DRONE AVIATION HOLDING CORP. FORM 8-K · Vice President in financial services marketing and membership services at Cendant Corp., ... and is a member of its Audit and Compensation

UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-KCURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (date of earliest event reported): June 3, 2014

DRONE AVIATION HOLDING CORP.(Exact name of registrant as specified in its charter)

Nevada 333-150332 46-5538504(State or Other Jurisdiction

of Incorporation)(CommissionFile Number)

(IRS EmployerIdentification No.)

11653 Central Parkway, Jacksonville, FL 32224 (Address of principal executive offices)

Registrant’s telephone number, including area code: (904)245-1788

9521-B Riverside Parkway, #134, Tulsa, Oklahoma 74137(Registrant's former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any ofthe following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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ITEM 1.01 Entry into a Material Definitive Agreement.ITEM 2.01 Completion of Acquisition or Disposition of Assets.ITEM 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; CompensatoryArrangements of Certain Officers

EXPLANATORY NOTE

Effective April 30, 2014, Drone Aviation Holding Corp., a Nevada corporation, F/K/A Macrosolve, Inc., an Oklahoma corporation(the “Company”) changed its state of incorporation to Nevada from Oklahoma (“Reincorporation”). In connection with the Reincorporation, theCompany exchanged each share of common stock issued and outstanding for shares of common stock of the newly formed Nevada entity,which was formed for purposes of the Reincorporation, on a 50.56186 for one basis, with comparable adjustments to outstanding convertiblesecurities of the Company (the ratio, the “Reincorporation Exchange Ratio”). All per share amounts referenced in this report below reflect theReincorporation Exchange Ratio.

The Share Exchange

On June 3, 2014, the Company entered into a Share Exchange Agreement (the “Exchange Agreement”) with Drone Aviation Corp., aNevada corporation (“Drone”), and the shareholders of Drone. Upon closing of the transaction contemplated under the Exchange Agreement(the “Share Exchange”), on June 3, 2014, the shareholders of all of Drone’s outstanding shares of common stock (the “Drone Shareholders”)transferred all the outstanding shares of common stock of Drone to the Company in exchange for an aggregate of 8,050,000 shares of theCompany’s common stock, $0.0001 par value per share (the “Common Stock”) and 36,050,000 shares of Series D Convertible PreferredStock, par value $0.0001 per share (“Series D Preferred Stock”). Pursuant to the terms of the Exchange Agreement, certain Drone Shareholderswho, as a result of receiving the shares of Common Stock would hold in excess of 3% of the Company’s issued and outstanding CommonStock on a post-closing basis, elected to receive shares of the Company’s Series D Preferred Stock, with such rights, preferences anddesignations as are set forth in the Certificate of Designations of Preferences, Rights and Limitations of Series D Convertible PreferredStock. As a result of the Share Exchange, Drone became a wholly-owned subsidiary of the Company.

Pursuant to the Share Exchange: ● At the closing of the Share Exchange, all of the shares of common stock of Drone outstanding immediately prior to the closing of the Share

Exchange were exchanged for the right to receive an aggregate of 8,050,000 shares of Common Stock (the “Share Exchange CommonShares”) and 36,050,000 shares of Series D Preferred Stock. Concurrently, members of the new management of the Company executedLock-Up Agreements (the “Lockup Agreements”) pursuant to which they agreed to refrain from the sale of any securities of the Companyheld by them, including the Share Exchange Common Shares and the Series D Preferred Stock, for a period of fifteen (15) months althoughthe Lockup Agreement provides for certain leak out provisions, allowing the holder the right to sell up to 3.5% of the average daily volumeof the Common Stock beginning on the thirteen month anniversary of the Lockup Agreement.

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Upon the closing of the Share Exchange, Michael Haas resigned from all officer positions with the Company but remains a director of theCompany. Felicia Hess was appointed Chief Executive Officer and director, Daniyel Erdberg was appointed Chief Operating Officer andWayne Jackson was appointed Chairman of the Board.

On June 3, 2014, the Company sold an aggregate of 2,700,000 units (the “Units”) in a private placement (the “Private Placement”) of

its securities to certain investors (the “Investors”) at a purchase price of $0.50 per Unit pursuant to subscription agreements (the “SubscriptionAgreements”) for an aggregate purchase price of $1,350,000. Each Unit consists of (i) one share of the Company’s Series E ConvertiblePreferred Stock, par value $0.0001 per share (the “Series E Preferred Stock”), each of which is convertible into one (1) share of CommonStock, with such rights and designations as set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series EConvertible Preferred Stock, attached as an exhibit to this Current Report (the “Series E Certificate of Designation”); and (ii) a three yearwarrant, attached as an exhibit to this Current Report (the “Warrant”), to purchase one share of Common Stock (the “Warrant Shares”) at anexercise price of $1.00 per Warrant Share.

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The Units sold in the Private Placement, as well as the conversion ratio of the Series E Preferred Stock and the exercise price of theWarrants, are subject to a “Most Favored Nations” provision for a period of 24 months from the closing of the Private Placement in the eventthe Company issues Common Stock or securities convertible into or exercisable for shares of Common Stock at a price per share or conversionor exercise price per share which shall be less than $0.50 per share, subject to certain customary exceptions. Each share of the Series EPreferred Stock is convertible into one (1) share of Common Stock and has a stated value of $0.0001. The conversion ratio is subject toadjustment in the event of stock splits, stock dividends, combination of shares and similar recapitalization transactions. The Company isprohibited from effecting the conversion of the Series E Preferred Stock to the extent that, as a result of such conversion, the holder wouldbeneficially own more than 3.33% (provided that certain investors elected to block their beneficial ownership at 4.99%), in the aggregate, of theissued and outstanding shares of the Company’s Common Stock calculated immediately after giving effect to the issuance of shares of CommonStock upon the conversion of the Series E Preferred Stock (the “Beneficial Ownership Limitation”). Each share of the Series E Preferred Stockis entitled to the number of votes equal to the number of shares of Common Stock such share is convertible into at such time, but not in excessof the Beneficial Ownership Limitation. Each Warrant is exercisable for one share of Common Stock at an exercise price of $1.00 pershare. The Warrant may be exercised on a cashless basis. The Company is prohibited from effecting the exercise of a Warrant to the extent that,as a result of such exercise, the holder would beneficially own more than 3.33%, in the aggregate, of the issued and outstanding shares of theCompany’s Common Stock calculated immediately after giving effect to the issuance of shares of Common Stock upon the exercise of theWarrant, which limitation may be increased to 4.99% upon not less than 61 days’ prior notice to the Company.

Giving effect to (i) the closing of the Share Exchange and (ii) the closing of the Private Placement, there were approximately

11,970,709 shares of Common Stock issued and outstanding, 36,050,000 shares of Series D Preferred Stock outstanding and 2,700,000 sharesof Series E Preferred Stock outstanding.

The Share Exchange Common Shares and the Series D Preferred Stock, were not registered under the Securities Act, and wereissued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “SecuritiesAct”). The Series E Preferred Stock and the Warrants issued to investors in the Private Placement were not registered under the Securities Act,and were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506 promulgatedthereunder. Certificates representing these shares will contain a legend stating the restrictions applicable to such shares.

Changes to the Board of Directors and Executive Officers. On June 3, 2014, effective upon the closing of the Share Exchange,

Michael Haas resigned as interim President of the Company (but remains a director) and Felicia Hess was appointed Chief Executive Officerand director, Daniyel Erdberg was appointed Chief Operating Officer and Wayne Jackson was appointed as Chairman of the Board ofDirectors.

Felicia Hess, 47, was appointed our Chief Executive Officer and one of our directors upon the closing of the Share Exchange. Ms.

Hess served as a director of World Surveillance Group Inc., a developer of lighter-than-air aerostats and unmanned aerial systems, from March2013 through May 2014. In addition, Ms. Hess was the President and a Director of Lighter Than Air Systems Corp., a wholly ownedsubsidiary of World Surveillance Group Inc. (“WSGI”), specializing in advanced custom designed intelligence, reconnaissance and surveillance(“ISR”) solutions from March 2013 to May 2014 when Drone acquired LTAS and Ms. Hess remained the President of LTAS following suchacquisition. Ms. Hess was the President of LTAS since its inception in September 2009. From 2007-2009, Ms. Hess served as Director ofMarketing and Business Development for Aerial Products Corp., an aerial surveillance solutions provider. Prior to that Ms. Hess served asVice President in financial services marketing and membership services at Cendant Corp., where she integrated financial software to furtherweb site development and customer acquisition for some of the nation’s largest financial institutions. Ms. Hess was chosen as a director of theCompany based on her knowledge of the LTAS operations.

Daniyel Erdberg, 36, was appointed our Chief Operating Officer upon the closing of the Share Exchange. Mr. Erdberg served asDirector of Business Development at WSGI, a developer of lighter-than-air aerostats and unmanned aerial systems, from November 2011through May 2014 where he worked with LTAS, a wholly owned subsidiary of WSGI, specializing in advanced custom designed IRSsolutions. Mr. Erdberg successfully worked with LTAS's aerial surveillance solutions for various government and commercial customers.Over the past 13 years, Mr. Erdberg has been involved in operations of companies involved in various sectors of technology including softwaredevelopment, telecommunications, wireless networking and unmanned aerial systems. Mr. Erdberg graduated from Florida InternationalUniversity with a Bachelors of Administration in International Business.

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Wayne Jackson, 85, was appointed our Chairman of the Board of Directors upon closing of the Share Exchange. General Jacksonhas served as a Director of World Surveillance Group Inc., a developer of lighter-than-air aerostats and unmanned aerial systems since April2009, and is a member of its Audit and Compensation Committees and the Chairman of its Compensation Committee. Major General Jacksonhad a 37-year career with the United States Army, Air Force and Navy, retiring from active duty in 1984. During his military career, GeneralJackson served in various overseas theaters of operations and in a variety of assignments. He commanded Aviation, Civil Affairs, Infantry,Military Intelligence, Signal Corps and Special Forces units, as well as holding two General Office Commands and a position as the Director ofCounterintelligence and Security, Headquarters Department of the Army. In addition, General Jackson also served as Chief, Division ofProbation Administrative Office of the United States Court, Washington, D.C. General Jackson has been awarded the Parachute Badge, theExpert Infantry Badge and the Master Aviator Badge. His decorations include the Distinguished Service Medal, the Meritorious Service Medal,the Army Commendation Medal and several other military awards and decorations.

General Jackson has remained an active member of the defense and intelligence communities and contributes extensive military

industry experience relevant to the needs and requirements for the Company’s products by the Company’s primary initial target customer. Forthese reasons, we believe General Jackson has the requisite set of skills and experience to serve as a valuable member of our board of directors.

None of Ms. Hess, Mr. Erdberg or General Jackson has any family relationship with any of the other executive officers or directors ofthe Company. There are no arrangements or understandings between Ms. Hess, Mr. Erdberg or General Jackson and any other person pursuantto which such individual was appointed as an officer and/or director of the Company.

Felicia Hess Employment Agreement. On June 3, 2014, we entered into an employment agreement with Felicia Hess (the “Hess

Employment Agreement”), whereby Ms. Hess agreed to serve as our Chief Executive Officer and director for a period of one (1) year, subjectto renewal, in consideration for an annual salary of $150,000. Additionally, Ms. Hess shall be entitled to a starting bonus equal to $25,000 andiseligible for an annual cash bonus in an amount equal to up to one hundred percent (100%) of her then-current base salary if the Companymeets or exceeds criteria adopted by the Compensation Committee of the Board of Directors. Ms. Hess shall also be eligible for grants ofawards under stock option or other equity incentive plans of the Company as the Company’s Compensation Committee or, in the absencethereof, the Company’s Board of Directors may from time to time determine and shall be entitled to participate in all benefits plans the Companyprovides to its senior executives. The Company shall reimburse Ms. Hess for all reasonable expenses incurred in the course of heremployment. In the event Ms. Hess’ employment is terminated without Cause or by Ms. Hess with Good Reason (as such terms are defined inthe Hess Employment Agreement), Ms. Hess shall be entitled to receive severance benefits equal to six months of her then-current base salary,continued coverage under the Company’s benefit plans for a period of twelve months and payment of her pro-rated earned annual bonus.Additionally, the Company has agreed to execute and deliver in favor of Ms. Hess an indemnification agreement and to maintain directors’ andofficers’ insurance in an amount of not less than five million dollars ($5,000,000) during her term of employment. Ms. Hess has also agreed toa one (1) year non-competition and non-solicitation provision.

Daniyel Erdberg Employment Agreement. On June 3, 2014, we entered into an employment agreement with Daniyel Erdberg (the“Erdberg Employment Agreement”), whereby Mr. Erdberg agreed to serve as our Chief Operating Officer for a period of one (1) year, subjectto renewal, in consideration for an annual salary of $140,000. Additionally, Mr. Erdberg shall be entitled to a starting bonus equal to $24,000and is eligible for an annual cash bonus in an amount equal to up to one hundred percent (100%) of his then-current base salary if the Companymeets or exceeds criteria adopted by the Compensation Committee of the Board of Directors. Mr. Erdberg shall also be eligible for grants ofawards under stock option or other equity incentive plans of the Company as the Compensation Committee or, in the absence thereof, theCompany’ Board of Directors, may from time to time determine and shall be entitled to participate in all benefits plans the Company provides toits executives. The Company shall reimburse Mr.Erdberg for all reasonable expenses incurred in the course of his employment. In the event Mr.Erdberg’s employment is terminated without Cause or by Mr. Erdberg with Good Reason (as such terms are defined in the ErdbergEmployment Agreement), Mr. Erdberg shall be entitled to receive severance benefits equal to six months of his then-current base salary,continued coverage under the Company’s benefit plans for a period of twelve months and payment of his pro-rated earned annual bonus.Additionally, the Company has agreed to execute and deliver in favor of Mr. Erdberg an indemnification agreement and to maintain directors’and officers’ insurance in an amount of not less than five million dollars ($5,000,000) during his term of employment. Mr. Erdberg has alsoagreed to a one (1) year non-competition and non-solicitation provision.

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Changes to the Business. Following the closing of the Share Exchange, through our wholly owned subsidiary, Drone, weentered into the business of design, development, marketing and sale of lighter-than-air (“LTA”) advanced aerostats and land-based ISRsolutions and tethered drones. Following the Share Exchange, we will continue to be a “smaller reporting company,” as defined in Item 10(f)(1)of Regulation S-K, as promulgated by the SEC.

The foregoing description of the Share Exchange, the Lockup Agreements, the Private Placement, the Series D Preferred Stock, theSeries E Preferred Stock, the Warrants, the Subscription Agreements, the Employment Agreements, and related transactions does not purport tobe complete and is qualified in its entirety by reference to the complete text of the Exchange Agreement, Form of Lockup Agreement, Certificateof Designations of Preferences, Rights and Limitations of Series D Convertible Preferred Stock, Certificate of Designations of Preferences,Rights and Limitations of Series E Convertible Preferred Stock, the Warrant, the Form of Subscription Agreement, the Hess EmploymentAgreement and the Erdberg Employment Agreement, which are filed as Exhibits hereto, and which are incorporated herein by reference.

Corporate Structure

Our current corporate structure is set forth below:

Description of Drone’s Business

In this Current Report, unless the context provides otherwise, the terms “the Company,” “we,” “us,” and “our” refer to Drone AviationHolding Corp. and its wholly-owned subsidiaries.

Corporate Overview

Drone was incorporated in the state of Nevada on March 31, 2014. On May 5, 2014, Drone entered into a share exchange agreement withLighter Than Air Systems Corp. (“LTAS”) and World Surveillance Group Inc. (“WSGI”), the sole shareholder of LTAS, pursuant to whichWSGI transferred all of the issued and outstanding common stock of LTAS to Drone in consideration for capital of Drone and LTAS became awholly owned subsidiary of Drone. Through LTAS, Drone provides aerial and land-based surveillance and communications solutions togovernment and commercial customers. LTAS systems are designed and developed in-house utilizing proprietary technologies and processesthat result in compact, rapidly deployable aerostat solutions and mast-based systems.

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Business of Drone

Drone, through its wholly owned subsidiary, LTAS, is focused on the development of a series of tethered aerostats known as theBlimp in a Box™ (“BiB”) system, the Winch Aerostat Small Platform (“WASP”) and certain other tethered drone based products. The BiBsystem is a lighter-than-air, compact aerostat platform either self-contained on a trailer that can be towed by an MATV or MRAP or otherstandard vehicle, or it can operate from the bed of a pickup truck. It is designed to provide semi-persistent, mobile, real-time day/night highdefinition footage for intelligence, surveillance and reconnaissance (“ISR”), detection of improvised explosive devices (“IEDs”), border securityand other governmental and civilian uses. The WASP, is a mobile, tactical-sized aerostat capable of carrying a variety of payloads in support ofmilitary operations. Both the BiB and the WASP can also be utilized for disaster response missions, by supporting two-way and cellularcommunications, and act as a repeater or provide wireless networking.

The BiB and WASP systems have a tethered envelope filled with helium gas, either a stabilized ISR payload or communicationspayload, portable ground control station and a datalink between the ground station and the envelope. Hovering at up to 2,000 ft. above theground, the systems provide surveillance and communications capabilities with relatively low acquisition and maintenance costs. The systemsrequire an operational crew of a minimum of two personnel, relatively simple maintenance procedures and a quick retrieval and helium top-offfor re-inflation.

LTAS systems were used to support a sole source contract from the United States Department of Defense (“DoD”) for a set of BiBaerostat systems. The contract award included on-location support for technical fact gathering, installation and training for the BiB systems. TheBiB systems were delivered to Fort Polk, LA in April and May 2013 and testing of the aerostat system and also multiple training sessions forsoldiers on the base in preparation for future military exercises was performed at that time. Formal DoD acceptance of the BiB systems wasissued following completion of the testing, training and an inventory accounting.

In other contracts:

· LTAS has provided seven critical aerostat launcher electric main winches and spare components to support the Small Tactical Multi-Payload Aerostat System (STMPAS) for the U.S. Army Rapid Equipping Force (REF). The LTAS custom designed, engineeredand manufactured winch systems were requested by Georgia Tech Research Institute working with the REF in support of STMPAS.STMPAS, although larger than the BiB, is a tactical aerostat system designed to provide ISR capability for small tactical units inAfghanistan and other locations.

· LTAS also provided two WASP systems and six aerostats to BAE Systems to support the U.S. Army Space and Missile Defense

Command (SMDC). The LTAS self-contained, compact, trailer-mounted aerostat launcher system and aerostats have been deliveredand are undergoing testing and evaluation for various mission profiles to support and enhance critical communications for the Army.

· Five custom aerostat systems and subcomponents were provided by LTAS to support the REF. The aerostat systems and relatedcomponents were delivered directly into active overseas operations to support U.S. military troops. The LTAS aerostat systemsrequested by the REF were custom-designed and engineered, and were manufactured to provide capabilities for specific missionrequirements. The systems include aerostats, winches, tank racks and related support equipment.

· LTAS has received an order for a BiB 100 aerostat system for use by a State Department of Transportation. Subsequent to the initialBiB 100 aerostat system order, the customer purchased additional surveillance related equipment. The BiB 100 was delivered to thecustomer during the second quarter of 2014, after which onsite training and test operations commenced. Unlike a free flying drone orother unmanned aerial vehicle, the highly mobile BiB 100 aerostat system utilizes a high strength, power tether line to remainconnected to an integrated trailer where secure communications are transmitted. The system is designed to provide incident awarenessand assessment ("IAA") and can be used to monitor illegal activity, identify and monitor traffic patterns, or provide disaster responsein a secure manner without the risk of being intercepted or jammed.

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LTAS WASP aerostat systems successfully participated in the U.S. Army's Network Integration Experiment (NIE) 14.1 at the U.S.Army White Sands Missile Range in New Mexico during October and November 2013. The two complete, turn-key trailer-mounted aerostatlauncher systems previously delivered to SMDC enable persistent, on-demand, beyond-line-of-sight communications in support of groundforces maneuvers. The NIE is a series of semi-annual, soldier-led evaluations designed to further integrate, mature and rapidly progress theArmy's tactical communications network. NIE serves as a principal driver of change in the Army -- such in-field evaluation and integrationevents drive requirements, field recommendations and procurement.

WASP Systems provided by LTAS to the SMDC/Army Forces Strategic Command participated in the U.S. Army's NIE 14.2 whichtook place at Fort Bliss, TX and White Sands Missile Range, NM during April and May 2014. The two WASPs returned to NIE 14.2 as a“Baseline System” following their successful mission at NIE 14.1 where they were a “System Under Evaluation,” the difference being that theWASP system was used to test other new systems. The WASP is a mobile, tactical-sized aerostat capable of carrying a variety of payloads insupport of military operations helping troops in the field have a tactical edge while communicating over greater distances. The WASP leveragesaerostat technology to elevate network payloads to an advantaged height to enable persistent network connectivity while reducing risk to unitsconducting missions. The NIE 14.2 exercises were intended to evaluate joint force network capabilities; improve unified land operations withcommunications nodes based on aircraft and unmanned aerial vehicles (UAVs); integrate networking technologies into the armored brigadecombat team; develop ways to deliver, collect and process integrated, multi-source intelligence to front-line warfighters; and make fieldcommand posts more mobile and efficient. The NIE 14.2 exercises also will involve beyond-line-of-sight communications; expeditionary signalbrigade tropospheric scatter communications; network intrusion prevention; cellular communications; electromagnetic spectrum operation;condition based maintenance; and operational energy solutions.

LTAS also focuses on a product range of telescoping masts as a cost-effective means for elevating a camera, radar or antenna array.LTAS model masts are available for heights from 20 feet to over 100 feet (10 stories) and head-load ratings from 15 pounds to 120 pounds.LTAS mast packages and systems are engineered for specific applications that support mobile border patrol, perimeter security, crowdmanagement, emergency incident response, situational awareness, pipeline security, communications relay, repeater and primary antenna array,check points, and port security.

The LTAS tethered drone product line currently under development, are electrically powered drones connected to a ground basedlauncher via a safe and secure tether line. The concept of the tethered drone system is built on the strength of our years of developing tetheredsolutions for our aerostat products and combining that with the advantages of single and multi-rotor copters. The end result is a robust capabilitydesigned to be used in almost all weather environments and controlled with the push of a button. The LTAS tethered copters are being designedto take off, hover and land via remote control while being connected by a unique tether technology where all data, controls and endurance arebuilt into the tether. The same components and systems that our military customers rely on in our launcher systems are being incorporated intothe self-contained LTAS copter system in order to produce a heavier-than-air, tethered product offering. The LTAS tethered drones are designedto take off from the launcher and hover to an operational altitude of up to 1000ft. The tethered system is designed to then follow the vehicle thatis towing the self-contained launcher which is mounted on a standard military specification trailer. The tethered drones are designed to be able toautonomously detect when to follow the tether or simply hover when the vehicle is parked. With the push of a button, the system is designed tobe able to land and be placed back in the launcher for reuse all within FAA guidelines while combining extended durations of up to 18 hours.

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Market

We believe a large and increasing market exists for aerostats like the BiB and WASP, which are smaller and more mobile than many ofthe large tethered aerostats on the market currently and which are specifically designed for quick deployment, maneuverability and superiorweather handling. The BiB and WASP in their deflated, crated form can be transported in standard sized military or commercial vehicles andcan be quickly inflated and launched to the mission applicable altitude by two operators within minutes where they can either remain stationaryor be towed for mobile operations. The systems can be outfitted with various payloads depending on the application or mission. Finally thesystems can be deflated by the same small crew within minutes and either left inflated for near-term redeployment without the need for anyfurther helium or repackaged in their crate for longer-term redeployment. We believe the capabilities of the BiB and WASP system includingtheir relatively low cost, ability to be prepackaged and integrated into a standard vehicle for easy transport to remote locations, the ability todeploy the system within minutes by a small crew without large infrastructure or resources, its ability to hover providing a semi-persistentsecurity capability or their mobile capabilities providing situational awareness to on-the-move forces, and their extremely durable body that isable to handle adverse weather more effectively make the systems advantageous for use in a wide variety of military, quasi-military and civilianapplications.

The market for our LTA aerostats and tethered drones has grown significantly over the last several years, especially following thenumber of terrorist attacks here and abroad, due to the demands associated with the current global threat environment. Aerostats and free flyingdrones proved very valuable in the Iraq and Afghanistan wars and thus are expected to be an increasing military priority in the coming years asthey are able to provide lower cost and safer ISR and communications. The military has transformed into a smaller, more agile fighting force inneed of a network of technologies to provide improved observation, communication and precision targeting of combat troop locations, whichare often embedded in dense population centers or dispersed in remote locations. Our products are intended to provide critical observation andcommunications capabilities serving the increased demand for ISR and communications, including real-time tactical reconnaissance, tracking,combat assessment and geographic data, while reducing the risks to our troops in theatre. The ability to observe adversaries on a continuousbasis in all manner of locations with high-resolution cameras, sensors and other electronic equipment and enhance communication among ourtroops remain critical needs for our military. Finally, in a highly constrained fiscal environment, the typically lower acquisition anduse/maintenance costs of LTA aerostats and tethered drones make them more appealing when compared to their heavier than air manned orlarger LTA unmanned system alternatives.

The markets for LTAS systems on a stand-alone basis and/or combined with other payloads relates to the following applications,among others: Government:

● International, Federal, state and local governments as well as US and foreign government agencies, including DoD, DEA, HomelandSecurity, Customs and Border Patrol, EPA, State Department, FEMA, Transportation, Penitentiary, Police;

● Military;● Intelligence, reconnaissance and surveillance;● Border security monitoring;● Drug enforcement;● Monitoring environmental pollution and sampling air emissions; and● Traffic monitoring. Commercial Applications: ● Mobile communications system;● ISR platform;● Agriculture monitoring● Security for large events● Natural disaster instant infrastructure;● Oil pipeline monitoring and exploration; and● Atmospheric and climate research.

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LTAS’s mast business is focused on producing unique mast-based surveillance systems that offer increased capability at a lowindustry cost. The potential markets for LTAS’s mast products include mobile border patrol, perimeter security, crowd management,emergency incident response situational awareness, communications relay, repeater and primary antenna array, check points, and port security. LTAS currently has various customers utilizing its mast products in both the government and commercial markets. Competition

We believe that the principal competitive factors in the markets for the LTAS aerostat systems include product performance, features,acquisition cost, lifetime operating cost, including maintenance and support, ease of use, integration with existing equipment, size, mobility,quality, reliability, customer support, brand and reputation.

We believe the current market competitors to the BiB and WASP aerostat systems include a large number of not only small “mom andpop” tethered aerostat and balloon companies but large defense contractors, among them: TCOM, Raytheon, Lockheed Martin, ISL, CompassSystems, Raven Aerostar and American Blimp Corporation. We believe there are numerous competitors for LTAS mast systems includingNetvision and Wanco.

Many of LTAS’s competitors have received considerable funding from government or government-related sources to develop andbuild LTA aerostats. Most of these organizations and many of LTAS’s other competitors have greater financial, technical, manufacturing,marketing and sales resources and capabilities than we do. We anticipate increasing competition as a result of defense industry consolidation,which has enabled companies to enhance their competitive position and ability to compete against us. In addition, other companies mayintroduce competing aerostats or solutions based on alternative technologies that may adversely affect the competitive position of LTAS. As aresult, LTAS’s products may become less or non-competitive or obsolete.

Technology, Research and Development

The development, commercialization and construction of the BiB and WASP aerostat systems, masts and tethered drone program aredone in-house.

The research and development efforts of LTAS are largely focused on the tethered drone systems and aerostat systems. LTAS hasdeveloped a “non-military spec” BiB system for use in more commercial or governmental applications not requiring the level of durability andruggedness of the current militarized model and LTAS continues to work on different models with different payloads for various applications.

The LTAS tethered drones are currently under development and can be integrated with any of our aerostat systems as well as our mastsystems. The concept of the tethered drone systems is built on the strength of our years of developing tethered solutions for our aerostatproducts and combining that with the advantages of single and multi-rotor copters. The end result is a robust capability designed to be used inalmost all weather environments and controlled with the push of a button. The LTAS tethered drones are being designed to take off, hover andland via remote control while being connected by a unique tether technology where all data, controls and endurance are built into the tether. Thesame components and systems that LTAS’s military customers rely on in its launcher systems are being incorporated into the self-containedLTAS copter system in order to produce a unique heavier-than-air, tethered product offering.

Partners

LTAS has several agreements with partners to assist it with the marketing and sales of various products, as it currently has limited in-house sales capabilities. LTAS has several distributors both here and abroad for its products as well. Intellectual Property

LTAS’s success and ability to compete depends in part on its ability to develop and maintain its intellectual property and proprietarytechnology and to operate without infringing on the proprietary rights of others. As the development of the tethered drone and aerostat systemscontinues, it is expected that LTAS will rely on patents, trade secrets, copyrights, trademarks, non-disclosure agreements and other contractualprovisions. Trademark registration on the name Blimp in a Box has also been filed and issued. In certain cases, when appropriate, LTAS optsto protect its intellectual property through trade secrets as opposed to filing for patent protection in order to preserve confidentiality. All ofLTAS employees are subject to non-disclosure agreements and other contractual provisions to establish and maintain its proprietary rights.

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Dependence on a Few Customers and Regulatory Matters

We anticipate that the majority of LTAS’s revenue at least in the foreseeable future will come from U.S. government and government-related entities, including both the DoD and other departments and agencies. Government programs that LTAS may seek to participate in mustcompete with other programs for consideration during Congress’s budget and appropriations hearings, and may be affected by changes not onlyin political power and appointments but also general economic conditions and other factors beyond its control. Reductions, extensions orterminations in a program that LTAS is seeking to participate in or overall defense spending could adversely affect its ability to generaterevenues and realize any profits. We cannot predict whether potential changes in security, defense and intelligence priorities will affordopportunities for LTAS’s business in terms of research and development or product contracts, but any reduction in government spending onsuch programs could negatively impact its ability to generate revenues.

LTAS has registered as a contractor with the U.S. Government and is required to comply with and will be affected by laws andregulations relating to the award, administration and performance of U.S. contracts. Government contract laws and regulations affect howLTAS will do business with customers, and in some instances, will impose added costs on its business. A violation of specific laws andregulations could result in the imposition of fines and penalties, the termination of any then existing contracts or the inability to bid on futurecontracts.

Since LTAS systems are tethered to the ground they comply with regulations enforced by the FAA, which currently does not allowany untethered flights by free flying UAS in commercial airspace in the U.S. without prior FAA clearance certifications or an FAA Certificateof Waiver or Authorization (COA) that are difficult and time-consuming to obtain.

International sales of our products may also be subject to U.S. laws, regulations and policies like the United States Department of State

restrictions on the transfer of technology, ITAR and other export laws and regulations and may be subject to first obtaining licenses, clearancesor authorizations from various regulatory entities. This may limit our ability to sell our products abroad and the failure to comply with any ofthese regulations could adversely affect its ability to conduct business and generate revenues as well as increasing its operating costs. Ourproducts may also be subject to regulation by the National Telecommunications and Information Administration and the FederalCommunications Commission that regulate wireless communications.

Sources and Availability of Components

Certain materials and equipment for our products are custom made for those products and are dependent upon either a single or limitednumber of suppliers. Failure of a supplier could cause delays in delivery of the products if another supplier cannot promptly be found or if thequality of such replacement supplier’s components is inferior or unacceptable.

Risk Factors There are numerous and varied risks, known and unknown, that may prevent us from achieving our goals. If any of these risks

actually occur, our business, financial condition or results of operation may be materially adversely affected. In such case, the trading price ofour common stock could decline and investors could lose all or part of their investment.

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Risks Related to Drone Product development is a long, expensive and uncertain process.

The development of LTA aerostats, tethered drones and mast-based ISR systems is a costly, complex and time-consuming process,and the investment in product development often involves a long wait until a return, if any, is achieved on such investment. We continue tomake significant investments in research and development relating to our aerostats, mast-based ISR systems, and tethered powereddrones. Investments in new technology and processes are inherently speculative. Technical obstacles and challenges we encounter in ourresearch and development process may result in delays in or abandonment of product commercialization, may substantially increase the costs ofdevelopment, and may negatively affect our results of operations. Successful technical development of our products does not guarantee successful commercialization.

We may successfully complete the technical development for one or all of our product development programs, but still fail to develop acommercially successful product for a number of reasons, including among others the following: ● failure to obtain the required regulatory approvals for their use;● prohibitive production costs;● competing products;● lack of innovation of the product;● ineffective distribution and marketing;● lack of sufficient cooperation from our partners; and● demonstrations of the products not aligning with or meeting customer needs.

Although we have sold our BiB and WASP aerostat systems and various other aerostat and mast-based ISR systems and components,our success in the market for the products we develop will depend largely on our ability to prove our products’ capabilities. Upondemonstration, our aerostats, tethered drones and mast-based ISR systems may not have the capabilities they were designed to have or that webelieved they would have. Furthermore, even if we do successfully demonstrate our products’ capabilities, potential customers may be morecomfortable doing business with a larger, more established, more proven company than us. Moreover, competing products may prevent us fromgaining wide market acceptance of our products. Significant revenue from new product investments may not be achieved for a number of years,if at all. Our potential customers are likely to be government or government-related entities that are subject to appropriations by Congress andreduced funding for defense procurement and research and development programs would likely adversely impact our ability to generaterevenues.

We anticipate that the majority of our revenue (for our aerostats and tethered drone sales) at least in the foreseeable future will comefrom U.S. government and government-related entities, including both the DoD and other departments and agencies. Government programsthat we may seek to participate in and contracts for aerostats or tethered drones must compete with other programs for consideration duringCongress’ budget and appropriations hearings, and may be affected by changes not only in political power and appointments but also generaleconomic conditions and other factors beyond our control. Reductions, extensions or terminations in a program that we are seeking toparticipate in or overall defense or other spending could adversely affect our ability to generate revenues and realize any profits. We cannotpredict whether potential changes in security, defense, communications and intelligence priorities will afford opportunities for our business interms of research and development or product contracts, but any reduction in government spending on such programs could negatively impactour ability to generate revenues.

Some of our products may be subject to governmental regulations.

International sales of our products may be subject to U.S. laws, regulations and policies like the International Traffic in ArmsRegulations (ITAR) and other export laws and regulations and may be subject to first obtaining licenses, clearances or authorizations fromvarious regulatory entities. If we are not allowed to export our products or the clearance process is burdensome, our ability to generate revenuewould be adversely affected. The failure to comply with any of these regulations could adversely affect our ability to conduct our business andgenerate revenues as well as increasing our operating costs.

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We compete with companies that have significantly more resources than us and already have received government contracts for thedevelopment of aerostats and tethered drones.

A number of our competitors have received considerable funding from government or government-related sources to develop variousaerostats and tethered drones. Most of these organizations and many of our other competitors have greater financial, technical, manufacturing,marketing and sales resources and capabilities than we do. Our products will compete not only with other tethered aerostats, but also withheavier-than-air fixed wing aircraft, manned aircraft, communications satellites and balloons. We anticipate increasing competition as a result ofdefense industry consolidation, which has enabled companies to enhance their competitive position and ability to compete against us. Inaddition, other companies may introduce competing aerostats or solutions based on alternative technologies that may adversely affect ourcompetitive position. As a result, our products may become less or non-competitive or obsolete. If we are not able to compete successfullyagainst our current and future competitors, we may fail to generate revenues and our financial condition would be adversely affected. We may pursue strategic transactions in the future, which could be difficult to implement, disrupt our business or change our businessprofile significantly.

We intend to consider potential strategic transactions, which could involve acquisitions or dispositions of businesses or assets, jointventures or investments in businesses, products or technologies that expand, complement or otherwise relate to our current or future business.We may also consider, from time to time, opportunities to engage in joint ventures or other business collaborations with third parties to addressparticular market segments. These activities create risks such as among others: (i) the need to integrate and manage the businesses and productsacquired with our own business and products, (ii) additional demands on our resources, systems, procedures and controls, (iii) disruption ofour ongoing business, and (iv) diversion of management’s attention from other business concerns. Moreover, these transactions could involve:(a) substantial investment of funds or financings by issuance of debt or equity securities; (b) substantial investment with respect to technologytransfers and operational integration; and (c) the acquisition or disposition of product lines or businesses. Also, such activities could result inone-time charges and expenses and have the potential to either dilute the interests of existing shareholders or result in the issuance of, orassumption of debt. Such acquisitions, investments, joint ventures or other business collaborations may involve significant commitments offinancial and other resources of our company. Any such activity may not be successful in generating revenue, income or other returns to us, andthe resources committed to such activities will not be available to us for other purposes. Moreover, if we are unable to access capital markets onacceptable terms or at all, we may not be able to consummate acquisitions, or may have to do so on the basis of a less than optimal capitalstructure. Our inability: (i) to take advantage of growth opportunities for our business or for our products, or (ii) to address risks associatedwith acquisitions or investments in businesses, may negatively affect our operating results. Additionally, any impairment of goodwill or otherintangible assets acquired in an acquisition or in an investment, or charges to earnings associated with any acquisition or investment activity,may materially reduce our earnings. These future acquisitions or joint ventures may not result in their anticipated benefits and we may not beable to properly integrate acquired products, technologies or businesses, with our existing products and operations or combine personnel andcultures. Failure to do so could deprive us of the intended benefits of those acquisitions.

If we fail to protect our intellectual property rights, we could lose our ability to compete in the marketplace.

Our intellectual property and proprietary rights are important to our ability to remain competitive and for the success of our productsand our business. Patent protection can be limited and not all intellectual property is or can be patented. We rely on a combination of patent,trademark, copyright, and trade secret laws as well as confidentiality agreements and procedures, non-compete agreements and other contractualprovisions to protect our intellectual property, other proprietary rights and our brand. We have little protection when we must rely on tradesecrets and nondisclosure agreements. Our intellectual property rights may be challenged, invalidated or circumvented by third parties. We maynot be able to prevent the unauthorized disclosure or use of our technical knowledge or other trade secrets by employees or competitors.Furthermore, our competitors may independently develop technologies and products that are substantially equivalent or superior to ourtechnologies and/or products, which could result in decreased revenues. Moreover, the laws of foreign countries may not protect ourintellectual property rights to the same extent as the laws of the U.S. Litigation may be necessary to enforce our intellectual property rightswhich could result in substantial costs to us and substantial diversion of management attention. If we do not adequately protect our intellectualproperty, our competitors could use it to enhance their products. Our inability to adequately protect our intellectual property rights couldadversely affect our business and financial condition, and the value of our brand and other intangible assets.

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Other companies may claim that we infringe their intellectual property, which could materially increase our costs and harm our ability togenerate future revenue and profit.

We do not believe our product technologies infringe the proprietary rights of any third party, but claims of infringement are becomingincreasingly common and third parties may assert infringement claims against us. It may be difficult or impossible to identify, prior to receipt ofnotice from a third party, the trade secrets, patent position or other intellectual property rights of a third party, either in the United States or inforeign jurisdictions. Any such assertion may result in litigation or may require us to obtain a license for the intellectual property rights of thirdparties. If we are required to obtain licenses to use any third party technology, we would have to pay royalties, which may significantly reduceany profit on our products. In addition, any such litigation could be expensive and disruptive to our ability to generate revenue or enter into newmarket opportunities. If any of our products were found to infringe other parties’ proprietary rights and we are unable to come to termsregarding a license with such parties, we may be forced to modify our products to make them non-infringing or to cease production of suchproducts altogether. The nature of our business involves significant risks and uncertainties that may not be covered by insurance or indemnity.

