Exhibit 10.2





Exhibit 10.2




EXECUTION COPY




EMPLOYMENT AGREEMENT




THIS EMPLOYMENT AGREEMENT (hereinafter this “Agreement”) is made this 27th
day of May 2011 (the “Effective Date”) between Homeland Security Capital Corporation, a
Delaware corporation (hereinafter the “Company”) and Michael T. Brigante, an individual
(hereinafter the “Executive”).



WHEREAS, the Company is engaged in the business of providing specialized technology-based
radiological, nuclear, environmental, disaster relief and electronic security solutions to
government and commercial customers (the “Business”);



WHEREAS, the Executive has been employed as the Company’s Senior Vice President of Finance and
Chief Financial Officer pursuant to an employment agreement dated May 15, 2007 (the “Prior
Employment Agreement”);



WHEREAS, the Company granted the Executive options to purchase 9,500,000 shares of common
stock of the Company (the “Options”) pursuant to stock option agreements dated July 10,
2006, May 10, 2007 and July 30, 2008 (the “Option Agreements”); and



WHEREAS, the Company desires to continue to employ the Executive as its Executive Vice
President of Finance and Chief Financial Officer, and the Executive desires to continue to be so
employed by the Company, on the terms and conditions hereinafter set forth;



NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and
agreements herein set forth, the Company and the Executive hereby agree as follows:



1. Employment. The Company hereby agrees to employ the Executive, and the Executive
hereby agrees to serve as the Executive Vice President of Finance and Chief Financial Officer of
the Company. The Executive shall report to the Company’s Chief Executive Officer (the
“CEO”) and agrees to perform such duties customary to that office and such additional
duties as shall from time to time reasonably be assigned to him by the CEO. The Executive further
agrees to devote all of his full working-time and attention to the performance of such duties and
to the promotion of the business and interests of the Company and its subsidiaries and affiliates
(which shall include time spent meeting any continuing professional education requirements), unless
otherwise approved in advance by the Company’s Board of Directors (the “Board”). The
Executive may serve on boards of for profit and not-for-profit companies, and participate in civic,
religious or charitable activities, provided that such outside activities do not interfere
materially with, or detract from, the performance of his duties to the Company. Prior to accepting
service on any company’s board, Executive must first receive prior approval of the Board, which
approval will not be unreasonably withheld. The Company hereby acknowledges and agrees to
Executive’s service with the entities listed on Appendix A hereto.



2. Term of Employment. The Executive’s employment hereunder shall be for a term of
one (1) year commencing on the Effective Date and ending on the day before the first anniversary of
the Effective Date (the “Expiration Date”), unless terminated earlier pursuant to
Section 4 of this Agreement (the “Term of Employment”). Thereafter, this Agreement
shall
automatically be renewed and the Term of Employment extended for additional consecutive terms
of one (1) year (each a “Renewal Term”), unless such renewal is objected to by either the
Company or the Executive upon ninety (90) days written notice prior to the commencement of the next
Renewal Term. In the event of renewal, the last day of each Renewal Term shall be deemed the new
Expiration Date and shall so extend the Term of Employment.


 


 









 





3. Compensation and Other Related Matters.



(a) Base Salary. As compensation for services rendered hereunder, effective June 1,
2011, the Executive’s salary shall increase to $250,000 annually (the “Base Salary”), which
shall accrue day to day and be paid in accordance with the Company’s then prevailing payroll
practices. The Base Salary may be increased from time to time at the discretion of the Company,
but it shall not be decreased without the prior written consent of the Executive.



(b) Bonus. At the sole discretion of the Company, the Executive shall be eligible to
receive a bonus for each fiscal year ending during the Term of Employment in an amount up to fifty
percent (50%) of the Executive’s Base Salary (the “Bonus”) based on the Executive and the
Company successfully achieving targeted annual performance objectives, which objectives will be
established by the Compensation Committee of the Board in consultation with the CEO and Executive,
in consultation with the Executive, within sixty (60) days following the start of each fiscal year.
In the event the Company changes its fiscal year (which is currently June 30th),
Executive shall be eligible to receive a pro-rated Bonus, if any, for any shortened fiscal year,
the numerator of which is the number of days in such shortened fiscal year and the denominator of
which is 365. The Bonus for each such fiscal year (including any shortened fiscal year) will be
paid no later than two and one-half (2 1/2) months following the end of such fiscal year. Except as
otherwise provided for in this Agreement, to receive such Bonus, the Executive must still be
employed with the Company on the date when the Bonus is payable and no event of Cause (as defined
below) shall have occurred.



