Document:

ex10-2.htm

    
      

    

    Exhibit
10.2

     

     

    
      MODIFICATION, WAIVER AND
CONSENT AGREEMENT

      

      

      This Modification, Waiver and Consent
Agreement is made this 17th day of December, 2008 (“Agreement”) among IDO
Security Inc., a Nevada corporation (the “Company”), and the signatories
hereto who are Subscribers under a Subscription Agreement with the Company dated
on or about December 24, 2007 (“Subscription Agreement”).

      

      WHEREAS, the Company is contemplating
an additional investment of an aggregate of up to $1,351,137.50 Purchase Price
in promissory Notes, Preferred Stock  and Warrants of the Company
(“New Financing”); and

      

      WHEREAS, the Company is in default of
material terms of the Transaction Documents and the Subscribers may elect to
exercise their rights to accelerate the Maturity Date of the Notes and foreclose
on the Collateral under the Security Agreement.

      

      NOW THEREFORE, in consideration of the
promises and mutual covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby consent and agree as follows:

      

      1.            
All capitalized terms herein shall have the meanings ascribed to them in the
Transaction Documents (as defined in the Subscription Agreement).

      

      2.            
The undersigned consent to the New Financing and to the amendment of all
Schedules, Exhibits and documents including but not limited to the Collateral
Agent Agreement, Security Agreement, and the Intercreditor and Modification
Agreement to include the New Financing and to subordinate Subscribers’ security
interest and to authorize the Collateral Agent to make additional filings at the
discretion of the Collateral Agent to memorialize the first priority security
interest to be granted, to the investors in the New Financing.

      

      3.            
Annexed hereto is Amended Schedules A-1(Junior Lenders) and A-2 (Senior Lenders)
to the Security Agreement and Collateral Agent Agreement which will replace the
current Schedule A.

      

      4.            
The undersigned Subscribers waive the rights granted to them pursuant to Section
12(a), Right of First Refusal, of the Subscription Agreement, only to the extent
such rights relate to the New Financing but do not waive the anti-dilution
rights and protections contained in Section 12(b) Favored Nations Provision of
the Subscription Agreement and in the Transaction Documents.

      

      5.            
Subscribers hereby agree and consent to the issuance by the Company of up to
100,000 shares of the Company’s Common Stock (or securities convertible into
common stock) to service providers.

      

      6.            
Subscribers agree to waive through December 31, 2008 the Company’s defaults of
the terms of the Transaction Documents but do not waive any liquidated
damages.

      

      7.            
Company acknowledges, agrees and represents that in connection with the New
Financing the rights and provisions of Section 12(b) Favored Nations Provision
of the Subscription Agreement, Section 3.4 (d) of the Note and Section 3.4 of
the Warrant shall apply to the Securities issued and issuable to Subscribers
pursuant to the Subscription Agreement and Transaction Documents.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      8.            
The Company acknowledges and agrees that the New Financing will not result in
the commencement of a new holding period pursuant to Rule 144 for any person
holding Securities of the Company or having the right to receive Securities of
the Company.

      

      

      
        9.            
The
following Section 2.1 of the Notes dated December 24, 2007 shall be
deleted

      

      