We develop and sell products where insurance or indemnification may not be available, including: · Designing and developing products using advanced and unproven technologies and aerostats and tethered drones in intelligence and

homeland security applications that are intended to operate in high demand, high risk situations; and · Designing and developing products to collect, distribute and analyze various types of information.

Failure of certain of our products could result in loss of life or property damage. Certain products may raise questions with respect toissues of civil liberties, intellectual property, trespass, conversion and similar concepts, which may raise new legal issues. Indemnification tocover potential claims or liabilities resulting from a failure of technologies developed or deployed may be available in certain circumstances butnot in others. We are not able to maintain insurance to protect against all operational risks and uncertainties. Substantial claims resulting froman accident, failure of our product, or liability arising from our products in excess of any indemnity or insurance coverage (or for whichindemnity or insurance is not available or was not obtained) could harm our financial condition, cash flows, and operating results. Anyaccident, even if fully covered or insured, could negatively affect our reputation among our customers and the public, and make it more difficultfor us to compete effectively. If we are unable to recruit and retain key management, technical and sales personnel, our business would be negatively affected.

For our business to be successful, we need to attract and retain highly qualified technical, management and sales personnel. The failureto recruit additional key personnel when needed with specific qualifications and on acceptable terms or to retain good relationships with ourpartners might impede our ability to continue to develop, commercialize and sell our products. To the extent the demand for skilled personnelexceeds supply, we could experience higher labor, recruiting and training costs in order to attract and retain such employees. The loss of anymembers of our management team may also delay or impair achievement of our business objectives and result in business disruptions due to thetime needed for their replacements to be recruited and become familiar with our business. We face competition for qualified personnel fromother companies with significantly more resources available to them and thus may not be able to attract the level of personnel needed for ourbusiness to succeed.

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Economic conditions in the U.S. and worldwide could adversely affect our revenues.

Our revenues and operating results depend on the overall demand for our technologies and services. If the U.S. and worldwideeconomies continue to weaken, either alone or in tandem with other factors beyond our control (including war, political unrest, shifts in marketdemand for our services, actions by competitors, etc.), we may not be able to maintain or expand the growth of our revenue. Item 3.02 Unregistered Sales of Equity Securities.

The information set forth in Item 2.01 is incorporated by reference herein.

The transactions did not involve any underwriters, underwriting discounts or commissions, or any public offering. The issuance ofthese securities was deemed to be exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) and/or Rule 506thereunder, thereof, as a transaction by an issuer not involving a public offering.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

The information set forth in Item 2.01 and 3.02 is incorporated by reference herein.

On June 3, 2014, we filed a Certificate of Designation of Preferences, Rights and Limitations of Series D Convertible Preferred Stockauthorizing the issuance of up to 36,0505,000 shares of Series D Preferred Stock and a Certificate of Designation of Preferences, Rights andLimitations of Series E Convertible Preferred Stock authorizing the issuance of up to 2,700,000 shares of Series E Preferred Stock. Item 9.01 Financial Statements and Exhibits (d) Exhibits.

The following is filed as an Exhibit to this Current Report on Form 8-K. Exhibit No. Description3.1 Certificate of Designation of Series D Preferred Stock filed with the Nevada Secretary of State on June 3, 2014.3.2 Certificate of Designation of Series E Preferred Stock filed with the Nevada Secretary of State on June 3, 2014.10.1 Share Exchange Agreement10.2 Employment Agreement dated June 3, 2014 between the Company and Felicia Hess10.3 Employment Agreement dated June 3, 2014 between the Company and Daniyel Erdberg10.4 Form of Indemnification Agreement10.5 Form of Lockup Agreement10.6 Form of Subscription Agreement10.7 Form of Warrant10.8 Sublease Agreement dated April 28, 2014, by and between Aerial Products Corp. and LTAS

10.9 Independent Contractor Agreement dated July 29, 2013, by and among US Technik, Inc., LTAS and World SurveillanceGroup Inc.

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SIGNATURE

Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by theundersigned thereunto duly authorized. DRONE AVIATION HOLDING CORP. Date: June 5, 2014 By: /s/ Felicia Hess Felicia Hess Chief Executive Officer

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Exhibit 3.1

ROSS MILLERSecretary of State

STATE OF NEVADA

OFFICE OF THESECRETARY OF STATE

SCOTT W. ANDERSONDeputy Secretary

for Commercial Recordings

Certified CopyJune 3, 2014

Job Number: C20140603-2727Reference Number:Expedite:Through Date:

The undersigned filing officer hereby certifies that the attached copies are true and exact copies of all requested statements and relatedsubsequent documentation filed with the Secretary of State’s Office, Commercial Recordings Division listed on the attached report. Document Number(s) Description Number of Pages20140408202-93 Certificate of Designation 8 Pages/ 1 Copies

Certified By: NitaHibshmanCertificate Number:C20140603-2727You may verify thiscertificateonline athttp://www.nvsos.gov/

Respectfully,

ROSS MILLERSecretary of State

Commercial Recording Division

202 N. Carson StreetCarson City, Nevada 89701-4069

Telephone (775) 684-5708Fax (775) 684-7138

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Certificate of Designation(PURSUANT TO NRS 78.1955)

USE BLACK INK ONLY - DONOT HIGHLIGHT ABOVE SPACE IS FOR

OFFICE USE ONLY

Certificate of Designation ForNevada Profit Corporations

(Pursuant to NRS 78.1955)

1. Name of corporation:Drone Aviation Holding Corp.

2. By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes the followingregarding the voting powers, designations, preferences, limitations, restrictions and relative rights of the following class or series of stock. The Undersigned, Chief Financial Officer of Drone Aviation Holding Corp., a Nevada corporation (the "Corporation"), in accordancewith the provisions of the Revised Nevada Statues, does hereby certify that, pursuant to the authority conferred upon the Board ofDirectors by the Articles of Incorporation of the Corporation, the following resolution creating a series of Series D Convertible PreferredStock, was duly adopted on June 3, 2014. See attached. 3. Effective date of filing: (optional) (must not be later than 90 days after the certificate is filed) 4. Signature: (required)

X

Filing Fee: $175.00 IMPORTANT: Failure to include any of the above information and submit with the proper fees may cause this filing to berejected.

This form must be accompanied byappropriate fees. Nevada Secretary of State Stock

Designation Revised: 3-6-09

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CERTIFICATE OF DESIGNATION OF PREFERENCES,RIGHTS AND LIMITATIONS

OFSERIES D CONVERTIBLE PREFERRED STOCK

The undersigned, Chief Financial Officer of Drone Aviation Holding Corp., a Nevada corporation (the “Corporation”), DOES HEREBYCERTIFY that the following resolutions were duly adopted by the Board of Directors of the Corporation by unanimous written consent on June3, 2014;

WHEREAS, the Board of Directors is authorized within the limitations and restrictions stated in the Articles of Incorporation of theCorporation, to provide by resolution or resolutions for the issuance of One Hundred Million (100,000,000) shares of Preferred Stock, par value$0.0001 per share, of the Corporation, in such series and with such designations, preferences and relative, participating, optional or other specialrights and qualifications, limitations or restrictions as the Corporation’s Board of Directors shall fix by resolution or resolutions providing for theissuance thereof duly adopted by the Board of Directors; and

WHEREAS, it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to authorize and fix the terms of a series ofPreferred Stock and the number of shares constituting such series.

NOW, THEREFORE, BE IT RESOLVED:

Section 1. Designation and Authorized Shares. The Corporation shall be authorized to issue Thirty Six Million Fifty Thousand(36,050,000) shares of Series D Preferred Stock, par value $0.0001 per share (the “Series D Preferred Stock”).

Section 2. Stated Value. Each share of Series D Preferred Stock shall have a stated value of $0.0001 per share (the “Stated Value”).

Section 3. Liquidation.

(a) Upon the liquidation, dissolution or winding up of the business of the Corporation, whether voluntary or involuntary, eachholder of Series D Preferred Stock shall be entitled to receive, for each share thereof, out of assets of the Corporation legally available therefor, apreferential amount in cash equal to (and not more than) the Stated Value. All preferential amounts to be paid to the holders of Series DPreferred Stock in connection with such liquidation, dissolution or winding up shall be paid before the payment or setting apart for payment ofany amount for, or the distribution of any assets of the Corporation to the holders of (i) any other class or series of capital stock whose termsexpressly provide that the holders of Series D Preferred Stock should receive preferential payment with respect to such distribution (to the extentof such preference), (ii) the Corporation’s Series C Convertible Preferred Stock and (iii) the Corporation's Common Stock and not before anypayment to the Corporation’s Series A Convertible Preferred Stock, Series B Convertible Preferred Stock or Series B-1 Convertible PreferredStock. If upon any such distribution the assets of the Corporation shall be insufficient to pay the holders of the outstanding shares of Series DPreferred Stock (or the holders of any class or series of capital stock ranking on a parity with the Series D Preferred Stock as to distributions inthe event of a liquidation, dissolution or winding up of the Corporation) the full amounts to which they shall be entitled, such holders shall shareratably in any distribution of assets in accordance with the sums which would be payable on such distribution if all sums payable thereon werepaid in full.

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(b) Upon the completion of the distribution required by subparagraph (a) of this Section 3 and the distribution to holders ofany other of the Corporation’s securities which entitles them to a preferential payment over the Series D Preferred Stock, the holders of theSeries D Preferred Stock shall be entitled to participate in any distribution made to the holders of Common Stock, on an “as-converted basis”,along with any other holders who are entitled to such distribution, on a pro rata basis, based on the number of shares of Series D Preferred Stockheld at the time of such distribution. For the avoidance of doubt, holders of the Series D Preferred Stock shall not be entitled to any payment ordistribution in connection with any payments made to holders of the Corporation’s Series A Convertible Preferred Stock, Series B ConvertiblePreferred Stock or the Series B-1 Convertible Preferred Stock, including pursuant to Section 3 of the Certificate of Designations of Preferences,Rights and Limitations of Series B-1 Convertible Preferred Stock

(c) Any distribution in connection with the liquidation, dissolution or winding up of the Corporation, or any bankruptcy orinsolvency proceeding, shall be made in cash to the extent possible. Whenever any such distribution shall be paid in property other than cash,the value of such distribution shall be the fair market value of such property as determined in good faith by the Board of Directors of theCorporation.

Section 4. Voting. Except as otherwise expressly required by law, each holder of Series D Preferred Stock shall be entitled to vote onall matters submitted to shareholders of the Corporation and shall be entitled to the number of votes for each share of Series D Preferred Stockowned at the record date for the determination of shareholders entitled to vote on such matter or, if no such record date is established, at the datesuch vote is taken or any written consent of shareholders is solicited, equal to the number of shares of Common Stock such shares of Series DPreferred Stock are convertible into at such time, but not in excess of the conversion limitations set forth in Section 5 herein. Except as otherwiserequired by law, the holders of shares of Series D Preferred Stock shall vote together with the holders of Common Stock on all matters and shallnot vote as a separate class.

Section 5. Conversion.

(a) Conversion Right. Each holder of Series D Preferred Stock may, from time to time, convert any or all of such holder’sshares of Series D Preferred Stock into fully paid and non-assessable shares of Common Stock in an amount equal to one (1) of theCorporation’s common stock (the “Common Stock”) for each one (1) share of Series D Preferred Stock surrendered.

(b) Conversion Procedure. In order to exercise the conversion privilege under this Section 5, the holder of any shares of

Series D Preferred Stock to be converted shall give written notice to the Corporation at its principal office that such holder elects to convert suchshares of Series D Preferred Stock or a specified portion thereof into shares of Common Stock as set forth in such notice (the “ConversionNotice”, and such date of delivery of the Conversion Notice to the Corporation, the “Conversion Notice Delivery Date”). Within three (3)business days following the Conversion Notice Delivery Date, the Corporation shall issue and deliver a certificate or certificates representing thenumber of shares of Common Stock determined pursuant to this Section 5 (the “Share Delivery Date”). In case of conversion under this Section5 of only a part of the shares of Series D Preferred Stock represented by a certificate surrendered to the Corporation, the Corporation shall issueand deliver a new certificate for the number of shares of Series D Preferred Stock which have not been converted, upon receipt of the originalcertificate or certificates representing shares of Series D Preferred Stock so converted. Until such time as the certificate or certificatesrepresenting shares of Series D Preferred Stock which have been converted are surrendered to the Corporation and a certificate or certificatesrepresenting the Common Stock into which such shares of Series D Preferred Stock have been converted have been issued and delivered, thecertificate or certificates representing the shares of Series D Preferred Stock which have been converted shall represent the shares of CommonStock into which such shares of Series D Preferred Stock have been converted. The Corporation shall pay all documentary, stamp or similarissue or transfer tax due on the issue of shares of Common Stock issuable upon conversion of the Series D Preferred Stock.

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(c) Maximum Conversion.

(i) Notwithstanding anything to the contrary set forth in this Certificate of Designation, at no time may all or a portion of sharesof Series D Preferred Stock be converted if the number of shares of Common Stock to be issued pursuant to such conversionwould exceed, when aggregated with all other shares of Common Stock owned by such holder at such time, the number ofshares of Common Stock which would result in such holder beneficially owning (as determined in accordance with Section13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules thereunder) more than 3.33% ofall of the Common Stock outstanding at such time (the “3.33% Beneficial Ownership Limitation”).

(ii) By written notice to the Corporation, any holder of Series D Preferred Stock may increase or decrease the 3.33% Beneficial

Ownership Limitation to any other percentage not in excess of 4.99% specified in such notice; provided that (i) any suchincrease will not be effective until the 61st day after such notice is delivered to the Corporation, and (ii) any such increase ordecrease will apply only to such holder of Series D Preferred Stock sending such notice and not to any other holder of Series DPreferred Stock; provided further, that the Corporation acknowledges that, notwithstanding the foregoing, as of the date hereof,some holders of Series D Preferred Stock have elected to have the 3.33% Beneficial Ownership Limitation to initially be4.99%.

(iii) For purposes of this Section 5, in determining the number of outstanding shares of Common Stock, a holder of Series D

Preferred Stock may rely on the number of outstanding shares of Common Stock as reflected in (1) the Corporation’s mostrecent Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and ExchangeCommission, as the case may be, (2) a more recent public announcement by the Corporation or (3) any other notice by theCorporation setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the writtenor oral request of a holder of Series D Preferred Stock, the Corporation shall within one (1) business day confirm orally andin writing to such holder the number of shares of Common Stock then outstanding. In any case, the number of outstandingshares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Corporation,including shares of Series D Preferred Stock, held by such holder and its affiliates since the date as of which such number ofoutstanding shares of Common Stock was reported, which in any event are convertible or exercisable, as the case may be, intoshares of the Corporation’s Common Stock within sixty (60) days’ of such calculation and which are not subject to alimitation on conversion or exercise analogous to the limitation contained herein. The provisions of this paragraph shall beconstrued and implemented in a manner otherwise than in strict conformity with the terms of this Section 5 to correct thisparagraph (or any portion hereof) which may be defective or inconsistent with the intended beneficial ownership limitationherein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.

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(d) Buy-In. If, by the Share Delivery Date, the Corporation fails for any reason to deliver the shares of Common Stockissuable upon conversion of the Series D Preferred Stock, as set forth in the Conversion Notice, and after such Share Delivery Date, theconverting holder purchases, in an arm’s length open market transaction or otherwise, shares of Common Stock (the “Covering Shares”) in orderto make delivery in satisfaction of a sale of Common Stock by the converting holder (the “Sold Shares”), which delivery such converting holderanticipated to make using the shares to be issued upon such conversion (a “Buy-In”), the converting holder shall have the right to require theCorporation to pay to the converting holder the Buy-In Adjustment Amount. The Corporation shall pay the Buy-In Adjustment Amount to theconverting holder in immediately available funds immediately upon demand by the converting holder. For purposes of this Certificate ofDesignation, the term “Buy-In Adjustment Amount” means the amount equal to the excess, if any, of (i) the converting holder’s total purchaseprice (including brokerage commissions, if any) for the Covering Shares associated with a Buy-In, over (ii) the net proceeds (after brokeragecommissions, if any) received by the converting holder from the sale of the Sold Shares. By way of illustration and not in limitation of theforegoing, if the converting holder purchases shares of Common Stock having a total purchase price (including brokerage commissions) of$11,000 to cover a Buy-In, with respect to shares of Common Stock it sold for net proceeds of $10,000, the Buy-In Adjustment Amount whichthe Corporation will be required to pay to the converting holder will be $1,000.

Section 6. Other Provisions.

(a) Reservation of Common Stock. The Corporation shall at all times reserve from its authorized Common Stock a sufficientnumber of shares to provide for conversion of all Series D Preferred Stock from time to time outstanding.

(b) Record Holders. The Corporation and its transfer agent, if any, for the Series D Preferred Stock may deem and treat therecord holder of any shares of Series D Preferred Stock as reflected on the books and records of the Corporation as the sole true and lawfulowner thereof for all purposes, and neither the Corporation nor any such transfer agent shall be affected by any notice to the contrary.

Section 7. Restriction and Limitations. Except as expressly provided herein or as required by law so long as any shares of Series DPreferred Stock remain outstanding, the Corporation shall not, without the vote or written consent of the holders of at least a majority of the thenoutstanding shares of the Series D Preferred Stock, take any action which would adversely and materially affect any of the preferences,limitations or relative rights of the Series D Preferred Stock.

Section 8. Certain Adjustments.

(a) Stock Dividends and Stock Splits. If the Corporation, at any time while the Series D Preferred Stock is outstanding: (A)shall pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equityequivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issuedby the Corporation pursuant to the Series D Preferred Stock), (B) subdivide outstanding shares of Common Stock into a larger number ofshares, (C) combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D)issue by reclassification of shares of the Common Stock any shares of capital stock of the Corporation, each share of Series D Preferred Stockshall receive such consideration as if such number of shares of Series D Preferred had been, immediately prior to such foregoing dividend,distribution, subdivision, combination or reclassification, the holder of the number of shares of Common Stock into which it could convert atsuch time. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination ofstockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of asubdivision, combination or re-classification.

Section 9. Equal Treatment of Holders. No consideration (including any modification of this Certificate of Designation or relatedtransaction document) shall be offered or paid to any person or entity to amend or consent to a waiver or modification of any provision of thisCertificate of Designation or related transaction document unless the same consideration is also offered to all of holders of the outstanding sharesof Series D Preferred Stock. For clarification purposes, this provision constitutes a separate right granted to each holder by the Corporation andnegotiated separately by each holder, and is intended for the Corporation to treat all holders of the Series D Preferred Stock as a class and shallnot in any way be construed as such holders acting in concert or as a group with respect to the purchase, disposition or voting of the Series DPreferred Stock or otherwise

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IN WITNESS WHEREOF, the undersigned has executed this Certificate this 3rd day of June 2014. By:

/s/

Name:Kendall Carpenter Title: Chief Financial Officer

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Exhibit 3.2

ROSS MILLERSecretary of State

STATE OF NEVADA

OFFICE OF THESECRETARY OF STATE

SCOTT W. ANDERSONDeputy Secretary

for Commercial Recordings

Certified Copy

June 3, 2014

Job Number: C20140603-2727Reference Number:Expedite:Through Date:

The undersigned filing officer hereby certifies that the attached copies are true and exact copies of all requested statements and relatedsubsequent documentation filed with the Secretary of State’s Office, Commercial Recordings Division listed on the attached report. Document Number(s) Description Number of Pages20140408214-36 Certificate of Designation 8 Pages/ 1 Copies

Certified By: NitaHibshmanCertificate Number:C20140603-2727You may verify thiscertificateonline athttp://www.nvsos.gov/

Respectfully,

ROSS MILLER Secretary of State

Commercial Recording Division202 N. Carson Street

Carson City, Nevada 89701-4069Telephone (775) 684-5708

Fax (775) 684-7138

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Certificate of Designation(PURSUANT TO NRS 78.1955)

USE BLACK INK ONLY - DO NOT HIGHLIGHT ABOVE SPACE IS FOROFFICE USE ONLY

Certificate of Designation ForNevada Profit Corporations

(Pursuant to NRS 78.1955)

1. Name of corporation: Drone Aviation Holding Corp.

2. By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes the followingregarding the voting powers, designations, preferences, limitations, restrictions and relative rights of the following class or series of stock. The Undersigned, Chief Financial Officer of Drone Aviation Holding Corp., a Nevada corporation (the "Corporation"), in accordance withthe provisions of the Revised Nevada Statues, does hereby certify that, pursuant to the authority conferred upon the Board of Directors bythe Articles of Incorporation of the Corporation, the following resolution creating a series of Series E Convertible Preferred Stock, wasduly adopted on June 3, 2014. See attached. 3. Effective date of filing: (optional) (must not be later than 90 days after the certificate is filed) 4. Signature: (required)

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Filing Fee: $175.00 IMPORTANT: Failure to include any of the above information and submit with the proper fees may cause this filing to be rejected.

This form must be accompanied byappropriate fees. Nevada Secretary of State Stock

Designation

appropriate fees. Designation Revised: 3-6-09

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CERTIFICATE OF DESIGNATION OF PREFERENCES,RIGHTS AND LIMITATIONS

OFSERIES E CONVERTIBLE PREFERRED STOCK

The undersigned, Chief Financial Officer of Drone Aviation Holding Corp., a Nevada corporation (the “Corporation”), DOES HEREBYCERTIFY that the following resolutions were duly adopted by the Board of Directors of the Corporation by unanimous written consent onJune 3, 2014;

WHEREAS, the Board of Directors is authorized within the limitations and restrictions stated in the Articles of Incorporation of theCorporation, as amended, to provide by resolution or resolutions for the issuance of One Hundred Million (100,000,000) shares of PreferredStock, par value $0.0001 per share, of the Corporation, in such series and with such designations, preferences and relative, participating,optional or other special rights and qualifications, limitations or restrictions as the Corporation’s Board of Directors shall fix by resolution orresolutions providing for the issuance thereof duly adopted by the Board of Directors; and

WHEREAS, it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to authorize and fix the terms of a series ofPreferred Stock and the number of shares constituting such series;

NOW, THEREFORE, BE IT RESOLVED:

Section 1. Designation and Authorized Shares. The Corporation shall be authorized to issue Two Million Seven Hundred Thousand(2,700,000) shares of Series E Convertible Preferred Stock, par value $0.0001 per share (the “Series E Preferred Stock”).

Section 2. Stated Value. Each share of Series E Preferred Stock shall have a stated value of $0.0001 per share (the “Stated Value”).

Section 3. Liquidation.

(a) Upon the liquidation, dissolution or winding up of the business of the Corporation, whether voluntary or involuntary,each holder of Series E Preferred Stock shall be entitled to receive, for each share thereof, out of assets of the Corporation legally availabletherefor, a preferential amount in cash equal to (and not more than) the Stated Value. All preferential amounts to be paid to the holders ofSeries E Preferred Stock in connection with such liquidation, dissolution or winding up shall be paid before the payment or setting apart forpayment of any amount for, or the distribution of any assets of the Corporation to the holders of (i) any other class or series of capital stockwhose terms expressly provide that the holders of Series E Preferred Stock should receive preferential payment with respect to suchdistribution (to the extent of such preference) and (ii) the Corporation's Common Stock. If upon any such distribution the assets of theCorporation shall be insufficient to pay the holders of the outstanding shares of Series E Preferred Stock (or the holders of any class or seriesof capital stock ranking on a parity with the Series E Preferred Stock as to distributions in the event of a liquidation, dissolution or winding upof the Corporation) the full amounts to which they shall be entitled, such holders shall share ratably in any distribution of assets in accordancewith the sums which would be payable on such distribution if all sums payable thereon were paid in full.

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(b) Any distribution in connection with the liquidation, dissolution or winding up of the Corporation, or any bankruptcy orinsolvency proceeding, shall be made in cash to the extent possible. Whenever any such distribution shall be paid in property other than cash,the value of such distribution shall be the fair market value of such property as determined in good faith by the Board of Directors of theCorporation.

Section 4. Voting. Except as otherwise expressly required by law, each holder of Series E Preferred Stock shall be entitled to vote onall matters submitted to shareholders of the Corporation and shall be entitled to the number of votes for each share of Series E Preferred Stockowned at the record date for the determination of shareholders entitled to vote on such matter or, if no such record date is established, at the datesuch vote is taken or any written consent of shareholders is solicited, equal to the number of shares of Common Stock such shares of Series EPreferred Stock are convertible into at such time, but not in excess of the conversion limitations set forth in Section 5 herein. Except asotherwise required by law, the holders of shares of Series E Preferred Stock shall vote together with the holders of Common Stock on allmatters and shall not vote as a separate class.

Section 5. Conversion.

(a) Conversion Right. Each holder of Series E Preferred Stock may, from time to time, convert any or all of such holder’sshares of Series E Preferred Stock into fully paid and non-assessable shares of the Corporation’s common stock, par value $0.0001 per share(the “Common Stock”) in an amount equal to one (1) share of Common Stock for each one (1) share of Series E Preferred Stock surrendered.

(b) Conversion Procedure. In order to exercise the conversion privilege under this Section 5, the holder of any shares of

Series E Preferred Stock to be converted shall give written notice to the Corporation at its principal office that such holder elects to convert suchshares of Series E Preferred Stock or a specified portion thereof into shares of Common Stock as set forth in such notice (the “ConversionNotice”, and such date of delivery of the Conversion Notice to the Corporation, the “Conversion Notice Delivery Date”). Within three (3)business days following the Conversion Notice Delivery Date, the Corporation shall issue and deliver a certificate or certificates representingthe number of shares of Common Stock determined pursuant to this Section 5 (the “Share Delivery Date”). In case of conversion under thisSection 5 of only a part of the shares of Series E Preferred Stock represented by a certificate surrendered to the Corporation, the Corporationshall issue and deliver a new certificate for the number of shares of Series E Preferred Stock which have not been converted, upon receipt ofthe original certificate or certificates representing shares of Series E Preferred Stock so converted. Until such time as the certificate orcertificates representing shares of Series E Preferred Stock which have been converted are surrendered to the Corporation and a certificate orcertificates representing the Common Stock into which such shares of Series E Preferred Stock have been converted have been issued anddelivered, the certificate or certificates representing the shares of Series E Preferred Stock which have been converted shall represent the sharesof Common Stock into which such shares of Series E Preferred Stock have been converted. The Corporation shall pay all documentary, stampor similar issue or transfer tax due on the issue of shares of Common Stock issuable upon conversion of the Series E Preferred Stock.

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(c) Maximum Conversion.

(i) Notwithstanding anything to the contrary set forth in this Certificate of Designation, at no time may all or a portion of sharesof Series E Preferred Stock be converted if the number of shares of Common Stock to be issued pursuant to such conversionwould exceed, when aggregated with all other shares of Common Stock owned by such holder at such time, the number ofshares of Common Stock which would result in such holder beneficially owning (as determined in accordance with Section13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules thereunder) more than 3.33%of all of the Common Stock outstanding at such time (the “3.33% Beneficial Ownership Limitation”).

(ii) By written notice to the Corporation, any holder of Series E Preferred Stock may increase or decrease the 3.33% Beneficial

Ownership Limitation to any other percentage not in excess of 4.99% specified in such notice; provided that (i) any suchincrease will not be effective until the 61st day after such notice is delivered to the Corporation, and (ii) any such increase ordecrease will apply only to such holder of Series E Preferred Stock sending such notice and not to any other holder of SeriesE Preferred Stock; provided further, that the Corporation acknowledges that, notwithstanding the foregoing, as of the datehereof, some holders of Series E Preferred Stock have elected to have the 3.33% Beneficial Ownership Limitation to initiallybe 4.99%.

(iii) For purposes of this Section 5, in determining the number of outstanding shares of Common Stock, a holder of Series E

Preferred Stock may rely on the number of outstanding shares of Common Stock as reflected in (1) the Corporation’s mostrecent Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and ExchangeCommission, as the case may be, (2) a more recent public announcement by the Corporation or (3) any other notice by theCorporation setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the writtenor oral request of a holder of Series E Preferred Stock, the Corporation shall within one (1) business day confirm orally andin writing to such holder the number of shares of Common Stock then outstanding. In any case, the number of outstandingshares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Corporation,including shares of Series E Preferred Stock, held by such holder and its affiliates since the date as of which such number ofoutstanding shares of Common Stock was reported, which in any event are convertible or exercisable, as the case may be, intoshares of the Corporation’s Common Stock within sixty (60) days’ of such calculation and which are not subject to alimitation on conversion or exercise analogous to the limitation contained herein. The provisions of this paragraph shall beconstrued and implemented in a manner otherwise than in strict conformity with the terms of this Section 5 to correct thisparagraph (or any portion hereof) which may be defective or inconsistent with the intended beneficial ownership limitationherein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.

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(d) Buy-In. If, by the Share Delivery Date, the Corporation fails for any reason to deliver the shares of Common Stockissuable upon conversion of the Series E Preferred Stock, as set forth in the Conversion Notice, and after such Share Delivery Date, theconverting holder purchases, in an arm’s length open market transaction or otherwise, shares of Common Stock (the “Covering Shares”) inorder to make delivery in satisfaction of a sale of Common Stock by the converting holder (the “Sold Shares”), which delivery such convertingholder anticipated to make using the shares to be issued upon such conversion (a “Buy-In”), the converting holder shall have the right to requirethe Corporation to pay to the converting holder the Buy-In Adjustment Amount. The Corporation shall pay the Buy-In Adjustment Amount tothe converting holder in immediately available funds immediately upon demand by the converting holder. For purposes of this Certificate ofDesignation, the term “Buy-In Adjustment Amount” means the amount equal to the excess, if any, of (i) the converting holder’s total purchaseprice (including brokerage commissions, if any) for the Covering Shares associated with a Buy-In, over (ii) the net proceeds (after brokeragecommissions, if any) received by the converting holder from the sale of the Sold Shares. By way of illustration and not in limitation of theforegoing, if the converting holder purchases shares of Common Stock having a total purchase price (including brokerage commissions) of$11,000 to cover a Buy-In, with respect to shares of Common Stock it sold for net proceeds of $10,000, the Buy-In Adjustment Amount whichthe Corporation will be required to pay to the converting holder will be $1,000.

Section 6. Other Provisions.

(a) Reservation of Common Stock. The Corporation shall at all times reserve from its authorized Common Stock a sufficientnumber of shares to provide for conversion of all Series E Preferred Stock from time to time outstanding.

(b) Record Holders. The Corporation and its transfer agent, if any, for the Series E Preferred Stock may deem and treat therecord holder of any shares of Series E Preferred Stock as reflected on the books and records of the Corporation as the sole true and lawfulowner thereof for all purposes, and neither the Corporation nor any such transfer agent shall be affected by any notice to the contrary.

Section 7. Restriction and Limitations. Except as expressly provided herein or as required by law so long as any shares of Series EPreferred Stock remain outstanding, the Corporation shall not, without the vote or written consent of the holders of at least a majority of the thenoutstanding shares of the Series E Preferred Stock, take any action which would adversely and materially affect any of the preferences,limitations or relative rights of the Series E Preferred Stock.

Section 8. Certain Adjustments.

(a) Stock Dividends and Stock Splits. If the Corporation, at any time while the Series E Preferred Stock is outstanding: (A)shall pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equityequivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stockissued by the Corporation pursuant to the Series E Preferred Stock), (B) subdivide outstanding shares of Common Stock into a larger numberof shares, (C) combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D)issue by reclassification of shares of the Common Stock any shares of capital stock of the Corporation, each share of Series E Preferred Stockshall receive such consideration as if such number of shares of Series E Preferred had been, immediately prior to such foregoing dividend,distribution, subdivision, combination or reclassification, the holder of the number of shares of Common Stock into which it could convert atsuch time. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination ofstockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of asubdivision, combination or re-classification.

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(b) Favored Nations Provision. For a period of twenty-four (24) months from the date of issuance of Series E PreferredStock, other than in connection with (i) full or partial consideration in connection with a strategic merger, acquisition, consolidation or purchaseof substantially all of the securities or assets of a corporation or other entity which holders of such securities or debt are not at any time grantedregistration rights equal to or greater than those granted to the holders of Series E Preferred Stock, (ii) the Corporation’s issuance of securitiesin connection with strategic license agreements and other partnering arrangements so long as such issuances are not primarily for the purposeof raising capital and which holders of such securities or debt are not at any time granted registration rights equal to or greater than thosegranted to the holders, (iii) the Corporation’s issuance of Common Stock or the issuances or grants of options to purchase Common Stock toemployees, directors, and consultants, pursuant to plans that have been approved by a majority of the stockholders and a majority of theindependent members of the board of directors of the Corporation or in existence as such plans are constituted on the date of issuance, (iv) theCorporation’s issuance of securities upon the exercise or exchange of or conversion of any securities exercisable or exchangeable for orconvertible into shares of Common Stock issued and outstanding on the date of issuance of Series E Preferred Stock, (v) an issuance by theCorporation of securities resulting from the conversion of Series E Preferred Stock or upon exercise of warrants issued in connection with theSeries E Preferred Stock, (vi) the Corporation’s issuance of Common Stock or the issuances or grants of options to purchase Common Stockto consultants and service providers approved by a majority in amount of the shares of Series E Preferred Stock held as of the date of approval(“Holder Consent”), and (vii) any and all securities required to be assumed by the Corporation by the terms thereof as a result of any of theforegoing even if issued by a predecessor acquired in connection with a business combination, merger or share exchange (collectively, theforegoing (i) through (vii) are “Excepted Issuances”), if at any time the Corporation shall issue any Common Stock or securities convertibleinto or exercisable for shares of Common Stock (or modify any of the foregoing which may be outstanding) to any person or entity at a priceper share or conversion or exercise price per share which shall be less than $0.50 per share, being the per share price of the Series E PreferredStock hereunder or as in effect at such time, without Holder Consent (the “Lower Price Issuance”), then the Corporation shall issue the holdersuch number of additional shares of Series E Preferred Stock to reflect such lower price for the shares of Series E Preferred Stock such that theholder shall hold such number of shares of Series E Preferred Stock in total, had holder paid a per share price equal to the Lower PriceIssuance. Common Stock issued or issuable by the Corporation for no consideration or for consideration that cannot be determined at the timeof issue will be deemed issuable or to have been issued for $0.0001 per share of Common Stock. The rights of holders set forth in this Section8(b) are in addition to any other rights the holders have pursuant to this Certificate of Designation, and any other agreement referred to orentered into in connection herewith or to which holders and Corporation are parties. Notwithstanding anything herein or in any otheragreement to the contrary, the Corporation shall only be required to make a single adjustment with respect to any Lower Price Issuance,regardless of the existence of multiple basis therefore.

Section 9. Equal Treatment of Holders. No consideration (including any modification of this Certificate of Designation or relatedtransaction document) shall be offered or paid to any person or entity to amend or consent to a waiver or modification of any provision of thisCertificate of Designation or related transaction document unless the same consideration is also offered to all of holders of the outstandingshares of Series E Preferred Stock. For clarification purposes, this provision constitutes a separate right granted to each holder by theCorporation and negotiated separately by each holder, and is intended for the Corporation to treat all holders of the Series E Preferred Stock as aclass and shall not in any way be construed as such holders acting in concert or as a group with respect to the purchase, disposition or voting ofthe Series E Preferred Stock or otherwise.

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IN WITNESS WHEREOF, the undersigned has executed this Certificate this 3rd day of June 2014. By:

/s/

Name:Kendall Carpenter Title: Chief Financial Officer

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Exhibit 10.1SHARE EXCHANGE AGREEMENT

This SHARE EXCHANGE AGREEMENT (this “Agreement”), dated as of June 3, 2014, is by and among Drone Aviation

Holding Corp., a Nevada corporation (the “Parent”), Drone Aviation Corp., a Nevada corporation (the “Company”) and the shareholders of theCompany (the “Shareholders” and each a “Shareholder”). Each of the parties to this Agreement is individually referred to herein as a “Party” andcollectively as the “Parties.”

BACKGROUND

The Company has 44,100,000 shares of common stock (the “Company Shares”) outstanding, all of which are held by theShareholders. The Shareholders have agreed to transfer the Company Shares in exchange for an aggregate of Forty Four Million One HundredThousand (44,100,000) newly issued shares of common stock, par value $0.0001 per share, of the Parent ( the “Parent Common Stock”), exceptthat Shareholders who, as a result of receiving the Company Shares would hold in excess of 3% of the Parent’s issued and outstanding commonstock on a post-Closing (as defined below) basis, may elect, in its sole discretion by checking the applicable box on the signature page hereto, toreceive shares of the Parent’s Series D Convertible Preferred Stock, with such rights, preferences and designations as are set forth in theCertificate of Designations of Preferences, Rights and Limitations of Series D Convertible Preferred Stock, attached hereto as Exhibit A (the“Parent Preferred Stock, and collectively with the Parent Common Stock, the “Parent Stock”).

The exchange of Company Shares for Parent Stock is intended to constitute a reorganization within the meaning of the InternalRevenue Code of 1986, as amended (the “Code”), or such other tax free reorganization or restructuring provisions as may be available under theCode.

The Board of Directors of each of the Parent and the Company has determined that it is desirable to affect this plan ofreorganization and share exchange.

On May 5, 2014, the Company entered into a share exchange agreement (the “LTAS Share Exchange Agreement”) withLighter Than Air Systems Corp (“LTAS”) and the sole shareholder of LTAS pursuant to which all of the outstanding capital of LTAS wastransferred to the Company in exchange for shares of the Company’s common stock, causing LTAS to become a wholly owned subsidiary of theCompany. Under the LTAS Share Exchange Agreement, LTAS made representations and warranties to the Company which LTASacknowledges that the Parent shall be entitled to rely upon as a third party beneficiary thereof as of the date such representations and warrantieswere made.

AGREEMENT

NOW THEREFORE, for good and valuable consideration the receipt and sufficiency is hereby acknowledged, the Partieshereto intending to be legally bound hereby agree as follows:

ARTICLE IExchange of Shares

SECTION 1.01. (a) Exchange by the Shareholders. At the Closing (as defined in Section 1.02), the Shareholders shall sell,

transfer, convey, assign and deliver to the Parent all of the Company Shares free and clear of all Liens in exchange for (i) an aggregate of FortyFour Million One Hundred Thousand (44,100,000) shares of Parent Common Stock and Parent Preferred Stock in such amounts and in suchdenominations as set forth on Exhibit B, attached hereto.

SECTION 1.02. Closing. The closing (the “Closing”) of the transactions contemplated by this Agreement (the “Transactions”) shalltake place at such location to be determined by the Company and Parent, commencing upon the satisfaction or waiver of all conditions andobligations of the Parties to consummate the Transactions contemplated hereby (other than conditions and obligations with respect to the actionsthat the respective Parties will take at Closing) or such other date and time as the Parties may mutually determine (the “Closing Date”).

ARTICLE IIRepresentations and Warranties of the Shareholders

Each Shareholder individually, and not on behalf of any other Shareholder, hereby represents and warrants to the Parent, as follows:

SECTION 2.01. Good Title. The Shareholder is the record and beneficial owner, and has good and marketable title to its Company

Shares with the right and authority to sell and deliver such Company Shares to Parent as provided herein. The Shareholder owns the CompanyShares free and clear of any and all Liens, claims, encumbrances, preemptive rights, right of first refusal and adverse interests of any kind. Uponregistering of the Parent as the new owner of such Company Shares in the share register of the Company, the Parent will receive good title tosuch Company Shares, free and clear of all liens, security interests, pledges, equities and claims of any kind, voting trusts, shareholderagreements and other encumbrances (collectively, “Liens”).

SECTION 2.02. Power and Authority. All acts required to be taken by the Shareholder to enter into this Agreement and to carry out theTransactions have been properly taken. This Agreement constitutes a legal, valid and binding obligation of the Shareholder, enforceable againstsuch Shareholder in accordance with the terms hereof, subject to applicable bankruptcy, insolvency and similar laws of general applicability andto general principles of equity.

