Document:

INDUCEMENT AGREEMENT

 

This INDUCEMENT AGREEMENT
(“Agreement”), effective as of April 2, 2012 (the “Effective Date”), is entered by and between
East Shore Ventures LLC (the “Company”) and Zivi Nedivi (“Nedivi”) (collectively, the “Parties”
and, each, a “Party”). Capitalized terms used herein but not otherwise defined shall have the same meaning as
in the Services Agreement, effective April 2, 2012, between Cyalume Technologies, Inc. (“Cyalume”), Cyalume
Technologies Holdings, Inc. (“Holdings”) and the Company (the “Services Agreement”).

 

WHEREAS, Nedivi is
an employee of the Company;

 

WHEREAS, pursuant to
the Services Agreement, the Company has agreed to provide certain Services (defined in Section 2 of the Services Agreement) to
Cyalume, Holdings and their respective subsidiaries and affiliates (collectively, the “Cyalume Group”), which
Services, in general, are for the Company to provide (exclusively and personally by Nedivi) services of the type customarily performed
by a Chief Executive Officer (“CEO”) of a publicly-traded company; and

 

WHEREAS, the execution
and delivery to Cyalume of this Agreement is a condition precedent to Cyalume’s and Holding’s obligations under the
Services Agreement;

 

NOW, THEREFORE, on
the basis of the foregoing premises and in consideration of the mutual covenants and agreements contained herein, the Parties agree
as follows:

 

1.          Consent
to Services Agreement; Performance of Services; Acceptance of CEO Appointment. Nedivi represents and acknowledges that he is
familiar with all of the terms, covenants and conditions of the Services Agreement and hereby consents to the execution thereof
by the Company. Nedivi agrees to perform and comply with all of the terms, covenants, conditions and obligations of the Services
Agreement as they relate to him and to the Company – including, without limitation, his provision of the Services to the
Cyalume Group – as if Nedivi had directly entered into the Services Agreement with Cyalume and Holdings, even if his employment
relationship with the Company ceases. Nedivi also hereby confirms all grants, representations, warranties and agreements made by
the Company under the Services Agreement. Nedivi shall not do or fail to do any act or thing which might tend to interfere with
any of the Cyalume Group’s rights, benefits or privileges under the Services Agreement. Nedivi acknowledges his entering
into this Agreement is a condition precedent to, and material inducement of, Cyalume and Holdings entering into the Services Agreement.
Pursuant to Section 1 of the Services Agreement, Cyalume and Holdings, as a matter of corporate designation only, and without entering
into an employment relationship with Nedivi, shall appoint, and they shall each cause their direct and indirect subsidiaries and
affiliates to appoint, Nedivi as their respective CEO. Nedivi hereby accepts such appointment. Further, within a reasonable period
of time following the Effective Date, Nedivi shall be appointed as a member of the Board of Directors of Cyalume (the “Board”),
and Nedivi hereby accepts such appointment.

 

	 	
        Company Initials:_____

        Nedivi Initials:_____

 

    	 

    	 

    

 

2.            Payment
and Status of Nedivi.

 

2.1         Nedivi
represents, acknowledges and agrees that he is an employee of the Company and that he is not an employee of Cyalume,
Holdings or any other member of the Cyalume Group. Nedivi represents and warrants that he is not working simultaneously under
any contrary arrangement or agreement that would make him or cause him to be considered to be an employee or agent of
Cyalume, Holdings or of any other member of the Cyalume Group while providing the Services. Nedivi acknowledges and agrees
that the Company has, retains and shall continue to bear sole, exclusive and total legal responsibility for Nedivi as his
employer. This responsibility includes, without limitation, the obligation to ensure full compliance with and satisfaction of
(i) all state and federal payroll, income and unemployment tax requirements; (ii) all state and federal wage and hour
requirements; (iii) all worker’s compensation insurance and unemployment insurance requirements; and (iv) all other
applicable state and federal employment law requirements arising from the Company’s employment of Nedivi and/or the
performance of the Services or any other work under the Services Agreement by Nedivi. Nedivi also acknowledges and agrees
that he shall not be treated as an employee of Cyalume, Holdings or any other member of the Cyalume Group for any reason,
including without limitation for purposes of vacations, disability, insurance, pensions or other employee benefits offered or
provided by any member of the Cyalume Group. Unless Nedivi is deemed substituted for the Company as a direct party to the
Services Agreement pursuant to Section 2.2  below, Nedivi shall look solely to the Company, and not to Cyalume, Holdings or
any other member of the Cyalume Group, for the payment of compensation for performance of the Services to members of the
Cyalume Group and for the discharge of all other obligations of the Company with respect to Nedivi’s performance of the
Services.

 

2.2         Nedivi
represents and warrants that the Company is a duly qualified and existing limited liability company under the laws of Florida.
If the Company or its successors in interest should be dissolved or should otherwise cease to exist, or for any reason should fail,
refuse or neglect to perform, observe or comply with the terms, covenants and conditions of the Services Agreement, Nedivi shall,
at Cyalume’s election, be deemed to be employed directly by Cyalume for the balance of the Term of the Services Agreement
upon the terms, covenants and conditions set forth therein.

 

2.3         Nedivi
shall indemnify, defend and hold harmless Cyalume and its affiliates, and their respective officers, directors, shareholders, employees,
agents and other representatives from and against any and all asserted or threatened claims, demands, losses, liabilities, damages,
judgments, expenses (including reasonable attorneys’ fees) and causes of action (“Claims” and, each, a
“Claim”) that is predicated in any manner on a finding by any court, enforcement agency, government entity,
arbitrator or other adjudicator, in each case solely related to employment taxes, that Nedivi is an employee or joint employee
of Cyalume, Holdings or any other member of the Cyalume Group, including without limitation any Claim due to Cyalume’s alleged
failure to deduct and withhold from the compensation payable under the Services Agreement, any amounts required or permitted to
be deducted and withheld from the compensation of any employee under the provisions of the federal and applicable state income
tax laws, the Federal Social Security Act, the applicable state unemployment insurance tax laws, and/or any amendments thereof
and/or any other applicable statutes heretofore or hereafter enacted requiring the withholding of any amount from the compensation
of an employee. Unless Cyalume requests otherwise, Nedivi shall have the obligation to control the defense, negotiation and settlement
of any claim for which Nedivi has the obligation to provide indemnification. Cyalume shall cooperate and assist Nedivi in the defense
of any such claim.

 

	 	
        Company Initials:_____

        Nedivi Initials:_____

 

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2.4         If
the Company’s engagement under the Services Agreement is terminated or, if after becoming an employee of Cyalume pursuant
to Section 2.2 above, Nedivi’s employment with Cyalume is terminated, effective the date of such termination (the “Termination
Date”), Nedivi shall be deemed to have resigned from all positions held in Cyalume, Holdings and/or any other member
of the Cyalume Group, including without limitation the position of CEO of any and all Cyalume Group members. Upon request by Cyalume,
Nedivi shall promptly sign any and all documents reflecting such resignations.

