Document:

CLEARSIGN COMBUSTION CORPORATION

 

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT is entered
into, effective as of March __, 2012 by and between ClearSign Combustion Corporation, a Washington corporation (the “Company”),
and [___________________ ](“Indemnitee”).

 

WHEREAS, it is essential to the Company
to retain and attract as directors and officers the most capable persons available;

 

WHEREAS, Indemnitee is a director and/or
officer of the Company; and

 

WHEREAS, in recognition of Indemnitee’s
need for substantial protection against personal liability in order to enhance Indemnitee’s continued and effective service
to the Company, and in order to induce Indemnitee to provide services to the Company as a director and/or officer, the Company
wishes to provide in this Agreement for the indemnification of and advance of expenses to Indemnitee to the fullest extent (whether
partial or complete) permitted by Washington state law and as set forth in this Agreement, and, to the extent insurance is maintained,
for the coverage of Indemnitee under the Company’s director and officer liability insurance policies.

 

NOW, THEREFORE, in consideration of the
above premises and of Indemnitee’s continued service to the Company, and intending to be legally bound hereby, the parties
agree as follows:

 

1.    Certain Definitions.

 

		(a)	“Board” means the board of directors of the Company.

 

		(b)	“Change in Control” shall be deemed to have occurred if (i) any “person” (as such term is used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Act”)), other than a trustee
or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly
by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company (collectively
“excluded persons”), is or becomes the “Beneficial Owner” (as defined in Rule 13d-3 under
the Act), directly or indirectly, of securities of the Company representing 30% or more of the total voting power represented by
the Company’s then outstanding Voting Securities, or (ii) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board and any new director whose election by the Board or nomination for election by
the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease
for any reason to constitute a majority of the Board, or (iii) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a different
jurisdiction, or other transaction in which there is no substantial change in the shareholders of the Company or their relative
stock holdings), or (iv) a merger in which the Company is the surviving corporation but after which the shareholders of the Company
immediately prior to such merger (other than any shareholder that merges, or which owns or controls another corporation that merges
with the Company in such merger) cease to own their shares or other equity interest in the Company, or (v) in the event of a dissolution
or liquidation of the Company, or (vi) the sale or disposition (in one transaction or a series of transactions) of all or substantially
all of the Company’s assets, or (vii) the acquisition, sale, or transfer of more than 50% of the outstanding shares of the
Company by tender offer or similar transaction.

 

    	 

    	 

    

 

 

		(c)	“Company” shall include, in addition to the Company
named in this Agreement, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or
merger with the Company, which constituent corporation, if its separate existence had continued, would have had power and authority
to indemnify its directors, officers, employees or agents.  For purposes of this Agreement, references to “other enterprises”
shall include employee benefit plans; and references to “serving at the request of the Company” shall include any service
as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer,
employee or agent with respect to an employee benefit plan or its participants or beneficiaries; and if Indemnitee acted in good
faith and in a manner Indemnitee reasonably believed to be in the interest of the participants and beneficiaries of an employee
benefit plan, Indemnitee shall be deemed to have acted in a manner “not opposed to the best interests” of the
Company as referred to in this Agreement.

 

		(d)	“Expenses” mean any expense, liability, or loss, including attorneys’ fees, judgments, fines, ERISA
excise taxes and penalties, amounts paid or to be paid in settlement, any interest, assessments, or other charges imposed thereon,
and any federal, state, local, or foreign taxes imposed as a result of the actual or deemed receipt of any payments under this
Agreement, paid or incurred in connection with investigating, defending, being a witness in, or participating in (including on
appeal), or preparing for any of the foregoing in, any Proceeding relating to any Indemnifiable Event.

 

		(e)	“Indemnifiable Event” means any event or occurrence that takes place either prior to or after the effective
date of this Agreement, relating to the fact that Indemnitee is or was a director or an officer of the Company, or while a director
or officer is or was serving at the request of the Company as a director, officer, employee, trustee, agent, or fiduciary of another
foreign or domestic corporation, partnership, joint venture, employee benefit plan, trust, or other enterprise, or was a director,
officer, employee, or agent of a foreign or domestic corporation that was a predecessor corporation of the Company or of another
enterprise at the request of such predecessor corporation, or related to anything done or not done by Indemnitee in any such capacity.

 

		(f)	“Independent Counsel” means the person or body appointed in connection with Section 3.

 

		(g)	“Potential Change in Control” shall be deemed to have occurred if (i) the Company enters into an agreement
or arrangement, the consummation of which would result in the occurrence of a Change in Control, (ii) any person (including the
Company) publicly announces an intention to take or to consider taking actions that, if consummated, would constitute a Change
in Control, (iii) any person (other than an Excluded Person) who is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 10% or more of the combined voting power of the Company’s then outstanding Voting
Securities, increases his beneficial ownership of such securities by 5% or more over the percentage so owned by such person on
the date hereof, or (iv) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in
Control has occurred.

 

    	 

    	 

    

 

		(h)	“Proceeding” means (i) any threatened, pending, or complete action, suit, or proceeding, whether civil,
criminal, administrative, investigative, or other, or (ii) any inquiry, hearing, or investigation, whether conducted by the Company
or any other party, that Indemnitee in good faith believes might lead to the institution of any such action, or proceeding.

 

		(i)	“Reviewing Party” means the person or body appointed in accordance with Section 3.

 

		(j)	“Voting Securities” means any securities of the Company that vote generally in the election of directors.

 

2.    Agreement to Indemnify.

 

(a)      General
Agreement. In the event Indemnitee was, is, or becomes a party to or witness or other participant in, or is threatened to
be made a party to or witness or other participant in, a Proceeding by reason of (or arising in part out of) an Indemnifiable
Event, the Company shall indemnify Indemnitee from and against any and all Expenses to the fullest extent permitted by law, as
the same exists or may hereafter be amended or interpreted (but in the case of any such amendment or interpretation, only to the
extent that such amendment or interpretation permits the Company to provide broader indemnification rights than were permitted
prior thereto).

 

(b)      Limitations
on Indemnification. Indemnification shall be provided to any Indemnitee to the fullest extent permitted by the Revised Code
of Washington (“RCW”). Accordingly, the RCW substantially provides the following limitations, which shall apply
to any indemnification provided under this Agreement:

 

(1)  A
corporation may not indemnify a director unless approved in the specific case after a determination has been made that indemnification
of the director is permissible in the circumstances because the director has met the applicable Standard of Conduct (defined below).

 

(2)  The
determination shall be made:

     (a)  by the board of directors by majority vote of a quorum consisting of directors not at the time parties
to the Proceeding;

     (b)  if a quorum cannot be obtained under (a) above, by majority vote of a committee duly designated by
the Board, in which designation directors who are parties may participate, consisting solely of two or more directors not at the
time parties to the Proceeding;

     (c)  by special legal counsel:

 

(i)        selected
by the Board or its committee in the manner prescribed in (a) or (b) of this subsection; or

 

(ii)       if
a quorum of the Board cannot be obtained under (a) of this subsection and a committee cannot be designated under (b) of this subsection,
selected by majority vote of the full Board, in which selection directors who are parties may participate; or

 

    	 

    	 

    

 

(d)  by the shareholders, but shares
owned by or voted under the control of directors who are at the time parties to the Proceeding may not be voted on the determination.

 

An individual shall be deemed to have met
the “Standard of Conduct”, and the Company may indemnify an individual made a party to a proceeding because
the individual is or was a director and/or officer against liability incurred in the proceeding if:

(a)  the individual acted in good
faith; and

(b)  the individual reasonably
believed:

 

(i)          in
the case of conduct in the individual’s official capacity with the Company, that the individual’s conduct was in its
best interests; and

 

(ii)         in
all other cases, that the individual’s conduct was at least not opposed to its best interests; and

 

(c)  in the case of any criminal
proceeding, the individual had no reasonable cause to believe the individual’s conduct was unlawful.

