Document:

Exhibit 10.2

 

SEVERANCE AGREEMENT

 

This SEVERANCE AGREEMENT
(the “Agreement”) is made and effective this 27th day of March 2014, by and between I.D. Systems, Inc., a Delaware
corporation (the “Company”) and Brett Kilpatrick (“Executive”).

 

BACKGROUND:

 

WHEREAS, Executive
is currently employed as Executive Vice President of Worldwide Sales of the Company; and

 

WHEREAS, the Board
of Directors of the Company (the "Board") has determined it is in the best interests of the Company to enter into
this Agreement to, among other things, help retain and motivate Executive in his position with the Company.

 

NOW, THEREFORE, in
consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:

 

1.     
     Certain Definitions: As used in the Agreement, the following terms shall have the
respective meanings set forth below:

 

(a)          "Affiliate"
of the Company means any Person that controls, is controlled by, or is under common control with, the Company. A Person shall be
deemed to be in control of another Person if, and for so long as, it owns or controls more than 50% of the voting power in the
election of directors (or, in the case of an entity that is not a corporation, for the election of the corresponding managing authority)
of such other Person.

 

(b)          “Cause”
means Executive’s (i) conviction of, or plea of nolo contendere to, a felony or crime involving moral turpitude; (ii) fraud
on or misappropriation of any funds or property of the Company; (iii) willful violation of any law, rule or regulation (other than
minor traffic violations or similar offenses or solely as a result of vicarious liability) or (iv) breach of fiduciary duty which
results in personal profit to Executive. Executive shall be given notice of the termination of Executive's employment for Cause
and shall have an opportunity to be heard by the Board with respect thereto and, to the extent that the Board deems the matter
curable, shall have a reasonable period of time to cure the matter to the Board's reasonable satisfaction.

 

(c)          “Change
in Control Event” means the occurrence of any of the following events with respect to the Company:

 

(i)          the consummation
of any consolidation or merger of the Company in which the holders of the Company's common stock, par value $0.01 per share ("Common
Stock") immediately prior to such consolidation or merger own less than fifty percent (50%) of the outstanding common
stock of the surviving corporation immediately after the merger; or

 

    	 

    	 

    

 

(ii)         the
consummation of any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company, other than to a subsidiary or Affiliate; or

 

(iii)        any
action pursuant to which any person or group (as such terms are defined in Section 13(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), shall become the “beneficial owner” (as such term is defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of shares of capital stock entitled to vote generally for the election
of directors of the Company (“Voting Securities”) representing more than thirty (30%) percent of the combined
voting power of the Company’s then outstanding Voting Securities (calculated as provided in Rule 13d-3(d) in the case of
rights to acquire any such securities); or

 

(iv)        the
individuals (x) who, as of the effective date of this Agreement, constitute the Board (the “Original Directors”)
and (y) who thereafter are elected to the Board and whose election, or nomination for election, to the Board was approved by a
vote of a majority of the Original Directors then still in office (such Directors being called “Additional Original Directors”)
and (z) who thereafter are elected to the Board and whose election or nomination for election to the Board was approved by a vote
of a majority of the Original Directors and Additional Original Directors then still in office, cease for any reason to constitute
a majority of the members of the Board.

 

(d)          “Code”
means the Internal Revenue Code of 1986, as amended.

 

(e)          "Disability"
means that Executive is incapable of performing his principal duties due to physical or mental incapacity or impairment for 120
consecutive days, or for 180 non-consecutive days, during any 12 month period.

 

(e)          “Good
Reason” means (i) a material reduction in Executive’s base salary as in effect from time to time; (ii) a material
reduction in Executive's authority, duties or responsibilities; (iii) Executive’s principal office location being moved to
a location which is more than 25 miles from the principal office location at which Executive performs services on the date this
Agreement is executed or (iv) a material breach by the Company of the agreement under which Executive provides services to the
Company; provided, however, that Executive must notify the Company, within 90 days of the occurrence of any of the foregoing conditions,
that he considers it to be a "Good Reason" condition, and provide the Company with at least 30 days in which to cure
the condition. In addition, the resignation may not occur later than 6 months after the occurrence of the condition giving rise
to the resignation. If Executive fails to provide such notice and cure period prior to his resignation, or his resignation occurs
later than 6 months after the initial occurrence of the condition, his resignation shall not be deemed to be for "Good Reason"
and Executive shall be deemed to have waived any right to receive any of the payments or benefits set forth in Section 2 hereof.

 

(f)          “Person”
means an individual, a partnership, a limited liability company, a corporation, an association, a joint stock corporation, a trust,
a joint venture, an unincorporated organization, or any court, administrative agency or commission or other federal, state, county,
local or foreign governmental authority, instrumentality, agency or commission.

 

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(g)          “Release”
means a separation and general release agreement in the form annexed hereto as Exhibit A and made a part hereof.

 

(h)          “Trigger
Event” means the occurrence of either: (i) the termination of Executive’s employment by the Company other than
a termination for Cause; or (ii) Executive’s resignation for Good Reason, in either case, within 6 months following a Change
in Control Event. For purposes of clarity, a termination of Executive's employment due to his death or Disability shall not be
considered a termination of Executive's employment by the Company other than for Cause, and shall not constitute a Trigger Event.

 

2.            Trigger
Event Payments and Benefits.

 

Within 45 days after
the occurrence of a Trigger Event (or such shorter period as may be required by the Release), Executive shall execute and deliver
to the Company the Release. Upon the sooner of the expiration of any applicable revocation period required for the Release to be
effective with respect to age discrimination claims and the date on which it is otherwise permitted to be effective and irrevocable
under applicable law (such sooner date the “Release Effective Date”), Executive shall be entitled to:

 

(a)          cash
payments (collectively the "Severance Payment") at the rate of Executive’s annual base salary as in effect
immediately prior to the Trigger Event for a period of 12 months (the "Severance Period"), payable as set forth
below. The Severance Payment shall be made as a series of separate payments in accordance with the Company's standard payroll practices
(and subject to all applicable tax withholdings and deductions), commencing with the first regular payroll date on or immediately
following the 60th day after the date of the Trigger Event.

 

(b)          if
Executive timely elects "COBRA" coverage and provided Executive continues to make contributions for such continuation
coverage equal to Executive’s contribution amount in effect immediately preceding the date of Executive’s termination
of employment, the Company shall waive the remaining portion of Executive’s healthcare continuation payments under COBRA
for the Severance Period. Notwithstanding the foregoing, in the event that Executive becomes eligible to obtain alternate healthcare
coverage from a new employer before the end of the Severance Period, the Company’s obligation to waive the remaining portion
of Executive’s healthcare continuation coverage under COBRA shall cease. Executive understands and affirms that Executive
is obligated to inform the Company if Executive becomes eligible to obtain alternate healthcare coverage from a new employer before
the end of the Severance Period.

 

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(c)          Executive's
previously granted Company stock options and restricted stock ("Retention Shares”) shall (to the extent not already
then "vested"), partially "vest" and a portion of the stock options shall be exercisable, in each case on a
pro-rated basis, taking into account the number of months elapsed since the date of grant as compared to the scheduled vesting
date. For example, if the total number of months from the grant date until the vesting date is 36 months, and the Trigger Event
occurs at the end of the 12th month after the grant date, then effective on the Release Effective Date, the total number of vested
options and vested Retention Shares should be equal to 1/3 (i.e., 12/36) of the total number of each granted. Notwithstanding
anything to the contrary contained herein, the terms of the I.D. Systems, Inc. 2007 Equity Compensation Plan (the “Plan”)
shall govern acceleration of vesting of stock options and restricted stock in the event of a “Change of Control” as
defined in the Plan.

 

3.            Covenants
Agreement. As a condition to the Company's obligations hereunder, Executive shall execute and deliver to the Company an agreement
in the form of Exhibit B annexed hereto and made a part hereof relating to confidentiality, assignment of inventions, non-competition
and non-solicitation. The non-competition and non-solicitation covenants shall apply for a period equal to the Severance Period.

 

4.            At
Will Employment. Nothing in this Agreement shall alter Executive’s status as an “at-will” employee.

 

5.            Headings.
Headings used in this Agreement are for convenience of reference only and do not affect the meaning of any provision.

 

6.            Counterparts.
This Agreement may be executed as of the same effective date in one or more counterparts, each of which shall be deemed an original.