 

3.            Exclusivity
and Best Efforts. During the Term of the Services Agreement, (i) subject to the proviso below, Nedivi shall devote his entire
business time, energy and skill to providing the Services to the Cyalume Group under the Services Agreement; (ii) Nedivi shall
use his reasonable best efforts to perform the Services, as well as the Company’s other obligations under the Service Agreement
in a diligent, trustworthy, businesslike and efficient manner; (iii) Nedivi shall not engage in any other business, profession
or occupation for compensation or otherwise, except as provided below in this Section 3; and (iv) Nedivi shall not engage in any
activity that, directly or indirectly, impairs or conflicts with his performance of the Services or with the Company’s other
duties obligations to Cyalume, Holdings and other members of the Cyalume Group under the Service Agreement, provided, however,
that the foregoing shall not prevent Nedivi from (A) managing his personal affairs and passive personal investments, (B) participating
in charitable, civic, educational, professional or community affairs, (C) providing services for Eilam Ltd., and (D) serving on
the board of directors of Urban Aeronautics, so long as, in the aggregate, any such activities do not unreasonably interfere or
conflict with Nedivi’s or the Company’s duties under the Service Agreement or this Agreement or create a potential
conflict of interest with any member of the Cyalume Group, as reasonably determined by the Board.

 

4.            Confidentiality,
Non-Solicitation and Non-Competition.

 

4.1         Representations
and Acknowledgements. Nedivi acknowledges and agrees that: (i) among the Cyalume Group’s most valuable
and indispensable assets are its Confidential Information (defined below) and its close relationships with its
customers, suppliers and employees, to which the Cyalume Group has devoted and continues to devote a substantial amount of
time, money and other resources to develop; (ii) in connection with performing the Services under the Service Agreement,
Nedivi will be exposed to and acquire the Cyalume Group’s Confidential Information and develop, at the Cyalume
Group’s expense, special and close relationships with the Cyalume Group’s customers and suppliers; (iii) the
Cyalume Group’s Confidential Information and close customer, supplier and employee relationships must be protected;
(iv) this Section  4 is a material provision of this Agreement and Cyalume and Holdings would not engage the Company under
the Services Agreement but for the promises and acknowledgements that Nedivi makes in this Section 4; and (v) to the extent
required by law, the covenants in this Agreement contain reasonable limitations as to time, geographical area and scope of
activities to be restricted and that such covenants do not impose a greater restraint on Nedivi than is necessary to protect
the Cyalume Group’s Confidential Information, close customer, supplier and employee relationships and other legitimate
business interests.

 

	 	
        Company Initials:_____

        Nedivi Initials:_____

 

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4.2         Confidential
Information. During the Term of the Services Agreement, at any time that Nedivi is an employee of Cyalume, and at all times
thereafter, Nedivi will not, except as required to provide the Services or as may be required by law, directly or indirectly,
use or disclose to any third person, without the prior written consent of Cyalume, any Confidential Information of the Cyalume
Group. For purposes of this Agreement, “Confidential Information” means all information of a confidential or
proprietary nature regarding the Cyalume Group or its business or properties that the Cyalume Group has furnished or furnishes
to the Company (including Nedivi), whether before or after the effective date of the Services Agreement, or is or becomes available
to the Company (including Nedivi) by virtue of the Company’s engagement under the Service Agreement or this Agreement, whether
tangible or intangible, and in whatever form or medium provided, as well as all information the Company and/or Nedivi generates
that contains, reflects or is derived from such information that, in each case, has not been published or disclosed to, and is
not otherwise known to, the public (or only known to the public, directly or indirectly, as a result of conduct by the Company
or Nedivi that is not authorized by Cyalume, Holdings or any other member of the Cyalume Group). Confidential Information includes,
without limitation, customer lists, customer requirements and specifications, designs, financial data, sales figures, costs and
pricing figures, marketing and other business plans, product development, marketing concepts, personnel matters, drawings, specifications,
instructions, methods, processes, techniques, computer software or data of any sort developed or compiled by any member of the
Cyalume Group, formulae or any other information relating to the Cyalume Group’s services, products, sales, technology,
research data, software and all other know-how, trade secrets or proprietary information, or any copies, elaborations, modifications
and adaptations thereof. In the event that a member of the Cyalume Group is bound by a confidentiality agreement or understanding
with a customer, vendor, supplier or other party regarding the confidential information of such customer, vendor, supplier or
other party, which is more restrictive than specified above in this Section 4.2, and of which Nedivi has notice or is aware, Nedivi
shall adhere to the provisions of such other confidentiality agreement, in addition to those of this Section 4.2.

 

4.3         Non-Interference
and Non-Competition.

 

(a)          No-Interference
with Customers and Suppliers; Non-Competition. Nedivi agrees that, during the Restricted Period (defined below), regardless
of whether, or on what basis, the Company’s engagement under the Services Agreement (or, if applicable, Nedivi’s employment
with Cyalume) is terminated or any claim that Nedivi or the Company may have against any member of the Cyalume Group under the
Services Agreement or otherwise, Nedivi shall not, without the prior written consent of Cyalume, directly or indirectly (defined
below), actually or attempt to:

 

(i)         solicit, induce, contact or persuade any
Customer (defined below) to terminate, reduce or refrain from renewing or extending its contractual or other relationship with
any member of the Cyalume Group in regard to the purchase of products or services developed, marketed or sold by any member of
the Cyalume Group, or to become a customer of or enter into any contractual or other relationship with Nedivi or any other person
or entity for products or services that are the same, similar or otherwise in competition with the products and services that the
Cyalume Group is providing, or is actively contemplating to provide pursuant to its respective members’ current business
plans, in each case, as of the Termination Date (collectively, “Competing Services”); and/or

 

	 	
        Company Initials:_____

        Nedivi Initials:_____

 

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(ii)
solicit, induce, contact or persuade any supplier of goods or services to the Cyalume Group (“Supplier”) to
terminate, reduce or refrain from renewing or extending its contractual or other relationship with any member(s) of the Cyalume
Group in regard to the supplying of goods or services to such member(s) of the Cyalume Group; and/or

 

(iii)        offer
or provide to any Customer any Competing Services; and/or

 

(iv)       engage in the business of providing Competing Services in any country in which any member
of the Cyalume Group is doing business, or is actively contemplating to do business pursuant to its current business plan, in each
case, as of the Termination Date.

 

(b)          No
Interference with Employees. Nedivi agrees that, during the Restricted Period, regardless of whether, or on what basis, the
Company’s engagement under the Services Agreement (or, if applicable, Nedivi’s employment with Cyalume) is terminated
or any claim that Nedivi or the Company may have against any member of the Cyalume Group under the Services Agreement or otherwise,
Nedivi shall not, without the prior written consent of Cyalume, directly or indirectly, actually or attempt to: (i) solicit, induce
or entice any employee, consultant or independent contractor of a member of the Cyalume Group to terminate, reduce or refrain from
renewing or extending such person’s or entity’s business or employment relationship with such member of the Cyalume
Group; (ii) solicit, induce or entice any employee of a member of the Cyalume Group to engage in Competing Services; or (iii) employ
or otherwise engage as an employee, independent contractor or consultant (a) any employee of the Cyalume Group or (b) any person
who was employed by the Cyalume Group within the then prior twelve-month period.

