Document:

amended
and restated EMPLOYMENT AGREEMENT

 

This Amended and Restated
Employment Agreement (the “Agreement”) is made and entered into on this 19th day of April, 2012 (the “Effective
Date”), by and between Cyalume Technologies, Inc., a Delaware corporation (the “Company”), and Michael
Bielonko (“Employee”).

 

WHEREAS, the Company
and Employee are parties to that certain Employment Agreement, dated May 15, 2009, as amended on September 1, 2011 (the “Original
Agreement”).

 

WHEREAS, the Company
and Employee desire to amend and restate the Original Agreement to modify certain of the terms and conditions set forth therein.

 

WHEREAS, the Company
desires to continue to employ Employee as Chief Financial Officer (CFO) of the Company, and Employee desires to continue such employment
upon the terms and conditions set forth herein.

 

NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows:

 

		1.	TERM. This Agreement shall be for an initial term of three (3) years, beginning on the Effective
Date. The Agreement shall continue for successive one-year periods thereafter unless and until terminated by either party upon
thirty (30) days’ written notice prior to the Agreement’s anniversary/expiration date, or until terminated pursuant
to Section 8 of this Agreement.

 

		2.	DUTIES OF EMPLOYEE.

 

		(a)	Duties. Employee shall be employed as CFO. Employee’s duties shall be such executive,
managerial, administrative, and professional duties as are commensurate with the position of CFO, and as shall be assigned by the
President and Chief Operating Officer or the Board of Directors of the Company, or by their authorized designees. Employee may
delegate duties to other employees of the Company as he reasonably determines is in the best interest of the Company, consistent
with the general authority and power given to him hereunder. The principal place of employment of Employee shall be at the Company’s
executive offices in West Springfield, Massachusetts.

 

		(b)	Exclusive Employment. Employee shall devote the whole of his business time, attention and
abilities to carrying out his duties hereunder.

 

		(c)	Loyal and Conscientious Performance. Employee agrees that to the best of his ability and
experience, and in compliance with all applicable laws and the Company’s policies, Certificate of Incorporation and Bylaws,
as they may be amended from time to time, he will at all times loyally and conscientiously perform all the duties and obligations
required of him by the terms of this Agreement. Employee further agrees he shall use his best efforts to promote the interests
and reputation of the Company and its affiliates and not do anything which is to the detriment of the Company or its affiliates.

 

    	 

    	 

    

 

		3.	COMPENSATION AND BENEFITS.

 

		(a)	Salary. For all the services to be rendered by Employee in any capacity hereunder, the Company
shall pay Employee, in equal installments consistent with the Company’s practices for its employees, salary and compensation
as set forth in Schedule 1 attached to this Agreement and incorporated herein. The Company shall have the ability to withhold
from the compensation otherwise due to Employee under this Agreement any amounts required to be withheld from compensation from
time to time under applicable law.

 

		(b)	Severance Benefits.

 

		(i)	In the event Employee’s employment with the Company is terminated by the Company other than
as a result of death, disability (as defined in Section 8(a)(ii)), retirement or for “cause” (as defined in Section
8(a)(iii)), or if Employee’s employment with the Company is terminated by Employee for the reason set forth in Section 8(d),
and upon execution by Employee of a separation agreement prepared by the Company within thirty (30) days of the date of termination
of Employee’s employment, the Company will pay Employee, at normal payroll intervals for six (6) months, a sum equal to Employee’s
annual Base Salary in effect at the time of termination hereunder, less applicable deductions and withholdings.

 

		(ii)	If, upon a Change of Control or within twelve (12) months following a Change of Control, Employee’s
employment is terminated without “cause” or if Employee terminates his employment for Good Reason, and upon execution
by Employee of a separation agreement prepared by the Company within thirty (30) days of the date of termination of Employee’s
employment, Employee will be entitled to receive, in addition to the severance benefit set forth in Section 3(b)(i), a severance
benefit equal to six (6) months of his Base Salary, less applicable deductions and withholdings, payable in full on the date of
Employee’s termination. For purposes of this provision, the following definitions will apply:

 

		(A)	A “Change of Control” shall mean (1) any consolidation, merger or amalgamation of the
Company with or into any other corporation whereby the voting shareholders of the Company immediately prior to such event receive
less than fifty percent (50%) of the voting shares of the consolidated, merged or amalgamated corporation; (2) a sale by the Company
of all or substantially all of the Company’s assets; or (3) any transaction or series of transactions having, directly or
indirectly, the same effect as any of the foregoing.

 

		(B)	A termination for “cause” shall mean those reasons defined in Sections 8(a)(i), 8(a)(ii)
and 8(a)(iii).

 

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		(C)	A termination for “Good Reason” shall mean (1) a material diminution in Employee’s
title or duties or assignment to Employee of materially inconsistent duties; (2) a material reduction in Employee’s Base
Salary except for reductions applicable to all management; (3) a relocation of Employee’s principal place of employment of
a distance in excess of fifty (50) miles unless such relocation is effected at the request of Employee or with Employee’s
approval, or (4) a material breach by the Company of a material term of this Agreement. For purposes of this Agreement, Good Reason
shall not be deemed to exist unless Employee’s termination of employment for Good Reason occurs within ninety (90) days following
the initial existence of one of the conditions specified in clauses (i) through (iii) above, Employee provides the Company with
written notice of the existence of such condition within ninety (90) days after the initial existence of the condition, and the
Company fails to remedy the condition within thirty (30) days after its receipt of such notice.

 

		(iii)	In the event that Employee elects to terminate this Agreement for any reason other than that set
forth in Sections 3(b)(ii)(C) or 8(d), or in the event that this Agreement is terminated due to Employee’s death or disability,
the Company shall not be obligated to pay to Employee any severance payments whatsoever and Employee shall be entitled only to
that Base Salary and those benefits which he has earned through the date of such termination.

 

		(c)	Fringe Benefits. So long as Employee remains in the employ of the Company, Employee shall
be provided those benefits set forth in Schedule 1 to this Agreement. Employee shall also receive such additional benefits
as may be authorized from time to time by the Company’s Board of Directors.