 

7.            Binding
Agreement; Assignment. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns.

 

8.            Governing
Law; Jurisdiction. This Agreement and any and all matters arising directly or indirectly herefrom shall be governed by, and
construed in accordance with, the internal laws of the State of New Jersey, without reference to the choice of law principles thereof.
Any legal action, suit or other proceeding arising out of or in any way connected with this Agreement shall be brought in the courts
of the State of New Jersey, or in the United States courts for the District of New Jersey. With respect to any such proceeding
in any such court: (i) each party generally and unconditionally submits itself and its property to the exclusive jurisdiction of
such court (and corresponding appellate courts therefrom), and (ii) each party waives, to the fullest extent permitted by law,
any objection it has or hereafter may have the venue of such proceeding as well as any claim that it has or may have that such
proceeding is in an inconvenient forum.

 

9.            Amendments.
This Agreement may only be amended or otherwise modified, and the provisions hereof may only be waived, by a writing executed by
the parties hereto.

 

10.          Entire
Agreement. This Agreement shall constitute the entire agreement of the parties with respect to the matters covered hereby and
shall supersede all previous written, oral or implied understandings between them with respect to such matters.

 

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11.          Opportunity
to Consult Counsel. Executive hereby acknowledges that he has read and fully understands this Agreement, that he has been advised
that Lowenstein Sandler LLP is counsel to the Company and not to Executive, and that Executive has been advised to, and has had
the opportunity to, consult with counsel and Executive’s personal financial or tax advisor with respect to this Agreement.

 

12.          No
Effect on Other Benefits. Notwithstanding anything contained herein to the contrary, nothing contained herein shall adversely
affect the rights of Executive and his dependents and beneficiaries to any and all benefits to which any of them may be entitled
under the benefit plans and arrangements of the Company in accordance with the terms of such benefit plans and arrangements.

 

13.          Section
409A.

 

(a)          This
Agreement is intended to comply with the requirements of Section 409A of the Code and regulations promulgated thereunder (“Section
409A”). To the extent that any provision in this Agreement is ambiguous as to its compliance with Section 409A, the provision
shall be read in such a manner so that no payments due under this Agreement shall be subject to an "additional tax" as
defined in Section 409A(a)(1)(B) of the Code. For purposes of Section 409A, each payment made under this Agreement shall be treated
as a separate payment. In no event may Executive, directly or indirectly, designate the calendar year of payment.

 

(b)          Notwithstanding
anything to the contrary contained herein, if necessary to comply with the restriction in Section 409A(a)(2)(B) of the Code concerning
payments to “specified employees,” any payment on account of Executive’s separation from service that would otherwise
be due hereunder within six months after such separation shall nonetheless be delayed until the first business day of the seventh
month following Executive’s date of termination and the first such payment shall include the cumulative amount of any payments
that would have been paid prior to such date if not for such restriction, together with interest on such cumulative amount during
the period of such restriction at a rate, per annum, equal to the applicable federal short-term rate (compounded monthly) in effect
under Section 1274(d) of the Code on the date of termination. For purposes of Section 2 hereof, Executive shall be a “specified
employee” for the 12-month period beginning on the first day of the fourth month following each “Identification Date”
if he is a “key employee” (as defined in Section 416(i) of the Code without regard to Section 416(i)(5) thereof) of
the Company at any time during the 12-month period ending on the “Identification Date.” For purposes of the foregoing,
the Identification Date shall be December 31. Notwithstanding anything contained herein to the contrary, Executive shall not be
considered to have terminated employment with the Company for purposes of Section 2 hereof unless he would be considered to have
incurred a “termination of employment” from the Company within the meaning of Treasury Regulation §1.409A-1(h)(1)(ii).

 

(c)          Executive
acknowledges that any tax liability incurred by Executive under Section 409A of the Code is solely the responsibility of Executive.

 

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14.          No
Mitigation. Executive shall be under no obligation to seek other employment after Executive's termination of employment with
the Company, and the obligations of the Company to Executive which arise pursuant to Section 2 of this Agreement shall not be subject
to mitigation or offset.

 

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

 

	 	 	I.D. SYSTEMS, INC.	 
	 	 	 	 	 
	 	 	By:	/s/
    Kenneth S. Ehrman	 
	 	 	 	Name: Kenneth S. Ehrman	 
	 	 	 	Title: Interim CEO and President	 
	 	 	 	Date: 3/27/14	 
	Date:	 	 	 	 
	 	 	 	 	 
	WITNESS:	 	EXECUTIVE:	 
	 	 	 	 	 
	/s/
    Ned Mavrommatis	 	/s/
    Brett Kilpatrick	 
	Name: Ned Mavrommatis	 	Name:  Brett Kilpatrick	 
	Date: 3/27/14	 	Date: 3/27/14	 

 

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EXHIBIT A

FORM OF RELEASE

 

SEPARATION AND GENERAL RELEASE AGREEMENT

 

This Separation and
General Release Agreement (the "Agreement") is entered into between _______________ with an address at _____________________________
(the “Employee") and I.D. Systems, Inc. ("ID Systems"), together with its parent, divisions,
affiliates, and subsidiaries and their respective officers, directors, employees, shareholders, members, partners, plan administrators,
attorneys, and agents, as well as any predecessors, future successors or assigns or estates of any of the foregoing with an address
at 123 Tice Boulevard, Woodcliff Lake, New Jersey 07677 (the “Released Parties”).

 

1.          Separation
of Employment. Employee acknowledges and understands that Employee’s last day of employment with ID Systems was _______________
(the “Separation Date”). Employee acknowledges and agrees that, except as otherwise provided in this Agreement,
Employee has received all compensation and benefits to which Employee is entitled as a result of Employee’s employment. Employee
understands that, except as otherwise provided in this Agreement, Employee is entitled to nothing further from any of the Released
Parties, including reinstatement by ID Systems.

 

2.          Employee
General Release of Released Parties. In consideration of the payments and benefits set forth in Section 4 below, Employee hereby
unconditionally and irrevocably releases, waives, discharges, and gives up, to the full extent permitted by law, any and all Claims
(as defined below) that Employee may have against any of the Released Parties, arising on or prior to the date of Employee’s
execution and delivery of this Agreement to ID Systems. “Claims” means any and all actions, charges, controversies,
demands, causes of action, suits, rights, and/or claims whatsoever for debts, sums of money, wages, salary, severance pay, commissions,
bonuses, unvested stock options, vacation pay, sick pay, fees and costs, attorneys fees, losses, penalties, damages, including
damages for pain and suffering and emotional harm, arising, directly or indirectly, out of any promise, agreement, offer letter,
contract, understanding, common law, tort, the laws, statutes, and/or regulations of the State of New Jersey or any other state
and the United States, including, but not limited to, federal and state whistleblower laws, Title VII of the Civil Rights Act of
1964, the Civil Rights Act of 1991, the Equal Pay Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the
Employment Retirement Income Security Act (excluding COBRA), the Vietnam Era Veterans Readjustment Assistance Act, the Fair Credit
Reporting Act, the Age Discrimination in Employment Act (“ADEA”), the Older Workers’ Benefit Protection
Act, the Occupational Safety and Health Act, the Sarbanes-Oxley Act of 2002, the New Jersey Law Against Discrimination, the New
Jersey Family Leave Act, the New Jersey Civil Rights Act, and the New Jersey Conscientious Employee Protection Act, as each may
be amended from time to time, whether arising directly or indirectly from any act or omission, whether intentional or unintentional.
This Section 2 releases all Claims including those of which Employee is not aware and those not mentioned in this Agreement. Employee
specifically releases any and all Claims arising out of Employee’s employment with ID Systems or separation therefrom. Employee
expressly acknowledges and agrees that, by entering into this Agreement, Employee is releasing and waiving any and all Claims,
including, without limitation, Claims that Employee may having arising under ADEA, which have arisen on or before the date of Employee’s
execution and delivery of this Agreement to ID Systems.

 

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3.          Representations;
Covenant Not to Sue. Employee hereby represents and warrants to the Released Parties that Employee has not: (A) filed, caused
or permitted to be filed any pending proceeding (nor has Employee lodged a complaint with any governmental or quasi-governmental
authority) against any of the Released Parties, nor has Employee agreed to do any of the foregoing; (B) assigned, transferred,
sold, encumbered, pledged, hypothecated, mortgaged, distributed, or otherwise disposed of or conveyed to any third party any right
or Claim against any of the Released Parties that has been released in this Agreement; or (C) directly or indirectly assisted any
third party in filing, causing or assisting to be filed, any Claim against any of the Released Parties. Except as set forth in
Section 11 below, Employee covenants and agrees that he shall not encourage or solicit or voluntarily assist or participate in
any way in the filing, reporting or prosecution by herself or any third party of a proceeding or Claim against any of the Released
Parties.

