Document:

Exhibit 10.02

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT
(the “Agreement”) is dated as of April 2, 2012 (the “Agreement Effective Date”), between
Tonix Pharmaceuticals Holding Corp., a Nevada corporation (the “Company”), and Benjamin A. Selzer (the “Executive”).

 

WHEREAS, as of April
1, 2011, the Executive and Tonix Pharmaceuticals, Inc., a Delaware corporation and wholly owned subsidiary of the Company (the
“Subsidiary”), entered into an employment agreement (the “April 2011 Employment Agreement”);

 

WHEREAS, as of July
27, 2011, the Executive and the Subsidiary entered into an amendment to the April 2011 Employment Agreement;

 

WHEREAS, on October
7, 2011, the Subsidiary consummated a transaction (the “Transaction”) pursuant to which the Subsidiary was acquired
by a publicly registered company for a majority of the then issued and outstanding shares of such company and the Subsidiary became
a wholly owned subsidiary of the Company; and

 

WHEREAS, the Executive
and the Subsidiary wish to terminate the April 2011 Employment Agreement, as amended, and the Executive and the Company wish to
enter into a new employment agreement.

 

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

 

Section
1.   Employment.

 

The Executive is currently
an employee of the Subsidiary and as of the date hereof such employment relationship and the April 2011 Employment Agreement are
hereby terminated and the Executive shall hereinafter be employed by the Company, upon the terms and subject to the conditions
set forth in this Agreement for the period beginning on the Agreement Effective Date and ending as provided in Section 4 (the “Employment
Period”).

 

Section
2.   Position and Duties.

 

(a)       During
the Employment Period, the Executive shall continue to serve as the Chief Operating Officer of the Company. The Executive shall
have such duties and responsibilities as may be assigned to him from time to time by the Chief Executive Officer and/or the Board
of Directors of the Company (the “Board”).

 

    	 

    	 

    

 

(b)       The
Executive shall report to the Chief Executive Officer of the Company and shall devote his best efforts and substantially all of
his active business time and attention (except for permitted vacation periods and reasonable periods of illness or other incapacity)
on a full-time basis to the business and affairs of the Company and its affiliates, as those duties may be assigned by the Chief
Executive Officer and/or the Board. The Executive shall perform his duties and responsibilities to the best of his abilities in
a diligent and professional manner. The Executive shall perform his duties principally at the Company’s offices in New York
City, and, to the extent reasonably requested by the Chief Executive Officer or the Board, shall provide services as needed at
the Company’s other offices. During the Employment Period, the Executive shall not engage in any outside business activity
without the prior written approval of the Board, whether or not such activity is pursued for gain, profit or other pecuniary advantage.

 

(c)       The
foregoing restrictions shall not limit or prohibit the Executive from engaging in passive investment, and community, charitable
and social activities not interfering with the Executive’s performance and obligations hereunder.

 

Section
3.     Salary and Benefits.

 

(a)       Subject
to clauses (b) and (c) below, during the Employment Period, the Executive shall be employed on an at-will basis at a salary equal
to One Hundred Seventy Five Thousand Dollars ($175,000).

 

(b)       Commencing
on October 7, 2012, the Executive’s salary shall be increased to Two Hundred Fifty Thousand Dollars ($250,000) per annum,
or such other rate as the Board may designate from time to time (the “Adjusted Post-Financing Salary”).

 

(c)       In
the event, and upon the consummation, of the closing of the sale of shares of the common stock of the
Company to the public in an underwritten public offering pursuant to an effective registration statement under the Securities Act
of 1933, as amended, resulting in at least Ten Million Dollars ($10,000,000) of proceeds, net of the underwriting discount and
commissions, to the Company (a “Fundamental Transaction”), the Executive’s salary shall be increased
to Three Hundred Twenty Thousand Dollars ($320,000) per annum, or such other rate as the Board may designate from time to time
(the “Fundamental Transaction Salary”), and, if he remains employed until the date of such Fundamental Transaction,
the Executive shall thereupon be compensated for the difference between the Fundamental Transaction Salary and the Adjusted Post-Financing
Salary, such difference to be calculated based on One Hundred Ninety-One Dollars and Seventy-Eight Cents ($191.78) per calendar
day, multiplied by the number of calendar days elapsing from October 7, 2012 through the consummation of the Fundamental Transaction,
subject to a maximum aggregate payment of One Hundred Seventy Thousand Dollars ($170,000). The difference between the Adjusted
Post-Financing Salary payable to the Executive prior to the consummation of the Fundamental Transaction and the Fundamental Transaction
Salary shall be paid in a single lump sum at the same time that the Executive’s first regular Fundamental Transaction Salary
installment would be paid, net of applicable withholding and payroll taxes.

 

(d)       The
Executive may be eligible to earn annual bonuses as shall be determined by the Board in its sole discretion. The Board shall determine
the amount of each such annual bonus, if any, promptly following the close of the calendar year and shall pay such bonus by no
later than March 15th of the year immediately following the year in which the bonus was earned.

 

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(e)       In
addition, during the Employment Period, the Executive shall be entitled to participate in all employee benefit programs and plans
for which executive employees of the Company are generally eligible from time to time.

 

(f)       The
Company shall, in accordance with policies then in effect with respect to payments of business expenses, pay or reimburse the Executive
for all reasonable out-of-pocket business expenses actually incurred by the Executive during the Employment Period in performing
services hereunder; provided, however that to the extent required to comply with the provisions of Section 409A (“Code
Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”), (1) no reimbursement
of expenses incurred by the Executive during any taxable year shall be made after the last day of the following taxable year of
the Executive, (2) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a taxable year of the
Executive shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, to the Executive in any
other taxable year, and (3) the right to reimbursement of such expenses shall not be subject to liquidation or exchange for another
benefit. All expenses shall be accounted for in such reasonable detail as the Company may require.

 

(g)       During
the Employment Period, the Executive shall be entitled to twenty (20) vacation days per year, as well as holidays, sick days and
personal days in accordance with the Company’s policies, as such policies may be amended from time to time. The Executive
may not carry forward any unused vacation, holiday, sick or personal days into subsequent years.

 

Section
4.     Term and Termination.

 

(a)       General.
The Employment Period shall commence on the Agreement Effective Date and shall end on the second anniversary of the Agreement Effective
Date (the “Initial Term”), and shall be renewed annually thereafter for one (1) year terms, unless and until
either party provides ninety (90) days’ advance written notice prior to the end of the then-current Employment Period that
such party declines to so extend the Employment Period; provided, however, that the Employment Period shall terminate prior
to such date upon the occurrence of any of the events set forth in clauses (b), (c) or (d) below. The Executive’s Termination
Date shall mean the date of his Separation from Service as determined under Code Section 409A and Treasury Regulation Section 1.409A-
1(h).

 

(b)       Notwithstanding
anything else set forth herein, prior to the consummation of a Fundamental Transaction the Employment Period may be terminated
by the Company with or without Cause without obligation other than the payment of the Accrued Obligations (as defined below).

 

(c)       Termination
by the Company; Resignation by the Executive. The Employment Period may be terminated by the Company at any time for
Cause (as defined below), or by the Executive’s resignation without Good Reason (as defined below). The Executive may resign
for Good Reason in accordance with the last paragraph of Section 5(c). The Employment Period may be terminated by the Company at
any time other than for Cause.

 

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(d)       Termination
due to Death or Disability. The Employment Period shall be terminated upon the Executive’s death or Separation from Service
(as defined below) due to Disability (as defined below).

 

(e)       Definition
of Cause:

 

For purposes of this
Agreement, “Cause” means:

 

(A)       the
failure by the Executive to perform such duties as are within the scope of this Agreement and as are reasonably requested in good
faith by the Chief Executive Officer or the Board in the course of the Executive’s performance of his duties hereunder;

 

(B)       gross
negligence, recklessness or willful misconduct by the Executive in the performance of his duties;

 

(C)       a
conviction of or a plea of guilty or nolo contendere by the Executive to a crime involving fraud, embezzlement, theft, other financial
dishonesty or moral turpitude;

 

(D)       the
material breach by the Executive of this Agreement or of any other agreement or contract with the Company, or any of its affiliates;
or

 

(E)       the
Board’s reasonable determination that the Executive has engaged in a violation of state or federal law relating to the workplace
environment (including, without limitation, laws relating to sexual harassment or age, sex or other prohibited discrimination).

 

The Company shall not
be entitled to terminate for Cause unless the Company provides to the Executive written notice documenting in reasonable detail
the basis for termination and an opportunity of at least thirty (30) days in duration (such duration to be determined in good faith
by the Company), to cure, unless (i) the Company reasonably determines that providing such opportunity to cure to the Executive
is reasonably likely to have a material adverse effect on its business, financial condition, results of operations, prospects or
assets, or (ii) the facts and circumstances underlying such termination are not able to be cured, in which case the Company may
terminate without providing an opportunity to cure.

 

Section
5.     Payments Upon Termination.

 

(a)       Termination
for Cause. Termination by the Executive without Good Reason; Natural Expiration of the Employment Period. If the Employment
Period is terminated after the consummation of a Fundamental Transaction (i) by the Company for Cause, (ii) by the Executive without
Good Reason and not on account of death or Disability, or (iii) upon the natural expiration of the Employment Period pursuant to
Section 4(a) above, then the Executive shall be entitled to receive his Fundamental Transaction Salary and other remuneration and
benefits only to the extent that such amount has accrued through the Termination Date (the “Accrued Obligations”).
For the avoidance of doubt, the Accrued Obligations shall be paid promptly upon the termination of the Employment Period, in accordance
with applicable law, and shall not include any bonus that remains unpaid as of the Termination Date or that is accruing in the
year of termination.

