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that
any signature is delivered by facsimile transmission or by an e-mail which contains an electronic file of an executed signature
page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such facsimile or electronic file signature page (as the case may be) were an
original thereof.

 

f.           Notices.
Any notice or communication permitted or required hereunder shall be in writing and shall be deemed sufficiently given if hand-delivered
or sent (i) postage prepaid by registered mail, return receipt requested, or (ii) by facsimile, to the respective parties as set
forth below, or to such other address as either party may notify the other in writing.

 

 

	 	If
    to the Company, to:	Drone
    Aviation Holding Corp.
	 	 	11651
    Central Parkway #118
	 	 	Jacksonville,
    FL 32224
	 	 	Attention:
    Chief Executive Officer

 

If
to Holder, to the address set forth on the signature page of the Holder

 

g.           Expenses.
The parties hereto shall pay their own costs and expenses in connection herewith.

 

h.           Entire
Agreement; Amendments. This Agreement constitutes the entire agreement between the parties with regard to the subject matter
hereof and thereof, superseding all prior agreements or understandings, whether written or oral, between or among the parties.
This Agreement may be amended, modified, superseded, cancelled, renewed or extended, and the terms and conditions hereof may be
waived, only by a written instrument signed by all parties, or, in the case of a waiver, by the party waiving compliance. Except
as expressly stated herein, no delay on the part of any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any waiver on the part of any party of any right, power or privilege hereunder preclude any other
or future exercise of any other right, power or privilege hereunder.

 

    	 	8	 

     

    

 

i.           Headings.
The headings used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this
Agreement. 

 

j.           Reporting
Status. Until the date on which none of the Securities are outstanding, the Company shall timely file all reports required
to be filed with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and the Company shall continue to timely file reports under the Exchange Act even if the Exchange Act or the rules and regulations
thereunder would otherwise no longer require or permit such filings.

 

k.           Listing.
The Company shall use reasonable best efforts to promptly secure the listing or designation for quotation (as the case may be)
of all of the Shares upon each national securities exchange and automated quotation system, if any, upon which the Common Stock
is then listed or designated for quotation (as the case may be) (subject to official notice of issuance) (but in no event later
than the date of this Agreement) and shall use reasonable best efforts to maintain such listing or designation for quotation (as
the case may be) of all Shares from time to time issuable under the terms of this Agreement on such national securities exchange
or automated quotation system. The Company shall maintain the Common Stock’s listing or authorization for quotation (as
the case may be) on the Principal Market, The New York Stock Exchange, the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global
Market or the Nasdaq Global Select Market, the Over-the-Counter Bulletin Board or the OTCQX (each, an “Eligible Market”).
Neither the Company nor any of its Subsidiaries shall take any action which could be reasonably expected to result in the delisting
or suspension of the Common Stock on an Eligible Market. The Company shall pay all fees and expenses in connection with satisfying
its obligations under this Section 8(l).

 

l.           Pledge
of Securities. The Company acknowledges and agrees that the Securities may be pledged by the Holder in connection with a bona
fide margin agreement or other loan or financing arrangement that is secured by the Securities. The pledge of Securities shall
not be deemed to be a transfer, sale or assignment of the Securities hereunder, and if the Holder effects a pledge of Securities
it shall not be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant
to this Agreement. The Company hereby agrees to execute and deliver such documentation as a pledgee of the Securities may reasonably
request in connection with a pledge of the Securities to such pledgee by the Holder.

 

(Signature
Pages Follow)

 

    	 	9	 

     

    

 

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

 

DRONE AVIATION
HOLDING CORPORATION

 

	By:	 	 
	Name:	 	 
	Title:	 	 

 

HOLDER:
[_________]

 

	By:	 	 

 

Address
for Notices:

 

	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

Address
for delivery of Securities:

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