(c) Special Bonus. The Company shall pay to the Executive a one-time payment in an
amount equal to $124,462.66 (the “Special Bonus”) on the first to occur of (i) December 31,
2011 and (ii) a Change of Control. If payment is made because of a Change of Control, the payment
will be paid to the Executive in a lump-sum amount within the five (5) day period following the
closing date of the Change of Control. Except as otherwise provided for in this Agreement, to
receive the Special Bonus, the Executive must still be employed with the Company on the date when
such Special Bonus is payable and no event of Cause shall have occurred.



As used herein, “Change of Control” means the date (i) that any one person (for
purposes herein, “person” includes an individual or entity), or more than one person acting as a
group, acquires (or has acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons), assets from the Company that have a total gross fair market
value equal to or more than forty percent (40%) of the total gross fair market value of all of the
assets of the Company immediately before such acquisition or acquisitions (which, for the sake of
clarity, includes the sale of the Company’s Safety and Ecology Corporation subsidiary); (ii) that
any one person, or more than one person acting as a group, is or becomes the beneficial owner,
directly or indirectly, of forty percent (40%) or more of the voting stock of the Company; or (iii)
of a consummation of a merger, consolidation, share exchange or similar form
of corporate reorganization (a “Business Combination”) of the Company with or into any
other entity other than a Business Combination in which the shares of the Company outstanding
immediately before such Business Combination are exchanged or converted into or constitute shares
which represent sixty (60%) or more of the surviving entity’s voting capital stock after such
Business Combination. Notwithstanding the foregoing, under no circumstances shall a Change of
Control occur under this Agreement if it results from the sale of the Company’s assets to an entity
in which more than fifty percent (50%) of the total voting power is owned by the Company’s
shareholders (individually or in the aggregate) who own (individually or in the aggregate), more
than fifty percent (50%) of the total voting power of the Company.


 


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(d) Options. As consideration for the Company entering into this Agreement, the
Executive agrees that he shall forfeit the Options and the Option Agreements will be terminated as
of the Effective Date; thereafter, the Option Agreements will be of no further force and effect and
the Executive shall not have any right to exercise the Options.



(e) Automobile Allowance. During the Term of Employment, the Company will pay to the
Executive a monthly automobile allowance in an amount equal to $500, which amount will be paid
pursuant to the Company’s prevailing payroll schedule and pro-rated for any partial months of
employment; provided, however, that payment of the automobile allowance will not commence until
after such time that the Executive is no longer using the Company provided vehicle.



(f) 401K Matching Contribution. The Company will make a matching contribution
annually to the Executive’s 401K account based on the amount of the Executive’s elective deferrals,
up to the maximum allowed under Section 401(k) of the Internal Revenue Code of 1986, as amended
(the “Code”), subject to and consistent with the terms of the governing plan document.



(g) Other Benefits. Executive shall be provided with health, life, dental, long term
care and disability insurance coverage and such other benefits and perquisites as are provided to
other senior executives of the Company, as amended from time to time. The Executive will be
entitled to six (6) weeks of vacation per year, which will accrue monthly. Any accrued but unused
vacation time in one calendar year will roll-over to the subsequent calendar year if the Agreement
is renewed.



(h) Expenses. The Executive will be reimbursed for all reasonable out-of-pocket
expenses actually incurred by him in the furtherance of his duties under this Agreement, including
travel and lodging to visit the Company’s headquarters (which shall include either (i) the use of
the corporate apartment in Washington, DC maintained by the Company as of the Effective Date or
(ii) if, following the Effective Date, the Company no longer maintains the corporate apartment,
payment of a monthly housing allowance in an amount that is no more than the Company’s cost of
maintaining the corporate apartment as of the date that the Company no longer maintains the
apartment) and other offices. Such expenses shall be reimbursed upon submission to the Company of
invoices containing original receipts for all such expenditures, and upon review by the Company
with respect to the reasonable nature thereof. All expense reimbursements shall be paid as soon as
administratively practicable.


 


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(i) Attorneys’ Fees. The Company will reimburse the Executive for
attorney’s fees and costs actually incurred by Executive in connection with the review of this
Agreement, up to an amount equal to $10,000, which will be paid to Executive within thirty (30)
days of Executive’s submission to the Company of invoice(s) evidencing the fees and costs.



4. Termination.



(a) Disability. The Company may terminate the Executive’s employment for Disability
upon ninety (90) days written notice. For purposes of this Agreement, “Disability” means a
determination by the Company in accordance with applicable law that as a result of a physical or
mental injury, illness, or impairment, Executive is unable to perform the essential functions of
his position with or without reasonable accommodation for a period of (i) ninety (90) consecutive
days, or (ii) one hundred twenty (120) days (which days need not be consecutive) in any one (1)
year period.



(b) Death. The Executive’s employment shall terminate immediately upon the death of
the Executive.