 

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(b)       Termination
due to death or Disability. If the Employment Period is terminated after the consummation of a Fundamental Transaction due
to the Executive’s death or Disability, then the Executive (or his legal representative) shall be entitled to the Accrued
Obligations, plus, if the Executive (or, if applicable, his legal representative) executes and does not revoke a general release
of claims in a form reasonably satisfactory to the Company by the 53rd day following the Executive’s Separation from Service
due to death or Disability, then, subject to Section 10, the Executive (or, if appropriate, his estate) shall be entitled to receive
a lump sum cash payment equal to two (2) months of the Executive’s then current salary paid on the 60th day following his
death or Separation from Service due to Disability, subject to applicable tax withholding requirements.

 

For purposes of this
Agreement, Disability shall have the meaning accorded the term under Treasury Regulation Section 1.409A-3(i)(4).

 

(c)       Termination
by the Company other than for Cause, or by the Executive for Good Reason. If after the consummation of a Fundamental Transaction
the Employment Period is terminated by the Company other than for Cause, or the Executive terminates employment for Good Reason,
and such termination constitutes an Involuntary Separation from Service within the meaning of Treasury Regulation Sections 1.409A-l(n)
and (h), then the Executive shall be entitled to the Accrued Obligations and, if the Executive executes and does not revoke a general
release of claims in a form reasonably satisfactory to the Company by the 53rd day following his Separation from Service, then,
subject to Section 10, the Executive (or, if appropriate, his estate) shall also be entitled to receive a lump sum cash payment
equal to six (6) months of the Fundamental Transaction Salary (the “Severance”) paid on the 60th day following
his Separation from Service, subject to applicable tax withholding requirements.

 

For purposes of this
Agreement, “Good Reason” shall mean the Executive’s Separation from Service within ninety (90) days after
the initial occurrence of (i) a material diminution in the Executive’s authority, duties or responsibilities; (ii) a material
reduction in the Executive’s then current salary (as adjusted); or (iii) the relocation of the Executive’s primary
work location to a location that is more than fifty (50) miles from the Executive’s immediately prior work location; provided
that the Executive shall not have Good Reason to separate from service unless the Executive provides written notice to the Company
of the condition constituting Good Reason to terminate within thirty (30) days of the initial occurrence thereof, and the Company
has a period of at least thirty (30) days after receipt of such notice to remedy said condition(s).

 

(d)       No
Other Benefits. Except as otherwise required by law (e.g., COBRA) or as specifically provided herein, all of the Executive’s
rights to salary, severance, fringe benefits and bonuses hereunder (if any) accruing after the Termination Date shall cease upon
the Termination Date. Except as specifically provided herein, the Executive shall not be entitled to any severance payments or
benefits under any severance policy or practice maintained by the Company or its affiliates.

 

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(e)       Compliance
With Code Section 409A. Notwithstanding anything herein to the contrary, this Agreement is intended to be interpreted and shall
operate so that the payments and benefits set forth herein either shall be exempt from the requirements of Code Section 409A or
shall comply with the requirements of such provision; provided, however, that in no event shall the Company be liable to the Executive
for or with respect to any taxes, penalties or interest which may be imposed upon the Executive pursuant to Code Section 409A.
For purposes of this Agreement, the terms “termination,” “termination of employment” and variations thereof
shall mean a “separation from service” as defined in Treasury Regulation Section 1.409A-1(h) (“Separation
From Service”). To the extent that any Severance payment constitutes a “deferral of compensation” subject
to Code Section 409A (a “409A Payment”), then, (A) in the event that a termination of Executive’s employment
does not constitute a Separation From Service, such 409A Payment shall begin at such time as the Executive has otherwise experienced
such a Separation from Service, and the date of such Separation from Service shall be deemed to be his Termination Date for purposes
of Section 4(a) hereof, and (B) if on the date of the Executive’s Separation from Service, the Executive is a “specified
employee” of a public company, as such term is defined in Treasury Regulation Section 1.409A-l(i), as determined from time
to time by the Company, then such 409A Payment shall not be made to the Executive until the earlier of (i) six (6) months and one
day after the Executive’s Separation from Service; or (ii) the date of his death, and shall be paid without adjustment for
the delay in payment. The Executive hereby acknowledges that he has been advised to seek and has sought the advice of a tax advisor
with respect to the tax consequences to the Executive of all payments pursuant to this Agreement, including any adverse tax consequences
or penalty taxes under Code Section 409A and applicable state tax law. The Executive hereby agrees to bear the entire risk of any
such adverse federal and state tax consequences and penalty taxes in the event any payment pursuant to this Agreement is deemed
to be subject to Code Section 409A, and that no representations have been made to the Executive relating to the tax treatment of
any payment pursuant to this Agreement under Code Section 409A and the corresponding provisions of any applicable state income
tax laws.

 

Section
6.      Nondisclosure and Nonuse of Confidential Information.

 

(a)       The
Executive shall not disclose or use at any time without the written consent of the Company, either during the Employment Period
or thereafter, any Confidential Information (as defined below) of which the Executive is or becomes aware, whether or not such
information is developed by him, except to the extent that such disclosure or use is directly related to and required by the Executive’s
performance in good faith of duties assigned to the Executive by the Company or is required to be disclosed by law, court order,
or similar compulsion; provided, however, that such disclosure shall be limited to the extent so required or compelled; and provided,
further, that the Executive shall give the Company notice of such disclosure and cooperate with the Company in seeking suitable
protection. The Executive acknowledges that the Company’s Confidential Information has been generated at great effort and
expense by the Company and its predecessors and affiliates and has been maintained in a confidential manner by the Company, its
predecessors and affiliates. The Executive does not claim any rights to or lien on any Confidential Information. The Executive
will immediately notify the Company of any unauthorized possession, use, disclosure, copying, removal or destruction, or attempt
thereof, of any Confidential Information by anyone of which the Executive becomes aware and of all details thereof. The Executive
shall take all reasonably appropriate steps to safeguard Confidential Information and to protect it against disclosure, misuse,
espionage, loss and theft. The Executive shall deliver to the Company on the Termination Date, or at any time the Company may request,
all memoranda, notes, plans, records, reports, computer tapes and software and other documents and data (and copies thereof regardless
of the form thereof (including electronic and optical copies)) relating to the Confidential Information or the Work Product (as
defined below) of the Company or any of its affiliates which the Executive may then possess or have under his control.

 

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(b)       As
used in this Agreement, the term “Confidential Information” means information that is not generally known to the public
and that is used, developed or obtained by the Company or any affiliate in connection with its business, including, but not limited
to, information, observations and data obtained by the Executive while employed by the Company or any predecessors thereof (including
those obtained prior to the date hereof) concerning (i) the business or affairs of the Company (or such predecessors), (ii) technologies,
products or services, (iii) data, test results, designs, methods, formulae, production methods, know-how, show-how, techniques,
systems, processes, specifications, drawings, reports, software programs, works of authorship, research and development, (iv) inventions,
new developments and trade secrets, whether patentable or unpatentable and whether or not reduced to practice, (v) existing and
prospective licensees, partners, customers, clients and suppliers, (vi) agreements with licensees, partners, customers, clients,
suppliers and other entities or individuals, (vii) projects, plans and proposals, (vii) fees, costs and pricing structures, (viii)
accounting and business methods, (ix) business strategies, acquisition plans and candidates, financial or other performance data
and personnel lists and data, and (x) all similar and related information in whatever form, unless the information is or becomes
publicly known through lawful means.

 

Section
7.    Inventions and Patents.

 

The Executive agrees
that all inventions, ideas, innovations, improvements, modifications, data, test results, technical information, systems, software
developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade names, logos and all similar or related
information (whether patentable or unpatentable) which relate to the Company’s or any of its affiliates’ actual or
anticipated business, research and development or existing or future products or services and which are conceived, developed or
made by the Executive (whether or not during usual business hours or on the premises of the Company or any affiliate and whether
or not alone or in conjunction with any other person) while employed by the Company (including those conceived, developed or made
prior to the date of this Agreement) together with all patent applications, letters patent, trademark, tradename and service mark
applications or registrations, copyrights, reissues thereof and any other legal protection thereon that may be granted for or upon
any of the foregoing (collectively referred to herein as the “Work Product”), belong in all instances to the
Company or such affiliate. The Executive shall promptly disclose such Work Product to the Chief Executive Officer and perform all
actions reasonably requested by the Chief Executive Officer (whether during or after the Employment Period) to establish and confirm
the Company’s ownership of such Work Product (including, without limitation, the execution and delivery of assignments, consents,
powers of attorney and other instruments) and provide reasonable assistance to the Company or any of its affiliates in connection
with (a) the prosecution of any applications for patents, trademarks, trade names, service marks, reissues thereof or other legal
protection thereon, (b) the maintenance, enforcement and renewal of any rights that may be obtained, granted or vest therein, and
(c) the prosecution and defense of any actions, proceedings, oppositions or interferences relating thereto. If the Company is unable,
after reasonable effort, to secure the signature of the Executive on any such papers, any executive officer of the Company shall
be entitled to execute any such papers as the agent and the attorney-in-fact of the Executive, and the Executive hereby irrevocably
designates and appoints each executive officer of the Company as his or her agent and attorney-in-fact to execute any such papers
on his or her behalf, and to take any and all actions as the Company may deem necessary or desirable in order to protect its rights
and interests in any Work Product, under the conditions described in this sentence.

 

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Section
8.     Non-Compete; Non-Solicitation; Non-Disparagement.

 

(a)       The
Executive acknowledges that, in the course of employment with the Company and/or its affiliates, he has and will become familiar
with the Company’s and its predecessors and affiliates’ trade secrets and with other confidential information concerning
the Company and its predecessors and affiliates and that his services have been and will be of special, unique and extraordinary
value to the Company and its affiliates. Therefore, in order to protect the Company’s interest in its Confidential Information,
the Executive agrees that during the Employment Period and for one (1) year thereafter (collectively, the “Non-Compete
Period,” subject to automatic extension during the period of any violation of this Section 8), he shall not directly
or indirectly own, manage, control, participate in, consult with, render services for, or in any manner engage in or represent
any business competing with the development, marketing, and/or sale of drugs intended for use in the treatment of attention deficit
disorder, attention deficit and hyperactivity disorder, headaches, primary insomnia disorder, fibromyalgia, post-traumatic stress
disorder or any other products and/or services of the Company or its affiliates that exist or are in the process of being formed
or acquired as of the Termination Date (the “Business”), within any Restricted Territory. As used in this Agreement,
the term “Restricted Territory” means (i) the United States and (ii) any other country or territory in which
the Company has engaged in, or is engaging in, the Business as of the Termination Date. Nothing herein shall be construed to prevent
the Executive from participating in and completing all necessary activities required to maintain the Executive’s professional
standards.