      2.1.           Payment of Monthly Amount in
Cash or Common Stock.  Subject to Section 3.2 hereof, the
Borrower, at the Borrower’s election, shall pay the Monthly Amount (i) in cash
in an amount equal to 110% of the Principal Amount component of the Monthly
Amount and 100% of all other components of the Monthly Amount, within four (4)
business days after the applicable Repayment Date, or (ii) in registered Common
Stock at an applied conversion rate equal to the lesser of (A) the Fixed
Conversion Price (as defined in section 3.1 hereof), or (B) seventy-five percent
(75%) of the average of the closing bid price of the common stock as reported by
Bloomberg L.P. for the Principal Market for the ten trading days preceding the
date a Notice of Conversion, if any, [as described in Section 3.3a] is given to
the Borrower by Holder after Borrower notifies Holder of its election to pay the
Monthly Amount with shares of Common Stock pursuant to the following
sentence.  The Borrower must send notice to the Holder by confirmed
telecopier not later than 6:00 P.M., New York City time on the twenty-second
trading day preceding a Repayment Date notifying Holder of Borrower’s election
to pay the Monthly Redemption Amount in cash or Common Stock.  The
Notice must state the amount of cash to be paid and include supporting
calculations.  If the Borrower elects to pay the Monthly Amount with
Common Stock and if the Holder does not give Notice of Conversion then the
Repayment Date shall be deemed the Conversion Date and the Conversion Price
shall be the lessor of (A) the Fixed Conversion Price (as defined in section 3.1
hereof) or (B) seventy five (75%) of the average of the closing bid price for
the five trading days preceding the Repayment Date.  Until fifteen
(15) trading days after notice is given by the Borrower that the Borrower has
elected to pay the Monthly Amount with Common Stock, the holder may elect to
defer such payment of Common Stock until the Holder has elected to deliver a
Notice of Conversion with respect to such Monthly Amount.  The
Conversion Price with respect to such deferred Monthly Amount shall be the
Conversion Price set forth above in subsection (ii) of this Section
2.1.  Amounts paid with shares of Common Stock must be delivered to
the Holder as described in Section 3.3(b).    Elections by
the Borrower must be made to all Other Holders in proportion to the relative
Note principal held by the Holder and the Other Holders.  If such
notice is not timely sent or if the Monthly Redemption Amount is not timely
delivered, then Holder shall have the right, instead of the Company, to elect at
any time from when such notice was required to be given until the applicable
Repayment Date whether to be paid in cash or Common Stock.  Such
Holder’s election shall not be construed to be a waiver of any default by
Borrower relating to non-timely compliance by Borrower with any of its
obligations under this Note.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      and
replaced with the following:

      

      2.1              Payment of Monthly Amount in
Cash or Common Stock.  Subject
to Section 3.2 hereof, the Borrower, at the Borrower’s election, shall pay
the Monthly Amount (i) in cash in an amount equal to 110% of the Principal
Amount component of the Monthly Amount and 100% of all other components of the
Monthly Amount, within four (4) business days after the applicable Repayment
Date, or (ii) in registered Common Stock at an applied conversion rate equal to
the lesser of (A) the Fixed Conversion Price (as defined in section 3.1 hereof),
or (B) seventy-five percent (75%) of the average of the closing bid price of the
common stock as reported by Bloomberg L.P. for the Principal Market for the five
trading days preceding the date a Notice of Conversion, if any, [as described in
Section 3.3a] is given to the Borrower by Holder after Borrower notifies Holder
of its election to pay the Monthly Amount with shares of Common Stock pursuant
to the following sentence.  The Borrower must send notice to the
Holder by confirmed telecopier not later than 6:00 P.M., New York City time on
the twenty-second trading day preceding a Repayment Date notifying Holder of
Borrower’s election to pay the Monthly Redemption Amount in cash or Common
Stock.  The Notice must state the amount of cash to be paid and
include supporting calculations.  If the Borrower elects to pay the
Monthly Amount with Common Stock and if the Holder does not give Notice of
Conversion then the Repayment Date shall be deemed the Conversion Date and the
Conversion Price shall be the lessor of (A) the Fixed Conversion Price (as
defined in section 3.1 hereof) or (B) seventy five (75%) of the average of the
closing bid price for the five trading days preceding the Repayment Date.
Borrower must give Holder fifteen (15) trading days notice prior to each
Repayment Date if Borrower will pay the Monthly Amount in cash, otherwise such
payment will be made by delivery of shares of Common Stock.  The
foregoing sentence notwithstanding such Monthly Amount if to be paid with shares
of Common Stock will be automatically deferred (“Deferred Payment”) unless the
Holder gives notice to the Borrower at least five (5) days before a Repayment
Date that the Holder will accept payment of such Monthly Amount in the form of
Common Stock.  The Conversion Price of each Deferred Payment will be
the lesser of (i) the Conversion Price (as defined in Section 3.1 hereof), or
(ii) seventy-five percent (75%) of the average of the closing bid prices of the
Common Stock as reported by Bloomberg L.P. for the Principal Market for the five
(5) trading days preceding the date a Notice of Conversion (a form of which is
annexed as Exhibit A to this Note) is given by Holder to the Borrower with respect to such
Deferred Payment. Amounts paid with shares of Common Stock must be
delivered to the Holder as described in Section 3.3(b).  Elections by
the Borrower must be made to all Other Holders in proportion to the relative
Note principal held by the Holder and the Other Holders.  The
foregoing notwithstanding, no amount payable hereunder may be paid in shares of
Common Stock by the Borrower without the consent of the Holder after and during
the pendency of an Event of Default (or an event that with the passage of time
or the giving of notice could become an Event of Default), unless waived in
writing by the Holder.  Common Stock delivered pursuant to this
Section 2 must be immediately resellable and transferable by the Holder without
any additional holding period.

