Ex 10.1 License Agreement-AudioEye

LICENSE AGREEMENT

This License Agreement (this “Agreement”) is made this 30^th day of June 2014 (the

“Effective Date”), by and between AudioEye, Inc., a Delaware corporation (“Licensor”), and

PearTrack Systems Group Limited, a Nevada corporation (“Licensee”) (each a “Party” and

together, the “Parties”).

RECITALS

Licensor is a for-profit corporation in the business of developing Internet content

publication and distribution software that enables conversion of any media into accessible

formats and allows for real time distribution to end users on any Internet-connected device.

Licensor’s relevant consuming public consists of private companies and public

organizations seeking to enable easy-to-navigate Internet accessibility for their online content to

seniors, learning disabled, visually impaired, print impaired, dyslexic, non-English speaking and

a host of other website visitors.

Licensor provides services throughout the United States.

Licensor is the owner of certain proprietary materials (the “Proprietary

Materials”) defined in Section 1.15 and described in more detail in Appendix A, incorporated

herein by reference.

Licensor wishes to license certain of the Proprietary Materials to Licensee for

Licensee’s use in the Territory.

Licensee wishes to license the Proprietary Materials and use them in the Territory

to develop and sell products and services throughout the Territory to the Targeted Market.

Licensee agrees and acknowledges that the Proprietary Materials are Licensor’s

valuable property and that Licensor is the sole owner of the Proprietary Materials.

NOW THEREFORE, in consideration of the mutual promises, covenants, and

agreements herein, the Parties, intending to be legally bound, agree as follows:

SUBSTANTIVE PROVISIONS

DEFINITIONS

The following terms shall have the indicated meanings when used in this Agreement:

1.1

Affiliate. With respect to any specified Person, any other Person directly or

indirectly Controlling or Controlled by, or under direct or indirect common Control with, such

specified Person.

1.2

Confidential Information. Confidential Information shall be information

disclosed by one Party to the other Party (i) in writing or in other tangible form, or (ii) orally or

in other intangible form, as described and defined herein. Confidential Information, with respect

to the recipient Party, shall include, but is not limited to, information, business methods, business

practices, marketing plans, operations information, employee information, customer lists,

financial information, business records, trade secrets, source code, documents or materials

provided by the disclosing Party or on behalf of the disclosing Party to the recipient Party,

together with any notes, e-mails, analyses, memoranda, computer records or other materials

prepared by the recipient Party which contain or reflect such documents, information or

materials, but shall exclude any such information, documents or materials which: (i) are lawfully,

to the recipient Party’s knowledge, in the possession of the recipient Party prior to the date of

this Agreement; (ii) were available in the public domain other than through a violation of the

recipient Party’s obligations under this Agreement; (iii) the recipient Party developed

independently without reference to the Confidential Information; or (iv) is furnished to the

recipient Party by a third party not under an obligation of confidentiality to the disclosing Party

known to the recipient Party.

1.3

Control. With respect to any specific Person, the power to direct the management

and policies of such Person, directly or indirectly, whether through the ownership of voting

securities, by contract or otherwise; and the terms “Controlling” and “Controlled” have

correlative meanings.

1.4

End User. Any customer within the United States that obtains Product from

Licensee for use, installation and/or application.

1.5

Goodwill. The reputation, quality, commercial recognition and public perception

of any Mark and/or the content included in the Proprietary Materials and/or their use. All

Goodwill arising solely from Licensee’s use of the Proprietary Materials shall inure solely to the

benefit of Licensor. Neither during the Term of this Agreement nor at any time thereafter shall

Licensee assert any claim or ownership right to the Goodwill.

1.6

Including. As used in this Agreement, the word “including” shall mean

“including by way of illustration only and not as a limitation.”

1.7

Intellectual Property. All intellectual property associated with the Proprietary

Materials, all materials associated with the implementation thereof, and all Marks and Goodwill.

Intellectual Property includes: (a) any idea, formula or formulation, design, concept, technique,

technology, invention, discovery, or improvement regardless of patentability, patents, patent

applications, trade secrets, Know How, trade names, trademarks, and service marks; (b) any

work of authorship, regardless of copyrightability, manuals, copyrights and any moral rights

recognized by law; (c) any other similar intellectual property including those defined under the

Patent Act (35 U.S.C. §§ 101 et seq.), the Copyright Act (17 U.S.C. §§ 101 et seq.), the Lanham

Act (15 U.S.C. §§ 1051 et seq.), and the Uniform and Arizona Trade Secrets Acts (A.R.S. §§ 44-

401 et seq.); (d) all Goodwill including the Goodwill associated with the preceding; and (e) the

Marks. Licensor is the sole owner of all Intellectual Property and it is Licensor’s valuable asset.