 

		4.	NONCOMPETITION BY EMPLOYEE.

 

		(a)	During the term of this Agreement and for a period of two (2) years after Employee has ceased to
be employed by Company for any reason, Employee shall not, without the prior written consent of a duly authorized officer of Company,
directly or indirectly (i) engage in the business of, or (ii) assist or have an interest in (whether as proprietor, partner, investor,
stockholders, officer, director or any type of principal whatsoever), or (iii) enter the employment of or act as an agent, advisor,
or consultant to any person, firm, partnership, association, corporation, business organization, entity or enterprise that is,
or is to become, directly or indirectly, engaged in any business actually or potentially competitive with that of Company in any
area or territory in which Company offers its services or products.

 

		(b)	During the term of this Agreement, and for a period of two (2) years after Employee has ceased
to be employed by Company for any reason, Employee shall not, without the prior written consent of a duly authorized officer of
Company, solicit from any person, company, firm or organization, or any affiliate of the foregoing, which was or is a client or
associated firm of Company or which Company was soliciting as a client or associated firm of Company during any of the twelve (12)
months immediately preceding the termination or expiration of the Agreement, any business substantially similar to that done by
Company, including but not limited to any business Employee was soliciting or on which he worked while employed by Company.

 

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		5.	CONFIDENTIALITY. Employee acknowledges, understands and agrees that all trade secrets and
information relating to the business of the Company and/or its affiliates, including without limitation, procedures, product information,
manufacturing techniques or processes, expertise, records, customer or prospect lists and information, vendor lists and information,
supplier lists and information, internal operating forms, financial information or accounting methods, systems, books, manuals,
employee information, any confidential information concerning the business, the Company, its affiliates, or the business, policies
or operations of the business, the Company or its affiliates which Employee may have learned, possessed or controlled on or prior
to the date hereof or which Employee may learn, possess or control during the term of Employee’s continued employment by
the Company or any of its affiliates (as an employee, consultant, agent or otherwise) (collectively, “Trade Secrets”)
are confidential and shall remain the sole and exclusive property of the Company and its affiliates. Trade Secrets include both
written information and information not reduced to writing. Except as may be required pursuant to any law or the order of a court,
or except as may be public knowledge (which shall not have become public knowledge as a result of any action of Employee), Employee
shall not, at any time, retain, duplicate, remove from the business premises of Company or any of its affiliates, make use of,
other than in the ordinary course of fulfilling his duties as an employee of the Company, divulge or otherwise disclose, directly
or indirectly, any Trade Secrets. Employee shall not publish or disclose, and shall exercise his best efforts to prevent others
from publishing or disclosing, any Trade Secrets and he shall not use or attempt to use any such knowledge or information which
he may have or acquire in any manner which may injure or cause loss, whether directly or indirectly, to the Company or its affiliates
or use his personal knowledge or influence over any customers, clients, suppliers or contractors of the Company or its affiliates
so as to take advantage of the Company’s or its affiliate’s trade or business connections or utilize information confidentially
obtained by him.

 

		6.	non-solicitation. Employee hereby covenants
and agrees that, at all times during his employment with the Company and for a period of two (2) years immediately following his
termination for any reason, Employee shall not employ or seek to employ any person employed at the time by the Company or any of
its affiliates, or otherwise engage or entice, either directly or indirectly, such person to leave such employment.

 

		7.	violation of agreement.

 

		(a)	The restrictions set forth in Sections 4, 5 and 6 shall extend to any and all activities of Employee,
whether alone or together with or on behalf of or through any other person or entity.

 

		(b)	Employee’s obligations under Sections 4, 5 and 6 shall survive termination of this Agreement
and of Employee’s employment with the Company.

 

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		(c)	Employee acknowledges that the restrictions contained in Sections 4, 5 and 6, in view of the nature
of the business in which Company is engaged, are reasonable and necessary to protect the legitimate interests of Company. Employee
understands that the remedies at law for his violation of any of the covenants or provisions of Sections 4, 5 and 6 will be inadequate,
that such violations will cause irreparable injury within a short period of time, and that Company shall be entitled to preliminary
injunctive relief and other injunctive relief against such violation. Such injunctive relief shall be in addition to, and in no
way in limitation of, any and all other remedies that Company shall have in law and equity for the enforcement of those covenants
and provisions. Employee further acknowledges that should he violate any of the covenants or provisions of Sections 4, 5 and 6,
he will reimburse Company for its reasonable costs and attorneys’ fees incurred to enforce the terms of this Agreement.

 

		8.	TERMINATION.

 

		(a)	Employee’s employment hereunder may be terminated by the Company immediately upon the occurrence
of any of the following events, and the Company shall have no obligations to Employee for any period after the effective date of
such termination, except vested benefits or as otherwise provided in Section 3 herein:

 

		(i)	The death of Employee.

 

		(ii)	A mental or physical illness or injury that prevents Employee from performing his duties hereunder
for a period of 90 consecutive days or for 120 days in any 360 day period, or Employee has been declared by a court of competent
jurisdiction to be mentally incompetent or incapable of managing his affairs.

 

		(iii)	For “cause” which, for the purposes of this Section, shall mean:

 

		(A)	Continued neglect or failure to perform his duties and responsibilities; or

 

		(B)	Formally being charged, either criminally or civilly, with committing fraud, misappropriation or
embezzlement, whether or not in the performance of Employee’s duties as an employee of the Company; or

 

		(C)	Violations of any law which violation materially affects Employee’s performance of his duties
to the Company; or

 

		(D)	The conviction of, or plea of guilty or nolo contendere to, a felony or crime involving moral turpitude;
or

 

		(E)	Willfully engaging in conduct materially injurious to the Company or its affiliates; or

 

		(F)	Diverting any business opportunity of the Company or its affiliates for Employee’s direct
or indirect personal gain; or

 

		(G)	Failure to observe or perform the covenants and agreements contained in this Agreement, including
but not limited to those contained in Sections 4, 5 and 6 of this Agreement.