      

      10.           All
other terms of the Transaction Documents shall remain unamended and in full
force and effect.

      

      11.           This
Agreement constitutes the entire agreement among the parties, and supersedes all
prior and contemporaneous agreements and understandings of the parties in
connection herewith.  No changes, modifications, terminations or
waivers of any of the provisions hereof shall be binding unless in writing and
signed by all of the parties thereto.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      12.           Except
as expressly modified pursuant to this Agreement, the terms of each Note remains
unchanged and in full force and effect.

      

      13.           This
Agreement may be executed in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.  This Agreement may also be
executed by either party hereto by facsimile signature, which shall be deemed to
be an original signature of such party hereon.

      

      

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      IN
WITNESS WHEREOF, the undersigned have executed and delivered this Modification,
Waiver & Consent as of the date first written above.

      

      
        	
                "COMPANY"

              	 	
                "THE
      COLLATERAL AGENT"

              
	
                IDO
      SECURITY INC.

              	 	
                BARBARA
      R. MITTMAN

              
	
                a
      Nevada corporation

              	 	 
      	 
      	 
      
	 
      	 
      	 	 
      	 
      	 
      
	 
      	 
      	 	 
      	 
      	 
      
	
                By:

              	
                 

              	 	
                 

              
	
                Its:

              	
                 

              	 	 
      	 
      	 
      
	 
      	 
      	 	 
      	 
      	 
      
	 
      	 
      	 	 
      	 
      	 
      
	 
      	 
      	 	 
      	 
      	 
      
	 
      	 
      	 	
                Name
      of Subscriber (Print):

              
	 
      	 
      	 	 
      	 
      	 
      
	 
      	 
      	 	
                 

              
	 
      	 
      	 	 
      	 
      	 
      
	 
      	 
      	 	 
      	 
      	 
      
	 
      	 
      	 	
                By:

              	
                 

              
	 
      	 
      	 	 
      	 
      	 
      
	 
      	 
      	 	
                Print
      Name of Signator:Employment Agreement, dated as of December 19, 2008

 Exhibit 10.112 
 EMPLOYMENT AGREEMENT 
 This EMPLOYMENT AGREEMENT (the “Agreement”), dated as of
December 19, 2008, is entered into by and between CORTEX PHARMACEUTICALS, INC. (the “Company”), and MARK VARNEY (the “Executive”). 
 WITNESSETH 
 WHEREAS, the Executive has considerable experience in management and pharmaceutical
research and development. 
 WHEREAS, the Company wishes to employ the Executive as its President and Chief Executive Officer, and the
Executive wishes to be so employed by the Company. 
 NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as
follows: 
 1. Engagement. The Company hereby employs the Executive as its President and Chief Executive Officer, reporting to the
Company’s Board of Directors, and the Executive hereby accepts such employment, on the terms and conditions hereinafter set forth. Additionally, during the term of this Agreement, the Company shall nominate the Executive for reelection as a
member of the Board of Directors and use its best efforts to cause Executive to be so elected. 
 2. Term. The term of this Agreement
will begin on August 13, 2008, and shall continue thereafter for an initial three (3) year period, unless earlier terminated pursuant to the provisions of this Agreement or otherwise extended by mutual agreement of the Company’s Board
of Directors and the Executive. 
 3. Duties. During the term of this Agreement, the Executive shall serve as the Company’s
President and Chief Executive Officer, and shall have such duties and responsibilities as are set forth in the Company’s Bylaws and such other executive responsibilities as may be assigned to him from time to time by the Company’s Chairman
of the Board and/or the Board of Directors. In particular and without limitation, the Executive’s duties shall include using diligent efforts as appropriate to (i) assist in raising additional equity capital and research and development
funds for the Company, (ii) facilitate the internal development of the Company’s technology assets, (iii) integrate developments licensed from academic laboratories into the technology base of the Company, and pursue both the in/out
licensing of technologies and/or acquisition of other technologies complementary to those of the Company, (iv) develop relationships with potential corporate partners for the development and commercialization of the Company’s technologies,
and (v) pursue the in-licensing of drug candidates from third parties. The Executive shall use his best efforts and shall act in good faith in performing all duties reasonably required to be performed by him under this Agreement. 
  