 

4.          Payment.
As good consideration for Employee’s execution, delivery, and non-revocation of this Agreement, ID Systems shall provide
Employee with the payments and benefits set forth in Section 2 of the Severance Agreement, dated as of March [__], 2014, between
Employee and ID Systems payable as set forth therein. Employee acknowledges that Employee is not otherwise entitled to receive
the payments and benefits described in this Section 4 and acknowledges that nothing in this Agreement shall be deemed to be an
admission of liability on the part of any of the Released Parties. Employee agrees that Employee will not seek anything further
from any of the Released Parties.

 

5.          Who
is Bound. ID Systems and Employee are bound by this Agreement. Anyone who succeeds to Employee’s rights and responsibilities,
such as the executors of Employee’s estate, is bound, and anyone who succeeds to ID Systems’s rights and responsibilities,
such as its successors and assigns, is also bound.

 

6.          Cooperation.   
Employee agrees that, within five business days of the Separation Date, he shall provide ID Systems (attention: _________) with
a written comprehensive summary of all outstanding work activities, current and prospective customer contact information, and otherwise
reasonably cooperate as necessary to effect a transition of his responsibilities.  Employee also agrees that he will cease
from communicating with any current ID Systems employees (with the exception of __________________) regarding ID Systems personnel
or other business-related matters. Employee agrees to reasonably cooperate in any ID Systems investigations and/or litigation regarding
events that occurred during Employee’s tenure with ID Systems.  ID Systems will compensate Employee for reasonable expenses
Employee incurs in extending such cooperation regarding investigations and/or litigation, so long as Employee provides advance
written notice of Employee’s request for compensation.

 

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7.          Non
Disparagement and Confidentiality. Employee agrees not to make any defamatory or derogatory statements concerning any of the
Released Parties. Provided inquiries are directed to ID Systems’ Department of Human Resources, ID Systems shall disclose
to prospective employers information limited to Employee’s dates of employment and last position held by Employee. Employee
confirms and agrees that Employee shall not, directly or indirectly, disclose to any person or entity or use for Employee’s
own benefit, any confidential information concerning the business, finances or operations of ID Systems or its customers; provided,
however, that Employee’s obligations under this Section 7 shall not apply to information generally known in ID Systems’
industry through no fault of Employee or the disclosure of which is required by law after reasonable notice has been provided to
ID Systems sufficient to enable ID Systems to contest the disclosure. Confidential information shall include, without limitation,
trade secrets, customer lists, details of contracts, pricing policies, operational materials, marketing plans or strategies, security
and safety plans and strategies, project development, and any other non-public or confidential information of, or relating to,
ID Systems or its affiliates. Employee also agrees that the amounts paid to Employee and all of the other terms of this Agreement
shall be kept confidential, unless ID Systems discloses them in a public filing. Employee acknowledges that he continues to be
bound by the Confidentiality, Assignment of Contributions and Inventions, Non-Competition and Non-Solicitation Agreement (the “Covenants
Agreement”).

 

8.          Remedies.
If Employee tells anyone the amount paid to Employee or any other term of this Agreement (unless ID Systems has publicly disclosed
the terms of this Agreement in a public filing), breaches any other term or condition of this Agreement or the Covenants Agreement,
or any representation made by Employee in this Agreement was false when made, it shall constitute a material breach of this Agreement
and, in addition to and not instead of the Released Parties’ other remedies hereunder, under the Covenants Agreement or otherwise
at law or in equity, Employee shall be required to immediately, upon written notice from ID Systems, return the payments paid by
ID Systems hereunder, less $500. Employee agrees that if Employee is required to return the payments, this Agreement shall continue
to be binding on Employee and the Released Parties shall be entitled to enforce the provisions of this Agreement as if the payments
had not been repaid to ID Systems and ID Systems shall have no further payment obligations to Employee hereunder. Further, in the
event of a material breach of this Agreement, Employee agrees to pay all of the Released Parties’ attorneys’ fees and
other costs associated with enforcing this Agreement.

 

9.          ID
Systems Property. Employee represents that he has returned all ID Systems property in Employee’s possession, custody
or control, including, but not limited to, all ID Systems equipment, samples, laptop computers, personal digital assistants, cell
phones, pass codes, keys, swipe cards, documents or other materials that Employee received, prepared, or helped prepare. Employee
represents that Employee has not retained any copies, duplicates, reproductions, computer disks, or excerpts thereof of ID Systems’
documents.

 

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10.         Construction
of Agreement. In the event that one or more of the provisions contained in this Agreement shall for any reason be held unenforceable
in any respect under the law of any state of the United States or the United States, such unenforceability shall not affect any
other provision of this Agreement, but this Agreement shall then be construed as if such unenforceable provision or provisions
had never been contained herein or therein. If it is ever held that any restriction hereunder is too broad to permit enforcement
of such restriction to its fullest extent, such restriction shall be enforced to the maximum extent permitted by applicable law.
This Agreement and any and all matters arising directly or indirectly herefrom or therefrom shall be governed under the laws of
the State of New Jersey, without reference to choice of law rules. ID Systems and Employee consent to the sole jurisdiction of
the federal and state courts of New Jersey. ID SYSTEMS AND EMPLOYEE HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL BY JURY IN
ANY ACTION CONCERNING THIS AGREEMENT OR ANY AND ALL MATTERS ARISING DIRECTLY OR INDIRECTLY HEREFROM AND REPRESENT THAT THEY HAVE
CONSULTED WITH COUNSEL OF THEIR CHOICE OR HAVE CHOSEN VOLUNTARILY NOT TO DO SO SPECIFICALLY WITH RESPECT TO THIS WAIVER.

 

11.         Acknowledgments.
ID Systems and Employee acknowledge and agree that:

 

(A) By entering into
this Agreement, Employee does not waive any rights or Claims that may arise after the date that Employee executes and delivers
this Agreement to ID Systems;

 

(B) This Agreement
shall not affect the rights and responsibilities of the Equal Employment Opportunity Commission (the “EEOC”)
to enforce the ADEA and other laws, and further acknowledge and agree that this Agreement shall not be used to justify interfering
with Employee’s protected right to file a charge or participate in an investigation or proceeding conducted by the EEOC.
Accordingly, nothing in this Agreement shall preclude Employee from filing a charge with, or participating in any manner in an
investigation, hearing or proceeding conducted by, the EEOC, but Employee hereby waives any and all rights to recover under, or
by virtue of, any such investigation, hearing or proceeding;

 

(C) Notwithstanding
anything set forth in this Agreement to the contrary, nothing in this Agreement shall affect or be used to interfere with Employee’s
protected right to test in any court, under the Older Workers’ Benefit Protection Act, or like statute or regulation, the
validity of the waiver of rights under ADEA set forth in this Agreement; and

 

(D) Nothing in this
Agreement shall preclude Employee from: exercising Employee’s rights, if any (i) under Section 601-608 of the Employee Retirement
Income Security Act of 1974, as amended, popularly known as COBRA, or (ii) ID Systems’s pension plan or 401(k) plan,
if applicable.

 

12.         Opportunity
For Review.

 

(A)         Employee
represents and warrants that Employee: (i) has had sufficient opportunity to consider this Agreement; (ii) has read this Agreement;
(iii) understands all the terms and conditions hereof; (iv) is not incompetent or had a guardian, conservator or trustee appointed
for Employee; (v) has entered into this Agreement of Employee’s own free will and volition; (vi) has duly executed and delivered
this Agreement; (vii) understands that Employee is responsible for Employee’s own attorney’s fees and costs; (viii)
has had the opportunity to review this Agreement with counsel of Employee’s choice or has chosen voluntarily not to do so;
(ix) understands the Employee has been given twenty-one (21) days to review this Agreement before signing this Agreement and understands
that he is free to use as much or as little of the 21-day period as he wishes or considers necessary before deciding to sign this
Agreement; (x) understands that if Employee does not sign and return this Agreement to ID Systems within 21 days of his receipt,
ID Systems shall have no obligation to enter into this Agreement, Employee shall not be entitled to the payments and benefits set
forth in Section 4 of this Agreement, and the Separation Date shall be unaltered; and (xi) this Agreement is valid, binding and
enforceable against the parties to this Agreement in accordance with its terms.

 

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(B)         This
Agreement shall be effective and enforceable on the eighth (8th) day after execution and delivery to ID Systems by Employee.
The parties to this Agreement understand and agree that Employee may revoke this Agreement after having executed and delivered
it to ID Systems by so advising ID Systems in writing no later than 11:59 p.m. on the seventh (7th) day after Employee’s
execution and delivery of this Agreement to ID Systems. If Employee revokes this Agreement, it shall not be effective or enforceable,
Employee shall not be entitled to the payments and benefits set forth in Section 4 of this Agreement, and the Separation Date shall
be unaltered.