 

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		(b)	Employee’s employment hereunder may be terminated at any time upon the mutual written agreement
of Employee and the Company.

 

		(c)	Employee’s employment hereunder may be terminated by either party with thirty (30) days of
written notice thereof. Notwithstanding the foregoing, if Employee’s employment hereunder is terminated without “cause”
during the initial term of this Agreement, Employee shall be paid any applicable severance benefits as set forth in Section 3(b),
less applicable deductions and withholdings.

 

		(d)	Employee may terminate his employment hereunder for Good Reason as defined in Section 3(b)(ii)(c).

 

		(e)	Except as may otherwise be set forth herein, in the event of termination of Employee’s employment
by the Company as permitted under clause (a) of this Section, Employee shall be entitled only to his Base Salary and other compensation
and benefits earned through the date of termination.

 

		(f)	Upon the termination of his employment hereunder for any reason whatsoever, Employee shall immediately
deliver to the Company all documents, statistics, accounts, records, programs and other items of whatever nature or description
(the “Documents”) which may be in his possession or under his control which relate in any way to the Trade Secrets
or the business or affairs of the Company or of any of its affiliates, and no copies of any such Documents or any part thereof
shall be retained by him.

 

		(g)	In the event of the termination of Employee’s employment under this Agreement, Employee shall
be deemed to have resigned from all positions held in the Company. Upon request of the Company, Employee shall promptly sign any
and all documents reflecting such resignations as of the date of termination of his employment.

 

		9.	REPRESENTATIONS. Employee hereby represents
and warrants that this Agreement constitutes his valid and binding obligation enforceable in accordance with its terms and the
execution, delivery and performance of this Agreement does not violate any agreement, arrangement or restriction of any kind to
which Employee is a party or by which he is bound.

 

		10.	MISREPRESENTATION. Neither party hereto shall
knowingly at any time make any untrue statement in relation to the other or any of their affiliates and in particular Employee
shall not after the termination of his employment hereunder wrongfully represent himself as being employed by or connected with
the Company or any affiliate of the Company.

 

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		11.	REIMBURSEMENT OF EXPENSES. The Company shall
reimburse Employee for all ordinary and necessary out-of-pocket expenses reasonably incurred by Employee on behalf of the business
of the Company. Employee agrees that expense reports must be submitted to obtain reimbursement of expenses as well as presentation
of such supporting documentation as the Company may reasonably require. Employee further agrees to submit with expense reports
such records and logs as may be required by the relevant taxing authorities for the substantiation of each such business expense
as a deduction on the Company’s income tax returns. Any reimbursements by the Company to Employee of any eligible expenses
under this Agreement that are not excludable from Employee’s income for Federal income tax purposes (the “Taxable
Reimbursements”) shall be made by no later than the earlier of the date on which they would be paid under the Company’s
normal policies and the last day of the taxable year of Employee following the year in which the expense was incurred. The amount
of any Taxable Reimbursements to be provided to Employee, during any taxable year of Employee shall not affect the expenses eligible
for reimbursement in any other taxable year of Employee. The right to Taxable Reimbursement shall not be subject to liquidation
or exchange for another benefit.

 

		12.	INVENTIONS, ETC.

 

		(a)	It shall be part of the normal duties of Employee at all times to consider in what manner and by
what new methods or devices the products, services, processes, equipment or systems of the Company or any of its affiliates with
which he is concerned or for which he is responsible might be improved, and promptly to give to the President of the Company or
Board of Directors full details of any invention or improvement which he may from time to time make or discover in the course of
his duties, and to further the interests of the Company with regard thereto. Subject only to any contrary provisions of the laws
of the United States or the Commonwealth of Massachusetts, all such materials, inventions, improvements, methods, products, services,
equipment or systems shall be deemed to be “works made for hire”, and to the extent such items are not works made for
hire, Employee hereby irrevocably grants and assigns such materials, inventions, improvements, methods, products, services, equipment
or systems to the Company which shall be entitled, free of charge, to the sole ownership of any such invention or improvement.

 

		(b)	Employee shall, if and when required so to do by the Company, at the expense of the Company, apply
or join with the Company in applying for patents or other protection in any part of the world for any such discovery, invention
or process as aforesaid and shall at the expense of the Company, execute and do or cause to be done all instruments and things
reasonably necessary for vesting the said patent or other protection when obtained and all right, title and interest to and in
the same in the Company or in such other person as the Company may designate.

 

		(c)	For the purpose of this clause Employee hereby irrevocably authorizes the company as his attorney
in his name to execute any documents or take any actions which are required in, order to give effect to the provisions of this
Section and the Company is hereby empowered to appoint and remove at its pleasure any person as agent and substitute for and on
behalf of the Company in respect of all or any of the matters aforesaid.

 

		13.	NOTICES. Any notices to be given hereunder
by either party to the other may be effectuated either by personal delivery in writing, by electronic facsimile transmission, by
commercial overnight courier or by mail, postage prepaid, with return receipt requested. Notices shall be addressed to the parties
as follows:

 

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If to the Company:

 

Cyalume Technologies, Inc.

96 Windsor Street

West Springfield, MA, 01089

Attention: President

 

with a copy to:

 

Greenberg Traurig, P.A.

401 East Las Olas Blvd., Suite 2000

Fort Lauderdale, FL 33301

Attention: Bruce I. March, Esq.

 

If to Employee:

 

Michael Bielonko

68 Wilks Pond Road

Berlin, CT 06037

 

or to such other addresses as either
the Company or Employee may designate by written notice to each other. Notices delivered personally shall be deemed duly given
on the date of actual receipt; mailed notices shall be deemed duly given as of the fifth (5th) day after the date so
mailed. Notices hereunder may be delivered by electronic facsimile transmission (fax) if confirmation by sender is made within
three (3) business days by mail or personal delivery.

 

		14.	ATTORNEYS’ FEES. If any party shall
bring an action to enforce this Agreement, each party will bear her/his/its own attorneys’ fees and costs.