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 4. Availability. Except as herein provided, the Executive shall devote substantially all of his
working time, attention and energies to the Company’s business and, except as provided herein, during the term of this Agreement shall not be engaged in any other business activity without the prior written approval of the Board of Directors.
The Executive may engage in a reasonable level of professional activities as are typical for individuals of a comparable professional stature. 
 5. Compensation. As compensation for the services to be rendered hereunder, the Company agrees as follows: 
 (a) To pay the Executive an annual salary of not less than Three Hundred Sixty-Two Thousand Dollars ($362,000) per annum, subject to increases based on an annual review by the Compensation Committee of the Board of Directors. 
 (b) To provide the Executive with the opportunity to earn an annual bonus based upon the attainment of individual and corporate
performance criteria defined by the Board of Directors in such amounts as shall be within the discretion of the Compensation Committee and as the Board of Directors determines is appropriate based on the overall financial condition of the Company.

 (c) To continue the mortgage assistance program adopted at the time of Executive’s hire. The mortgage assistance
program specifies that the Company will provide an interest subsidy over five (5) years in the form of monthly payments, whereby the Company will pay 6% of the principal amount of a mortgage (which mortgage shall not to exceed $1,200,000) on
Executive’s primary residence in Southern California during the first year, 5% during the second year, 4% during the third year, 3% during the fourth year, and 2% during the fifth year. Payments under the mortgage assistance program will also
be subject to an income tax gross up factor of 1.6. This mortgage assistance program started in August 2006 and will terminate upon the earlier of (i) Executive’s termination of employment with the Company or (ii) August 2011.

 (d) To reimburse the Executive, promptly upon presentation of itemized vouchers, for all ordinary and customary business
expenses, consistent with the Company’s reimbursement policy, incurred by the Executive in the performance of his duties. 
 (e) To allow the Executive to participate in such employee benefit programs as are made available to the management of the Company when and as the Executive becomes eligible therefore under the terms of such programs, including, without
limitation, group health, disability and life insurance benefits and participation in other employee benefit plans. 
  

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 (f) To allow the Executive to have four (4) weeks of paid vacation each year during
the term of this Agreement, subject to the maximum accrual permitted by the Company’s employment policies. The Company and the Executive agree that time devoted by the Executive toward travel to, and attendance at, scientific meetings, boards
of director meetings, and trips to meet with business leaders at trade associations shall not constitute vacation periods. The Executive acknowledges that salary and all other compensation payable under this Agreement shall be subject to withholding
for income and other applicable taxes to the extent required by law. 
 6. Ownership of Material Information. All right, title and
interest of every kind and nature whatsoever in and to discoveries, inventions and improvements, patents (and applications therefore), copyrights, ideas, know how, creations or other proprietary rights arising from or connected with the
Executive’s employment with the Company shall become and remain the exclusive property of the Company, and the Executive shall have no interest therein. The Executive agrees to sign the standard proprietary rights agreement that is required of
all Company employees. 
 7. Confidential Information. The Executive covenants and agrees with the Company that he will not, during
the term of this Agreement or thereafter, disclose to anyone (except to the extent reasonably necessary for the Executive to perform his duties hereunder or as may be required by law) any confidential information concerning the business or affairs
of the Company (or of any affiliate or subsidiary of the Company), including but not limited to business plans, joint ventures, financial or cost information, and confidential scientific and clinical information (whether of the Company or entrusted
to the Company by a third party under a confidentiality agreement or understanding), which the Executive shall have acquired in the course of or incident to the performance of his duties pursuant to the terms of this Agreement or his prior
employment by the Company. Nothing herein shall be construed as prohibiting the Executive from disclosing to anyone any information which is, or which becomes, available to the public (other than by reason of a violation by the Executive of this
Section 7), which is a matter of general business knowledge or experience or which the Executive is required to disclose under applicable law. 
 8. Termination for Cause. The Company may terminate the employment of the Executive under this Agreement at any time for “Cause” (as hereinafter defined) upon notice to the Executive. As used herein, the term
“Cause” shall mean only: (a) the Executive’s willful refusal or failure to perform the duties assigned to him; provided, however, that the employment of the Executive shall not be terminated under this clause unless the Executive
is given notice in writing by the Chairman of the Board or the Board of Directors that the conduct in question constitutes grounds for termination under this Section 8 and the Executive is allowed a period of thirty (30) days to remedy the
refusal or failure; (b) the Executive’s conviction of a crime involving moral turpitude under the laws of any state, the District of Columbia or of the United States; or (c) the Executive’s breach of any of the material terms of
this Agreement. If the employment of the Executive under this Agreement is terminated under Section 8, the Company shall give written notice to the Executive specifying the cause of such action. Upon the effectiveness of a termination of
employment under this Section 8, (i) the Executive agrees to immediately tender his resignation from the Company’s Board of Directors and (ii) the Company shall be relieved of all further obligations under this Agreement, except