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SECTION 2.03. No Conflicts. The Shareholder has the requisite power and authority to enter into this Agreement and to consummatethe transactions contemplated hereby and otherwise to carry out the Shareholder’s obligations hereunder. No consent, approval or agreement ofany individual or entity is required to be obtained by the Shareholder in connection with the execution and performance by the Shareholder of thisAgreement or the execution and performance by the Shareholder of any agreements, instruments or other obligations entered into in connectionwith this Agreement. The execution and delivery of this Agreement by the Shareholder and the performance by the Shareholder of its obligationshereunder in accordance with the terms hereof: (i) will not require the consent of any third party or any federal, state, local or foreign governmentor any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic orforeign (“Governmental Entity”) under any statutes, laws, ordinances, rules, regulations, orders, writs, injunctions, judgments, or decrees(collectively, “Laws”); (ii) to such Shareholder’s knowledge, will not violate any Laws applicable to such Shareholder; and (iii) will not violate orbreach any contractual obligation to which such Shareholder is a party.

SECTION 2.04. No Finder’s Fee. The Shareholder has not created any obligation for any finder’s, investment banker’s or broker’s feein connection with the Transactions that the Company or the Parent will be responsible for.

SECTION 2.05. Purchase Entirely for Own Account. The Parent Stock proposed to be acquired by the Shareholder hereunder will beacquired for investment for his own account, and not with a view to the resale or distribution of any part thereof, and the Shareholder has nopresent intention of selling or otherwise distributing the Parent Stock, except in compliance with applicable securities laws.

SECTION 2.06. Available Information. The Shareholder has such knowledge and experience in financial and business matters that it iscapable of evaluating the merits and risks of an investment in the Parent.

SECTION 2.07. Non-Registration. The Shareholder understands that the Parent Common Stock (or the Parent Preferred Stock and theshares of Parent’s common stock issuable upon conversion of the Parent Preferred Stock, as the case may be) have not been registered under theSecurities Act of 1933, as amended (the “Securities Act”) and, if issued in accordance with the provisions of this Agreement, will be issued byreason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fidenature of the investment intent and the accuracy of the Shareholder’s representations as expressed herein.

SECTION 2.08. Restricted Securities. The Shareholder understands that the shares of Parent Stock are characterized as “restrictedsecurities” under the Securities Act inasmuch as this Agreement contemplates that, if acquired by the Shareholder pursuant hereto, the ParentStock would be acquired in a transaction not involving a public offering. The Shareholder further acknowledges that if the Parent Stock is issuedto the Shareholder in accordance with the provisions of this Agreement, such Parent Stock may not be resold without registration under theSecurities Act or the existence of an exemption therefrom. The Shareholder represents that it is familiar with Rule 144 promulgated under theSecurities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

SECTION 2.09. Legends. It is understood that the shares of Parent Common Stock, Parent Preferred Stock and common stock issuableupon conversion of the Parent Preferred Stock will bear the following legend or another legend that is similar to the following:

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGECOMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON ANEXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPTPURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACTOR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOTSUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND INACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGALOPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OFWHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIESMAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BYSUCH SECURITIES.

and any legend required by the “blue sky” laws of any state to the extent such laws are applicable to the securities represented by the certificate solegended.

SECTION 2.10. Accredited Investor. The Shareholder is an “accredited investor” within the meaning of Rule 501 under the SecuritiesAct and the Shareholder was not organized for the specific purpose of acquiring the Parent Stock.

SECTION 2.11 Shareholder Acknowledgment. The Shareholder has access to and has reviewed the Parent’s filingswith the Securities and Exchange Commission, at WWW.SEC.GOV, including the “Risk Factors” contained therein.

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ARTICLE IIIRepresentations and Warranties of the Company

The Company has provided to the Parent a Disclosure Schedule (the “Company Disclosure Schedule”). The Company represents and

warrants to the Parent, except as set forth in the Company Disclosure Schedule, regardless of whether or not the Company Disclosure Scheduleis referenced with respect to any particular representation or warranty, as follows:

SECTION 3.01. Organization, Standing and Power. The Company is duly incorporated or organized, validly existing and in goodstanding under the laws of the State of Nevada and has the corporate power and authority and possesses all governmental franchises, licenses,permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its businessesas presently conducted, other than such franchises, licenses, permits, authorizations and approvals the lack of which, individually or in theaggregate, has not had and would not reasonably be expected to have a material adverse effect on the Company and its Subsidiaries, a materialadverse effect on the ability of the Company to perform its obligations under this Agreement or on the ability of the Company to consummate theTransactions (a “Company Material Adverse Effect”). The Company and each Subsidiary is duly qualified to do business in each jurisdictionwhere the nature of its business or its ownership or leasing of its properties make such qualification necessary, except where the failure to soqualify would not reasonably be expected to have a Company Material Adverse Effect. The Company has delivered to the Parent true andcomplete copies of the articles of incorporation and bylaws of the Company, each as amended to the date of this Agreement (as so amended, the“Company Charter Documents”).

SECTION 3.02. Subsidiaries; Equity Interests. Except as set forth in the Company Disclosure Schedule, the Company does not own,directly or indirectly, any capital stock, membership interest, partnership interest, joint venture interest or other equity interest in any person (each,a “Subsidiary” and collectively, the “Subsidiaries”).

SECTION 3.03. Capital Structure. The authorized share capital of the Company consists of One Hundred Million (100,000,000) sharesof common stock with Forty Four Million One Hundred Thousand (44,100,000) shares outstanding and One Hundred Million (100,000,000)shares of preferred stock authorized with no shares of preferred stock outstanding. No shares or other voting securities of the Company areissued, reserved for issuance or outstanding. All outstanding shares of the Company are duly authorized, validly issued, fully paid and non-assessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right orany similar right under any provision of the applicable corporate laws of its state of incorporation, the Company Charter Documents or anyContract (as defined in Section 3.04) to which the Company is a party or otherwise bound. There are no bonds, debentures, notes or otherindebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matterson which holders of Company Shares may vote (“Voting Company Debt”). Except as otherwise set forth herein or as set forth in the CompanyDisclosure Schedule, as of the date of this Agreement, there are no options, warrants, rights, convertible or exchangeable securities, “phantom”stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind towhich the Company is a party or by which the Company is bound (i) obligating the Company to issue, deliver or sell, or cause to be issued,delivered or sold, additional shares or other equity interests in, or any security convertible or exercisable for or exchangeable into any shares orcapital stock or other equity interest in, the Company or any Voting Company Debt, (ii) obligating the Company to issue, grant, extend or enterinto any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right toreceive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the shares or capitalstock of the Company.

SECTION 3.04. Authority; Execution and Delivery; Enforceability. The Company has all requisite corporate power and authority toexecute and deliver this Agreement and to consummate the Transactions. The execution and delivery by the Company of this Agreement and theconsummation by the Company of the Transactions have been duly authorized and approved by the Board of Directors of the Company and noother corporate proceedings on the part of the Company are necessary to authorize this Agreement and the Transactions. When executed anddelivered, this Agreement will be enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency and similarlaws of general applicability as to which the Company is subject.

SECTION 3.05. No Conflicts; Consents.

(a) The execution and delivery by the Company of this Agreement does not, and the consummation of the Transactions andcompliance with the terms hereof and thereof will not, conflict with, or result in any violation of or default (with or without notice or lapse oftime, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, orresult in the creation of any Lien upon any of the properties or assets of the Company under any provision of (i) the Company CharterDocuments, (ii) any material contract, lease, license, indenture, note, bond, agreement, permit, concession, franchise or other instrument (a“Contract”) to which the Company is a party or by which any of their respective properties or assets is bound or (iii) subject to the filings andother matters referred to in Section 3.05(b), any material judgment, order or decree (“Judgment”) or material Law applicable to the Company orits properties or assets, other than, in the case of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, have not had andwould not reasonably be expected to have a Company Material Adverse Effect.

(b) Except for any filings with the Securities and Exchange Commission (the “SEC”) and applicable “Blue Sky” or statesecurities commissions, no material consent, approval, license, permit, order or authorization (“Consent”) of, or registration, declaration or filingwith, or permit from, any Governmental Entity is required to be obtained or made by or with respect to the Company in connection with theexecution, delivery and performance of this Agreement or the consummation of the Transactions.

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SECTION 3.06. Taxes.

(a) The Company and each Subsidiary has timely filed, or has caused to be timely filed on its behalf, all Tax Returns requiredto be filed by it, and all such Tax Returns are true, complete and accurate, except to the extent any failure to file or any inaccuracies in any filedTax Returns, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material AdverseEffect. All Taxes shown to be due on such Tax Returns, or otherwise owed, have been timely paid, except to the extent that any failure to pay,individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect. There are nounpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of nobasis for any such claim.

(b) If applicable, the Company has established an adequate reserve reflected on its financial statements for all Taxes payable bythe Company (in addition to any reserve for deferred Taxes to reflect timing differences between book and Tax items) for all Taxable periods andportions thereof through the date of such financial statements. No deficiency with respect to any Taxes has been proposed, asserted or assessedagainst the Company, and no requests for waivers of the time to assess any such Taxes are pending, except to the extent any such deficiency orrequest for waiver, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material AdverseEffect.

(c) For purposes of this Agreement:

“Taxes” includes all forms of taxation, whenever created or imposed, and whether of the United States or elsewhere, andwhether imposed by a local, municipal, governmental, state, foreign, federal or other Governmental Entity, or in connection with any agreementwith respect to Taxes, including all interest, penalties and additions imposed with respect to such amounts.

“Tax Return” means all federal, state, local, provincial and foreign Tax returns, declarations, statements, reports, schedules,forms and information returns and any amended Tax return relating to Taxes.

SECTION 3.07. Litigation. There is no action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as adeposition) or investigation pending or threatened in writing against or affecting the Company, or any of its properties before or by any court,arbitrator, governmental or administrative agency, regulatory authority (federal, state, county, local or foreign), stock market, stock exchange ortrading facility (“Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of this Agreement or the ParentStock or (ii) could, if there were an unfavorable decision, individually or in the aggregate, have or reasonably be expected to result in a CompanyMaterial Adverse Effect. Neither the Company nor any director or officer thereof (in his or her capacity as such), is or has been the subject ofany Action involving a claim or violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.

SECTION 3.08. Compliance with Applicable Laws. The Company is in compliance with all applicable Laws, including those relatingto occupational health and safety and the environment, except for instances of noncompliance that, individually and in the aggregate, have not hadand would not reasonably be expected to have a Company Material Adverse Effect. This Section 3.08 does not relate to matters with respect toTaxes, which are the subject of Section 3.06.

SECTION 3.09. Brokers; Schedule of Fees and Expenses. No broker, investment banker, financial advisor or other person is entitled toany broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Transactions based upon arrangements madeby or on behalf of the Company.

SECTION 3.10. No Additional Agreements. The Company does not have any agreement or understanding with the Shareholders withrespect to the Transactions other than as specified in this Agreement.

SECTION 3.11. Investment Company. The Company is not, and is not an affiliate of, and immediately following the Closing will nothave become, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

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ARTICLE IVRepresentations and Warranties of the Parent

The Parent represents and warrants as follows to the Shareholders and the Company, that, except as set forth in the Parent SEC

Documents (as defined herein), or in a Disclosure Schedule delivered by the Parent to the Company and the Shareholders (the “Parent DisclosureSchedule”):

SECTION 4.01. Organization, Standing and Power. The Parent is duly organized, validly existing and in good standing under the lawsof the State of Nevada and has full corporate power and authority and possesses all governmental franchises, licenses, permits, authorizations andapprovals necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its businesses as presently conducted,other than such franchises, licenses, permits, authorizations and approvals the lack of which, individually or in the aggregate, has not had andwould not reasonably be expected to have a material adverse effect on the Parent, a material adverse effect on the ability of the Parent to performits obligations under this Agreement or on the ability of the Parent to consummate the Transactions (a “Parent Material Adverse Effect”). TheParent is duly qualified to do business in each jurisdiction where the nature of its business or their ownership or leasing of its properties makesuch qualification necessary and where the failure to so qualify would reasonably be expected to have a Parent Material Adverse Effect. TheParent has made available to the Company true and complete copies of the articles of incorporation of the Parent, as amended to the date of thisAgreement (as so amended, the “Parent Charter”), and the Bylaws of the Parent, as amended to the date of this Agreement (as so amended, the“Parent Bylaws”).

SECTION 4.02. Subsidiaries; Equity Interests. Except as set forth in the Parent SEC Documents, the Parent does not own, directly orindirectly, any capital stock, membership interest, partnership interest, joint venture interest or other equity interest in any person.

SECTION 4.03. Capital Structure. The authorized capital stock of the Parent consists of Three Hundred Million (300,000,000) sharesof common stock, par value $0.0001 per share, and One Hundred Million (100,000,000) shares of preferred stock, par value $0.0001 per share,of which (i) 3,920,709 shares of common stock are issued and outstanding (before giving effect to the issuances to be made at Closing), (ii) FiveHundred and Ninety Five Thousand (595,000) shares of preferred stock are designated as Series A Convertible Preferred Stock, of which FiveHundred and Ninety Five Thousand (595,000) are issued and outstanding, (iii) Three Hundred Twenty-Four Thousand Six Hundred SeventyOne (324,671) shares of preferred stock are designated as Series B Convertible Preferred Stock, of which Three Hundred Twenty-FourThousand Six Hundred Seventy One (324,671) are issued and outstanding, (iv) One Hundred Fifty-Six Thousand Two Hundred Thirty-One(156,231) shares of preferred stock are designated as Series B-1 Convertible Preferred Stock, of which One Hundred Fifty-Six Thousand TwoHundred Thirty-One (156,231) are issued and outstanding; (v) Three Hundred and Fifty-Five Thousand (355,000) shares of preferred stock aredesignated as Series C Convertible Preferred Stock, of which 355,000 are issued and outstanding, and (vi) no shares of Parent Stock or preferredstock are held by the Parent in its treasury. No other shares of capital stock or other voting securities of the Parent were issued, reserved forissuance or outstanding. All outstanding shares of the capital stock of the Parent are, and all such shares that may be issued prior to the datehereof will be when issued, duly authorized, validly issued, fully paid and non-assessable and not subject to or issued in violation of anypurchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the NevadaRevised Statutes, the Parent Charter, the Parent Bylaws or any Contract to which the Parent is a party or otherwise bound. Except as set forth inthe Parent SEC Documents, there are no bonds, debentures, notes or other indebtedness of the Parent having the right to vote (or convertible into,or exchangeable for, securities having the right to vote) on any matters on which holders of Parent common stock may vote (“Voting ParentDebt”). Except in connection with the Transactions and except as set forth in the Parent SEC Documents, as of the date of this Agreement, thereare no options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-basedperformance units, commitments, Contracts, arrangements or undertakings of any kind to which the Parent is a party or by which it is bound (i)obligating the Parent to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in,or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Parent or any Voting ParentDebt, (ii) obligating the Parent to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract,arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economicbenefits and rights occurring to holders of the capital stock of the Parent. As of the date of this Agreement, there are no outstanding contractualobligations of the Parent to repurchase, redeem or otherwise acquire any shares of capital stock of the Parent. Except as set forth in the ParentSEC Documents, the Parent is not a party to any agreement granting any security holder of the Parent the right to cause the Parent to registershares of the capital stock or other securities of the Parent held by such security holder under the Securities Act.

SECTION 4.04. Authority; Execution and Delivery; Enforceability. The Parent has all requisite corporate power and authority toexecute and deliver this Agreement and consummate all Transactions. The execution and delivery by the Parent of this Agreement and theconsummation by the Parent of the Transactions have been duly authorized and approved by the Board of Directors of the Parent and no othercorporate proceedings on the part of the Parent are necessary to authorize this Agreement and the Transactions. This Agreement constitutes alegal, valid and binding obligation of the Parent, enforceable against the Parent in accordance with the terms hereof.

SECTION 4.05. No Conflicts; Consents.

(a) The execution and delivery by the Parent of this Agreement, does not, and the consummation of Transactions andcompliance with the terms hereof and thereof will not, conflict with, or result in any violation of or default (with or without notice or lapse oftime, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, or toincreased, additional, accelerated or guaranteed rights or entitlements of any person under, or result in the creation of any Lien upon any of theproperties or assets of the Parent under, any provision of (i) the Parent Charter or Parent Bylaws, (ii) any material Contract to which the Parent isa party or by which any of its properties or assets is bound or (iii) subject to the filings and other matters referred to in Section 4.05(b), anymaterial Judgment or material Law applicable to the Parent or its properties or assets, other than, in the case of clauses (ii) and (iii) above, anysuch items that, individually or in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect.

(b) No consent of, or registration, declaration or filing with, or permit from, any Governmental Entity is required to be obtainedor made by or with respect to the Parent in connection with the execution, delivery and performance of this Agreement or the consummation ofthe Transactions, other than the (A) filing with the SEC of reports under Sections 13 and 16 of the Securities Exchange Act of 1934, as amended

the Transactions, other than the (A) filing with the SEC of reports under Sections 13 and 16 of the Securities Exchange Act of 1934, as amended(the “Exchange Act”), and (B) filings under state “blue sky” laws, as each may be required in connection with this Agreement and theTransactions.

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SECTION 4.06. SEC Documents; Undisclosed Liabilities.

(a) The Parent has filed all Parent SEC Documents since July 25, 2008, pursuant to Sections 13 and 15 of the Exchange Act,as applicable (the “Parent SEC Documents”).

(b) As of its respective filing date, each Parent SEC Document complied in all material respects with the requirements of theExchange Act and the rules and regulations of the SEC promulgated thereunder applicable to such Parent SEC Document, and did not containany untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statementstherein, in light of the circumstances under which they were made, not misleading. Except to the extent that information contained in any ParentSEC Document has been revised or superseded by a later filed Parent SEC Document, none of the Parent SEC Documents contains any untruestatement of a material fact or omits to state any material fact required to be stated therein or necessary in order to make the statements therein, inlight of the circumstances under which they were made, not misleading. The financial statements of the Parent included in the Parent SECDocuments comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SECwith respect thereto, have been prepared in accordance with the U.S. generally accepted accounting principles (“GAAP”) (except, in the case ofunaudited statements, as permitted by the rules and regulations of the SEC) applied on a consistent basis during the periods involved (except asmay be indicated in the notes thereto) and fairly present the financial position of Parent as of the dates thereof and the results of its operations andcash flows for the periods shown (subject, in the case of unaudited statements, to normal year-end audit adjustments).

(c) Except as set forth in the Parent SEC Documents, the Parent has no liabilities or obligations of any nature (whether accrued,absolute, contingent or otherwise) required by GAAP to be set forth on a balance sheet of the Parent or in the notes thereto.

SECTION 4.07. Information Supplied. None of the information supplied or to be supplied by the Parent for inclusion or incorporationby reference in any SEC filing or report contains any untrue statement of a material fact or omits to state any material fact required to be statedtherein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.

SECTION 4.08. Absence of Certain Changes or Events. Except as disclosed in the filed Parent SEC Documents or in the ParentDisclosure Schedule, from the date of the most recent audited financial statements included in the filed Parent SEC Documents to the date of thisAgreement, the Parent has conducted its business only in the ordinary course, and during such period there has not been:

(a) any change in the assets, liabilities, financial condition or operating results of the Parent from that reflected in the ParentSEC Documents, except changes in the ordinary course of business that have not caused, in the aggregate, a Parent Material Adverse Effect;

(b) any damage, destruction or loss, whether or not covered by insurance, that would have a Parent Material Adverse Effect;

(c) any waiver or compromise by the Parent of a valuable right or of a material debt owed to it;

(d) any satisfaction or discharge of any lien, claim, or encumbrance or payment of any obligation by the Parent, except in theordinary course of business and the satisfaction or discharge of which would not have a Parent Material Adverse Effect;

(e) any material change to a material Contract by which the Parent or any of its assets is bound or subject;

(f) any material change in any compensation arrangement or agreement with any employee, officer, director or stockholder;

(g) any resignation or termination of employment of any officer of the Parent;

(h) any mortgage, pledge, transfer of a security interest in, or lien, created by the Parent, with respect to any of its materialproperties or assets, except liens for taxes not yet due or payable and liens that arise in the ordinary course of business and do not materiallyimpair the Parent’s ownership or use of such property or assets;

(i) any loans or guarantees made by the Parent to or for the benefit of its employees, officers or directors, or any members oftheir immediate families, other than travel advances and other advances made in the ordinary course of its business;

(j) any declaration, setting aside or payment or other distribution in respect of any of the Parent’s capital stock, or any direct orindirect redemption, purchase, or other acquisition of any of such stock by the Parent;

(k) any alteration of the Parent’s method of accounting or the identity of its auditors;

(l) any issuance of equity securities to any officer, director or affiliate, except pursuant to existing Parent stock option plans; or

(m) any arrangement or commitment by the Parent to do any of the things described in this Section 4.08.

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SECTION 4.09. Taxes.

(a) The Parent has timely filed, or has caused to be timely filed on its behalf, all Tax Returns required to be filed by it, and allsuch Tax Returns are true, complete and accurate, except to the extent any failure to file, any delinquency in filing or any inaccuracies in any filedTax Returns, individually or in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect. AllTaxes shown to be due on such Tax Returns, or otherwise owed, has been timely paid, except to the extent that any failure to pay, individually orin the aggregate, has not had and would not reasonably be expected to have a Parent Material Adverse Effect.

(b) The most recent financial statements contained in the Parent SEC Documents reflect an adequate reserve for all Taxespayable by the Parent (in addition to any reserve for deferred Taxes to reflect timing differences between book and Tax items) for all Taxableperiods and portions thereof through the date of such financial statements. No deficiency with respect to any Taxes has been proposed, assertedor assessed against the Parent, and no requests for waivers of the time to assess any such Taxes are pending, except to the extent any suchdeficiency or request for waiver, individually or in the aggregate, has not had and would not reasonably be expected to have a Parent MaterialAdverse Effect.

(c) There are no Liens for Taxes (other than for current Taxes not yet due and payable) on the assets of the Parent. The Parentis not bound by any agreement with respect to Taxes.

SECTION 4.10. Absence of Changes in Benefit Plans. From the date of the most recent audited financial statements included in theParent SEC Documents to the date of this Agreement, except as set forth in the Parent SEC Documents or the Parent Disclosure Schedule, therehas not been any adoption or amendment in any material respect by Parent of any collective bargaining agreement or any bonus, pension, profitsharing, deferred compensation, incentive compensation, stock ownership, stock purchase, stock option, phantom stock, retirement, vacation,severance, disability, death benefit, hospitalization, medical or other plan, arrangement or understanding (whether or not legally binding)providing benefits to any current or former employee, officer or director of Parent (collectively, “Parent Benefit Plans”). As of the date of thisAgreement, except as disclosed in the Parent SEC Documents or the Parent Disclosure Schedule, there are not any employment, consulting,indemnification, severance or termination agreements or arrangements between the Parent and any current or former employee, officer or directorof the Parent, nor does the Parent have any general severance plan or policy.

SECTION 4.11. ERISA Compliance; Excess Parachute Payments. The Parent does not, and since its inception never has, maintained,or contributed to any “employee pension benefit plans” (as defined in Section 3(2) of ERISA), “employee welfare benefit plans” (as defined inSection 3(1) of ERISA) or any other Parent Benefit Plan for the benefit of any current or former employees, consultants, officers or directors ofParent.

SECTION 4.12. Litigation. Except as disclosed in the Parent SEC Documents, there is no Action which (i) adversely affects orchallenges the legality, validity or enforceability of any of this Agreement or the Parent Stock or (ii) could, if there were an unfavorable decision,individually or in the aggregate, have or reasonably be expected to result in a Parent Material Adverse Effect. Neither the Parent nor any directoror officer thereof (in his or her capacity as such), is or has been the subject of any Action involving a claim or violation of or liability underfederal or state securities laws or a claim of breach of fiduciary duty.

SECTION 4.13. Compliance with Applicable Laws. Except as disclosed in the Parent SEC Documents, the Parent is in compliancewith all applicable Laws, including those relating to occupational health and safety, the environment, export controls, trade sanctions andembargoes, except for instances of noncompliance that, individually and in the aggregate, have not had and would not reasonably be expected tohave a Parent Material Adverse Effect. Except as set forth in the Parent SEC Documents, the Parent has not received any written communicationduring the past two years from a Governmental Entity that alleges that the Parent is not in compliance in any material respect with any applicableLaw. The Parent is in compliance with all effective requirements of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulationsthereunder, that are applicable to it, except where such noncompliance could not have or reasonably be expected to result in a Parent MaterialAdverse Effect.

SECTION 4.14. Labor Matters. There are no collective bargaining or other labor union agreements to which the Parent is a party or bywhich it is bound. No material labor dispute exists or, to the knowledge of the Parent, is imminent with respect to any of the employees of theParent.

SECTION 4.15. Transactions With Affiliates and Employees. Except as set forth in the Parent SEC Documents, none of the officers ordirectors of the Parent and, to the knowledge of the Parent, none of the employees of the Parent is presently a party to any transaction with theParent or any subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangementproviding for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments toor from any officer, director or such employee or, to the knowledge of the Parent, any entity in which any officer, director, or any such employeehas a substantial interest or is an officer, director, trustee or partner.

SECTION 4.16. No Additional Agreements. The Parent does not have any agreement or understanding with the Shareholders withrespect to the Transactions other than as specified in this Agreement.

SECTION 4.17. Investment Company. The Parent is not, and is not an affiliate of, and immediately following the Closing will not havebecome, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

SECTION 4.18. Disclosure. The Parent confirms that neither it nor any person acting on its behalf has provided any Shareholder or itsrespective agents or counsel with any information that the Parent believes constitutes material, non-public information except insofar as theexistence and terms of the proposed transactions hereunder may constitute such information and except for information that will be disclosed bythe Parent under a current report on Form 8-K filed after the Closing. All disclosure provided to the Shareholders regarding the Parent, itsbusiness and the transactions contemplated hereby, furnished by or on behalf of the Parent (including the Parent’s representations and warrantiesset forth in this Agreement) are true and correct and do not contain any untrue statement of a material fact or omit to state any material fact

set forth in this Agreement) are true and correct and do not contain any untrue statement of a material fact or omit to state any material factnecessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

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SECTION 4.19. Listing and Maintenance Requirements. The Parent is, and has no reason to believe that it will not in the foreseeablefuture continue to be, in compliance with the listing and maintenance requirements for continued listing of the Parent Common Stock on thetrading market on which the shares of Parent Common Stock are currently listed or quoted. The issuance and sale of the shares of Parent Stockunder this Agreement does not contravene the rules and regulations of the trading market on which the Parent Common Stock is currently listedor quoted, and no approval of the stockholders of the Parent is required for the Parent to issue and deliver to the Shareholders the Parent Stockcontemplated by this Agreement.

SECTION 4.20. Contracts. Except as disclosed in the Parent SEC Documents or the Parent Disclosure Schedule, there are no Contractsthat are material to the business, properties, assets, condition (financial or otherwise), results of operations or prospects of the Parent taken as awhole. The Parent is not in violation of or in default under (nor does there exist any condition which upon the passage of time or the giving ofnotice would cause such a violation of or default under) any Contract to which it is a party or by which it or any of its properties or assets isbound, except for violations or defaults that would not, individually or in the aggregate, reasonably be expected to result in a Parent MaterialAdverse Effect.

SECTION 4.21. Title to Properties. The Parent has good title to, or valid leasehold interests in, all of its properties and assets used inthe conduct of its businesses. All such assets and properties, other than assets and properties in which the Parent has leasehold interests, are freeand clear of all Liens and except for Liens that, in the aggregate, do not and will not materially interfere with the ability of the Parent to conductbusiness as currently conducted. The Parent has complied in all material respects with the terms of all material leases to which it is a party andunder which it is in occupancy, and all such leases are in full force and effect.

SECTION 4.22. Intellectual Property. The Parent owns, or is validly licensed or otherwise has the right to use, all Intellectual PropertyRights which are material to the conduct of the business of the Parent taken as a whole. The Parent SEC Documents sets forth a description of allIntellectual Property Rights which are material to the conduct of the business of the Parent taken as a whole. No claims are pending or, to theknowledge of the Parent, threatened that the Parent is infringing or otherwise adversely affecting the rights of any person with regard to anyIntellectual Property Right. To the knowledge of the Parent, no person is infringing the rights of the Parent with respect to any IntellectualProperty Right.

SECTION 4.23 Brokers; Schedule of Fees and Expenses. No broker, investment banker, financial advisor or otherperson is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Transactions based uponarrangements made by or on behalf of the Parent.

SECTION 4.24 Issuance of the Parent Stock. The shares of Parent Stock are duly authorized and, when issued inaccordance with this Agreement against delivery of the Company Shares by the Shareholders, Shareholders will receive good title to such sharesof Parent Stock, and such shares will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens, other than restrictionsgenerally imposed by federal and state securities laws. The issuance of the shares of Parent Stock to the Shareholders is not subject to anypreemptive or similar rights to subscribe for or purchase securities.

ARTICLE VDeliveries

SECTION 5.01. Deliveries of the Shareholders.

(a) At or prior to the Closing, the Shareholders shall deliver to the Parent:

(i) Certificates representing the Company Shares;

(ii) this Agreement which shall constitute a duly executed share transfer power for transfer by the Shareholders

of their Company Shares to the Parent (which Agreement shall constitute a limited power of attorney in theParent or any officer thereof to effectuate any Company Share transfers as may be required under applicablelaw, including, without limitation, recording such transfer in the share registry maintained by the Companyfor such purpose); and

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SECTION 5.02. Deliveries of the Parent.

(a) At or prior to the Closing, the Parent shall deliver to the Company:

(i) This Agreement, duly executed by Parent;

(ii) a certificate from the Parent, signed by its Secretary or Assistant Secretary certifying that the attached copiesof the Parent Charter, Parent Bylaws and resolutions of the Board of Directors of the Parent approving thisAgreement and the transactions contemplated hereunder, are all true, complete and correct and remain in fullforce and effect;

(iii) a letter of resignation of Michael Haas as interim President of the Parent (Mr. Haas shall remain a director

of the Parent);

(iv) evidence of the election of Felicia Hess as Chief Executive Officer and Director of the Parent, Dan Erdbergas Chief Operating Officer of the Parent, and Wayne Jackson as Chairman of the Board, effective upon theClosing (Ms. Hess, Mr. Erdberg and Mr. Jackson shall be collectively referred to herein as the “IncomingOfficers and Directors”);

(v) the Executive Employment Agreement by and between Parent and each of Ms. Hess and Mr. Erdberg in the

forms attached hereto as Exhibits C, and D, respectively;

(vi) the Employment Agreement between the Parent and certain incoming employees, in the forms attachedhereto as Exhibits E and F (such employees shall be referred to herein as the “Incoming Employee”;

(viii) the Consulting Agreement between the Parent and a certain third party consultant, in the form attached

hereto as Exhibit G; and

(ix) the Lockup Agreement substantially in the form attached hereto as Exhibit H, executed by the holder of theParent’s Series C Convertible Preferred Stock attached hereto.

(b) Promptly following the Closing, the Parent shall deliver to the Shareholders, certificates representing the new shares of

Parent Stock issued to the Shareholders as set forth on Exhibit B.

SECTION 5.03. Deliveries of the Company.

(a) Concurrently herewith, the Company is delivering to the Parent this Agreement and the Company Disclosure Scheduleexecuted by the Company.

(b) At or prior to the Closing, the Company shall deliver to the Parent a certificate from the Company, signed by its Secretaryor Assistant Secretary certifying that the attached copies of the Company’s Charter Documents and resolutions of the Board of Directors of theCompany approving this Agreement and the Transactions, are all true, complete and correct and remain in full force and effect.

(c) At or prior to Closing, the Company shall deliver to the Parent, a Lockup Agreement, substantially in the form attachedhereto as Exhibit I (and, in the case of the Lockup for Mr. Jackson, the Lockup Agreement in the form attached hereto as Exhibit J), executedby each of the Incoming Officers and Directors and Incoming Employees, which Lockup Agreement may only be released by the Board ofDirectors of the Parent.

(d) At or prior to Closing, the Company shall deliver to the Parent the Non-Competition Waivers as required by Section 6.02(j)herein.

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ARTICLE VIConditions to Closing

SECTION 6.01. Shareholders and Company Conditions Precedent. The obligations of the Shareholders and the Company to enter into

and complete the Closing is subject, at the option of the Shareholders and the Company, to the fulfillment on or prior to the Closing Date of thefollowing conditions:

(a) Representations and Covenants. The representations and warranties of the Parent contained in this Agreement shall be truein all material respects on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date, except therepresentations and warranties of Parent otherwise qualified by materiality shall be true and correct in all respects. The Parent shall haveperformed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied withby the Parent on or prior to the Closing Date. The Parent shall have delivered to the Shareholders and the Company, a certificate, dated theClosing Date, to the foregoing effect.

(b) Litigation. No action, suit or proceeding shall have been instituted before any court or governmental or regulatory body orinstituted or threatened by any governmental or regulatory body to restrain, modify or prevent the carrying out of the Transactions or to seekdamages or a discovery order in connection with such Transactions, or which has or may have, in the reasonable opinion of the Company or theShareholders, a materially adverse effect on the assets, properties, business, operations or condition (financial or otherwise) of the Parent or theCompany.

(c) No Material Adverse Change. There shall not have been any occurrence, event, incident, action, failure to act, or transactionsince December 31, 2013 which has had or is reasonably likely to cause a Parent Material Adverse Effect.

(d) SEC Reports. The Parent shall have filed all reports and other documents required to be filed by Parent under the U.S.federal securities laws through the Closing Date.

(e) OTCBB Quotation. The Parent shall have maintained its status as a Company whose common stock is quoted on the Over-the-Counter Bulletin Board and Parent shall not have received any notice that any reason shall exist as to why such status shall not continueimmediately following the Closing.

(f) Deliveries. The deliveries specified in Section 5.02 shall have been made by the Parent.

(g) No Suspensions of Trading in Parent Stock; Listing. Trading in the Parent Common Stock shall not have been suspendedby the SEC or any trading market (except for any suspensions of trading of not more than one trading day solely to permit dissemination ofmaterial information regarding the Parent) at any time since the date of execution of this Agreement, and the Parent Common Stock shall havebeen at all times since such date listed for trading on a trading market.

(h) Satisfactory Completion of Due Diligence. The Company and the Shareholders shall have completed their legal, accountingand business due diligence of the Parent and the results thereof shall be satisfactory to the Company and the Shareholders in their sole andabsolute discretion.

(i) Cash on Hand. The Parent shall have, subsequent to the closing of the transactions contemplated by this Agreement (which,for the avoidance of doubt, shall include cash on hand of the Company), together with gross proceeds of any financings consummated inconnection with the transactions contemplated by this Agreement, cash on hand in the minimum amount of $1,500,000.

(j) Closing Capitalization. At Closing, the authorized capitalization and the number of issued and outstanding shares of ParentStock on a fully diluted basis for the Parent shall be as set forth on Exhibit K.

SECTION 6.02. Parent Conditions Precedent. The obligations of the Parent to enter into and complete the Closing are subject, at theoption of the Parent, to the fulfillment on or prior to the Closing Date of the following conditions, any one or more of which may be waived bythe Parent in writing.

(a) Representations and Covenants. The representations and warranties of the Shareholders and the Company contained in thisAgreement shall be true in all material respects on and as of the Closing Date, except the representations and warranties of Shareholders and theCompany otherwise qualified by materiality shall be true and correct in all respects with the same force and effect as though made on and as ofthe Closing Date. The Shareholders and the Company shall have performed and complied in all material respects with all covenants andagreements required by this Agreement to be performed or complied with by the Shareholders and the Company on or prior to the ClosingDate. The Company shall have delivered to the Parent a certificate, dated the Closing Date, to the foregoing effect with respect to the Company.

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(b) Litigation. No action, suit or proceeding shall have been instituted before any court or governmental or regulatory body orinstituted or threatened by any governmental or regulatory body to restrain, modify or prevent the carrying out of the Transactions or to seekdamages or a discovery order in connection with such Transactions, or which has or may have, in the reasonable opinion of the Parent, amaterially adverse effect on the assets, properties, business, operations or condition (financial or otherwise) of the Company.

(c) No Material Adverse Change. There shall not have been any occurrence, event, incident, action, failure to act, or transactionsince inception which has had or is reasonably likely to cause a Company Material Adverse Effect.

(d) Deliveries. The deliveries specified in Section 5.01 and Section 5.03 shall have been made by the Shareholders and theCompany, respectively.

(e) Post-Closing Capitalization. At, and immediately after, the Closing, the authorized capitalization, and the number of issuedand outstanding shares of the Company, on a fully-diluted basis, shall be described in the Company Disclosure Schedule.

(f) Satisfactory Completion of Due Diligence. The Parent shall have completed its legal, accounting and business due diligenceof the Company and the results thereof shall be satisfactory to the Parent in its sole and absolute discretion.

(i) Lockup Agreements. The Company shall deliver to the Parent at Closing, a Lockup Agreement, substantially in the formattached hereto as Exhibit I (and, in the case of Mr. Jackson, the form attached hereto as Exhibit J), executed by each of the Incoming Officersand Directors and Incoming Employees, which Lockup Agreement may only be released by the Board of Directors of the Parent.

(j) Waiver of Conflicts. Each of the Incoming Officers and Directors and Incoming Employees shall have delivered toParent evidence of waiver by each such individual’s current employer of any conflict of interests, non-competition agreements or similaremployment restricting agreements that may be in effect as it relates to such Incoming Officer.

ARTICLE VIICovenants

SECTION 7.01. Audit of Company Financial Statements. The Company shall deliver to Parent audited financial statements for the

period from inception to December 31, 2013 and unaudited financial statements for any subsequent interim period no later than 50 days from theClosing Date.

SECTION 7.02. Public Announcements. The Parent and the Company will consult with each other before issuing, and provide eachother the opportunity to review and comment upon, any press releases or other public statements with respect to the Agreement and theTransactions and shall not issue any such press release or make any such public statement prior to such consultation, except as may be requiredby applicable Law, court process or by obligations pursuant to any listing agreement with any national securities exchanges.

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SECTION 7.03. Fees and Expenses. All fees and expenses incurred in connection with this Agreement shall be paid by the Partyincurring such fees or expenses, whether or not this Agreement is consummated.

SECTION 7.04. Filing of 8-K and Press Release. The Parent shall file, no later than four (4) business days of the Closing Date, acurrent report on Form 8-K and attach as exhibits all relevant agreements with the SEC disclosing the terms of this Agreement and other requisitedisclosure regarding the Transactions.

SECTION 7.05. Access. Each Party shall permit representatives of any other Party to have full access to all premises, properties,personnel, books, records (including Tax records), contracts, and documents of or pertaining to such Party.

ARTICLE VIII

Miscellaneous

SECTION 8.01. Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in writing

and shall be deemed given upon receipt by the Parties at the following addresses (or at such other address for a Party as shall be specified by likenotice):

If to the Parent, to:Drone Aviation Holding Corp.

11653 Central Parkway, Jacksonville, FL 32224Attn: President

If to the Company, to:Drone Aviation Corp.

101 Middlesex Turnpike, Box #312Burlington, MA 01803Attn: President

If to the Shareholders at the addresses set forth in Exhibit A hereto.

SECTION 8.02. Amendments; Waivers; No Additional Consideration. No provision of this Agreement may be waived or amendedexcept in a written instrument signed by the Company, Parent and the Shareholders. No waiver of any default with respect to any provision,condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or awaiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any Party to exercise any right hereunder inany manner impair the exercise of any such right.