 

Agreed to and accepted on this ____ day
of ________, 20__.

 

	Witness:	 	EMPLOYEE:	 
	 	 	 	 
	 	 	 	 
	 	 	Name:	 
	 	 	 	 
	Agreed to and accepted on this ____ day of ________, 20__.
	 	 	 	 
		 	ID SYSTEMS, INC.	 
	 	 	 	 
	 	 	 	 
	 	 	Name:	 
	 	 	Title:	 

 

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EXHIBIT B

FORM OF COVENANTS AGREEMENT

 

I.D. SYSTEMS, INC.

 

Confidentiality, Assignment of Contributions
and

Inventions, Non-Competition, and Non-Solicitation
Agreement

 

Background.
I am a paid employee of I.D. Systems, Inc., a Delaware corporation (the “Company”). I am executing this Agreement
in consideration of my continued employment with the Company and the severance agreement, effective as of March [__], 2014.

 

1. Confidentiality.
While working for the Company, I may have previously developed or acquired, or may in the future develop or acquire, knowledge
in my work or from my colleagues or otherwise of Confidential Information relating to the Company, its business, potential business
or that of its customers or its or their respective affiliates. “Confidential Information” includes information
concerning the identity of customers or their requirements or key contacts within the customer’s organization, suppliers,
distributors, software programs, demonstration programs, routines, algorithms, computer systems, plans, strategies, research, formulations,
processes, production methods and sources, products and specifications, equipment manufacturing and other techniques, designs,
know-how, show how, trade secrets, inventions, improvements, discoveries, concepts, methodology, formulas, drawings, maps, manuals,
models, specifications, records, files, memoranda, notes, reports, files, correspondence, financial and sales data, pricing lists
or terms, trading terms, training materials and methods, marketing, distribution, and merchandising techniques and strategies,
evaluations, opinions and interpretations, together with all other writings or materials of any type embodying any of the foregoing
and any and all other technical, operating, financial, and business information or materials relating to the Company, its customers
or its or their respective affiliates, whether or not reduced to writing or other medium and whether or not marked or labeled
confidential, proprietary, or the like, regardless of whether created by me, others or both. Confidential Information does not
include information that is or becomes public domain without fault on my part. I will have the burden of proof with respect to
the exclusion of any information from the definition of “Confidential Information.”

 

With respect to Confidential
Information of the Company, its customers and its or their respective affiliates, I agree that:

 

(a) The Confidential
Information is and will continue to be the sole and exclusive property of the Company;

 

(b) Except as required
under applicable law or pursuant to any judicial process or administrative proceeding with subpoena powers, I will use the Confidential
Information only in the performance of my duties for the Company. I will not use the Confidential Information at any time (during
or after my employment with the Company or any of its affiliates) for my personal benefit, for the benefit of any other Person
or in any manner adverse to the interests of the Company, its customers or its or their respective affiliates;

 

    	-12-

    	 

    

 

(c) Except as required
under applicable law or pursuant to any judicial process or administrative proceeding with subpoena powers, I will not disclose
the Confidential Information at any time (during or after my employment with the Company or any of its affiliates) except to authorized
Company personnel, unless the Company consents in advance in writing or unless the Confidential Information indisputably becomes
of public knowledge or enters the public domain (without fault on my part);

 

(d) I will safeguard
the Confidential Information by all reasonable steps and abide by all policies and procedures of the Company and its customers
in effect from time to time regarding storage, copying, destroying, publication or posting, or handling of such Confidential Information,
in whatever medium or format that Confidential Information takes;

 

(e) Except as required
under applicable law or pursuant to any judicial process or administrative proceeding with subpoena powers, I will execute and
abide by all confidentiality agreements that the Company reasonably requests me to sign or abide by, whether those agreements are
for the benefit of the Company, an affiliate or an actual or a potential customer or supplier thereof;

 

(f) I will return all
materials containing or relating to Confidential Information, together with all other Company or customer property, to the Company
when my employment with the Company or any of its affiliates terminates (either voluntary or involuntary) or upon the Company’s
earlier request. I shall not retain any copies or reproductions of correspondence, memoranda, reports, notebooks, drawings, photographs,
or other documents relating in any way to the business or affairs of the Company, its customers or its or their respective affiliates;
and

 

(g) Upon any termination
of my employment with the Company, I will acknowledge to the Company, in writing and under oath, in the form attached hereto as
Exhibit A that I have complied with this Agreement.

 

As used herein, the
term “Person” means an individual, a partnership, a corporation, a limited liability company, an association,
a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity or department, agency
or subdivision of the government entity.

 

For purposes of clauses
(b), (c) and (e), in the event of any required disclosure, I will promptly notify the Company and reasonably cooperate and assist
the Company in resisting such disclosure in the event it chooses to do so.

 

    	-13-

    	 

    

 

2. Contributions
and Inventions.  While employed by the Company, I may make Contributions and Inventions deemed by the Company to have value
to it. The terms “Contributions” and “Inventions” are understood to include all information,
ideas, concepts, technology, improvements, discoveries, formulae, inventions, creations, discoveries, techniques, designs, methods,
trade secrets, technical specifications and data, works, modifications, processes, know-how, show-how, concepts, expressions, improvements,
works of authorship (including computer programs), ideas and other developments, whether or not they are patentable or copyrightable
or subject to analogous protection and regardless of their form or state of development and whether or not I have made them alone
or with others, together with any and all rights to U.S. or foreign applications for patents, inventor’s certifications or
other industrial rights that may be filed thereon, including divisions, continuations-in-part, reissues and/or extensions thereof.

 

This Agreement covers
Contributions and Inventions of any kind that are conceived or made by me, alone or with others, while I am employed by the Company,
regardless of whether they are conceived or made during regular working hours or at my place of work (whether located at the Company,
customer facilities, at home or elsewhere) and that (i) relate to the Company’s business or potential business or that of
its affiliates, (ii) result from tasks assigned to me by the Company, or (iii) are conceived or made with the use of the Company’s
time, facilities, resources, or materials. With respect to Contributions or Inventions covered by this Agreement, I agree that:

 

(a) I will disclose
them promptly to the Company. I will not disclose them to anyone other than authorized Company personnel;

 

(b) They will belong
solely to the Company from conception as “works made for hire” (as that term is used under U.S. copyright law) or otherwise.
To the extent that title to any such Contributions and Inventions do not, by operation of law, vest in the Company, I hereby irrevocably
assign to the Company all right, title and interest, including, without limitation, tangible and intangible rights such as patent
rights, trademarks, and copyrights, that I may have or may acquire in and to all such Contributions and Inventions, benefits and/or
rights resulting therefrom, and agree to promptly execute any further specific assignments related to such Contributions or Inventions,
benefits and/or rights at the request of the Company. If the Company wants more specific or formal evidence of this, I will sign
written documents of assignment at the Company’s request. I also hereby assign to the Company, or waive if not assignable,
all “moral rights” in and to any Contributions and Inventions and agree promptly to execute any further specific assignments
or waivers related to moral rights at the request of the Company; and

 

(c) I will, at any
time, either during the time I am employed by the Company or thereafter, assist the Company in obtaining and maintaining patent,
copyright, trademark, mask works and other protection for them, in all countries and territories, at the Company’s expense.
In the event that the Company is unable to secure my signature after reasonable effort in connection with any patent, trademark,
copyright, mask work or other similar protection relating to a Contribution or an Invention, I hereby irrevocably designate and
appoint the Company and its duly authorized officers and agents as my agent and attorney-in-fact, to act for and on my behalf and
stead to execute and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance
of patents, trademarks, copyrights, mask works or other similar protection thereon with the same legal force and effect as if executed
by me.

 

    	-14-

    	 

    

 

(d) Any Contributions
or Inventions relating to the business of the Company and disclosed to the Company within 6 months following the termination of
my employment shall be deemed to fall within the provisions of this Section 2. The “business of the Company’ as used
in this Section 2 includes the actual business conducted by the Company or any of its affiliates at any time during my employment
with the Company, as well as any business in which the Company or any of its affiliates, at any time during my employment with
the Company, proposes or proposes to engage.

 

3. Obligations
to Prior Employers or Others. I do not have any non-disclosure, non-compete, non-solicitation or other obligations to any
previous employer or other Person that would prohibit, limit, conflict or interfere with my obligations under this Agreement or
the performance of my duties for the Company. I will not disclose to the Company or its customers or induce the Company or its
customers to use any secret or confidential information or material belonging to others, including my former employers, if any.