 

Notwithstanding the foregoing, the Company
may not indemnify a director and/or officer:

 

(a)  in connection with a proceeding
by or in the right of the Company in which the director was adjudged liable to the Company; or

 

(b)  in connection with any other
proceeding charging improper personal benefit to the director, whether or not involving action in the director’s official
capacity, in which the director was adjudged liable on the basis that personal benefit was improperly received by the director.

 

Indemnification permitted under this Section
in connection with a proceeding by or in the right of the Company is limited to reasonable expenses incurred in connection with
the proceeding.

 

(c)    Initiation of Proceeding.
Notwithstanding anything in this Agreement to the contrary, Indemnitee shall not be entitled to indemnification pursuant to this
Agreement in connection with any Proceeding initiated by Indemnitee against the Company or any director or officer of the Company
unless (i) the Company has joined in or the Board has consented to the initiation of such Proceeding, (ii) the Proceeding is one
to enforce indemnification rights under Section 5, or (iii) the Proceeding is instituted after a Change in Control and Independent
Counsel has approved its initiation.

 

(d)    Expense Advances. If so requested
by Indemnitee, the Company shall advance (within ten business days of such request) any and all Expenses to Indemnitee (an “Expense
Advance”); provided that such request shall be accompanied by reasonable evidence of the expenses incurred by Indemnitee
and that, if and to the extent that the Reviewing Party determines that Indemnitee would not be permitted to be so indemnified
under applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company)
for all such amounts theretofore paid. If Indemnitee has commenced legal proceedings in a court of competent jurisdiction to secure
a determination that Indemnitee should be indemnified under applicable law, as provided in Section 4, any determination made by
the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee
shall not be required to reimburse the Company for any Expense Advance until a final judicial determination is made with respect
thereto (as to which all rights of appeal therefrom have been exhausted or have lapsed).

 

    	 

    	 

    

 

 

(e)    Mandatory Indemnification.
Notwithstanding any other provision of this Agreement (other than Section 2(f) below), to the extent that Indemnitee has been successful
on the merits in defense of any Proceeding relating in whole or in part to an Indemnifiable Event or in defense of any issue or
matter therein, Indemnitee shall be indemnified against all Expenses incurred in connection therewith.

 

(f)    Partial Indemnification.
If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses,
but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to
which Indemnitee is entitled.

 

(g)    Other Exceptions to Indemnification.
No indemnification pursuant to this Agreement shall be paid by the Company on account of:

(i)                  any
Proceeding in which judgment is rendered against Indemnitee for an accounting of profits made from the purchase or sale by Indemnitee
of securities of the Company pursuant to the provisions of Section 16(b) of the Act, as amended, or any similar statute;

 

(ii)                 any
reimbursement of the Company by Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits
realized by Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any
such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley
Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and
sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act); or

 

(iii)                expenses
or liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts
paid in settlement) which have been paid directly to Indemnitee by an insurance carrier under the D&O Liability Insurance (defined
below) policy maintained by the Company.

 

(h)     Mutual Acknowledgement. Both
the Company and Indemnitee acknowledge that in certain instances Federal law or applicable public policy may prohibit the Company
from indemnifying its directors, officers and employees under this Agreement or otherwise.  Indemnitee understands and acknowledges
that the Company may be required in the future to undertake with the Securities and Exchange Commission to submit the question
of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to
indemnify Indemnitee.

 

    	 

    	 

    

 

3.    Reviewing Party. Prior to any
Change in Control, the Reviewing Party shall be any appropriate person or body consisting of a member or members of the Board or
any other person or body appointed by the Board who is not a party to the particular Proceeding with respect to which Indemnitee
is seeking indemnification; after a Change in Control, the Reviewing Party shall be the Independent Counsel referred to below.
With respect to all matters arising after a Change in Control (other than a Change in Control approved by a majority of the directors
on the Board who were directors immediately prior to such Change in Control) concerning the rights of Indemnitee to indemnity payments
and Expense Advances under this Agreement or any other agreement or under applicable law or the Company’s Amended and Restated
Certificate of Incorporation or bylaws now or hereafter in effect relating to indemnification for Indemnifiable Events, the Company
shall seek legal advice only from Independent Counsel selected by Indemnitee and approved by the Company and who has not otherwise
performed services for the Company or the Indemnitee (other than in connection with indemnification matters) within the last five
years. The Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing
would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s
rights under this Agreement. Such counsel, among other things, shall render its written opinion to the Company and Indemnitee as
to whether and to what extent the Indemnitee should be permitted to be indemnified under applicable law. The Company agrees to
pay the reasonable fees of the Independent Counsel and to indemnify fully such counsel against any and all expenses (including
attorney’s fees), claims, liabilities, loss, and damages arising out of or relating to this Agreement or the engagement of
Independent Counsel pursuant hereto.

 

4.    Indemnification Process and Appeal.

 

(a)     Suit To Enforce Rights. Regardless
of any action by the Reviewing Party, if Indemnitee has not received full indemnification within 60 days after making a request
in accordance with Section 2(d), Indemnitee shall have the right to enforce its indemnification rights under this Agreement by
commencing litigation, in any appropriate court having subject matter jurisdiction thereof and in which venue is proper, seeking
an initial determination by the court or challenging any determination by the Reviewing Party or any aspect thereof, provided,
however, that such 60-day period shall be extended for reasonable time, not to exceed another 60 days, if the reviewing party in
good faith requires additional time for the obtaining or evaluating of documentation and information relating thereto. The Company
hereby consents to service of process and to appear in any such proceeding. Any determination by the Reviewing Party not challenged
by the Indemnitee shall be binding on the Company and Indemnitee. The remedy provided for in this Section 4 shall be in addition
to any other remedies available to Indemnitee in law or equity.

 

(b)     Defense to Indemnification, Burden
of Proof, and Presumptions. It shall be a defense to any action brought by Indemnitee against the Company to enforce this Agreement
(other than an action brought to enforce a claim for Expenses incurred in defending a Proceeding in advance of its final disposition
where the required undertaking has been tendered to the Company) that is not permissible under applicable law for the Company to
indemnify Indemnitee for the amount claimed. In connection with any such action or any determination by the Reviewing Party or
otherwise as to whether Indemnitee is entitled to be indemnified hereunder, the burden of proving such a defense or determination
shall be on the Company. Neither the failure of the Reviewing Party or the Company (including its Board, independent legal counsel,
or its shareholders) to have made a determination prior to the commencement of such action by Indemnitee that indemnification of
the claimant is proper under the circumstances because Indemnitee has met the Standard of Conduct set forth herein and under applicable
law, nor an actual determination by the Reviewing Party or Company (including its Board, independent legal counsel, or its shareholders)
that the Indemnitee had not met such applicable Standard of Conduct, shall be a defense to the action or create a presumption that
the Indemnitee has not met the applicable Standard of Conduct. For purposes of this Agreement, the termination of any claim, action,
suit, or proceeding, by judgment, order, settlement (whether with or without court approval), conviction, or upon a plea of nolo
contendere, or its equivalent shall not create a presumption that Indemnitee did not meet any particular standard of conduct or
have any particular belief or that a court has determined that indemnification is not permitted by applicable law.

 

    	 

    	 

    

 

5.    Indemnification for Expenses Incurred
in Enforcing Rights. The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall
(within ten business days of such request), advance such Expenses to Indemnitee, that are incurred by Indemnitee in connection
with any claim asserted against or covered action brought by Indemnitee for (i) indemnification of Expenses or Expense Advances
by the Company under this Agreement or any other agreement or under applicable law or the Company’s Amended and Restated
Certificate of Incorporation or bylaws now or hereafter in effect relating to indemnification for Indemnifiable Events, and or
(ii) recovery under directors’ and officers’ liability insurance policies maintained by the Company, regardless of
whether Indemnitee ultimately is determined to be entitled to such indemnification, Expense Advances, or

insurance recovery, as the case may be.

 

6.    Notification and Defense of Proceeding.

 

(a)     Notice. Promptly after receipt
by Indemnitee of notice of the commencement of any Proceeding, Indemnitee shall, if a claim in respect thereof is to be made against
the Company under this Agreement, notify the Company of the commencement thereof, but the omission so to notify the Company will
not relieve the Company from any liability that it may have to Indemnitee, except as provided in Section 6(c).