SECTION 8.03. Replacement of Securities. If any certificate or instrument evidencing any Parent Stock, is mutilated, lost, stolen ordestroyed, the Parent shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitutiontherefore, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Parent of such loss, theft or destructionand customary and reasonable indemnity, if requested. The applicants for a new certificate or instrument under such circumstances shall also payany reasonable third-party costs associated with the issuance of such replacement Parent Stock. If a replacement certificate or instrumentevidencing any Parent Stock is requested due to a mutilation thereof, the Parent may require delivery of such mutilated certificate or instrument asa condition precedent to any issuance of a replacement.

SECTION 8.04. Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery ofdamages, the Shareholders, Parent and the Company will be entitled to specific performance under this Agreement. The Parties agree thatmonetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoingsentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would beadequate.

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SECTION 8.05. Limitation of Liability. Notwithstanding anything herein to the contrary, each of the Parent and the Companyacknowledge and agree that the liability of a Shareholder arising directly or indirectly, under any transaction document of any and every naturewhatsoever shall be satisfied solely out of the assets of such Shareholder, and that no trustee, officer, other investment vehicle or any otheraffiliate of such Shareholder or any investor, shareholder or holder of shares of beneficial interest of such Shareholder shall be personally liablefor any liabilities of such Shareholder. Notwithstanding anything to the contrary herein, the obligations of each Shareholder under thisAgreement are several and not joint with the obligations of any other Shareholder, and no Shareholder shall be responsible in any way for theperformance of the obligations of any other Shareholder under this Agreement. Nothing contained herein or in this Agreement, and no actiontaken by any Shareholder pursuant hereto, shall be deemed to constitute the Shareholders as a partnership, an association, a joint venture or anyother kind of entity, or create a presumption that the Shareholders are in any way acting in concert or as a group with respect to such obligationsor the transactions contemplated by this Agreement. Each Shareholder shall be entitled to independently protect and enforce its rights, includingwithout limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Shareholder to be joined as an additionalparty in any proceeding for such purpose. Each Shareholder has been represented by its own separate legal counsel in its review and negotiationof this Agreement.

SECTION 8.06. Interpretation. When a reference is made in this Agreement to a Section, such reference shall be to a Section of thisAgreement unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall bedeemed to be followed by the words “without limitation.”

SECTION 8.07. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by anyrule or Law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long asthe economic or legal substance of the Transactions contemplated hereby is not affected in any manner materially adverse to any Party. Uponsuch determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith tomodify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that Transactionscontemplated hereby are fulfilled to the extent possible.

SECTION 8.08. Counterparts; Facsimile Execution. This Agreement may be executed in one or more counterparts, all of which shall beconsidered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties anddelivered to the other Parties. Facsimile execution and delivery of this Agreement is legal, valid and binding for all purposes.

SECTION 8.09. Entire Agreement; Third Party Beneficiaries. This Agreement, taken together with the Company Disclosure Scheduleand the Parent Disclosure Schedule, (a) constitute the entire agreement, and supersede all prior agreements and understandings, both written andoral, among the Parties with respect to the Transactions and (b) are not intended to confer upon any person other than the Parties any rights orremedies.

SECTION 8.10. Governing Law. This Agreement shall be governed by, and construed in accordance with, the internal laws of theState of New York, without reference to principles of conflicts of laws. Any action or proceeding brought for the purpose of enforcement of anyterm or provision of this Agreement shall be brought only in the Federal or state courts sitting in Nevada, and the parties hereby waive any and allrights to trial by jury.

SECTION 8.11. Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall beassigned, in whole or in part, by operation of law or otherwise by any of the Parties without the prior written consent of the other Parties. Anypurported assignment without such consent shall be void. Subject to the preceding sentences, this Agreement will be binding upon, inure to thebenefit of, and be enforceable by, the Parties and their respective successors and assigns.

SECTION 1.01.

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Share Exchange Agreement as of the date first

above written.

The Parent: DRONE AVIATION HOLDING CORP. By: /s/ Name: Michael Haas Title: Interim President

The Company: DRONE AVIATION CORP. By: /s/ Name: Glenn Kesner Title: President

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The Shareholders:

By:Title:Election to Receive PreferredStock:____

By:Title:Election to Receive PreferredStock:____

By:Title:Election to Receive PreferredStock:____

By:Title:Election to Receive PreferredStock:____

By:Title:Election to Receive PreferredStock:____

By:Title:Election to Receive PreferredStock:____

Exhibit 10.2

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT is made and entered into as of this 3rd day of June, 2014 (the “Effective Date”), by and betweenDrone Aviation Holding Corp., a Nevada corporation f/k/a Macrosolve, Inc., an Oklahoma corporation with offices at 11653 Central Parkway,Jacksonville, FL 32224 (the “Corporation”), and Felicia Hess, residing at 916 Fiddlers Creek Road, Ponte Vedra Beach, FL 32082 (the“Executive”), under the following circumstances:

RECITALS:

A. The Corporation desires to secure the services of the Executive upon the terms and conditions hereinafter set forth;and

B. The Executive desires to render services to the Corporation upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, the parties mutually agree as follows:

1. Employment. The Corporation hereby employs the Executive and the Executive hereby accepts employment as an executiveof the Corporation, subject to the terms and conditions set forth in this Agreement.

2. Duties. The Executive shall serve as the Chief Executive Officer of the Corporation, with such duties, responsibilities andauthority as are commensurate and consistent with her position, as may be, from time to time, assigned to her by the Board of Directors (the“Board”) of the Corporation. The Executive shall report directly to the Board. The Executive shall also serve as a member of the Company’sBoard. During the Term (as defined in Section 3), the Executive shall devote her full business time and efforts to the performance of her dutieshereunder unless otherwise authorized by the Board. Notwithstanding the foregoing, the expenditure of reasonable amounts of time by theExecutive for the making of passive personal investments, the conduct of business affairs and charitable and professional activities shall beallowed, provided such activities do not materially interfere with the services required to be rendered to the Corporation hereunder and do notviolate the restrictive covenants set forth in Section 9 below.

3. Term of Employment. The term of the Executive’s employment hereunder, unless sooner terminated as provided herein (the“Initial Term”), shall be for a period of one (1) year commencing on the Effective Date. The term of this Agreement shall automatically beextended for additional terms of one (1) year each (each a “Renewal Term”) unless either party gives prior written notice of non-renewal to theother party no later than thirty (30) days prior to the expiration of the Initial Term (“Non-Renewal Notice”), or the then current Renewal Term, asthe case may be. For purposes of this Agreement, the Initial Term and any Renewal Term are hereinafter collectively referred to as the “Term.”

4. Compensation of Executive.

(a) The Corporation shall pay the Executive as compensation for her services hereunder, in equal bi-weekly installments duringthe Term, the sum of $150,000 (the “Base Salary”), less such deductions as shall be required to be withheld by applicable law and regulations.The Corporation shall review the Base Salary on an annual basis and has the right but not the obligation to increase it but such salary shall not bedecreased during the Term.

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(b) (i) In addition to the Base Salary set forth in Section 4(a), the Executive shall be entitled to receive an annual cash

bonus in an amount equal to up to one hundred percent (100%) of her then-current Base Salary if the Corporation meets or exceeds criteriaadopted by the Compensation Committee of the Board of Directors (the “Compensation Committee”) for earning bonuses which criteria shall beadopted by the Compensation Committee annually. Bonuses shall be paid by the Corporation to the Executive promptly after determination thatthe relevant targets have been met, it being understood that the attainment of any financial targets associated with any bonus shall not bedetermined until following the completion of the Corporation’s annual audit and public announcement of such results and bonuses shall be paidpromptly following the Corporation’s announcement of earnings.

(ii) The Executive shall be entitled to a starting bonus equal to $25,000, which shall be paid within seven (7) calendar days fromthe Effective Date.

(c) Equity Awards. Executive shall be eligible for such grants of awards under stock option or other equity incentive plans ofthe Corporation adopted by the Board and approved by the Corporation’s stockholders (or any successor or replacement plan adopted by theBoard and approved by the Corporation’s stockholders) (the “Plan”) as the Compensation Committee of the Corporation may from time to timedetermine (the “Share Awards”). Share Awards shall be subject to the applicable Plan terms and conditions, provided, however, that ShareAwards shall be subject to any additional terms and conditions as are provided herein or in any award certificate(s), which shall supersede anyconflicting provisions governing Share Awards provided under the Plan.

(d) The Corporation shall pay or reimburse the Executive for all reasonable out-of-pocket expenses actually incurred or paidby the Executive in the course of her employment, including all reasonable expenses for the use of a cell phone in connection with Executive’semployment with the Corporation, consistent with the Corporation’s policy for reimbursement of expenses from time to time.

(e) The Executive shall be entitled to participate in such pension, profit sharing, group insurance, hospitalization, and grouphealth and benefit plans and all other benefits and plans, including perquisites, if any, as the Corporation provides to its senior executives,including group family health insurance coverage which shall be paid by the Corporation (the “Benefit Plans”). In the event the Corporation doesnot have a health benefit plan in place, the Corporation shall reimburse the Executive for expenses incurred in maintaining health and dentalinsurance for Executive and her dependents, in an amount not to exceed $1,500 per month.

(f) The Corporation shall execute and deliver in favor of the Executive an indemnification agreement on the same terms andconditions entered into with the other officers and directors of the Corporation. Such agreement shall provide for the indemnification of theExecutive for the term of his employment. The Corporation shall maintain directors’ and officers’ insurance during the Term in an amount of notless than Five Million Dollars ($5,000,000).

5. Termination.

(a) This Agreement and the Executive’s employment hereunder shall terminate upon the happening of any of the followingevents:

(i) upon the Executive’s death;

(ii) upon the Executive’s “Total Disability” (as herein defined);

(iii) upon the expiration of the Initial Term of this Agreement or any Renewal Term thereof, if either party has provided atimely notice of non-renewal in accordance with Section 3, above;

(iv) at the Executive’s option, upon thirty (30) days prior written notice to the Corporation;

(v) at the Executive’s option, in the event of an act by the Corporation, defined in Section 5(c), below, as constituting “GoodReason” for termination by the Executive; and

(vi) at the Corporation’s option, in the event of an act by the Executive, defined in Section 5(d), below, as constituting “Cause”for termination by the Corporation.

(b) For purposes of this Agreement, the Executive shall be deemed to be suffering from a “Total Disability” if the Executivehas failed to perform her regular and customary duties to the Corporation for a period of 180 days out of any 360-day period and if before theExecutive has become “Rehabilitated” (as herein defined) a majority of the members of the Board, exclusive of the Executive, vote to determinethat the Executive is mentally or physically incapable or unable to continue to perform such regular and customary duties of employment. As usedherein, the term “Rehabilitated” shall mean such time as the Executive is willing, able and commences to devote her time and energies to theaffairs of the Corporation to the extent and in the manner that he did so prior to her Total Disability. Nothing in this Section 5(b) shall beconstrued to waive the Executive’s rights, if any, under existing law including, without limitation, the Family and Medical Leave Act of 1993, 29U.S.C. s.2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. s12101 et seq.

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(c) For purposes of this Agreement, the term “Good Reason” shall mean that the Executive has resigned due to (i) anydiminution of duties inconsistent with Executive’s title, authority, duties and responsibilities (including, without limitation, a change in the chainof reporting); (ii) any reduction of or failure to pay Executive compensation provided for herein, except to the extent Executive consents inwriting prior to any reduction, deferral or waiver of compensation, which non-payment continues for a period of ten (10) days following writtennotice to the Corporation by Executive of such non-payment; (iii) any relocation of the principal location of Executive’s employment outside ofJacksonville, FL without the Executive’s prior written consent; (iv) the consummation of any Change in Control Transaction (as defined below);(vi) any material violation by the Corporation of its obligations under this Agreement that is not cured within thirty (30) days after receipt ofwritten notice thereof from the Executive. For purposes of this Agreement, the term “Change in Control Transaction” means the sale of theCorporation to an un-affiliated person or entity or group of un-affiliated persons or entities pursuant to which such party or parties acquire (i)shares of capital stock of the Corporation representing at least fifty percent (50%) of outstanding capital stock or sufficient to elect a majority ofthe Board of the Corporation (whether by merger, consolidation, sale or transfer of shares (other than a merger where the Corporation is thesurviving corporation and the shareholders and directors of the Corporation prior to the merger constitute a majority of the shareholders anddirectors, respectively, of the surviving corporation (or its parent)) or (ii) all or substantially all of the Corporation’s assets determined on aconsolidated basis.

(d) For purposes of this Agreement, the term “Cause” shall mean:

(i) conviction of a felony or a crime involving fraud or moral turpitude; or

(ii) theft, material act of dishonesty or fraud, intentional falsification of any employment or Corporation records, orcommission of any criminal act which impairs Executive’s ability to perform appropriate employment duties for the Corporation; or

(iii) intentional or reckless conduct or gross negligence materially harmful to the Corporation or the successor to theCorporation after a Change in Control Transaction, including violation of a non-competition or confidentiality agreement; or

(iv) willful failure to follow lawful and reasonable instructions of the person or body to which Executive reports, whichfailure, if curable, is not cured within thirty (30) days after written notice to the Executive thereof; or

(v) gross negligence or willful misconduct in the performance of Executive’s assigned duties; or

(vi) any material breach of this Agreement by Executive, which breach, if curable, is not cured within fifteen (15) daysafter written notice to the Executive of such breach.

6. Effects of Termination.

(a) Upon termination of the Executive’s employment pursuant to Section 5(a)(i) or (ii), in addition to the accrued but unpaidcompensation and vacation pay through the date of death or Total Disability and any other benefits accrued to her under any Benefit Plansoutstanding at such time and the reimbursement of documented, unreimbursed expenses incurred prior to such date, the Executive or her estate orbeneficiaries, as applicable, shall be entitled to the following severance benefits: (i) continued provision for a period of twelve (12) monthsfollowing the Executive’s death or Total Disability of benefits under Benefit Plans extended from time to time by the Corporation to its seniorexecutives; and (ii) payment on a pro-rated basis of any bonus or other payments earned in connection with any bonus plan to which theExecutive was a participant as of the date of death or Total Disability.

(b) Upon termination of the Executive’s employment pursuant to Section 5(a)(iii), where the Corporation has offered to renewthe term of the Executive’s employment for an additional one (1) year period and the Executive chooses not to continue in the employ of theCorporation, the Executive shall be entitled to receive only the accrued but unpaid compensation and vacation pay through the date of terminationand any other benefits accrued to her under any Benefit Plans outstanding at such time and the reimbursement of documented, unreimbursedexpenses incurred prior to such date. In the event the Corporation tenders a Non-Renewal Notice to the Executive, then the Executive shall beentitled to the same severance benefits as if the Executive’s employment were terminated pursuant to Section 5(a)(v); provided, however, if suchNon-Renewal Notice was triggered due to the Corporation’s statement that the Executive’s employment was terminated due to Section 5(a)(vi)(for “Cause”), then payment of severance benefits will be contingent upon a determination as to whether termination was properly for “Cause.”

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(c) Upon termination of the Executive’s employment pursuant to Section 5(a)(v) or other than pursuant to Section 5(a)(i),5(a)(ii), 5(a)(iii), 5(a)(iv), or 5(a)(vi) (i.e., without “Cause”), in addition to the accrued but unpaid compensation and vacation pay through the endof the Term or any then applicable extension of the Term and any other benefits accrued to her under any Benefit Plans outstanding at such timeand the reimbursement of documented, unreimbursed expenses incurred prior to such date, the Executive shall be entitled to the followingseverance benefits: (i) a cash payment, based on the current scale of Executive’s Base Salary, equal to six months of Base Salary, to be paid in asingle lump sum payment not later than sixty (60) days following such termination, less withholding of all applicable taxes; (ii) continuedprovision for a period of twelve (12) months after the date of termination of the benefits under Benefit Plans extended from time to time by theCorporation to its senior executives; and (iii) payment on a pro-rated basis of any bonus or other payments earned in connection with any bonusplan to which the Executive was a participant as of the date of the Executive’s termination of employment. In addition, any options or restrictedstock shall be immediately vested upon termination of Executive’s employment pursuant to Section 5(a)(v) or by the Corporation without“Cause”.

(d) Upon termination of the Executive’s employment pursuant to Section 5(a)(iv) or (vi), in addition to the reimbursement ofdocumented, unreimbursed expenses incurred prior to such date, the Executive shall be entitled to the following severance benefits: (i) accruedand unpaid Base Salary and vacation pay through the date of termination, less withholding of applicable taxes and any other benefits accrued toher under any Benefit Plans outstanding at such time; and (ii) continued provision, for a period of one (1) month after the date of the Executive’stermination of employment, of benefits under Benefit Plans extended to the Executive at the time of termination. Executive shall have anyconversion rights available under the Corporation’s Benefit Plans and as otherwise provided by law, including the Comprehensive OmnibusBudget Reconciliation Act.

(e) Any payments required to be made hereunder by the Corporation to the Executive shall continue to the Executive’sbeneficiaries in the event of her death until paid in full.

7. Vacations. The Executive shall be entitled to a vacation of three (3) weeks per year, during which period her salary shall bepaid in full. The Executive shall take her vacation at such time or times as the Executive and the Corporation shall determine is mutuallyconvenient. Any vacation not taken in one (1) year shall accrue, up to a maximum of six (6) weeks’ vacation shall carry over to the subsequentyear.

8. Disclosure of Confidential Information.

(a) The Executive recognizes, acknowledges and agrees that he has had and will continue to have access to secret andconfidential information regarding the Corporation, its subsidiaries and their respective businesses (“Confidential Information”), including but notlimited to, its products, methods, formulas, software code, patents, sources of supply, customer dealings, data, know-how, trade secrets andbusiness plans, provided such information (i) is not in or does not hereafter become part of the public domain, or (ii) became known to othersthrough no fault of the Executive. The Executive acknowledges that such information is of great value to the Corporation, is the sole property ofthe Corporation, and has been and will be acquired by her in confidence. In consideration of the obligations undertaken by the Corporationherein, the Executive will not, at any time, during or after her employment hereunder, reveal, divulge or make known to any person, anyConfidential Information acquired by the Executive during the course of her employment, which is treated as confidential by the Corporation, andnot otherwise in the public domain, except as required by law (but only after Executive has provided the Corporation with reasonable notice andopportunity to take action against any legally required disclosure. The provisions of this Section 8 shall survive the termination of the Executive’semployment hereunder.

(b) The Executive affirms that he does not possess and will not rely upon the protected trade secrets or confidential orproprietary information of any prior employer(s) in providing services to the Corporation or its subsidiaries, except his prior knowledge ofLighter Than Air Systems Corp. which was or will be acquired by the Corporation.

(c) In the event that the Executive’s employment with the Corporation terminates for any reason, the Executive shalldeliver forthwith to the Corporation any and all originals and copies, including those in electronic or digital formats, of Confidential Information;provided, however, Executive shall be entitled to retain (i) papers and other materials of a personal nature, including, but not limited to,photographs, correspondence, personal diaries, calendars and rolodexes, personal files and phone books, (ii) information showing hercompensation or relating to reimbursement of expenses, (iii) information that he reasonably believes may be needed for tax purposes and (iv)copies of plans, programs and agreements relating to her employment, or termination thereof, with the Corporation.

9. Non-Competition and Non-Solicitation.

(a) The Executive agrees and acknowledges that the Confidential Information that the Executive has already received andwill receive is valuable to the Corporation and that its protection and maintenance constitutes a legitimate business interest of the Corporation, tobe protected by the non-competition restrictions set forth herein. The Executive agrees and acknowledges that the non-competition restrictions setforth herein are reasonable and necessary and do not impose undue hardship or burdens on the Executive. The Executive also acknowledges thatthe Corporation’s business is conducted worldwide (the “Territory”), and that the Territory, scope of prohibited competition, and time durationset forth in the non-competition restrictions set forth below are reasonable and necessary to maintain the value of the Confidential Information of,and to protect the goodwill and other legitimate business interests of, the Corporation, its affiliates and/or its clients or customers. The provisionsof this Section 9 shall survive the termination of the Executive’s employment hereunder for the time periods specified below.

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(b) The Executive hereby agrees and covenants that he shall not without the prior written consent of the Corporation,directly or indirectly, in any capacity whatsoever, including, without limitation, as an employee, employer, consultant, principal, partner,shareholder, officer, director or any other individual or representative capacity (other than (i) as a holder of less than two (2%) percent of theoutstanding securities of a company whose shares are traded on any national securities exchange or (ii) as a limited partner, passive minorityinterest holder in a venture capital fund, private equity fund or similar investment entity which holds or may hold an equity or debt position inportfolio companies that are competitive with the Corporation; provided however, that the Executive shall be precluded from serving as anoperating partner, general partner, manager or governing board designee with respect to such portfolio companies), whether on the Executive'sown behalf or on behalf of any other person or entity or otherwise howsoever, during the Term and thereafter to the extent described below,within the Territory.

(1) Engage, own, manage, operate, control, be employed by, consult for, participate in, or be connected in any mannerwith the ownership, management, operation or control of any business in competition with the Business of the Corporation, as defined in the nextsentence. “Business” shall mean the development and sale of lighter than air and heavier than air tethered aerostats.

(2) Recruit, solicit or hire, or attempt to recruit, solicit or hire, any employee, or independent contractor of theCorporation to leave the employment (or independent contractor relationship) thereof, whether or not any such employee or independentcontractor is party to an employment agreement, for the purpose of competing with the Business of the Corporation;

(3) Attempt in any manner to solicit or accept from any customer of the Corporation, with whom Executive hadsignificant contact during Executive’s employment by the Corporation (whether under this Agreement or otherwise), business competitive withthe Business done by the Corporation with such customer or to persuade or attempt to persuade any such customer to cease to do business or toreduce the amount of business which such customer has customarily done with the Corporation, or if any such customer elects to move itsbusiness to a person other than the Corporation, provide any services of the kind or competitive with the Business of the Corporation for suchcustomer, or have any discussions regarding any such service with such customer, on behalf of such other person for the purpose of competingwith the Business of the Corporation; or

(4) Interfere with any relationship, contractual or otherwise, between the Corporation and any other party, including,without limitation, any supplier, distributor, co-venturer or joint venturer of the Corporation, for the purpose of soliciting such other party todiscontinue or reduce its business with the Corporation for the purpose of competing with the Business of the Corporation.

With respect to the activities described in Paragraphs (1), (2), (3) and (4) above, the restrictions of this Section 9 shall continueduring the Employment Period and, upon termination of the Executive’s employment for a period of one (1) year thereafter.

10. Clawback Rights. The Annual Bonus, and any and all stock based compensation (such as options and equity awards,including any Share Awards (collectively, the “Clawback Benefits”) shall be subject to “Corporation Clawback Rights” as follows: During theperiod that the Executive is employed by the Corporation and upon the termination of the Executive’s employment and for a period of three (3)years thereafter, if there is a Restatement (as defined below) of any financial results from which any Clawback Benefits to Executive shall havebeen determined, Executive agrees to repay any amounts which were determined by reference to any Corporation financial results which werelater restated, to the extent the Clawback Benefits amounts paid exceed the Clawback Benefits amounts that would have been paid, based on theRestatement of the Corporation’s financial information. All Clawback Benefits amounts resulting from such restated financial results shall beretroactively adjusted by the Compensation Committee to take into account the restated results, and any excess portion of the ClawbackBenefits resulting from such restated results shall be immediately surrendered to the Corporation and if not so surrendered within ninety (90)days of the revised calculation being provided to the Executive by the Compensation Committee following a publicly announced restatement, theCorporation shall have the right to take any and all action to effectuate such adjustment. The calculation of the Revised Clawback Benefits amountshall be determined by the Compensation Committee in good faith and applicable law, rules and regulations. All determinations by theCompensation Committee with respect to the Corporation Clawback Rights shall be final and binding on the Corporation and Executive. TheCorporation Clawback Rights shall terminate following a Change of Control, subject to applicable law, rules and regulations. For purposes ofthis Section 10, a restatement of financial results that requires a repayment of a portion of the Clawback Benefits amounts shall mean arestatement resulting from material non-compliance of the Corporation with any financial reporting requirement under the federal securities lawsand shall not include a restatement of financial results resulting from subsequent changes in accounting pronouncements or requirements whichwere not in effect on the date the financial statements were originally prepared (“Restatements”). Additionally, if any material breach of anyagreement by Executive relating to confidentiality, non-competition, non-raid of employees, or non-solicitation of vendors or customers(including, without limitation, Sections 8 or 9 hereof) or if any material breach of Corporation policy or procedures which causes material harm tothe Corporation occurs, as determined by the Board in its sole discretion, then the Executive agrees to repay or surrender any Clawback Benefitsupon demand by the Corporation and if not so repaid or surrendered within ninety (90) days of such demand, the Corporation shall have the rightto take any and all action to effectuate such adjustment. The parties acknowledge it is their intention that the foregoing Corporation ClawbackRights as relates to Restatements conform in all respects to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Actof 2010 (the “Dodd Frank Act”) and requires recovery of all “incentive-based” compensation, pursuant to the provisions of the Dodd Frank Actand any and all rules and regulations promulgated thereunder from time to time in effect. Accordingly, the terms and provisions of thisAgreement shall be deemed automatically amended from time to time to assure compliance with the Dodd Frank Act and such rules andregulation as hereafter may be adopted and in effect.

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11. Section 409A.

The provisions of this Agreement are intended to comply with Section 409A of the Internal Revenue Code of 1986, asamended (the “Code”) and any final regulations and guidance promulgated thereunder (“Section 409A”) and shall be construed in a mannerconsistent with the requirements for avoiding taxes or penalties under Section 409A. The Corporation and Executive agree to work together ingood faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoidimposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.

To the extent that Executive will be reimbursed for costs and expenses or in-kind benefits, except as otherwise permitted bySection 409A, (a) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit, (b) the amount ofexpenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible forreimbursement, or in-kind benefits to be provided, in any other taxable year; provided that the foregoing clause (b) shall not be violated withregard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limitrelated to the period the arrangement is in effect and (c) such payments shall be made on or before the last day of the taxable year following thetaxable year in which you incurred the expense.

A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providingfor the payment of any amounts or benefits upon or following a termination of employment unless such termination constitutes a “Separationfrom Service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement references to a “termination,”“termination of employment” or like terms shall mean Separation from Service.

Each installment payable hereunder shall constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b), including Treasury Regulation Section 1.409A-2(b)(2)(iii). Each payment that is made within the terms of the “short-term deferral” rule setforth in Treasury Regulation Section 1.409A-1(b)(4) is intended to meet the “short-term deferral” rule. Each other payment is intended to be apayment upon an involuntary termination from service and payable pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii), et. seq., to themaximum extent permitted by that regulation, with any amount that is not exempt from Code Section 409A being subject to Code Section 409A.

Notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” within the meaning ofSection 409A at the time of Executive’s termination, then only that portion of the severance and benefits payable to Executive pursuant to thisAgreement, if any, and any other severance payments or separation benefits which may be considered deferred compensation under Section409A (together, the “Deferred Compensation Separation Benefits”), which (when considered together) do not exceed the Section 409A Limit (asdefined herein) may be made within the first six (6) months following Executive’s termination of employment in accordance with the paymentschedule applicable to each payment or benefit. Any portion of the Deferred Compensation Separation Benefits in excess of the Section 409ALimit otherwise due to Executive on or within the six (6) month period following Executive’s termination will accrue during such six (6) monthperiod and will become payable in one lump sum cash payment on the date six (6) months and one (1) day following the date of Executive’stermination of employment. All subsequent Deferred Compensation Separation Benefits, if any, will be payable in accordance with the paymentschedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if Executive dies following termination but priorto the six (6) month anniversary of Executive’s termination date, then any payments delayed in accordance with this paragraph will be payable ina lump sum as soon as administratively practicable after the date of Executive’s death and all other Deferred Compensation Separation Benefitswill be payable in accordance with the payment schedule applicable to each payment or benefit.

For purposes of this Agreement, “Section 409A Limit” will mean a sum equal (x) to the amounts payable prior to March 15following the year in which Executive terminations plus (y) the lesser of two (2) times: (i) Executive’s annualized compensation based upon theannual rate of pay paid to Executive during the Corporation’s taxable year preceding the Corporation’s taxable year of Executive’s termination ofemployment as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any IRS guidance issued with respect thereto; or (ii) themaximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in whichExecutive’s employment is terminated.

12. Miscellaneous.

a. The Executive acknowledges that the services to be rendered by her under the provisions of this Agreement are of a special,unique and extraordinary character and that it would be difficult or impossible to replace such services. Accordingly, the Executive agrees thatany breach or threatened breach by her of Sections 8 or 9 of this Agreement shall entitle the Corporation, in addition to all other legal remediesavailable to it, to apply to any court of competent jurisdiction to seek to enjoin such breach or threatened breach. The parties understand andintend that each restriction agreed to by the Executive hereinabove shall be construed as separable and divisible from every other restriction, thatthe unenforceability of any restriction shall not limit the enforceability, in whole or in part, of any other restriction, and that one or more or all ofsuch restrictions may be enforced in whole or in part as the circumstances warrant. In the event that any restriction in this Agreement is morerestrictive than permitted by law in the jurisdiction in which the Corporation seeks enforcement thereof, such restriction shall be limited to theextent permitted by law. The remedy of injunctive relief herein set forth shall be in addition to, and not in lieu of, any other rights or remedies thatthe Corporation may have at law or in equity.

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b. Neither the Executive nor the Corporation may assign or delegate any of their rights or duties under this Agreement withoutthe express written consent of the other; provided however that the Corporation shall have the right to delegate its obligation of payment of allsums due to the Executive hereunder, provided that such delegation shall not relieve the Corporation of any of its obligations hereunder.

c. This Agreement constitutes and embodies the full and complete understanding and agreement of the parties with respect tothe Executive’s employment by the Corporation, supersedes all prior understandings and agreements, whether oral or written, between theExecutive and the Corporation, and shall not be amended, modified or changed except by an instrument in writing executed by the party to becharged. The invalidity or partial invalidity of one or more provisions of this Agreement shall not invalidate any other provision of thisAgreement. No waiver by either party of any provision or condition to be performed shall be deemed a waiver of similar or dissimilar provisionsor conditions at the same time or any prior or subsequent time.

d. This Agreement shall inure to the benefit of, be binding upon and enforceable against, the parties hereto and their respectivesuccessors, heirs, beneficiaries and permitted assigns.

e. The headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaningor interpretation of this Agreement.

f. All notices, requests, demands and other communications required or permitted to be given hereunder shall be in writing andshall be deemed to have been duly given when personally delivered, sent by registered or certified mail, return receipt requested, postage prepaid,or by private overnight mail service (e.g. Federal Express) to the party at the address set forth above or to such other address as either party mayhereafter give notice of in accordance with the provisions hereof. Notices shall be deemed given on the sooner of the date actually received or thethird business day after sending.

g. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York withoutreference to principles of conflicts of laws and each of the parties hereto irrevocably consents to the jurisdiction and venue of the federal and statecourts located in the State of New York.

h. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original,but all of which together shall constitute one of the same instrument. The parties hereto have executed this Agreement as of the date set forthabove. CORPORATION: DRONE AVIATION HOLDING CORP. f/k/a MACROSOLVE, INC. ____________________________ By:

Title: EXECUTIVE: ____________________________ FELICIA HESS

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Exhibit 10.3

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT is made and entered into as of this 3rd day of June 2014 (the “Effective Date”), by and betweenDrone Aviation Holding Corp., a Nevada corporation f/k/a Macrosolve, Inc., an Oklahoma corporation with offices at 11653 Central Parkway,Jacksonville, FL 32224 (the “Corporation”), and Daniyel Erdberg, residing at 1885 NE 117 Road, N. Miami, FL 33181 (the “Executive”), underthe following circumstances:

RECITALS:

A. The Corporation desires to secure the services of the Executive upon the terms and conditions hereinafter set forth;and

B. The Executive desires to render services to the Corporation upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, the parties mutually agree as follows:

1. Employment. The Corporation hereby employs the Executive and the Executive hereby accepts employment as an executiveof the Corporation, subject to the terms and conditions set forth in this Agreement.

2. Duties. The Executive shall serve as the Chief Operating Officer of the Corporation, with such duties, responsibilities andauthority as are commensurate and consistent with his position, as may be, from time to time, assigned to him by the Chief Executive Officer (the“CEO”) of the Corporation. The Executive shall report directly to the CEO. During the Term (as defined in Section 3), the Executive shall devoteall of his full business time and efforts to the performance of his duties hereunder unless otherwise authorized by the Board. Notwithstanding theforegoing, the expenditure of reasonable amounts of time by the Executive for the making of passive personal investments, the conduct ofbusiness affairs and charitable and professional activities shall be allowed, provided such activities do not materially interfere with the servicesrequired to be rendered to the Corporation hereunder and do not violate the restrictive covenants set forth in Section 9 below.

3. Term of Employment. The term of the Executive’s employment hereunder, unless sooner terminated as provided herein (the“Initial Term”), shall be for a period of one (1) year commencing on the Effective Date. The term of this Agreement shall automatically beextended for additional terms of one (1) year each (each a “Renewal Term”) unless either party gives prior written notice of non-renewal to theother party no later than thirty (30) days prior to the expiration of the Initial Term (“Non-Renewal Notice”), or the then current Renewal Term, asthe case may be. For purposes of this Agreement, the Initial Term and any Renewal Term are hereinafter collectively referred to as the “Term.”

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4. Compensation of Executive.

(a) The Corporation shall pay the Executive as compensation for his services hereunder, in equal bi-weekly installments duringthe Term, the sum of $140,000 (the “Base Salary”), less such deductions as shall be required to be withheld by applicable law and regulations.The Corporation shall review the Base Salary on an annual basis and has the right but not the obligation to increase it but such salary shall not bedecreased during the Term.

(b) (i) In addition to the Base Salary set forth in Section 4(a), the Executive shall be entitled to receive an annual cashbonus in an amount equal to up to one hundred percent (100%) of his then-current Base Salary if the Corporation meets or exceeds criteriaadopted by the Compensation Committee of the Board of Directors (the “Compensation Committee”) for earning bonuses which criteria shall beadopted by the Compensation Committee annually. Bonuses shall be paid by the Corporation to the Executive promptly after determination thatthe relevant targets have been met, it being understood that the attainment of any financial targets associated with any bonus shall not bedetermined until following the completion of the Corporation’s annual audit and public announcement of such results and bonuses shall be paidpromptly following the Corporation’s announcement of earnings.

(ii) The Executive shall be entitled to a starting bonus equal to $24,000, which shall be paid within seven (7) days from theEffective Date.

(c) Equity Awards. Executive shall be eligible for such grants of awards under stock option or other equity incentive plans ofthe Corporation adopted by the Board and approved by the Corporation’s stockholders (or any successor or replacement plan adopted by theBoard and approved by the Corporation’s stockholders) (the “Plan”) as the Compensation Committee of the Corporation may from time to timedetermine (the “Share Awards”). Share Awards shall be subject to the applicable Plan terms and conditions, provided, however, that ShareAwards shall be subject to any additional terms and conditions as are provided herein or in any award certificate(s), which shall supersede anyconflicting provisions governing Share Awards provided under the Plan.

(d) The Executive shall be entitled to participate in such pension, profit sharing, group insurance, hospitalization, and grouphealth and benefit plans and all other benefits and plans, including perquisites, if any, as the Corporation provides to its senior executives,including group family health insurance coverage which shall be paid by the Corporation (the “Benefit Plans”). In the event the Corporation doesnot have a health benefit plan in place, the Corporation shall reimburse the Executive for expenses incurred in maintaining health and dentalinsurance for Executive and his dependents, in an amount not to exceed $1,500 per month.

(e) The Corporation shall execute and deliver in favor of the Executive an indemnification agreement on the same terms andconditions entered into with the other officers and directors of the Corporation. Such agreement shall provide for the indemnification of theExecutive for the term of his employment. The Corporation shall maintain directors’ and officers’ insurance during the Term in an amount of notless than Five Million Dollars ($5,000,000)

5. Termination.

(a) This Agreement and the Executive’s employment hereunder shall terminate upon the happening of any of the followingevents:

(i) upon the Executive’s death;

(ii) upon the Executive’s “Total Disability” (as herein defined);

(iii) upon the expiration of the Initial Term of this Agreement or any Renewal Term thereof, if either party has provided atimely notice of non-renewal in accordance with Section 3, above;

(iv) at the Executive’s option, upon thirty (30) days prior written notice to the Corporation;

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(v) at the Executive’s option, in the event of an act by the Corporation, defined in Section 5(c), below, as constituting “GoodReason” for termination by the Executive; and

(vi) at the Corporation’s option, in the event of an act by the Executive, defined in Section 5(d), below, as constituting “Cause”for termination by the Corporation.

(b) For purposes of this Agreement, the Executive shall be deemed to be suffering from a “Total Disability” if the Executivehas failed to perform his regular and customary duties to the Corporation for a period of 180 days out of any 360-day period and if before theExecutive has become “Rehabilitated” (as herein defined) a majority of the members of the Board, exclusive of the Executive, vote to determinethat the Executive is mentally or physically incapable or unable to continue to perform such regular and customary duties of employment. As usedherein, the term “Rehabilitated” shall mean such time as the Executive is willing, able and commences to devote his time and energies to theaffairs of the Corporation to the extent and in the manner that he did so prior to his Total Disability. Nothing in this Section 5(b) shall beconstrued to waive the Executive’s rights, if any, under existing law including, without limitation, the Family and Medical Leave Act of 1993, 29U.S.C. s.2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. s12101 et seq.

(c) For purposes of this Agreement, the term “Good Reason” shall mean that the Executive has resigned due to (i) anydiminution of duties inconsistent with Executive’s title, authority, duties and responsibilities (including, without limitation, a change in the chainof reporting); (ii) any reduction of or failure to pay Executive compensation provided for herein, except to the extent Executive consents inwriting prior to any reduction, deferral or waiver of compensation, which non-payment continues for a period of ten (10) days following writtennotice to the Corporation by Executive of such non-payment; (iii) any relocation of the principal location of Executive’s employment outside ofMiami, FL without the Executive’s prior written consent; (iv) the consummation of any Change in Control Transaction (as defined below); (vi)any material violation by the Corporation of its obligations under this Agreement that is not cured within thirty (30) days after receipt of writtennotice thereof from the Executive. For purposes of this Agreement, the term “Change in Control Transaction” means the sale of the Corporationto an un-affiliated person or entity or group of un-affiliated persons or entities pursuant to which such party or parties acquire (i) shares of capitalstock of the Corporation representing at least fifty percent (50%) of outstanding capital stock or sufficient to elect a majority of the Board of theCorporation (whether by merger, consolidation, sale or transfer of shares (other than a merger where the Corporation is the surviving corporationand the shareholders and directors of the Corporation prior to the merger constitute a majority of the shareholders and directors, respectively, ofthe surviving corporation (or its parent)) or (ii) all or substantially all of the Corporation’s assets determined on a consolidated basis.

(d) For purposes of this Agreement, the term “Cause” shall mean:

(i) conviction of a felony or a crime involving fraud or moral turpitude; or

(ii) theft, material act of dishonesty or fraud, intentional falsification of any employment or Corporation records, orcommission of any criminal act which impairs Executive’s ability to perform appropriate employment duties for the Corporation; or

(iii) intentional or reckless conduct or gross negligence materially harmful to the Corporation or the successor to theCorporation after a Change in Control Transaction, including violation of a non-competition or confidentiality agreement; or

(iv) willful failure to follow lawful and reasonable instructions of the person or body to which Executive reports, whichfailure, if curable, is not cured within thirty (30) days after written notice to the Executive thereof; or

(v) gross negligence or willful misconduct in the performance of Executive’s assigned duties; or

(vi) any material breach of this Agreement by Executive, which breach, if curable, is not cured within fifteen (15) daysafter written notice to the Executive of such breach.