  

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as set forth in this Section 8. In the event of a termination of this Agreement pursuant to this Section 8, the Company’s sole liability to
Executive shall be (i) to pay Executive the installments of his then base salary accrued hereunder and unpaid for services rendered by Executive up to the date of such termination, together with any accrued but unused vacation, accrued and
unpaid reimbursements under Section 5(d), and accrued and unpaid amounts under the mortgage assistance program described in Section 5(c), and (ii) to pay the unpaid portion, if any, of any bonus that was previously awarded to him but
which is unpaid as of the effective date of such termination of employment, unless the payment of such bonus is dependent on Executive’s continued employment with the Company or the satisfaction of any other conditions that have not been
satisfied at the time of the termination of his employment. Notwithstanding such termination of employment, the Executive shall continue to be bound by the provisions of Sections 6 and 7. 
 9. Termination Without Cause or for Good Reason. 
 (a) The Company may terminate the employment of the Executive under this Agreement without Cause at any time upon at least sixty (60) days’ prior written notice to the Executive. In the event of (i) a
termination by the Company of the Executive’s employment for any reason other than Cause, (ii) the Executive’s termination of his employment for Good Reason, the Company shall pay to the Executive, in accordance with its normal
payroll practices, severance pay equal to twelve (12) months of the base salary based upon the average monthly base salary for the twelve (12) months immediately prior to the termination event. 
 (b) The Executive may terminate his employment under this Agreement at any time in accordance with this Section 9(b) for “Good
Reason,” which shall mean (i) the Company’s breach of any of the material terms of this Agreement, (ii) a material reduction or alteration of the duties of the Executive, or (iii) the relocation absent the Executive’s
consent of Executive’s principal office to a location more than 35 miles from the Company’s current headquarters (other than for temporary assignments or required travel in connection with the performance by Executive of his duties for the
Company). In order to terminate his employment under this Agreement for Good Reason, the Executive must provide written notice to the Company of the existence of the condition giving rise to Good Reason (a “Good Reason Condition”) within
ninety (90) days of the initial existence of such Good Reason Condition. Upon receipt of such notice of the Good Reason Condition, the Company will be provided with a period of sixty (60) days during which it may remedy the Good Reason
Condition, or ninety (90) days in the event of a Change of Control of the Company (as defined in Section 12), and not be required to provide for the payments and benefits described herein as a result of such proposed resignation due to the
Good Reason Condition specified in the notice. If the Good Reason Condition is not remedied within the period specified in the preceding sentence, and provided that the Executive is still employed by the Company, the Executive may resign for Good
Reason based on the Good Reason Condition specified in the notice, provided that such resignation must occur within two years after the initial existence of such Good Reason Condition. 
  

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 (c) In the event of either a termination by the Company of the Executive’s
employment without Cause or the Executive’s termination of his employment for Good Reason in either case which constitutes a “separation from service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) and the regulations promulgated thereunder, including Treasury Regulation Section 1.409A-1 (h) (a “Separation from Service”), the twelve (12) months of severance pay described in section 9(a)
shall be paid in accordance with its normal payroll practices over the twelve months following the Separation from Service. 
 (d) Nothing contained in this Agreement shall be construed to abrogate the obligations of the Company to the Executive, or the Executive’s personal representative or heirs, as the case may be, to make payment or provide any other
benefit that accrued prior to the termination of the Executive’s employment. Termination of employment under this Section 9 shall not terminate the Executive’s obligations under Sections 6 and 7. 
 10. Death or Disability of the Executive. 
 (a) This Agreement and Executive’s employment with the Company shall terminate immediately, without notice, upon the death of Executive. In the event of Executive’s death, the Company’s sole liability
to Executive shall be to pay Executive’s estate the same compensation that would be due to him under Section 8 in the event of a termination of Executive’s employment for Cause. 
 (b) In the event that the Executive during this period while employed under this Agreement shall at any time become unable, due to
illness, accident, injury or otherwise, to carry out his duties under this Agreement for a period of at least three (3) consecutive months, or a number of days totaling one hundred twenty (120) or more in any period of twelve
(12) consecutive months, the Company may terminate the employment of the Executive under this Agreement. In such event, the Company shall compensate the Executive in an amount equal to the difference between (i) the amount of severance pay
that would have been payable under section 9(a) had Executive been terminated without Cause and (ii) any disability insurance proceeds. A termination of employment under this Section 10 will not terminate the Executive’s obligations
under Sections 6 and 7. 
 11. Voluntary Termination. The Executive may terminate his employment under this Agreement at any time by
giving the Company ninety (90) days written notice. In the event of Executive’s voluntary termination, the Company’s sole liability to Executive shall be to pay Executive the same compensation that would be due to him under
Section 8 in the event of a termination of Executive’s employment for Cause. Termination of employment under this Section 11 shall not terminate the Executive’s obligations under Sections 6 and 7. 
  