 

(b)     Defense. With respect to
any Proceeding as to which Indemnitee notifies the Company of the commencement thereof, the Company shall be entitled to participate
in the Proceeding at its own expense and except as otherwise provided below, to the extent the Company so wishes, it may assume
the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election
to assume the defense of any Proceeding, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any
Expenses subsequently incurred by Indemnitee in connection with the defense of such Proceeding other than reasonable costs of investigation
or as otherwise provided below. Indemnitee shall have the right to employ his or her own legal counsel in such Proceeding, but
all Expenses related thereto incurred after notice from the Company of its assumption of the defense shall be at Indemnitee’s
expense unless: (i) the employment of legal counsel by Indemnitee has been authorized by the Company, (ii) Indemnitee has reasonably
determined that there may be a conflict of interest between Indemnitee and the Company in the defense of the Proceeding, (iii)
after a Change in Control, the employment of counsel by Indemnitee has been approved by the Independent Counsel, or (iv) the Company
shall not in fact have employed counsel to assume the defense of such Proceeding, in each of which case all Expenses of the Proceeding
shall be borne by the Company. The Company shall not be entitled to assume the defense of any Proceeding brought by or on behalf
of the Company or as to which Indemnitee shall have made the determination provided for in (ii) above.

 

(c)     Settlement of Claims. The
Company shall not be liable to indemnify Indemnitee under this Agreement or otherwise for any amounts paid in settlement of any
Proceeding effected without the Company’s written consent, provided, however, that if a Change in Control has occurred, the
Company shall be liable for indemnification of Indemnitee for amounts paid in settlement if the Independent Counsel has approved
the settlement. The Company shall not settle any Proceeding in any manner that would impose any penalty or limitation on Indemnitee
without Indemnitee’s written consent. The Company shall not be liable to indemnify the Indemnitee under this Agreement with
regard to any judicial award if the Company was not given a reasonable and timely opportunity, at its expense, to participate in
the defense of such action; the Company’s liability hereunder shall not be excused if participation in the Proceeding by
the Company was barred by this Agreement.

 

7.    Non-Exclusivity. The rights of
Indemnitee hereunder shall be in addition to any other rights Indemnitee may have under the Company’s Amended and Restated
Certificate of Incorporation, bylaws, applicable law, or otherwise. To the extent that a change in applicable law (whether by statute
or judicial decision) permits greater indemnification by agreement than would be afforded currently under the Company’s Amended
and Restated Certificate of Incorporation, bylaws, applicable law, or this Agreement, it is the intent of the parties that Indemnitee
enjoy by this Agreement the greater benefits so afforded by such change.

 

    	 

    	 

    

 

8.    Directors and Officers Liability
Insurance.

 

(a)  The Company
shall obtain and maintain a policy or policies of insurance (“D&O Liability Insurance”) with reputable insurance
companies providing liability insurance for directors and officers of the Company in their capacities as such (and for any capacity
in which any director or officer of the Company serves any other person or entity at the request of the Company), in respect of
acts or omissions occurring while serving in such capacity, on terms with respect to coverage and amount (including with respect
to the payment of expenses) no less favorable than those of such policy in effect on the date hereof except for any changes approved
by the Board of Directors of the Company.

 

(b)  Indemnitee
shall be covered by the Company’s D&O Liability Insurance policies as in effect from time to time in accordance with
the applicable terms to the maximum extent of the coverage available for any other director or officer under such policies. The
Company shall, promptly after receiving notice of a Proceeding as to which Indemnitee is a party or a participant (as a witness
or otherwise), give notice of such proceeding to the insurers under the Company’s D&O Liability Insurance policies in
accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable
actions to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such proceeding in accordance
with the terms of such policies. The failure or refusal of any such insurer to pay any such amount shall not affect or impair the
obligations of the Company under this Agreement.

 

(c)  Upon
request by Indemnitee, the Company shall provide to Indemnitee copies of the D&O Liability Insurance policies as in effect
from time to time. The Company shall promptly notify Indemnitee of any material changes in such insurance coverage.

 

9.    Amendment of this Agreement.  No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall operate as a waiver of any other provisions hereof (whether
or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided herein, no failure to exercise
or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof.

 

10.   Subrogation.  In the event of
payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including
the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.

 

11.   No Duplication of Payments.
 The Company shall not be liable under this Agreement to make any payment in connection with any claim made against Indemnitee to
the extent Indemnitee has otherwise received payment (under any insurance policy, bylaw, or otherwise) of the amounts otherwise
indemnifiable hereunder.

 

12.   Binding Effect.  This Agreement
shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including
any direct or indirect successor by purchase, merger, consolidation, or otherwise to all or substantially all of the business and/or
assets of the Company), assigns, spouses, heirs, and personal and legal representatives. The indemnification provided under this
Agreement shall continue as to Indemnitee for any action taken or not taken while serving in an indemnified capacity pertaining
to an Indemnifiable Event even though he or she may have ceased to serve in such capacity at the time of any Proceeding.

 

    	 

    	 

    

  

13.   Severability.  If any provision
(or portion thereof) of this Agreement shall be held by a court of competent jurisdiction to be invalid, void, or otherwise unenforceable,
the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible,
the provisions of this Agreement (including, without limitation, each portion of this Agreement containing any provision held to
be invalid, void, or otherwise unenforceable, that is not itself invalid, void, or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, void, or unenforceable.

 

14.   Governing Law.  This Agreement
shall be governed by and construed and enforced in accordance with the laws of the State of Washington applicable to contracts
made and to be performed in such state without giving effect to the principles of conflicts of laws.

 

15.   Notices.  All
notices, demands, and other communications required or permitted hereunder shall be made in writing and shall be deemed to
have been duly given if delivered by hand, against receipt, or mailed, postage prepaid, certified or registered mail, return
receipt requested, and addressed to the Company at:

 

ClearSign Combustion Corporation

12870 Interurban Avenue South

Seattle, Washington 98168

Fax: (206) 673-4848

Attn: Chief Executive Officer

 

Notice of change of address shall be effective
only when given in accordance with this Section. All notices complying with this Section shall be deemed to have been received
on the date of delivery or on the third business day after mailing.

 

16.   Entire Agreement.  Subject
to the provisions of Section 2(a), this Agreement sets forth the entire understanding between the parties hereto and supersedes
and merges all previous written and oral negotiations, commitments, understandings and agreements relating to the subject matter
hereof between the parties hereto.

 

17.   Retroactivity.  This
Agreement shall be deemed to have been in effect during all periods that Indemnitee was a director and/or officer of the Company,
regardless of the date of this Agreement.

 

18.   Counterparts.  This Agreement
may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

 

[Signature Page Follows]

 

    	 

    	 

    

 

IN WITNESS WHEREOF, the parties hereto have
duly executed and delivered this Indemnification Agreement as of the day specified above.

 

COMPANY:

	 	CLEARSIGN COMBUSTION CORPORATION
	 	 
	 	By:	 
	 	 	Richard F. Rutkowski
	 	 	Chief Executive Officer

 

	INDEMNITEE:	
	 	Name of Indemnitee (print name)
	 	 
	 	 
	 	SignatureEmployment
Agreement

 

Employment
Agreement, entered into as of March 5, 2012 (the “Signing Date”) to be effective as of January
1, 2012 (the “Effective Date”), by and between ICONIX BRAND GROUP, INC., a Delaware
corporation (the “Company”), and DAVID BLUMBERG (the “Employee”).

 

WITNESSETH

 

WHEREAS, the Employee
currently serves as Head of Strategic Development of the Company; and

 

WHEREAS, the Company
desires to continue to employ the Employee as its Head of Strategic Development upon the terms and subject to the conditions set
forth in this Agreement; and

 

WHEREAS, the Employee
is willing to accept such continued employment upon such terms;

 

NOW, THEREFORE, in consideration
of the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Company and the Employee hereby agree as follows:

 

1.                 
Engagement of Employee; Duties. During the Term, as defined in Section 3
below, the Employee shall have the title of Head of Strategic Development. The Employee shall be primarily responsible for overseeing
the Company’s merger and acquisition activities and assisting the Company’s Chief Financial Officer with respect to
any future financings or recapitalizations contemplated by the Company. In addition, the Employee shall have such other duties
as may be from time to time delegated to him by the Chief Executive Officer of the Company that are consistent with his position,
title and responsibilities. The Employee shall faithfully and diligently discharge his duties hereunder and use his best efforts
to implement the policies established and made known to him by the Company. The Employee shall report to the Chief Executive Officer
of the Company.