 

		15.	WAIVER OF BREACH. The waiver by any party
to a breach of any provision in this Agreement cannot operate or be construed as a waiver of any subsequent breach by a party.

 

		16.	SEVERABILITY. The invalidity or unenforceability
of any particular provision in this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed
in all respects as if the invalid or unenforceable provision were omitted.

 

		17.	ENTIRE AGREEMENT. This Agreement constitutes
the entire agreement between the parties hereto with respect to the subject matter hereof and thereof and supersedes and cancels
any and all previous agreements, written and oral, regarding the subject matter hereof between the parties hereto, including but
not limited to the Original Agreement. Employee hereby acknowledges that any compensation or benefits Employee otherwise may have
been entitled to under the Original Agreement are hereby waived. This Agreement shall not be changed, altered, modified or amended,
except by a written agreement signed by both parties hereto.

 

		18.	GOVERNING LAW. This Agreement shall be interpreted,
construed and governed according to the laws of Delaware, without giving effect to principles of conflicts or choice of laws of
Delaware or of any other jurisdiction.

 

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		19.	CONSENT TO JURISDICTION. Employee hereby
irrevocably submits to the jurisdiction of any court of Delaware or any federal court sitting in the State of Delaware over any
suit, action or proceeding arising out of or relating to this Agreement. Employee hereby agrees that a final judgment in any such
suit, action or proceeding brought in any such court, after all appropriate appeals, shall be conclusive and binding upon him.

 

		20.	SUCCESSORS AND ASSIGNS. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their successors, permitted assigns, legal representatives and
heirs, but neither this Agreement nor any rights hereunder shall be assignable by any of its parties except as permitted by this
Section. Employee agrees that this Agreement may be assigned or transferred by operation of law by the Company upon a sale, merger,
reorganization or other business combination of or involving the Company; provided, however, that (i) such assignee or other successor
to the Company shall assume all obligations of the Company hereunder and (ii) that Employee shall perform all services required
pursuant to this Agreement for any such assignee or successor.

 

		21.	MISCELLANEOUS. The Section headings of this
Agreement are for convenience of reference only and do not form a part hereof and do not in any way modify, interpret, or construe
the intentions of the parties. This Agreement may be executed in one or more counterparts and all such counterparts shall constitute
one and the same instrument.

 

		22.	RIGHT OF SET-OFF. The Company may at any
time offset against any compensation or other remuneration due or to become due to Employee, or anyone claiming through or under
Employee, any debt or debts due or to become due from Employee to the Company.

 

		23.	SECTION 409A COMPLIANCE

 

		(a)	General. It is the intention of both the Company and Employee
that the benefits and rights to which Employee could be entitled pursuant to this Agreement comply with Section 409A of the Code
and the Treasury Regulations and other guidance promulgated or issued thereunder (“Section 409A”), to the extent
that the requirements of Section 409A are applicable thereto, and the provisions of this Agreement shall be construed in a manner
consistent with that intention. If Employee or the Company believes, at any time, that any such benefit or right that is subject
to Section 409A does not so comply, it shall promptly advise the other and shall negotiate reasonably and in good faith to amend
the terms of such benefits and rights such that they comply with Section 409A (with the most limited possible economic effect on
Employee and on the Company).

 

		(b)	Distributions on Account of Separation from Service. If and to the extent required to comply with
Section 409A, no payment or benefit required to be paid under this Agreement on account of termination of Employee’s employment
shall be made unless and until Employee incurs a “separation from service” within the meaning of Section 409A.

 

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		(c)	6 Month Delay for Specified Employees.

 

		(i)	If Employee is a “specified employee”, then
no payment or benefit that is payable on account of Employee’s “separation from service”, as that term is defined
for purposes of Section 409A, shall be made before the date that is six months after Employee’s “separation from service”
(or, if earlier, the date of Employee’s death) if and to the extent that such payment or benefit constitutes deferred compensation
(or may be nonqualified deferred compensation) under Section 409A and such deferral is required to comply with the requirements
of Section 409A. Any payment or benefit delayed by reason of the prior sentence shall be paid out or provided in a single
lump sum at the end of such required delay period in order to catch up to the original payment schedule.

 

		(ii)	For purposes of this provision, Employee shall be considered
to be a “specified employee” if, at the time of his or her separation from service, Employee is a “key employee”,
within the meaning of Section 416(i) of the Code, of the Company (or any person or entity with whom the Company would be considered
a single employer under Section 414(b) or Section 414(c) of the Code) any stock of which is publicly traded on an established
securities market or otherwise.

 

		(d)	No Acceleration of Payments. Neither the Company nor Employee, individually or in combination,
may accelerate any payment or benefit that is subject to Section 409A, except in compliance with Section 409A and the provisions
of this Agreement, and no amount that is subject to Section 409A shall be paid prior to the earliest date on which it may be paid
without violating Section 409A.

 

		(e)	Treatment of Each Installment as a Separate Payment. For purposes of applying the provisions of
Section 409A to this Agreement, each separately identified amount to which Employee is entitled under this Agreement shall be treated
as a separate payment. In addition, to the extent permissible under Section 409A, any series of installment payments under this
Agreement shall be treated as a right to a series of separate payments.

  

[signatures
appear on following page]

 

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 IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year first above written.

 

		
        CYALUME TECHNOLOGIES, INC., a Delaware

        corporation

	 	 	 
	 	By:   	/s/ Zivi Nedivi
	 	 	 
	 	Name:   	Zivi Nedivi
	 	 	 
	 	Title:   	Chief Executive Officer
	 	 
	 	MICHAEL BIELONKO
	 	 
	 	/s/ Michael Bielonko

 

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SCHEDULE 1

 

TO EMPLOYMENT AGREEMENT OF

Michael Bielonko

  

		1.	Salary. The Company shall pay Employee an annual base salary (“Base Salary”)
of one-hundred eighty-seven thousand dollars ($187,000.00), at normal payroll intervals and less applicable deductions and withholdings,
which shall be subject to annual adjustments at the sole discretion of the Board of Directors of the Company.