 

Nothing herein shall
prohibit the Executive from being a passive owner of not more than one percent (1%) of the outstanding stock of any class of a
corporation which is publicly traded that is engaged in the Business, so long as the Executive has no active participation in the
business of such corporation.

 

(b)         During
the Non-Compete Period, the Executive shall not directly or indirectly through another person or entity:

 

(i)       induce
or attempt to induce any employee of the Company or any affiliate to leave the employ of the Company or such affiliate, or in any
way interfere with the relationship between the Company or any such affiliate, on the one hand, and any employee thereof, on the
other hand;

 

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(ii)       solicit
for hire or hire any person who was an employee of the Company or any affiliate until six (6) months after such individual’s
employment relationship with the Company or any affiliate has been terminated, provided that the Executive may hire any such person
(so long as such person is not a supervisor, manager or executive officer of the Company or any affiliate) who responds to a general
advertisement offering employment;

 

(iii)       solicit,
induce or attempt to solicit or induce any customer (it being understood that the term “customer” as used throughout
this Agreement includes any Person (x) that is purchasing goods or receiving services from the Company and/or any affiliates or
(y) that is directly or indirectly providing or referring customers to, or otherwise providing or referring business for, the Company
or any affiliates), supplier, licensee, subcontractor or other business relation of the Company or any affiliate to cease or reduce
doing business with the Company or such affiliate, or in any way interfere or attempt to interfere with the relationship between
any such customer, supplier, licensee, subcontractor or business relation, on the one hand, and the Company or any such affiliate,
on the other hand; or

 

(iv)       induce
or attempt to induce any customer, supplier, licensee, subcontractor or other business relation of the Company or affiliate to
purchase services or goods similar to those sold as part of the Business.

 

(c)          The
Executive understands that the foregoing restrictions may limit his ability to earn a livelihood in a business similar to the Business,
but he nevertheless believes that he has received and will receive sufficient consideration and other benefits as an employee of
the Company and as otherwise provided hereunder to clearly justify such restrictions which, in any event (given his education,
skills and ability), the Executive does not believe would prevent him from otherwise earning a living. The Executive further understands
that (i) the parties would not enter into this Agreement but for the covenants contained in this Section 8, and (ii) the provisions
of Sections 6 through 8 are reasonable and necessary to preserve the legitimate business interests of the Company and affiliates.

 

(d)         The
Executive shall inform any prospective or future employer of any and all restrictions contained in this Agreement and provide such
employer with a copy of such restrictions (but no other terms of this Agreement), prior to the commencement of that employment.

 

(e)         The
Executive agrees that the restrictions are reasonable and necessary, are valid and enforceable under New York law, and do not impose
a greater restraint than necessary to protect the Company’s legitimate business interests. If, at the time of enforcement
of Sections 6 through 8, a court holds that the restrictions stated herein are unreasonable under the circumstances then existing,
the Executive and the Company agree that the maximum period, scope or geographical area reasonable under such circumstances shall
be substituted for the stated period, scope or area so as to protect the Company to the greatest extent possible under applicable
law.

 

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(f)        In
order to protect the goodwill of the Company and its affiliates, to the fullest extent permitted by law, the Executive, both during
and after the Employment Period, agrees not to publicly criticize, denigrate, or otherwise disparage any of the Company, its affiliates,
and each such entity’s employees, officers, directors, licensees, partners, consultants, other service providers, products,
processes, policies, practices, standards of business conduct, or areas or techniques of research, development, manufacturing,
or marketing. Nothing in this Section 8(f) shall prevent the Executive or the Company from cooperating in any governmental proceeding
or from providing truthful testimony pursuant to a legally-issued subpoena. The Executive promises to provide the Company with
written notice of any request to so cooperate or provide testimony within one (1) day of being requested to do so, along with a
copy of any such request.

 

Section
9.   Enforcement.

 

Because the Executive’s
services are unique and because the Executive has access to Confidential Information and Work Product, the parties hereto agree
that money damages would be an inadequate remedy for any breach of this Agreement. Therefore, in the event of a breach or threatened
breach of this Agreement by the Executive, the Company and any of its affiliates or their successors or assigns may, in addition
to other rights and remedies existing in their favor at law or in equity, seek specific performance and/or injunctive or other
relief in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security) and
may apply to any court of competent jurisdiction to require the Executive to account for and pay over to the Company all compensation,
profits, moneys, accruals, increments or other benefits derived from or received as a result of any transactions constituting a
breach of the covenants contained herein in this Agreement. The Executive agrees not to claim that the Company or any of its affiliates
has adequate remedies at law for a breach of any of Sections 6 through 8, as a defense against any attempt by the Company or any
of its affiliates to obtain the equitable relief described in this Section 9.

 

Section
10.   Severance Payments.

 

In addition to the
foregoing, and not in any way in limitation thereof, or in limitation of any right or remedy otherwise available to the Company,
if the Executive violates any provision of the foregoing Sections 6 through 8, any Severance payments then or thereafter due from
the Company to the Executive pursuant to Section 5(c) shall be terminated forthwith and the Company’s obligation to pay and
the Executive’s right to receive such Severance payments shall terminate and be of no further force or effect, if and when
determined by a court of competent jurisdiction, in each case without limiting or affecting the Executive’s obligations (or
terminating the Non-Compete Period) under such Sections 6 through 8, or the Company’s other rights and remedies available
at law or equity.

 

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Section
11.   Representations, Warranties and Additional Covenants of the Executive.

 

The Executive hereby
represents and warrants to the Company that, after giving effect to the Termination of the April 2011 Employment Agreement, (a)
the execution, delivery and performance of this Agreement by the Executive does not and shall not conflict with, breach, violate
or cause a default under any agreement, contract or instrument to which the Executive is a party or any judgment, order or decree
to which the Executive is subject, (b) the Executive is not a party to or bound by any employment agreement, (c) the Executive
is not a party to or bound by any consulting agreement, non-compete agreement, confidentiality agreement or similar agreement with
any other person or entity that would affect the Company or the obligations of the Executive hereunder and (d) upon the execution
and delivery of this Agreement by the Company and the Executive, this Agreement will be a valid and binding obligation of the Executive,
enforceable in accordance with its terms. The Executive further represents and warrants that he has not disclosed, revealed or
transferred to any third party any of the Confidential Information that he may have previously obtained and that he has safeguarded
and maintained the secrecy of the Confidentiality Information to which he has had access or of which he has knowledge. In addition,
the Executive represents and warrants that he has no ownership in nor any right to nor title in any of the Confidential Information
and the Work Product.

 

Section
12.   Notices.

 

All notices, requests,
demands, claims, and other communications hereunder shall be in writing. Any notice, request, demand, claim or other communication
hereunder shall be deemed duly given when delivered personally to the recipient, telecopied to the intended recipient at the telecopy
number set forth therefor below, or one (1) business day after deposit with a nationally recognized overnight delivery service,
in each case as follows:

 

If to the Company, to:

 

Tonix Pharmaceuticals
Holding Corp.

509 Madison Avenue,
Suite 306

New York, New York
10022

Attention: Chief Executive
Officer

 

If to the Executive, to the address set
forth on the signature page hereto;

 

or such other address as the recipient
party to whom notice is to be given may have furnished to the other party in writing in accordance herewith. Any such communication
shall deemed to have been delivered and received (a) when delivered, if personally delivered, sent by telecopier or sent by overnight
courier, and (b) on the fifth business day following the date posted, if sent by mail. Instructions, notices or requests may be
sent by email to the Executive.

 

Section
13.    General Provisions.

 

(a)       Severability.
It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular
provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable
for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of
this Agreement or affecting the validity or enforceability of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction. Notwithstanding the foregoing and except to the extent otherwise provided in Section 8(e)
(with respect to a breach of the provisions of Section 8), if such provision could be more narrowly drawn so as not to be invalid,
prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating
the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

 

    	11

    	 

    

 

(b)       Complete
Agreement. This Agreement and those documents expressly referred to herein (including, but not limited to, the exhibit attached
hereto) constitute the entire agreement among the parties and supersede any prior correspondence or documents evidencing negotiations
between the parties, whether written or oral, and any and all understandings, agreements or representations by or among the parties,
whether written or oral, that may have related in any way to the subject matter of this Agreement.

(c)       Force
Majeure. Neither party shall be deemed to be in default of its obligations hereunder if and so long as it is prevented from
performing such obligations as a result of events beyond its reasonable control, including, without limitation, fire, power failures,
any act of war, riot, strikes, civil insurrection, earthquake, hurricane, tornado or other catastrophic natural events or acts
of God.

 

(d)       Successors
and Assigns. Except as otherwise provided herein, this Agreement shall bind and inure to the benefit of and be enforceable
by the Executive and the Company and their respective successors, assigns, heirs, representatives and estate; provided, however,
that the rights and obligations of the Executive under this Agreement shall not be assigned without the prior written consent of
the Company in its sole discretion. The Company may (i) assign any or all of its respective rights and interests hereunder to one
or more of its affiliates, (ii) designate one or more of its affiliates to perform its respective obligations hereunder (in any
or all of which cases the Company nonetheless shall remain responsible for the performance of all of their obligations hereunder),
(iii) collaterally assign any or all of its respective rights and interests hereunder to one or more lenders of the Company or
its affiliates, (iv) assign its respective rights hereunder in connection with the sale of all or substantially all of its business
or assets (whether by merger, sale of stock or assets, recapitalization or otherwise) and (v) merge any of affiliates with or into
the Company (or vice versa). The rights of the Company hereunder are enforceable by its affiliates, who are the intended third
party beneficiaries hereof.