(c) Cause. The Company may terminate the Executive’s employment for “Cause”
on contemporaneous written notice upon a resolution duly adopted by the affirmative vote of not
less than a majority of the entire membership of the Board. “Cause” shall mean termination
based upon (i) a conviction with respect to any felony involving theft, fraud, dishonesty or
misrepresentation; (ii) any misappropriation, embezzlement or conversion of the Company’s or any of
its subsidiary’s or affiliate’s property; (iii) willful misconduct by the Executive in respect of
the Executive’s material duties or obligations under this Agreement; or (iv) the Executive’s
material breach of this Agreement, provided that if the Executive engages in the conduct set forth
in (iii) or (iv) herein, the Company shall first notify the Executive in writing and may only
terminate the Executive for Cause if the Executive fails to cure such conditions giving rise to
Cause, if curable, within thirty (30) days following his receipt of the written notice.



(d) Termination Without Cause. The Company shall have the right to terminate the
Executive’s employment without Cause at any time upon ninety (90) days prior written notice.



(e) Good Reason. The Executive may resign his employment for “Good Reason”.
“Good Reason” means that the Company (i) materially breached any of its obligations under
this Agreement; (ii) materially reduced the Executive’s Base Salary; (iii) materially reduced the
Executive’s duties or responsibilities or authority; or (iv) requires the Executive to work at a
location on a permanent basis that is more than thirty (30) miles from the location at which the
Executive provided the services as of the Effective Date; provided, however, that within ninety
(90) days of the occurrence of the conditions giving rise to a resignation for Good Reason, the
Executive provides written notice to the Company setting forth in reasonable detail the conditions
giving rise to Good Reason, the Company fails to cure the conditions within thirty (30) days of
receipt of the notice, and the Executive resigns within ninety (90) days following the Company’s
receipt of the notice.



(f) Resignation. The Executive may resign his employment without Good Reason with
sixty (60) days prior written notice to the Company.


 


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(g) Expiration. The Executive’s employment will terminate on the Expiration Date.



5. Compensation Upon Termination.



(a) Disability; Death. If during the Term of Employment the Executive’s employment
shall be terminated by the Company due the Executive’s Disability pursuant to Section 4(a),
or due to the Executive’s Death pursuant to Section 4(b), the Company shall pay to the
Executive (or his estate, as applicable) (i) his accrued but unpaid Base Salary and accrued but
unused vacation time up to the date of termination (the “Accrued Obligations”); (ii) an
amount equal to one (1) year of the Executive’s Base Salary at the rate in effect as of the
effective date of the Executive’s termination of employment (the “Termination Date”); (iii)
the Bonus, if any, that the Executive would have received had he remained employed with the Company
through the Expiration Date, multiplied by a fraction, the numerator of which is the number of days
Executive was actually employed in the fiscal year in the year of the Termination Date and the
denominator of which is 365 (the “Pro-Rated Bonus”), provided that the Company and/or the
Executive have met the performance objectives under the applicable plan, as determined by the
Company; (iv) any unpaid Bonus from the prior fiscal year (the “Prior Year Bonus”); (v) the
Special Bonus, if unpaid, (together with the Pro-Rated Bonus and the Prior Year Bonus referred to
collectively as the “Bonus Payments”); and (vi) in the case of a termination due to
Executive’s Disability, if Executive timely elects to continue his health and/or dental insurance
coverage pursuant to COBRA, that portion of the COBRA premium that it would pay if Executive were
an active employee with the same type of coverage (the “COBRA Premiums”), for a period of
one (1) year from the Termination Date (or if earlier, the date Executive is eligible for
comparable coverage with a subsequent employer). The foregoing amounts (with the exception of the
COBRA Premiums, which shall be paid by the Company to the insurance carriers) shall be paid in a
lump-sum on the first regularly scheduled payroll date following the Termination Date. Thereafter
the Company shall have no further obligation to the Executive under this Agreement. Any amounts
paid by the Company for the COBRA Premiums under this Agreement shall be recorded as additional
income pursuant to Section 6041 of the Code, and shall not be entitled to any tax qualified
treatment.



(b) For Cause; Without Good Reason. If during the Term of Employment the Company
terminates the Executive’s employment for Cause under Section 4(c) of this Agreement or the
Executive resigns without Good Reason under Section 4(f), the Company shall pay to the
Executive the Accrued Obligations, and thereafter the Company shall have no further obligation to
the Executive under this Agreement.