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 12. Grant of Stock Options. The Company may grant to the Executive annual stock options to
purchase shares of common stock of the Company with an exercise price equal to the market price of the stock on the date of the grant. The decision whether to grant options and the quantity to be granted shall be at the sole discretion of the
Company’s Compensation Committee with appropriate consultation with the Chairman of the Board. The Executive’s stock option position will be reviewed by the Compensation Committee of the Board of Directors from time to time, but in no
event less than annually, and increases in such stock option position may be awarded dependent upon the performance of the Executive and performance factors for the Company. To the maximum extent permissible under the Code, stock options granted to
the Executive shall be “incentive stock options” as defined in Section 422 of the Code. The general terms and conditions of stock options granted to the Executive shall be in accordance with the stockholder-approved plans established
for the granting of options, amended from time to time and the Company’s customary form of stock option agreement; provided that in the event of the Executive’s termination of employment (i) by the Company without Cause, or
(ii) by the Executive for Good Reason, the Executive’s outstanding stock options shall be exercisable with respect to that portion of such stock options which is vested as of the Executive’s termination for the remainder of their
original term. In addition, notwithstanding anything herein, in any of the Company’s stock option plans or in any stock option agreement between the Company and the Executive, upon a Change of Control (as defined in such plans or agreements)
all stock options then held by the Executive shall vest immediately prior to such Change of Control; provided, however, that such acceleration of vesting shall not occur to the extent that a termination notice under Sections 8 or 11 hereof has been
delivered and such termination is ultimately consummated in accordance with such notice. In the event that the Company’s future plans or option agreements do not provide the definition of a Change of Control, and for purposes of
Section 9(b) hereof, the definition for purposes of such options and Section 9(b) shall be the same as the definition contained in the Company’s Amended and Restated 1996 Stock Incentive Plan. 
 13. Code Section 409A. 
 (a) Notwithstanding any provision to the contrary in this Agreement, if the Executive is deemed by the Company at the time of his Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i)
of the Code, to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion
of Executive’s benefits shall not be provided to Executive prior to the earlier of (a) the expiration of the six-month period measured from the date of the Executive’s Separation from Service with the Company or (b) the date of
Executive’s death. Upon the first business day following the expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section 13(a) shall be paid in a lump sum to Executive, and any
remaining payments due under the Agreement shall be paid as otherwise provided herein. For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)),
Executive’s right to receive the installment payments payable pursuant to Section 9 or 10 (the “Installment Payments”) shall be treated as a right to receive a series of separate payments and, accordingly, each Installment
Payment shall at all times be considered a separate and distinct payment. 
  