1.8

Intellectual Property Rights. Licensor’s legal rights to and/or interests in the

Intellectual Property including those rights defined under the Patent Act (35 U.S.C. §§ 101 et

seq.), the Copyright Act (17 U.S.C. §§ 101 et seq.), the Lanham Act (15 U.S.C. §§ 1051 et seq.),

and the Uniform and Arizona Trade Secrets Acts (A.R.S. §§ 44-401 et seq.).

1.9

Know How. Expert skill, information or body of knowledge that (a) imparts an

ability to cause a desired result, (b) is not readily available and (c) is outside the public domain.

1.10 Loss. All dues, penalties, fines, costs, amounts paid in settlement, liabilities,

obligations, taxes, liens, losses, expenses and fees, including court costs and reasonable attorney

fees and expenses arising out of any actions, suits, proceedings, hearings, investigations, charges,

complaints, claims, demands, injunctions, judgments, orders, decrees and rulings.

1.11 Mark; Marks. Trademarks and/or service marks whether or not registered; logos;

logotypes; and/or symbols indicating, representing or evidencing a source of origin in Licensor

and/or Licensor’s endorsement, approval or sponsorship; including any Goodwill incorporated

therein.

1.12 Material Breach. Any violation of this Agreement which excuses the non-

breaching Party from further performance and permits the non-breaching Party to commence

legal proceedings to seek equitable relief and/or damages.

1.13 Person. Any individual, corporation, limited liability company, partnership, firm,

joint venture, association, joint-stock company, trust or other entity, or any government or

agency or political subdivision, department or instrumentality thereof.

1.14 Product. Any one or more of the products and services created by Licensee that

specifically incorporate, or make use of in the course of development, the Proprietary Materials,

including all published and/or printed versions of same in any medium, directed toward the

Targeted Market.

1.15 Proprietary Materials. Materials over which Licensor has title or ownership

rights including: (a) Confidential Information of Licensor; (b) all content in the materials

developed by Licensor; (c) all source code, software, hardware, manuals, texts, sounds, visual

aides, demonstrations, photographs, designs, and the Know How and training necessary to

implement them; and (d) the Intellectual Property. A more specific description of the Proprietary

Materials is provided in Appendix A to this Agreement, incorporated herein by reference. The

Proprietary Materials are a valuable asset of Licensor.

1.16 Targeted Market. The private sector corporate and enterprise markets for mobile

asset monitoring, GPS tracking and mobile communications within logistics, transportation,

maritime shipping, trucking & rail, vending machine, intermodal containers, and other

applications.

1.17 Technology. The creation and/or application and/or installation and/or and use of

Product and the information and Know How necessary to do so.

1.18 Term. The term of this Agreement as set forth in Section 3.1 of this Agreement.

1.19 Territory. Worldwide.

LICENSE OF PROPRIETARY MATERIALS

2.1

Grant of Right. Licensor hereby grants to Licensee a non-exclusive, non-

transferable license during the Term and within the Territory, subject to all of the terms and

conditions contained in this Agreement, to: (1) use the Proprietary Materials to create, promote

and advertise Product in the Territory; and (2) use the Proprietary Materials to market, sell and

distribute Product in the Territory.

2.2

Right of Licensor to Use Proprietary Materials. Subject to the limitations set

forth herein, nothing in this Agreement shall be construed to limit the right of Licensor or any of

its agents or representatives, or any third parties licensed or otherwise authorized by Licensor, to

use the Proprietary Materials including the Marks or reproductions of same for any activity

within the Territory.

2.3

Limitation of Appointment. Licensee shall have no right to market or sell

Product to customers other than in the Targeted Market.

2.4

No Transfer of Ownership. No ownership interest in the Proprietary Materials

and Goodwill is transferred to Licensee hereunder nor shall anything in this Agreement be

construed as a transfer to Licensee of any rights to or interests in the Proprietary Materials and

Goodwill. Subject to the provisions of Section 6.3, any and all improvements, enhancements,

adaptations, derivatives, build offs, and modifications of the Proprietary Materials created by

Licensee during the Term of this Agreement and at any time thereafter shall be the exclusive

property of Licensor.

2.5

Licensee Pricing. Licensee may determine and fix its own pricing for Product.

TERM; RENEWAL; TERMINATION

3.1

Term. This Agreement shall commence on the Effective Date and continue in

perpetuity (“Term”).