(c) Without Cause; For Good Reason. If during the Term of Employment the Company
terminates the Executive’s employment without Cause pursuant to Section 4(d) of this
Agreement, or the Executive resigns his employment for Good Reason under Section 4(e), the
Company shall pay the Executive (i) an amount equal to one (1) year of his Base Salary at the rate
in effect as of the Termination Date (without regard to any reduction in Base Salary that gave rise
to Good Reason); (ii) the Base Salary that the Executive would have received had he remained
employed through the Expiration Date (without regard to any reduction in Base Salary that gave rise
to Good Reason) (together with the amount set forth in (i) the “Severance”); (iii) the
Bonus Payments; (iv) the COBRA Premiums for the until the date that is one (1) year following the
Termination Date or if earlier, the date Executive is eligible



 


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for
comparable coverage with a subsequent employer; and (v) the Accrued Obligations. Payment of the
Severance, the Bonus Payments, and the COBRA Premiums are conditioned on the Executive executing a
general release of claims releasing all of his claims against the Company in a form reasonably
satisfactory to the Company (but which will not require Executive to release his rights under this
Agreement that are intended to survive Executive’s termination of employment or any vested rights
under any Company plan or arrangement) (the “Release”) and the Release becoming effective
and irrevocable prior to the sixtieth (60th) day following the Termination Date. The
Severance will be paid in a lump sum amount on the sixtieth (60th) day following the Termination
Date. The Bonus Payments will be paid when such bonuses would have been paid had the Executive
remained employed by the Company. The Accrued Obligations will be paid on the next regularly
scheduled payroll date following the Termination Date. Thereafter, the Executive acknowledges that
the Company shall have no further obligation to the Executive under this Agreement.
Notwithstanding the foregoing, if the Executive is at any time in breach of Sections 7 or 8
of this Agreement, the Company will have no obligations under this Section 5(c).



(d) Termination Following Expiration. If the Company terminates the Executive’s
employment without Cause, as defined in Section 4(d), or if the Executive resigns for Good
Reason, as defined in Section 4(e), following the Expiration Date, the Company shall (i)
pay to the Executive an amount equal to one (1) year of his Base Salary at the rate in effect as of
the Termination Date in a lump sum amount on the sixtieth (60th) day following the Termination
Date, provided the Release is effective and irrevocable prior such date, and (ii) pay to the
Executive the Accrued Obligations on the next regularly scheduled payroll date following the
Termination Date. Thereafter, the Executive acknowledges that the Company shall have no further
obligation to the Executive under this Agreement. Notwithstanding the foregoing, if the Executive
is at any time in breach of Sections 7 or 8 of this Agreement, the Company will have no
obligations under this Section 5(d).



6. Resignation from Officer Positions. Immediately upon termination of the
Executive’s employment for any reason, either by the Company or voluntarily by the Executive, the
Executive shall resign from any officer positions with the Company then held by the Executive.



7. Confidentiality and Restrictive Covenants.



(a) The Executive acknowledges that:



(i) the Business in which the Company is engaged is intensely competitive and that his
employment by the Company will require that he have access to and knowledge of confidential
information of the Company, including, but not limited to, certain/all of the Company’s products,
plans for creation, prototypes, acquisition or disposition of products or publications, expansion
plans, financial status and plans, marketing plans, products, improvements, formulas, designs or
styles, source code, software architecture, hardware and software configurations, method of
distribution, customer lists, product development plans, rules and regulations, personnel
information and trade secrets of the Company, all of which are of vital importance to the success
of the Company’s business (collectively, “Confidential Information”);


 


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(ii) the direct or indirect disclosure of any Confidential Information
could place the Company at a serious competitive disadvantage and could do serious damage,
financial and otherwise, to the Company’s business;



(iii) by his training, experience and expertise, the Executive’s services to the Company will
be special and unique; and



(iv) if the Executive leaves the Company’s employ to work for a competitive business, in any
capacity, it could cause the Company irreparable harm.



(b) Covenant Against Disclosure. The Executive therefore covenants and agrees that
all Confidential Information relating to the Business of the Company or any of its subsidiaries,
affiliates or customers shall be and remain the sole property and confidential business information
of the Company, free of any rights of the Executive. The Executive shall not make any use of the
Confidential Information and shall not disclose any Confidential Information to third parties,
except in the performance of his duties hereunder or with the prior written consent of the Company.



(c) Return of Company Documents. The Executive agrees that, upon any termination of
his employment with the Company or upon the Company’s demand, he will return all Confidential
Information in his possession, directly or indirectly, that is in written or other tangible form
(together with all duplicates thereof) and that he will not retain or furnish any such Confidential
Information to any third party, either by sample, facsimile, film, audio or video cassette,
electronic data, verbal communication or any other means of communication.