 

		2.	Cash Bonus and Equity Bonus Awards

 

Cash Bonus. With
respect to each calendar year during the Term, Employee shall be eligible to receive a cash bonus based on the satisfaction of
certain performance goals to be established by the Compensation Committee of the Board of Directors of the Company within the first
90 days of each such calendar year. For purposes of this Agreement, cash bonuses shall be deemed to mean “Performance Unit
Awards” granted under the Cyalume Technologies Holdings, Inc. 2009 Omnibus Securities and Incentive Plan, as may be amended
from time to time (the “Plan”) and shall be deemed to be subject to the terms and conditions of such Plan and
payable thereunder. Any cash bonuses payable to Employee shall be paid in the calendar year immediately following the calendar
year to which such cash bonuses were earned. With respect to the first calendar year during the Term of this Agreement, the following
shall apply:

 

	Performance Unit Awards (Cash Bonuses) (Up to 25% of Base Salary)
	Criteria	 	Maximum % of
 Total Award	 	Award
	Revenue goals	 	50	 	100% if the Company achieves 100% of Revenue goal; 80% if the Company achieves 80% of Revenue goal.  If the Company achieves percentages of its budgeted Revenue between the limits above, the bonus will be awarded pro rata.
	 	 	 	 	 
	EBITDA goals	 	50	 	100% if the Company achieves 100% of EBITDA goal; 80% if the Company achieves 80% of EBITDA goal.  If the Company achieves percentages of its budgeted EBITDA between the limits above, the bonus will be awarded pro rata.

 

If Employee’s employment
is terminated by the Employer other than for “cause”, Employee shall be entitled to receive a prorated bonus for the
calendar year in which Employee terminated employment and, if applicable, the prior calendar year, based on the number of full
calendar months such Employee was employed by the Employer during such calendar year.

 

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Equity Bonus. With
respect to each calendar year during the Term, Employee shall be also be eligible to receive an equity-based bonus based on the
satisfaction of certain performance goals to be established by the Compensation Committee of the Board of Directors of the Company
within the first 90 days of each such calendar year. For purposes of this Agreement, equity-based bonuses shall be made under the
Plan and shall be deemed to be subject to the terms and conditions of such Plan. Any equity-based bonuses to be granted to Employee
shall be made to Employee either in shares of Restricted Stock or Stock Options within 30 days after the date on which the Compensation
Committee certifies that the performance goals, if any, have been met. Such Restricted Stock and/or Stock Options shall vest over
a period of three years.

 

With respect
to the first calendar year during the Term of this Agreement, the following shall apply. .

 

	Equity Bonus (Up to 25% of Base Salary)
	Criteria	 	Maximum % of
 Total Award	 	Award
	Revenue goals	 	50	 	100% if the Company achieves 100% of Revenue goal; 80% if the Company achieves 80% of Revenue goal.  If the Company achieves percentages of its budgeted Revenue between the limits above, the bonus will be awarded pro rata.
	 	 	 	 	 
	EBITDA goals	 	50	 	100% if the Company achieves 100% of EBITDA goal; 80% if the Company achieves 80% of EBITDA goal.  If the Company achieves percentages of its budgeted EBITDA between the limits above, the bonus will be awarded pro rata.

 

		3.	Benefits. Employee shall be provided with health, life, and disability insurance coverages
and other similar benefits substantially equivalent to those provided to employees of the Company from time to time, all in accordance
with the standard policies of the Company. Employee shall be permitted to participate in the Company’s 401(k) Retirement
Plan.

 

		4.	Paid Time Off (PTO)/Sick Days. Employee shall be provided with three (3) weeks of PTO, accrued
on a monthly basis, and with sick days in accordance with the standard policies of the Company. Employee shall be permitted to
carry over any unused PTO into any subsequent period. Upon termination of employment, Employee shall not be paid for unused sick
days, but will be paid for accrued, unused PTO.

 

		5.	Automobile Allowance.Employee shall be furnished an automobile allowance of $9000 per year,
to be paid in accordance with the Company payroll practices.

 

    	13SEPARATION
AND RELEASE agreement 

 

This SEPARATION
AND RELEASE AGREEMENT (this “Agreement”) is entered into as of April 25, 2012 (the “Execution Date”),
by and between Cyalume Technologies, Inc., a Delaware corporation (the “Company”), and Monte L. Pickens, an
individual residing in the State of Virginia (the “Employee”), each a “Party,” and collectively,
the “Parties.”

 

RECITALS

 

WHEREAS, the
Company and the Employee were parties to that certain Employment Agreement dated August 1, 2010, as amended by that certain Amendment
No. 1 dated September 1, 2011 (as amended, the “Employment Agreement”) pursuant to which Employee was employed
by the Company as Executive Vice President;

 

WHEREAS, pursuant
to Section 8(c) of the Employment Agreement, the Employment Agreement was terminated by the Company, effective May 1, 2012, provided
however, that Sections 4 (Non-Competition), 5 (Confidentiality), 6 (Non-Solicitation) and 12 (Inventions, Etc.) (collectively,
the “Restrictive Covenants”) survived the termination of the Employment Agreement in accordance with its terms
and remain in full force and effect;

 

WHEREAS, the
Employee has waived any and all notice requirements with respect to the termination of the Employment Agreement pursuant to Section
8(c) thereof;

 

WHEREAS, the
Company and the Employee, in order to settle, compromise and fully and finally release any and all claims and potential claims
between the Parties (and the Released Parties, as defined below in Section 4) arising out of Employee’s employment
and the cessation thereof, have agreed to resolve these matters on the terms and conditions set forth herein; and

 

WHEREAS, the
Employee acknowledges he is waiving rights and claims described herein in exchange for consideration in addition to anything of
value to which he is already entitled.

 

NOW, THEREFORE,
in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties agree as follows:

 

AGREEMENT

 

1.         Recitals.
The foregoing recitals are true and correct, and are material to and incorporated into this Agreement. The portion of this Agreement
pertaining to the Employee’s general release of all claims (Section 4 herein) shall become effective on the eighth
calendar day after the Execution Date (hereinafter referred to as the “Effective Release Date”), so long as
the Employee has not revoked the provisions of Section 6 herein in accordance with the provisions set forth in Section
12 of this Agreement.  