3.2

Termination Events. The Parties jointly may terminate this Agreement at any

time by mutual agreement in a writing signed by both of them. Further, either Party may

immediately terminate this Agreement upon written notice to the other Party if the other Party:

3.2.1 (a) ceases to exist or elects to dissolve; (b) becomes insolvent, makes or

attempts a general assignment for the benefit of its creditors; (c) suffers or permits the

appointment of a receiver for its business assets; or (d) avails itself of or becomes subject to any

proceeding under any federal Bankruptcy Act or other federal or state statute relating to

reorganization, insolvency or the protection of the rights of creditors; or

3.2.2 commits a material breach of this Agreement and the breaching Party of

written notice of the breach does not cure the breach within thirty (30) days after receipt.

3.3

Termination by Licensor. Notwithstanding the foregoing Section 3.2, Licensor

may immediately terminate this Agreement upon written notice to Licensee if Licensee:

3.3.1 fails to make any required payment in full to Licensor on the date due as

required by this Agreement and fails to cure the default within fifteen (15) days after receiving

written notice of the default; or

3.3.2 without the prior written consent of Licensor, attempts to distribute,

exchange or offer or promise to distribute or exchange to a third party one or more copies of the

Proprietary Materials, whether by sale, license, lease or otherwise; provided, however, that this

Section 3.3.2 shall not apply to the sale, lease or licensing of Product, which may include

elements of the Proprietary Materials and for which a fee is paid to Licensor as provided herein;

3.3.3 attempts an assignment of its rights under this Agreement except as

provided for in this Agreement, unless otherwise agreed by Licensor in writing; or

3.3.4 any entity acquires all or substantially all of the Controlling shares of

Licensee or any other change of Control of Licensee occurs.

3.4

Termination by Licensee. Licensee may terminate this Agreement upon written

notice to Licensor if a court of competent jurisdiction enters a final judgment that any portion of

the Proprietary Materials violates the intellectual property rights of a third party and the

judgment is not under appeal, and Licensor fails to cure the infringement within ninety (90) days

of entry of the judgment. During the ninety (90) days Licensor may, at its option and expense,

procure for Licensee the right to continue to distribute Product subject to the judgment.

3.5

Rights Cumulative. The Parties’ rights as set forth in this Section 3 are

cumulative in addition to any other rights the parties may have at law or in equity.

3.6

Fulfillment of Obligations. The termination of this Agreement shall not

otherwise release either Party from its obligation to pay any sum that may be then or thereafter

owing to the other Party, nor operate to discharge any liability that had been incurred by either

Party prior to termination. All payments due Licensor prior to the date of termination shall be

paid to Licensor within thirty (30) days of the date of termination. Except as provided in the

preceding sentence, either Party shall not, by reason of the termination of this Agreement, be

liable to the other Party for any damages (whether direct, consequential or incidental to and

including loss of profit or prospective profits of any kind) sustained or arising out of any such

termination.

3.7

Effect of Termination. Upon termination of this Agreement, Licensee may

continue to dispose of its existing inventory of Product with the prior written consent of

Licensor, but Licensee shall immediately cease to use the Proprietary Materials including the

Marks and shall cease to market, advertise, sell, lease and/or license Product so long as it

contains any Proprietary Materials; provided, however, that Licensee shall have the right to meet

and complete, and the foregoing shall not restrict or preclude in any way Licensee from meeting

or completing, all of its existing contractual obligations to End Users with respect to sales, leases

or licenses for Product entered into prior to termination of this Agreement; provided, further, that

this provision shall not restrict Licensee from marketing, advertising, selling, leasing and/or

licensing Product so long as it no longer contains any Proprietary Materials. All new orders for

Product that Licensee is not contractually obligated to End Users to fulfill and which remain

unshipped as of the date of termination may be cancelled by Licensor if delivery is required

thirty (30) or more days after the date of termination.

3.8

Return of Property. Within fifteen (15) days of termination of this Agreement

Licensee shall return to Licensor or destroy all of the Proprietary Materials in Licensee’s

possession or control including all advertising, marketing and promotional materials.

3.9

Post-termination Disclosure of Confidential Information. No Confidential

Information of either Party may be disclosed by the other Party following termination of this

Agreement, except as provided herein.

3.10 Survival. The following Sections of this Agreement shall survive the termination

of this Agreement: 1, 3.8, 3.9, 3.10, 3.111, 4.9, 4.10, 5.2, 7, 8, 9, 10.2, 11, 12.1 and 13. Certain

other provisions may survive as indicated within their respective sections of this Agreement.

3.11 Remedies Upon Termination. Licensee acknowledges that its failure to cease

marketing and distribution of Product containing Proprietary Materials upon the termination of

this Agreement, except as herein permitted, may result in immediate irreparable damage to

Licensor. Licensee further acknowledges that Licensor will have no adequate remedy at law for

such failure and in the event of any such failure Licensor shall be entitled to seek equitable relief

by way of temporary and permanent injunctions and such other and further relief as any court of

competent jurisdiction may deem just and proper.