 

(e)       Governing
Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION),
THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK TO BE APPLIED.

 

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(f)           Jurisdiction
and Venue.

 

(i)       The
Company and the Executive hereby irrevocably and unconditionally submit, for themselves and their property, to the non-exclusive
jurisdiction of any New York State court or federal court of the United States of America sitting in the State of New York and
any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or for recognition
or enforcement of any judgment, and the Company and the Executive hereby irrevocably and unconditionally agree that all claims
in respect of any such action or proceeding may be heard and determined in any such New York State court or, to the extent permitted
by law, in such federal court. The Company and the Executive irrevocably waive, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any such court. The Company and the Executive agree
that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law. The Executive agrees not to commence a claim or proceeding hereunder in a
court other than a New York State court or federal court located in the State of New York, except if the Executive has first brought
such claim or proceeding in such New York State court or federal court located in the State of New York, and such court or courts
have denied jurisdiction over such claim or proceeding.

(ii)       The
Company and the Executive irrevocably and unconditionally waive, to the fullest extent they may legally and effectively do so,
any objection that they may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating
to this Agreement in any New York State court or federal court of the United States of America sitting in the State of New York
and any appellate court from any thereof.

 

(iii)       Notwithstanding
clauses (i)-(ii), the parties intend to and hereby confer jurisdiction to enforce the covenants contained in Sections 6 through
8 upon the courts of any jurisdiction within the geographical scope of such covenants. If the courts of any one or more of such
jurisdictions hold such covenants wholly or partially invalid or unenforceable by reason of the breadth of such scope or otherwise,
it is the intention of the parties that such determination not bar or in any way affect the Company’s right to the relief
provided above in the courts of any other jurisdiction within the geographical scope of such covenants, as to breaches of such
covenants in such other respective jurisdictions, such covenants as they relate to each jurisdiction being, for this purpose, severable
into diverse and independent covenants.

 

(iv)       The
parties further agree that the mailing by certified or registered mail, return receipt requested to both (x) the other party and
(y) counsel for the other party (or such substitute counsel as such party may have given written notice of prior to the date of
such mailing), of any process required by any such court shall constitute valid and lawful service of process against them, without
the necessity for service by any other means provided by law. Notwithstanding the foregoing, if and to the extent that a court
holds such means to be unenforceable, each of the parties’ respective counsel (as referred to above) shall be deemed to have
been designated agent for service of process on behalf of its respective client, and any service upon such respective counsel effected
in a manner which is permitted by New York law shall constitute valid and lawful service of process against the applicable party.

 

(g)          Amendment
and Waiver. The provisions of this Agreement may be amended and waived only with the prior written consent of the Company and
the Executive, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity,
binding effect or enforceability of this Agreement or any provision hereof.

 

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(h)       Headings.
The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

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

 

(j)       WAIVER
OF JURY TRIAL. NO PARTY TO THIS AGREEMENT OR ANY ASSIGNEE, SUCCESSOR, HEIR OR PERSONAL REPRESENTATIVE OF A PARTY SHALL SEEK A JURY
TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER LITIGATION PROCEDURE BASED UPON OR ARISING OUT OF THIS AGREEMENT OR
ANY OF THE OTHER AGREEMENTS OR THE DEALINGS OR THE RELATIONSHIP BETWEEN THE PARTIES. NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH
ACTION, IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT OR HAS NOT BEEN WAIVED. THE PROVISIONS
OF THIS SECTION HAVE BEEN FULLY DISCUSSED BY THE PARTIES HERETO, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NEITHER
PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO THE OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED
IN ALL INSTANCES.

 

* * * *

 

[Signature Page Follows]

 

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

 

	 	TONIX PHARMACEUTICALS HOLDING CORP.
	 	 
	 	By:	/s/ SETH LEDERMAN
	 	Seth Lederman, M.D.
	 	Chief Executive Officer
	 	 
	 	EXECUTIVE:
	 	 
	 	/s/ BENJAMIN A. SELZER
	 	Benjamin A. Selzer
	 	 
	 	Address:

 

	Agreed to for purposes of Section 1:	 
	 	 
	TONIX PHARMACEUTICALS, INC.	 
	 	 
	By:	/s/ SETH LEDERMAN	 
	Name:  Seth Lederman	 
	Title: PresidentSERVICES AGREEMENT

 

This SERVICES AGREEMENT
(“Agreement”), effective as of April 2, 2012 (the “Effective Date”), is entered into by and
between Cyalume Technologies, Inc., a Delaware corporation (the “Company”), Cyalume Technologies Holdings, Inc.,
a Delaware corporation (“Holdings”) and East Shore Ventures, LLC, a Florida limited liability company (“Contractor”)
(collectively, the “Parties” and, each, a “Party”).

 

WHEREAS, Zivi Nedivi
(“Nedivi”) is an employee of Contractor; and

 

WHEREAS, the Company,
a wholly owned subsidiary of Holdings, desires that Contractor be a consultant to the Company and provide to it services of the
type customarily performed by a Chief Executive Officer (“CEO”) and for Nedivi to personally provide such services,
and Contractor desires to accept such engagement, pursuant to the terms and conditions of hereof;

 

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

 

1.          Condition
Precedent; Appointment of Nedivi as CEO and Board Member. The Company’s obligations hereunder are expressly conditioned
upon Contractor and Nedivi executing and delivering to the Company a copy of the “Inducement Agreement” annexed
hereto as Exhibit A, the terms of which are incorporated herein by reference. As a matter of corporate designation only,
and without entering into an employment relationship with Nedivi, effective as of the Effective Date, Holdings and the Company
shall appoint, and they shall each cause their direct and indirect subsidiaries and affiliates to appoint, Nedivi as their respective
CEO and, pursuant to the Inducement Agreement, Nedivi shall accept such corporate designations. Further, within a reasonable period
of time following the Effective Date, Nedivi shall be appointed as a member of the Board of Directors of the Company (the “Board”),
and, pursuant to the Inducement Agreement, Nedivi shall accept such appointment.

 

2.          Services.
Contractor shall render to the Company and Holdings, and their direct and indirect subsidiaries and affiliates (collectively, the
“Company Group”), services consistent with those typically performed by a CEO of a publically-traded company
and such other duties commensurate with such a position as shall be specified or designated by the Board from time to time (the
“Services”). The Services shall be exclusively and personally performed by Nedivi. Although Nedivi’s primary
residence is in Israel, where he will, among other things, be working on the Company Group’s Israel initiatives, Nedivi shall
spend whatever time is necessary at the Company Group’s facilities in the United States, and shall undertake such further
travel, as is reasonably necessary to satisfactorily perform the Services.

 

3.          Term.
Contractor’s engagement hereunder shall commence on the Effective Date and shall continue for a period of three (3) years
thereafter (the “Initial Term”), subject to earlier termination exclusively as provided for in Section 8 below,
and subject to extension as provided in the following sentence. Following the Initial Term, provided Notice of Non-Renewal has
not been given (as defined in and in accordance with the provisions of Section 8.6 below), Contractor’s engagement hereunder
shall automatically be extended for successive, additional one-year periods (each a “Renewal Term”), subject
to earlier termination exclusively as provided for in Section 8 below. For the purposes of this Agreement, the “Term”
shall mean the period of Contractor’s engagement hereunder.

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	 

    	 

    

 

4.          Fees.

 

4.1           Cash
Fee. During the Term only, in consideration for the Services, the Company shall pay Contractor a cash fee at the rate of $37,500
per month (the “Cash Fee”), which fee shall be paid monthly in arrears on or before the last day of each month.
The Cash Fee for any partial month in which Contractor is engaged hereunder shall be pro-rated based on the number of days in such
partial month Contractor was engaged hereunder. The Board shall review the Cash Fee, at least annually, for merit increases and
may be increased at any time or from time to time (but shall not be decreased) from the then current Cash Fee. The Cash Fee will
not be reduced for any vacation time (up to four weeks per year), personal days (up to ten days per year) or holidays observed
by the Company that are taken by Nedivi during the Term.

 

4.2           Bonus.
During the Term only, Contractor shall be eligible for an annual bonus for each fiscal year of the Company (a “Bonus”),
subject to the terms and conditions of this Section 4.2. The payment and amount of any Bonus for a given fiscal year shall be based
on performance targets mutually agreed upon by the Parties in writing for such fiscal year (the “Annual Performance Targets”).
The Annual Performance Targets for the fiscal year in which the Effective Date occurs shall be established within forty-five (45)
days after the Effective Date, and the Annual Performance Targets for each subsequent fiscal year shall be established within forty-five
(45) days after the beginning of such fiscal year. If the Company’s performance meets, but does not exceed, the Annual Performance
Targets for a given fiscal year, the amount of the Bonus for such fiscal year shall equal 140% of the annualized rate of the Cash
Fee in effect as of the end of such fiscal year. If the Company’s performance exceeds the Annualized Performance Targets
for a given fiscal year, the amount of the Bonus for such fiscal year shall equal 140% of the annualized rate of the Cash Fee in
effect as of the end of such fiscal year, plus an additional 1% of such annualized rate for each 1% by which the Company’s
performance exceeds the Annualized Performance Targets for such fiscal year. If the Company’s performance fails to meet the
Annualized Performance Targets for a given fiscal year, the amount of the Bonus for such fiscal year shall equal 140% of the annualized
rate of the Cash Fee in effect as of the end of such fiscal year, less 2% of such annualized rate for each 1% by which the Company’s
performance failed to meet the Annualized Performance Targets for such fiscal year, provided, however, that Contractor shall
not be eligible for any Bonus for a given fiscal year in which the Company’s performance was less than or equal to 70% of
the Annualized Performance Targets for such fiscal year. Provided Contractor has not been terminated under Section 8.3 below (for
Cause by the Company) prior to the payment thereof, Contractor shall be eligible for (i) a Bonus for each fiscal year on the last
day of which Contractor is engaged hereunder and (ii) if Contractor’s engagement hereunder is terminated other than on the
last day of a fiscal year, a pro-rated Bonus for the fiscal year during which Contractor’s engagement hereunder is terminated,
based on the number of full calendar months Contractor was engaged hereunder during such fiscal year. Any Bonus earned for any
full or partial fiscal year shall be paid in the following fiscal year within 30 days after the Company’s audited financial
statements are issued, but in no event later than June 30th of such following fiscal year regardless of whether such audited financial
statements are issued by such date.