 

2.                 
Time. The Employee shall devote substantially all of his professional time to the business affairs of
the Company, provided that nothing contained herein shall be deemed to restrict the Employee from engaging in charitable, civic
or community activities and/or from overseeing and directing his personal, financial and legal affairs.

 

3.                 
Term. The Employee’s engagement under this Agreement shall commence on the Effective Date hereof
and shall continue for a period of one (1) year and one month (such period, the “Term”), or until January
31, 2013 unless otherwise terminated as provided herein.

 

    	1

    	 	

    
 

 

4.                 
Compensation.

 

		(a)	Base Salary. Employee's base salary during
the Term will be at a rate of not less than $400,000 per Term Year, paid in accordance with the Company's payroll practices and
policies then in effect, with such increases as determined by the Board of Directors of the Company (the “Board”)
or the Compensation Committee of the Board (the “Committee”) from time to time (such salary, as increased
from time to time, the “Base Salary”).

 

		(b)	Acquisition Payments. In addition to the Base
Salary, within ten (10) days after the closing of each Acquisition, as defined below, the Company shall pay to the Employee one
of the following amounts, as applicable, in cash (each such payment, an “Acquisition Payment”):

 

		(i)	$500,000 if the Acquisition is a First Tier Acquisition,
as defined below; and

 

		(ii)	$250,000 if the Acquisition is a Second Tier Acquisition,
as defined below.

 

		(c)	Restricted Stock. In addition to the Base Salary
and the Acquisition Payments, promptly upon approval by the Board and the Company’s stockholders of the Company’s
2012 Equity Incentive Plan or similar plan covering awards of common stock to the Company’s employees (the “Plan”),
the Company shall also grant to the Employee an award (the “Award”) of 37,900 shares (the “Award
Shares”) of the Company’s common stock, par value $0.001 per share (“Common Stock”),
subject to the terms and conditions set forth herein, in a Restricted Stock Agreement between Employee and the Company substantially
in the form, not inconsistent with the terms herewith, as provided to senior executives of the Company (the “Restricted
Stock Agreement”) and in the Company’s 2012 Equity Incentive Plan pursuant to which the Award is issued.

 

		(i)	For each of the first two (2) Acquisitions, the restrictions
on 10,000 of the Award Shares shall lapse (i.e., such Award Shares shall be deemed to have “vested”) upon the closing
of each such Acquisition. For each of the third and fourth Acquisitions, the restrictions on 8,900 of the Award Shares shall lapse
(i.e., such Award Shares shall be deemed to have “vested”) upon the closing of each such Acquisition. If the Company
has not completed at least four (4) Acquisitions on or before April 30, 2013, then all remaining unvested Award Shares shall be
forfeited.

 

		(ii)	Notwithstanding the foregoing: (x) in the event approval
of the Plan by the Board and the Company’s stockholders is not obtained prior to the termination of Employee’s employment
for the reasons set forth in Sections 5(a)(1), (2), (3) or (6) hereof , then in lieu of the grant of the Award to the Employee,
the Company shall pay to the Employee an amount equal to $365,400 (the “Alternate Payment”) during the
thirty (30) day period following the Date of Termination (as defined herein); and (y) in the event approval of the Plan by the
Board and the Company’s stockholders is not obtained prior to the first to occur of the termination of Employee’s
employment for the reasons set forth in Sections 5(a)(4) or (5) hereof and the last day of the Term, then in lieu of the grant
of the Award to the Employee with respect to the first and second Acquistions, the Company shall pay to Employee the vested portion
of the Alternate Payment, which shall be: $182,700 for each of the first two (2) Acquisitions that close prior to or within ninety
(90) days following the Date of Termination or the last day of the Term, as the case may be (i.e., an aggregate of $365,400 for
two (2) Acquisitions).

 

    	2

    	 	

    
 

 

		(d)	In the event of a Change in Control (as defined in
Section 5(d)(iii) below) at any time during the Term, the restrictions on all remaining unvested Award Shares shall immediately
lapse and all of the unvested Award Shares shall then be vested, notwithstanding any provision to the contrary contained in this
Agreement, the Plan or the Restricted Stock Agreement, or if the Award has not been granted prior to the Change in Control, the
Employee shall be paid, in lieu of the Award Shares and any portion of the Alternate Payment due pursuant to Section 4(c)(ii)
above, the amount of $692,433, which shall be paid within thirty (30) days of the Change of Control.

 

		(e)	Potential Acquisition Bonus Payments. In addition
to the payments set forth above, at the request of the Employee the Committee may consider granting the Employee a bonus, if during
the Term the aggregate Value, as defined below, of Acquisitions completed during the Term exceeds $100 million. The amount of
such bonus, if any, and the timing of the payment of any such bonus, shall be determined by the Committee in its sole discretion.

 

		(f)	Fringe Benefits. The Employee shall receive
the fringe benefits generally given to senior employees of the Company including, but not limited to, major medical, dental, life
insurance, and pension including any 401(k) or other profit sharing plan. The Employee shall also be added to or continued, as
the case may be, as an insured under the Company’s officers and directors insurance and all other policies which pertain
to officers of the Company. The Company shall also pay the Employee a car allowance of $1,500 per month during the Term.

 

		(g)	Reimbursement of Expenses. The Company shall
pay on behalf of the Employee the reasonable expenses incurred by him in the performance of his duties hereunder, including, without
limitation, expenses related to cell phones, blackberrys and laptop computers and such other expenses incurred in connection with
business related travel or entertainment in accordance with the Company’s policy, or, if such expenses are paid directly
by the Employee, the Company shall promptly reimburse the Employee for such payments, provided that the Employee (i) properly
accounts for such expenses in accordance with the Company’s policy, and (ii) has received prior approval by the Chief
Executive Officer of the Company for major expenses.

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		(h)	Vacation. Employee shall be entitled to four
weeks of paid vacation.

 

		(i)	Definitions. For the purposes of this Section
4:

 

		(i)	an “Acquisition” shall mean
any direct or indirect investment or acquisition, including, without limitation, by assignment, license, sublicense, lease, purchase,
merger or otherwise, in a single transaction or series of transactions, by the Company or any of its now existing or hereafter
acquired or formed subsidiaries or affiliates, in or of any entity, business, brand, trademark, service mark, patent, license,
revenue stream or other asset (x) that closes during the Term, or (y) with respect to which a Letter of Intent, Memorandum of
Understanding or similar agreement, and/or a definitive agreement, is entered into during the Term and that closes within ninety
(90) days following the end of the Term;

 

		(ii)	[Intentionally Omitted];

 

		(iii)	a “First Tier Acquisition”
shall mean an Acquisition that has a Value of $30 million or greater;

 

		(iv)	a “Second Tier Acquisition”
shall mean an Acquisition that has a Value of less than $30 million; and

 

		(v)	the “Value” of an Acquisition
shall mean the projected gross revenue stream to be derived by the Company from such Acquisition during the first (1st)
complete year following the closing of the Acquisition as set forth in the base line projections presented to the Board in connection
with the approval of such Acquisition (if and to the extent that such projections exist and are presented), in all cases before
deduction of operational and transaction expenses, and provided that if and to the extent that the target entity has received
advances and/or other pre-payments in consideration for a reduction in royalty or other payments to be received by the target
entity at any time during the first (1st) complete year following the closing of the Acquisition, the projected gross
revenue stream to be derived by the Company from such Acquisition shall be  equitably
adjusted to take into account the reduction
in royalty or other payments resulting from such advances and/or pre-payments.