 

4. Excluded Information.
A complete list, by non-confidential descriptive title of all Contributions, Inventions, ideas, reports or other creative works,
if any, made or conceived by me prior to my employment by the Company and intended to be excluded from this Agreement, is attached
as Exhibit B. I shall not assert any rights under any Contributions, Inventions, ideas, reports or other creative
works as having been made or acquired by me prior to my being employed by the Company, unless such Contributions, Inventions, ideas,
reports or other creative works are identified on Exhibit B. If, after the date of this Agreement, I believe that
any Contribution or Invention is excluded from this Agreement, I agree to obtain written authorization from the Company, prior
to applying for any patent on the Contribution or Invention, and prior to taking any steps to commercially exploit the Contribution
or Invention.

 

5. Covenant Against
Competition and Solicitation.

 

(a) I acknowledge and
understand that, in view of my position as an employee of the Company, I may have previously been afforded, or in the future may
be afforded, access to the Company’s Confidential Information and that of its affiliates. I therefore agree that during the
course of my employment with the Company or any of its affiliates and for a period of 12 months after termination of my employment
with the Company and all of its affiliates (for any reason or no reason) (the “Restricted Period”), I will not,
anywhere within the United States of America or any other country or territory in which the Company or its affiliates conducts
business, either directly or indirectly, whether alone or as an employee, employer, consultant, independent contractor, agent,
principal, partner, joint venturer, stockholder, member, officer, director or otherwise of any company or other business enterprise,
or in any other individual or representative capacity, engage in, assist in, participate in, or otherwise be connected to or benefit
from any Competitive Business. As used in this Agreement, “Competitive Business” shall mean any individual,
entity, or business enterprise that is engaged in or is seeking to engage in: (i) the development, design, manufacture, marketing,
sale and/or distribution of tracking and monitoring products; or (ii) the development, design, manufacture, marketing, sale and/or
distribution of any products that are directly competitive with products that (a) represent at least 10% of the Company’s
consolidated product revenues, (b) were first sold or distributed by the Company or any of its affiliates during the preceding
12-month period, or (c) are being developed, produced, marketed and/or distributed by the Company or any of its affiliates and
are scheduled to be first sold or distributed by the Company within a 12-month period; provided, however, that for purposes of
this definition, a business shall be a “Competitive Business,” as it applies during the 12 month period after termination
of my employment only if the Company is engaged or is actively seeking to engage in that business on the date of my termination
of employment with the Company or was engaged or actively seeking to engage in that business at any time during the preceding 12
months.

 

    	-15-

    	 

    

 

(b) During the Restricted
Period, I will not, without the express prior written consent of the Company, directly or indirectly: (i) solicit, induce, or assist
any third person in soliciting or inducing any Person that is (or was at any time within the 12 months prior to the solicitation
or inducement) an employee, consultant, independent contractor or agent of the Company or any of its affiliates to leave the employment
of the Company or any of its affiliates or cease performing services as an independent contractor, consultant or agent of the Company
or any of its affiliates; (ii) hire, engage, or assist any third party in hiring or engaging, any individual that is or was (at
any time within the 12 months prior to the attempted hiring) an employee of the Company or any of its affiliates; or (iii) contact,
communicate, solicit, or transact any business with or assist any third party in contacting, communicating, soliciting, or transacting
any business with any Person that is or was (at any time within 12 months prior to the contact, communication, solicitation, or
transaction) a customer, distributor or supplier of the Company or its affiliates (or Person who, at any time during the 12 months
prior to the contact, communication, solicitation, or transaction, the Company or its affiliates contacted, communicated with or
solicited for the purposes of becoming a customer, distributor, or supplier of the Company or its affiliates and I was in any way
involved or otherwise had knowledge of or reasonably should have had knowledge of such contact, communication, or solicitation)
for the purposes of inducing such customer, distributor, or supplier or potential customer, distributor, or supplier to be connected
to or benefit from any business competitive with that of the Company or its affiliates or terminate its or their business relationship
with the Company or its affiliates.

 

6. Non-Disparagement.
I will not at any time (during or after my employment with the Company) disparage the reputation of the Company, its affiliates,
or any of its or their respective officers and directors.

 

7. Interpretation
and Scope of this Agreement.

 

(a)          In
the event that any court of competent jurisdiction shall determine that any one or more of the provisions contained in this Agreement
shall be unenforceable in any respect, then such provision shall be deemed limited and restricted to the extent that the court
shall deem the provision to be enforceable. It is the intention of the parties to this Agreement that the covenants and restrictions
in this Agreement be given the broadest interpretation permitted by law. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other provision hereof. The covenants and restrictions contained
in this Agreement shall be deemed a series of separate covenants and restrictions. If, in any judicial proceeding, a court of competent
jurisdiction should refuse to enforce all of the separate covenants and restrictions in this Agreement, then such unenforceable
covenants and restrictions shall be deemed eliminated from the provisions of this Agreement for the purpose of such proceeding
to the extent necessary to permit the remaining separate covenants and restrictions to be enforced in such proceeding.

 

    	-16-

    	 

    

 

(b)          I
acknowledge that the restrictions on the activities in which I may engage that are set forth in this Agreement and the location
and period of time for which such restrictions apply are reasonable and necessary to protect the legitimate business interests
of the Company and shall survive the termination of my employment. I understand that the Company’s business is global and,
accordingly, the restrictions cannot be limited to any particular geographic area. I further acknowledge that the restrictions
contained in this Agreement will not prevent me from earning a livelihood during the applicable period of restriction.

 

(c)          I
understand and agree that if I breach or threaten to breach any of the provisions of this Agreement, including, without limitation,
the provisions of Sections 1, 2, 5 or 6 hereof, the Company would suffer irreparable harm and damages would be an inadequate remedy.
Accordingly, I acknowledge that, in the event of any breach or threatened breach by me of any of the provisions of this Agreement,
the Company shall be entitled to temporary, preliminary and permanent injunctive or other equitable relief in any court of competent
jurisdiction (without being required to post a bond or other collateral) and to an equitable accounting of all earnings, profits
and other benefits arising, directly or indirectly, from such violation, which rights shall be cumulative and in addition to (rather
than instead of) any other rights or remedies to which the Company may be entitled at law or in equity. In addition (and not instead
of those rights), I further covenant that I shall be responsible for payment of the reasonable fees and expenses of the Company’s
attorneys and experts, as well as the Company’s court costs, pertaining to any suit, arbitration, mediation, action or other
proceeding (including the costs of any investigation related thereto) in which the Company prevails, arising directly or indirectly
out of my violation or threatened violation of any of the provisions of this Agreement. If the Company does not prevail in any
suit, arbitration, mediation, action or other proceeding arising directly or indirectly out of my purported violation of any of
the provisions of this Agreement, the Company shall be responsible for payment of the reasonable fees and expenses of attorneys
and experts that I incur, as well as my court costs, pertaining to any such suit, arbitration, mediation, action or other proceeding
(including the costs of any investigation related thereto).

 

(d)          This
Agreement shall be binding upon me, my heirs, assigns and personal representatives and shall inure to the benefit of the Company,
its affiliates and their respective successors and assigns (including, without limitation, the purchaser of all or substantially
all of its assets).

 

(e)          This
Agreement shall constitute the entire agreement between Company and myself with respect to the matters covered hereby and shall
supersede all previous written, oral or implied understandings between us with respect to such matters.

 

(f)          I
acknowledge that my employment with the Company is “at-will.” I understand that nothing contained in this Agreement
shall give me a right to continue in the employ of the Company, and the right to terminate my employment with the Company, at any
time, with or without cause, is specifically reserved to the Company. I also understand that I may resign from employment with
the Company at any time in my discretion.

 

    	-17-

    	 

    

 

(g)          Any
and all actions or controversies arising out of this Agreement, Employee’s employment by the Company or termination therefrom,
including, without limitation, tort claims, shall be construed and enforced in accordance with the internal laws of the State of
New Jersey, without regard to the choice of law principles thereof.

 

I represent and warrant that: (a) I
have read this Agreement; (b) I understand all the terms and conditions hereof; (c) I have entered into this Agreement of my own
free will and volition; (d) I have been advised by the Company to seek and have, to the extent I have deemed necessary, received
the advice of counsel of any own selection; and (e) the terms of this Agreement are fair, reasonable and are being agreed to voluntarily
in exchange for my continued employment with the Company and the severance agreement effective as of March [__], 2014.        

 

	Date:______________	 	 
	 	 	 	Name:
	 	 	 	 
	Accepted:	 	 
	 	 	 
	I.D. SYSTEMS, INC.	 	 
	 	 	 	 