 

	 	Company Initials:____
	 	Contractor Initials:____

 

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4.3           Equity.

 

(a)          Option.
The Company’s Board of Directors previously approved the issuance of a ten year option (the “Option”)
to Contractor to purchase 1,111,963 shares of the Company’s Common Stock (the “Shares”) at an exercise price
per Share equal to $3.60. The Option shall become exercisable annually in five equal installments on each of the first five anniversaries
of the approval of the issuance of the Option. The Option will contain provisions providing (i) that the Option will not become
exercisable as to 141,333 of the Shares unless a proportional number of shares underlying the warrants issued to Granite Creek
FlexCap I, L.P. and/or Patriot Capital II, LP are exercised; (ii) that, in the event that, prior to the date that the Option is
fully exercisable, (A) there is a Change of Control or (B) Contractor’s engagement hereunder is terminated pursuant to Section
8.5 below (by the Company without Cause or by Contractor for Good Reason), the Option shall become fully exercisable as of the
date of such Change of Control or termination, provided, however, that, if such termination of Contractor’s engagement
occurs within the first eighteen (18) months of the Effective Date, then only two-fifths (2/5) of the Option shall become fully
exercisable as of the date of such termination; (iii) for piggyback registration rights; and (iv) that Contractor will receive
a cash payment equal to the Tax Payment (as defined below) pursuant to the terms of Section 4.3(c) below. Notwithstanding anything
in this Section 4.3(a) to the contrary, if, prior to the date that the Option is fully exercisable, Contractor’s engagement
hereunder is terminated pursuant to Section 8.5 below (by the Company without Cause or by Contractor for Good Reason) upon or following
Contractor and/or Nedivi being formally charged with a felony, the Option shall not become fully exercisable as of the date of
such termination, but rather will become fully exercisable only upon a final disposition of such felony charge that does not result
in Contractor and/or Nedivi being convicted of or pleading no contest to a felony. Assuming that the Option is able to be registered
by the Company on a Registration Statement on Form S-8, the Company shall so register the Option prior to the first anniversary
of the approval of the issuance of the Option.

 

(b)          Change
of Control. A “Change of Control” shall be deemed to have occurred if (i) any person (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)), other
than the Company, any employee benefit plan of the Company, or any entity owned directly or indirectly by the shareholders of the
Company in substantially the same proportion as their ownership of stock of the Company, enters into a merger, acquisition, consolidation,
purchase, stock acquisition, asset acquisition, or similar business transaction with the Company and, as a result thereof, becomes
the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of securities of the Company (not including
in the securities beneficially owned by such person any securities acquired directly from the Company or its affiliates) representing
50% or more of the combined voting power of the Company’s then outstanding voting securities, unless the individuals who
were members of the Board immediately prior to the execution of the agreement providing for such transaction constitute a majority
of the board of directors of the surviving corporation or of a corporation directly or indirectly beneficially owning a majority
of the voting securities of the surviving corporation; (ii) individuals who are directors or director nominees of the Company as
of the effective date of this Agreement (the “Incumbent Board”) cease for any reason to constitute a majority
of the Board, provided that any individual becoming a director subsequent to the effective date of this Agreement whose appointment
or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the Incumbent Board
shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than
the Board; or (iii) the stockholders of the Company approve the complete liquidation or dissolution of the Company, or a sale or
other disposition of all or substantially all of the assets of the Company; provided, however, that any transfer of assets to related
parties described in Treasury Regulation § 1.409A-3(i)(5)(vii)(B)(1) shall not constitute a Change in Control.

 

	 	Company Initials:____
	 	Contractor Initials:____

 

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(c)          Tax
Payment.

 

(i)          As
used herein, “Tax Payment” means an amount which, after reduction for all Taxes (as hereafter defined) as a
result of the receipt of the Tax Payment, is equal to the excess, if any, of the Ordinary Income Tax (as hereafter defined) over
the Capital Gain Tax (as hereafter defined).

 

(ii)         As
used herein, “Taxes” means the Israeli, U.S. federal, state and local income tax and self-employment tax that
would be imposed on Contractor and members of Contractor for the tax year in which the Option is exercised, assuming that Contractor’s
or the members of Contractor, as applicable, state and local taxes are fully deductible for U.S. federal income tax purposes.

 

(iii)        As
used herein, “Ordinary Income Tax” means the Israeli, U.S. federal, state and local income tax and self-employment
tax that Contractor or the members of Contractor, as applicable, would pay for the tax year in which the Option is exercised, as
a result of exercising the Option, without taking into account any other deductions in excess of the other income or gain that
Contractor or the members of Contractor, as applicable, may have.

 

(iv)        As
used herein, “Capital Gain Tax” means the Israeli, U.S. federal, state and local income tax (including any additional
Medicare tax under Internal Revenue Code Section 3101(b)(2)) that Contractor or the members of Contractor would have been subject
to if Contractor had sold the shares underlying the portion of the Option which is exercised on the date of exercise for their
fair market value, assuming (i) that Contractor had a tax basis equal to the exercise price for such shares and (ii) no deductions
in excess of the other income or gain that Contractor or the members of Contractor, as applicable, may have, are taken.

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	4

    	 

    

 

(v)         Nedivi’s
tax advisors will prepare (at the cost and expense of the Company) the calculations (the “Tax Calculations”)
of the Tax Payment, showing in reasonable detail the Ordinary Income Tax, Capital Gain Tax and the Taxes used in calculating the
Tax Payment, for each of Contractor and each member of Contractor for the tax year in which the Option is exercised. Nedivi shall
give a copy of such Tax Calculations to the chief financial officer of the Company (the “CFO”), certifying that
such Tax Calculations are true, correct and complete. At that time, or promptly upon request of the CFO, Nedivi shall also make
available any additional underlying information reasonably necessary for the Company to verify the Tax Calculations to (A) the
CFO for the CFO’s exclusive review and (B) if any, the independent accounting firm selected by the parties to resolve any
dispute regarding the amount of the Tax Payment (as provided for below). The CFO shall not make or retain copies of any of the
documents disclosed to him in connection with such review, and the CFO shall keep strictly confidential and not disclose to any
other person the information contained in such documents, except that, notwithstanding anything to the contrary herein, the CFO
may disclose such information as is reasonably necessary to verify the Tax Calculations to (A) the Company’s accountants
or auditors and (B) if any, the independent accounting firm selected by the parties to resolve any dispute regarding the amount
of the Tax Payment (as provided for below). Contractor and Nedivi shall cooperate with the Company in the verification of the Tax
Calculations. The Company shall raise any question or dispute relating to the Tax Calculations within ten (10) business days after
its receipt of the Tax Calculations. If the parties cannot agree on the resolution of the issues relating to the Tax Calculations
within three (3) business days, the issue shall be promptly presented to an independent accounting firm that is reasonably acceptable
to all of the parties, which agrees to resolve the dispute within ten (10) business days and to keep all information disclosed
in the proceeding strictly confidential. The cost of such accounting firm shall be borne by the Company, unless the accounting
firm determines that that the Tax Payment is less than ninety-five percent (95%) of the amount of the Tax Payment as determined
pursuant to the Tax Calculations. The Tax Payment shall be made by the Company to Contractor or the members of Contractor, as applicable,
within three (3) days after the Tax Calculations have become final.

 

4.4           No
Other Fees; Tax Reporting. Other than the fees provided by this Section 4, Contractor shall not be entitled to any other fees
or compensation of any kind unless the Company specifically approves such compensation in advance in writing. Neither federal,
state, nor local taxes of any kind shall be withheld or paid by the Company on behalf of Contractor in connection with payments
made by the Company under this Section 4. The Company shall issue a Form 1099 to Contractor with respect to such payments that,
in the aggregate, are equal to or greater than $600 in any calendar year or as otherwise required by law. Contractor acknowledges
that, as an independent contractor, Contractor will be solely liable for any taxes or other payments typically paid or made
by an employee which may be required by federal, state or local law to be deducted from or paid on account of any payments made
to Contractor by the Company under this Agreement.

 

5.          Exclusivity
and Reasonable Best Efforts. During the Term, (i) Contractor (including Nedivi) shall in all material respects conform to and
comply with the lawful directions and instructions given to it by the Board; (ii) subject to the proviso below, Nedivi shall devote
his entire business time, energy and skill to providing the Services under this Agreement; (iii) Contractor and Nedivi shall use
their reasonable best efforts to promote and serve the interests of the Company Group and to perform their duties and obligations
hereunder in a diligent, trustworthy, businesslike and efficient manner; (iv) Nedivi shall not engage in any other business, profession
or occupation for compensation or otherwise, except as provided below in this Section 5; and (v) Contractor and Nedivi shall not
engage in any activity that, directly or indirectly, impairs or conflicts with their respective performance of their obligations
and duties to the Company Group, provided, however, that the foregoing shall not prevent Nedivi from (A) managing his personal
affairs and passive personal investments, (B) participating in charitable, civic, educational, professional or community affairs,
(C) providing services for Eilam Ltd. and (D) serving on the board of directors of Urban Aeronautics, so long as, in the aggregate,
any such activities do not unreasonably interfere or conflict with Contractor’s and Nedivi’s duties hereunder or under
the Inducement Agreement or create a potential business or fiduciary conflict with any member of the Company Group, as reasonably
determined by the Board.