 

2.         End
of Employment. The Employee’s employment with the Company shall end effective as of the end of business on April
30, 2012 (the “End Date”). Notwithstanding the foregoing, the Employee shall continue to be available by telephone
for consultation with management of the Company during normal business hours to aid in the transition of management of the Company.

 

    	 

    	 

    

 

3.         Severance
Payments. In accordance with Section 3(b) of the Employment Agreement and in full satisfaction of the Company’s obligations
to the Employee under such Employment Agreement and for his services to the Company, and in consideration for the agreements of
the Employee set forth herein (including, without limitation, the full and final release given by the Employee under Section
4 of this Agreement, the Covenant Not to Sue given by the Employee under Section 7 of this Agreement and the Restrictive
Covenants), the Company shall provide the Employee with continued payment of the Employee’s base salary for twelve (12) month’s
following the End Date until April 30, 2013, such payments to be made monthly in arrears in accordance with the Company’s
ordinary payroll practices, and subject to payroll deductions and tax withholdings in accordance with the Company’s usual
practices and as required by law, provided, that the Employee continues to abide by this Agreement.

 

4.         General
Release of All Claims By Employee. In consideration of, and as a condition to the Company’s agreement to pay the
severance payments set forth in Section 3 of this Agreement, the Employee, for himself, his spouse (if any), their marital
community (if any), and their respective heirs, estates, representatives, executors, successors and assigns, hereby fully, forever,
irrevocably, and unconditionally release and discharge the Company, its subsidiaries, parent companies, employee benefit plans,
any co-employers or joint employers, their officers, directors, employees, agents, attorneys, administrators, representatives,
successors, heirs, assigns, and all persons acting by, through, under, or in concert with them (collectively referred to hereinafter
as the “Released Parties”), from any and all claims which he or they may have against them, or any of them,
which could have arisen out of any act or omission occurring from the beginning of time to the Effective Release Date of this Agreement,
whether now known or unknown, asserted or unasserted. This release includes, but is not limited to, any and all claims brought
or that could be brought under any agreement between the Company and the Employee (except for this Agreement), as well as any and
all claims brought or that could be brought to pursuant to or under the Americans with Disabilities Act; Title VII of the Civil
Rights Act of 1964; the Age Discrimination in Employment Act (ADEA); the Older Workers Benefit Protection Act; the Civil
Rights Act of 1991; the Family and Medical Leave Act (FMLA); the National Labor Relations Act; the Fair Labor Standards Act (FLSA);
the Employee Retirement and Income Security Act (ERISA); the Securities and Exchanges Acts of 1933 and 1934; the Sarbanes-Oxley
Act (SOX); the Consolidated Omnibus Budget Reconciliation Act (COBRA); the Rehabilitation Act, the Labor Management Relations Act,
the Equal Pay Act; the United States Constitution; the Virginia Constitution; the Virginia Human Rights Act, the Virginia Payment
of Wage Law, the Virginia Minimum Wage Act, the Fairfax County Human Rights Ordinance, and Virginia’s wage and hour statutes,
laws, orders, ordinances, and regulations, each and all as amended, and any other statute set forth in the statutes or codes of
any state, including but not limited to Virginia, that pertain or relate to, or otherwise touches upon, the employment relationship
between the Company and the Employee and the Released Parties; including (but not limited to) any and all actions for breach of
contract, express or implied, breach of the covenant of good faith and fair dealing, express or implied, promissory estoppel, wrongful
termination in violation of public policy, all other claims for wrongful termination and constructive discharge, and all other
tort claims, including, but not limited to, assault, battery, false imprisonment, intentional interference with contractual relations,
intentional or negligent infliction of emotional distress, invasion of privacy, negligence, negligent investigation, negligent
hiring, supervision, or retention, defamation, intentional or negligent misrepresentation, fraud, and any and all other laws and
regulations relating to employment, employment termination, employment discrimination, harassment, and/or retaliation, wages, hours,
employee benefits, compensation, sexual harassment, and any and all claims for attorneys’ fees and costs, whether arising
out of, under, or pursuant to any federal, state, or local statute, law, regulation, ordinance, or order. This release of claims
expressly includes, but is not limited to, any and all claims arising out of and/or in any way related to the Employee’s
employment with the Company or the circumstances of the termination of that employment, whether known by him at the time of execution
of this Agreement or not, including any such claims that could be brought for breach of or otherwise relating to any agreements
between the Company and the Employee, other than this Agreement, whether oral or written, including, but not limited to, the Employment
Agreement. This release of claims further expressly includes, without limitation, any claim(s) for any unpaid wages, bonus amounts,
or any other compensation from the Company. By signing this Agreement, however, the Employee does not waive any rights or claims
that may arise under this Agreement, nor does he waive any vested rights he may have under the terms of any profit-sharing, retirement,
or similar employee welfare benefit plan administered or sponsored by the Company or any rights to indemnification or insurance
coverage available to the Employee from or through the Company.

 

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5.         Adequate
Consideration. The Employee acknowledges and agrees that the Company’s agreement to make the severance payments set
forth in Section 3 of this Agreement, provides substantial consideration to the Employee in addition to anything of value
to which he is, as a matter of law, otherwise entitled.

 

6.         No
Pending Claims. The Employee represents and warrants that there are no claims, charges, lawsuits, or any similar matters
of any kind filed by him or on his behalf or for his benefit presently pending against the Company or the Released Parties, or
any of them, in any forum whatsoever, including, without limitation, in any state or federal court, or before any federal, state,
or local administrative agency, board, or governing body. The Employee further represents and warrants that the Employee has not
heretofore assigned or transferred, or purported to assign or transfer, to any person, firm, corporation or entity any claim, charge,
lawsuit, or any similar matter of any kind herein released.