 

		(i)	Acquisition Parameters.For purposes of
clarification and this Section 4, the Value of a transaction in which the Company acquires less than all of any entity, business,
brand, trademark, service mark, patent, license, revenue stream or other asset will be determined based upon the percentage of
such entity, business, brand, trademark, service mark, patent, license, revenue stream or other asset that is acquired by the
Company, with such Value to be increased if and to the extent that the Company subsequently acquires all or part of the balance
of such entity, business, brand, trademark, service mark, patent, license, revenue stream or other asset during the Term. Thus,
by way of example, if the Company acquires a 70% interest in a trademark that has a projected gross revenue stream during the
first complete year following the closing of the Acquisition of $40 million, for purposes of this Section 4 the Value of the Acquisition
will be deemed to be $28 million. If and when the Company acquires the remaining 30% interest in such trademark, the acquisition
of such 30% interest will not be deemed to be a separate Acquisition for all purposes of this Section 4 but the Value of the remaining
interest acquired (i.e., $12 million) will be added to the Value of the initial interest acquired (i.e., $28 million), to determine
whether the combined transaction qualifies as a First Tier Acquisition rather than a Second Tier Acquisition. If the Value of
the additional interest acquired results in a combined transaction that qualifies as a First Tier Acquisition rather than a Second
Tier Acquisition, within ten (10) days after the closing of the Acquisition of the additional interest, the Company will pay to
the Employee the difference between the amount of compensation he would have received had the transaction initially qualified
as a First Tier Acquisition and the amount he received by virtue of the transaction initially being treated as a Second Tier Acquisition.
For purposes of further clarification and this Section 4, the acquisition of multiple brands in a single transaction or series
of related transactions will be deemed to be a single Acquisition for all purposes of this Section 4.

 

    	 

    	 	

    
 

 

5.                 
Termination of Employment.

 

		(a)	General. The Employee’s employment under
this Agreement may be terminated without any breach of this Agreement only on the following circumstances:

 

(1)              
Death. The Employee’s employment under this Agreement shall terminate upon his death.

 

(2)              Disability. If the Employee suffers a Disability (as defined below in this sub-section (2)), the Company may terminate
the Employee’s employment under this Agreement upon thirty (30) days’ prior written notice; provided that the Employee
has not returned to full time performance of his duties during such thirty (30) day period. For purposes hereof, “Disability”
shall mean the Employee’s inability to perform his duties and responsibilities hereunder, with or without reasonable accommodation,
due to any physical or mental illness or incapacity, which condition either (i) has continued
for a period of one hundred eighty (180) days (including weekends and holidays) during the Term, or (ii) is
projected by the Board in good faith after consulting with a doctor selected by the Company and consented to by the Employee (or,
in the event of the Employee’s incapacity, his legal representative), such consent not to be unreasonably withheld, that
the condition is likely to continue for a period of at least six (6) consecutive months from its commencement.

 

(3)              
Good Reason. The Employee may terminate his employment under this Agreement for Good Reason at any time on or prior
to the one hundred twentieth (120th) day after the occurrence of any of the Good Reason events set forth in the following
sentence. For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following
events without the Employee’s consent:

 

		(i)	the failure by the Company to timely comply with its
material obligations and agreements contained in this Agreement;

 

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		(ii)	a material diminution of the authorities, duties or
responsibilities of the Employee set forth in Section 1 above (other than temporarily while the Employee is physically or
mentally incapacitated and unable to properly perform such duties, as determined by the Board in good faith);

 

		(iii)	the loss of the titles of the Employee with the Company
set forth in Section 1 above;

 

		(iv)	the re-location of the Employee to an office outside
of New York, New York (the borough of Manhattan);

 

		(v)	the assignment to the Employee of duties or responsibilities
which represent a material diminution of his duties and responsibilities set forth in Section 1 above; or

 

		(vi)	a change in the reporting structure so that the Employee
reports to someone other than the Chief Executive Officer of the Company;

 

provided, however, that,
within ninety (90) days of any such events having occurred, the Employee shall have provided the Company with written notice that
such events have occurred and afforded the Company thirty (30) days to cure same. The parties agree that a termination for Good
Reason shall be treated as an involuntary separation under Code Section 409A (as  defined in Section 9(a) below); provided,
however, that in the event it is finally determined that any taxes are due and payable in connection with the receipt of
such consideration by the Employee, then the Employee agrees to pay any taxes, penalties and interest that may arise in connection
therewith, and shall indemnify and hold harmless the Company from any taxes, penalties and interest that result therefrom.

 

(4)              
Without Good Reason. The Employee may voluntarily terminate his employment under this Agreement without Good Reason
upon written notice by the Employee to the Company at least sixty (60) days prior to the effective date of such termination (which
termination the Company may, in its sole discretion, make effective earlier than the date set forth in the Notice of Termination
(as hereinafter defined in sub-section (b) below)).

 

(5)              
Cause. The Company may terminate the Employee’s employment under this Agreement at any time for Cause. Termination
for “Cause” shall mean termination of the Employee’s employment because of the occurrence of any
of the following as determined by the Board:

 

		(i)	the willful and continued failure by the Employee to
attempt in good faith to substantially perform his obligations under this Agreement (other than any such failure resulting from
the Employee’s incapacity due to a Disability); provided, however, that the Company shall have provided the
Employee with written notice that such actions are occurring and the Employee has been afforded at least thirty (30) days to cure
same;

 

    	6

    	 	

    
 

 

		(ii)	the indictment of the Employee for, or his conviction
of or plea of guilty or nolo contendere to, a felony or any other crime involving moral turpitude or dishonesty;

 

		(iii)	the Employee’s willfully engaging in misconduct
in the performance of his duties for the Company (including theft, fraud, embezzlement, and securities law violations or a violation
of the Company’s Code of Conduct or other written policies) that is materially injurious to the Company, monetarily or otherwise;
or

 

		(iv)	the Employee’s willfully engaging in misconduct
other than in the performance of his duties for the Company (including theft, fraud, embezzlement, and securities law violations)
that is materially injurious to the Company or, in the good faith determination of the Board, is potentially materially injurious
to the Company, monetarily or otherwise.

 

For purposes of this Section 5(a)(5), no
act, or failure to act, on the part of the Employee shall be considered “willful,” unless done, or omitted to be done,
by him in bad faith and without reasonable belief that his action or omission was in, or not opposed to, the best interest of the
Company (including reputationally).

 

(6)Without
Cause. The Company may terminate the Employee’s employment under this Agreement without Cause immediately upon written
notice by the Company to the Employee.

 

		(b)	Notice of Termination. Any termination of the Employee’s employment by the Company
or by the Employee (other than termination by reason of the Employee’s death) shall be communicated by written Notice of
Termination to the other party. For purposes of this Agreement, a “Notice of Termination” shall mean
a written notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of the Employee’s employment under the provision
so indicated.

 

		(c)	Date of Termination. The “Date of Termination” shall mean (a) if
the Employee’s employment is terminated by his death, the date of his death, (b) if the Employee’s employment
is terminated pursuant to subsection 5(a)(2) above, thirty (30) days after Notice of Termination is given (provided that the Employee
shall not have returned to full-time performance of his duties during such thirty (30) day period), (c) if the Employee’s
employment is terminated pursuant to subsections 5(a)(3) or 5(a)(5) above, the date specified in the Notice of Termination after
the expiration of any applicable cure periods, (d) if the Employee’s employment is terminated pursuant to subsection 5(a)(4)
above, the date specified in the Notice of Termination which shall be at least sixty (60) days after Notice of Termination is given,
or such earlier date as the Company shall determine, in its sole discretion, and (e) if the Employee’s employment is
terminated pursuant to subsection 5(a)(6) above, the date on which a Notice of Termination is given.

    	7

    	 	

    

		(d)	Compensation Upon Termination.