OBLIGATIONS OF LICENSEE

4.1

Sub-Licensees. Licensee shall not appoint any sub-Licensee or agent to promote

and/or distribute Product without Licensor’s prior written consent; provided, however, that this

provision shall not apply to appointments of Affiliates of Licensee in such capacity.

Notwithstanding Licensor’s consent to Licensee’s appointment of sub-Licensees or agents,

Licensee shall remain liable for the performance of such sub-Licensees and agents.

4.2

Employees. Absent Licensee’s prior written notice to Licensor, all tasks

performed by Licensee related to Product including marketing, sales, customer support and

technical advising shall be carried out solely by Licensee’s employees or Affiliates.

4.3

Marketing. Without limiting the generality of Section 4.1 of this Agreement,

Licensee shall use commercially reasonable efforts to further the advertising, promotion,

marketing, sales and distribution of Product within the Territory.

4.4

Press Releases and Publicity. Either Party shall not issue or permit the issuance

of any press releases or publicity regarding Product or this Agreement, or grant any interview, or

make any public statements whatsoever concerning Product or this Agreement without the prior

written consent of the other Party, which consent shall not be unreasonably withheld.

4.5

Records. Licensee shall keep complete and accurate records of its sales and

service of Product. Licensee shall keep all records current and, upon reasonable notice, shall

make them available for inspection by Licensor’s representatives.

4.6

Annual Reports. On or before February 1 of each calendar year, Licensee shall

provide to Licensor a financial report detailing Licensee’s results related to Product during the

previous calendar year.

4.7

Customer Support. Licensee agrees to provide all End Users with reasonable, as

determined by Licensee in its sole discretion, service and technical support, including:

4.7.1 technical information; and

4.7.2 availability of personnel to ensure that Product is timely and effectively

supported and that appropriate and necessary training is provided; and

4.7.3 customer support personnel available at reasonable times during business

hours to respond to inquiries and complaints from customers and End Users.

4.8

Litigation. Licensee shall not take any legal action relating to the protection or

defense of any Intellectual Property Rights except as provided in this Agreement.

4.9

Non-Compete. The Parties acknowledge that: (a) the Technology is a unique

body of knowledge; (b) the Technology is Internet-based which gives it a worldwide reach; (c)

Product is specialized; (d) Product, like the Technology, also is Internet-based and similarly has

a worldwide reach; (e) the market for Product is nationwide, technologically sophisticated and

specialized; and (f) the marketplace for Product is competitive. Licensee also acknowledges that

Licensor has a legitimate and protectable interest in the Proprietary Materials, which include

Confidential Information of Licensor and trade secrets such as data formulations, source codes,

object codes, program development strategies and projections.

4.9.1 Licensee further acknowledges that during the term of this Agreement it

will have access to the Proprietary Materials, including the Confidential Information of Licensor,

that by their nature are applicable not only to Targeted Market but potentially also to other

markets and industries within the Territory. Licensee further acknowledges that any disclosure or

unauthorized use of the Confidential Information of Licensor will cause irreparable harm and

loss to Licensor for which monetary damages would be inadequate compensation.

4.9.2 During the Term of this Agreement (the “Non-compete Period”), Licensee

agrees that it will not purchase, sell, advertise, market, endorse or distribute any product that is

substantially similar with Product.

4.9.3 Licensee further agrees that during the Non-compete Period it will not

associate or affiliate with or assist any person or entity that competes with Licensor if such

association or affiliation or assistance may require Licensee to rely upon or disclose any of the

Proprietary Materials.

4.9.4 Licensee agrees that the geographic scope of this covenant not to compete

shall be nationwide.

4.10 Non-solicitation. Licensee covenants and agrees that during the Term of this

Agreement and for a period of one (1) year thereafter Licensee shall not directly or indirectly (a)

induce or attempt to persuade any customer or client of Licensor to terminate his, her or its

business relationship with Licensor, or (b) induce, attempt to persuade or solicit any other

affiliate, associate, employee, agent, vendor, supplier, consultant, distributor or representative of

Licensor to terminate his, her or its business relationship with Licensor; provided, however, that

this restriction shall not apply to any such Person who as of the date hereof has already entered

into discussions with Licensee or contacted Licensee with respect to entering into a commercial

or employment relationship, or contacts Licensee of such Person’s own accord, and without

solicitation by Licensee, to initiate such discussions; provided, further, that generalized

advertisement of commercial or employment opportunities including in trade or industry

publications (not focused specifically on or directed in any way at such Persons) shall not be

deemed to cause a breach of this restriction.