6. Effects of Termination.

(a) Upon termination of the Executive’s employment pursuant to Section 5(a)(i) or (ii), in addition to the accrued but unpaidcompensation and vacation pay through the date of death or Total Disability and any other benefits accrued to him under any Benefit Plansoutstanding at such time and the reimbursement of documented, unreimbursed expenses incurred prior to such date, the Executive or his estate orbeneficiaries, as applicable, shall be entitled to the following severance benefits: (i) continued provision for a period of twelve (12) monthsfollowing the Executive’s death or Total Disability of benefits under Benefit Plans extended from time to time by the Corporation to its seniorexecutives; and (ii) payment on a pro-rated basis of any bonus or other payments earned in connection with any bonus plan to which theExecutive was a participant as of the date of death or Total Disability

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(b) Upon termination of the Executive’s employment pursuant to Section 5(a)(iii), where the Corporation has offered to renewthe term of the Executive’s employment for an additional one (1) year period and the Executive chooses not to continue in the employ of theCorporation, the Executive shall be entitled to receive only the accrued but unpaid compensation and vacation pay through the date of terminationand any other benefits accrued to him under any Benefit Plans outstanding at such time and the reimbursement of documented, unreimbursedexpenses incurred prior to such date. In the event the Corporation tenders a Non-Renewal Notice to the Executive, then the Executive shall beentitled to the same severance benefits as if the Executive’s employment were terminated pursuant to Section 5(a)(v); provided, however, if suchNon-Renewal Notice was triggered due to the Corporation’s statement that the Executive’s employment was terminated due to Section 5(a)(vi)(for “Cause”), then payment of severance benefits will be contingent upon a determination as to whether termination was properly for “Cause.”

(c) Upon termination of the Executive’s employment pursuant to Section 5(a)(v) or other than pursuant to Section 5(a)(i),5(a)(ii), 5(a)(iii), 5(a)(iv), or 5(a)(vi) (i.e., without “Cause”), in addition to the accrued but unpaid compensation and vacation pay through the endof the Term or any then applicable extension of the Term and any other benefits accrued to him under any Benefit Plans outstanding at such timeand the reimbursement of documented, unreimbursed expenses incurred prior to such date, the Executive shall be entitled to the followingseverance benefits: (i) a cash payment, based on the current scale of Executive’s Base Salary, equal to six months of Base Salary, to be paid in asingle lump sum payment not later than sixty (60) days following such termination, less withholding of all applicable taxes; (ii) continuedprovision for a period of twelve (12) months after the date of termination of the benefits under Benefit Plans extended from time to time by theCorporation to its senior executives; and (iii) payment on a pro-rated basis of any bonus or other payments earned in connection with any bonusplan to which the Executive was a participant as of the date of the Executive’s termination of employment. In addition, any options or restrictedstock shall be immediately vested upon termination of Executive’s employment pursuant to Section 5(a)(v) or by the Corporation without“Cause”.

(d) Upon termination of the Executive’s employment pursuant to Section 5(a)(iv) or (vi), in addition to the reimbursement ofdocumented, unreimbursed expenses incurred prior to such date, the Executive shall be entitled to the following severance benefits: (i) accruedand unpaid Base Salary and vacation pay through the date of termination, less withholding of applicable taxes and any other benefits accrued tohim under any Benefit Plans outstanding at such time; and (ii) continued provision, for a period of one (1) month after the date of the Executive’stermination of employment, of benefits under Benefit Plans extended to the Executive at the time of termination. Executive shall have anyconversion rights available under the Corporation’s Benefit Plans and as otherwise provided by law, including the Comprehensive OmnibusBudget Reconciliation Act.

(e) Any payments required to be made hereunder by the Corporation to the Executive shall continue to the Executive’sbeneficiaries in the event of his death until paid in full.

7. Vacations. The Executive shall be entitled to a vacation of three (3) weeks per year, during which period his salary shall bepaid in full. The Executive shall take his vacation at such time or times as the Executive and the Corporation shall determine is mutuallyconvenient. Any vacation not taken in one (1) year shall accrue, up to a maximum of six (6) weeks’ vacation shall carry over to the subsequentyear.

8. Disclosure of Confidential Information.

(a) The Executive recognizes, acknowledges and agrees that he has had and will continue to have access to secret andconfidential information regarding the Corporation, its subsidiaries and their respective businesses (“Confidential Information”), including but notlimited to, its products, methods, formulas, software code, patents, sources of supply, customer dealings, data, know-how, trade secrets andbusiness plans, provided such information (i) is not in or does not hereafter become part of the public domain, or (ii) became known to othersthrough no fault of the Executive. The Executive acknowledges that such information is of great value to the Corporation, is the sole property ofthe Corporation, and has been and will be acquired by him in confidence. In consideration of the obligations undertaken by the Corporationherein, the Executive will not, at any time, during or after his employment hereunder, reveal, divulge or make known to any person, anyConfidential Information acquired by the Executive during the course of his employment, which is treated as confidential by the Corporation, andnot otherwise in the public domain, except as required by law (but only after Executive has provided the Corporation with reasonable notice andopportunity to take action against any legally required disclosure. The provisions of this Section 8 shall survive the termination of the Executive’semployment hereunder.

(b) The Executive affirms that he does not possess and will not rely upon the protected trade secrets or confidential orproprietary information of any prior employer(s) in providing services to the Corporation or its subsidiaries, except his prior knowledge ofLighter Than Air Systems Corp. which was or will be acquired by the Corporation.

(c) In the event that the Executive’s employment with the Corporation terminates for any reason, the Executive shalldeliver forthwith to the Corporation any and all originals and copies, including those in electronic or digital formats, of Confidential Information;provided, however, Executive shall be entitled to retain (i) papers and other materials of a personal nature, including, but not limited to,photographs, correspondence, personal diaries, calendars and rolodexes, personal files and phone books, (ii) information showing hiscompensation or relating to reimbursement of expenses, (iii) information that he reasonably believes may be needed for tax purposes and (iv)copies of plans, programs and agreements relating to his employment, or termination thereof, with the Corporation.

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9. Non-Competition and Non-Solicitation.

(a) The Executive agrees and acknowledges that the Confidential Information that the Executive has already received andwill receive is valuable to the Corporation and that its protection and maintenance constitutes a legitimate business interest of the Corporation, tobe protected by the non-competition restrictions set forth herein. The Executive agrees and acknowledges that the non-competition restrictions setforth herein are reasonable and necessary and do not impose undue hardship or burdens on the Executive. The Executive also acknowledges thatthe Corporation’s business is conducted worldwide (the “Territory”), and that the Territory, scope of prohibited competition, and time durationset forth in the non-competition restrictions set forth below are reasonable and necessary to maintain the value of the Confidential Information of,and to protect the goodwill and other legitimate business interests of, the Corporation, its affiliates and/or its clients or customers. The provisionsof this Section 9 shall survive the termination of the Executive’s employment hereunder for the time periods specified below.

(b) The Executive hereby agrees and covenants that he shall not without the prior written consent of the Corporation,directly or indirectly, in any capacity whatsoever, including, without limitation, as an employee, employer, consultant, principal, partner,shareholder, officer, director or any other individual or representative capacity (other than (i) as a holder of less than two (2%) percent of theoutstanding securities of a company whose shares are traded on any national securities exchange or (ii) as a limited partner, passive minorityinterest holder in a venture capital fund, private equity fund or similar investment entity which holds or may hold an equity or debt position inportfolio companies that are competitive with the Corporation; provided however, that the Executive shall be precluded from serving as anoperating partner, general partner, manager or governing board designee with respect to such portfolio companies), whether on the Executive'sown behalf or on behalf of any other person or entity or otherwise howsoever, during the Term and thereafter to the extent described below,within the Territory.

(1) Engage, own, manage, operate, control, be employed by, consult for, participate in, or be connected in any mannerwith the ownership, management, operation or control of any business in competition with the Business of the Corporation, as defined in the nextsentence. “Business” shall mean the development and sale of lighter than air and heavier than air tethered aerostats.

(2) Recruit, solicit or hire, or attempt to recruit, solicit or hire, any employee, or independent contractor of theCorporation to leave the employment (or independent contractor relationship) thereof, whether or not any such employee or independentcontractor is party to an employment agreement, for the purpose of competing with the Business of the Corporation;

(3) Attempt in any manner to solicit or accept from any customer of the Corporation, with whom Executive hadsignificant contact during Executive’s employment by the Corporation (whether under this Agreement or otherwise), business competitive withthe Business done by the Corporation with such customer or to persuade or attempt to persuade any such customer to cease to do business or toreduce the amount of business which such customer has customarily done with the Corporation, or if any such customer elects to move itsbusiness to a person other than the Corporation, provide any services of the kind or competitive with the Business of the Corporation for suchcustomer, or have any discussions regarding any such service with such customer, on behalf of such other person for the purpose of competingwith the Business of the Corporation; or

(4) Interfere with any relationship, contractual or otherwise, between the Corporation and any other party, including,without limitation, any supplier, distributor, co-venturer or joint venturer of the Corporation, for the purpose of soliciting such other party todiscontinue or reduce its business with the Corporation for the purpose of competing with the Business of the Corporation.

With respect to the activities described in Paragraphs (1), (2), (3) and (4) above, the restrictions of this Section 9 shall continueduring the Employment Period and, upon termination of the Executive’s employment for a period of one (1) year thereafter.

10. Clawback Rights. The Annual Bonus, and any and all stock based compensation (such as options and equity awards,including any Share Awards (collectively, the “Clawback Benefits”) shall be subject to “Corporation Clawback Rights” as follows: During theperiod that the Executive is employed by the Corporation and upon the termination of the Executive’s employment and for a period of three (3)years thereafter, if there is a Restatement (as defined below) of any financial results from which any Clawback Benefits to Executive shall havebeen determined, Executive agrees to repay any amounts which were determined by reference to any Corporation financial results which werelater restated, to the extent the Clawback Benefits amounts paid exceed the Clawback Benefits amounts that would have been paid, based on theRestatement of the Corporation’s financial information. All Clawback Benefits amounts resulting from such restated financial results shall beretroactively adjusted by the Compensation Committee to take into account the restated results, and any excess portion of the ClawbackBenefits resulting from such restated results shall be immediately surrendered to the Corporation and if not so surrendered within ninety (90)days of the revised calculation being provided to the Executive by the Compensation Committee following a publicly announced restatement, theCorporation shall have the right to take any and all action to effectuate such adjustment. The calculation of the Revised Clawback Benefits amountshall be determined by the Compensation Committee in good faith and applicable law, rules and regulations. All determinations by theCompensation Committee with respect to the Corporation Clawback Rights shall be final and binding on the Corporation and Executive. TheCorporation Clawback Rights shall terminate following a Change of Control, subject to applicable law, rules and regulations. For purposes ofthis Section 10, a restatement of financial results that requires a repayment of a portion of the Clawback Benefits amounts shall mean arestatement resulting from material non-compliance of the Corporation with any financial reporting requirement under the federal securities lawsand shall not include a restatement of financial results resulting from subsequent changes in accounting pronouncements or requirements whichwere not in effect on the date the financial statements were originally prepared (“Restatements”). Additionally, if any material breach of anyagreement by Executive relating to confidentiality, non-competition, non-raid of employees, or non-solicitation of vendors or customers(including, without limitation, Sections 8 or 9 hereof) or if any material breach of Corporation policy or procedures which causes material harm tothe Corporation occurs, as determined by the Board in its sole discretion, then the Executive agrees to repay or surrender any Clawback Benefitsupon demand by the Corporation and if not so repaid or surrendered within ninety (90) days of such demand, the Corporation shall have the rightto take any and all action to effectuate such adjustment. The parties acknowledge it is their intention that the foregoing Corporation ClawbackRights as relates to Restatements conform in all respects to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Actof 2010 (the “Dodd Frank Act”) and requires recovery of all “incentive-based” compensation, pursuant to the provisions of the Dodd Frank Actand any and all rules and regulations promulgated thereunder from time to time in effect. Accordingly, the terms and provisions of thisAgreement shall be deemed automatically amended from time to time to assure compliance with the Dodd Frank Act and such rules and

Agreement shall be deemed automatically amended from time to time to assure compliance with the Dodd Frank Act and such rules andregulations as hereafter may be adopted and in effect.

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11. Section 409A.

The provisions of this Agreement are intended to comply with Section 409A of the Internal Revenue Code of 1986, asamended (the “Code”) and any final regulations and guidance promulgated thereunder (“Section 409A”) and shall be construed in a mannerconsistent with the requirements for avoiding taxes or penalties under Section 409A. The Corporation and Executive agree to work together ingood faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoidimposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.

To the extent that Executive will be reimbursed for costs and expenses or in-kind benefits, except as otherwise permitted bySection 409A, (a) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit, (b) the amount ofexpenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible forreimbursement, or in-kind benefits to be provided, in any other taxable year; provided that the foregoing clause (b) shall not be violated withregard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limitrelated to the period the arrangement is in effect and (c) such payments shall be made on or before the last day of the taxable year following thetaxable year in which you incurred the expense.

A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providingfor the payment of any amounts or benefits upon or following a termination of employment unless such termination constitutes a “Separationfrom Service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement references to a “termination,”“termination of employment” or like terms shall mean Separation from Service.

Each installment payable hereunder shall constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b), including Treasury Regulation Section 1.409A-2(b)(2)(iii). Each payment that is made within the terms of the “short-term deferral” rule setforth in Treasury Regulation Section 1.409A-1(b)(4) is intended to meet the “short-term deferral” rule. Each other payment is intended to be apayment upon an involuntary termination from service and payable pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii), et. seq., to themaximum extent permitted by that regulation, with any amount that is not exempt from Code Section 409A being subject to Code Section 409A.

Notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” within the meaning ofSection 409A at the time of Executive’s termination, then only that portion of the severance and benefits payable to Executive pursuant to thisAgreement, if any, and any other severance payments or separation benefits which may be considered deferred compensation under Section409A (together, the “Deferred Compensation Separation Benefits”), which (when considered together) do not exceed the Section 409A Limit (asdefined herein) may be made within the first six (6) months following Executive’s termination of employment in accordance with the paymentschedule applicable to each payment or benefit. Any portion of the Deferred Compensation Separation Benefits in excess of the Section 409ALimit otherwise due to Executive on or within the six (6) month period following Executive’s termination will accrue during such six (6) monthperiod and will become payable in one lump sum cash payment on the date six (6) months and one (1) day following the date of Executive’stermination of employment. All subsequent Deferred Compensation Separation Benefits, if any, will be payable in accordance with the paymentschedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if Executive dies following termination but priorto the six (6) month anniversary of Executive’s termination date, then any payments delayed in accordance with this paragraph will be payable ina lump sum as soon as administratively practicable after the date of Executive’s death and all other Deferred Compensation Separation Benefitswill be payable in accordance with the payment schedule applicable to each payment or benefit.

For purposes of this Agreement, “Section 409A Limit” will mean a sum equal (x) to the amounts payable prior to March 15following the year in which Executive terminations plus (y) the lesser of two (2) times: (i) Executive’s annualized compensation based upon theannual rate of pay paid to Executive during the Corporation’s taxable year preceding the Corporation’s taxable year of Executive’s termination ofemployment as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any IRS guidance issued with respect thereto; or (ii) themaximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in whichExecutive’s employment is terminated.

12. Miscellaneous.

a. The Executive acknowledges that the services to be rendered by him under the provisions of this Agreement are of a special,unique and extraordinary character and that it would be difficult or impossible to replace such services. Accordingly, the Executive agrees thatany breach or threatened breach by him of Sections 8 or 9 of this Agreement shall entitle the Corporation, in addition to all other legal remediesavailable to it, to apply to any court of competent jurisdiction to seek to enjoin such breach or threatened breach. The parties understand andintend that each restriction agreed to by the Executive hereinabove shall be construed as separable and divisible from every other restriction, thatthe unenforceability of any restriction shall not limit the enforceability, in whole or in part, of any other restriction, and that one or more or all ofsuch restrictions may be enforced in whole or in part as the circumstances warrant. In the event that any restriction in this Agreement is morerestrictive than permitted by law in the jurisdiction in which the Corporation seeks enforcement thereof, such restriction shall be limited to theextent permitted by law. The remedy of injunctive relief herein set forth shall be in addition to, and not in lieu of, any other rights or remedies thatthe Corporation may have at law or in equity.

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b. Neither the Executive nor the Corporation may assign or delegate any of their rights or duties under this Agreement withoutthe express written consent of the other; provided however that the Corporation shall have the right to delegate its obligation of payment of allsums due to the Executive hereunder, provided that such delegation shall not relieve the Corporation of any of its obligations hereunder.

c. This Agreement constitutes and embodies the full and complete understanding and agreement of the parties with respect tothe Executive’s employment by the Corporation, supersedes all prior understandings and agreements, whether oral or written, between theExecutive and the Corporation, and shall not be amended, modified or changed except by an instrument in writing executed by the party to becharged. The invalidity or partial invalidity of one or more provisions of this Agreement shall not invalidate any other provision of thisAgreement. No waiver by either party of any provision or condition to be performed shall be deemed a waiver of similar or dissimilar provisionsor conditions at the same time or any prior or subsequent time.

d. This Agreement shall inure to the benefit of, be binding upon and enforceable against, the parties hereto and their respectivesuccessors, heirs, beneficiaries and permitted assigns.

e. The headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaningor interpretation of this Agreement.

f. All notices, requests, demands and other communications required or permitted to be given hereunder shall be in writing andshall be deemed to have been duly given when personally delivered, sent by registered or certified mail, return receipt requested, postage prepaid,or by private overnight mail service (e.g. Federal Express) to the party at the address set forth above or to such other address as either party mayhereafter give notice of in accordance with the provisions hereof. Notices shall be deemed given on the sooner of the date actually received or thethird business day after sending.

g. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York withoutreference to principles of conflicts of laws and each of the parties hereto irrevocably consents to the jurisdiction and venue of the federal and statecourts located in the State of New York.

h. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original,but all of which together shall constitute one of the same instrument. The parties hereto have executed this Agreement as of the date set forthabove. CORPORATION: DRONE AVIATION HOLDING CORP. f/k/a MACROSOLVE, INC. ____________________________ By:

Title: EXECUTIVE: ____________________________ DANIYEL ERDBERG

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Exhibit 10.4

DRONE AVIATION HOLDING CORP.

DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT

This Director and Officer Indemnification Agreement, dated as of this [__] day of [___] 2014 (this “Agreement”), is made by andbetween Drone Aviation Holding Corp., a Nevada corporation (the “Company”), and [___] (the “Indemnitee”).

RECITALS:

A. Chapter 78.115 of the Nevada Revised Statutes provides that the business and affairs of a corporation shall be managed by orunder the direction of its board of directors.

B. By virtue of the managerial prerogatives vested in the directors and officers of a Nevada corporation, directors and officers actas fiduciaries of the corporation and its stockholders.

C. Thus, it is critically important to the Company and its stockholders that the Company be able to attract and retain the mostcapable persons reasonably available to serve as directors and officers of the Company.

D. In recognition of the need for corporations to be able to induce capable and responsible persons to accept positions in corporatemanagement, Nevada law authorizes (and in some instances requires) corporations to indemnify their directors and officers, and furtherauthorizes corporations to purchase and maintain insurance for the benefit of their directors and officers.

E. Indemnitee is, or will be, a director and/or officer of the Company and his or her willingness to serve in such capacity ispredicated, in substantial part, upon the Company’s willingness to indemnify him or her to the fullest extent permitted by the laws of the State ofNevada, and upon the other undertakings set forth in this Agreement.

F. Therefore, in recognition of the need to provide Indemnitee with substantial protection against personal liability, in order toprocure Indemnitee’s service (or continued service) as a director and/or officer of the Company and to enhance Indemnitee’s ability to serve theCompany in an effective manner, and in order to provide such protection pursuant to express contract rights (intended to be enforceableirrespective of, among other things, any amendment to the Company’s certificate of incorporation or bylaws (collectively, the “ConstituentDocuments”), any change in the composition of the Company’s Board of Directors (the “Board”) or any change-in-control or businesscombination transaction relating to the Company), the Company wishes to provide in this Agreement for the indemnification and advancement ofExpenses to Indemnitee on the terms, and subject to the conditions, set forth in this Agreement.

G. In light of the considerations referred to in the preceding recitals, it is the Company’s intention and desire that the provisions ofthis Agreement be construed liberally, subject to their express terms, to maximize the protections to be provided to Indemnitee hereunder.

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AGREEMENT:

NOW, THEREFORE, the parties hereby agree as follows:

1. Certain Definitions. In addition to terms defined elsewhere herein, the following terms have the following meanings when used inthis Agreement with initial capital letters:

(a) “Change in Control” shall have occurred at such time, if any, as Incumbent Directors cease for any reason to constitute amajority of Directors. For purposes of this Section 1(a), “Incumbent Directors” means the individuals who, as of the date hereof, are Directorsof the Company and any individual becoming a Director subsequent to the date hereof whose election, nomination for election by the Company’sstockholders, or appointment, was approved by a vote of at least a majority of the then Incumbent Directors (either by a specific vote or byapproval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination);provided, however, that an individual shall not be an Incumbent Director if such individual’s election or appointment to the Board occurs as aresult of an actual or threatened election contest (as described in Rule 14a-12(c) of the Securities Exchange Act of 1934, as amended) with respectto the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than theBoard.

(b) “Claim” means (i) any threatened, asserted, pending or completed claim, demand, action, suit or proceeding, whether civil,criminal, administrative, arbitrative, investigative or other, and whether made pursuant to federal, state or other law; and (ii) any inquiry orinvestigation, whether made, instituted or conducted by the Company or any other Person, including, without limitation, any federal, state or othergovernmental entity, that Indemnitee reasonably determines might lead to the institution of any such claim, demand, action, suit orproceeding. For the avoidance of doubt, the Company intends indemnity to be provided hereunder in respect of acts or failure to act prior to, onor after the date hereof.

(c) “Controlled Affiliate” means any corporation, limited liability company, partnership, joint venture, trust or other entity orenterprise, whether or not for profit, that is directly or indirectly controlled by the Company. For purposes of this definition, “control” means thepossession, directly or indirectly, of the power to direct or cause the direction of the management or policies of an entity or enterprise, whetherthrough the ownership of voting securities, through other voting rights, by contract or otherwise; provided that direct or indirect beneficialownership of capital stock or other interests in an entity or enterprise entitling the holder to cast 15% or more of the total number of votesgenerally entitled to be cast in the election of directors (or persons performing comparable functions) of such entity or enterprise shall be deemedto constitute control for purposes of this definition.

(d) “Disinterested Director” means a director of the Company who is not and was not a party to the Claim in respect of whichindemnification is sought by Indemnitee.

(e) “Expenses” means attorneys’ and experts’ fees and expenses and all other costs and expenses paid or payable inconnection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to investigate, defend, be awitness in or participate in (including on appeal), any Claim.

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(f) “Indemnifiable Claim” means any Claim based upon, arising out of or resulting from (i) any actual, alleged or suspectedact or failure to act by Indemnitee in his or her capacity as a director, officer, employee or agent of the Company or as a director, officer,employee, member, manager, trustee or agent of any other corporation, limited liability company, partnership, joint venture, trust or other entity orenterprise, whether or not for profit, as to which Indemnitee is or was serving at the request of the Company, (ii) any actual, alleged or suspectedact or failure to act by Indemnitee in respect of any business, transaction, communication, filing, disclosure or other activity of the Company orany other entity or enterprise referred to in clause (i) of this sentence, or (iii) Indemnitee’s status as a current or former director, officer, employeeor agent of the Company or as a current or former director, officer, employee, member, manager, trustee or agent of the Company or any otherentity or enterprise referred to in clause (i) of this sentence or any actual, alleged or suspected act or failure to act by Indemnitee in connectionwith any obligation or restriction imposed upon Indemnitee by reason of such status. In addition to any service at the actual request of theCompany, for purposes of this Agreement, Indemnitee shall be deemed to be serving or to have served at the request of the Company as adirector, officer, employee, member, manager, trustee or agent of another entity or enterprise if Indemnitee is or was serving as a director, officer,employee, member, manager, agent, trustee or other fiduciary of such entity or enterprise and (i) such entity or enterprise is or at the time of suchservice was a Controlled Affiliate, (ii) such entity or enterprise is or at the time of such service was an employee benefit plan (or related trust)sponsored or maintained by the Company or a Controlled Affiliate, or (iii) the Company or a Controlled Affiliate (by action of the Board, anycommittee thereof or the Company’s Chief Executive Officer (“CEO”) (other than as the CEO him or herself)) caused or authorized Indemniteeto be nominated, elected, appointed, designated, employed, engaged or selected to serve in such capacity.

(g) “Indemnifiable Losses” means any and all Losses relating to, arising out of or resulting from any Indemnifiable Claim;provided, however, that Indemnifiable Losses shall not include Losses incurred by Indemnitee in respect of any Indemnifiable Claim (or anymatter or issue therein) as to which Indemnitee shall have been adjudged liable to the Company, unless and only to the extent that a court ofcompetent jurisdiction in which such Indemnifiable Claim was brought shall have determined upon application that, despite the adjudication ofliability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification for such Expenses as thecourt shall deem proper.

(h) “Independent Counsel” means a nationally recognized law firm, or a member of a nationally recognized law firm, that isexperienced in matters of Nevada corporate law and neither presently is, nor in the past five years has been, retained to represent: (i) theCompany (or any subsidiary) or Indemnitee in any matter material to either such party (other than with respect to matters concerning theIndemnitee under this Agreement, or of other indemnitees under similar indemnification agreements) or (ii) any other named (or, as to athreatened matter, reasonably likely to be named) party to the Indemnifiable Claim giving rise to a claim for indemnificationhereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards ofprofessional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determineIndemnitee’s rights under this Agreement.

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(i) “Losses” means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal orother) and amounts paid or payable in settlement, including, without limitation, all interest, assessments and other charges paid or payable inconnection with or in respect of any of the foregoing.

(j) “Person” means any individual, entity or group, within the meaning of Section 13(d)(3) or 14(d)(2) of the SecuritiesExchange Act of 1934, as amended.

(k) “Standard of Conduct” means the standard for conduct by Indemnitee that is a condition precedent to indemnification ofIndemnitee hereunder against Indemnifiable Losses relating to, arising out of or resulting from an Indemnifiable Claim. The Standard of Conductis (i) good faith and a reasonable belief by Indemnitee that his action was in or not opposed to the best interests of the Company and, with respectto any criminal action or proceeding, that Indemnitee had no reasonable cause to believe that his conduct was unlawful.

2. Indemnification Obligation. Subject only to Section 7 and to the proviso in this Section, the Company shall indemnify, defend andhold harmless Indemnitee, to the fullest extent permitted or required by the laws of the State of Nevada in effect on the date hereof or as suchlaws may from time to time hereafter be amended to increase the scope of such permitted indemnification, against any and all IndemnifiableClaims and Indemnifiable Losses; provided, however, that, except as provided in Section 5, Indemnitee shall not be entitled to indemnificationpursuant to this Agreement in connection with (i) any Claim initiated by Indemnitee against the Company or any director or officer of theCompany unless the Company has joined in or consented to the initiation of such Claim, or (ii) the purchase and sale by Indemnitee of securitiesin violation of Section 16(b) of the Securities Exchange Act of 1934, as amended. The Company acknowledges that the foregoing obligationmay be broader than that now provided by applicable law and the Company’s Constituent Documents and intends that it be interpretedconsistently with this Section and the recitals to this Agreement.

3. Advancement of Expenses. Indemnitee shall have the right to advancement by the Company prior to the final disposition of anyIndemnifiable Claim of any and all actual and reasonable Expenses relating to, arising out of or resulting from any Indemnifiable Claim paid orincurred by Indemnitee. Without limiting the generality or effect of any other provision hereof, Indemnitee’s right to such advancement is notsubject to the satisfaction of any Standard of Conduct. Without limiting the generality or effect of the foregoing, within five business days afterany request by Indemnitee that is accompanied by supporting documentation for specific reasonable Expenses to be reimbursed or advanced, theCompany shall, in accordance with such request (but without duplication), (a) pay such Expenses on behalf of Indemnitee, (b) advance toIndemnitee funds in an amount sufficient to pay such Expenses, or (c) reimburse Indemnitee for such Expenses; provided that Indemnitee shallrepay, without interest, any amounts actually advanced to Indemnitee that, at the final disposition of the Indemnifiable Claim to which the advancerelated, were in excess of amounts paid or payable by Indemnitee in respect of Expenses relating to, arising out of or resulting from suchIndemnifiable Claim. In connection with any such payment, advancement or reimbursement, at the request of the Company, Indemnitee shallexecute and deliver to the Company an undertaking, which need not be secured and shall be accepted without reference to Indemnitee’s ability torepay the Expenses, by or on behalf of the Indemnitee, to repay any amounts paid, advanced or reimbursed by the Company in respect ofExpenses relating to, arising out of or resulting from any Indemnifiable Claim in respect of which it shall have been determined, following thefinal disposition of such Indemnifiable Claim and in accordance with Section 7, that Indemnitee is not entitled to indemnification hereunder.

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4. Indemnification for Additional Expenses. Without limiting the generality or effect of the foregoing, the Company shall indemnify andhold harmless Indemnitee against and, if requested by Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within five businessdays of such request accompanied by supporting documentation for specific Expenses to be reimbursed or advanced, any and all actual andreasonable Expenses paid or incurred by Indemnitee in connection with any Claim made, instituted or conducted by Indemnitee for (a)indemnification or reimbursement or advance payment of Expenses by the Company under any provision of this Agreement, or under any otheragreement or provision of the Constituent Documents now or hereafter in effect relating to Indemnifiable Claims, and/or (b) recovery under anydirectors’ and officers’ liability insurance policies maintained by the Company; provided, however, if it is ultimately determined that theIndemnitee is not entitled to such indemnification, reimbursement, advance or insurance recovery, as the case may be, then the Indemnitee shall beobligated to repay any such Expenses to the Company; provided further, that, regardless in each case of whether Indemnitee ultimately isdetermined to be entitled to such indemnification, reimbursement, advance or insurance recovery, as the case may be, Indemnitee shall return,without interest, any such advance of Expenses (or portion thereof) which remains unspent at the final disposition of the Claim to which theadvance related.

5. Partial Indemnity. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or aportion of any Indemnifiable Loss but not for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee for theportion thereof to which Indemnitee is entitled.

6. Procedure for Notification. To obtain indemnification under this Agreement in respect of an Indemnifiable Claim or IndemnifiableLoss, Indemnitee shall submit to the Company a written request therefore, including a brief description (based upon information then available toIndemnitee) of such Indemnifiable Claim or Indemnifiable Loss. If, at the time of the receipt of such request, the Company has directors’ andofficers’ liability insurance in effect under which coverage for such Indemnifiable Claim or Indemnifiable Loss is potentially available, theCompany shall give prompt written notice of such Indemnifiable Claim or Indemnifiable Loss to the applicable insurers in accordance with theprocedures set forth in the applicable policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay,on behalf of the Indemnitee, all Indemnifiable Claims and Indemnifiable Losses in accordance with the terms of such policies. The Companyshall provide to Indemnitee a copy of such notice delivered to the applicable insurers, substantially concurrently with the delivery thereof by theCompany. The failure by Indemnitee to timely notify the Company of any Indemnifiable Claim or Indemnifiable Loss shall not relieve theCompany from any liability hereunder unless, and only to the extent that, the Company did not otherwise learn of such Indemnifiable Claim orIndemnifiable Loss and to the extent that such failure results in forfeiture by the Company of substantial defenses, rights or insurance coverage.

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7. Determination of Right to Indemnification.

(a) To the extent that Indemnitee shall have been successful on the merits or otherwise in defense of any Indemnifiable Claimor any portion thereof or in defense of any issue or matter therein, including, without limitation, dismissal without prejudice, Indemnitee shall beindemnified against all Indemnifiable Losses relating to, arising out of or resulting from such Indemnifiable Claim in accordance with Section 2and no Standard of Conduct Determination (as defined in Section 7(b)) shall be required.

(b) To the extent that the provisions of Section 7(a) are inapplicable to an Indemnifiable Claim that shall have been finallydisposed of, any determination of whether Indemnitee has satisfied the applicable Standard of Conduct (a “Standard of ConductDetermination”) shall be made as follows: (i) if a Change in Control shall not have occurred, or if a Change in Control shall have occurred butIndemnitee shall have requested that the Standard of Conduct Determination be made pursuant to this clause (i), (A) by a majority vote of aquorum of the Board consisting entirely of Disinterested Directors, or (B) if there is no quorum consisting of Disinterested Directors, or if aquorum consisting of Disinterested Directors so directs, by Independent Counsel in a written opinion addressed to the Board, a copy of whichshall be delivered to Indemnitee; and (ii) if a Change in Control shall have occurred and Indemnitee shall not have requested that the Standard ofConduct Determination be made pursuant to clause (i) above, by Independent Counsel in a written opinion addressed to the Board, a copy ofwhich shall be delivered to Indemnitee.

(c) If (i) Indemnitee shall be entitled to indemnification hereunder against any Indemnifiable Losses pursuant to Section 7(a),(ii) no determination of whether Indemnitee has satisfied any applicable standard of conduct under Nevada law is a legally required conditionprecedent to indemnification of Indemnitee hereunder against any Indemnifiable Losses, or (iii) Indemnitee has been determined or deemedpursuant to Section 7(b) to have satisfied the applicable Standard of Conduct, then the Company shall pay to Indemnitee, within five businessdays after the later of (x) the Notification Date in respect of the Indemnifiable Claim or portion thereof to which such Indemnifiable Losses arerelated, out of which such Indemnifiable Losses arose or from which such Indemnifiable Losses resulted, and (y) the earliest date on which theapplicable criterion specified in clause (i), (ii) or (iii) above shall have been satisfied, an amount equal to the amount of such IndemnifiableLosses. Nothing herein is intended to, or shall, dispense with any requirement that Indemnitee meet an applicable Standard of Conduct in orderto be indemnified if and to the extent required by applicable law.

(d) If a Standard of Conduct Determination is required to be, but has not been, made by Independent Counsel pursuant toSection 7(b)(i), the Independent Counsel shall be selected by the Board or a committee of the Board, and the Company shall give written notice toIndemnitee advising him or her of the identity of the Independent Counsel so selected. If a Standard of Conduct Determination is required to be,or to have been, made by Independent Counsel pursuant to Section 7(b)(ii), the Independent Counsel shall be selected by Indemnitee, andIndemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either case, Indemniteeor the Company, as applicable, may, within five business days after receiving written notice of selection from the other, deliver to the other awritten objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel soselected does not satisfy the criteria set forth in the definition of “Independent Counsel” in Section 1(h), and the objection shall set forth withparticularity the factual basis of such assertion. Absent a proper and timely objection, the Person so selected shall act as Independent Counsel. Ifsuch written objection is properly and timely made and substantiated, (i) the Independent Counsel so selected may not serve as IndependentCounsel unless and until such objection is withdrawn or a court has determined that such objection is without merit and (ii) the non-objectingparty may, at its option, select an alternative Independent Counsel and give written notice to the other party advising such other party of theidentity of the alternative Independent Counsel so selected, in which case the provisions of the two immediately preceding sentences and clause(i) of this sentence shall apply to such subsequent selection and notice. If applicable, the provisions of clause (ii) of the immediately precedingsentence shall apply to successive alternative selections. If no Independent Counsel that is permitted under the foregoing provisions of thisSection 7(d) to make the Standard of Conduct Determination shall have been selected within 30 calendar days after the Company gives its initialnotice pursuant to the first sentence of this Section 7(d) or Indemnitee gives its initial notice pursuant to the second sentence of this Section 7(d),as the case may be, either the Company or Indemnitee may petition the district court of the State of Nevada for resolution of any objection whichshall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as IndependentCounsel of a person or firm selected by the Court or by such other person as the Court shall designate, and the person or firm with respect towhom all objections are so resolved or the person or firm so appointed will act as Independent Counsel. In all events, the Company shall pay allof the actual and reasonable fees and expenses of the Independent Counsel incurred in connection with the Independent Counsel’s determinationpursuant to Section 7(b).

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8. Cooperation. Indemnitee shall cooperate with reasonable requests of the Company in connection with any Indemnifiable Claim andany individual or firm making such Standard of Conduct Determination, including providing to such Person documentation or information whichis not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to defend theIndemnifiable Claim or make any Standard of Conduct Determination without incurring any unreimbursed cost in connection therewith. TheCompany shall indemnify and hold harmless Indemnitee against and, if requested by Indemnitee, shall reimburse Indemnitee for, or advance toIndemnitee, within five business days of such request accompanied by supporting documentation for specific costs and expenses to bereimbursed or advanced, any and all costs and expenses (including attorneys’ and experts’ fees and expenses) actually and reasonably incurredby Indemnitee in so cooperating with the Person defending the Indemnifiable Claim or making such Standard of Conduct Determination.

9. Presumption of Entitlement. Notwithstanding any other provision hereof, in making any Standard of Conduct Determination, thePerson making such determination shall presume that Indemnitee has satisfied the applicable Standard of Conduct.

10. No Other Presumption. For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether withor without court approval) or conviction, or upon a plea of nolo contendere or its equivalent, will not create a presumption that Indemnitee did notmeet any applicable Standard of Conduct or that indemnification hereunder is otherwise not permitted.

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11. Non-Exclusivity. The rights of Indemnitee hereunder will be in addition to any other rights Indemnitee may have under theConstituent Documents, or the substantive laws of the Company’s jurisdiction of incorporation, any other contract or otherwise (collectively,“Other Indemnity Provisions”); provided, however, that (a) to the extent that Indemnitee otherwise would have any greater right toindemnification under any Other Indemnity Provision, Indemnitee will without further action be deemed to have such greater right hereunder, and(b) to the extent that any change is made to any Other Indemnity Provision which permits any greater right to indemnification than that providedunder this Agreement as of the date hereof, Indemnitee will be deemed to have such greater right hereunder. The Company may not, without theconsent of Indemnitee, adopt any amendment to any of the Constituent Documents the effect of which would be to deny, diminish or encumberIndemnitee’s right to indemnification under this Agreement.

12. Liability Insurance and Funding. For the duration of Indemnitee’s service as a director and/or officer of the Company and for areasonable period of time thereafter, which such period shall be determined by the Company in its sole discretion, the Company shall usecommercially reasonable efforts (taking into account the scope and amount of coverage available relative to the cost thereof) to cause to bemaintained in effect policies of directors’ and officers’ liability insurance providing coverage for directors and/or officers of the Company, and, ifapplicable, that is substantially comparable in scope and amount to that provided by the Company’s current policies of directors’ and officers’liability insurance. Upon reasonable request, the Company shall provide Indemnitee or his or her counsel with a copy of all directors’ andofficers’ liability insurance applications, binders, policies, declarations, endorsements and other related materials. In all policies of directors’ andofficers’ liability insurance obtained by the Company, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee thesame rights and benefits, subject to the same limitations, as are accorded to the Company’s directors and officers most favorably insured by suchpolicy. Notwithstanding the foregoing, (i) the Company may, but shall not be required to, create a trust fund, grant a security interest or use othermeans, including, without limitation, a letter of credit, to ensure the payment of such amounts as may be necessary to satisfy its obligations toindemnify and advance expenses pursuant to this Agreement and (ii) in renewing or seeking to renew any insurance hereunder, the Company willnot be required to expend more than 2.0 times the premium amount of the immediately preceding policy period (equitably adjusted if necessary toreflect differences in policy periods).

13. Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to allof the related rights of recovery of Indemnitee against other Persons (other than Indemnitee’s successors), including any entity or enterprisereferred to in clause (i) of the definition of “Indemnifiable Claim” in Section 1(f). Indemnitee shall execute all papers reasonably required toevidence such rights (all of Indemnitee’s reasonable Expenses, including attorneys’ fees and charges, related thereto to be reimbursed by or, at theoption of Indemnitee, advanced by the Company).

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14. No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment to Indemnitee in respectof any Indemnifiable Losses to the extent Indemnitee has otherwise already actually received payment (net of Expenses incurred in connectiontherewith) under any insurance policy, the Constituent Documents and Other Indemnity Provisions or otherwise (including from any entity orenterprise referred to in clause (i) of the definition of “Indemnifiable Claim” in Section 1(f)) in respect of such Indemnifiable Losses otherwiseindemnifiable hereunder.

15. Defense of Claims. Subject to the provisions of applicable policies of directors’ and officers’ liability insurance, if any, theCompany shall be entitled to participate in the defense of any Indemnifiable Claim or to assume or lead the defense thereof with counselreasonably satisfactory to the Indemnitee; provided that if Indemnitee determines, after consultation with counsel selected by Indemnitee, that (a)the use of counsel chosen by the Company to represent Indemnitee would present such counsel with an actual or potential conflict, (b) the namedparties in any such Indemnifiable Claim (including any impleaded parties) include both the Company and Indemnitee and Indemnitee shallconclude that there may be one or more legal defenses available to him or her that are different from or in addition to those available to theCompany, (c) any such representation by such counsel would be precluded under the applicable standards of professional conduct thenprevailing, or (d) Indemnitee has interests in the claim or underlying subject matter that are different from or in addition to those of other Personsagainst whom the Claim has been made or might reasonably be expected to be made, then Indemnitee shall be entitled to retain separate counsel(but not more than one law firm plus, if applicable, local counsel in respect of any particular Indemnifiable Claim for all indemnitees inIndemnitee’s circumstances) at the Company’s expense. The Company shall not be liable to Indemnitee under this Agreement for any amountspaid in settlement of any threatened or pending Indemnifiable Claim effected without the Company’s prior written consent. The Company shallnot, without the prior written consent of the Indemnitee, effect any settlement of any threatened or pending Indemnifiable Claim which theIndemnitee is or could have been a party unless such settlement solely involves the payment of money and includes a complete and unconditionalrelease of the Indemnitee from all liability on any claims that are the subject matter of such Indemnifiable Claim. Neither the Company norIndemnitee shall unreasonably withhold its consent to any proposed settlement; provided that Indemnitee may withhold consent to any settlementthat does not provide a complete and unconditional release of Indemnitee.

16. Mutual Acknowledgment. Both the Company and the Indemnitee acknowledge that in certain instances, Federal law or applicablepublic policy may prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. Indemniteeunderstands and acknowledges that the Company may be required in the future to undertake to the Securities and Exchange Commission tosubmit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy toindemnify Indemnitee and, in that event, the Indemnitee’s rights and the Company’s obligations hereunder shall be subject to that determination.

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17. Successors and Binding Agreement.

(a) This Agreement shall be binding upon and inure to the benefit of the Company and any successor to the Company,including, without limitation, any Person acquiring directly or indirectly all or substantially all of the business or assets of the Company whetherby purchase, merger, consolidation, reorganization or otherwise (and such successor will thereafter be deemed the “Company” for purposes ofthis Agreement), but shall not otherwise be assignable or delegatable by the Company.

(b) This Agreement shall inure to the benefit of and be enforceable by the Indemnitee’s personal or legal representatives,executors, administrators, heirs, distributees, legatees and other successors.

(c) This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign ordelegate this Agreement or any rights or obligations hereunder except as expressly provided in Sections 17(a) and 17(b). Without limiting thegenerality or effect of the foregoing, Indemnitee’s right to receive payments hereunder shall not be assignable, whether by pledge, creation of asecurity interest or otherwise, other than by a transfer by the Indemnitee’s will or by the laws of descent and distribution, and, in the event of anyattempted assignment or transfer contrary to this Section 17(c), the Company shall have no liability to pay any amount so attempted to beassigned or transferred.

18. Notices. For all purposes of this Agreement, all communications, including without limitation notices, consents, requests orapprovals, required or permitted to be given hereunder must be in writing and shall be deemed to have been duly given when hand delivered ordispatched by electronic facsimile transmission (with receipt thereof orally confirmed), or one business day after having been sent for next-daydelivery by a nationally recognized overnight courier service, addressed to the Company (to the attention of the Secretary of the Company) and toIndemnitee at the applicable address shown on the signature page hereto, or to such other address as any party may have furnished to the other inwriting and in accordance herewith, except that notices of changes of address will be effective only upon receipt.

19. Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by and construed inaccordance with the substantive laws of the State of Nevada, without giving effect to the principles of conflict of laws of such State. TheCompany and Indemnitee each hereby irrevocably consent to the jurisdiction of the district court of the State of Nevada for all purposes inconnection with any action or proceeding which arises out of or relates to this Agreement, waive all procedural objections to suit in thatjurisdiction, including, without limitation, objections as to venue or inconvenience, agree that service in any such action may be made by noticegiven in accordance with Section 18.

20. Validity. If any provision of this Agreement or the application of any provision hereof to any Person or circumstance is heldinvalid, unenforceable or otherwise illegal, the remainder of this Agreement and the application of such provision to any other Person orcircumstance shall not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal shall be reformed to the extent, andonly to the extent, necessary to make it enforceable, valid or legal. In the event that any court or other adjudicative body shall decline to reformany provision of this Agreement held to be invalid, unenforceable or otherwise illegal as contemplated by the immediately preceding sentence, theparties thereto shall take all such action as may be necessary or appropriate to replace the provision so held to be invalid, unenforceable orotherwise illegal with one or more alternative provisions that effectuate the purpose and intent of the original provisions of this Agreement asfully as possible without being invalid, unenforceable or otherwise illegal.

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21. Miscellaneous. No provision of this Agreement may be waived, modified or discharged unless such waiver, modification ordischarge is agreed to in writing signed by Indemnitee and the Company. No waiver by either party hereto at any time of any breach by the otherparty hereto or compliance with any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver ofsimilar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise,expressed or implied with respect to the subject matter hereof have been made by either party that are not set forth expressly in this Agreement.

22. Certain Interpretive Matters. Unless the context of this Agreement otherwise requires, (1) “it” or “its” or words of any genderinclude each other gender, (2) words using the singular or plural number also include the plural or singular number, respectively, (3) the terms“hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement, (4) the terms “Article,” “Section,” “Annex” or“Exhibit” refer to the specified Article, Section, Annex or Exhibit of or to this Agreement, (5) the terms “include,” “includes” and “including” willbe deemed to be followed by the words “without limitation” (whether or not so expressed), and (6) the word “or” is disjunctive but notexclusive. Whenever this Agreement refers to a number of days, such number will refer to calendar days unless business days are specified andwhenever action must be taken (including the giving of notice or the delivery of documents) under this Agreement during a certain period of timeor by a particular date that ends or occurs on a non-business day, then such period or date will be extended until the immediately followingbusiness day. As used herein, “business day” means any day other than Saturday, Sunday or a United States federal holiday.

23. Entire Agreement. This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, bothwritten and oral, between the parties hereto with respect to the subject matter of this Agreement. Any prior agreements or understandingsbetween the parties hereto with respect to indemnification are hereby terminated and of no further force or effect. This Agreement is not theexclusive means of securing indemnification rights of Indemnitee and is in addition to any rights Indemnitee may have under any ConstituentDocuments.

24. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but allof which together shall constitute one and the same agreement.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

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IN WITNESS WHEREOF, Indemnitee has executed and the Company has caused its duly authorized representative to execute this

Agreement as of the date first above written.

DRONE AVIATION HOLDING CORP.

By:______________________________________ Name: Title:

INDEMNITEE:

__________________________________________Name:Address: __________________________________

__________________________________________

__________________________________________

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Exhibit 10.5

LOCK-UP AGREEMENT

, 2014

Ladies and Gentlemen:

The undersigned is an incoming, current or former director, executive officer or beneficial owner of shares of capital stock, or securitiesconvertible into or exercisable or exchangeable for the capital stock (each, a “Company Security”) of Drone Aviation Holding Corp., a Nevadacorporation f/k/a Macrosolve, Inc., an Oklahoma corporation (the “Company”). The undersigned understands that the Company will acquire bymerger, share exchange or similar business combination (the “Merger”) Drone Aviation Corp., a Nevada corporation, concurrently with theprivate placement by the Company of units of the Company’s securities (the “Funding Transaction”). The undersigned understands that theCompany and the investors in the Funding Transaction will proceed with the Funding Transaction in reliance on this Letter Agreement.

1. Lockup. In recognition of the benefit that the Merger and the Funding Transaction will confer upon the undersigned, and for other goodand valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees, for the benefit of theCompany, and each investor in the Funding Transaction, that, without the written consent of the Company, during the period beginning on theclosing date of the Merger (the “Closing Date”) and ending fifteen (15) months after the Closing date (the “Lockup Period”), the undersigned willnot, directly or indirectly, (i) offer, sell, offer to sell, contract to sell, hedge, pledge, sell any option or contract to purchase, purchase any option orcontract to sell, grant any option, right or warrant to purchase or sell (or announce any offer, sale, offer of sale, contract of sale, hedge, pledge,sale of any option or contract to purchase, purchase of any option or contract of sale, grant of any option, right or warrant to purchase or othersale or disposition), or otherwise transfer or dispose of (or enter into any transaction or device that is designed to, or could be expected to, resultin the disposition by any person at any time in the future), any securities of the Company (each, a “Company Security”), beneficially owned,within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), by the undersigned on the datehereof or hereafter acquired or (ii) enter into any swap or other agreement or any transaction that transfers, in whole or in part, directly orindirectly, the economic consequence of ownership of any Company Security, whether any such swap or transaction described in clause (i) or (ii)above is to be settled by delivery of any Company Security (each of the foregoing, a “Prohibited Sale”). This Letter Agreement shall apply to allCompany Securities owned by the undersigned.

2. Leak Out Provision. Notwithstanding the restrictions set forth in Section 1 herein, beginning on the date that is the thirteen (13) monthanniversary of the Closing Date and ending on the expiration of the Lockup Period, the undersigned may sell Company Securities in such amountas shall equal up to 3.5% of the average daily volume of the Company’s common stock on any given trading day.

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

4. Opinion of Counsel. Any Company Security of the undersigned shall contain a restrictive “lock-up” legend governed by the terms ofthis Letter Agreement. The Company’s transfer agent shall only accept an opinion of counsel to remove such legend from counsel acceptable tothe Company. An opinion from Harvey Kesner, Esq. and any firm with which he is associated shall be deemed acceptable counsel to theCompany.

5. Governing Law. This Letter Agreement shall be governed by and construed in accordance with the laws of the New York.

6. Miscellaneous. This Letter Agreement will become a binding agreement among the undersigned as of the date hereof. In the event thatno closing of the Merger occurs, this Letter Agreement shall be null and void. This Letter Agreement (and the agreements reflected herein) maybe terminated by the mutual agreement of Company and the undersigned, and if not sooner terminated, will terminate upon the expiration date ofthe Lockup Period. This Letter Agreement may be duly executed by facsimile and in any number of counterparts, each of which shall be deemedan original, and all of which together shall be deemed to constitute one and the same instrument. Signature pages from separate identicalcounterparts may be combined with the same effect as if the parties signing such signature page had signed the same counterpart. This LetterAgreement may be modified or waived only by a separate writing signed by each of the parties hereto expressly so modifying or waiving suchagreement.

[SIGNATURE PAGES FOLLOW]

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Very truly yours,

Number of shares of Common Stock owned:

Certificate Numbers: _____________________________

Other Securities owned: ___________________________

Accepted and Agreed to:

Drone Aviation Holding Corp.

By: Name: Title:

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Exhibit 10.6

SUBSCRIPTION AGREEMENT

This Subscription Agreement (this “Agreement”) is being delivered to the purchaser identified on the signature page to this Agreement(the “Subscriber”) in connection with its investment in the securities of Drone Aviation Holding Corp., a Nevada corporation (the“Company”). The Company is conducting a private placement (the “Offering”) of units (the “Units”) at a purchase price of $0.50 per Unit (the“Purchase Price”) with each Unit consisting of (i) one share (the “Shares”) of the Company’s Series E Convertible Preferred Stock, par value$0.0001 per share, which is convertible into one (1) share of common stock, $0.0001 par value per share (the “Common Stock”), with suchrights and designations as set forth in the form of Certificate of Designation of Preferences, Rights and Limitations of Series E ConvertiblePreferred Stock, attached hereto as Exhibit A, (the “Series E Certificate of Designation”) and (ii) a three year warrant, in the form attached heretoas Exhibit B (the “Warrant”) to purchase one share of Common Stock (the “Warrant Shares”) at an exercise price of $1.00 per share. Forpurposes of this Agreement, the term “Securities” shall refer to the Shares, the Common Stock into which the Shares are convertible, theWarrants and the Warrant Shares.

Prior to the closing of the Offering, the Company took certain corporate actions, including (i) changing the Company’s name to “DroneAviation Holding Corp.” from “Macrosolve, Inc.” (the “Name Change”), (ii) changing the state of the Company’s state of incorporation toNevada from Oklahoma (the “Reincorporation”); (iii) in connection with the Reincorporation, exchanging each share of Common Stock issuedand outstanding for shares of Common Stock of the newly formed Nevada entity, which will be formed for purposes of the Reincorporation, ona 50.56186 for one basis, with comparable adjustments to outstanding convertible securities of the Company (the “Reincorporation Exchange”and such ratio, the “Reincorporation Exchange Ratio”) and (iv) changing the number of shares of authorized capital from 500,000,000 shares ofCommon Stock, par value $0.01 per share and 10,000,000 shares of preferred stock, par value $0.01 per share to 400,000,000 shares ofCommon Stock, par value $0.0001 per share and 100,000,000 shares of preferred stock, par value $0.0001 per share (the “Capital Increase and,collectively with the Name Change, the Reincorporation and the Reincorporation Exchange, the “Corporate Actions”). The Company’s Board ofDirectors and the holder of a majority of the Company’s outstanding voting capital have voted in favor of the Corporate Actions and suchCorporate Actions will be effective following the approval by the Financial Industry Regulatory Authority (“FINRA”), at which time a newtrading symbol will become effective in connection with the Name Change. The Transaction Documents (as defined below) reflect theconsummation of the Name Change, Reincorporation and all per share and dollar amounts referenced in this Agreement and the TransactionDocuments reflect the anticipated Reincorporation Exchange.

Additionally, in connection with the Offering, the Company will acquire all of the outstanding capital stock of Drone Aviation Corp., aNevada corporation (the “Acquisition”).

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IMPORTANT INVESTOR NOTICES

NO OFFERING LITERATURE OR ADVERTISEMENT IN ANY FORM MAY BE RELIED UPON IN THE OFFERING OF THESESECURITIES EXCEPT FOR THIS SUBSCRIPTION AGREEMENT AND ANY SUPPLEMENTS HERETO, AND NO PERSON HASBEEN AUTHORIZED TO MAKE ANY REPRESENTATIONS EXCEPT THOSE CONTAINED HEREIN. THIS AGREEMENT IS CONFIDENTIAL AND THE CONTENTS HEREOF MAY NOT BE REPRODUCED, DISTRIBUTED ORDIVULGED BY OR TO ANY PERSONS OTHER THAN THE RECIPIENT OR ITS REPRESENTATIVE, ACCOUNTANT OR LEGALCOUNSEL, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY. EACH PERSON WHO ACCEPTS DELIVERY OFTHIS AGREEMENT, ACKNOWLEDGES AND AGREES TO THE FOREGOING RESTRICTIONS. THIS AGREEMENT DOES NOT PURPORT TO BE ALL-INCLUSIVE OR TO CONTAIN ALL OF THE INFORMATION THAT YOUMAY DESIRE IN EVALUATING THE COMPANY, OR AN INVESTMENT IN THE OFFERING. THIS AGREEMENT DOES NOTCONTAIN ALL OF THE INFORMATION THAT WOULD NORMALLY APPEAR IN A PROSPECTUS FOR AN OFFERINGREGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). YOU MUST CONDUCT ANDRELY ON YOUR OWN EVALUATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITSAND RISKS INVOLVED, IN DECIDING WHETHER TO INVEST IN THE OFFERING. THIS AGREEMENT CONTAINS A SUMMARY OF CERTAIN PROVISIONS OF VARIOUS DOCUMENTS RELATING TO THEOPERATIONS OF THE COMPANY. THESE SUMMARIES DO NOT PURPORT TO BE COMPLETE AND ARE QUALIFIED INTHEIR ENTIRETY BY REFERENCE TO THE TEXTS OF THE ORIGINAL DOCUMENTS. THIS AGREEMENT DOES NOT CONSTITUTE AN OFFER OR SOLICITATION OF AN OFFER TO ANY PERSON OR IN ANYJURISDICTION WHERE SUCH OFFER OR SOLICITATION IS UNLAWFUL OR NOT AUTHORIZED. EACH PERSON WHOACCEPTS DELIVERY OF THIS AGREEMENT AGREES TO RETURN IT AND ALL RELATED DOCUMENTS IF SUCH PERSONDOES NOT PURCHASE ANY OF THE SECURITIES DESCRIBED HEREIN. NEITHER THE DELIVERY OF THIS AGREEMENT AT ANY TIME NOR ANY SALE OF SECURITIES HEREUNDER SHALLIMPLY THAT INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THECOMPANY WILL EXTEND TO EACH PROSPECTIVE INVESTOR (AND TO ITS REPRESENTATIVE, ACCOUNTANT OR LEGALCOUNSEL, IF ANY) THE OPPORTUNITY, PRIOR TO ITS PURCHASE OF UNITS, TO ASK QUESTIONS OF AND RECEIVEANSWERS FROM THE COMPANY CONCERNING THE OFFERING AND TO OBTAIN ADDITIONAL INFORMATION, TO THEEXTENT THE COMPANY POSSESSES THE SAME OR CAN ACQUIRE IT WITHOUT UNREASONABLE EFFORT OR EXPENSE,IN ORDER TO VERIFY THE ACCURACY OF THE INFORMATION SET FORTH HEREIN. ALL SUCH ADDITIONALINFORMATION SHALL ONLY BE PROVIDED IN WRITING AND IDENTIFIED AS SUCH BY THE COMPANY THROUGH ITSDULY AUTHORIZED OFFICERS AND/OR DIRECTORS ALONE; NO ORAL INFORMATION OR INFORMATION PROVIDED BYANY BROKER OR THIRD PARTY MAY BE RELIED UPON. NO REPRESENTATIONS, WARRANTIES OR ASSURANCES OF ANY KIND ARE MADE OR SHOULD BE INFERRED WITHRESPECT TO THE ECONOMIC RETURN, IF ANY, THAT MAY ACCRUE TO AN INVESTOR IN THE COMPANY.

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THIS AGREEMENT CONTAINS FORWARD-LOOKING STATEMENTS REGARDING THE COMPANY’S PERFORMANCE,STRATEGY, PLANS, OBJECTIVES, EXPECTATIONS, BELIEFS AND INTENTIONS. THE OUTCOME OF THE EVENTSDESCRIBED IN THESE FORWARD-LOOKING STATEMENTS IS SUBJECT TO SUBSTANTIAL RISKS, AND ACTUAL RESULTSCOULD DIFFER MATERIALLY. THE SECTIONS ENTITLED “EXECUTIVE SUMMARY,” “RISK FACTORS,” AND“DESCRIPTION OF BUSINESS,” IN ANY SECURITIES AND EXCHANGE COMMISSION (“SEC”) FILING OR REPORT, AS WELLAS THIS AGREEMENT GENERALLY, CONTAIN DISCUSSIONS OF SOME OF THE FACTORS THAT COULD CONTRIBUTE TOTHESE DIFFERENCES. THIS SUBSCRIPTION AGREEMENT AND THE SEC FILINGS AND REPORTS INCLUDE DATA OBTAINED FROM INDUSTRYPUBLICATIONS AND REPORTS, WHICH THE COMPANY BELIEVES TO BE RELIABLE SOURCES; HOWEVER, NEITHER THEACCURACY NOR THE COMPLETENESS OF THIS DATA IS GUARANTEED AND WE HAVE NEITHER INDEPENDENTLYVERIFIED THIS DATA NOR SOUGHT THE CONSENT OF SUCH SOURCES TO REFER TO THEIR REPORTS. THE OFFERING PRICE OF THE SECURITIES HAS BEEN DETERMINED ARBITRARILY. THE PRICE OF THE SECURITIES DOESNOT NECESSARILY BEAR ANY RELATIONSHIP TO THE ASSETS, EARNINGS OR BOOK VALUE OF THE COMPANY, OR TOPOTENTIAL ASSETS, EARNINGS, OR BOOK VALUE OF THE COMPANY. THERE IS NO ACTIVE TRADING MARKET IN THECOMPANY’S COMMON STOCK AND THERE CAN BE NO ASSURANCE THAT AN ACTIVE TRADING MARKET IN ANY OFTHE COMPANY’S SECURITIES WILL DEVELOP OR BE MAINTAINED. A LIMITED NUMBER OF SHARES OF COMMONSTOCK MAY BE ELIGIBLE FOR TRADING PRIOR TO REGISTRATION OF THE SECURITIES SOLD IN THE OFFERING, ANDSUCH REGISTRATION MAY BE DELAYED IN CERTAIN CIRCUMSTANCES. THE PRICE OF COMMON STOCK TRADED ONANY EXCHANGE MAY BE IMPACTED BY A LACK OF LIQUIDITY OR AVAILABILITY OF COMMON STOCK FOR PUBLICSALE AND ALSO WILL NOT NECESSARILY BEAR ANY RELATIONSHIP TO THE ASSETS, EARNINGS, BOOK VALUE ORPOTENTIAL PROSPECTS OF THE COMPANY OR APPLICABLE QUOTED OR TRADING PRICES THAT MAY EXISTFOLLOWING REGISTRATION OR THE LAPSE OF RESTRICTIONS ON THE SECURITIES SOLD PURSUANT TO THE OFFERINGOR OTHER RESTRICTIONS. SUCH PRICES SHOULD NOT BE CONSIDERED ACCURATE INDICATORS OF FUTURE QUOTEDOR TRADING PRICES THAT MAY SUBSEQUENTLY EXIST FOLLOWING THE OFFERING. THE COMPANY RESERVES THE RIGHT, IN ITS SOLE DISCRETION, TO REJECT ANY SUBSCRIPTION IN WHOLE OR IN PARTFOR ANY REASON OR FOR NO REASON. THE COMPANY IS NOT OBLIGATED TO NOTIFY RECIPIENTS OF THISAGREEMENT WHETHER ALL OF THE SECURITIES OFFERED HEREBY HAVE BEEN SOLD. SUBSCRIBERS MAY BE DEEMED TO BE IN POSSESSION OF MATERIAL NON-PUBLIC INFORMATION WITHIN THEMEANING OF THE UNITED STATES SECURITIES LAWS AND REGULATIONS REGARDING A PUBLIC COMPANY. THISAGREEMENT CONTAINS CONFIDENTIAL INFORMATION CONCERNING THE COMPANY, AND HAS BEEN PREPAREDSOLELY FOR USE IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN. ANY USE OF THIS INFORMATION FORANY PURPOSE OTHER THAN IN CONNECTION WITH THE CONSIDERATION OF AN INVESTMENT IN THE SECURITIES OFTHE COMPANY THROUGH THE OFFERING DESCRIBED HEREIN MAY SUBJECT THE USER TO CIVIL AND/OR CRIMINALLIABILITY. THE RECIPIENT, BY ACCEPTING THIS AGREEMENT, AGREES (I) NOT TO DISTRIBUTE OR REPRODUCE THISAGREEMENT, IN WHOLE OR IN PART, AT ANY TIME, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY; (II) TOKEEP CONFIDENTIAL THE EXISTENCE OF THIS DOCUMENT AND THE INFORMATION CONTAINED HEREIN OR MADEAVAILABLE IN CONNECTION WITH ANY FURTHER INVESTIGATION OF THE COMPANY; AND (III) TO REFRAIN FROMTRADING IN THE PUBLICLY-TRADED SECURITIES OF THE COMPANY OR ANY OTHER RELEVANT COMPANY FOR SOLONG AS SUCH RECIPIENT IS IN POSSESSION OF THE MATERIAL NON-PUBLIC INFORMATION CONTAINED HEREIN.SUBSCRIBERS ARE ADVISED THAT THEY SHOULD SEEK THEIR OWN LEGAL COUNSEL PRIOR TO EFFECTUATING ANYTRANSACTIONS IN THE PUBLICLY TRADED COMPANY’S SECURITIES. FOR RESIDENTS OF ALL STATES THIS OFFERING IS BEING MADE SOLELY TO “ACCREDITED INVESTORS,” AS SUCH TERM IS DEFINED IN RULE 501 OFREGULATION D UNDER THE SECURITIES ACT. THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIESACT OR THE SECURITIES LAWS OF ANY STATE AND WILL BE OFFERED AND SOLD IN RELIANCE UPON THE EXEMPTIONFROM REGISTRATION AFFORDED BY SECTION 4(a)(2) THEREUNDER AND REGULATION D (RULE 506) OF THESECURITIES ACT AND CORRESPONDING PROVISIONS OF STATE SECURITIES LAWS.

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THE SECURITIES OFFERED HEREBY ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAYNOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATELAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILLBE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATESECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOINGAUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OFTHIS AGREEMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. PROSPECTIVE INVESTORS SHOULD NOT CONSTRUE THE CONTENTS OF THIS AGREEMENT AS INVESTMENT, LEGAL,BUSINESS, OR TAX ADVICE. EACH INVESTOR SHOULD CONTACT HIS, HER OR ITS OWN ADVISORS REGARDING THEAPPROPRIATENESS OF THIS INVESTMENT AND THE TAX CONSEQUENCES THEREOF, WHICH MAY DIFFER DEPENDINGON AN INVESTOR’S PARTICULAR FINANCIAL SITUATION. IN NO EVENT SHOULD THIS AGREEMENT BE DEEMED ORCONSIDERED TO BE TAX ADVICE PROVIDED BY THE COMPANY. FOR FLORIDA RESIDENTS ONLY THE SECURITIES REFERRED TO HEREIN WILL BE SOLD TO, AND ACQUIRED BY, THE HOLDER IN A TRANSACTIONEXEMPT UNDER § 517.061 OF THE FLORIDA SECURITIES ACT. THE SECURITIES HAVE NOT BEEN REGISTERED UNDERSAID ACT IN THE STATE OF FLORIDA. IN ADDITION, ALL FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE OFVOIDING THE PURCHASE WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCHSUBSCRIBER TO THE COMPANY, AN AGENT OF THE COMPANY, OR AN ESCROW AGENT OR WITHIN THREE DAYSAFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH SUBSCRIBER, WHICHEVER OCCURSLATER. 1. SUBSCRIPTION AND PURCHASE PRICE

(a) Subscription. Subject to the conditions set forth in Section 2 hereof, the Subscriber hereby subscribes for and agrees topurchase the number of Units indicated on page 16 hereof on the terms and conditions described herein.

(b) Purchase of Units. The Subscriber understands and acknowledges that the purchase price to be remitted to the Company inexchange for the Units shall be set at $0.50 per Unit, for an aggregate purchase price as set forth on page 16 hereof (the “Aggregate PurchasePrice”), which shall be equivalent to $0.50 per Share, exclusive of the value of the Warrants. For the avoidance of doubt, the Aggregate PurchasePrice takes into account the Reincorporation Exchange Ratio. The Subscriber’s delivery of this Agreement to the Company shall be accompaniedby payment for the Units subscribed for hereunder, payable in United States Dollars, by wire transfer of immediately available funds delivered toSichenzia Ross Friedman Ference LLP, as escrow agent (the “Escrow Agent”) pursuant to the terms of the escrow agreement, in the formattached hereto as Exhibit C (the “Escrow Agreement”) in accordance with the wire instructions set forth in the Escrow Agreement. TheSubscriber understands and agrees that, subject to Section 2 and applicable laws, by executing this Agreement, it is entering into a bindingagreement. 2. ACCEPTANCE, OFFERING TERM AND CLOSING PROCEDURES

(a) Acceptance. Subject to full, faithful and punctual performance and discharge by the Company of all of its duties, obligationsand responsibilities as set forth in this Agreement, the Escrow Agreement, the Series E Certificate of Designation, the Warrant and any otheragreement entered into between the Subscriber and the Company relating to this subscription (collectively, the "Transaction Documents"), theSubscriber shall be legally bound to purchase the Units pursuant to the terms and conditions set forth in this Agreement. For the avoidance ofdoubt, upon the occurrence of the failure by the Company to fully, faithfully and punctually perform and discharge any of its duties, obligationsand responsibilities as set forth in any of the Transaction Documents, which shall have been performed or otherwise discharged prior to theClosing (as defined below), the Subscriber may, on or prior to the Closing, at its sole and absolute discretion, elect not to purchase the Units andprovide instructions to the Company to receive the full and immediate refund of the Aggregate Purchase Price. In the event the Closing does nottake place because of (i) the election not to purchase the Units by the Subscriber or (ii) the failure to effectuate the Initial Closing (as definedbelow) on or prior to June 30, 2014 (unless extended in the discretion of the Board of Directors) for any reason or no reason, this Agreement andany other Transaction Documents shall thereafter be terminated and have no force or effect, and the parties shall take all steps, including theexecution of instructions to the Company, to ensure that the Aggregate Purchase Price shall promptly be returned or caused to be returned to theSubscriber without interest thereon or deduction therefrom.

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(b) Closing. The closing of the purchase and sale of the Units hereunder (the “Closing”) shall take place at such time and place asdetermined by the Company and may take place in one of more closings. Closings shall take place on a Business Day promptly following thesatisfaction of the conditions set forth in Section 6 below, as determined by the Company (the “Closing Date”). “Business Day” shall mean fromthe hours of 9:00 a.m. (Eastern Time) through 5:00 p.m. (Eastern Time) of a day other than a Saturday, Sunday or other day on whichcommercial banks in New York, New York are authorized or required to be closed. The Shares and the Warrants purchased by the Subscriberwill be delivered by the Company promptly following the Final Closing Date (as defined in Section 5(h) below) of the Offering.

(c) Following Acceptance or Rejection. The Subscriber acknowledges and agrees that this Agreement and any other documentsdelivered in connection herewith will be held by the Company. In the event that this Agreement is not accepted by the Company for whateverreason, which the Company expressly reserves the right to do, this Agreement, the Aggregate Purchase Price received (without interest thereon)and any other documents delivered in connection herewith will be returned to the Subscriber at the address of the Subscriber as set forth in thisAgreement. If this Agreement is accepted by the Company, the Company is entitled to treat the Aggregate Purchase Price received as an interestfree loan to the Company until such time as the Subscription is accepted.

(d) Favored Nations Provision. For a period of twenty-four (24) months from the Final Closing Date, other than in connectionwith (i) full or partial consideration in connection with a strategic merger, acquisition, consolidation or purchase of substantially all of thesecurities or assets of a corporation or other entity which holders of such securities or debt are not at any time granted registration rights equal toor greater than those granted to the Subscribers, (ii) the Company’s issuance of securities in connection with strategic license agreements andother partnering arrangements so long as such issuances are not primarily for the purpose of raising capital and which holders of such securitiesor debt are not at any time granted registration rights equal to or greater than those granted to the Subscribers, (iii) the Company’s issuance ofCommon Stock or the issuances or grants of options to purchase Common Stock to employees, directors, and consultants, pursuant to plans thathave been approved by a majority of the stockholders and a majority of the independent members of the board of directors of the Company or inexistence as such plans are constituted on the date of this Agreement, (iv) the Company’s issuance of securities upon the exercise or exchange ofor conversion of any securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date ofthis Agreement on the terms in effect on the Closing Date, (v) an issuance by the Company of securities resulting from the exercise of Warrantsor conversion of the Shares, (vi) the Company’s issuance of Common Stock or the issuances or grants of options to purchase Common Stock toconsultants and service providers approved by a majority in amount of the Shares sold in the Offering held as of the date of approval(“Subscriber Consent”), and (vii) any and all securities required to be assumed by the Company by the terms thereof as a result of any of theforegoing even if issued by a predecessor acquired in connection with a business combination, merger or share exchange (collectively, theforegoing (i) through (vii) are “Excepted Issuances”), if at any time the Company shall issue any Common Stock or securities convertible into orexercisable for shares of Common Stock (or modify any of the foregoing which may be outstanding) to any person or entity at a price per shareor conversion or exercise price per share which shall be less than $0.50 per share, being the per share price of the Series E PreferredStock hereunder (disregarding any value attributable to the Warrants) or as in effect at such time, without Subscriber Consent (the “Lower PriceIssuance”) and other than with regard to Excepted Issuances, then the Company shall issue the Subscriber such number of additional Units toreflect such lower price for the Shares such that the Subscriber shall hold such number of Units, in total, had Subscriber paid a per Unit priceequal to the Lower Price Issuance. Common Stock issued or issuable by the Company for no consideration or for consideration that cannot bedetermined at the time of issue will be deemed issuable or to have been issued for $0.0001 per share of Common Stock. The rights ofSubscribers set forth in this Section 2 are in addition to any other rights the Subscribers have pursuant to this Agreement, the Series E Certificateof Designation or the Warrants, and any other agreement referred to or entered into in connection herewith or to which Subscribers and Companyare parties. Notwithstanding anything herein or in any other agreement to the contrary, the Company shall only be required to make a singleadjustment with respect to any Lower Price Issuance, regardless of the existence of multiple basis therefore.

(e) Extraordinary Events Regarding Common Stock. In the event that the Company shall (a) issue additional shares of CommonStock as a dividend or other distribution on outstanding Common Stock, (b) subdivide its outstanding shares of Common Stock, or (c) combineits outstanding shares of the Common Stock into a smaller number of shares of Common Stock, then, in each such event, the Purchase Priceshall, simultaneously with the happening of such event, be adjusted by multiplying the then Purchase Price by a fraction, the numerator of whichshall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which shall be the numberof shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Purchase Price then ineffect. The Purchase Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events describedherein. The number of Units that the Subscriber shall thereafter be entitled to receive (including number of shares of Common Stock or WarrantShares the Subscriber may thereafter be entitled to receive upon conversion of the Shares or exercise of the Warrants, as the case may be) shall beadjusted to a number determined by multiplying the number of shares of Common Stock that would otherwise (but for the provisions of thisSection) be issuable on such conversion or exercise by a fraction of which (a) the numerator is the Purchase Price that would otherwise (but forthe provisions of this Section) be in effect, and (b) the denominator is the Purchase Price then in effect.

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(f) Certificate as to Adjustments. In each case of any adjustment or readjustment in (i) the Shares (ii) the number of Warrant

Shares issuable upon the exercise of the Warrants, (iii) the exercise price of the Warrants and/or (iv) the conversion ratio of the Shares, theCompany, at its expense, will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment orreadjustment in accordance with the terms hereof and of the Series E Certificate of Designation or the Warrant, as applicable, and prepare acertificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. TheCompany will forthwith mail a copy of each such certificate to the Subscriber. 3. THE SUBSCRIBER’S REPRESENTATIONS, WARRANTIES AND COVENANTS

Each Subscriber, severally and not jointly, hereby acknowledges, agrees with and represents, warrants and covenants to the Company,as follows:

(a) The Subscriber has full power and authority to enter into this Agreement, the execution and delivery of which has been dulyauthorized, if applicable, and this Agreement constitutes a valid and legally binding obligation of the Subscriber, except as may be limited bybankruptcy, reorganization, insolvency, moratorium and similar laws of general application relating to or affecting the enforcement of rights ofcreditors, and except as enforceability of the obligations hereunder are subject to general principles of equity (regardless of whether suchenforceability is considered in a proceeding in equity or law).

(b) The Subscriber acknowledges its understanding that the Offering and sale of the Securities is intended to be exempt fromregistration under the Securities Act, by virtue of Section 4(a)(2) of the Securities Act and the provisions of Regulation D promulgatedthereunder (“Regulation D”). In furtherance thereof, the Subscriber represents and warrants to the Company and its affiliates as follows:

(i) The Subscriber realizes that the basis for the exemption from registration may not be available if, notwithstanding theSubscriber’s representations contained herein, the Subscriber is merely acquiring the Securities for a fixed or determinable period in thefuture, or for a market rise, or for sale if the market does not rise. The Subscriber does not have any such intention.

(ii) The Subscriber realizes that the basis for exemption would not be available if the Offering is part of a plan or scheme

to evade registration provisions of the Securities Act or any applicable state or federal securities laws, except sales pursuant to aregistration statement or sales that are exempted under the Securities Act.

(iii) The Subscriber is acquiring the Securities solely for the Subscriber’s own beneficial account, for investment

purposes, and not with a view towards, or resale in connection with, any distribution of the Securities.

(iv) The Subscriber has the financial ability to bear the economic risk of the Subscriber’s investment, has adequate meansfor providing for its current needs and contingencies, and has no need for liquidity with respect to an investment in the Company.

(v) The Subscriber and the Subscriber’s attorney, accountant, purchaser representative and/or tax advisor, if any

(collectively, the “Advisors”) has such knowledge and experience in financial and business matters as to be capable of evaluating themerits and risks of a prospective investment in the Securities. If other than an individual, the Subscriber also represents it has not beenorganized solely for the purpose of acquiring the Securities.

(vi) The Subscriber (together with its Advisors, if any) has received all documents requested by the Subscriber, if any,

and has carefully reviewed them and understands the information contained therein, prior to the execution of this Agreement.

(c) The Subscriber is not relying on the Company or any of its employees, agents, sub-agents or advisors with respect to the legal,tax, economic and related considerations involved in this investment. The Subscriber has relied on the advice of, or has consulted with, only itsAdvisors. Each Advisor, if any, has disclosed to the Subscriber in writing (a copy of which is annexed to this Agreement) the specific details ofany and all past, present or future relationships, actual or contemplated, between the Advisor and the Company or any affiliate or sub-agentthereof.

(d) The Subscriber has carefully considered the potential risks relating to the Company and a purchase of the Securities, and fullyunderstands that the Securities are a speculative investment that involves a high degree of risk of loss of the Subscriber’s entire investment.Among other things, the Subscriber has carefully considered each of the risks described under the heading “Risk Factors” in the Company’s SECFilings (as defined below) and any additional disclosures in the nature of Risk Factors described herein.

(e) The Subscriber will not sell or otherwise transfer any Securities without registration under the Securities Act or an exemptiontherefrom, and fully understands and agrees that the Subscriber must bear the economic risk of its purchase because, among other reasons, theSecurities have not been registered under the Securities Act or under the securities laws of any state and, therefore, cannot be resold, pledged,assigned or otherwise disposed of unless they are subsequently registered under the Securities Act and under the applicable securities laws ofsuch states, or an exemption from such registration is available. In particular, the Subscriber is aware that the Securities are “restricted securities,”as such term is defined in Rule 144 promulgated under the Securities Act (“Rule 144”), and they may not be sold pursuant to Rule 144 unless allof the conditions of Rule 144 are met. The Subscriber also understands that the Company is under no obligation to register the Securities onbehalf of the Subscriber or to assist the Subscriber in complying with any exemption from registration under the Securities Act or applicable statesecurities laws. The Subscriber understands that any sales or transfers of the Securities are further restricted by state securities laws and theprovisions of this Agreement.