 

(c)          Definitions.
For the purposes of this Section 4.3, the “Restricted Period” shall mean the Term of the Services
Agreement (and, if applicable, any period during which Nedivi is employed by Cyalume) and for a period of two (2) years
thereafter, except that such period shall be extended for any period therein during which the Company and/or Nedivi were in
violation of any provision of this Section  4.3 or of Section 11.3 of the Services Agreement. Notwithstanding the foregoing,
the Restricted Period shall end in the event that Cyalume fails to make any payments required by Section 9 of the Services
Agreement within 10 days after written notice from the Company to Cyalume of such failure. For purposes of this Section
4.3, “Customer” shall mean any company or individual: (i) who contacted the Company and/or Nedivi, whom
the Company and/or Nedivi contacted or served, or for whom the Company and/or Nedivi supervised contact or service regarding
the actual or potential purchase of Cyalume Group products or services during the Term of the Services Agreement (or,
if applicable, any period during which Nedivi is employed by Cyalume); (ii) who purchased products or services from the
Cyalume Group during the Term of the Services Agreement (or, if applicable, any period during which Nedivi is employed by
Cyalume); and/or (iii) who was an active prospect of the Cyalume Group for the purchase of products or services from the
Cyalume Group during the Term of the Services Agreement (or, if applicable, any period during which Nedivi is employed by
Cyalume). For the purpose of this Section 4.3, “directly or indirectly” shall include any activity, on
behalf of Nedivi or on behalf of or in conjunction with any other person or entity, whether as an employee, agent,
consultant, independent contractor, officer, director, principal, shareholder, equity holder, partner, member, joint
venturer, lender, investor or otherwise, except that nothing in this Agreement shall prohibit Nedivi from being a passive
holder, for investment purposes only, of not more than 2% of the outstanding stock of any company listed on a national
securities exchange, or actively traded on an over-the-counter market.

 

	 	
        Company Initials:_____

        Nedivi Initials:_____

 

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5.            Intellectual
Property.

 

5.1         Cyalume’s
Proprietary Rights. Nedivi acknowledges and agrees that all Intellectual Property (defined below) created, made or conceived
by the Company and/or Nedivi, solely or jointly, during the Term (or, if applicable, any period during which Nedivi is employed
by Cyalume) that relates to the actual or anticipated businesses of the Cyalume Group or results from or is suggested by any work
performed by employees or other independent contractors for or on behalf of the Cyalume Group (“Cyalume Intellectual Property”)
shall be deemed “work for hire” and shall be and remain the sole and exclusive property of Cyalume or other applicable
member of the Cyalume Group for any and all purposes and uses whatsoever as soon as the Company and/or Nedivi conceives or develops
such Intellectual Property, and Nedivi hereby agrees that his assigns, executors, heirs, administrators or personal representatives
shall have no right, title or interest of any kind or nature therein or thereto, or in or to any results and proceeds therefrom.
If for any reason such Cyalume Intellectual Property is not deemed to be “work-for-hire,” then Nedivi hereby irrevocably
and unconditionally assigns all rights, title, and interest in such Cyalume Intellectual Property to Cyalume and agrees that Cyalume
is under no further obligation, monetary or otherwise, to Nedivi for such assignment. Nedivi also hereby waives all claims to any
moral rights or other special rights that Nedivi may have or may accrue in any Cyalume Intellectual Property. As used in this Agreement,
"Intellectual Property" shall mean and include any ideas, inventions (whether or not patentable), designs, improvements,
discoveries, innovations, patents, patent applications, trademarks, service marks, trade dress, trade names, trade secrets, works
of authorship, copyrights, copyrightable works, films, audio and video tapes, other audio and visual works of any kind, scripts,
sketches, models, formulas, tests, analyses, software, firmware, computer processes, computer and other applications, creations
and properties, Confidential Information and any other patents, inventions or works of creative authorship.

 

5.2        Cooperation. Nedivi agrees to assist
the Cyalume Group, and to take all reasonable steps, with securing patents, registering copyrights and trademarks, and obtaining
any other forms of protection for the Intellectual Property in the United States and elsewhere, all at the sole cost and expense
of Cyalume. In particular, at Cyalume’s sole cost and expense, forthwith upon request of Cyalume, Nedivi shall execute all
such assignments and other documents (including applications for patents, copyrights, trademarks, and assignments thereof) and
take all such other action as Cyalume may reasonably request in order (i) to vest in the applicable member of the Cyalume Group
all of the Company’s and/or Nedivi’s right, title, and interest in and to such Intellectual Property, free and clear
of liens, mortgages, security interests, pledges, charges, and encumbrances (“Liens”) (and Nedivi agrees to
take such action as is reasonably necessary to remove all such Liens) and (ii), if patentable or copyrightable, to obtain patents
or copyrights (including extensions and renewals) therefor in any and all countries in such name as Cyalume shall determine. If
– despite the Cyalume’s reasonable best efforts to get Nedivi to sign any lawful or necessary documents required in
order for the Cyalume Group to apply for and obtain any copyright or patent with respect to any work performed by the Company and/or
Nedivi under the Services Agreement (including applications or renewals, extensions, divisions or continuations) – Nedivi
fails to sign such documents, Nedivi hereby irrevocably designates and appoints Cyalume and its duly authorized officers and agents
as Nedivi’s agents and attorneys-in-fact to act for and in Nedivi’s behalf, and in Nedivi’s place and stead,
to execute and file any such applications or documents and to do all other lawfully permitted reasonable acts to further the prosecution
and issuance of copyrights and patents with respect to such Intellectual Property with the same legal force and effect as if executed
or undertaken by Nedivi, provided that Cyalume may not take any such act that would directly result in liability to the Company
or Nedivi, unless such liability results from, in whole or in part, the Company’s (including Nedivi’s) breach of the
Services Agreement or Nedivi’s breach of this Agreement.

  

	 	
        Company Initials:_____

        Nedivi Initials:_____

 

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5.3         No
infringement. Nedivi represents and warrants to Cyalume that, to the best of Nedivi’s knowledge, all Services, Intellectual
Property and any other work the Company and/or Nedivi delivers to the Cyalume Group shall be original and shall not infringe upon
or violate any patent, copyright or proprietary right of any person or third party.

 

5.4         License
to Prior Invention. If the Company and/or Nedivi in the course of providing the Services incorporates into Cyalume Intellectual
Property a product that Nedivi has, alone or jointly with others, conceived, developed or reduced to practice prior to the Company’s
engagement with Cyalume in which Nedivi has a property right (each, a “Prior Invention”), Nedivi hereby grants
to the Cyalume Group a perpetual, nonexclusive, royalty-free, irrevocable, worldwide license (with the full right to sublicense)
to make, have made, modify, use and sell any such Prior Invention.