FEES; ROYALTIES; PAYMENT

5.1

Payment; Pricing; Cancellation.

5.1.1 Licensee agrees to pay Licensor a non-refundable licensing fee as set forth

in Appendix B to this Agreement, to be paid upon execution of this Agreement.

5.1.2. Licensee will determine in its sole discretion, as it deems appropriate, the

pricing of Product and any fees to be charged in relation therewith. Licensee may from time to

time and in its sole discretion, as it deems appropriate, revise such Product pricing and/or fees.

Licensee will give Licensor, upon Licensor’s request, a current schedule of Product pricing and

associated fees.

5.1.3 Licensee agrees to pay Licensor a fee equal to twelve percent (12%) of the

gross revenue from the sale, lease or licensing of Product. Licensee agrees to pay Licensor on a

quarterly basis for all fees due for the previous calendar quarter’s payments processed by

Licensee, with such fees to be calculated and paid by Licensee within forty-five (45) days after

the end of the applicable quarter.

5.1.4 In addition to the twelve percent (12%) fee set forth in Section 5.1.3, if

Licensee requests Licensor to provide additional services and assistance in connection with

Licensee’s development and sale of Product, Licensee and Licensor shall negotiate in good faith

with respect to additional separate compensation to Licensor for the provision of such services

and assistance to Licensee.

5.1.5 In addition to any other remedy available to Licensor, if any payment due

under this Section 5 is delayed for any reason, interest shall accrue and be payable, to the extent

legally enforceable, on such unpaid principal amount from and after the date on which the same

became due, at one point five percent (1.5%) per month.

5.2

Accounting; Books and Records.

5.2.1 Licensee shall, at its sole cost and expense, maintain complete and

accurate books and records (specifically including, without limitation, the original or copies of

documents supporting entries in the books of account) covering all transactions arising out of or

relating to this Agreement.

5.2.2 Upon reasonable advance notice of not less than forty-eight (48) hours,

Licensor and its duly authorized representatives shall have the right during normal business

hours during the Term and for one (1) year thereafter, to examine said books and records and all

other documents and materials in the possession or control of Licensee and its agents with

respect to the subject matter and terms of this Agreement. Within a reasonable period (which

shall not exceed thirty (30) days) following the completion of any audit, any Person performing

such audit on Licensor’s behalf shall provide Licensee with a certified written report containing

such Person’s conclusions, including the amount of any underpayment owed or overpayment

made, if any, by Licensee hereunder.

5.2.3 The exercise by Licensor of any right to audit at any time or the

acceptance by Licensor of any statement or payment shall be without prejudice to any of

Licensor’s rights and remedies and shall not bar Licensor from thereafter disputing the accuracy

of any payment or statement. Licensee shall remain fully liable for any balance due under this

Agreement.

QUALITY; STANDARDS; PROTECTION AND PRESERVATION OF RIGHTS

6.1

Licensor’s Intellectual Property; Validity of Marks. Licensee acknowledges

that Licensor is the owner of all right, title and interest in and to the Intellectual Property and

Intellectual Property Rights as described in the foregoing Recitals and Definitions, including

rights and interests in the Marks. Licensee agrees that it will not at any time during the Term of

this Agreement or at any time thereafter contest the validity or ownership of the Intellectual

Property or directly or indirectly assist others in contesting the validity or ownership of the

Intellectual Property.

6.2

Licensor Goodwill, Image, and Reputation. Licensee shall use commercially

reasonable efforts to conduct its business in a manner that preserves the good name, image and

reputation of Licensor. Licensee agrees that Licensor’s Goodwill and reputation are valuable

commercial assets of Licensor. Licensee agrees that it will not intentionally do anything to

damage Licensor’s Goodwill and reputation. Licensee acknowledges that the Intellectual

Property represents the valuable Goodwill of Licensor. Any unauthorized use of any of the

Intellectual Property by Licensee will constitute a material breach of this Agreement and an

infringement.

6.3

Improvements. Licensor acknowledges that Product and the Technology, and all

improvements, extensions, modifications, derivatives, and build-offs (the “Improvements”) of or

to any of Product or the Technology developed in whole or in part by Licensee shall belong

exclusively to Licensee. Licensor shall promptly execute any documents required by Licensee to

record ownership in Product and/or the Technology, and any Improvements thereon. If requested

by Licensee, Licensor shall cause its employees and agents to cooperate with Licensee, at

Licensee’s expense, to obtain intellectual property protection, including trademark, patent or

cost shall be fully borne by Licensor where Licensor’s willful misconduct or gross negligence

have in any way endangered or threatened to endanger such rights of Licensee.