	By:	 	 	 

 

    	-18-

    	 

    

 

EXHIBIT A

 

STATE OF NEW JERSEY

COUNTY OF _________________

 

The undersigned, being
duly sworn, does hereby certify that he/she has complied with, and will continue to comply with, for the applicable period set
forth therein, all of the terms of the Confidentiality, Assignment of Contributions and Inventions, Non Competition and Non-Solicitation
Agreement dated _______ __, 200_ by the Undersigned in favor of I.D. Systems, Inc. (the “Company”). I have returned
all Company property and all materials relating to or containing Confidential Information to the Company and I have not retained
any copies or reproductions of any correspondence, memoranda, reports, notebooks, drawings, photographs or other documents or materials
relating to the affairs of the Company, its customers and its or their affiliates.

 

	 	 
	 	Name:

 

	Sworn and Subscribed to	 
	before me this ____ day of	 
	______________, ______	 
	 	 
	 	 

 

    	-19-

    	 

    

 

EXHIBIT B

 

Excluded Information

(See Section 4. If None, type “NONE”)

 

NONE

 

    	-20-EXHIBIT 10.21

 

OFFICE SPACE LEASE 

 

This OFFICE SPACE LEASE
(the “Lease”) is made as of the 21st day of January 2013, by and between 15850 Holdings, LLC, a Delaware
limited liability company or its assigns (“Landlord”) and DGSE Companies, Inc., a Nevada corporation (“Tenant”).
The date this Lease is executed and delivered by both parties hereto shall be referred to hereinafter as the “Execution Date.”

 

WITNESETH:

 

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

 

1.           Leased
Property. Landlord demises and leases to Tenant and Tenant leases and takes from Landlord all those certain “Premises”
consisting of approximately 4,500 square feet of the Building, including a designated portion of the Building’s vault and
a designated portion of the Building’s shipping area. The “Building” as that term is used herein shall mean the
existing approximate 76,544 square foot building existing on the approximately 7.035 acres of land (the “Land”) located
at 15850 Dallas Parkway, Dallas, TX 75248.

 

2.           Common
Areas. Landlord grants Tenant a nonexclusive license for the Term to use the parking areas, roadways, pedestrian sidewalks,
driveways, landscape areas, public washrooms, cafeteria, workout facility, and all other areas and facilities in the Building and
on the Land provided and designated from time to time by Landlord for the general nonexclusive use and convenience of Tenant and
other tenants in the Building (“Common Areas”).

 

3.           Lease
Term. The term of the Lease shall start on the Execution Date and terminate on December 31, 2015 (the “Term”).

 

4.           Rent.

 

(a)          Tenant
agrees to commence the payment of Rent for the Premises in the amount of $90,000.00 per year, to be paid in monthly installments
of $7,500.00, commencing on January 1, 2014 (“Rent Commencement Date”). Tenant shall pay Rent in advance on the first
day of each calendar month succeeding the Rent Commencement Date throughout the Term, with appropriate proration for any partial
calendar month or Lease Year, to: 15850 Holdings, LLC, 15850 Dallas Parkway, Dallas, TX 75248, Attention: Accounting, unless and
until Landlord shall give Tenant written notice of a change of address or of the party to whom such rents shall be payable.

 

(b)          If Tenant shall fail to pay any Rent within five (5) days after the same is due, Tenant shall be obligated to pay a late
payment charge equal to ten percent (10%) of the Rent payment not paid when due to reimburse the Landlord its administrative
costs.

 

    	 

    	 

    

 

5.           Delivery
and Alterations.

 

(a)          Landlord
is delivering the Premises to Tenant in as-is condition. Landlord will provide Tenant an Improvement Allowance of $40,000.00,
for Tenant improvements (the “Improvements”), upon the Execution Date.

 

(b)          During
the Term, Tenant shall not have the right to make any further alterations or modifications to the Premises without Landlord’s
prior written authorization.

 

6.           Mechanics’
Liens. Tenant covenants that it will not permit any lien to be filed against the Premises nor shall Tenant permit any judgment,
lien or attachment to lien, as applicable, against the Premises as a result of nonpayment for, or disputes with respect to, labor
or materials furnished to the Premises for or on behalf of Tenant or any party claiming by, through, or under Tenant. Should any
lien of any nature, including but not limited to the foregoing, be filed against the Premises as a result of Tenant’s use
or alteration of the Premises, Tenant shall, within thirty (30) days after receipt of written notice of such lien, cause said lien
to be removed, or otherwise protected against execution during good faith contest, by posting a bond therefor in accordance with
applicable law, or securing removal of such lien in another method reasonably acceptable to Landlord. The obligations under this
Paragraph 6 shall survive termination of this Lease or expiration of the term hereof.

 

7.           Insurance.

 

(a)          Liability
Insurance. During the Term, Tenant shall keep in full force a policy of commercial general liability insurance with bodily
injury and property damage coverage with respect to the Premises and business operated by Tenant, which shall name Landlord and
Landlord's first mortgagee, if any, as additional insureds as their respective interests may appear. The limits of such commercial
general liability policy shall be not less than $1,000,000.00 combined single limit for bodily injury and property damage, with
a maximum deductible of $25,000.00. Tenant will also require any contractor performing work on the Premises in accordance with
Paragraph 6 to name Landlord as an additional insured with respect to the contractor’s general liability insurance policy
and a certificate of said insurance shall be provided with this endorsement prior to the commencement of construction.

 

(b)          Workers'
Compensation Insurance. To the extent required by law, Tenant shall maintain workers' compensation insurance covering its respective
employees in statutory limits.

 

(c)          Form
of Policies. All insurance required by this Paragraph 7 shall be with insurers licensed or otherwise permitted to conduct business
in the State of Texas. Any insurance hereunder may be provided under blanket policies of insurance, provided that each policy shall
provide that the minimum coverage amounts specified hereunder shall be available following an insured loss at the Premises, notwithstanding
losses at other properties or facilities owned or operated by Tenant. All property insurance maintained by Tenant shall name Tenant
as insured and Landlord as additional insured, as their interests may appear, and, so long as the Premises are mortgaged pursuant
to a mortgage, shall be subject to a standard mortgagee clause in favor of Landlord’s mortgagee. All other insurance shall
be in the name of Tenant, and shall name Landlord and any first mortgagee as additional insureds.

 

    	2

    	 

    

  

(d)          Policy
Provisions. All policies of insurance (other than self-insurance) enumerated above shall be provided by insurance carriers
with an AM Best rating of not less than A-; provided, however, that if the rating of any such insurer falls below such level, such
rating reduction shall not constitute a default hereunder provided all renewals of such policies shall be with carriers with an
AM Best rating of not less than A- at the time of such renewal. All such policies shall be written as primary policies not entitled
to contribution from, nor contributing with, any coverage that Landlord may carry. An increased coverage or “umbrella”
policy may be provided and utilized by either party to increase the coverage provided by individual or blanket policies in lower
amounts, and the aggregate coverage provided by all such policies with respect to the Premises and Tenant's liability hereunder
shall be satisfactory, provided that such policies otherwise comply with the provisions of this Paragraph 7 and the coverage afforded
to Landlord and other insured persons is not diminished by reason of the use of such blanket or umbrella policy.

 

(e)          Waiver
of Right of Recovery and Subrogation. With respect to any loss covered by insurance or required to be covered by insurance
hereunder, Landlord and Tenant hereby waive any and all rights of recovery against each other for any loss or damage to the Premises
or the contents contained therein, or for loss of income on account of fire or other casualty, or for injury sustained on the Premises;
and each party’s aforesaid policies of insurance shall, to the extent available, contain appropriate provisions recognizing
this mutual release and waiving all rights of subrogation by the respective insurance carriers. If such waiver of subrogation shall
be obtainable only at a premium over that chargeable without such waiver, the party whose insurance carrier charges such additional
premium agrees to pay such additional premium (or, if the policy in question covers property in addition to the Premises, then
the portion of the additional premium attributable to the Premises).

 

(f)          Evidence
of Insurance. At the Execution Date and no less than annually thereafter, Tenant shall cause to be issued to Landlord certificates
of insurance evidencing compliance with the applicable covenants of this Paragraph 7. Each such certificate shall provide that
no expiration, cancellation or material change in the insurance evidenced thereby shall be effective unless ten (10) days’
notice of such expiration, cancellation or material change shall have been given to the certificate holder (and any mortgagee,
if applicable).

 

(g)         Indemnities.
Tenant hereby agrees to indemnify, defend and hold Landlord harmless from all claims, costs, liability, damage or expense, including
reasonable attorneys' fees and court costs at trial and all appellate levels, for any death, damage or injury to persons or property
occurring on the Premises or the driveways and entranceways thereto, or resulting from or relating to Tenant’s use thereof.