(d) Non-competition. The Executive agrees that, during the Term of Employment and,
following the termination of the Executive’s employment for any reason, during the period that is
equal to the sum of (i) one (1) year; and (ii) the period of time between the Termination Date and
ending on the Expiration Date (together with the Term of Employment, the “Restricted
Period”), the Executive shall not, directly or indirectly, own, manage, operate, control or
participate in the ownership, management or control of, or be connected as an officer, employee,
partner, director, or have any financial interest in, or aid or assist anyone else in the conduct
of, any entity or business which competes with the Business conducted by the Company or any of its
subsidiaries or affiliates within any area in which the Company or any of its subsidiaries or
affiliates conducts its business on the Termination Date. Notwithstanding the foregoing,
Executive’s (i) ownership of securities of a public company engaged in competition with the
Company’s Business not in excess of two percent (2%) of any class of such securities; or (ii)
ownership interest and/or position in any future special purpose acquisition corporations, shall
not be considered a breach of the covenants set forth in this Section 7(d).



(e) Further Covenant. During the Restricted Period, the Executive shall not, directly
or indirectly, take any of the following actions, and, to the extent the Executive owns, manages,
operates, controls, is employed by or participates in the ownership, management, operation or
control of any business, the Executive will use his best efforts to ensure that such business does
not take any of the following actions:



(i) persuade or attempt to persuade any customer of the Company or any of its subsidiaries or
affiliates to cease doing business with the Company or any of its
subsidiaries or affiliates, or to reduce the amount of business any customer does with the
Company or any of its subsidiaries or affiliates;


 


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(ii) solicit for himself or on behalf of an entity that competes with the Business of the
Company, the business of a customer of the Company or any of its subsidiaries or affiliates, or
solicit any such entity that was a customer of the Company or any of its subsidiaries or affiliates
within one (1) year prior to the termination of the Executive’s employment; and



(iii) persuade or attempt to persuade any employee of the Company or any of its subsidiaries
or affiliates to leave the employ of the Company or any of its subsidiaries or affiliates, or hire
or engage, directly or indirectly, any individual who was an employee of the Company or any of its
subsidiaries or affiliates during the one (1) year prior to the Executive’s termination of
employment.



8. Intellectual Property.



(a) Assignment. The Executive assigns, to the Company, without additional
compensation, all right, title and interest in all creations, inventions, ideas, designs,
copyrightable materials, trademarks, and other technology and rights (and any related improvements
or modifications), whether or not subject to patent or copyright protection (collectively,
“Inventions”), relating to any activities of the Company that are conceived or developed by
the Executive in the course of his employment, whether alone or with others and whether or not
conceived or developed during regular business hours, and if based on Confidential Information
after the termination of this Agreement for any reason. Such Inventions shall be the sole property
of the Company and, to the maximum extent permitted by applicable law, shall be deemed “works made
for hire” as the term is used in the United States Copyright Act.



(b) Disclosure. The Executive will promptly inform the Company of any such
Inventions. The Executive will (whether while employed by the Company or after the termination of
this Agreement), at the Company’s sole expense, execute such written instruments and do other such
acts as may be necessary in the reasonable opinion of the Company or its counsel to secure the
Company’s rights in the Inventions, including obtaining a patent, registering a copyright, or
otherwise (and the Executive irrevocably appoints the Company and any of its officers as your
attorney in fact to undertake such acts in his name). The Executive’s obligation to execute
written instruments and otherwise assist the Company in securing its rights in the Inventions will
continue after the termination of this Agreement for any reason.



(c) Sub-License. To the extent, if any, that the Executive retains any right, title
or interest with respect to any Inventions that he develops during his employment with the Company,
the Executive grants to the Company an irrevocable, paid-up, transferable, sub-licensable,
worldwide right and license (i) to modify all or any portion of such Inventions, including, without
limitation, the making of additions to or deletions from such Inventions, regardless of the medium
(now or hereafter known) into which such Inventions may be modified and regardless of the effect of
such modifications on the integrity of such Inventions, and (ii) to identify the Executive, or not
to identify the Executive, as one or more authors of or contributors to such Inventions or any
portion thereof, whether or not such Inventions or any portion thereof have been modified. The
Executive further waives any “moral” rights, or other rights with
respect to attribution of authorship or integrity of such Inventions that he may have under
any applicable law, whether under copyright, trademark, unfair competition, defamation, right of
privacy, contract, tort or other legal theory.


 


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9. Disputes.



(a)  Arbitration. The Executive and the Company will arbitrate any and all
controversies, claims or disputes arising out of or relating to this Agreement or the Executive’s
employment with the Company (“Claims”) before the American Arbitration Association
(“AAA”) in accordance with the AAA’s National Rules for the Resolution of Employment
Disputes. The Executive waives any right to a trial by jury in any controversy, claim or dispute
with the Company, including those that arise under any federal, state or local law, including
without limitation, claims of harassment, discrimination or wrongful termination under common law
or under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans
with Disabilities Act, the Age Discrimination in Employment Act, the Older Workers’ Benefit
Protection Act. This Section 9(a) shall not apply to claims by the Executive under Section
806 of the Corporate and Criminal Fraud Accountability Act of 2002, Title VIII of the
Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1514A, as amended.