 

		(i)	Termination for Cause or Without Good Reason.
If the Employee’s employment shall be terminated by the Company for Cause or by the Employee without Good Reason, the Employee
shall receive from the Company: (a) any earned but unpaid Base Salary through the Date of Termination, paid in accordance with
the Company’s standard payroll practices; (b) reimbursement for any unreimbursed expenses properly incurred and paid in
accordance with Section 4(f) through the Date of Termination; (c) payment for any accrued but unused vacation time in accordance
with Company policy; (d) such vested accrued benefits, and other payments, if any, as to which the Employee (and his eligible
dependents) may be entitled under, and in accordance with the terms and conditions of, the employee benefit arrangements, plans
and programs of the Company as of the Date of Termination, other than any severance pay plan; (e) any unpaid Acquisition Payment
and any Acquisition Payment with respect to any Acquisition that closes within 90 days of the Date of Termination, with such Acquisition
Payment(s) to be made within ten (10) days after the closing of each such Acquisition ((a) though (e), the “Amounts
and Benefits”); and (f) all vested Award Shares or, if the Award has not theretofore been granted, the vested portion
of the Alternate Payment, and the Company shall have no further obligation with respect to this Agreement other than as provided
in Section 8 of this Agreement. In addition, any portion of the Award or the Alternate Payment, as the case may be, that remains
unvested on the Date of Termination shall be forfeited as of the Date of Termination.

 

		(ii)	Termination without Cause or for Good Reason.
If, prior to the expiration of the Term, the Employee terminates his employment hereunder for Good Reason or the Company terminates
the Employee’s employment hereunder without Cause (other than a termination by reason of death or Disability), and the Employee
has not received and is not entitled to any payment under Section 5(d)(iii) hereof, then the Company shall pay to or provide
the Employee with the Amounts and Benefits and, subject to Section 9 hereof:

 

		1.	an amount equal to the sum of all applicable Base Salary for the remaining
balance of the Term determined as if such termination had not occurred, which shall be payable in full in a lump sum cash
payment to be made to the Employee within thirty (30) days of the Date of Termination;

 

		2.	any bonus earned but unpaid for a prior year or other
completed period (the “Prior Bonus”), which shall be payable in full in a lump sum cash payment to be
made to the Employee within thirty (30) days of the Date of Termination;

 

    	8

    	 	

    
 

 

		3.	subject to the Employee’s (a) timely election of
continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
with respect to the Company’s group health insurance plans in which the Employee participated immediately prior to the Date
of Termination (“COBRA Continuation Coverage”), and (b) continued payment by the Employee of premiums
for such plans at the “active employee” rate (excluding, for purposes of calculating cost, an employee’s ability
to pay premiums with pre-tax dollars), the Company shall provide COBRA Continuation Coverage for the Employee and his eligible
dependents until the earliest of (x) the Employee or his eligible dependents, as the case may be, ceasing to be eligible under
COBRA, (y) eighteen (18) months following the Date of Termination, and (z) the Employee becoming eligible for comparable coverage
under the health insurance plan of a subsequent employer (the benefits provided under this sub-section (4), the “Medical
Continuation Benefits”); and

 

		4.	notwithstanding any provisions to the contrary contained
in this Agreement, the Plan or the Restricted Stock Agreement, all remaining restrictions relating to any then unvested Award
Shares eligible to vest for the first two (2) Acquisitions only, if any, shall immediately lapse, or, if the Award has not theretofore
been granted, the Employee shall be paid the Alternate Payment in a lump sum cash payment to be made to the Employee within thirty
(30) days of the Date of Termination. Any remaining unvested Award Shares, other than the Award Shares eligible to vest for the
first two (2) Acquisitions, or any unvested portion of the Alternate Payment, shall be forfeited as of the Date of Termination.

 

		(iii)	Termination Following Change in Control. If the
Company terminates the Employee’s employment without Cause or the Employee terminates the Employee’s employment for
Good Reason, in each case within twelve (12) months after a Change in Control, then in addition to the Amounts and Benefits, the
Company shall pay to the Employee, in a lump sum, in cash, within fifteen (15) days after the Date of Termination, an amount equal
to $100 less than three (3) times the greater of (i) $400,000 or (ii) the average of the annual cash compensation received by
the Employee on or after the Effective Date in his capacity as an employee of the Company during the “base period”
(as defined in Section 280G of the Internal Revenue Code of 1986 (the “Code”)); provided, however,
that if such lump sum severance payment, either alone or together with other payments or benefits, either cash or non-cash, that
the Employee has the right to receive from the Company, including, but not limited to, accelerated vesting or payment of any deferred
compensation, options, stock appreciation rights or any benefits payable to the Employee under any plan for the benefit of employees,
which would constitute an “excess parachute payment” (as defined in Section 280G of the Code), then
such lump sum severance payment or other benefit shall be reduced to the largest amount that will not result in receipt by the
Employee of an excess parachute payment. In addition to the foregoing, upon a termination of the Employee’s employment as
set forth above, the Employee shall be entitled to receive the payments in the amounts contemplated, and on the dates specified,
by sub-section 5(d)(ii)(1), (2) and (3). For purposes of this Section 5(d)(iii), the Employee’s cash compensation shall
mean the sum of his Base Salary, plus Acquisition Payments paid to the Employee, if any, plus any acquisition bonus payments paid
to the Employee, if any, pursuant to Section 4(e) above. In the event of a conflict between the provisions of this Section 5(d)(iii)
and the provisions of Section 5(d)(ii), the provisions of this Section 5(d)(iii) will control.

    	9

    	 	

    
 

 

For purposes of this Agreement,
a “Change in Control” shall mean any of the following:

 

		1.	any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or pursuant to which shares of the Company’s Common Stock would be
converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company Common
Stock immediately prior to the merger have the same proportionate ownership of Common Stock of the surviving corporation immediately
after the merger;

 

		2.	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;

 

		3.	any approval by the stockholders of the Company of any
plan or proposal for the liquidation or dissolution of the Company;

 

		4.	the cessation of control (by virtue of their not constituting
a majority of directors) of the Board by the individuals (the “Continuing Directors”) who (x) at the
date of this Agreement were directors or (y) become directors after the date of this Agreement and whose election or nomination
for election by the Company’s stockholders, was approved by a vote of at least two-thirds of the directors then in office
who were directors at the date of this Agreement or whose election or nomination for election was previously so approved); or

 

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		5.	(A) the acquisition of beneficial ownership (“Beneficial
Ownership”), within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), of an aggregate of 25% or more of the voting power of the Company’s outstanding voting securities by
any person or group (as such term is used in Rule 13d-5 under the Exchange Act) who beneficially owned less than 10% of the voting
power of the Company’s outstanding voting securities on the Effective Date, (B) the acquisition of Beneficial Ownership
of an additional 15% of the voting power of the Company’s outstanding voting securities by any person or group who beneficially
owned at least 10% of the voting power of the Company’s outstanding voting securities on the Effective Date, or (C) the
execution by the Company and a stockholder of a contract that by its terms grants such stockholder (in its, hers or his capacity
as a stockholder) or such stockholder’s Affiliate (as defined in Rule 405 promulgated under the Securities Act of 1933
(an “Affiliate”)) including, without limitation, such stockholder’s nominee to the Board
(in its, hers or his capacity as an Affiliate of such stockholder), the right to veto or block decisions or actions of the Board;
provided, however, that notwithstanding the foregoing, the events described in items (A), (B) or (C) above shall
not constitute a Change in Control hereunder if the acquiror is (aa) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or one of its affiliated entities and acting in such capacity, (bb) a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of voting
securities of the Company, or (cc) a person or group meeting the requirements of clauses (i) and (ii) of Rule 13d-1(b)(1) under
the Exchange Act;

 

		6.	subject to applicable law, in a Chapter 11 bankruptcy
proceeding, the appointment of a trustee or the conversion of a case involving the Company to a case under Chapter 7.

 

		(iv)	Termination upon Death. In the event of the Employee’s
death, the Company shall pay or provide to the Employee’s estate: (i) the Amounts and Benefits, and (ii) the Prior
Bonus. In addition: (x) notwithstanding any provisions to the contrary contained in this Agreement,
the Plan or the Restricted Stock Agreement, in the event a Change in Control shall not have theretofore occurred, all
then unvested Award Shares eligible to vest for the first two (2) Acquisitions, if any, shall immediately become vested on the
Date of Termination and all such amounts and Award Shares shall be distributed to the Employee’s estate within thirty (30)
days of the Date of Termination, or in the event the Award has not been made because approval of the Plan by the Board and the
Company’s stockholders has not occurred, the estate shall be paid the Alternate Payment within thirty (30) days of the Date
of Termination; and (y) the Employee’s estate shall receive from the Company the Acquisition Payment with respect
to any Acquisition that closes within 90 days of the Date of Termination, with such Acquisition Payment(s) to be made within ten
(10) days after the closing of each such Acquisition.