 

7.         Covenant
Not to Sue. The Employee represents and warrants that he has not assigned or transferred or purported to assign or transfer
any claim against the Released Parties, and is fully entitled to release the same, and he has not currently filed any lawsuits
or actions with any federal, state, or local court or any federal, state, or local administrative agency, board, or governing body,
against the Company or the Released Parties, or any of them. The Employee specifically covenants not to file any lawsuits, complaints,
claims, or charges, either on his own behalf or in any representative capacity, in any federal, state or local court or before
any federal, state, or local administrative agency, board, or governing body against the Company or the Released Parties, or any
of them, on and/or for any and all of the claims released by this Agreement.

 

8.         Acknowledgment
of Restrictive Covenants. Notwithstanding anything to the contrary contained herein, the Parties acknowledge and agree
that the Restrictive Covenants shall remain in full force and effect in accordance with their respective terms. Employee acknowledges
that the Restrictive Covenants are reasonable and necessary to protect the legitimate interests of the Company.

 

9.         Preclusive
Effect of Agreement. The Employee acknowledges, understands, and agrees that this Agreement may be pled as a complete bar
to any action or suit for any and all claims released by this Agreement before any court or administrative body with respect to
any lawsuit, complaint, charge, or claim under federal, state, local, or other law relating to any possible claim that existed
or may have existed against the Company or the Released Parties, or any of them, arising out of any event occurring from the beginning
of time through the Effective Release Date of this Agreement.

 

10.         Return
of Employer Property. Prior to or on the Execution Date, the Employee agrees to and shall return to the Company all Company
property in his actual or constructive possession, if he has not already done so, including, but not limited to all computers,
cell phones, smartphones, PDAs, key cards, access badges, keys, credit cards, passwords, books, and records belonging to the Company.

 

11.         Review.
A copy of this Agreement was delivered to Employee on April [__], 2012. The Employee is advised that he has twenty-one (21) days
from the date he is presented with this Agreement to consider the general release of all claims set forth in Section 4 of
this Agreement. If the Employee executes this Agreement below with respect to the general release of all claims set forth herein
before the expiration of twenty-one (21) days, he acknowledges that he has done so for the purpose of expediting the payment of
the consideration provided for herein, and that he has expressly waived his right to take twenty-one (21) days to consider this
Agreement.

 

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12.         Revocation.
Employee may revoke his agreement to the general release of all claims set forth in Section 4 of this Agreement for a period
of seven (7) days after he signs it. The Employee agrees that if he elects to revoke Section 4 of this Agreement, he will
notify the Company, in writing via certified mail, on or before the expiration of the revocation period. Receipt by the Company
of proper and timely notice of revocation cancels and voids Section 4 of this Agreement.

 

13.         Knowing
and Voluntary; ADEA Waiver. The Employee represents and warrants that he was advised by the Company to consult with an
attorney of his own choosing concerning the provisions set forth herein, and that he has thoroughly discussed all aspects of this
Agreement with counsel of his choosing, or that he had the opportunity to do so. The Employee further represents and warrants that
he has carefully read and fully understands all of the provisions of this Agreement, including the fact that he is releasing all
claims and potential claims against the Company and the Released Parties, and that he is entering into this Agreement, without
coercion, and with full knowledge of its significance and the legal consequences thereof. The Employee represents and warrants
that as part of this Agreement, he is knowingly and voluntarily releasing and waiving any claims he believes he may have under
the Age Discrimination in Employment Act.

 

14.         Binding
Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto, their heirs, personal representatives,
successors or assigns.

 

15.         Non-Admission.
Execution of this Agreement and compliance with its terms shall not be considered or deemed an admission by the Company of any
liability whatsoever, or as an admission by the Company of any violation of the Employee’s rights or the rights of any other
person, a violation of any order, law, statute or duty, or breach of any duty owed to the Employee, or any other person. The Company
specifically disclaims any and all such liability.

 

16.         Cooperation.
The Employee agrees, until May 30, 2014, to provide reasonable assistance to the Company (including assistance with litigation
and arbitration matters, if any), upon the Company’s reasonable request, concerning the Employee’s previous employment-related
responsibilities. Such assistance may include, but is not limited to, communicating and/or meeting with the Company’s attorneys,
giving deposition testimony, attending depositions, reviewing pleadings, including discovery pleadings, executing documents, and
attending and giving testimony in court and arbitration proceedings. The Employee will also perform all acts and execute
and deliver any documents that may be reasonably necessary to carry out the provisions of this paragraph. If requested, the Employee
agrees to provide the Company with reasonable assistance, including, without limitation, providing information, in connection with
the transition of his employment duties and responsibilities to others and matters with which he was involved during his employment
with the Company. The Company agrees to pay or promptly reimburse the Employee for all reasonable
costs and expenses of the Employee incurred in connection with the provision of service or assistance by the Employee under this
Section 16, which the Employee agrees to submit in writing to the Company in advance, to the extent possible, for pre-approval
by the Company. 

 

17.         Non-Disparagement.
The Employee agrees that neither he nor anyone acting on his behalf will make, directly, indirectly, or anonymously, any derogatory
or disparaging statement about the Company or the Released Parties, or any of them, to any individual or entity, including, but
not limited to, the Company or the Released Parties actual or potential clients, customers, vendors, business partners, suppliers,
employees, financial or credit institutions, or the media or general public, nor directly or indirectly take any action which is
intended to embarrass the other Party. For purposes of this Section 17, a derogatory or disparaging statement is any communication,
oral or written, which would cause or to tend to cause the recipient of the communication to question the business condition, integrity,
competence, fairness, or good character of the person to whom or entity to which the communication relates.

 

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18.         Entire
Agreement. This Agreement represents the entire understanding of the parties with respect to the matters set forth in this
Agreement and supersedes any previous agreements entered into between the parties and may only be amended or altered by a writing
executed by all parties hereto.