(b) Administrative Claims. While this Agreement precludes the Executive from filing a
court action for any Claim against the Company, this Agreement does not prohibit the Executive from
filing an administrative charge with a local, state or federal administrative body.



(c) Injunctive Relief. Notwithstanding the agreement to arbitrate, a breach by the
Executive of his obligations under Section 7 or 8 of this Agreement would cause the Company
irreparable harm and no adequate remedy at law would be available in respect thereof. Accordingly,
if any dispute arises between the parties under Section 7 or 8, the parties shall not be
required to arbitrate such Claim under Section 9(a), but shall have the right to institute
judicial proceedings in any court of competent jurisdiction with respect to such dispute or claim
and may be entitled to relief enjoining such acts without the need to post a bond. If such
judicial proceedings are instituted, such proceedings shall not be stayed or delayed pending the
outcome of any arbitration proceeding under Section 9(a) of this Agreement. The Executive
and the Company consent to the exclusive jurisdiction of the United States District Court for the
Eastern District of Virginia (or if such court cannot exercise jurisdiction for any reason, to the
jurisdiction of the Virginia state courts encompassing Arlington County) for this purpose.
Further, the Executive and the Company waive any objections to the jurisdiction of such courts
based on improper or inconvenient forum.



(d) Attorneys’ Fees. In the event that either party commences a litigation,
arbitration or an administrative action against the other to enforce such party’s rights hereunder,
the prevailing party shall be entitled to recover from the non-prevailing party all reasonable
costs, expenses and fees, including reasonable attorneys’ fees, through all appeals, incurred in
prosecuting or defending such action.


 


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10. Market Standoff Agreement. The Executive agrees that if so requested by the
Company or by any representative of any underwriters in connection with any registration of the
offering of any securities of the Company under the Securities Act, the Executive shall not sell or
otherwise transfer any securities of the Company during the ninety (90) day period following
the effective date of a registration statement of the Company filed under the Securities Act of
1933, as amended.



11. Director’s and Officer’s Liability Insurance. During the Term of Employment and
thereafter, until such time as all applicable statutes of limitations have expired, the Company, or
any successor to the Company resulting from a Change of Control, shall keep in place a director’s
and officer’s liability insurance policy (or policies) providing coverage in an amount up to at
least $5,000,000.



12. Indemnification. The Executive shall be indemnified and held harmless by the
Company against all liabilities, damages, claims, lawsuits, judgments, settlements, fines, costs
and expenses, including reasonable attorneys fees (the attorney to be selected by Executive), and
other amounts actually and reasonably incurred by Executive in connection with any proceeding or
claim (or threatened proceeding or claim) arising by reason of Executive’s employment with the
Company, whether before, during or after the Term of Employment, in accordance with the
indemnification provisions of the Company’s Certificate of Incorporation and/or Bylaws as in effect
on the Effective Date, and otherwise to the fullest extent to permissible under the laws of the
state of incorporation, as may be amended from time to time.



13. Non-Disparagement. Executive agrees that he will not, whether during his
employment or thereafter, directly or indirectly, make or ratify any statement, public or private,
oral or written, to any person that disparages, either professionally or personally, the Company or
any of its subsidiaries or affiliates, past and present, and each of them, as well as its and their
trustees, directors, officers, members, managers, partners, agents, attorneys, insurers, employees,
stockholders, representatives, assigns, and successors, past and present, and each of them. The
Company agrees that during Executive’s employment and thereafter, it will not and will cause its
trustees, directors, officers, members, managers, partners, assigns and successors, past and
present, and each of them, not to, directly or indirectly, make or ratify any statement, public or
private, oral or written, to any person that disparages, either professionally or personally.
Notwithstanding the foregoing, nothing in this Agreement shall prohibit the Company or Executive
from making truthful statements when required by law.



14. Section 409A.



(a) To the extent that the payments and benefits to which the Executive is entitled in
connection with a termination of his employment (the “Separation Benefits”) constitute
non-qualified deferred compensation subject to Section 409A of the Code, the following rules shall
apply to the Separation Benefits: (i) Any termination of the Executive’s employment triggering
payment of the Separation Benefits must constitute a “separation from service” under Section
409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) before distribution of such benefits can
commence. To the extent that the termination of the Executive’s employment does not constitute a
separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as
the result of further services that are reasonably anticipated to be provided by the Executive to
the Company at the time the Executive’s employment terminates), any part of the Separation Benefits
that constitute non-qualified deferred compensation under Section 409A shall be delayed until after
the date of a subsequent event constituting a separation of service under Section 409A(a)(2)(A)(i)
of the Code



 