 

6.           Non-Disparagement.
During and after the Term of the Services Agreement (or, if applicable, any period during which Nedivi is employed by Cyalume),
except as may be required by law, Nedivi may not make any statement (verbal, written or otherwise) about the Cyalume Group or any
of its members or their respective financial status, business, personnel, directors, officers, consultants, services or business
methods that is intended to or is reasonably likely to disparage or denigrate the Cyalume Group and/or any of its individual members.

 

7.           Cooperation.
During and after the Term of the Services Agreement (or, if applicable, any period during which Nedivi is employed by
Cyalume), Nedivi shall assist and cooperate with the Cyalume Group, upon reasonable advance notice with due consideration for
his other business or personal commitments, in connection with the defense or prosecution of any claim that may be made
against or by any member of the Cyalume Group, or in connection with any ongoing or future investigation or dispute or claim
of any kind involving any member of the Cyalume Group, including any proceeding before any arbitral, administrative,
judicial, legislative, or other body or agency, including testifying in any proceeding or executing and delivering to the
applicable member of the Cyalume Group such documents that may be reasonably necessary to carry out the provision of this
Section 7, in each case, to the extent such claims, investigations or proceedings relate to the Services or any other work
performed or required to be performed by the Company and/or Nedivi, pertinent knowledge possessed by Nedivi, or any act or
omission by Nedivi involving the Cyalume Group. In no event shall Nedivi’s cooperation materially interfere with his
services for a subsequent employer or other similar service recipient; however, Nedivi will make reasonable good faith
efforts to fulfill his obligations under this Section 7  in a manner that will not result in any such interference.

 

	 	
        Company Initials:_____

        Nedivi Initials:_____

 

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8.            Company
Property. Nedivi agrees that all Confidential Information, trade secrets, drawings, designs, reports, computer programs or
data, books, handbooks, manuals, files (electronic or otherwise), computerized storage media, papers, memoranda, letters, notes,
photographs, facsimile, software, computers, PDAs, Blackberries and other documents (electronic or otherwise), materials and equipment
of any kind that the Company and/or Nedivi has acquired or will acquire in the course of performing the Services or their other
respective obligations under the Services Agreement and/or this Agreement are and remain the property of the Cyalume Group. Upon
the Termination Date, or sooner if requested by Cyalume, Nedivi shall return all such documents, materials and records to Cyalume
and not make or take copies of the same without the prior written consent of Cyalume.

 

9.            Remedies.
Nedivi acknowledges and agrees that a breach of Sections  4 through  8 above or of Sections 11-16 of the Services Agreement
would injure the Cyalume Group irreparably in a way which could not be adequately compensated for by an award of monetary
damages. Nedivi therefore consents to the issuance to the Cyalume Group or any of its members of a preliminary and/or
permanent injunction, without the posting of a bond, to restrain any such breach or threatened breach of those sections.
Additionally, in the event the Company and/or Nedivi breaches or threatens to breach any of the covenants, promises or
obligations contained in this Agreement or the Services Agreement, the Cyalume Group shall be entitled to recover without
limitation from Nedivi all costs and fees (including reasonable attorneys’ fees) incurred by the Cyalume Group in
connection with enforcing this Agreement and/or the Services Agreement. Nothing herein shall be construed, however, as
prohibiting the Cyalume Group from pursuing any other available remedies for such breach or threatened breach.

 

10.          Representations
Regarding Prior Work and Legal Obligations.

 

10.1        Nedivi
represents and warrants that Nedivi has no agreement or other legal obligation with any prior employer, or any other person or
entity, that restricts Nedivi’s ability to accept this Agreement, or Nedivi’s ability to perform the Services to Cyalume
under the Services Agreement. Nedivi further represents and warrants that he is not a party to any agreement (including, without
limitation, a non-competition, non-solicitation, no hire or similar agreement) and has no other legal obligation that restricts
in any way Nedivi’s ability to perform the Services and other obligations for the benefit of the Cyalume Group, including,
without limitation, those under this Agreement or the Services Agreement.

 

10.2        Nedivi
acknowledges and agrees that he has been instructed by Cyalume that at no time should Nedivi divulge to or use for the benefit
of the Cyalume Group any trade secret or confidential or proprietary information of any previous entity with which Nedivi was affiliated
or of any other third-party. Nedivi expressly represents and warrants that Nedivi has not divulged or used any such information
for the benefit of the Cyalume Group and will not do so.

 

10.3       Nedivi represents and agrees that Nedivi
has not and will not misappropriate any intellectual property belonging to any other person or entity.

 

	 	
        Company Initials:_____

        Nedivi Initials:_____

 

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10.4        Nedivi
represents and acknowledges that Cyalume is basing important business decisions on these representations, agreements and warranties,
and it affirms that all of the statements included herein are true. Nedivi agrees that he shall defend, indemnify and hold the
Cyalume Group harmless from any Claim by any person in any way arising out of, relating to, or in connection with a breach and/or
the falsity of any of the representations, agreements and warranties made by Nedivi in this Section 10.

 

11.          Miscellaneous
Provisions.

 

11.1         Independent
Contractor Relationship. Nothing in this Agreement shall create a partnership or joint venture between Nedivi and Cyalume,
or any other form of legal association that would impose liability upon either Cyalume or Nedivi for the act or failure to act
of the other. Unless approved by Cyalume, Nedivi shall have no authority to bind any member of the Cyalume Group in any respect.

 

11.2         IRCA
Compliance. Nedivi shall present evidence to Cyalume of his identity and authorization to work in the United States as required
by the Immigration Reform and Control Act of 1986 (IRCA).

 

11.3         Assignability
and Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the heirs, executors, administrators,
successors and legal representatives of Nedivi, and shall inure to the benefit of and be binding upon the Company and its successors
and assigns, but the obligations of Nedivi are personal services and may not be delegated or assigned. Nedivi shall not be entitled
to assign, transfer, pledge, encumber, hypothecate or otherwise dispose of this Agreement, or any of Nedivi’s rights and
obligations hereunder, and any such attempted delegation or disposition shall be null and void and without effect. Cyalume and
other members of the Cyalume Group are each a third-party beneficiary of this Agreement and, therefore, each shall have standing
to enforce this Agreement. Nedivi agrees that, in the event of a breach or threatened breach of this Agreement by Nedivi or of
the Services Agreement by the Company, Cyalume and any of the other members of the Cyalume Group may assert a claim directly against
Nedivi without being first required to resort to or exhaust any rights or remedies against the Company.

 

11.4         Severability
and Blue Penciling. If any provision of this Agreement is held to be invalid, the remaining provisions shall remain in full
force and effect. However, if any court determines that any covenant in this Agreement is unenforceable because the duration, geographic
scope or restricted activities thereof are overly broad, then such provision or part thereof shall be modified by reducing the
overly broad duration, geographic scope or restricted activities by the minimum amount so as to make the covenant, in its modified
form, enforceable.