INFRINGEMENT

7.1

Notification of Infringement Actions. Licensee will notify Licensor in writing

of any third-party use or registration or attempted use or registration of any of the Intellectual

Property that infringes or is likely to infringe Licensor’s rights in the Intellectual Property within

three (3) calendar days of becoming aware of the same. Licensee also shall notify Licensor in

writing of any action, claim or demand against Licensee relating to the Intellectual Property

within three (3) calendar days of receipt of notice of such action, claim or demand. Upon notice

of an infringement or potential infringement or an action, claim, or demand against Licensee

relating to the Intellectual Property, Licensor shall in its sole discretion: (a) determine whether to

bring an action to stop the infringement, or (b) determine whether to defend against any such

action, claim or demand, if such action, claim or demand is due solely to Licensee’s use of any

of the Intellectual Property.

7.2

Licensor Litigation Responsibilities. If Licensor brings any action or defends

against any such action, claim or demand, Licensor shall (1) select counsel to handle the action

or defense, (2) be responsible for the costs of the action or defense, including reasonable

attorneys’ fees, (3) be entitled to any recovery, and (4) in its sole discretion, agree upon

settlement terms. Licensee shall reasonably cooperate in all respects with Licensor in connection

with any such action or defense. Such cooperation shall include Licensee’s production of

relevant information, including without limitation documents and things, and giving testimony at

deposition and trial without being subpoenaed. If Licensee desires to retain its own counsel in

connection with any such action or defense, it shall be responsible for its own attorneys’ fees and

costs.

CONFIDENTIAL INFORMATION

8.1

Confidential Obligations. The recipient Party shall hold and treat, and direct its

potential and existing partners, officers, directors, employees, agents, representatives, consultants

and advisors, including, without limitation, attorneys, accountants and financial advisors

(collectively, “Related Persons”), to hold and treat, in confidence, the Confidential Information

of the disclosing Party. Without the disclosing Party’s prior written consent, the recipient Party

and its Related Persons shall not, except as hereinafter provided, disclose such Confidential

Information to any other Person or use such Confidential Information other than in connection

with the recipient Party’s duties and obligations pursuant to this Agreement. The recipient Party

further agrees to disclose such Confidential Information only to those of its Related Persons who

need to know such Confidential Information in connection with this Agreement, and who the

recipient Party directs to keep such information confidential and to abide by the terms of this

Agreement with respect to, and only with respect to, Confidential Information to the same extent

as if they were parties hereto.

8.2

Permitted Disclosure. Notwithstanding the foregoing, the recipient Party or any

Related Person of the recipient Party may disclose such Confidential Information: (a) pursuant to

any lawful subpoena of any governmental or regulatory authority regulating or overseeing any

part of the business or activities of the recipient Party or such Related Person, or in connection

with any examination of the recipient Party or such Related Person by such authority; or (b)

pursuant to any order of any court of competent jurisdiction. To the extent disclosure is required

by any court order or pursuant to any subpoena or other legal process, the recipient Party or such

Related Person will, if lawfully able to do so, promptly notify the disclosing Party of such

requirement or request so that the disclosing Party may seek a protective order or other

appropriate remedy or waive compliance with the confidentiality provisions of this Agreement.

In the event that such protective order or other remedy is not obtained, or that the disclosing

Party waives compliance with the confidentiality provisions of this Agreement, the party

requested or compelled to disclose such Confidential Information will furnish only that portion

of such Confidential Information which is legally required and will exercise its commercially

reasonable efforts to obtain reliable assurance that the confidential treatment will be accorded

that portion of the Confidential Information so furnished.

REPRESENTATIONS & WARRANTIES

Each Party represents and warrants that it has full power and authority to enter into this

Agreement and to carry out all actions required of it by this Agreement. And further:

9.1

By Licensor. Licensor represents and warrants:

9.1.1 that neither the Intellectual Property, the Proprietary Materials nor this

Agreement infringes the rights of third parties, including rights in any U.S. patent, trademark,

trade dress, copyright or other proprietary or property right, nor misappropriates or discloses any

third party trade secrets; and

9.1.2 that it will work with Licensee in good faith and will use commercially

reasonable efforts to assist Licensee in marketing Product during the Term of this Agreement.

9.2

Licensor’s Limitation of Liability and Disclaimer. Licensor’s representations

and warranties set forth in this Section 9 shall be and are subject to and limited by the limitations

of liability set forth more fully in Sections 10 and 11 of this Agreement.

9.3

By Licensee. Licensee represents and warrants:

9.3.1 that its entry into this Agreement does not violate any of its agreements

with any third party; and

9.3.2 that it will not grant any rights to any third party that conflict with its

obligations to or the rights of Licensor as set forth in this Agreement.