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and Treas. Reg. §1.409A-1(h). For purposes of clarification, this Section 14(a) shall
not cause any forfeiture of benefits on the Executive’s part, but shall only act as a delay until
such time as a “separation from service” occurs; (ii) if the Executive is a “specified employee”
(as that term is used in Section 409A and regulations and other guidance issued thereunder) on the
date his separation from service becomes effective, any part of the Separation Benefits that
constitutes non-qualified deferred compensation subject to Section 409A shall be delayed until the
earlier of (A) the business day following the six-month anniversary of the date his separation from
service becomes effective, and (B) the date of the Executive’s death, but only to the extent
necessary to avoid the adverse tax consequences and penalties under Section 409A. On the earlier
of (A) the business day following the six-month anniversary of the date his separation from service
becomes effective, and (B) the Executive’s death, the Company shall pay the Executive in a lump sum
the aggregate value of the non-qualified deferred compensation that the Company otherwise would
have paid the Executive prior to that date under this Agreement but for this Section; (iii)
it is intended that each installment of the payments and benefits provided in this Agreement in
connection with a termination of the Executive’s employment shall be treated as a “separate
payment” for purposes of Section 409A; and (iv) neither the Company nor the Executive shall have
the right to accelerate or defer the delivery of any such payments or benefits except to the extent
specifically permitted or required by Section 409A.



In the event any of Executive’s non-qualified deferred compensation is subject to a six-month
delay pursuant to this Section 14(a), the Company shall place immediately negotiable funds
into a “rabbi” trust in an amount equal to the cash payments that may be due (or will be due) to
Executive as a result of Executive’s termination of employment. Such trust shall be maintained
pursuant to a standard rabbi trust arrangement among the Company, Executive and an independent
trustee (reasonably acceptable to Executive) providing for the timely payment to Executive of the
amounts held in such trust in the event Executive becomes entitled thereto under the applicable
provisions of this Agreement (the (“Trust Agreement”). The Trust Agreement shall be
maintained until the payment to Executive of all sums held in the trust. This provision is subject
to the limitations imposed by Section 409A(b) of the Code. In addition, this provision will be
null and void if the establishment or maintenance of such a trust would result in the imposition of
a tax or penalty under Section 409A.



(b) If any of the reimbursements or in-kind benefits provided for under this Agreement are
subject to Section 409A and the rules and regulations thereunder, the following rules shall apply:
(i) in no event shall any such reimbursement be paid after the last day of the taxable year
following the taxable year in which the expense was incurred; (ii) the amount of such reimbursable
expenses incurred, or the provision of in-kind benefits, in one tax year shall not affect the
expenses eligible for reimbursement or the provision of in-kind benefits in any other tax year; and
(iii) the right to such reimbursement for expenses or provision of in-kind benefits is not subject
to liquidation or exchange for any other benefit.



(c) Notwithstanding any other provision of this Agreement to the contrary, in the event of any
ambiguity in the terms of this Agreement, such term(s) shall be interpreted and at all times
administered in a manner that avoids the inclusion of compensation in income under Section 409A, or
the payment of increased taxes, excise taxes or other penalties under Section 409A.



(d) The parties intend this Agreement to be in compliance with or otherwise
exempt from Section 409A. Executive acknowledges and agrees that Company does not guarantee
the tax treatment or tax consequences associated with any payment or benefit arising under this
Agreement, including but not limited to consequences related to Section 409A.


 


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15. No Mitigation or Off-Set. The Executive shall be under no obligation to seek
other employment after his termination of employment with the Company and the obligations of the
Company that arise upon the termination of his employment shall not be subject to mitigation or
off-set.



16. Section 280G.



(a) Excise Tax.



(i) In the event a Change in Control occurs and the Executive becomes entitled to any benefits
or payments in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code)
under this Agreement, or any other plan, arrangement, or agreement with the Company (the “Total
Payments”), and the Total Payments will be subject to the tax (the “Excise Tax”)
imposed by Section 4999 of the Code (or any similar tax that may hereafter be imposed), the
aggregate present value of the Payments (as defined below) under this Agreement shall be reduced
(but not below zero) to the Reduced Amount (as defined below) if reducing the Payments will provide
the Executive with a greater net after-tax amount than would be the case if no reduction was made.
The term “Payment” means any benefit or payment in the nature of compensation (within the
meaning of Section 280G(b)(2) of the Code) under this Agreement. The “Reduced Amount”
shall be an amount expressed in present value which maximizes the aggregate present value of
Payments under this Agreement without causing any Payment under this Agreement to be subject to the
Excise Tax, determined in accordance with Section 280G(d)(4) of the Code. The Company shall reduce
the Payments under this Agreement by first reducing Payments that are not payable in cash and then
by reducing cash Payments.