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(f) No oral or written representations or warranties have been made, or information furnished, to the Subscriber or its Advisors, ifany, by the Company or any of its officers, employees, agents, sub-agents, affiliates, advisors or subsidiaries in connection with the Offering,other than any representations of the Company contained herein, and in subscribing for the Units the Subscriber is not relying upon anyrepresentations other than those contained herein.

(g) The Subscriber’s overall commitment to investments that are not readily marketable is not disproportionate to the Subscriber’snet worth, and an investment in the Securities will not cause such overall commitment to become excessive.

(h) The Subscriber understands and agrees that the certificates for the Securities shall bear substantially the following legend until(i) such Securities shall have been registered under the Securities Act and effectively disposed of in accordance with a registration statement thathas been declared effective or (ii) in the opinion of counsel acceptable to the Company, such Securities may be sold without registration under theSecurities Act, as well as any applicable “blue sky” or state securities laws:

“[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATENOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN][THE SECURITIESREPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFEREDFOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATIONSTATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) ANOPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLYACCEPTABLE 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 SAIDACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH ABONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THESECURITIES.”

(i) Certificates evidencing Securities shall not be required to contain the legend set forth in Section 3(h) above or any other legend(i) while a registration statement covering the resale of such Securities is effective under the Securities Act, (ii) following any sale of suchSecurities 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 (provided that the Subscriber provides the Company with reasonable assurances that such Securities areeligible for sale, assignment or transfer under Rule 144 which shall not include an opinion of the Subscriber’s counsel), (iv) in connection with asale, assignment or other transfer (other than under Rule 144), provided that the Subscriber provides the Company with an opinion of counsel tothe Subscriber, in a form generally acceptable to the Company, to the effect that such sale, assignment or transfer of the Securities may be madewithout registration under the applicable requirements of the Securities Act or (v) if such legend is not required under applicable requirements ofthe Securities Act (including, without limitation, controlling judicial interpretations and pronouncements issued by the SEC). If a legend is notrequired pursuant to the foregoing, the Company shall no later than three (3) business days following the delivery by the Subscriber to theCompany or the transfer agent (with notice to the Company) of a legended certificate representing such Securities (endorsed or with stock powersattached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer, if applicable), together with any otherdeliveries from the Subscriber as may be required above in this Section 3(i), as directed by the Subscriber, either: (A) provided that theCompany’s transfer agent is participating in the DTC Fast Automated Securities Transfer Program and such Securities are shares of CommonStock issuable upon conversion of the Shares, credit the aggregate number of shares of Common Stock to which the Subscriber shall be entitledto the Subscriber’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system or (B) if the Company’stransfer agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via reputable overnight courier) tothe Subscriber, a certificate representing such Securities that is free from all restrictive and other legends, registered in the name of the Subscriberor its designee. The Company shall be responsible for any transfer agent fees or DTC fees with respect to any issuance of Securities or theremoval of any legends with respect to any Securities in accordance herewith.

(j) Neither the SEC nor any state securities commission has approved the Securities or passed upon or endorsed the merits of theOffering. There is no government or other insurance covering any of the Securities.

(k) The Subscriber and its Advisors, if any, have had a reasonable opportunity to ask questions of and receive answers from aperson or persons acting on behalf of the Company concerning the Offering and the business, financial condition, results of operations andprospects of the Company, and all such questions have been answered to the full satisfaction of the Subscriber and its Advisors, if any.

1. (l) (i) In making the decision to invest in the Securities the Subscriber has relied solely upon the information provided bythe Company in the Transaction Documents. To the extent necessary, the Subscriber has retained, at its own expense, and relied uponappropriate professional advice regarding the investment, tax and legal merits and consequences of this Agreement and the purchase of theSecurities hereunder. The Subscriber disclaims reliance on any statements made or information provided by any person or entity in the course ofSubscriber’s consideration of an investment in the Securities other than the Transaction Documents.

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(ii) The Subscriber represents and warrants that: (i) the Subscriber was contacted regarding the sale of the Securities bythe Company (or an authorized agent or representative thereof) with whom the Subscriber had a prior substantial pre-existing relationship and(ii) no Securities were offered or sold to it by means of any form of general solicitation or general advertising, and in connection therewith, theSubscriber did not (A) receive or review any advertisement, article, notice or other communication published in a newspaper or magazine orsimilar media or broadcast over television or radio, whether closed circuit, or generally available; or (B) attend any seminar meeting or industryinvestor conference whose attendees were invited by any general solicitation or general advertising; or (C) observe any website or filing of theCompany with the SEC in which any offering of securities by the Company was described and as a result learned of any offering of securities bythe Company.

(m) The Subscriber has taken no action that would give rise to any claim by any person for brokerage commissions, finders’ feesor the like relating to this Agreement or the transactions contemplated hereby.

(n) The Subscriber is not relying on the Company or any of its employees, agents, or advisors with respect to the legal, tax,economic and related considerations of an investment in the Securities, and the Subscriber has relied on the advice of, or has consulted with, onlyits own Advisors.

(o) The Subscriber acknowledges that any estimates or forward-looking statements or projections furnished by the Company tothe Subscriber were prepared by the management of the Company in good faith, but that the attainment of any such projections, estimates orforward-looking statements cannot be guaranteed by the Company or its management and should not be relied upon.

(p) No oral or written representations have been made, or oral or written information furnished, to the Subscriber or its Advisors,if any, in connection with the Offering that are in any way inconsistent with the information contained herein.

(q) (For ERISA plans only) The fiduciary of the ERISA plan (the “Plan”) represents that such fiduciary has been informed of andunderstands the Company’s investment objectives, policies and strategies, and that the decision to invest “plan assets” (as such term is defined inERISA) in the Company is consistent with the provisions of ERISA that require diversification of plan assets and impose other fiduciaryresponsibilities. The Subscriber or Plan fiduciary (i) is responsible for the decision to invest in the Company; (ii) is independent of the Companyand any of its affiliates; (iii) is qualified to make such investment decision; and (iv) in making such decision, the Subscriber or Plan fiduciary hasnot relied primarily on any advice or recommendation of the Company or any of its affiliates.

(r) This Agreement is not enforceable by the Subscriber unless it has been accepted by the Company, and the Subscriberacknowledges and agrees that the Company reserves the right to reject any subscription for any reason.

(s) The Subscriber is an “Accredited Investor” as defined in Rule 501(a) under the Securities Act. In general, an “AccreditedInvestor” is deemed to be an institution with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 (excludingsuch person’s residence) or annual income exceeding $200,000 or $300,000 jointly with his or her spouse.

(t) The Subscriber, either alone or together with its representatives, has such knowledge, sophistication and experience in businessand financial matters so as to be capable of evaluating the merits and risks of the Offering, and has so evaluated the merits and risks of suchinvestment. The Subscriber has not authorized any person or entity to act as its Purchaser Representative (as that term is defined in Regulation Dof the General Rules and Regulations under the Securities Act) in connection with the Offering. The Subscriber is able to bear the economic riskof an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

(u) The Subscriber has reviewed, or had the opportunity to review, all of the SEC Filings (as defined below) and all “RiskFactors” and “Forward Looking Statements” disclaimers contained therein. In addition, the Subscriber has reviewed and acknowledges it hassuch knowledge, sophistication and experience in securities matters.

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4. THE COMPANY’S REPRESENTATIONS, WARRANTIES AND COVENANTS

The Company hereby acknowledges, agrees with and represents, warrants and covenants to each Subscriber, as follows:

(a) Organization and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the lawsof its state of incorporation. The Company is duly qualified to do business, and is in good standing in the states required due to (a) theownership or lease of real or personal property for use in the operation of the Company's business or (b) the nature of the business conducted bythe Company. The Company has all requisite power, right and authority to own, operate and lease its properties and assets, to carry on itsbusiness as now conducted, to execute, deliver and perform its obligations under this Agreement and the other Transaction Documents to whichit is a party, and to carry out the transactions contemplated hereby and thereby. All actions on the part of the Company and its officers anddirectors necessary for the authorization, execution, delivery and performance of this Agreement and the other Transaction Documents, theconsummation of the transactions contemplated hereby and thereby, and the performance of all of the Company's obligations under thisAgreement and the other Transaction Documents have been taken or will be taken prior to the Closing. This Agreement has been, and the otherTransaction Documents to which the Company is a party on the Closing will be, duly executed and delivered by the Company, and thisAgreement is, and each of the other Transaction Documents to which it is a party on the Closing will be, a legal, valid and binding obligation ofthe Company, enforceable against the Company in accordance with its terms, except as may be limited by bankruptcy, reorganization, insolvency,moratorium and similar laws of general application relating to or affecting the enforcement of rights of creditors, and except as enforceability ofthe obligations hereunder are subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding inequity or law).

(b) Issuance of Securities. The Securities to be issued to the Subscriber pursuant to this Agreement, when issued and delivered inaccordance with the terms of this Agreement and the applicable Transaction Documents, will be duly and validly issued and will be fully paid andnon-assessable.

(c) Authorization; Enforcement. The execution, delivery and performance of this Agreement and the other TransactionDocuments by the Company, and the consummation of the transactions contemplated hereby and thereby, will not (a) constitute a violation (withor without the giving of notice or lapse of time, or both) of any provision of any law or any judgment, decree, order, regulation or rule of anycourt, agency or other governmental authority applicable to the Company, (b) require any consent, approval or authorization of, or declaration,filing or registration with, any person, (c) result in a default (with or without the giving of notice or lapse of time, or both) under, acceleration ortermination of, or the creation in any party of the right to accelerate, terminate, modify or cancel, any agreement, lease, note or other restriction,encumbrance, obligation or liability to which the Company is a party or by which it is bound or to which any assets of the Company are subject,(d) result in the creation of any lien or encumbrance upon the assets of the Company, or upon any shares of Common Stock, preferred stock orother securities of the Company, (e) conflict with or result in a breach of or constitute a default under any provision of the articles ofincorporation or bylaws of the Company, or (f) invalidate or adversely affect any permit, license, authorization or status used in the conduct of thebusiness of the Company.

(d) SEC Filings. The Company is subject to, and in full compliance with, the reporting requirements of Section 13 or 15(d) of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”). The Company has made available to each Subscriber through the EDGARsystem true and complete copies of the Company’s filings for the prior two full fiscal years plus any interim period (collectively, the “SECFilings”), and all such SEC Filings are incorporated herein by reference. The SEC Filings, when they were filed with the SEC (or, if anyamendment with respect to any such document was filed, when such amendment was filed), complied in all material respects with the applicablerequirements of the Exchange Act and the rules and regulations thereunder and did not, as of such date, contain an untrue statement of a materialfact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of thecircumstances under which they were made, not misleading. All reports and statements required to be filed by the Company under the ExchangeAct have been filed, together with all exhibits required to be filed therewith. The Company and each of its direct and indirect subsidiaries, if any(collectively, the “Subsidiaries”), are engaged in all material respects only in the business described in the SEC Filings, and the SEC Filingscontain a complete and accurate description in all material respects of the business of the Company and the Subsidiaries.

(e) No Financial Advisor. The Company acknowledges and agrees that each Subscriber is acting solely in the capacity of anarm’s length purchaser with respect to the Securities and the transactions contemplated hereby. The Company further acknowledges thatSubscriber is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and thetransactions contemplated hereby and any advice given by any Subscriber or any of its representatives or agents in connection with thisAgreement and the transactions contemplated hereby is merely incidental to such Subscriber’s purchase of the Securities. The Company furtherrepresents to each Subscriber that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation ofthe transactions contemplated hereby by the Company and its representatives.

(f) Indemnification. The Company will indemnify and hold harmless each Subscriber and, where applicable, its directors,officers, employees, agents, advisors and shareholders, from and against any and all loss, liability, claim, damage and expense whatsoever(including, but not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defendingagainst any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened) arising out of or based upon anyrepresentation or warranty of the Company contained herein or in any document furnished by the Company to each Subscriber in connectionherewith being untrue in any material respect or any breach or failure by the Company to comply with any covenant or agreement made by theCompany to each Subscriber in connection therewith; provided, however, that the Company’s liability shall not exceed such Subscriber’sAggregate Purchase Price tendered hereunder.

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(g) Capitalization and Additional Issuances. The authorized and outstanding capital stock of the Company on a fully diluted basisas of the date of this Agreement and the Closing Date (not including the Securities or any securities issued in connection with the Acquisition)are set forth in the Company’s SEC Filings and Schedule I annexed hereto. Except as set forth in the Company’s SEC Filings and Schedule Iannexed hereto, there are no options, warrants, or rights to subscribe to, securities, rights, understandings or obligations convertible into orexchangeable for or giving any right to subscribe for any shares of capital stock or other equity interest of the Company or any of itssubsidiaries. The only officer, director, employee and consultant stock option or stock incentive plan or similar plan currently in effect orcontemplated by the Company are described in the Company’s SEC Filings. There are no outstanding agreements or preemptive or similar rightsaffecting the Company's Common Stock.

(h) Private Placements. Assuming the accuracy of each Subscriber’s representations and warranties set forth in Section 3, noregistration under the Securities Act is required for the offer and sale of the Securities by the Company to the Subscribers as contemplatedhereby.

(j) Investment Company. The Company is not, and is not an affiliate of, and immediately after receipt of payment for the Unitswill not be or be an affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. TheCompany shall conduct its business in a manner so that it will not become subject to the Investment Company Act.

(k) Shell Company Status. The Company is not and has never been an issuer identified in Rule 144(i)(1) of the SecuritiesAct. 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 theExchange Act.

(l) Litigation. Except as set forth in the SEC Filings, there is no action, suit, proceeding, inquiry or investigation before or by thePrincipal Market, any court, public board, other Governmental Entity, self-regulatory organization or body pending or, to the knowledge of theCompany, threatened against or affecting the Company or any of its Subsidiaries, the Common Stock or any of the Company’s or itsSubsidiaries’ officers or directors which is outside of the ordinary course of business or individually or in the aggregate material to the Companyor any of its Subsidiaries. No director, officer or employee of the Company or any of its subsidiaries has willfully violated 18 U.S.C. §1519 orengaged in spoliation in reasonable anticipation of litigation. Without limitation of the foregoing, there has not been, and to the knowledge of theCompany, there is not pending or contemplated, any investigation by the SEC involving the Company, any of its Subsidiaries or any current orformer director or officer of the Company or any of its Subsidiaries. The SEC has not issued any stop order or other order suspending theeffectiveness of any registration statement filed by the Company under the Securities Act or the Exchange Act. “Governmental Entity” meansany nation, state, county, city, town, village, district, or other political jurisdiction of any nature, federal, state, local, municipal, foreign, or othergovernment, governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, orentity and any court or other tribunal), multi-national organization or body; or body exercising, or entitled to exercise, any administrative,executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature or instrumentality of any of the foregoing, includingany entity or enterprise owned or controlled by a government or a public international organization or any of the foregoing. “Principal Market”means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSEMKT, The NASDAQ Capital Market, The NASDAQ Global Market, The NASDAQ Global Select Market, the New York Stock Exchange,OTCQX, OTCQB or the OTC Bulletin Board (or any successors to any of the foregoing).

(m) Employee Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement oremploys any member of a union. The Company believes that its and its Subsidiaries’ relations with their respective employees are good. TheCompany and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting labor, employment andemployment practices and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance wouldnot, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. “Material Adverse Effect” means anymaterial adverse effect on (i) the business, properties, assets, liabilities, operations (including results thereof), condition (financial or otherwise) orprospects of the Company or any Subsidiary, individually or taken as a whole, (ii) the transactions contemplated hereby or in any of the otherTransaction Documents or (iii) the authority or ability of the Company or any of its Subsidiaries to perform any of their respective obligationsunder any of the Transaction Documents.

(n) Tax Status. The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income and allother tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes and other governmentalassessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those beingcontested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent tothe periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxingauthority of any jurisdiction, and the officers of the Company and its Subsidiaries know of no basis for any such claim. The Company is notoperated in such a manner as to qualify as a passive foreign investment company, as defined in Section 1297 of the U.S. Internal Revenue Codeof 1986, as amended.

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(o) Indebtedness and Other Contracts. Except as set forth in the SEC Filings and Schedule I annexed hereto, neither theCompany nor any of its Subsidiaries, (i) has any outstanding Indebtedness (as defined below), (ii) is a party to any contract, agreement orinstrument, the violation of which, or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably beexpected to result in a Material Adverse Effect, (iii) is in violation of any term of, or in default under, any contract, agreement or instrumentrelating to any Indebtedness, except where such violations and defaults would not result, individually or in the aggregate, in a Material AdverseEffect, or (iv) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of theCompany’s officers, has or is expected to have a Material Adverse Effect. For purposes of this Agreement: (x) “Indebtedness” of any Personmeans, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchaseprice of property or services (including, without limitation, “capital leases” in accordance with generally accepted accounting principles) (otherthan trade payables entered into in the ordinary course of business), (C) all reimbursement or payment obligations with respect to letters of credit,surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar instruments, includingobligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness created or arisingunder any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquiredwith the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of defaultare limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in connectionwith generally accepted accounting principles, consistently applied for the periods covered thereby, is classified as a capital lease, (G) allindebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness has an existing right,contingent or otherwise, to be secured by) any mortgage, claim, lien, tax, right of first refusal, pledge, charge, security interest or otherencumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person whichowns such assets or property has not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations inrespect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G) above; (y) “Contingent Obligation” means, asto any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or otherobligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provideassurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be compliedwith, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto; and (z) “Person” means anindividual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity andany Governmental Entity or any department or agency thereof.

(p) No Undisclosed Events, Liabilities, Developments or Circumstances. Except as set forth in the SEC Filings, no event,liability, development or circumstance has occurred or exists, or is reasonably expected to exist or occur with respect to the Company, any of itsSubsidiaries or any of their respective businesses, properties, liabilities, prospects, operations (including results thereof) or condition (financial orotherwise), that (i) would be required to be disclosed by the Company under applicable securities laws on a registration statement on Form S-1filed with the SEC relating to an issuance and sale by the Company of its Common Stock and which has not been publicly announced, (ii) couldhave a material adverse effect on any Subscriber’s investment hereunder or (iii) would reasonably be expected to have a Material Adverse Effect.

(q) No Additional Agreements. Neither the Company nor any of its Subsidiaries has any agreement or understanding with anySubscriber with respect to the transactions contemplated by the Transaction Documents other than pursuant to documents substantially identicalto the Transaction Documents.

(r) No Disqualification Events. To the Company’s knowledge, none of the Company, any of its predecessors, any affiliatedissuer, any director, executive officer, other officer of the Company participating in the offering contemplated hereby, any beneficial owner of20% or more of the Company's outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term isdefined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person”)is subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”),except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether anyIssuer Covered Person is subject to a Disqualification Event.

(s) General Solicitation. None of the Company, any of its affiliates (as defined in Rule 501(b) under the Securities Act) or anyperson acting on behalf of the Company or such affiliate will solicit any offer to buy or offer or sell the Securities by means of any form ofgeneral solicitation or general advertising within the meaning of Regulation D, including: (i) any advertisement, article, notice or othercommunication published in any newspaper, magazine or similar medium or broadcast over television or radio; and (ii) any seminar or meetingwhose attendees have been invited by any general solicitation or general advertising.

5. OTHER AGREEMENTS OF THE PARTIES (a) Furnishing of Information. As long as any Subscriber owns Securities, the Company covenants to timely file (or obtain extensions inrespect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to theExchange Act. As long as any Subscriber owns Securities, if the Company is not required to file reports pursuant to the Exchange Act, it willprepare and furnish to the Subscribers and make publicly available in accordance with Rule 144(c) under the Securities Act such information as isrequired for the Subscribers to sell the Securities under Rule 144. The Company further covenants that it will take such further action as anyholder of Securities may reasonably request, all to the extent required from time to time to enable such person to sell such Securities withoutregistration under the Securities Act within the limitation of the exemptions proved by Rule 144 under the Securities Act.

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(b) Shareholder Rights Plan. No claim will be made or enforced by the Company or, to the knowledge of the Company, any other personthat any Subscriber is an “Acquiring Person” under any shareholder rights plan or similar plan or arrangement in effect or hereafter adopted bythe Company, or that any Subscriber could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securitiesunder the Transaction Documents or under any other agreement between the Company and the Subscribers. (c) Securities Laws Disclosure; Publicity. The Company shall within four (4) Business Days after this Agreement has been executed, filea Current Report on Form 8-K with the SEC, including the Transaction Documents as exhibits thereto. From and after the filing of the CurrentReport on Form 8-K, the Company shall have publicly disclosed all material, non-public information delivered to any of the Subscribers by theCompany or any of its Subsidiaries, or any of their respective officers, directors, employees or agents. The Company and each Subscriber shallconsult with each other in issuing any press releases with respect to the transactions contemplated hereby, and no Subscriber shall issue any suchpress release or otherwise make any such public statement without the prior consent of the Company, which consent shall not unreasonably bewithheld. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Subscriber, or include the name of anySubscriber in any filing with the SEC or any regulatory agency, without the prior written consent of such Subscriber, except to the extent suchdisclosure is required by law in which case the Company shall provide the Subscribers with prior notice of such disclosure. The Companyunderstands that any such disclosure shall cause irreparable harm and each Subscriber shall be entitled to injunctive relief and liquidated damagesin connection therewith. (d) Integration. The Company shall not, and shall use its best efforts to ensure that no affiliate of the Company shall, after the date hereof,sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security that would be integrated with the offer or sale of theUnits in a manner that would require the registration under the Securities Act of the sale of the Units to the Subscribers. (e) Reservation of Securities. The Company shall maintain a reserve from its duly authorized shares of Common Stock for issuancepursuant to the Transaction Documents in such amount as may be required to fulfill its obligations in full under the Transaction Documents. Inthe event that at any time the then authorized shares of Common Stock are insufficient for the Company to satisfy its obligations in full under theTransaction Documents, the Company shall promptly take such actions as may be required to increase the number of authorized shares. (f) Use of Proceeds. The Company anticipates using the gross proceeds from the Offering for general working capital purposes. (g) Closings. The initial closing shall be referred to as the ‘Initial Closing” and may be held upon receipt and acceptance of subscriptionsprior to June 30, 2014. The date of the Initial Closing is sometimes referred to as the “Initial Closing Date.” Subsequent closings (each a“Subsequent Closing”) will be held until the earlier to occur of: (i) the date on which the entire Offering has been subscribed for and accepted bythe Company, and (ii) July 31, 2014. The Offering may be extended up to August 15, 2014 (the “Final Closing” and such date of the FinalClosing, the “Final Closing Date”), without additional notice to Subscribers. Officers, directors and affiliates of the Company, Sichenzia RossFreidman Ference LLP (the Escrow Agent) and the placement agent, if any, may purchase securities in the Offering or otherwise receivesecurities in connection with the conversion of outstanding debt.

(h) Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by theTransaction Documents, the Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide any Subscriberor its agents or counsel with any information that the Company believes constitutes material non-public information, and each Subscriber agrees,and shall direct its agents and counsel not to, request any material non-public information from the Company or any Person acting on its behalf,unless prior thereto such Subscriber shall have executed a written agreement with the Company regarding the confidentiality and use of suchinformation. The Company understands and confirms that each Subscriber shall be relying on the foregoing covenant in effecting transactions insecurities of the Company.

(i) Acquisition. As a condition to the Closing of the Offering, on or prior to the Initial Closing of the Offering, the Companyshall have consummated the Acquisition. 6. CONDITIONS TO ACCEPTANCE OF SUBSCRIPTION

(a) The Closing of the sale of the Units is conditioned upon satisfaction of the following conditions precedent on or before the ClosingDate:

(i) As of the Closing, no legal action, suit or proceeding shall be pending against the Company that seeks to restrain or prohibitthe transactions contemplated by this Agreement.

(ii) The representations and warranties of the Company and the Subscribers contained in this Agreement shall have been true andcorrect in all material respects on the date of this Agreement and shall be true and correct as of the Closing as if made on the Closing Date.

(b) On or prior to the Initial Closing of the Offering, the Company shall have consummated the Acquisition. 7. MISCELLANEOUS PROVISIONS

(a) All parties hereto have been represented by counsel, and no inference shall be drawn in favor of or against any party by virtueof the fact that such party’s counsel was or was not the principal draftsman of this Agreement.

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(b) Each of the parties hereto shall be responsible to pay the costs and expenses of its own legal counsel in connection with thepreparation and review of this Agreement and related documentation.

(c) Neither this Agreement, nor any provisions hereof, shall be waived, modified, discharged or terminated except by aninstrument in writing signed by the party against whom any waiver, modification, discharge or termination is sought.

(d) The representations, warranties and agreement of each Subscriber and the Company made in this Agreement shall survive theexecution and delivery of this Agreement and the delivery of the Securities.

(e) Any party may send any notice, request, demand, claim or other communication hereunder to the Subscriber at the address setforth on the signature page of this Agreement or to the Company at its primary office (including personal delivery, expedited courier, messengerservice, fax, ordinary mail or electronic mail), but no such notice, request, demand, claim or other communication will be deemed to have beenduly given unless and until it actually is received by the intended recipient. Any party may change the address to which notices, requests,demands, claims and other communications hereunder are to be delivered by giving the other parties written notice in the manner herein set forth.

(f) Except as otherwise provided herein, this Agreement shall be binding upon, and inure to the benefit of, the parties to thisAgreement and their heirs, executors, administrators, successors, legal representatives and assigns. If any Subscriber is more than one person orentity, the obligation of any Subscriber shall be joint and several and the agreements, representations, warranties and acknowledgments containedherein shall be deemed to be made by, and be binding upon, each such person or entity and its heirs, executors, administrators, successors, legalrepresentatives and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereofand merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.

(g) This Agreement is not transferable or assignable by any Subscriber.

(h) The Company hereby represents and warrants as of the date hereof and as of the Closing Date that none of the terms offeredto any Person with respect to any offer, sale or subscription of Securities (each a "Subscription Document"), is or will be more favorable to suchPerson than those of the Subscriber and this Agreement shall be, without any further action by the Subscriber or the Company, deemed amendedand modified in an economically and legally equivalent manner such that the Subscriber shall receive the benefit of the more favorable termscontained in such Subscription Document. Notwithstanding the foregoing, the Company agrees, at its expense, to take such other actions (suchas entering into amendments to the Transaction Documents) as the Subscriber may reasonably request to further effectuate the foregoing.

(i) Except as otherwise provided herein, this Agreement shall not be changed, modified or amended except in writing signed byboth (a) the Company and (b) Subscribers in the Offering holding 60% of the Units issued in the Offering then held by the originalSubscribers. The Company shall be prohibited from offering any additional consideration to any Subscriber in this Offering (or such originalSubscriber’s transferee) for the purposes of inducing such person to change, modify, waive or amend any term of this Agreement or any otherTransaction Document without making the same offer on a pro-rata basis to all other Subscribers (and those transferees) in this Offering allocableto the securities acquired by such transferee(s).

(j) This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without givingeffect to conflicts of law principles.

(k) The Company and each Subscriber hereby agree that any dispute that may arise between them arising out of or in connectionwith this Agreement shall be adjudicated before a court located in the City of New York, Borough of Manhattan, and they hereby submit to theexclusive jurisdiction of the federal and state courts of the State of New York located in the City of New York, Borough of Manhattan withrespect to any action or legal proceeding commenced by any party, and irrevocably waive any objection they now or hereafter may haverespecting the venue of any such action or proceeding brought in such a court or respecting the fact that such court is an inconvenient forum,relating to or arising out of this Agreement or any acts or omissions relating to the sale of the securities hereunder, and consent to the service ofprocess in any such action or legal proceeding by means of registered or certified mail, return receipt requested, postage prepaid, in care of theaddress set forth herein or such other address as either party shall furnish in writing to the other.

(l) WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTIONBROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY,TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

(m) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of whichtogether shall constitute one and the same instrument.

[Signature Pages Follow]

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ALL SUBSCRIBERS MUST COMPLETE THIS PAGE

IN WITNESS WHEREOF, the Subscriber has executed this Agreement on the ____ day of _____, 2014.

x $0.50 for per Unit = Units subscribed for Aggregate Purchase Price

Manner in which Title is to be held (Please Check One):

1. ___ Individual 7. ___ Trust/Estate/Pension or Profit sharing PlanDate Opened:______________

2. ___ Joint Tenants with Right of Survivorship 8. ___ As a Custodian for________________________________Under the Uniform Gift to Minors Act of the State of________________________________

3. ___ Community Property 9. ___ Married with Separate Property4. ___ Tenants in Common 10. ___ Keogh5. ___ Corporation/Partnership/ Limited Liability

Company11. ___ Tenants by the Entirety

6. ___ IRA

ALTERNATIVE DISTRIBUTION INFORMATION

To direct distribution to a party other than the registered owner, complete the information below. YOU MUST COMPLETE THISSECTION IF THIS IS AN IRA INVESTMENT. Name of Firm (Bank, Brokerage, Custodian): Account Name: Account Number: Representative Name: Representative Phone Number: Address: City, State, Zip:

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IF MORE THAN ONE SUBSCRIBER, EACH SUBSCRIBER MUST SIGN.

INDIVIDUAL SUBSCRIBERS MUST COMPLETE THIS PAGE 17.

SUBSCRIBERS WHICH ARE ENTITIES MUST COMPLETE PAGE 18.

EXECUTION BY NATURAL PERSONS

_____________________________________________________________________________Exact Name in Which Title is to be Held

_________________________________Name (Please Print)

_________________________________Name of Additional Purchaser

_________________________________Residence: Number and Street

_________________________________Address of Additional Purchaser

_________________________________City, State and Zip Code

_________________________________City, State and Zip Code

_________________________________Social Security Number

_________________________________Social Security Number

_________________________________Telephone Number

_________________________________Telephone Number

_________________________________Fax Number (if available)

________________________________Fax Number (if available)

_________________________________E-Mail (if available)

________________________________E-Mail (if available)

__________________________________(Signature)

________________________________(Signature of Additional Purchaser)

ACCEPTED this ___ day of _________ 2014, on behalf of the Company.

By:_________________________________Name:Title:

[SIGNATURE PAGE FOR SUBSCRIPTION AGREEMENT]

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EXECUTION BY SUBSCRIBER WHICH IS AN ENTITY(Corporation, Partnership, LLC, Trust, Etc.)

_____________________________________________________________________________Name of Entity (Please Print)

Date of Incorporation or Organization:State of Principal Office:Federal Taxpayer Identification Number:____________________________________________Office Address ____________________________________________City, State and Zip Code ____________________________________________Telephone Number ____________________________________________Fax Number (if available) ____________________________________________E-Mail (if available) By: _________________________________

Name:Title:

[seal]Attest: _________________________________

(If Entity is a Corporation)

__________________________________________________________________Address

ACCEPTED this ____ day of __________ 2014, on behalf of the Company.

By: _________________________________Name:Title:

[SIGNATURE PAGE FOR SUBSCRIPTION AGREEMENT]

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INVESTOR QUESTIONNAIRE Instructions: Check all boxes below which correctly describe you. oo You are (i) a bank, as defined in Section 3(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), (ii) a

savings and loan association or other institution, as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in anindividual or fiduciary capacity, (iii) a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of1934, as amended (the “Exchange Act”), (iv) an insurance company as defined in Section 2(13) of the Securities Act, (v) aninvestment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”),(vi) a business development company as defined in Section 2(a)(48) of the Investment Company Act, (vii) a Small BusinessInvestment Company licensed by the U.S. Small Business Administration under Section 301 (c) or (d) of the Small BusinessInvestment Act of 1958, as amended, (viii) a plan established and maintained by a state, its political subdivisions, or anagency or instrumentality of a state or its political subdivisions, for the benefit of its employees and you have total assets inexcess of $5,000,000, or (ix) an employee benefit plan within the meaning of the Employee Retirement Income Security Actof 1974, as amended (“ERISA”) and (1) the decision that you shall subscribe for and purchase shares of common stock orpreferred stock, is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings and loanassociation, insurance company, or registered investment adviser, or (2) you have total assets in excess of $5,000,000 and thedecision that you shall subscribe for and purchase the Units is made solely by persons or entities that are accredited investors,as defined in Rule 501 of Regulation D promulgated under the Securities Act (“Regulation D”) or (3) you are a self-directedplan and the decision that you shall subscribe for and purchase the Securities is made solely by persons or entities that areaccredited investors.

oo You are a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940,

as amended. oo You are an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), a

corporation, Massachusetts or similar business trust or a partnership, in each case not formed for the specific purpose ofmaking an investment in the Securities and its underlying securities in excess of $5,000,000.

oo You are a director or executive officer of the Company. oo You are a natural person whose individual net worth, or joint net worth with your spouse, exceeds $1,000,000 (excluding

residence) at the time of your subscription for and purchase of the Securities. oo You are a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint

income with your spouse in excess of $300,000 in each of the two most recent years, and who has a reasonable expectation ofreaching the same income level in the current year.

oo You are a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities and

whose subscription for and purchase of the Securities is directed by a sophisticated person as described in Rule 506(b)(2)(ii)of Regulation D.

oo You are an entity in which all of the equity owners are persons or entities described in one of the preceding paragraphs.

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Check all boxes below which correctly describe you. With respect to this investment in the Securities, your: Investment Objectives: ooAggressive Growth ooSpeculation Risk Tolerance: ooLow Risk oo Moderate Risk ooHigh Risk Are you associated with a FINRA Member Firm? oo Yes oo No Your initials (purchaser and co-purchaser, if applicable) are required for each item below: ____ ____ I/We understand that this investment is not guaranteed. ____ ____ I/We are aware that this investment is not liquid. ____ ____ I/We are sophisticated in financial and business affairs and are able to evaluate the risks and merits of an investment in this

offering. ____ ____ I/We confirm that this investment is considered “high risk.” (This type of investment is considered high risk due to the

inherent risks including lack of liquidity and lack of diversification. Success or failure of private placements such as this is dependent on the corporate issuer of these securities and is outside the control of the

investors. While potential loss is limited to the amount invested, such loss is possible.)

The Subscriber hereby represents and warrants that all of its answers to this Investor Questionnaire are true as of the date of itsexecution of the Subscription Agreement pursuant to which it purchased the Securities. Name of Purchaser [please print] Name of Co-Purchaser [please print] Signature of Purchaser (Entities pleaseprovide signature of Purchaser’s dulyauthorized signatory.)

Signature of Co-Purchaser

Name of Signatory (Entities only) Title of Signatory (Entities only)

[SIGNATURE PAGE FOR INVESTOR QUESTIONNAIRE]

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Exhibit 10.7 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE AND HAVE BEEN ISSUED INRELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,AND, ACCORDINGLY, MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FORSALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II) SUCH SECURITIES MAY BE SOLDPURSUANT TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLYSATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED.

DRONE AVIATION HOLDING CORP.Warrant

Date of Issuance: [__], 2014 (“Issuance Date”)

DRONE AVIATION HOLDING CORP., a Nevada corporation (the “Company”), hereby certifies that, for good and valuableconsideration, the receipt and sufficiency of which is hereby acknowledged, [___], the registered holder hereof or its permitted assigns (the“Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then ineffect, upon exercise of this Warrant (including any Warrants issued in exchange, transfer or replacement hereof, this “Warrant”), at any timeor times on or after the date hereof (the “Exercisability Date”), but not after 11:59 p.m., New York time, on the Expiration Date (as definedbelow) the number of shares, subject to adjustment as provided herein, of fully paid, non-assessable shares of Common Stock (as definedbelow) set forth below in Section 1(b) (the “Warrant Securities”). This Warrant is one of a series of Warrants being issued pursuant to thatcertain Subscription Agreement, dated the date hereof (the “Subscription Date”), by and between the Company and the Holder (the“Subscription Agreement”). Except as otherwise defined herein, capitalized terms used in this Warrant shall have the meanings set forth inthe Subscription Agreement. 1. EXERCISE OF WARRANT.

(a) Mechanics of Exercise. Subject to the terms and conditions hereof, this Warrant may be exercised by the Holder on any dayon or after the Exercisability Date, in whole or in part, by (i) delivery of a written notice, in the form attached hereto as Exhibit A (the “ExerciseNotice”), of the Holder’s election to exercise this Warrant and (ii) (A) payment to the Company by no later than two (2) Trading Days of anamount equal to the applicable Exercise Price in effect on the date of exercise multiplied by the number of Warrant Securities as to which thisWarrant is being exercised (the “Aggregate Exercise Price”) in cash or by wire transfer of immediately available funds or (B) by delivery ofthe Exercise Notice to the Company specifying that this Warrant is being exercised as a Cashless Exercise (as defined in Section 1(d)). TheHolder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the ExerciseNotice with respect to less than all of the Warrant Securities shall have the same effect as cancellation of the original Warrant and issuance of anew Warrant evidencing the right to purchase the remaining number of Warrant Securities. On or before the first (1st) Trading Day followingthe date on which the Company has received an Exercise Notice, the Company shall transmit by facsimile an acknowledgment of confirmationof receipt of such Exercise Notice to the Holder and the Company’s transfer agent (the "Transfer Agent"). On or before the third (3rd) TradingDay following the date on which the Company has received such Exercise Notice (the “Share Delivery Date”), the Company shall, (X)provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program,upon the request of the Holder, credit such aggregate number of Warrant Securities to which the Holder is entitled pursuant to such exercise tothe Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal At Custodian system, or (Y) if the Transfer Agent isnot participating in the DTC Fast Automated Securities Transfer Program, issue and dispatch by overnight courier to the address as specified inthe Exercise Notice, a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of sharesof Common Stock to which the Holder is entitled pursuant to such exercise. Upon delivery of the Exercise Notice, the Holder shall be deemedfor all corporate purposes to have become the holder of record of the Warrant Securities with respect to which this Warrant has been exercised,irrespective of the date such Warrant Securities are credited to the Holder’s DTC account or the date of delivery of the certificates evidencingsuch Warrant Securities, as the case may be. If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and thenumber of Warrant Securities represented by this Warrant submitted for exercise is greater than the number of Warrant Securities being acquiredupon an exercise, then the Company shall as soon as practicable and in no event by no later than three (3) Business Days after any exercise andat its own expense, issue a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Securitiespurchasable immediately prior to such exercise under this Warrant, less the number of Warrant Securities with respect to which this Warrant isexercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares ofCommon Stock to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all transfer taxes which may bepayable with respect to the issuance and delivery of Warrant Securities upon exercise of this Warrant.

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(b) Exercise Price. For purposes of this Warrant, “Exercise Price” means $1.00, subject to adjustment as provided herein. The

Warrant Securities means [___] ([__]) shares of Common Stock.

(c) Company’s Failure to Timely Deliver Securities. If within three (3) Trading Days of receipt of the Exercise Notice, theCompany shall fail to issue to the Holder a certificate for the number of shares of Common Stock to which the Holder is entitled and registersuch shares of Common Stock on the Company’s share register or credit the Holder’s balance account with DTC for such number of shares ofCommon Stock to which the Holder is entitled upon the Holder’s exercise of this Warrant, and if on or after such third Trading Day the Holderpurchases (or any third party on behalf of such Holder or for the Holder’s account purchases, in an open market transaction or otherwise)shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that theHolder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within three (3) Trading Days after the Holder’s writtenrequest and at the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (includingbrokerage commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligationto deliver such certificate (and to issue such Warrant Securities) or credit the Holder’s balance account with DTC for such Warrant Securitiesshall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Warrant Securities orcredit the Holder’s balance account with DTC for the number of such Warrant Securities and pay cash to the Holder in an amount equal to theexcess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, multiplied by (B) the Closing Bid Priceon the Share Delivery Date.