10.

LIMITATIONS OF LIABILITY AND DISCLAIMERS

10.1 LICENSOR MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY

KIND, EXPRESS OR IMPLIED, RELATED TO THE INTELLECTUAL PROPERTY OR THE

PROPRIETARY MATERIALS INCLUDING WARRANTIES OF MERCHANTABILITY OR

FITNESS FOR A SPECIFIC PURPOSE.

10.2 LICENSOR SHALL NOT BE LIABLE TO LICENSEE FOR LOSS OF

PROFITS OF BUSINESS, INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR

PUNITIVE DAMAGES, WHETHER BASED IN CONTRACT OR IN TORT (INCLUDING

NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, BUT NOT INCLUDING GROSS

NEGLIGENCE OR WILLFUL MISCONDUCT), WARRANTY OR INDEMNITY,

WHETHER OR NOT LICENSOR AND/OR LICENSEE HAS BEEN ADVISED OF THE

POSSIBILITY OF SUCH DAMAGES.

11.

INDEMNIFICATION

11.1 Indemnification. Each Party shall not have recourse against the other Party in

respect to, and shall indemnify and hold the other Party harmless against, any Loss, liability or

cost arising from any suit or proceeding brought by a third party based upon any claim, whether

in contract or tort, including negligence or fault but not including gross negligence or willful

misconduct, to the extent that such claim arises from or results from the alleged acts or omissions

of such Party in the performance of this Agreement, including claims in connection with the

advertising, distribution, marketing, sale and/or use of the Intellectual Property.

11.2 Sub-Licensees and Agents. Licensee agrees to indemnify Licensor and hold

Licensor harmless from all damages, Losses, liabilities or expenses arising in any manner from

any act or omission on the part of any sub-Licensee or agent appointed by Licensee. The

provisions of Article 11 and Licensee’s obligations thereunder shall survive any termination

and/or rescission of this Agreement.

11.3 Insurance. Each Party shall maintain at its own expense in full force and effect

commencing from the initial sale of Product into the market and at all times thereafter during

which the Proprietary Materials are licensed pursuant to this Agreement at least a $1,000,000

general liability insurance policy with an insurance carrier reasonably acceptable to the other

Party. This insurance shall be for the benefit of each Party and shall name the other as a named

insured. Each Party shall carry any workers compensation insurance required by law. Each Party

shall provide the other with certificates of insurance upon request from the other Party and shall

provide written notice to the other Party of the cancellation or any substantial modification of

any policy.

12.

ASSIGNMENT

12.1 No Assignment Without Consent. This Agreement shall inure to the benefit of

and be binding upon the Parties hereto, their successors and assigns. The rights granted to each

Party hereunder are personal in nature and each Party shall not sell, transfer, lease, sub-license or

assign this Agreement or rights and interests hereunder or any part thereof to any Person, by

operation of law or otherwise, without the prior written consent of the other Party or except as set

forth in Section 12.2. Any attempted assignment, sub-license or transfer of this Agreement by a

Party in derogation of the terms and conditions of this Agreement shall be null and void and shall

subject the Agreement to immediate termination by the other Party.

12.2 Affiliates; Change of Control. Either Party may assign this Agreement to an

Affiliate. Licensor may assign this Agreement to any entity that acquires all or substantially all

of the controlling shares of Licensor. Any change of control of Licensor shall be deemed a valid

assignment of this Agreement. Except in connection with an assignment to an Affiliate, Licensee

may not assign this Agreement without the written consent of Licensor.

13.

MISCELLANEOUS

13.1 Recitals; Definitions. The Parties warrant to each other that, to the best of their

knowledge, the foregoing Recitals and Definitions are true and correct. No facts have come to

the attention of any Party suggesting any other state of affairs or any incorrect statements in the

Recitals and/or Definitions. The Parties agree that the statements in the Recitals and Definitions

form a material part of this Agreement and are incorporated herein by reference.

13.2 Independent Contractors. The Parties are independent contractors. Neither Party

is an agent, representative or partner of the other Party. Neither Party shall have any right, power

or authority to enter into any agreement, either express or implied, for or on behalf of, or to incur

any obligation or liability for, or to otherwise bind, the other Party. This Agreement shall not be

construed to create an association, joint venture, co-ownership, franchiser/franchisee

relationship, or partnership between the Parties or to impose any partnership obligation or

liability upon either Party.

13.3 Costs. Except as otherwise expressly provided in writing, each Party assumes full

responsibility for all costs and expenses which it incurs in carrying out its obligations under this

Agreement, including, but not limited to, all rentals, salaries, commissions, advertising,

demonstration, travel and accommodation expenses without the right to reimbursement for any

portion thereof from the other Party.