(b) Computation. In determining the potential impact of the Excise Tax, the Company
may rely on any advice it deems appropriate, including, but not limited to, the counsel of its
independent accounting firm. For purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amount of such Excise Tax:



(i) The amount of the Total Payments which shall be treated as subject to the Excise Tax shall
be equal to the amount of excess parachute payments within the meaning of Section 280G(b)(1) of the
Code, as determined by the Company’s independent accounting firm;



(ii) The value of any non-cash benefits or any deferred or accumulated payment or benefit
shall be determined by the Company’s independent accounting firm in accordance with the principles
of Sections 280G(d)(3) and (4) of the Code; and



(iii) The value of the non-competition covenants contained in this Agreement shall be taken
into account to reduce “parachute payments” to the maximum extent allowable under Section 280G of
the Code.



(iv) For purposes of the determinations under this Section 16, the Executive shall be
deemed to pay federal income taxes at the highest marginal rate of federal
income taxation in the calendar year in which the applicable payment is to be made, and state and
local income taxes at the highest marginal rate of taxation in the state and locality of the
Executive’s residence, net of the maximum reduction in federal income taxes which could be obtained
from deduction of such state and local taxes.


 


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17. Miscellaneous.



(a) Successors; Binding Agreement. This Agreement and the obligations of the Company
hereunder and all rights of the Executive hereunder shall inure to the benefit of the parties
hereto and their respective heirs, personal representatives, successors and assigns, provided,
however, that the duties of the Executive hereunder are personal to the Executive and may not be
delegated or assigned by him.



(b) Notice. All notices of termination and other communications provided for in this
Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand,
facsimile, overnight carrier, or mailed by United States registered mail, return receipt requested,
addressed as follows:




If to the Company:




Homeland Security Capital Corporation

1005 North Glebe Road, Suite 550

Arlington, Virginia 22201

Fax: (703) 528-7073

Attn: Board of Directors




With a copy to (which shall not constitute notice):




Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C.

The Chrysler Center

666 Third Avenue

New York, New York 10017

Fax: (212) 983-3115

Attn: Avisheh Avini, Esq.




If to the Executive:




Michael T. Brigante

17 Daniel Drive

Hillsborough, New Jersey 08844




With a copy to (which shall not constitute notice):




Becker, Glynn, Melamed & Muffly, LLP

299 Park Avenue

New York, New York 10171

Fax: (212) 888-0255

Attn: Bonnie Klugman, Esq.


 


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(c) or to such other address as either party may designate by notice to the other, which
notice shall be deemed to have been given upon receipt.



(d) Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware without regard to the conflict of law rules thereof.



(e) Waivers. The waiver of either party hereto of any right hereunder or of any
failure to perform or breach by the other party hereto shall not be deemed a waiver of any other
right hereunder or of any other failure or breach by the other party hereto, whether of the same or
a similar nature or otherwise. No waiver shall be deemed to have occurred unless set forth in
writing executed by or on behalf of the waiving party. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver shall operate only as to
the specific term or condition waived and shall not constitute a waiver of such term or condition
for the future or as to any act other than that specifically waived.



(f) Validity. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this Agreement, which
shall otherwise remain in full force and effect. Moreover, if any one or more of the provisions
contained in this Agreement is held to be excessively broad as to duration, scope or activity, such
provisions shall be construed by limiting and reducing them so as to be enforceable to the maximum
extent compatible with applicable law.



(g) Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the same instrument.



(h) Entire Agreement. This Agreement sets forth the entire agreement and understanding
of the parties in respect of the subject matter contained herein, and supersedes all prior
agreements (including, without limitation, the Prior Employment Agreement, which shall be of no
further force and effect as of the Effective Date), promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any officer, employee or
representative of either party in respect of said subject matter.



(i) Modifications. This Agreement may only be modified in a writing signed by both the
Company and the Executive.



(j) Headings Descriptive. The headings of the several paragraphs of this Agreement
are inserted for convenience only and shall not in any way affect the meaning or construction of
any of this Agreement.



(k) Capacity. The Executive represents and warrants that he is not a party to any
agreement that would prohibit him from entering into this Agreement or performing fully his
obligations hereunder.



(l) Survival. The parties agree that the obligations and rights set forth in
Section 5 and Sections 7 through and including Section 16 shall survive the
termination of this Agreement or the Executive’s employment for any reason.



[signature page follows]




 


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IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the date
first written above.



	 	 	 	 	 
	 	MICHAEL T. BRIGANTE

 	 
	 	/s/ Michael T. Brigante
 	 
	 
	 	HOMELAND SECURITY CAPITAL CORPORATION

 	 
	 	By:  	/s/ C. Thomas McMillen
 	 
	 	 	Name:  	C. Thomas McMillen 	 
	 	 	Title:  	Chief Executive Officer 	 




 


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