(d) Cashless Exercise. Notwithstanding anything contained herein to the contrary, at any time, the Holder may, in its solediscretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Companyupon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of shares ofCommon Stock determined according to the following formula (a “Cashless Exercise”):

Net Number = (A x B) - (A x C) B

For purposes of the foregoing formula:

A = the total number of shares with respect to which this Warrant is then being exercised.

B = the arithmetic average of the Closing Sale Price of the shares of Common Stock for the Trading Day immediately preceding thedate of the Exercise Notice.

C = the Exercise Price then in effect for the applicable Warrant Securities at the time of such exercise.

(e) Rule 144. For purposes of Rule 144(d) promulgated under the Securities Act, as in effect on the date hereof, assuming theHolder is not an affiliate of the Company, it is intended that the Warrant Securities issued in a Cashless Exercise shall be deemed to have beenacquired by the Holder, and the holding period for the Warrant Securities shall be deemed to have commenced, on the date this Warrant wasoriginally issued pursuant to the Subscription Agreement.

(f) Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the WarrantSecurities, the Company shall promptly issue to the Holder the number of Warrant Securities that are not disputed.

(g) Registration of Warrant. The Company shall register this Warrant, upon records to be maintained by the Company for thatpurpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registeredHolder of record of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and forall other purposes, absent actual notice to the contrary.

(h) Registration of Transfers. The Company shall register the transfer of any portion of this Warrant in the Warrant Register,upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Transfer Agent or to theCompany at its address specified herein. Upon any such registration of transfer, a new warrant to purchase Common Stock, in substantially theform of this Warrant (any such new warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to thetransferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferringHolder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights andobligations of a holder of a Warrant.

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(i) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to

exercise any portion of this Warrant, pursuant to Section 1 or otherwise, to the extent that after giving effect to such issuance after exercise asset forth on the applicable Exercise Notice, the Holder (together with the Holder’s affiliates, and any other Persons acting as a group togetherwith 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 includethe number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, non-exercised portion of thisWarrant beneficially owned by the Holder or any of its affiliates and (ii) exercise or conversion of the unexercised or non-converted portion ofany other securities of the Company (including, without limitation, any other Common Stock equivalents) subject to a limitation on conversionor exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its affiliates. Except as set forth in thepreceding sentence, for purposes of this Section 1(i), beneficial ownership shall be calculated in accordance with Section 13(d) of the SecuritiesExchange of 1934, as amended (the “Exchange Act”) and the rules and regulations promulgated thereunder, it being acknowledged by theHolder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and theHolder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in thisSection 1(i) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together withany affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of an ExerciseNotice shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by theHolder together with any affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial OwnershipLimitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination asto any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules andregulations promulgated thereunder. For purposes of this Section 1(i), in determining the number of outstanding shares of Common Stock, aHolder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annualreport filed with the SEC, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice bythe Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of aHolder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion orexercise of securities of the Company, including this Warrant, held by the Holder or its affiliates since the date as of which such number ofoutstanding shares of Common Stock was reported (taking into account any applicable beneficial ownership limitations contained therein). The“Beneficial Ownership Limitation” shall be 3.33% of the number of shares of the Common Stock outstanding immediately after giving effectto the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon not less than 61 days’ prior notice to theCompany, may increase the Beneficial Ownership Limitation provisions of this Section 1(i), but not in excess of 4.99% of the number of sharesof the Common Stock outstanding immediately after giving effect to the issuance of the shares of Common Stock issuable upon exercise of thisWarrant. Any such increase will not be effective until the 61st day after such notice is delivered to the Company. Notwithstanding theforegoing, the Holder may decrease the Beneficial Ownership Limitation provisions of this Section 1(i) at any time. The provisions of thisparagraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(i) to correct thisparagraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained orto make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraphshall apply to a successor holder of this Warrant. 2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SECURITIES. The Exercise Price and the numberof Warrant Securities issuable upon exercise of this Warrant, as applicable, shall be adjusted from time to time as follows:

(a) Adjustment upon Subdivision or Combination of Common Stock. If the Company at any time on or after the SubscriptionDate subdivides (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise) its outstanding shares ofCommon Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionatelyreduced and the number of Warrant Securities will be proportionately increased. If the Company at any time on or after the Subscription Datecombines (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise) its outstanding shares ofCommon Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionatelyincreased and the number of Warrant Securities will be proportionately decreased. Any adjustment under this Section 2(a) shall becomeeffective at the close of business on the date the subdivision or combination becomes effective.

(b) Favored Nations Provision. For a period of twenty-four (24) months from the Issuance Date, other than in connection with(i) full or partial consideration in connection with a strategic merger, acquisition, consolidation or purchase of substantially all of the securitiesor assets of a corporation or other entity which holders of such securities or debt are not at any time granted registration rights equal to orgreater than those granted to the Holder, (ii) the Company’s issuance of securities in connection with strategic license agreements and otherpartnering arrangements so long as such issuances are not primarily for the purpose of raising capital and which holders of such securities ordebt are not at any time granted registration rights equal to or greater than those granted to the Holder, (iii) the Company’s issuance of CommonStock or the issuances or grants of options to purchase Common Stock to employees, directors, and consultants, pursuant to plans that havebeen approved by a majority of the stockholders and a majority of the independent members of the board of directors of the Company or inexistence as such plans are constituted on the Issuance Date, (iv) the Company’s issuance of securities upon the exercise or exchange of orconversion of any securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on theIssuance Date (v) an issuance by the Company of securities resulting from the exercise of Warrants or conversion of preferred stock issued inconnection with this Warrant, (vi) the Company’s issuance of Common Stock or the issuances or grants of options to purchase Common Stockto consultants and service providers approved by Holders of a majority in amount of the Warrants outstanding as of the date of approval(“Warrant Holder Consent”), and (vii) any and all securities required to be assumed by the Company by the terms thereof as a result of any ofthe foregoing even if issued by a predecessor acquired in connection with a business combination, merger or share exchange (collectively, theforegoing (i) through (vii) are “Excepted Issuances”), if at any time the Company shall issue any Common Stock or securities convertible intoor exercisable for shares of Common Stock (or modify any of the foregoing which may be outstanding) to any person or entity at a price pershare or conversion or exercise price per share which shall be less than $1.00 per share, or as in effect at such time, without Warrant Holder

share or conversion or exercise price per share which shall be less than $1.00 per share, or as in effect at such time, without Warrant HolderConsent (the “Lower Price Issuance”), then the Exercise Price of the Warrant shall automatically be reduced to reflect such other lower price andthe number of Warrant Securities should be adjusted to reflect such lower price such that the Holder shall hold such number of WarrantSecurities, in total, had Holder paid such lower price. Common Stock issued or issuable by the Company for no consideration or forconsideration that cannot be determined at the time of issue will be deemed issuable or to have been issued for $0.0001 per share of CommonStock. The rights of the Holder set forth in this Section 2(b) are in addition to any other rights the Holder has pursuant to this Warrant, and anyother agreement referred to or entered into in connection herewith or to which Holder and Company are parties. Notwithstanding anythingherein or in any other agreement to the contrary, the Company shall only be required to make a single adjustment with respect to any LowerPrice Issuance, regardless of the existence of multiple basis therefore.

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(c) Other Events. If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for

by such provisions (including, without limitation, the granting of stock appreciation rights or phantom stock rights), then the Company’s Boardof Directors will make an appropriate adjustment in the Exercise Price and the number of Warrant Securities so as to protect the rights of theHolder; provided that no such adjustment pursuant to this Section 2(c) will increase the Exercise Price or decrease the number of WarrantSecurities as otherwise determined pursuant to this Section 2.

3. RIGHTS UPON DISTRIBUTION OF ASSETS.

(a) If at any time or from time to time the holders of Common Stock of the Company (or any shares of stock or other securitiesat the time receivable upon the exercise of this Warrant) shall have received or become entitled to receive, without payment therefor:

(i) Common Stock or any shares of stock or other securities which are at any time directly or indirectly convertible into orexchangeable for Common Stock, or any rights or options to subscribe for, purchase or otherwise acquire any of theforegoing by way of dividend or other distribution (other than a dividend or distribution covered in Section 2(a) above);

(ii) any cash paid or payable otherwise than as a cash dividend; or

(iii) Common Stock or additional stock or other securities or property (including cash) by way of spinoff, split-up,reclassification, combination of shares or similar corporate rearrangement (other than shares of Common Stock pursuant toSection 2(a) above),

then and in each such case, the Holder hereof will, upon the exercise of this Warrant, be entitled to receive, in addition to the number of sharesof Common Stock receivable thereupon, and without payment of any additional consideration therefor, the amount of stock and other securitiesand property (including cash in the cases referred to in clauses (ii) and (iii) above) which such Holder would hold on the date of such exercisehad such Holder been the holder of record of such Common Stock as of the date on which holders of Common Stock received or becameentitled to receive such shares or all other additional stock and other securities and property.

(b) Upon the occurrence of each adjustment pursuant to this Section 3, the Company at its expense will, at the written request ofthe Holder, promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth suchadjustment, including a statement of the adjusted number or type of Warrant Securities or other securities issuable upon exercise of this Warrant(as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment isbased. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Company’s transferagent. 4. FUNDAMENTAL TRANSACTIONS. Upon the occurrence of a Fundamental Transaction, the Successor Entity shall assume thisWarrant in accordance with the provisions of this Section 4, including agreements to deliver to each holder of Warrants in exchange for suchWarrants a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant,including, without limitation, an adjusted exercise price equal to the value for the shares of Common Stock reflected by the terms of suchFundamental Transaction, and exercisable for a corresponding number of shares of capital stock or other securities equivalent to the shares ofCommon Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) priorto such Fundamental Transaction, and satisfactory to the Holder. Upon the occurrence of any Fundamental Transaction, the Successor Entityshall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrantreferring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shallassume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as theCompany herein. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any FundamentalTransaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or inexchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to ensure that the Holder willthereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the Fundamental Transaction but priorto the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property) purchasable upon theexercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever(including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of suchFundamental Transaction had the Warrant been exercised immediately prior to such Fundamental Transaction (including, if the WarrantSecurities underlying this Warrant include securities that are convertible or exercisable, had such Warrant Securities been converted orexercised, as applicable, into shares of Common Stock). If holders of Common Stock are given any choice as to the securities, cash or propertyto be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the consideration it receives upon any exerciseof this Warrant following such Fundamental Transaction. The provisions of this Section 4 shall apply similarly and equally to successiveFundamental Transactions and Corporate Events and shall be applied without regard to any limitations on the exercise of this Warrant.

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5. NON-CIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Articles ofIncorporation, Bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue orsale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, andwill at all times in good faith comply with all the provisions of this Warrant and take all actions consistent with effectuating the purposes of thisWarrant. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stockreceivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary orappropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exerciseof this Warrant, and (iii) shall, so long as this Warrant is outstanding, take all action necessary to reserve and keep available out of its authorizedand unissued shares of Common Stock, solely for the purpose of effecting the exercise of this Warrant, 100% of the number of shares ofCommon Stock issuable upon exercise of this Warrant then outstanding (without regard to any limitations on exercise).

6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder,solely in such Person’s capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of sharecapital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in suchPerson’s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withholdconsent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance orotherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the WarrantSecurities which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrantshall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as astockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.

7. REISSUANCE OF WARRANTS.

(a) Transfer of Warrant. Subject to Section 14 of this Warrant, if this Warrant is to be transferred, the Holder shall surrenderthis Warrant to the Company and deliver the completed and executed Assignment Form, in the form attached hereto as Exhibit B, whereuponthe Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as theHolder may request, representing the right to purchase the number of Warrant Securities being transferred by the Holder and, if less then thetotal number of Warrant Securities then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to theHolder representing the right to purchase the number of Warrant Securities not being transferred.

(b) Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of theloss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by theHolder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shallexecute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Securities thenunderlying this Warrant.

(c) Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal

office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase thenumber of Warrant Securities then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of suchWarrant Securities as is designated by the Holder at the time of such surrender; provided, however, that no Warrants for fractional shares ofCommon Stock shall be given. Notwithstanding anything to the contrary herein, in no event shall the original Warrant be subdivided into morethan three (3) separate Warrants and such new Warrants shall not be further subdivided.

(d) Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this

Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, theright to purchase the Warrant Securities then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) orSection 7(c), the Warrant Securities designated by the Holder which, when added to the number of shares of Common Stock and/or othersecurities underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Securities thenunderlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date,and (iv) shall have the same rights and conditions as this Warrant.

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8. NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be givenin accordance with Section 7(e) of the Subscription Agreement.

9. AMENDMENT AND WAIVER. This Warrant may be modified or amended or the provisions hereof waived with the writtenconsent signed by both (a) the Company and (b) the Holder of this Warrant.

10. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with, and all questionsconcerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of NewYork, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any otherjurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York.

11. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shallnot be construed against any person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form partof, or affect the interpretation of, this Warrant. 12. DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of theWarrant Securities, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within two (2) Business Daysof receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable toagree upon such determination or calculation of the Exercise Price or the Warrant Securities within three Business Days of such disputeddetermination or arithmetic calculation being submitted to the Holder, then the Company shall, within two (2) Business Days submit viafacsimile (a) the disputed determination of the Exercise Price to an independent, reputable investment bank selected by the Company andapproved by the Holder, which approval shall not be unreasonably withheld, or (b) the disputed arithmetic calculation of the Warrant Securitiesto the Company’s independent, outside accountant. The Company shall cause the investment bank or the accountant, as the case may be, toperform the determinations or calculations and notify the Company and the Holder of the results no later than ten Business Days from the time itreceives the disputed determinations or calculations. The prevailing party in any dispute resolved pursuant to this Section 12 shall be entitled tothe full amount of all reasonable expenses, including all costs and fees paid or incurred in good faith, in relation to the resolution of suchdispute. Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all parties absentdemonstrable error.

13. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrantshall be cumulative and in addition to all other remedies available under this Warrant and the other Transactions Documents, as applicable, atlaw or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holderto pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breachby it of its obligations hereunder may cause irreparable harm to the Holder and that the remedy at law for any such breach may beinadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder may be entitled, in addition toall other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond orother security being required. The issuance of Warrant Securities and certificates for such Warrant Securities as contemplated hereby upon theexercise of this Warrant shall be made without charge to the Holder for any issuance tax in respect thereof. 14. TRANSFER. Subject to compliance with applicable laws, this Warrant may be offered for sale, sold, transferred or assignedwithout the consent of the Company, provided that the Company is notified in writing within two business days following such transaction.

15. WARRANT AGENT. The Company shall serve as warrant agent under this Warrant. Upon 30 days' notice to the Holder, theCompany may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or anycorporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which theCompany or any new warrant agent transfers substantially all of its corporate trust or stockholder services business shall be a successor warrantagent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrantagent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder's last address as shown on the Warrant Register.

16. SEVERABILITY. If any provision of this Warrant shall be held to be invalid and unenforceable, such invalidity or unenforceabilityshall not affect any other provision of this Warrant.

17. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:

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(a) “Bloomberg” means Bloomberg Financial Markets.

(b) “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of NewYork are authorized or required by law to remain closed.

(c) “Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price and lastclosing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins tooperate on an extended hours basis and does not designate the closing bid price or the closing trade price, as the case may be, then the last bidprice or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the PrincipalMarket is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, ofsuch security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if theforegoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on theelectronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported forsuch security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported inthe “pink sheets” by the OTC Markets Group LLC. If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on aparticular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price, as the case may be, of such security on such dateshall be the fair market value as mutually determined by the Company and the Holder. All such determinations to be appropriately adjusted forany stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.

(d) “Common Stock” means (i) the Company’s shares of Common Stock, par value $0.0001 per share, and (ii) any sharecapital into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.

(e) “Eligible Market” means the Principal Market, The New York Stock Exchange, Inc., The NYSE MKT, The NASDAQGlobal Market, The NASDAQ Capital Market, the Over the Counter Bulletin Board, the OTCQX or the OTCQB or any successor market.

(f) “Expiration Date” means the date that is three (3) years following the Issuance Date or, if such date falls on a day other thana Business Day or on which trading does not take place on the Principal Market (a “Holiday”), the next date that is not a Holiday.

(g) “Fundamental Transaction” means that (i) the Company or any of its Subsidiaries shall, directly or indirectly, in one ormore related transactions, (1) consolidate or merge with or into (whether or not the Company or any of its Subsidiaries is the survivingcorporation) any other person, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its respectiveproperties or assets to any other person, or (3) allow any other person to make a purchase, tender or exchange offer that is accepted by theholders of more than 50% of the outstanding shares of Voting Stock of the Company (not including any shares of Voting Stock of theCompany held by the person or persons making or party to, or associated or affiliated with the persons making or party to, such purchase,tender or exchange offer), or (4) consummate a stock or share purchase agreement or other business combination (including, without limitation,a reorganization, recapitalization, spin-off or scheme of arrangement) with any other person whereby such other person acquires more than 50%of the outstanding shares of Voting Stock of the Company (not including any shares of Voting Stock of the Company held by the other personor other persons making or party to, or associated or affiliated with the other persons making or party to, such stock or share purchaseagreement or other business combination), or (5) (I) reorganize, recapitalize or reclassify the Common Stock, (II) effect or consummate a stockcombination, reverse stock split or other similar transaction involving the Common Stock or (III) make any public announcement or disclosurewith respect to any stock combination, reverse stock split or other similar transaction involving the Common Stock (including, withoutlimitation, any public announcement or disclosure of (x) any potential, possible or actual stock combination, reverse stock split or other similartransaction involving the Common Stock or (y) board or stockholder approval thereof, or the intention of the Company to seek board orstockholder approval of any stock combination, reverse stock split or other similar transaction involving the Common Stock), or (ii) any“person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act and the rules and regulationspromulgated thereunder) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of50% of the aggregate ordinary voting power represented by issued and outstanding Voting Stock of the Company.

(h) “Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose commonstock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, thePerson or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

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(i) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an

unincorporated organization, any other entity and a government or any department or agency thereof.

(j) “Principal Market” means the principal securities exchange or securities market on which the Common Stock is then quotedor traded.

(k) “Subsidiary” means any subsidiary of the Company including any direct or indirect subsidiary of the Company formed oracquired after the date hereof.

(l) “Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or

surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such FundamentalTransaction shall have been entered into.

(m) “Trading Day” means any day on which the Common Stock are traded on the Principal Market, or, if the Principal Marketis not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the CommonStock are then traded; provided that “Trading Day” shall not include any day on which the Common Stock are scheduled to trade on suchexchange or market for less than 4.5 hours or any day that the Common Stock are suspended from trading during the final hour of trading onsuch exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market,then during the hour ending at 4:00:00 p.m., New York time).

(n) “Voting Stock” of a person means capital stock of such person of the class or classes pursuant to which the holders thereofhave the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers, trustees or othersimilar governing body of such person (irrespective of whether or not at the time capital stock of any other class or classes shall have or mighthave voting power by reason of the happening of any contingency).

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of the Issuance Date set out above.

DRONE AVIATION HOLDING CORP. /s/ Name: Title:

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EXHIBIT A

EXERCISE NOTICETO BE EXECUTED BY THE REGISTERED HOLDER

TO EXERCISE THIS WARRANT

DRONE AVIATION HOLDING CORP.The undersigned holder hereby exercises the right to purchase _________________ shares of Common Stock (the “Warrant

Securities”) of DRONE AVIATION HOLDING CORP. a Nevada corporation (the “Company”), evidenced by the attached Warrant (the“Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

1. Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as:

____________ a “ Cash Exercise ” with respect to _________________ Warrant Securities; and/or

____________ a “ Cashless Exercise ” with respect to _______________ Warrant Securities.

2. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Securities to be issued pursuanthereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with the termsof the Warrant.

3. Delivery of Warrant Securities. The Company shall deliver to the holder __________ Warrant Securities in accordance with theterms of the Warrant and, after delivery of such Warrant Securities, _____________ Warrant Securities remain subject to the Warrant.

Date: _______________ __, ______

Name of Registered Holder /s/ Name: Title:

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ACKNOWLEDGMENT

The Company hereby acknowledges this Exercise Notice and hereby directs the Company’s transfer agent to issue the above indicated numberof shares of Common Stock in accordance with the Transfer Agent Instructions dated [___ ____], 20[__] from the Company andacknowledged and agreed to by the Company’s transfer agent.

DRONE AVIATION HOLDING CORP. /s/ Name: Title:

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EXHIBIT B

ASSIGNMENT FORM

DRONE AVIATION HOLDING CORP.(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.) FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to Name: ________________________

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Address: ________________________ (Please Print)

Dated: _______________ __, ______Holder’s Signature: Holder’s Address: ________________________

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NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration orenlargement or any change whatever. Officers of corporations and those acting in a fiduciary or other representative capacity should file properevidence of authority to assign the foregoing Warrant.

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Exhibit 10.8

SUBLEASE AGREEMENT

This Sublease Agreement between Aerial Products Corporation (“APC”) and Lighter Than Air Systems Corp. (“LTAS”) is effective on the datefully executed by both parties ("Effective Date"), and is entered into by and between APC, a Florida corporation with offices at 11653 CentralParkway, Jacksonville, FL 32224 and LTAS, a Florida corporation with offices at 11653 Central Parkway, Jacksonville, FL 32224.

WHEREAS, APC entered into a lease agreement dated November 2, 2011 with Tolemac, Inc. (the “Lease”) for property consisting ofSuite 209 and 210 at 11653 Central Parkway, Jacksonville, FL 32224 (the “Leases Premises”).

WHEREAS, LTAS would like to sublease the Leased Premises from APC for the duration of the Lease.

NOW, THEREFORE, in consideration of the mutual promises and consideration contained herein, the parties agreed as follows:

1. APC hereby agrees to sublease the Leased Premises to LTAS for the duration of the Lease (December 31, 2014) on the terms set forthin the Lease.

2. LTAS hereby agrees to lease the Leased Premises from APC for the duration of the Lease on the terms set forth in the Lease and shallpay the rent required under such Lease directly to the Landlord each month no later than the date it is required to be paid in the Lease.

3. LTAS hereby agrees to comply with all of the obligations of APC as “Tenant” under the Lease and all of the terms and conditions setforth in the Lease.

4. This Agreement embodies the entire agreement between APC and LTAS with respect to the Sublease of the Leased Premises.

5. This Amendment shall be construed and governed by the laws of the State of Florida.

IN WITNESS WHEREOF, APC and LTAS have executed and delivered this Sublease Agreement effective as of the Effective Date. AERIAL PRODUCTS CORP. LIGHTER THAN AIR SYSTEMS CORP. By: By: Name: Kevin Hess Name: Felicia Hess Title: CEO Title: President Date: April 28, 2014 Date: April 28, 2014

Exhibit 10.9 INDEPENDENT CONTRACTOR AGREEMENT

THIS INDEPENDENT CONTRACTOR AGREEMENT (the "Agreement") is made and entered into this 29th day of July, 2013 (the "EffectiveDate") by and between Lighter Than Air Systems Corp., a Florida corporation duly organized under law and having a place of business at 11653Central Parkway, Jacksonville, FL 32224 (hereinafter referred to as “LTAS"), US Technik, Inc., a Colorado corporation duly organized underlaw and having a place of business at 3472 Research Parkway, Suite 104-235, Colorado Springs, CO 80920 (hereinafter referred to as"Contractor"), and World Surveillance Group Inc., a Delaware corporation duly organized under law and having a place of business at StateRoad 405, Building M6-306A, Room 1400, Kennedy Space Center, Florida 32815 (hereinafter referred to as “WSGI”, and together with LTAS,the “Companies”, and all together with the Contractor, the “Parties”).

WHEREAS, the Companies wish to engage Contractor to provide the services described herein and Contractor agrees to provide the services forthe compensation and otherwise in accordance with the terms and conditions contained in this Agreement.

WHEREAS, for purposes of this Agreement, the term “Contractor” shall include US Technik, Inc. and its successors and permitted assigns.

NOW THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which arehereby acknowledged, accepted and agreed to, the Parties, intending to be legally bound, agree to the terms set forth below.

1. TERM.

(a) Commencing as of the Effective Date and continuing until the date this Agreement is terminated (the “Termination Date”) by any Partypursuant to the terms hereto (the “Term”), Contractor agrees that it will provide the services set forth below in Sections 2, 3 and 4 to theCompanies.

(b) This Agreement and Contractor’s engagement hereunder may be terminated for any reason or for no reason by either the Companies orContractor upon 10 days written notice by either to the other.

(c) Upon termination of this Agreement, no Party shall have any further obligations under this Agreement, except (i) to pay any fees owingbefore such termination, (ii) for fees the Companies are obligated to pay Contractor during the Tail Period (as defined below), and (iii) for theobligations that by their terms survive this termination as noted in Section 16 hereof.

2. SALES.

(a) Duties. Contractor hereby agrees that, during the Term, it shall act as a non-exclusive sales contractor for the Companies throughout theUnited States and internationally in regard to its efforts to secure commercial contracts for the Companies’ products (the “SalesServices”). Contractor will introduce to the Companies prospective customers, and such prospective customers so introduced to the Companiesby Contractor shall be set forth on Exhibit A hereto (the “Contacts”), as shall be updated by the Parties from time to time. Contractor shall notprovide any non-public information or materials regarding the Companies or their respective parent or affiliated companies to any third partyunless such information or materials are approved in advance by the Companies and the third party has entered into a confidentiality or non-disclosure agreement reasonably satisfactory to the Companies. The Companies shall have the exclusive right to negotiate the terms andconditions of any proposed commercial transaction with a customer, but Contractor agrees to participate in such discussions or negotiations andprovide all other sales support services reasonably necessary to result in a contract if requested by the Companies as part of the Sales Serviceswith fees to be paid pursuant to Section 2(b) below. Contractor agrees to actively and diligently use its best efforts to promote the sale of theCompanies’ products during the Term.

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(b) Fees.

(i) Subject to the provisions hereof, if a Company enters into a contract for the sale of any of the Companies’ products with any of theContacts introduced to the Companies by Contractor pursuant to the performance of the Sales Services hereunder and listed on Exhibit A heretoeither during the Term of this Agreement or during the one (1) year period following the Termination Date (the “Tail Period”), such Companyshall pay Contractor fees as set forth on Exhibit B hereto. If Contractor receives a fee relating to a contract pursuant to this Section 2(b),Contractor agrees that no additional fee under Section 3(b) shall be paid to Contractor on or relating to the same contract.

(ii) The Company agrees to make the payments required by Section 2(b) hereof to Contractor within fifteen (15) business days of receiptby the Company of revenue pursuant to a contract with such a Contact, by wire transfer of funds to an account designated by Contractor onExhibit C attached hereto.

(iii) Contractor shall be entitled to reimbursement for all reasonable travel expenses, which were approved by the Companies prior to theirincurrence, incurred in the performance of the Sales Services, within fifteen (15) business days of the completion and submission of supportingappropriate written statements and receipts.

3. SALES SUPPORT SERVICES.

(a) Duties and Services. Contractor hereby agrees that, during the Term, it shall provide sales services and support to the Companies asreasonably requested by a Company or as reasonably necessary to lead to the sale of the Companies’ products in the form of, among other things,acting on the Companies’ behalf at marketing events, trade shows, and potential customer presentations and meetings, marketing of theCompanies’ products, and providing demonstrations of the Companies’ products (“Sales Support Services”) at the rate of $100 per hour.

(b) Fees.

(i) The Company agrees to make the payments required by Section 3(b) hereof to Contractor within fifteen (15) business days of thecompletion of the Sales Support Services by wire transfer of funds to an account designated by Contractor on Exhibit C attached hereto.

(ii) Contractor shall be entitled to reimbursement for all reasonable travel expenses, which were approved by the Companies prior to theirincurrence, incurred in the performance of the Sales Support Services, within fifteen (15) business days of the completion and submission ofsupporting appropriate written statements and receipts.

4. FIELD SERVICES AND TRAINING.

(a) Duties and Services. Contractor hereby agrees that, during the Term, it shall have a right of first refusal (as set forth below) to providepost contract, field services support, operations support and training to the Companies’ customers relating to all of the Companies’ products(“Field Services,” and together with Sales Services and Sales Support Services, the “Services”), which Field Services shall include, among otherthings, preparation of all training materials and manuals, delivery and initial training on products, advanced training programs, live productexercises, and/or operations support, on a project-by-project basis. Contractor hereby agrees that it shall not solicit for or provide any fieldservices support, operations support or training to customers of the Companies that are not Contacts, without the prior written consent of theCompanies.

(b) Process. In the event a Company receives a contract, including a contract from a Contact, for the provision by it of any post customercontract operations support, field services or training, such Company shall deliver to Contractor, at least 20 days prior to the date such servicesare proposed to be rendered (or such shorter period as the Company may have), a written SOW describing such services, including the terms andconditions thereof and the compensation therefor, and providing Contractor an option during the 10 day period following delivery of such noticeto agree to provide such services on the terms and conditions set forth therein. If Contractor declines such option or fails to respond to suchCompany within the time period set forth above, such Company may engage another entity to provide such services on substantially the termsand conditions set forth in the SOW.

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(c) Fees.

(i) The fees to be paid to Contractor for any Field Services shall be as set forth in the written SOW or as otherwise agreed between theParties. The Company agrees to make the payments required by Section 4(b) hereof to Contractor within fifteen (15) business days of thecompletion of the Field Services as set forth on the SOW, by wire transfer of immediately available funds to an account designated by Contractoron Exhibit C attached hereto.

(ii) Contractor shall be entitled to reimbursement for all reasonable travel expenses, which were approved by the Companies prior to theirincurrence, incurred in the performance of the Field Services, within fifteen (15) business days of the completion and submission of supportingappropriate written statements and receipts.

5. REPRESENTATIONS AND WARRANTIES.

(a) Contractor agrees that all Services will be rendered by it as an independent contractor and that this Agreement does not create anemployer-employee relationship, agency, partnership, co-venturer or other similar relationship between Contractor and the Companies, any law ofany jurisdiction to the contrary notwithstanding, and that the Companies will not incur any liability as a result of Contractor’s actionshereunder. Contractor shall at all times disclose that it is an independent contractor of the Companies and will not hold itself out as, or representto any third party that it is, an agent, partner, officer, director, co-venturer, representative or employee of the Companies in connection with thisAgreement or the performance of the Services hereunder or otherwise. Contractor shall have no power to enter into any agreement on behalf of,or otherwise bind, the Companies, and Contractor shall not enter into any contract or commitment on behalf of the Companies.

(b) Contractor represents and warrants to the Companies that all Services, work and deliverables to be performed hereunder shall beperformed by it in a professional and workmanlike manner in accordance with the highest industry standards and on a timely basis.

(c) Contractor represents and warrants to the Companyies that (i) it is under no contractual or other restrictions or obligations which areinconsistent with the execution of this Agreement; and (ii) the execution and performance of this Agreement will not violate any policies orprocedures of any other person or entity for which it performs any services concurrently with those performed herein.

(d) Contractor acknowledges that by the very nature of its relationship with the Companies, it, from time to time, may have knowledge ofor access to material non-public information of LTAS and WSGI, as such term is defined in the Securities Act of 1933, as amended. Contractoragrees and covenants that (i) it will not make any purchases, sales or other transactions in the securities of WSGI based on or while in possessionof any material non-public information, and (ii) it will use its best efforts to safeguard and prevent the dissemination of such material non-publicinformation to third parties.

(e) Contractor agrees that at any time and from time to time, upon the request of the Companies, to do, execute, acknowledge and deliver,or cause to be done, executed, acknowledged and delivered, all such further acts, documents and instruments as may be required to effect any ofthe transactions contemplated by this Agreement at the agreed upon rate as specified in Section 3(a).

(f) Contractor agrees that at all times in the performance of the Services, it will neither undertake nor cause, nor permit to be undertaken,any activity which either (i) is illegal under any laws, decrees, rules, orders or regulations in effect in either the United States or any other countryin which the Companies have a business interest; or (ii) would have the effect of causing the Companies to be in violation of any laws, decrees,rules, orders or regulations in effect in either the United States or any other country in which the Companies have a business interest. In theperformance of the Services, Contractor will at all times act in the best interests of the Companies.

6. CONFIDENTIALITY; PROPRIETARY RIGHTS. The Contractor agrees that during the Term and thereafter:

(a) The Contractor will not at any time, directly or indirectly, disclose or divulge any Confidential Information (as hereinafter defined),except as required in connection with the performance of the Services hereunder as authorized in advance by the Companies, and except to theextent required by law (but only after the Contractor has provided the Companies with reasonable notice and opportunity to take action againstany legally required disclosure). As used herein, “Confidential Information” means all trade secrets and all other information of a business,financial, marketing, technical, personnel or other nature relating to the business of the Companies including, without limitation, any customer orvendor lists developed by the Companies, investor information, prospective customer names developed by the Companies, financial statementsand projections, know-how, pricing policies, operational methods, methods of doing business, technical processes, policies, procedures,techniques, formulae, designs and design projects, know-how, specifications, inventions, computer hardware, software programs and sourcecode, data relating to the development, research, testing costs, marketing and uses of the Companyies’ products, business plans, budgets,financial information, and projects pertaining to the Companies and including any information of others that the Companies have agreed to keepconfidential; provided, that Confidential Information shall not include any information that has entered or enters the public domain through nofault of the Contractor.

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(b) Contractor shall make no use whatsoever, directly or indirectly, of any Confidential Information at any time, except asrequired in connection with the performance of the Services hereunder.

(c) Upon a Company’s request at any time and for any reason and upon termination of this Agreement, Contractor shallimmediately deliver to the Companies, or destroy if directed by the Companies, all materials (including all soft and hard copies) in its possessionor under its control which contain or relate to Confidential Information, all documents or other written materials generated by Contractor in theperformance of the Services hereunder and all other property of the Companies.

(d) Contractor agrees to keep the existence of this Agreement and any of its terms and conditions, as well as the negotiationsleading up to this Agreement, completely confidential and will not publicize or disclose the existence of or conditions, terms or content of thisAgreement in any manner, whether in writing or orally, to any person or entity, directly or indirectly, unless required to do so by law.

(e) All inventions, modifications, discoveries, designs, developments, improvements, processes, software programs, works ofauthorship, documentation, formulae, data, techniques, know-how, secrets or intellectual property rights or any interest therein (collectively, the“Developments”) made by the Contractor, either alone or in conjunction with others, at any time or at any place during the Term hereof, whetheror not reduced to writing or practice during such contracting period, which relate to the Companies’ current products or products underdevelopment shall be and hereby are the exclusive property of the Companies without any further compensation to the Contractor. In addition,without limiting the generality of the prior sentence, all such Developments which are copyrightable work by the Contractor are intended to be“work made for hire” as defined in Section 101 of the Copyright Act of 1976, as amended, and shall be and hereby are the property of theCompanies.

(f) The Contractor shall promptly disclose all such Developments to the Companies. If any such Development is not the propertyof the Companies by operation of law, this Agreement or otherwise, the Contractor will, and hereby does, assign to the Companies all right, titleand interest in such Development, without further consideration, and will assist the Companies and their nominees in every way, at theCompanies’ expense, to secure, maintain and defend the Companies’ rights in such Development. The Contractor shall sign all instrumentsnecessary for the filing and prosecution of any applications for, or extension or renewals of, letters patent (or other intellectual propertyregistrations or filings) of the USA or any foreign country that the Companies desire to file and relates to any such Development. The Contractorhereby irrevocably designates and appoints the Companies and their duly authorized officers and agents as such Contractor’s agent and attorney-in-fact (which designation and appointment shall be deemed coupled with an interest and shall survive the Contractor’s death or incapacity), to actfor and in the Contractor’s behalf to execute and file any such applications, extensions or renewals and to do all other lawfully permitted acts tofurther the prosecution and issuance of such letters patent, other intellectual property registrations or filings, or such other similar documents withthe same legal force and effect as if executed by the Contractor.

7. REMEDIES; APPLICABILITY TO AFFILIATED COMPANIES.

Without limiting the remedies available to a Party, the other Parties hereto acknowledge that a breach or a threatened breach of any of thecovenants contained herein could result in irreparable injury to such Party for which there might be no adequate remedy at law, and that, in theevent of such a breach or threat thereof, such Party shall be entitled to obtain a temporary restraining order and/or a preliminary injunction and apermanent injunction restraining the other Party from engaging in any activities prohibited herein or such other equitable relief as may be requiredto enforce specifically any of such covenants herein. For purposes of this Agreement, the term “Companies” shall include the Companies, each oftheir respective affiliated companies, subsidiaries and parent companies, as applicable, and their respective successors and assigns.

8. WAIVER. Any waiver by a Party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of anysubsequent breach of the same or any other provision hereof. All waivers by a Party shall be in writing.

9. SEVERABILITY; REFORMATION. In case any one or more of the provisions or parts of a provision contained in this Agreementshall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect anyother provision or part of a provision of this Agreement; and this Agreement shall, to the fullest extent lawful, be reformed and construed as ifsuch invalid or illegal or unenforceable provision, or part of a provision, had never been contained herein, and such provision or part reformed sothat it would be valid, legal and enforceable to the maximum extent possible. Without limiting the foregoing, if any provision (or part ofprovision) contained in this Agreement shall for any reason be held to be excessively broad as to duration, activity or subject, it shall be construedby limiting and reducing it, so as to be enforceable to the fullest extent compatible with then existing applicable law.

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10. ASSIGNMENT. The Companies shall have the right to assign their rights and obligations under this Agreement to a party whichassumes the Companies' obligations hereunder. Contractor shall not have the right to assign their rights or obligations under this Agreementwithout the prior written consent of the Companies, whether by operation of law or otherwise. This Agreement shall be binding upon and inureto the benefit of the Parties’ successors and permitted assigns.

11. HEADINGS. Headings and subheadings are for convenience only and shall not be deemed to be a part of this Agreement.

12. AMENDMENTS. This Agreement constitutes the entire agreement between the Parties hereto and replaces and supersedes all prioragreements relating to the subject matter hereof, between the Parties to this Agreement and their affiliates. This Agreement may be amended ormodified, in whole or in part, only by an instrument in writing signed by all Parties hereto.

13. NOTICES. Any notices or other communications required hereunder shall be in writing and shall be deemed given when delivered inperson, by nationally recognized overnight courier service, or when mailed, by certified or registered first class mail, postage prepaid, returnreceipt requested, addressed to the Parties at their addresses specified in the preamble to this Agreement or to such other addresses of which aParty shall have notified the others in accordance with the provisions of this Section 13; provided, however, the address set forth above forWSGI shall be used only for personal or courier delivery and if notice is to be sent by mail, it shall be sent to WSGI at Mail Code: SWC,Kennedy Space Center, FL 32899.

14. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall constitute an original and allof which shall be deemed a single agreement. Facsimile copies with signatures shall be given the same legal effect as an original.

15. GOVERNING LAW. This Agreement shall be construed in accordance with and governed for all purposes by the laws of State ofFlorida applicable to contracts executed and wholly performed within such jurisdiction, without regard to its internal choice of law analysis. Anydispute arising hereunder shall be referred to and heard only in an appropriate court of competent jurisdiction in Brevard County, Florida.

16. SURVIVAL. The provisions of Sections 1(c) and 5 through 16 of this Agreement shall survive the expiration of the Term or thetermination of this Agreement in accordance with the terms of such provisions or if no term is provided therein, indefinitely.

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EXECUTED effective as of the Effective Date.

LIGHTER THAN AIR SYSTEMS CORP. US TECHNIK, INC By: By: Name: Felicia Hess Name: Robert King Title: President Title: President WORLD SURVEILLANCE GROUP INC. By: Name: Glenn D. Estrella Title: President and CEO

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