 

11.5         Choice
of Law and Forum. This Agreement shall be interpreted and enforced in accordance with the laws of the State of Delaware, without
regard to its conflict-of-law principles. The Parties agree that any dispute concerning or arising out of this Agreement or the
Services Agreement, or the Company’s and/or Nedivi’s provision of the Services, shall be tried exclusively in an appropriate
state or federal court in the state of Delaware and hereby consent, and waive any objection, to the jurisdiction of any such court.

 

	 	
        Company Initials:_____

        Nedivi Initials:_____

 

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11.6         Mutual
Waiver of Jury Trial. Nedivi and the Company each hereby waive the right to trial by jury in any action or proceeding concerning
or arising out of this Agreement or the Services Agreement, or any matter concerning the Company’s or Nedivi’s provision
of the Services to the Cyalume Group. Nedivi and the Company further agree that a copy of this Agreement may be filed with any
court as written evidence of the knowing, voluntary, and bargained agreement herein irrevocably to waive trial by jury, and that
any such dispute or controversy shall instead be tried in a court of competent jurisdiction by a judge sitting without a jury.

 

11.7         Notices.
If Cyalume serves the Company with any notices, demands or instruments relating to this Agreement, the Services Agreement, or the
rendition of the Services to Cyalume, service upon the Company shall also constitute service upon Nedivi.

 

11.8         Survival
of Terms. All provisions of this Agreement that, either expressly or impliedly, contain obligations that extend beyond
termination of the Term of the Services Agreement (or, if applicable, Nedivi’s employment with Cyalume), including
without limitation those in Sections 4-9 and 11 hereof, shall survive the termination of the Term of the Services Agreement
(or, if applicable, Nedivi’s employment with Cyalume) for any reason.

 

11.9         Interpretation.
The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation
of this Agreement. The language in all parts of this Agreement shall in all cases be construed according to its fair meaning, and
not strictly for or against any Party or third-party. The Parties acknowledge that both of them have participated in drafting this
Agreement; therefore, any general rule of construction that any ambiguity shall be construed against the drafter shall not apply
to this Agreement. In this Agreement, unless the context otherwise requires, the masculine, feminine and neuter genders and the
singular and the plural include one another.

 

11.10       Entire
Agreement. This Agreement constitutes the entire understanding and agreement of the Parties with respect to the subject matter
hereof. This Agreement supersedes all prior negotiations, discussions, correspondence, communications, understandings and agreements
regarding such subject matter. The Company and Nedivi each acknowledges and agrees that it/he is not relying on, and it/he may
not rely on, any oral or written representation of any kind that is not set forth in writing in this Agreement.

 

11.11       Waivers
and Amendments. This Agreement may be altered, amended, modified, superseded or canceled, and the terms hereof may be waived,
only by a written instrument, approved in writing by Cyalume, and signed by the Parties or, in the case of a waiver, signed by
the Party alleged to have waived compliance. No delay by any Party or any member of the Cyalume Group in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any Party or any member of
the Cyalume Group of any such right, power or privilege, nor any single or partial exercise of any such right, power or privilege,
preclude any other or further exercise thereof or the exercise of any other such right, power or privilege.

 

	 	
        Company Initials:_____

        Nedivi Initials:_____

 

    	10

    	 

    

 

11.12       Counterparts.
This Agreement may be executed in counterparts, and each counterpart, when executed, shall have the efficacy of a signed original.
Photographic, electronically scanned and facsimiles of such signed counterparts may be used in lieu of the originals for any purpose.

 

[The remainder of this page is intentionally
blank; signature page follows.]

 

	 	
        Company Initials:_____

        Nedivi Initials:_____

 

    	11

    	 

    

 

IN WITNESS WHEREOF, the
Parties have executed and delivered this Agreement as of the Effective Date.

 

	EAST SHORE VENTURES LLC	 

 

	By:	/s/ Zivi Nedivi	 
	 	Name: Zivi Nedivi	 
	 	Title: President	 

 

	/s/ Zivi Nedivi	 
	Zivi Nedivi	 

 

	 	
        Company Initials:_____

        Nedivi Initials:_____

 

    	12SEPARATION AGREEMENT

AND GENERAL RELEASE

 

This SEPARATION AGREEMENT AND GENERAL RELEASE
(“Agreement”) is entered into by and between Cyalume Technologies, Inc. (the “Company”) and Derek Dunaway
(“Employee”) (collectively, the “Parties” and, each, a “Party”). The Parties entered into an
Employment Agreement effective May 15, 2009 (the “Employment Agreement”), pursuant to which Employer employed Employee
as Chief Executive Officer of the Company (“CEO”) for a three year term ending May 14, 2012. The Company has advised
Employee that it does not intend to renew the Employment Agreement and that it has retained the services of another individual
(the “Successor CEO”) that will assume all the authority and responsibilities previously exercised by Employee, effective
April 2, 2012. In consideration of the mutual promises and agreements contained in this Agreement, and other valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

1.           Cessation
of Employment; Resignation of Directorship. Employee’s employment by the Company will terminate effective May 14,
2012 (the “Termination Date”). Subject to paragraph 9 below, Employee shall cease to have any authority or
responsibility for the conduct of the affairs of the Company as of April 2, 2012 (“Cessation Date”). The Company
will pay Employee the following, less applicable withholdings and deductions: (a) Employee’s regular base salary at the
annual rate of $297,500 to and through the Termination Date; (b) payment for accrued, unused vacation days as of the
Cessation Date will be paid on the Cessation Date; (c) payment of a $100,000 bonus which has been owed to Employee since 2008
will be paid on the Cessation Date. Additionally, the Company will reimburse Employee for unreimbursed business expenses
incurred per existing Company policies, provided such expenses are or have been submitted for reimbursement to the Company in
a manner consistent with Section 11 of the Employment Agreement no later than 10 days after the Termination Date. Effective
on the Cessation Date as of such time the Successor CEO is appointed as CEO, Employee resigns as a member of the
Company’s the Board of Directors and relinquishes his title as CEO.

 

2.           Severance
and Other Enhanced Benefits in Exchange for Signing Agreement. In consideration for, and contingent upon, Employee executing
(and not revoking) this Agreement and the Second Agreement, as defined in and pursuant to the terms of paragraph 22 below, and
in exchange for the promises, covenants, releases and waivers set forth herein, the Company will provide to Employee the following
payments and benefits, to which Employee expressly acknowledges he would not otherwise be entitled:

 

a.           Severance
Pay. The Company will pay Employee as severance pay, less applicable withholdings and deductions, $350,000, which amount shall
be paid in the form of salary continuation (at the annual rate of $350,000) to commence as soon as practicable after the Payment
Commencement Date (as defined in paragraph 22 below), provided that the first payment shall include payment for any payroll dates
between the Termination Date and the date of such first payment.