 

	 	Company Initials:____
	 	Contractor Initials:____

 

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6.          Reimbursement
for Expenses. Contractor is authorized to incur reasonable expenses in the discharge of the Services, including, without limitation,
travel and lodging expenses incurred when Nedivi travels to the United States and in furtherance of his other obligations under
Section 2 above. The Company shall also reimburse Contractor for travel-related expenses incurred as a result of Nedivi’s
travel to the United States in connection with Contractor being interviewed and considered for the engagement hereunder. Subject
to the provisions of Section 20.3 below (“Section 409A Compliance”), the Company shall reimburse Contractor
for all such proper expenses (except for any compensation or benefits provided to Nedivi or any of Contractor’s other employees)
upon presentation by Contractor of itemized accounts of such expenditures. For the avoidance of doubt, Contractor shall be reimbursed
for each non-cancelable expense eligible for reimbursement hereunder that is incurred prior to the date Contractor’s engagement
is terminated hereunder (the “Termination Date”), even if the incurred expenses relates to an event occurring
after the Termination Date (e.g., airline tickets purchased prior to the Termination Date for a flight occurring after the
Termination Date).

 

7.          Payment
and Status of Nedivi.

 

7.1           Nedivi
shall be an employee of Contractor. Nedivi shall not be an employee of the Company, Holdings or any other member of the Company
Group, and Contractor represents and warrants that Nedivi is not working simultaneously under any contrary arrangement or agreement
that would make him or cause him to be considered to be an employee or agent of the Company, Holdings or any other member of the
Company Group while providing the Services. Contractor has, retains and shall continue to bear sole, exclusive and total legal
responsibility for Nedivi as the employer of Nedivi. This responsibility includes, without limitation, the obligation to ensure
full compliance with and satisfaction of (i) all state and federal payroll, income and unemployment tax requirements; (ii) all
state and federal wage and hour requirements; (iii) all worker’s compensation insurance and unemployment insurance requirements;
and (iv) all other applicable state and federal employment law requirements arising from Contractor’s employment of Nedivi
and/or the performance of the Services or other work hereunder by Nedivi. Nedivi shall not be treated as an employee of the Company,
Holdings or any other member of the Company Group for any reason, including without limitation for purposes of vacations, disability,
insurance, pensions or other employee benefits offered or provided by any member of the Company Group.

 

7.2           Contractor
shall indemnify, defend and hold harmless the Company and its affiliates, and their respective officers, directors, shareholders,
employees, agents and other representatives from and against any and all asserted or threatened claims, demands, losses, liabilities,
damages, judgments, expenses (including reasonable attorneys’ fees) and causes of action (“Claims” and,
each, a “Claim”) that is predicated in any manner on a finding by any court, enforcement agency, government
entity, arbitrator or other adjudicator, in each case solely related to employment taxes, that Nedivi is an employee or joint employee
of the Company, Holdings or any other member of the Company Group. Unless the Company requests otherwise, Contractor shall have
the obligation to control the defense, negotiation and settlement of any claim for which Contractor has the obligation to provide
indemnification. The Company shall cooperate and assist Contractor in the defense of any such claim.

 

	 	Company Initials:____
	 	Contractor Initials:____

 

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8.          Termination.

 

8.1           Death.
Contractor’s engagement hereunder shall immediately and automatically be terminated upon Nedivi’s death.

 

8.2           Disability.
The Board may terminate Contractor’s engagement hereunder due to Nedivi’s Disability by providing written notice of
such termination and its effective date to Contractor. For the purposes of this Agreement, “Disability” shall
mean Nedivi has been, with or without a reasonable accommodation, unable to perform the essential functions of the Services due
to a physical or mental injury, infirmity or incapacity for a period of 120 consecutive days or 150 days during any twelve-month
period. Any dispute as to whether Nedivi has a Disability shall be resolved by an independent physician (at the sole cost and expense
of the Company), reasonably acceptable to Contractor and the Board, whose determination shall be final and binding upon both Contractor
and the Company. If the Board and Contractor are unable to agree on the selection of such an independent physician, each shall
appoint a physician and those two physicians shall select a third physician who (at the sole cost and expense of the Company) shall
make the determination of whether Nedivi has a Disability. Notwithstanding the foregoing, in the event that, as a result of earlier
absence because of mental or physical incapacity, Nedivi incurs a “separation from service” within the meaning of such
term under “Section 409A” (as defined in Section 20.3 below), Contractor’s engagement hereunder shall automatically
be terminated on such date as a Disability termination.

 

8.3           For
Cause by the Company. The Board may terminate Contractor’s engagement hereunder for Cause, at any time, upon written
notice reasonably detailing the grounds giving rise to Cause. For purposes of this Agreement, the term “Cause”
means Contractor’s and/or Nedivi’s (i) willful material misconduct; (ii) material failure to materially perform the
Services; (iii) willful refusal to follow a reasonable and lawful directive of the Board, or committee thereof, that is materially
related to and consistent with the provisions of Section 2 above; (iv) material failure to materially comply with the Company Group’s
reasonable and lawful material written policies and practices, if any, applicable to Contractor and/or Nedivi; (v) an act of theft,
fraud or dishonesty of a material nature against any member of the Company Group that is material to the Company Group as a whole;
(vi) conviction of a felony; or (vii) material breach of any material term of this Agreement or the Inducement Agreement; provided,
however, that, in the event of conduct described in clauses (ii) (provided such conduct is not willful), (iii), (iv) and (vii)
that is capable of being cured, Cause shall exist only if the Company provides written notice to Contractor reasonably detailing
such grounds giving rise to Cause and Contractor or Nedivi, as applicable, fails to cure such grounds for Cause to the reasonable
satisfaction of the Company within a reasonable period of time after delivery to Contractor of such written notice, which in no
event shall exceed fifteen (15) calendar days. The date of termination of Contractor’s engagement hereunder in the event
such engagement is terminated for Cause shall be the date on which Contractor is given notice of termination under this Section
8.3, except, if a notice period is required, Contractor’s engagement hereunder shall terminate upon the expiration of said
notice period if Contractor fails to previously cure the grounds giving rise to Cause. No termination of Contractor for Cause shall
be permitted unless the written notice of such termination occurs during the ninety (90) day period immediately following the date
that the events or actions constituting Cause first become known to the Board.

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	7

    	 

    

 

8.4           Termination
by Contractor for Good Reason. Contractor may terminate its engagement hereunder for Good Reason, at any time, provided that
Contractor provides the Company with ten (10) days’ prior written notice of such termination and such notice is given within
sixty (60) days of when Good Reason first arises. For the purpose of this Agreement, "Good Reason" means (i) a
material and substantial diminution in the titles, authority, duties or responsibilities as contemplated by Section 2 above (other
than while Nedivi is temporarily physically or mentally incapacitated or as required by applicable law), (ii) a failure by the
Company to pay Contractor the fees and other benefits provided for herein, other than an isolated, insubstantial and inadvertent
failure not occurring in bad faith; (iii) a requirement that Contractor report to a person other than the Board; or (iv) other
material breach by the Company of a material provision of this Agreement; provided (i) Contractor has provided the Company
with written notice reasonably detailing such breach within sixty (60) days of the occurrence thereof or, if later, within thirty
(30) days of the date upon which Contractor first becomes aware of such breach, and (ii) the Company fails to cure (if curable)
such breach within thirty (30) days after delivery to it of such written notice. The date of termination of Contractor’s
engagement hereunder in the event Contractor terminates its engagement for Good Reason shall be the effective date of Contractor’s
termination for Good Reason, except that Company may waive all or any part of the above-referenced 10-day notice period or of the
30-day cure period, in which event Contractor’s engagement hereunder shall terminate on the last day of such notice or cure
period that has not been waived or, if the entire notice or cure period has been waived, the date on which the entire notice period
and cure periods were waived.

 

8.5           Without
Cause or Without Good Reason. The Company may terminate Contractor’s engagement hereunder without Cause, at any time,
with or without prior notice, in its sole and complete discretion, by providing written notice of such termination and its effective
date to Contractor. Likewise, Contractor may terminate its engagement hereunder without Good Reason upon sixty (60) days prior
written notice to the Board without any liability.

 

8.6           Expiration
of the Term. Provided Contractor’s engagement hereunder has not been previously terminated pursuant to the terms hereof,
Contractor’s engagement hereunder shall be terminated upon the expiration of the then current term if one Party provides
notice to the other of its decision not to renew this Agreement upon the expiration of the then current term (“Notice
of Non-Renewal”). A Notice of Non-Renewal by Contractor shall be effective only if it is provided to the Company at least
sixty (60) days prior to the end of the then current term.

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	8

    	 

    
 

9.          Effect
of Termination of Contractor’s Engagement.

 

9.1           Generally.
In the event Contractor’s engagement hereunder terminates, Contractor shall have no right to receive any compensation, benefits
or any other payments or remuneration of any kind from the Company Group, except as otherwise provided by this Section 9, in any
separate written agreement between Contractor and the Company or as may be required by law. In the event Contractor’s engagement
hereunder is terminated for any reason, including under Section 8.6 above (Expiration of the Term), Contractor shall receive the
following (collectively, the “Accrued Amounts”): (i) its Cash Fee through and including the effective date
of such termination (the “Termination Date”), which shall be paid pursuant to the terms of Section 4.1 above,
(ii) payment for unreimbursed business expenses subject to, and in accordance with, the terms of Section 6 above, (iii) to the
extent due pursuant to the terms of Section 4.2 above, any unpaid Bonus in respect to any completed fiscal year that has ended
on or prior to the Termination Date and, if the Termination Date is other than on the last day of a fiscal year, any pro-rated
Bonus in respect to the fiscal year in which the Termination Date occurs, which, in each case, shall be paid pursuant to the terms
of Section 4.2 above, and (iv) rights to indemnification by virtue of Contractor’s and/or Nedivi’s position as an
officer or director of a member of the Company Group and the benefits under any directors’ and officers’ liability
insurance policy maintained by any member of the Company Group.