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		(v)	Termination upon Disability. In the event the
Company terminates the Employee’s employment hereunder for reason of Disability, the Company shall pay or provide to the
Employee: (i) the Amounts and Benefits; (ii) the Prior Bonus; and (iii) the Medical Continuation Benefits. In
addition: (x) notwithstanding any provisions to the contrary contained in this Agreement, the Plan or the Restricted Stock
Agreement, in the event a Change in Control shall not have theretofore occurred, all then unvested
Award Shares eligible to vest for the first two (2) Acquisitions, if any, shall immediately become vested on the Date of Termination
and all such amounts and Award Shares shall be distributed to the Employee within thirty (30) days of the Date of Termination,
or in the event the Award has not been made because approval of the Plan by the Board and the Company’s stockholders has
not occurred, the estate shall be paid the Alternate Payment within thirty (30) days of the Date of Termination; and (y) the
Employee shall receive from the Company the Acquisition Payment with respect to any Acquisition that closes within 90 days of
the Date of Termination, with such Acquisition Payment(s) to be made within ten (10) days after the closing of each such Acquisition.

 

		(vi)	Payments of Compensation Upon Termination. For
the avoidance of doubt, in the event the Employee shall be entitled to receive payments and benefits pursuant to any one of sub-sections
5(d)(i), (ii), (iii), (iv) or (v) above, he shall be entitled to no payments or benefits under any other of such sub-sections,
except as expressly set forth in sub-section 5(d)(iii) with respect to payments and benefits contemplated by sub-section 5(d)(ii).
Notwithstanding any provision to the contrary contained in this Section 5(d), if any bonus amount is based in whole or in part
on the results of the audit by the Company’s independent public accountants of the Company’s financial statements
for a calendar year, and such amount cannot be paid within the applicable thirty (30) day period provided for herein, then such
amount shall be paid by the later of March 15th of the calendar year immediately following the calendar year to which
it relates or the end of the applicable thirty (30) day period.

 

(e)               
No Duty to Mitigate. The Employee shall not be required to mitigate the amount of any payment provided for in this
Section 5 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 5 be reduced
by any compensation earned by the Employee as the result of the Employee’s employment by another employer or business or
by profits earned by the Employee from any other source at any time before and after the Date of Termination

 

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6.           Confidentiality. The Company and the
Employee acknowledge that as a result of the services to be performed by the Employee under this Agreement the Employee shall be
in possession of confidential information relating to the business practices of the Company. The term “confidential
information” shall mean any and all information (oral and written) relating to the Company or any of its subsidiaries
or other affiliates or their licensees, or any of their respective activities, as well as any vendor, suppler, customer or other
third party acquired by the Employee in connection with his employment by the Company, other than such information which can be
shown by the Employee to be in the public domain other than as the result of a breach of the provisions of this Section 6. The
Employee shall not, during or after the Term, directly or indirectly, use, communicate, disclose or disseminate to any person,
firm or corporation any confidential information regarding the clients, customers, trade secrets or business practices or plans
or other confidential information of the Company and its subsidiaries or other affiliates or their licensees without the prior
written consent of the Company other than as may be required under any applicable laws, regulations or directives of any government
agency, tribunal or authority having jurisdiction in the matter or under subpoena or other process of law. Upon the termination
of this Agreement for any reason whatsoever, all documents, records, notebooks, equipment, programs, customer and prospective customer
lists and other materials, in each case which contain confidential information relating to the Company or any of its subsidiaries
or other affiliates or their licensees which are in the possession of the Employee, including all copies thereof, shall be promptly
returned to the Company.

 

7.            Noncompetition; Nonsolicitation.

 

(1)              
The Employee hereby agrees that during the period commencing on the Effective Date and ending two (2) years after the termination
of the employment of the Employee (the “Non-Compete Term”), he shall not, directly or indirectly, make
any direct or indirect investment or acquisition (by assignment, purchase, merger or otherwise), or be an officer or a manager
in any Competing Entity. For the purposes of this Agreement, the term “Competing Entity” shall mean Windsong
Brands, NexCen Brands, The Cherokee Group and/or any entity or business that is competitive with the Company’s licensing
business, provided that a Competing Entity shall not include private equity or hedge funds, manufacturers, wholesalers, sourcing
businesses or other importers, whether brand owners or licensees.

 

(2)              
The Employee shall not, during the period commencing on the Effective Date and ending two (2) years after the termination
of the employment of the Employee, directly or indirectly, take any action which constitutes an interference with or a disruption
of any of the Company’s or any of its subsidiaries’ or other affiliates’ business activities including, without
limitation, the solicitation of the Company’s or any subsidiary’s or other affiliates’ licensors, licensees or
persons listed on the personnel lists of the Company or any subsidiary or other affiliate on the Date of Termination.

 

(3)              
For purposes of clarification, but not of limitation, the Employee hereby acknowledges and agrees that he shall be prohibited
from, during the period commencing on the Effective Date and ending two (2) years after the termination of the employment of the
Employee, directly or indirectly, hiring, offering to hire, enticing, soliciting or in any other manner persuading or attempting
to persuade any officer, employee, agent, supplier, lessor, lessee, licensor, licensee or customer of the Company or any of its
subsidiaries or other affiliates (but only those suppliers existing during the time of the Employee’s employment by the Company
or any subsidiary or other affiliate, or at the Date of Termination), to discontinue or alter his, her or its relationship with
the Company or any subsidiary or other affiliate.

    	13

    	 	

    
 

 

(4)              
Without intending to limit the remedies available to the Company, the Employee acknowledges that a breach of any of the
covenants contained in this Section 7 may result in material and irreparable injury to the Company, or its subsidiaries or other
affiliates, for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely
and that, in the event of such a breach or threat, the Company shall be entitled to seek a temporary restraining order and/or a
preliminary or permanent injunction restraining the Employee from engaging in activities prohibited by this Section 7 or such other
relief as may be required specifically to enforce any of the covenants in this Section 7. If for any reason it is held that the
restrictions under this Section 7 are not reasonable or that consideration therefor is inadequate, such restrictions shall be interpreted
or modified to include as much of the duration and scope identified in this Section 7 as will render such restrictions valid and
enforceable.

 

8.            Indemnification.
The Company shall indemnify and hold harmless the Employee against any and all expenses reasonably incurred by him in connection
with or arising out of (a) the defense of any action, suit or proceeding in which he is a party, or (b) any claim asserted
or threatened against him, in either case by reason of or relating to his being or having been an employee, officer or director
of the Company or any subsidiary, whether or not he continues to be such an employee, officer or director at the time of incurring
such expenses, except insofar as such indemnification is prohibited by law. Such expenses shall include, without limitation, the
reasonable fees and disbursements of attorneys, amounts of judgments and amounts of any settlements. The foregoing indemnification
obligation is independent of any similar obligation provided in the Company’s Certificate of Incorporation or Bylaws, and
shall apply with respect to any matters attributable to periods prior to the date of this Agreement, and to matters attributable
to Employee's employment hereunder, without regard to when asserted.

 

9.                 
Section 409A of the Code.

 

		(a)	It is intended that the provisions of this Agreement
comply with Section 409A of Code and the regulations and guidance promulgated thereunder (collectively “Code Section
409A”), and all provisions of this Agreement shall be construed in a manner consistent with the requirements for
avoiding taxes or penalties under Code Section 409A. If any provision of this Agreement (or of any award of compensation, including
equity compensation or benefits) would cause the Employee to incur any additional tax or interest under Code Section 409A,
the Company shall, upon the specific request of the Employee, use its reasonable business efforts to in good faith reform such
provision to comply with Code Section 409A; provided, that to the maximum extent practicable, the original intent
and economic benefit to the Employee and the Company of the applicable provision shall be maintained, but the Company shall have
no obligation to make any changes that could create any additional economic cost or loss of benefit to the Company. The Company
shall timely use its reasonable business efforts to amend any plan or program in which the Employee participates to bring it in
compliance with Code Section 409A. Notwithstanding the foregoing, the Company shall have no liability with regard to any failure
to comply with Code Section 409A so long as it has acted in good faith with regard to compliance therewith.