 

    	 

    	 

    

 

b.           Equity.
Any unvested equity awards issued to the Employee shall become vested in full upon May 14, 2012. Employee currently has
unvested equity awards for 29,998 shares of the Company’s common stock that will vest on the Cessation Date. In order
to permit the Employee to satisfy the Employee’s tax obligations related to the vesting of said equity securities
pursuant to this Section 2.b, the Company shall permit the Employee to sell to the Company one-third (1⁄3) of said
equity securities on the same terms and conditions in effect at the time of vesting, as the Company permits its other
employees to sell equity securities to it. Any options to purchase the Company’s common stock shall terminate on the
termination date specified in such option agreement as if the Employee had continued to be employed by the Company until such
date.

 

3.           COBRA.
Under a separate cover, the Company will inform Employee of Employee’s rights to convert and continue existing health insurance
coverage, if any, under COBRA following the termination of Employee’s employment.

 

4.           No
Other Payments. Employee represents, warrants and acknowledges that the Company owes Employee no wages, overtime pay, commissions,
bonuses, sick pay, personal leave pay, severance pay, vacation pay or other compensation or benefits or payments or form of remuneration
of any kind or nature, other than that specifically provided for in this Agreement.

 

5.           Releases.

 

a.           Release
from Employee to the Company. For good and valuable consideration, including, without limitation, the payments and benefits
provided by paragraph 2 above, Employee hereby voluntarily, knowingly and willingly releases, acquits and forever discharges the
Company and its former, current and future parents, subsidiaries, divisions, affiliates, predecessors, successors and assigns,
and each of their current, former and future agents, employees, officers, directors, shareholders, members, trustees, heirs, joint
venturers, attorneys, representatives, owners and servants, (collectively, the “Company Entities”) from any and all
claims, costs or expenses of any kind or nature whatsoever (collectively, “Claims”), whether known or unknown, foreseen
or unforeseen, that Employee ever had, now has or may have based upon any matter, fact, cause or thing, occurring from the beginning
of time up to and including the Termination Date, including, without limitation, all Claims regarding Employee’s employment
with the Company, any events that may have occurred during the course of Employee’s employment or the termination of Employee’s
employment, or any other matters or Claims of any kind or nature. This includes, without limitation, a release of any Claims for
unpaid wages, holiday pay, overtime, bonuses or other compensation, breach of contract, wrongful discharge, disability benefits,
life, health and medical insurance, sick leave, or any other fringe benefit, employment discrimination, unlawful harassment, retaliation,
emotional distress, violations of public policy, defamation, fraudulent misrepresentation or inducements and severance pay. Employee
is also specifically releasing any rights or Claims Employee may have, if any, under common law or the Worker Adjustment Retraining
and Notification Act, the Age Discrimination in Employment Act (“ADEA”) (which prohibits discrimination in employment
based on age), Older Workers Benefit Protection Act of 1990 (“OWBPA”) (which also prohibits discrimination in employment
based on age), Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Civil Rights Act of 1866, the Rehabilitation
Act, the Labor Management Relations Act, the Equal Pay Act, the Americans with Disabilities Act, the Employment Retirement Income
Security Act, the Sarbanes-Oxley Act of 2002, Massachusetts Law Prohibiting Unlawful Discrimination, as amended, Mass. Gen. Laws
ch. 151B, §§ 1 et seq., Massachusetts Equal Pay Law (Massachusetts Discriminatory Wage Rates Penalized Law),
Mass. Gen. Laws ch. 149, §§ 105A et seq., Massachusetts Right to be Free from Sexual Harassment Law, Mass. Gen.
Laws ch. 214, § 1C, Massachusetts Discrimination Against Certain Persons on Account of Age Law, Mass. Gen. Laws ch. 149,
§§ 24A et seq., Massachusetts Equal Rights Law, Mass. Gen. Laws ch. 93, §§ 102 et seq., Massachusetts
Violation of Constitutional Rights Law, Mass. Gen. Laws ch. 12, § 11I, Massachusetts Family and Medical Leave Law, Mass Gen.
Laws ch. 149, § 52D, all the above statutes as amended from time to time, and any other federal, state or local laws, rules,
ordinances or regulations, whether equal employment laws, rules or regulations or otherwise or any right under any Company pension,
welfare, or stock plans. This release covers both Claims that Employee knows about, and those that Employee may not know about.
By signing this Agreement, Employee is forever giving up Employee’s rights to make the aforementioned Claims or demands.
Notwithstanding the foregoing, nothing contained herein shall be construed to alter, limit, or release (i) any claim or right
to indemnification and/or contribution Employee may have pursuant to applicable law or pursuant to the Company’s governance
instruments for acts committed during the scope of Employee’s employment with the Company; (ii) coverage, if any, under
any Company liability insurance policy; (iii) any claim or right under state unemployment and workers’ compensation statutes;
(iv) any right Employee may have to a vested benefit under any pension or welfare plan of the Company or under the Plan, as modified
by paragraph 2.b above; (v) any other claim or right that may not be released by private agreement; and (vi) any claim arising
from obligations of the Company to Employee that are expressly set forth in this Agreement.

 

    	2

    	 

    

 

b.           Release
from the Company to Employee. For good and valuable consideration, including without limitation the Release set forth in paragraph
5.a above, the Company hereby voluntarily, knowingly and willingly releases, acquits and forever discharges Employee and his administrators,
heirs, executors and assigns (the “Employee Entities”) from any and all Claims, whether known or unknown, foreseen
or unforeseen, that the Company ever had, now has or may have based upon any matter, cause or thing occurring from the beginning
of time up to and including the Termination Date, including, but not limited to, all Claims regarding Employee’s employment
with the Company, any events that may have occurred during the course of Employee’s employment or the termination of his
employment, or any other matters or Claims of any kind or nature. This release covers both Claims that the Company knows about,
and those that the Company may not know about. This release does not cover Claims that may arise from obligations of the Employee
to the Company that are expressly set forth in this Agreement. Notwithstanding the foregoing, this paragraph shall not include
a release or waiver of any Claim arising from or relating to any criminal, grossly negligent or fraudulent
conduct or willful gross misconduct by Employee.

 

6.           No
Pending Lawsuits; No Assignment of Claims. Employee represents and warrants that Employee has not filed any Claim, lawsuit
or charge against any of the Company Entities. Employee hereby promises never to file a Claim, lawsuit or charge asserting any
Claims that Employee has released in Paragraph 5.a above, except that nothing in this Agreement, including
the provisions of this paragraph and paragraph 5.a above, shall prevent Employee from filing a charge or complaint with
or from participating in an investigation or proceeding conducted by the Equal Employment Opportunity Commission (EEOC), National
Labor Relations Board (NLRB), or any other federal, state or local agency charged with the enforcement of any laws. However, to
the extent any such charge or complaint or any other Claim is made against any of the Company Entities (including the EEOC or
NLRB), Employee expressly waives any Claim to any form of monetary or other damages, or any other form of individual recovery
or relief in connection with any such charge, complaint or Claim. Employee further represents and warrants that Employee has not
heretofore assigned or transferred, or purported to assign or transfer, to any person, firm, corporation or entity any Claim or
other matter herein released. Notwithstanding the foregoing, nothing herein shall prohibit Employee from challenging the validity
of the ADEA or OWBPA waiver herein; however, in the event Employee unsuccessfully does so, Employee may be held liable for the
Company’s attorney’s fees and costs to the same extent that successful defendants are allowed attorney’s fees
under the ADEA and/or OWBPA.