 

9.2           Termination
Pay. In the event Contractor’s engagement is terminated by the Company pursuant to Section 8.5 above (without Cause)
or Section 8.6 above (by Notice of Non-Renewal), or by Contractor pursuant to Section 8.4 hereof (Good Reason), in addition to
the Accrued Amounts, Contractor shall be entitled to receive an amount equal to the Cash Fee immediately prior to the Termination
Date (“Contractor’s Final Cash Fee”) for a six-month period (the “Termination Pay”),
subject to and in accordance with the terms of this Section 9.2. Payment of the Termination Pay is conditioned on (i) Contractor’s
continued compliance in all material respects with the terms of this Agreement that survive termination of Contractor’s engagement
hereunder; (ii) Nedivi’s continued compliance in all material respects with the terms of the Inducement Agreement that survive
termination of Contractor’s engagement hereunder; and (iii) Contractor and Nedivi each signing, within fifty (50) days following
the Termination Date, a respective General Release of Claims in the forms that are respectively annexed hereto as Exhibit B
and Exhibit C, which forms may be modified as necessary to comply with the then applicable law. Payment of Contractor’s
Final Cash Fee for the above period shall be paid in monthly installments in the same manner as provided for in Section 4.1 above,
with the first such payment to be made within sixty (60) days following the Termination Date, provided that, if such 60-day
period spans two calendar years, then payment of the Termination Pay shall commence in the calendar year following the year in
which the Termination Date occurs. The first payment of Termination Pay shall include payment for any monthly payments that would
have otherwise been paid between the Termination Date and the date of such payment.

 

9.3           In
the event Contractor’s engagement hereunder is terminated, Nedivi shall be deemed to have resigned from all positions held
in the Company Group, including without limitation that of CEO. Upon request by the Company, Consultant shall promptly sign, or
cause Nedivi to sign, any and all documents reflecting such resignations as of the Termination Date.

 

10.         Notice
of Termination. In the event Contractor elects to terminate his engagement hereunder by terminating this Agreement for Good
Reason under Section 8.4 above or by giving Notice of Non-Renewal under Section 8.6 above, Contractor agrees to provide the Company
with the applicable prior written notice of termination required by such Sections (the “Notice Period”). The
Board may, in its discretion, elect to have Contractor perform no Services for all or any part of the Notice Period. Additionally,
during the Notice Period, (i) Contractor shall perform any services the Board reasonably and lawfully requests of Contractor consistent
with the provisions of Section 2 above, and (ii) the Company retains the right to terminate Contractor’s engagement hereunder
pursuant to Section 8.3 above.

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	9

    	 

    

 

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

 

11.1         Representations
and Acknowledgements. Contractor acknowledges and agrees that: (i) among the Company Group’s most valuable and indispensable
assets are its Confidential Information (defined below) and its close relationships with its customers, suppliers and employees,
which the Company Group has devoted and continues to devote a substantial amount of time, money and other resources to develop;
(ii) in connection with performing the Services, Contractor and Nedivi will be exposed to and acquire the Company Group’s
Confidential Information and develop, at the Company Group’s expense, special and close relationships with the Company Group’s
customers and suppliers; (iii) the Company Group’s Confidential Information and close customer, supplier and employee relationships
must be protected; (iv) this Section 11 is a material provision of this Agreement and the Company and Holdings would not engage
Contractor hereunder but for the promises and acknowledgements that Contractor makes in this Section 11 and which Nedivi makes
in the Inducement Agreement; and (v) to the extent required by law, the covenants in this Agreement and the Inducement Agreement
contain reasonable limitations as to time, geographical area and scope of activities to be restricted and that such covenants do
not impose a greater restraint on Contractor or Nedivi than is necessary to protect the Company Group’s Confidential Information,
close customer, supplier and employee relationships and other legitimate business interests.

 

11.2         Confidential
Information. During the Term and at all times thereafter, Contractor (including Nedivi) will not, except as required to provide
the Services or as may be required by law, directly or indirectly, use or disclose to any third person, without the prior written
consent of the Company, any Confidential Information of the Company Group. For purposes of this Agreement, “Confidential
Information” means all information of a confidential or proprietary nature regarding the Company Group or its business
or properties that the Company Group has furnished or furnishes to Contractor (including Nedivi), whether before or after the date
of this Agreement, or is or becomes available to Contractor (including Nedivi) by virtue of Contractor’s engagement hereunder,
whether tangible or intangible, and in whatever form or medium provided, as well as all information Contractor (including Nedivi)
generates that contains, reflects or is derived from such information that, in each case, has not been published or disclosed to,
and is not otherwise known to, the public (or only known to the public, directly or indirectly, as a result of conduct by Contractor
(including Nedivi) that is not authorized by the Company, Holdings or any other member of the Company Group). Confidential Information
includes, without limitation, customer lists, customer requirements and specifications, designs, financial data, sales figures,
costs and pricing figures, marketing and other business plans, product development, marketing concepts, personnel matters, drawings,
specifications, instructions, methods, processes, techniques, computer software or data of any sort developed or compiled by any
member of the Company Group, formulae or any other information relating to the Company Group’s services, products, sales,
technology, research data, software and all other know-how, trade secrets or proprietary information, or any copies, elaborations,
modifications and adaptations thereof. In the event that a member of the Company Group is bound by a confidentiality agreement
or understanding with a customer, vendor, supplier or other party regarding the confidential information of such customer, vendor,
supplier or other party, which is more restrictive than specified above in this Section 11.2, and of which Contractor has notice
or is aware, Contractor (including Nedivi) shall adhere to the provisions of such other confidentiality agreement, in addition
to those of this Section 11.2.

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	10

    	 

    

 

11.3         Non-Interference
and Non-Competition.

 

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

 

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

 

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

 

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

 

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

 

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

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	11

    	 

    

 

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

 

12.         Intellectual
Property.

 

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

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	12

    	 

    

 

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

 

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

 

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

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	13

    	 

    
 

13.         Non-Disparagement.

 

13.1         During
and after Contractor’s engagement hereunder, except as may be required by law, Contactor and Nedivi may not make any statement
(verbal, written or otherwise) about the Company Group or any of its members or their respective financial status, business, personnel,
directors, officers, consultants, services or business methods that is intended to or is reasonably likely to disparage or denigrate
the Company Group and/or any of its individual members.

 

13.2         During
and after Contractor’s engagement hereunder, except as may be required by law, the Company Group will not cause any person
to make, and none of the Company Group’s officers and directors shall make, any disparaging or denigrating statement (verbal,
written or otherwise) about Contractor and/or Nedivi including, without limitation, disparaging Contractor and/or Nedivi in connection
with disclosing the facts or circumstances surrounding any termination of Contractor’s engagement hereunder or criticizing
Contractor’s and/or Nedivi’s performance as an executive officer of any member of the Company Group. Nothing in this
Section 13.2 shall create any personal liability on behalf of any officers or directors of the Company Group.

 

14.         Cooperation.
During and after the Term, Contractor (including Nedivi) shall assist and cooperate with the Company Group, upon reasonable advance
notice with due consideration for his other business or personal commitments, in connection with the defense or prosecution of
any claim that may be made against or by any member of the Company Group, or in connection with any ongoing or future investigation
or dispute or claim of any kind involving any member of the Company Group, including any proceeding before any arbitral, administrative,
judicial, legislative, or other body or agency, including testifying in any proceeding or executing and delivering to the applicable
member of the Company Group such documents that may be reasonably necessary to carry out the provisions of this Section 14, in
each case, to the extent such claims, investigations or proceedings relate to the Services or any other work performed or required
to be performed by Contractor (including Nedivi), pertinent knowledge possessed by Contractor (including Nedivi), or any act or
omission by Contractor (including Nedivi) involving the Company Group. In no event shall Contractor’s (including Nedivi)
cooperation materially interfere with Contractor’s (including Nedivi) services for a subsequent employer or other similar
service recipient; however, Contractor (including Nedivi) will make reasonable good faith efforts to fulfill its obligations under
this Section 14 in a manner that will not result in any such interference. The Company will (i) promptly reimburse Contractor for
reasonable expenses Contractor (including Nedivi) incurs in fulfilling Contractor’s obligations under this Section 14 and
(ii) except with respect to any testimony given by Contractor (including Nedivi), reasonably compensate Contractor (including Nedivi)
for any continued material services as required under this Section 14.

 

	 	Company Initials:____
	 	Contractor Initials:____

  

    	14

    	 

    
 

15.         Company
Property. Contractor agrees that all Confidential Information, trade secrets, drawings, designs, reports, computer programs
or data, books, handbooks, manuals, files (electronic or otherwise), computerized storage media, papers, memoranda, letters, notes,
photographs, facsimile, software, computers, PDAs, Blackberries and other documents (electronic or otherwise), materials and equipment
of any kind that Contractor (including Nedivi) has acquired or will acquire during the course of the Term and/or providing the
Services are and remain the property of the Company Group. Upon termination of Contractor’s engagement hereunder, or sooner
if requested by the Company, Contractor (including Nedivi) shall return all such documents, materials and records to the Company
and not make or take copies of the same without the prior written consent of the Company.

 

16.         Remedies.
Contractor acknowledges and agrees that a breach of Sections 11 through 15 above or of Sections 4 through 7 of the Inducement Agreement
would injure the Company Group irreparably in a way which could not be adequately compensated for by an award of monetary damages.
Contractor therefore consents to the issuance to the Company Group or any of its members, as applicable, of a preliminary and/or
permanent injunction, without the posting of a bond, to restrain any such breach or threatened breach of those sections. Additionally,
in the event Contractor (including Nedivi) breaches or threatens to breach any of the covenants, promises or obligations contained
in this Agreement or the Inducement Agreement, the Company Group shall be entitled to recover without limitation from Contractor
all costs and fees (including reasonable attorneys’ fees) incurred by the Company Group in connection with enforcing this
Agreement. Nothing herein shall be construed, however, as prohibiting the Company Group from pursuing any other available remedies
for such breach or threatened breach.