 

    	3

    	 

    

 

8.           Damages
by Fire or Other Casualty.

 

(a)          In
the event of a fire, earthquake or other casualty, causing destruction or damage to the Premises, that is not a Threshold Event,
as hereinafter defined, this Lease shall not terminate except as expressly set forth herein, and Rent and other charges shall continue
to be paid by Tenant pursuant to the terms of this Lease. Within a reasonable time after such casualty, subject to Force Majeure,
applicable building codes, the procurement of building permits and the receipt of insurance proceeds to the extent of the damage
to the Premises, as applicable, Landlord shall complete reconstruction of the Premises to that condition existing immediately prior
to such casualty, except that Landlord shall have no obligations to reconstruct any Tenant alterations to the Premises. All such
reconstruction and repair shall be done by Landlord lien-free and in a good and workmanlike manner consistent with the quality
of labor and materials used in originally constructing the Improvements and in accordance with all applicable law. Notwithstanding
anything herein to the contrary, Landlord’s obligation to reconstruct the Premises shall be limited to the amount of insurance
proceeds actually received by Landlord. All insurance proceeds received on account of such damage or destruction (excluding proceeds
attributable to business income coverage), shall be applied pursuant to the terms of this Lease to the payment of the cost of such
restoration, repair, replacement, rebuilding, or alteration (the “Work”), including expenditures made for demolition,
temporary repairs or for the protection of property pending the completion of permanent restoration, repair, replacement, rebuilding,
or alteration.

 

(b)          In
the event of a fire, earthquake or other casualty, causing destruction or damage to the Premises that is a Threshold Event, either
Landlord or Tenant shall have the option of terminating this Lease. A party electing to terminate this Lease shall notify the other
party in writing of its exercise of such option within sixty (60) days following the occurrence of such casualty. In the event
neither party elects to terminate this Lease as set forth above, then Rent and other charges shall continue to be paid by Tenant
and, subject to Force Majeure, within two hundred forty (240) days after receipt by Landlord of the required governmental permits
for restoration, for which permits Landlord shall make prompt application following such destruction or damage, and insurance proceeds
with regard to such damage or destruction, Landlord shall complete reconstruction of the Premises to that condition existing immediately
prior to such casualty, except that Landlord shall have no obligations to reconstruct any Tenant alterations to the Premises. A
“Threshold Event,” as that term is used herein, shall mean a fire, earthquake, or other casualty, causing destruction
or damage to the Premises that (i) requires more than five (5) months from the event to repair and reconstruct, or (ii) that has
a repair and reconstruction cost of (A) fifty percent (50%) or greater of the then fair market value the Premises.

 

9.           Condemnation.

 

(a)          Definition
of Taking and Substantial Taking. For the purpose of this Lease, a “Taking” shall mean any condemnation or exercise
of the power of eminent domain by any authority vested with such power or any other taking for public use, including a private
purchase in lieu of condemnation by an authority vested with the power of eminent domain; the “Date of Taking” shall
mean the earlier of the date upon which title to the Premises or any portion thereof or any right appurtenant thereto so taken
is vested in the condemning authority or the date upon which possession of the Premises or any portion thereof is taken by the
condemning authority; and “Substantially All of the Premises” shall mean so much of the Premises or the rights appurtenant
thereto as, when taken, leaves the untaken portion unsuitable in Tenant’s reasonable opinion for the continued feasible and
economic operation of the Premises by Tenant for the same purposes as immediately prior to such Taking or as contemplated herein.

 

    	4

    	 

    

 

(b)          Tenant’s
Rights Upon Substantial Taking. Each party agrees to furnish the other a copy of any notice of a threatened or proposed Taking
received by such party. In the event of a Taking of Substantially All of the Premises, Tenant, at its option upon thirty (30) days’
written notice to Landlord, which shall be given no later than sixty (60) days following the Taking, shall have the right to terminate
this Lease. All Rent and other sums payable by Tenant hereunder shall be apportioned and paid through and including the Date of
Taking, and neither Landlord nor Tenant shall have any rights in any compensation or damages payable to the other in connection
with such Taking.

 

(c)          Tenant’s
Rights Upon Less Than Substantial Taking. In the event of a Taking of less than Substantially All of the Premises, Rent and
other charges shall be reduced fairly and equitably in accordance with the portion condemned or taken, effective as of the Date
of Taking, and Tenant shall make all necessary restorations to the Improvements so that the portions of the Improvements not taken
constitute a complete architectural unit, provided that the cost thereof to Tenant shall not exceed the proceeds of Tenant's condemnation
award (to the extent that such relates to the Improvements and not to Tenant’s personal property, intangibles or out-of-pocket
expenses unrelated thereto) and the portion of Landlord’s award allocable to the Premises (excluding any portion thereof
paid in compensation for loss of income or reduction of future rents), which Landlord shall make available to Tenant for such restoration.
If such funds exceed $50,000.00 and if required by a mortgagee or by Landlord, such awards shall be escrowed and disbursed in accordance
with the procedure set forth herein.

 

(d)          Rights
Upon Temporary Taking. Notwithstanding the foregoing, in the event of a Taking of the Premises or any portion thereof, for
temporary use (specifically one not exceeding one hundred eighty (180) days in duration), without the taking of the fee simple
title thereto, this Lease shall remain in full force and effect. All awards, damages, compensation and proceeds payable by the
condemnor by reason of such Taking relating to the Premises for periods prior to the expiration of the Lease shall be payable to
Tenant. All such awards, damages, compensation and proceeds for periods after the expiration of the Lease shall be payable to Landlord.
Anything contained in this subparagraph (d) to the contrary notwithstanding, a temporary Taking for any period in excess of one
hundred eighty (180) days may, at Tenant’s option, be deemed a permanent Taking and shall be governed by subparagraph (b)
or (c) above, as applicable.

 

(e)          Tenant’s
Right Upon Condemnation. In the event of a Taking described in subparagraph (b) or (c) above, Tenant shall be entitled to claim
compensation from the condemning authority for the value of its unamortized leasehold improvements paid for by Tenant, relocation
expenses and any other items to which Tenant is entitled under applicable law, provided Tenant obtains a separate award therefor
and provided, further, that Tenant shall not be entitled to any compensation for the value of its leasehold estate unless and to
the extent Landlord recovers the fair market value of the Land plus the amount of the Tenant Improvement Allowance.

 

10.         Assignment
and Subletting.         Tenant shall not sublet, assign, transfer, reassign and
grant concessions or licenses in all or any part of the Premises.

 

11.         Tenant’s
Signs. Tenant shall obtain Landlord’s written approval before fabricating or installing any sign on the Premises. Any
signage not previously approved is subject to removal at Tenant’s expense.

 

12.         Use.         Tenant
shall have the right to use the Premises for office and warehouse use.

 

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13.         Force
Majeure. The Execution Date shall be extended by one day for each day of Force Majeure, as defined below. The term “Force
Majeure” means any delay resulting from strikes, lockouts or other labor or industrial disturbance, civil disturbance, future
order of any government, court or regulatory body claiming jurisdiction, act of the public enemy, war, riot, sabotage, blockade,
embargo, failure or inability to secure materials, supplies or labor through ordinary sources by reason of shortages or priority
or similar regulation or order of any government or regulatory body, lightning, earthquake, fire, storm, hurricane, tornado, flood,
washout, explosion, unusually inclement weather, delays in obtaining permits or other governmental approvals due to no fault of
Landlord or any cause whatsoever beyond the reasonable control of the party from whom performance is required, or any of such party’s
contractors, subcontractors, or other representatives, whether or not similar to any of the causes hereinabove stated; provided,
however, that a party’s lack of funds shall not be deemed to be a cause beyond the control of that party.

 

14.         Landlord’s
Access. Landlord and Landlord’s agents shall have the right to enter the Premises for the purpose of testing and/or inspecting
same and ensuring compliance with Tenant’s obligations under this Lease and showing the Premises to prospective lenders,
buyers, and/or tenants, and to post notices of non-responsibility. Landlord and Landlord’s agents shall also have the right
to enter the Premises and make any repairs or restoration to maintain the Premises pursuant to the terms of this Lease, and may
for such purposes erect scaffolding and other necessary structures. Landlord shall, without liability to Tenant, have the right
to use any and all means which Landlord may deem proper to open the doors to the Premises in an emergency in order to obtain entry
to the Premises. Landlord reserves the right to post “For Lease” signs inside the windows of the Premises during the
last sixty (60) days of the Lease Term, and Tenant agrees to allow such signs to be reasonably displayed and to keep such signs
posted.