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		(b)	A termination of employment shall not be deemed to
have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following
a termination of employment unless such termination is also a “Separation from Service” within the meaning
of Section 409A and, for purposes of any such provision of this Agreement, references to a “resignation,”
“termination,” “termination of employment” or like terms shall mean Separation
from Service. If the Employee is deemed on the Date of Termination to be a “specified employee”, within
the meaning of that term under Section 409A(a)(2)(B) of the Code and using the identification methodology selected by the Company
from time to time, or if none, the default methodology, then with regard to any payment, the providing of any benefit or any distribution
of equity made subject to this Section 9 to the extent required to be delayed in compliance with Section 409A(a)(2)(B) of the
Code, and any other payment, the provision of any other benefit or any other distribution of equity that is required to be delayed
in compliance with Section 409A(a)(2)(B) of the Code, such payment, benefit or distribution shall not be made or provided prior
to the earlier of (i) the expiration of the six-month period measured from the date of the Employee’s Separation from Service,
or (ii) the date of the Employee’s death. On the first day of the seventh (7th) month following the date of Employee’s
Separation from Service or, if earlier, on the date of his death, (x) all payments delayed pursuant to this Section 9 (whether
they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed
to the Employee in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance
with the normal payment dates specified for them herein, and (y) all distributions of equity delayed pursuant to this Section
9 shall be made to the Employee. In addition to the foregoing, to the extent required by Section 409A(a)(2)(B) of the Code, prior
to the occurrence of a Disability termination as provided in this Agreement, the payment of any compensation to the Employee under
this Agreement shall be suspended for a period of six (6) months commencing at such time that the Employee shall be deemed to
have had a Separation from Service because either (A) a sick leave ceases to be a bona fide sick leave of absence, or (B) the
permitted time period for a sick leave of absence expires (an “SFS Disability”), without regard to whether
such SFS Disability actually results in a Disability termination. Promptly following the expiration of such six-month period,
all compensation suspended pursuant to the foregoing sentence (whether it would have otherwise been payable in a single sum or
in installments in the absence of such suspension) shall be paid or reimbursed to the Employee in a lump sum. On any delayed payment
date under this Section 9 there shall be paid to the Employee or, if the Employee has died, to his estate, in a single cash lump
sum together with the payment of such delayed payment, interest on the aggregate amount of such delayed payment at the Delayed
Payment Interest Rate (as defined below) computed from the date on which such delayed payment otherwise would have been made to
the Employee until the date paid. For purposes of the foregoing, the “Delayed Payment Interest Rate”
shall mean the short term applicable federal rate provided for in Section 1274(d) of the Code as of the business day immediately
preceding the payment date for the applicable delayed payment.

    	15

    	 	

    
 

 

		(c)	With regard to any provision herein that provides
for reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the right to reimbursement
or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible
for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement,
or in-kind benefits to be provided, in any other taxable year, provided that the foregoing clause (ii) shall not be
violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses
are subject to a limit related to the period the arrangement is in effect, and (iii) such payments shall be made on or before
the last day of the Employee’s taxable year following the taxable year in which the expense was incurred.

 

10.             
Miscellaneous.

 

		(a)	This Agreement shall be deemed to be a contract made
under the laws of the State of New York and for all purposes shall be construed in accordance with those laws. Any unresolved
controversy or claim arising out of or relating to this Agreement (including, but not limited to, any claims of breach of contract,
wrongful termination or age, sex, race or other discrimination), to the extent permissible by law, shall be submitted to arbitration
by one arbitrator mutually agreed upon by the parties, and if no agreement can be reached within thirty (30) days after names
of potential arbitrators have been proposed by JAMS®, then by one arbitrator having reasonable experience in employment matters
and who is chosen by JAMS®. The arbitration shall take place in New York, New York, in accordance with the JAMS® rules
then in effect, and judgment upon any award rendered in such arbitration will be binding and may be entered in any court having
jurisdiction thereof. There shall be limited discovery prior to the arbitration hearing as follows: (a) exchange of witness lists
and copies of documentary evidence and documents relating to or arising out of the issues to be arbitrated; (b) depositions
of all party witnesses; and (c) such other depositions as may be allowed by the arbitrator upon a showing of good cause. Depositions
shall be conducted in accordance with the New York Code of Civil Procedure, the arbitrator shall be required to provide in writing
to the parties the basis for the award or order of such arbitrator, and a court reporter shall record all hearings, with such
record constituting the official transcript of such proceedings. The Company and the Employee unconditionally consent to submit
to the exclusive jurisdiction of the New York State Supreme Court, County of New York or the United States District Court for
the Southern District of New York having subject matter jurisdiction.

 

		(b)	Employee may not delegate his duties or assign his
rights hereunder. No rights or obligations of the Company under this Agreement may be assigned or transferred by the Company other
than pursuant to a merger or consolidation in which the Company is not the continuing entity, or a sale, liquidation or other
disposition of all or substantially all of the assets of the Company, provided that the assignee or transferee is the successor
to all or substantially all of the assets or businesses of the Company and assumes the liabilities, obligations and duties of
the Company under this Agreement, either contractually or by operation of law. For the purposes of this Agreement, the term “Company”
shall include the Company and, subject to the foregoing, any of its successors and assigns. This Agreement shall inure to the
benefit of, and be binding upon, the parties hereto and their respective heirs, legal representatives, successors and permitted
assigns.

    	16

    	 	

    
 

 

		(c)	The invalidity or unenforceability of any provision
hereof shall not in any way affect the validity or enforceability of any other provision. This Agreement reflects the entire understanding
between the parties.

 

		(d)	This Agreement supersedes and any and all other agreements,
either oral or in writing, between the parties hereto with respect to the employment of the Employee by the Company and contains
all of the covenants and agreements between the parties with respect to such employment in any manner whatsoever. Any modification
or termination of this Agreement will be effective only if it is in writing signed by the party to be charged.

 

		(e)	This Agreement may be executed by the parties in one
or more counterparts, each of which shall be deemed to be an original but all of which taken together shall constitute one and
the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and
delivered to each of the other parties hereto.

 

11.          Notices. All notices relating to this Agreement shall be in writing and shall be either personally delivered,
delivered by a nationally recognized overnight courier or mailed by certified mail, return receipt requested, to be delivered at
such address as is indicated below, or at such other address or to the attention of such other person as the recipient has specified
by prior written notice to the sending party. Notice shall be effective when so personally delivered or when delivered by overnight
courier or five days after being mailed.

 

To the Company:

 

Iconix Brand Group, Inc.

1450 Broadway, 4th Floor

New York, New York 10018

Attention: Neil Cole, Chief Executive Officer

 

With a copy in the same manner to:

 

Blank Rome LLP

405 Lexington Avenue

New York, New York 10174

Attention: Robert J. Mittman, Esq.

 

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To the Employee:

 

David Blumberg

32 Alpine Road

Greenwich, CT 06830

 

With a copy in the same manner to:

 

Berkowitz, Trager & Trager, LLC

777 Third Avenue – 35th Floor

New York, New York 10017

Attention: Steven T. Gersh, Esq.

 

 

 

-signature
page follows-

 

    	18

    	 	

    
 

 

 

IN WITNESS WHEREOF, the
parties hereto have executed this Employment Agreement as of the 5th day of March, 2012.

 

 

	
        ICONIX BRAND GROUP,
        INC.

         

         

        By: /s/ Neil Cole________________

        Neil Cole

        Chief Executive Officer

         
	
        Employee

         

         

        /s/ David Blumberg_________

        David Blumberg

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