13.4 Captions; Headings. The captions and headings used in this Agreement are for

convenience only and shall not be construed to have any legal significance.

13.5 Governing Law; Jurisdiction; Venue; Attorney Fees. This Agreement shall be

interpreted and enforced in accordance with the laws of the State of Arizona, without regard to

the principles of conflict of laws. The Parties submit to the exclusive personal jurisdiction of the

State of Arizona. Venue for the adjudication of any dispute arising under or related to this

Agreement shall be only in Pima County, Arizona, and not elsewhere. Objections to the venue

are hereby waived. In the event that either Party shall be required by the actions of the other

Party to retain an attorney to enforce or protect its legal rights hereunder, and if judicial

proceedings shall thereafter ensue, the prevailing Party shall be entitled to its reasonable

attorney’s fees and costs.

13.6 Counterparts. This Agreement may be executed in any number of identical

counterparts with the same effect as if all Parties had signed the same document. All counterparts

shall be construed as, and shall constitute, one and the same agreement.

13.7 Invalidity; Severability. If any provisions of this Agreement should be or

become invalid or unenforceable, the validity of the remaining provisions shall not be affected.

The invalid or unenforceable provision shall be converted by mutual consent of the Parties, to the

extent possible, to a valid and enforceable provision which comes as close as possible to the

intention of the original provision.

13.8 Entire Agreement; Changes in Writing. This Agreement constitutes the entire

agreement of the Parties with respect to the subject matter of this Agreement. This Agreement

may not be amended or modified except in a writing signed by the Parties.

13.9 No Waiver. Under this Agreement, a waiver by a Party of any default in

performance by the other Party shall not constitute a waiver of any subsequent default in

performance. A waiver by a Party to exercise any right or option or to enforce any term,

condition or provision of this Agreement shall operate as a waiver only for the specific occasion

that the waiver is given and this Agreement shall otherwise continue to be fully effective and

operable as to all other occasions.

13.10 Notices. All notices by the parties must be in writing, served by registered mail or

by facsimile which must be confirmed by a letter, or by hand-delivery against receipt. Notices

shall be delivered to the following addresses:

To Licensor:

AudioEye, Inc.

Attn: Nathaniel T. Bradley, CEO

5210 E. Williams Circle, Suite 500

Tucson, AZ 85711

To Licensee:

PearTrack Systems Group Ltd.

Attn: E. William Withrow Jr.

1139-E Ballena Blvd, Suite 6

Alameda, CA 94501

13.11 Computation of Time. Any obligation or the exercise of any right that must be

performed within a specified number of days includes weekends and holidays in such

computation unless otherwise indicated.

13.12 Interpretation. This Agreement was reached as a result of negotiations between

competent parties. This Agreement shall be construed without regard to any presumption or other

rule requiring construction against the party drafting a document. It shall be construed neither for

nor against Licensor or Licensee, but shall be given a reasonable interpretation in accordance

with the plain meaning of its terms and the intent of the parties.

13.13 Conflict with Appendices. In the event of any conflict between this Agreement

and any attached Appendix, the terms and conditions of this Agreement shall control.

13.14 Time. Time is of the essence under this Agreement.

13.15 Cooperation and Other Documents and Actions. The Parties agree to

cooperate and fully execute any and all supplemental documents and take all further actions

which may be necessary and appropriate to give full force and effect to this Agreement.

13.16 Binding Agreement. This Agreement is binding upon and shall inure to the

benefit of the heirs, executors, personal representatives, successors and assigns of the Parties.

13.17 Effective Date. This Agreement shall be deemed effective as of the date first

stated above and may be specifically enforced.

The undersigned Parties have carefully reviewed this Agreement and accept its terms and

conditions. The Parties execute this Agreement as of its Effective Date.

LICENSOR:

LICENSEE:

AUDIOEYE, INC.

PEARTRACK SYSTEMS GROUP LIMITED

By:

Printed Name:

Title:

Appendix A

Licensor Proprietary Materials

Proprietary Materials consist of the following Licensor-produced intellectual property used in the

development of the Technology and implementation of Product:

U.S. patents numbered US7966184, US7653544, US8260616, US8046229, US8296150 and

US8589169.

Appendix B

License Fee

Licensee agrees to pay Licensor a non-refundable licensing fee equal to two hundred twenty-five

thousand dollars ($225,000) payable, at Licensee’s discretion, in the form of cash or Licensee’s

services at Licensee’s current rate. The parties agree that the Licensing Fee is due and payable

upon execution of this Agreement.