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 (b) Any reimbursements payable to the Executive pursuant to this Agreement shall be paid
to the Executive no later than thirty (30) days after submission of the appropriate expense report and, if requested, appropriate supporting documents. The amount of expenses reimbursed in one year shall not affect the amount eligible for
reimbursement in any subsequent year, and the Executive’s right to reimbursement under this Agreement will not be subject to liquidation or exchange for another benefit. 
 14. Capacity. The Executive represents and warrants to the Company that he is not now under any obligation of a contractual nature or otherwise,
to any person, firm, corporation, association, or other entity that is inconsistent or in conflict with this Agreement or which would prevent, limit or impair in any way the performance by him of his obligations hereunder. 
 15. Participation in Competitive Business. While the Executive is employed under this Agreement, the Executive shall not directly or indirectly
either as an employee, employer, consultant, agent, principal, partner, stockholder, corporate consultant, officer, director or in any other individual or representative capacity, engage or participate in any business that is in competition in any
manner whatsoever with the business of the Company without the prior written approval of the Company; provided, however, that nothing herein, shall preclude the Executive from owning less than one percent (1%) of the outstanding capital stock
of any company whose shares are traded on the New York Stock Exchange, the NYSE Alternext US (formerly, the American Stock Exchange) or NASDAQ. 
 16. Waiver. No act, delay, omission or course of dealing on the part of any party hereto in exercising any right, power or remedy hereunder shall operate as, are be construed as, a waiver thereof or otherwise prejudice such
party’s rights, powers and remedies under this Agreement. 
 17. Notice. Any and all notices referred to herein shall be
sufficient if furnished in writing and delivered by hand or by registered or certified mail, return receipt requested, postage fully prepaid, to the respective parties at the following addresses or such other address as either party may from time to
time designate in writing. Notices shall be effective when delivered. 
  

			
	To Executive:	  	Mark Varney
		
	To Company:	  	Attn: Corporate Secretary
		  	Cortex Pharmaceuticals, Inc.
		  	15241 Barranca Parkway
		  	Irvine, California 92618

  

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 18. Arbitration. All disputes arising under or in connection with this Agreement shall be
submitted to arbitration in Orange County, California, under the rules of the American Arbitration Association, and the decision of the arbitrator shall be final and binding. Judgment upon the award rendered may be entered and enforced in any court
having jurisdiction. 
 19. Assignability. The rights and obligations contained herein shall be binding on and inure to the benefit of
the successors and assigns of the Company. The Executive may not assign his rights or obligations hereunder without the prior written consent of the Company. 
 20. Attorneys’ Fees. If either party hereto brings any action to enforce his or its rights hereunder, the Company agrees to compensate the Executive for his reasonable legal fees. Additionally, the Company
agrees to pay for any fees associated with the preparation of this Agreement and, if required by the Company, any potential changes agreed to by the Executive to the terms and conditions of this Agreement in the future. 
 21. Construction. This Agreement shall be governed by and construed in accordance with the laws of the state of California. 
 22. Completeness. This Agreement sets forth all, and is intended by each party to be an integration of all, of the promises, agreements and
understandings between the parties hereto with respect to the subject matter hereof and supercedes all prior agreements and understandings, whether written or oral, between the parties with respect to that subject matter, including, without
limitation, that certain offer letter bearing the date December 22, 2005 from the Company to Executive. Notwithstanding the foregoing, this Agreement shall not supercede the negative equity agreement dated February 1, 2007 by and between
the Company and Executive, which agreement shall continue in full force and effect. 
 23. Counterparts. This Agreement may be
executed in multiple counterparts each of which shall be deemed to be an original, and all of which together shall constitute one agreement binding on the parties hereto. 
 24. Severability. Each provision of this Agreement shall be considered severable and if for any reason any provision that is not essential to the effectuation of the basic purpose of the Agreement is determined
to be invalid or contrary to any existing or future law, such invalidity shall not impair the operation of or affect those provisions of this Agreement that are valid. 
 25. Headings. Headings constrained in the Agreement are inserted for reference and convenience only and in no way define, limit, extend or describe the scope of this Agreement or the meaning or construction of
any of the provisions hereof. 
  

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 26. Survival of Terms. If this Agreement is terminated for any reason, the provision of Sections 6
and 7 shall survive and the Executive and the Company, as the case may be, shall continue to be bound by the terms thereof to the extent provided therein. 
 27. No Duty to Seek Employment. The Executive and the Company acknowledge and agree that nothing contained in the Agreement shall be construed as requiring Executive to seek or accept alternative or replacement
employment in the event of his termination of employment by the Company for any reason, and no payment or benefit payable hereunder shall be conditioned on Executive’s seeking or accepting such alternative or replacement employment. 

IN WITNESS HEREOF, the parties hereto have executed this Employment Agreement on the day and year first above written. 
  

			
	CORTEX PHARMACEUTICALS, INC.
		
	By:	 	/s/ Roger G. Stoll
		 	Name: Roger G. Stoll
		 	Its: Exec. Chairman
	
	EXECUTIVE
	
	/s/ Mark A. Varney
	MARK VARNEY

  

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