 

    	3

    	 

    

 

7.           Consequences
of Violation of Promises. If Employee breaches this Agreement including, but not limited to, by filing, bringing or
participating in any Claims or actions contrary to Employee’s agreements and representations made herein, including,
but not limited to, those in paragraphs 5 and 6 above, in addition to any other rights and remedies the Company may have, (i)
Employee will immediately repay to the Company all amounts received by Employee under paragraph 2 above and shall forfeit all
rights to any and all future payments and benefits, if any, to be provided under this Agreement, except for $100, which shall
be consideration for the release in paragraph 5.a above; and (ii) all unexercised stock options owned by Employee shall
immediately terminate. Further, if either Party breaches this Agreement, the non-breaching Party may recover from the
breaching Party all costs and expenses, including reasonable attorneys’ fees, incurred by the non-breaching Party in
connection with enforcing the terms of this Agreement. The foregoing provisions of this paragraph 7 shall not apply to any
Claims that Employee files under ADEA or OWBPA or any challenge that Employee makes to the validity of the ADEA or OWBPA
waiver contained in this Agreement. In the event Employee unsuccessfully challenges the validity of the ADEA or OWBPA waiver
herein, Employee may be held liable for the Company's attorneys' fees and costs to the same extent that successful defendants
are allowed attorneys' fees under the ADEA and/or OWBPA.

 

8.           Return
of Company Property. Employee acknowledges and agrees that all information (in paper or electronic form), materials and equipment
of any kind that Employee created or acquired during the course of Employee’s employment with the Company (collectively,
“Company Property”) are and remain the property of the Company. Such Company Property includes, without limitation,
books, handbooks, manuals, files, papers, memoranda, letters, facsimiles, photographs/images, audio recordings/files, electronically
stored information, software, computers, PDAs and Blackberries. Employee agrees that he has an obligation to return all Company
Property to the Company and covenants and represents that, as of the Termination Date, (i) he shall have returned to the Company
all Company Property (including that in electronic form); (ii) he shall not have made or taken copies of such Company Property;
and (iii) he shall have completely removed all electronically stored Company Property from all storage media in his possession,
custody or control, including, without limitation, from Employee’s home computer system(s) and any external disk or flash
drives. Notwithstanding the forgoing, the Parties agree that Employee may retain the laptop computer and the cellular telephone/PDA
that the Company has provided to him, provided, as of the Termination Date, all data concerning the Company is erased therefrom.
At the Company’s request, Employee agrees to provide the Company with access to such computer and cellular telephone/PDA
for the sole purpose of confirming that all data concerning the Company is erased therefrom.

 

    	4

    	 

    

 

9.           Cooperation.
Employee agrees to assist and to cooperate with the Company in connection with the defense or prosecution of any claim that
may be made against or by the Company, or in connection with any ongoing or future investigation or dispute or claim of any
kind involving the Company, including any proceeding before any arbitral, administrative, judicial, legislative, or other
body or agency, including testifying in any proceeding to the extent such claims, investigations or proceedings relate to
services performed or required to be performed by Employee, pertinent knowledge possessed by Employee, or any act or omission
by Employee. 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, 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 will
reimburse Employee for reasonable expenses Employee incurs in fulfilling Employee’s obligations under this paragraph.
The provisions of this paragraph 9 shall terminate and be of no further force and effect as of May 14, 2014.

 

10.          Non-Disparagement.
Employee agrees that Employee will not make, or cause to be made, any disparaging, negative or adverse statements
whatsoever, whether in public or private, and whether written, oral or otherwise, concerning any of the Company Entities or
their respective businesses, products or services. Similarly, the Company will not expressly authorize the issuance of any
such statement with respect to Employee. Furthermore, the Company shall instruct its current officers and director
(collectively, the “Specified Individuals”) not to make, or cause to be made, any disparaging, negative or
adverse statements whatsoever, whether in public or private, and whether written, oral or otherwise, concerning Employee, and
the Company shall use its best efforts to ensure that the Specified Individuals comply with such instruction. Nothing
contained herein shall create any personal liability on behalf of the Specified Individuals. This paragraph does not
apply to factual statements made in connection with legal proceedings, governmental and regulatory investigations and
actions, and internal Company investigations or any other statement or disclosure required by law. The provisions of this
paragraph 10 shall terminate and be of no further force and effect as of May 14, 2019.

 

11.          Requests
for Information and Testimony. Employee agrees that, in the event Employee is contacted by or on behalf of a person whom
Employee knows or reasonably should know is an actual or potential party in connection with an actual or potential Claim
involving the Company for the purpose of obtaining information or testimony from Employee concerning Employee’s or
others’ employment, duties or activities at the Company (including, without limitation, knowledge Employee came into
possession of in connection with Employee’s employment with the Company) that is known or reasonably should be known to
be relevant to such actual or potential Claim, Employee shall, to the extent permitted by law, (i) prior to providing any
such information or testimony and within 4 days of receipt of such request, advise the Company that such information or
testimony is sought, (ii) cooperate with the Company and its representatives (including its counsel) in connection with the
request for such information or testimony; and (iii) refuse to provide such information or testimony absent legal requirement
to do so. If Employee is legally required to comply with such request for information or testimony (e.g., if such
request is in the form of a subpoena or other legal process), to the extent permitted by law, Employee shall, in advance of
providing any response and within 4 days of receipt of such request, provide written notice to the Company of such request so
that it may seek to assert its rights and interests in connection with such request. Nothing in this Agreement shall prohibit
or restrict Employee from providing information to or otherwise cooperating with a governmental or law enforcement
organization. The provisions of this paragraph 11 shall terminate and be of no further force and effect as of May 14,
2019.

 

    	5

    	 

    

 

12.          Confidentiality
of this Agreement. The terms of this Agreement, including the specific amount paid hereunder, are and shall be kept confidential
by Employee and the Company and shall not hereafter be disclosed by Employee or the Company to any other person or entity, including,
without limitation, any current, former or future employees of the Company Entities, except (i) as may be required by law; (ii)
as may be required by any taxing authority; (iii) by each Party to his or its respective counsel, accountants, or financial advisors;
(iv) as may be required in the performance or enforcement of this Agreement; (v) by Employee, to Employee’s immediate family
members, as necessary; and (vi) by the Company to its current employees, officers, directors, shareholders and members with a reason
to know such information, provided in the cases of (iii), (v) and (vi), the disclosing Party makes the person to whom disclosure
is made aware of the confidentiality provisions of this Agreement and such person to whom disclosure is to be made agrees to keep
the terms and conditions of this Agreement fully confidential.

 

13.          Confidentiality,
Inventions, Non-Solicitation, Noncompetition. Employee acknowledges and hereby reaffirms Employee’s continuing obligations
to the Company pursuant to the Employment Agreement, including without limitation those under Sections 4 (Noncompetition by Employee),
5 (Confidentiality), 6 (Non-Solicitation) and 12 (Inventions, Etc.) of the Employment Agreement. Employee acknowledges, represents
and warrants that Employee has complied and will continue to comply with such obligations. A copy of the Employment Agreement is
annexed hereto and the terms thereof are hereby incorporated by reference.