 

15.        
Events of Tenant’s Default. Any of the following occurrences, conditions or acts by Tenant shall constitute an “Event
of Default” under this Lease:

 

(a)          Failure
to Pay Rent; Breach. (i) Tenant’s failure to make any payment of Rent required by this Lease within five (5) days after
the same is overdue after the receipt of written notice from Landlord that same is overdue, in which event such delinquent amount
shall accrue interest; or (ii) Tenant’s failure to observe or perform any other material provision of this Lease within thirty
(30) days after receipt of written notice from Landlord to Tenant specifying such default and demanding that the same be cured;
provided that, if such default cannot with due diligence be wholly cured within such thirty (30) day period, Tenant shall have
such longer period as is reasonably necessary to cure the default, so long as Tenant proceeds promptly to commence the cure of
same within such thirty (30) day period and diligently prosecutes the cure to completion.

 

(b)          Bankruptcy.
Any petition is filed by or against Tenant under any section or chapter of the Federal Bankruptcy Code, and, in the case of a petition
filed against Tenant, such petition is not dismissed within sixty (60) days after the date of such filing.

 

(c)          Insolvency.
Tenant becomes insolvent or transfers property in fraud of creditors.

 

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(d)          Assignment
for Benefit of Creditors. Tenant makes an assignment for the benefit of creditors.

 

(e)          Receivership.
A receiver is appointed for any of Tenant’s assets.

 

16.         Landlord’s
Remedies. After the occurrence of an Event of Default by Tenant, Landlord shall have the right to exercise the following remedies:

 

(a)          Continue
Lease. Landlord may, at its option, continue this Lease in full force and effect, without terminating Tenant’s right
to possession of the Premises, in which event Landlord shall have the right to collect Rent and other charges when due. In the
alternative, Landlord shall have the right to peaceably re-enter the Premises, without such re-entry being deemed a termination
of the Lease or an acceptance by Landlord of a surrender thereof. Landlord shall also have the right, at its option, from time
to time, without terminating this Lease, to relet the Premises, or any part thereof, with or without legal process, as the agent,
and for the account, of Tenant upon such terms and conditions as Landlord may deem advisable, in which event the rents received
on such reletting shall be applied (i) first to the reasonable and actual expenses of such reletting and collection, including
without limitation necessary renovation and alterations of the Premises, reasonable and actual attorneys’ fees and any reasonable
and actual real estate commissions paid, and (ii) thereafter toward payment of all sums due or to become due to Landlord hereunder.
If a sufficient amount to pay such expenses and sums shall not be realized, in Landlord’s exercise of commercially reasonable
efforts to mitigate its damages (which Landlord hereby agrees to make), then Tenant shall pay Landlord any such deficiency monthly,
and Landlord may bring an action or actions therefor as such monthly deficiency shall arise and accrue. Landlord shall not, in
any event, be required to pay Tenant any sums received by Landlord on a reletting of the Premises in excess of the rent provided
in this Lease, but such excess shall reduce any accrued present or future obligations of Tenant hereunder. Landlord’s re-entry
and reletting of the Premises without termination of this Lease shall not preclude Landlord from subsequently terminating this
Lease as set forth below.

 

(b)          Terminate
Lease. Landlord, at its option, may terminate the Lease by written notice to Tenant. If Landlord terminates this Lease, Landlord
may take possession of the Premises by judicial proceeding and may recover all damages allowed by state law and subject to any
obligation of Landlord to mitigate as required by law.

 

(c)          Reimbursement
of Landlord’s Costs in Exercising Remedies. Landlord may recover from Tenant, and Tenant shall pay to Landlord upon demand,
as Additional Rent, such reasonable and actual expenses as Landlord may incur in enforcing the terms of this Lease and/or recovering
possession of the Premises, placing the same in good order and condition and repairing or renovating the same for reletting, and
all other reasonable and actual expenses, commissions and charges incurred by Landlord in exercising any remedy provided herein
or as a result of any Event of Default by Tenant hereunder (including without limitation attorneys’ fees).

 

(d)          Remedies
Are Cumulative. The various rights and remedies reserved to Landlord herein are cumulative, and Landlord may pursue any and
all such rights and remedies, in addition to any other rights or remedies available at law or in equity, whether at the same time
or otherwise (to the extent not inconsistent with specific provisions of this Lease).

 

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17.         Notices.
Any notice permitted or required to be given pursuant to this Lease shall be deemed to have been given by: hand delivery; three
(3) business days after mailing a written notice by certified mail, postage prepaid, return receipt requested; or one (1) business
day after sending by Federal Express or other comparable overnight express courier service (with proof of receipt available), addressed
to the parties as follows:

 

	If to Landlord:	15850 Holdings, LLC	 
	 	Attn: Carl Gum 	 
	 	15850 Dallas Parkway	 
	 	Dallas, TX 75248	 
	 	(469) 522.1111 phone	 
	 	(469) 522.1100  fax	 
	 	 	 
	If to Tenant:	DGSE Companies, Inc. 	 
	 	Attn: Jim Vierling 	 
	 	15850 Dallas Parkway	 
	 	Dallas, TX 75248	 
	 	(469) 522.1111 phone	 
	 	(469) 522.1100  fax	 

 

or to such other addressees as any party
hereto shall from time to time give notice to the other party in accordance with this paragraph.

 

18.         Miscellaneous.

 

(a)          Headings
and Gender. All paragraph headings, titles or captions contained in this Lease are for convenience only and shall not be deemed
a part of this Lease and shall not in any way limit or amplify the terms and provisions of this Lease. The masculine, feminine
or neuter gender and the singular or plural number shall be deemed to include the others whenever the context so requires or indicates.

 

(b)          Relationship
of Landlord-Tenant. Nothing contained in this Lease shall be deemed or construed by the parties hereto or by any third person
to create the relationship of principal and agent, partnership, joint venture, or any other association between Landlord and Tenant
other than landlord-tenant relationship described herein.

 

(c)          Entire
Agreement; Merger. This Lease, including all exhibits hereto (which are hereby incorporated herein by reference for all purposes),
contains the full and final agreement of every kind and nature whatsoever between the parties hereto concerning the subject matter
of this Lease, and all preliminary negotiations and agreements of whatsoever kind or nature between Landlord and Tenant are merged
herein. This Lease cannot be changed or modified in any manner other than by a written amendment or modification executed by Landlord
and Tenant.

 

(d)          Attorneys’ Fees.
If either party shall be required to commence or defend any action or proceeding against any other party by reason of any breach
or claimed breach of any provision of this Lease, to commence or defend any action or proceeding in any way connected with this
Lease or to seek a judicial declaration of rights under this Lease, the party prevailing in such action or proceeding shall be
entitled to recover from or to be reimbursed by the other party for the prevailing party's reasonable and actual attorneys' fees
and costs through all levels of proceedings.

 

    	8

    	 

    

 

(e)          Partial Invalidity.
If any provision of this Lease or the application thereof to any person or circumstance shall be deemed invalid or unenforceable,
the remainder of this Lease and its application to other persons or circumstances shall not be affected by such partial invalidity
but shall be enforced to the fullest extent permitted by law as though such invalid or unenforceable provision was never a part
hereof.

 

(f)          Consents.
Any consent or approval granted by either party hereunder shall be deemed a consent only as to the matter on which such consent
was requested and shall not waive the consenting party's right to give or withhold consent to any subsequent matter.

 

(g)          Holidays.
If the day on which rent or any other payment due hereunder is payable, or the final day for curing a default, falls on a Saturday
or Sunday or on a legal holiday, it shall be payable or curable on the following business day.

 

(h)          Applicable Law.
This Lease shall be construed in accordance with the laws of the state where the Premises are located, and the parties agree that
jurisdiction for all actions hereunder shall lie therein.

 

(i)          Successors
and Assigns. All rights, obligations and liabilities herein given to or imposed upon any party hereto shall extend to the permitted
successors and assigns of such party, except as otherwise expressly provided in this Lease.

 

(j)          Counterparts.
This Lease may be executed in one or more identical counterparts, and as so executed by all parties hereto shall constitute a single
instrument for purposes of the effectiveness of this Lease.

 

19.         Survival.
All indemnification obligations set forth in this Lease shall survive any expiration or termination of this Lease.

 

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blank]

 

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IN WITNESS WHEREOF, Landlord and Tenant
have executed this Lease:

 

	 	LANDLORD
	 	 
	 	15850 HOLDINGS, LLC
	 	 	 
	 	By:  	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	Dated: ___________________, 2013
	 	 	 
	 	TENANT
	 	 
	 	DGSE cOMPANIES, INC.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	Date: ___________________, 2013

 

    	10

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