 

19.         Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. Each of the
Parties submits to the exclusive jurisdiction of any state or federal court sitting in Delaware, in any action or proceeding arising
out of or relating to this Agreement and irrevocably waives any objection to proceeding before such courts based upon lack of personal
jurisdiction or inconvenient forum. Each Party irrevocably consents to the service of process out of any of the aforementioned
courts by the mailing of copies thereof by registered or certified mail, postage prepaid, to such Party at the address set forth
in Section 20 below, such service to become effective three days after such mailing.

 

20.         Notices.
All notices and payments required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal
delivery to the party to be notified, (b) five (5) days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (c) one (1) day after deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All communications shall be sent to the party to be notified at the following address:

 

If to the Company to:

 

Cyalume Technologies,
Inc.

96 Windsor Street

West Springfield, MA
01089

Attention: President

 

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

 

Greenberg Traurig, P.A.

401 East Last Olas Blvd., Suite 2000

Fort Lauderdale, Florida 33301

Attention: Matthew W. Miller, Esq.

 

If to the Employee to:

 

Monte L. Pickens

16593 Ferriers Court

Leesburg, VA 20176

 

or to such other address as the person
to whom notice is to be given may have specified in a notice duly given to the sender as provided herein.

 

21.         Severability.
If any provision of this Agreement is found to be invalid or unenforceable by a court of competent jurisdiction, then all remaining
provisions shall be valid and enforceable to the fullest extent of the law, and the invalid or unenforceable provision shall be
deemed not to be a part of this Agreement.

 

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22.         Waiver.
The failure of a Party to insist upon strict adherence to any obligation of this Agreement shall not be considered a waiver or
deprive that Party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. Any
waiver of any provision of this Agreement must be in a written instrument signed and delivered by the Party waiving the provision.

 

23.         Counterparts.
This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.

 

24.         Assignment.
This Agreement may not be assigned by the Employee without the prior written consent of the Company. The rights and obligations
of this Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and assigns. Nothing
expressed or implied herein shall be construed to give any other person any legal or equitable rights hereunder. 

 

25.         Amendment.
This Agreement may not be modified, amended, supplemented, canceled or discharged, except by written instrument executed by all
parties hereto. No failure to exercise, and no delay in exercising, any right, power or privilege under this Agreement shall operate
as a waiver, nor shall any single or partial exercise of any right, power or privilege hereunder preclude the exercise of any other
right, power or privilege. No waiver of any breach of any provision shall be deemed to be a waiver of any preceding or succeeding
breach of the same or any other provision, nor shall any waiver be implied from any course of dealing between the parties hereto.
No extension of time for performance of any obligations or other acts hereunder or under any other agreement shall be deemed to
be an extension of the time for performance of any other obligations or any other acts. The rights and remedies of the parties
under this Agreement are in addition to all other rights and remedies, at law or equity, that they may have against each other.

 

26.         Confidentiality.
The Employee agrees that he will not disclose, either directly or indirectly, this Agreement, the transactions to be performed
in connection with this Agreement, or the terms and conditions of this Agreement, to any individual, corporation, partnership,
limited liability company, association, trust, unincorporated organization, or other entity, including but not limited to current
or former employees of the Company or the Released Parties, members of the press and media, and other members of the general public.
Notwithstanding the foregoing, the Employee may permissibly disclose the existence and terms of this Agreement to his spouse,
however, his spouse shall be bound to the confidentiality provisions set forth in this section. This section shall not prohibit
the Employee and his attorney(s) from disclosing the terms of this Agreement to his tax advisor(s) to the extent necessary to
prepare his income tax returns and to represent him in connection with any proceedings relating thereto, or from advising a governmental
taxing authority of the consideration being paid to him, or of the existence of this Agreement in response to a question or questions
posed by such taxing authority. The Parties agree that it shall not be a breach of this Agreement if the Employee’s disclosure
of such information has been compelled through the issuance of compulsory legal process, provided, however, that in such case,
Employee agrees to give Employer reasonable notice (care of Matthew W. Miller, Esq., Greenberg Traurig, LLP, 401 East Las Olas
Boulevard, Fort Lauderdale, Florida, 33301) of the order or subpoena in question and an opportunity to challenge the disclosure
of any such information before the appropriate court or agency. It shall not be a breach of this section for the Employee to disclose
the terms of this Agreement in a suit to enforce the terms of this Agreement or defend a claim that this Agreement has been breached.
The Employee understands and agrees that this confidentiality provision is a material term of this Agreement, and that his agreement
to this provision concerning confidentiality is a material inducement to the Company’s willingness to enter into this Agreement.

 

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27.         Further
Assurances. The Parties shall execute and deliver any other instruments or documents and take any further actions after
the execution of this Agreement, which may be reasonably required for the implementation of this Agreement and the transactions
contemplated hereby.

 

28.         Paragraph
Titles. The paragraph titles in this Agreement are for convenience only; they form no part of this Agreement and shall
not affect its interpretation.

 

29.         Construction.
The Parties hereto acknowledge and agree that each Party has participated in the drafting of this Agreement and has had the opportunity
to have this document reviewed by the respective legal counsel for the Parties hereto and that the normal rule of construction
to the effect that any ambiguities are to be resolved against the drafting Party shall not be applied to the interpretation of
this Agreement. No inference in favor of, or against, any Party shall be drawn from the fact that one Party has drafted any portion
hereof.

 

30.         Attorneys’
Fees and Costs. The Parties agree that each Party will bear its own costs and attorneys’ fees in connection with
all matters related to the subject matter of this Agreement and the resolution and settlement of those matters encompassed by
this Agreement. Should any legal action be commenced arising out of or related to this Agreement, the prevailing Party in any
such action shall be entitled to an award of reasonable attorneys’ fees and costs incurred therein. 

 

[Remainder
of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the Execution Date set forth above.

 

	 	COMPANY:
	 	 
	 	CYALUME TECHNOLOGIES, INC.
	 	 	 
	 	By:	/s/ Zivi Nedivi
	 	Name:	Zivi Nedivi
	 	Title:	Chief Executive Officer
	 	 
	 	EMPLOYEE:
	 	 	 
	 	By:	/s/ Monte L. Pickens
	 	 	Monte L. Pickens, individually

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