 

14.          Entire
Agreement. This Agreement and the provisions of the Employment Agreement that survive Employees termination of employment set
forth the entire agreement between the Parties and fully supersedes any and all prior agreements or understanding between them
pertaining to the subject matter thereof. This Agreement may not be altered, modified, amended or changed, in whole or in part,
except in writing executed by Employee and Company. The Company and Employee acknowledge and agree that they are not relying on,
and they may not rely on, any oral or written representation of any kind that is not set forth in writing in this Agreement.

 

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15.          Severability.
If any provision of this Agreement is held to be invalid, the remaining provisions shall remain in full force and effect.
However, the invalidity of any such provision shall have no effect upon, and shall not impair the enforceability of the
release language set forth in paragraph 5.a above, provided that, upon a finding by a court of competent jurisdiction that
the release language found in paragraph 5.a above is unenforceable, the Company shall rewrite paragraph 5.a above to cure the
defect and Employee shall re-execute the release upon request, and Employee shall not be entitled to any additional monies,
benefits and/or compensation therefor.

 

16.          Interpretation.
The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation
of this Agreement. The language in all parts of this Agreement shall in all cases be construed according to its fair meaning, and
not strictly for or against any Party. No provision in this Agreement will be interpreted in favor of, or against, any of the Parties
by reason of the extent to which any such Party or its counsel participated in the drafting thereof or by reason of the extent
to which any such provision is inconsistent with any prior draft hereof or thereof. In this Agreement, unless the context otherwise
requires, the masculine, feminine and neuter genders and the singular and the plural include one another.

 

17.          No
Admission. Nothing contained in this Agreement, nor the fact that the Parties sign this Agreement, shall be considered as an
admission of any type by either Party.

 

18.          Waiver.
No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement
of any provision of this Agreement except by written instrument signed by the Party charged with such waiver or estoppel. 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.

 

19.          Choice
of Law and Forum. This Agreement shall be interpreted and enforced in accordance with the laws of the State of Delaware, without
regard to its conflict-of-law principles. Employee agrees that any dispute concerning or arising out of this Agreement shall be
tried exclusively in an appropriate state or federal court in Delaware and hereby irrevocably consents and waives any objection
to the jurisdiction of any such court.

 

20.          Waiver
of Trial By Jury. Each Party each hereby waives any right to trial by jury on any claim, counterclaim, setoff, demand action
or cause of action whatsoever between them, including, without limitation, those arising out of or in any way pertaining or relating
to (i) this Agreement, (ii) any dealings between Employee and the Company with respect to this Agreement, and (iii) Employee’s
employment with the Company or termination thereof, whether now existing or hereafter arising, and whether sounding in contract,
tort or otherwise. Each Party agrees that either of them may file a copy of this Agreement with any court as written evidence of
the knowing, voluntary, and bargained agreement between Employee and the Company irrevocably to waive trial by jury, and that any
dispute or controversy whatsoever between Employee and the Company shall instead be tried in a court of competent jurisdiction
by a judge sitting without a jury. This paragraph shall not affect or limit the scope of any release of claim contained herein.

 

    	7

    	 

    

 

21.          Counterparts.
This Agreement may be executed in counterparts, and each counterpart, when executed, shall have the efficacy of a signed original.
Photographic and electronically created copies of such signed counterparts may be used in lieu of the originals for any purpose.

 

22.          Period
for Review and Right to Revoke. Company and Employee acknowledge and agree that, (i) Employee will have twenty-one (21) days
from the receipt of this Agreement in which to consider its terms (including, without limitation, Employee’s release and
waiver of any and all claims under the ADEA) before executing it; (ii) changes to the terms of this Agreement, whether material
or immaterial, will not restart this twenty-one (21) day period; and (iii) Employee will have seven (7) days after Employee’s
execution of this Agreement in which to revoke Employee’s acceptance of this Agreement, in which event a written notice of
such revocation must be received by Mark J. Goldberg, Esq., Loeb & Loeb LLP, 345 Park Ave, New York, NY 10154, on or before
5:00 p.m. on the seventh (7th) day; and (iv) this Agreement will become effective and enforceable on the eighth (8th)
day after Employee’s execution of this Agreement pursuant to the terms of this paragraph (the “Effective Date”),
provided (A) Employee has not previously revoked this Agreement pursuant to the terms hereof; and (B) Employee has executed and
delivered this Agreement to Mr. Goldberg no later than 5:00 p.m. on the twenty-first (21st) day following Employee’s
receipt of this Agreement from the Company. For this Agreement to be valid and enforceable, Employee must execute and deliver this
Agreement to Yaron Eitan on or before April 18, 2012 at 5:00 p.m. Further, if Employee executes this Agreement prior to the Termination
Date, then, in exchange for the consideration furnished to Employee in this Agreement, Employee shall re-execute and deliver to
the Company in the same manner as provided for in this paragraph another copy of this Agreement (the “Second Agreement”)
on or before 5:00 p.m. on the fifth (5th) day after the Termination Date; provided however that such re-execution by
Employee shall not constitute a waiver by Employee of the benefits to which Employee is entitled, or a release to the Company of
any of its obligations, under this Agreement. Employee agrees that Employee shall not be entitled to any additional monies, benefits
and/or compensation for so executing the Second Agreement. If Employee executes the Second Agreement, Employee will likewise be
entitled to the seven-day revocation provided for in this paragraph with respect to such Second Agreement. The “Payment Commencement
Date” shall be on the 8th day after Employee signs the Second Agreement, provided he has not previously revoked
the Second Agreement.

 

23.          Voluntary
and Knowing Execution of Agreement. Employee acknowledges that (i) Employee has been advised by the Company to consult an
attorney regarding any potential claims as well as the terms and conditions of this Agreement before executing it; (ii) Employee
fully understands the terms of this Agreement including, without limitation, the significance and consequences of the Release
in Paragraph 5.a above, including that it includes a release of age discrimination claims; (iii) Employee is executing this Agreement
in exchange for consideration in addition to anything of value to which he/she is already entitled, and (iv) Employee is fully
satisfied with the terms of this Agreement and is executing this Agreement voluntarily, knowingly and willingly and without duress.

 

[The remainder of this page is intentionally
blank; signature page follows.]

 

    	8

    	 

    

 

IN WITNESS WHEREOF, the Parties hereto have
executed this Agreement on the below-indicated dates.

 

	CYALUME TECHNOLOGIES, INC.	 	 
	                     (Company)	 	 
	 	 	 
	By:	/s/ Yaron Eitan	 	/s/ Derek Dunaway
	 	Name: Yaron Eitan	 	Derek Dunaway
	 	Title: Vice President, on behalf of the special committee	 	 

 

	Dated:	March 30, 2012	 	Dated:	March 30, 2012

 

    	9

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