 

17.         Representations
Regarding Prior Work and Legal Obligations.

 

17.1         Contractor
represents and warrants that Contractor (including Nedivi) has no agreement or other legal obligation with any prior employer,
or any other person or entity, that restricts Contractor’s ability to accept, or Nedivi’s ability to perform the Services
under, the engagement hereunder with the Company. Contractor further represents and warrants that neither it nor Nedivi is a party
to any agreement (including, without limitation, a non-competition, non-solicitation, no hire or similar agreement) and has no
other legal obligation that restricts in any way Contractor’s or Nedivi’s ability to perform the Services and other
obligations to the Company Group, including, without limitation, those under this Agreement and the Inducement Agreement.

 

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

 

17.3         Contractor
represents and agrees that Contractor (including Nedivi) has not and will not misappropriate any intellectual property belonging
to any other person or entity.

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	15

    	 

    
 

17.4         Contractor
represents and acknowledges that the Company is basing important business decisions on these representations, agreements and warranties,
and it affirms that all of the statements included herein are true. Contractor agrees that Contractor shall defend, indemnify and
hold the Company Group harmless from any Claim by any person in any way arising out of, relating to, or in connection with a breach
and/or the falsity of any of the representations, agreements and warranties made by Contractor in this Section 17.

 

18.         Indemnification.

 

18.1         Subject
to limitations imposed by law, the Company and Holdings shall indemnify and hold harmless Contractor and Nedivi to the fullest
extent permitted by law from and against any and all claims, damages, expenses (including attorneys’ fees), judgments, penalties,
fines, settlements, and all other liabilities incurred or paid by him in connection with the investigation, defense, prosecution,
settlement or appeal of any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative and to which Contractor and/or Nedivi was or is a party or is threatened to be made a party by reason of the
fact that Contractor and/or Nedivi is or was an officer, employee or agent of a member of the Company Group, or by reason of anything
done or not done by Contractor and/or Nedivi in any such capacity or capacities, provided that Contractor and/or Nedivi, as applicable,
acted in good faith, in a manner that was not grossly negligent or constituted willful misconduct and in a manner it or he reasonably
believed to be in or not opposed to the best interests of the Company Group, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe it or his conduct was unlawful. The Company also shall pay any and all expenses (including
reasonable attorney’s fees) incurred by Contractor and/or Nedivi as a result of Contractor and/or Nedivi being called as
a witness in connection with any matter involving the Company Group and/or any of its officers or directors, provided that
the Company shall not be obligated to pay for any such attorney’s fees if there is no appreciable risk of liability to Contractor
and/or Nedivi as a result of serving as such a witness, provided further that, in such event, the Company (at its expense)
will provide Contractor and/or Nedivi with reasonable access to the Company’s legal counsel for the sole purpose of advising
Contractor and/or Nedivi in connection their serving as such a witness.

 

18.2         The
Company and Holdings shall pay any expenses (including attorneys’ fees), judgments, penalties, fines, settlements, and other
liabilities incurred by Contractor and Nedivi, as applicable, in investigating, defending, settling or appealing any action, suit
or proceeding described in this Section 18 in advance of the final disposition of such action, suit or proceeding, as such expenses
(including attorneys’ fees), judgments, penalties, fines, settlements, and other liabilities come due. The Company shall
promptly pay the amount of such expenses to Contractor and/or Nedivi, as applicable, but in no event later than (ten) 10 days following
Contractor’s and/or Nedivi’s delivery to the Company of a written request for an advance pursuant to this Section 18,
together with a reasonable accounting of such expenses.

 

18.3         Contractor
and Nedivi, as applicable, hereby undertake and agree to repay to the Company any advances made pursuant to this Section 18 within
ten (10) days after an ultimate finding that Contractor and/or Nedivi, as applicable, are not entitled to be indemnified by the
Company for such amounts.

 

18.4         The
Company shall make the advances contemplated by this Section 18 regardless of Contractor’s and Nedivi’s, as applicable,
financial ability to make repayment, and regardless whether indemnification of the Indemnitee by the Company will ultimately be
required. Any advances and undertakings to repay pursuant to this Section 18 shall be unsecured and interest-free.

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	16

    	 

    
 

18.5         The
provisions of this Section 18 shall survive the termination of the Term or expiration of the term of this Agreement.

 

19.         Liability
Insurance. The Company Group will cover Nedivi and, to the extent permitted by the applicable policies, Contractor under its
officers’ and directors’ liability insurance in the same amount and to the same extent as the Company Group covers
its other officers and directors.

 

20.         Miscellaneous
Provisions.

 

20.1         Independent
Contractor Relationship. Nothing in this Agreement shall create a partnership or joint venture between the Parties, or any
other form of legal association that would impose liability upon one Party for the act or failure to act of the other Party. Unless
approved by the Company, Contractor (including Nedivi) shall have no authority to bind any member of the Company Group in any respect.

 

20.2         IRCA
Compliance. This Agreement, and Contractor’s engagement hereunder, are conditioned on Contractor establishing Nedivi’s
identity and authorization to work in the United States as required by the Immigration Reform and Control Act of 1986 (IRCA).

 

20.3         Section
409A Compliance. Unless otherwise expressly provided, any payment of compensation by Company to Contractor, whether pursuant
to this Agreement or otherwise, shall be made no later than the 15th day of the third month (i.e., 21⁄2
months) after the later of the end of the calendar year or the Company’s fiscal year in which Contractor’s right to
such payment vests (i.e., is not subject to a “substantial risk of forfeiture” for purposes of Code Section
409A of the Internal Revenue Code of 1986, as amended (“Section 409A”)). For purposes of this Agreement, termination
of Contractor’s engagement hereunder shall be deemed to occur only upon “separation from service” as such term
is defined under Section 409A. Each payment and each installment of any severance payments provided for under this Agreement shall
be treated as a separate payment for purposes of application of Section 409A. To the extent that any severance payments (including
payments on termination for “Good Reason”) come within the definition of “involuntary severance” under
Section 409A, such amounts up to the lesser of two times Contractor’s annual compensation for the year preceding the year
of termination or two times the Section 401(a)(17) limit for the year of termination, shall be excluded from “deferred compensation”
as allowed under Section 409A, and shall not be subject to the following Section 409A compliance requirements. All payments
of “nonqualified deferred compensation” (within the meaning of Section 409A) are intended to comply with the requirements
of Section 409A, and shall be interpreted in accordance therewith. Neither Party individually or in combination may accelerate,
offset or assign any such deferred payment, except in compliance with Section 409A. No amount shall be paid prior to the earliest
date on which it is permitted to be paid under Section 409A and Contractor shall have no discretion with respect to the timing
of payments except as permitted under Section 409A. Any Section 409A payments which are subject to execution
of a waiver and release which may be executed and/or revoked in a calendar year following the calendar year in which the payment
event (such as termination) occurs shall commence payment only in the calendar year in which the release revocation period ends
as necessary to comply with Section 409A. In the event that Nedivi is determined to be a “key employee” (as
defined and determined under Section 409A) of the Company at a time when its stock is deemed to be publicly traded on an established
securities market, payments determined to be “nonqualified deferred compensation” payable upon separation from service
shall be made no earlier than (i) the first day of the seventh (7th) complete calendar month following such termination,
or (ii) Nedivi’s death, consistent with the provisions of Section 409A.  Any payment delayed by reason of the prior
sentence shall be paid out in a single lump sum at the end of such required delay period in order to catch up to the original payment
schedule. All expense reimbursement or in-kind benefits subject to Section 409A provided under this Agreement or, unless
otherwise specified in writing, under any Company program or policy, shall be subject to the following rules: (i) the amount of
expenses eligible for reimbursement or in-kind benefits provided during one calendar year may not affect the benefits provided
during any other year; (ii) reimbursements shall be paid no later than the end of the calendar year following the year in which
Contractor incurs such expenses, and Contractor shall take all actions necessary to claim all such reimbursements on a timely basis
to permit the Company to make all such reimbursement payments prior to the end of said period, and (iii) the right to reimbursement
or in-kind benefits shall not be subject to liquidation or exchange for another benefit. Notwithstanding anything herein to the
contrary, no amendment may be made to this Agreement if it would cause the Agreement or any payment hereunder not to be in compliance
with Section 409A.

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	17

    	 

    

 

 

20.4         Assignability
and Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the heirs, executors, administrators,
successors and legal representatives of Contractor, and shall inure to the benefit of and be binding upon the Company and its successors
and assigns, but the obligations of Contractor (which must be performed personally by Nedivi) are personal services and may not
be delegated or assigned. Contractor shall not be entitled to assign, transfer, pledge, encumber, hypothecate or otherwise dispose
of this Agreement, or any of Contractor’s rights and obligations hereunder, and any such attempted delegation or disposition
shall be null and void and without effect. This Agreement may be assigned by the Company to a person or entity that is an affiliate
or a successor in interest to substantially all of the business operations of the Company, if in any such case such person or entity
shall by operation of law or expressly in writing assume all obligations of the Company hereunder as fully as if it had been originally
made a party thereto, but may not otherwise assign this Agreement or its rights and obligations hereunder. Upon such assignment,
the rights and obligations of the Company hereunder shall become the rights and obligations of such affiliate or successor person
or entity.

 

20.5         Right
of Set-Off. To the extent permitted by applicable law, each Party may at any time offset against any amounts owed to the other
Party hereunder or otherwise due to such other Party, or anyone claiming through or under such other Party, any debt or debts due
or to become due to it from such other Party.

 

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

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	18

    	 

    
 

20.7         Choice
of Law and Forum. This Agreement shall be interpreted and enforced in accordance with the laws of the State of Delaware, without
regard to its conflict-of-law principles. The parties agree that any dispute concerning or arising out of this Agreement or Contractor’s
engagement hereunder (or termination thereof) shall be tried exclusively in an appropriate state or federal court in the state
of Delaware and hereby consent, and waive any objection, to the jurisdiction of any such court.

  

20.8         Mutual
Waiver of Jury Trial. Contractor and the Company each hereby waive the right to trial by jury in any action or proceeding,
regardless of the subject matter, between them, including, without limitation, any action or proceeding based upon, arising out
of, or in any way relating to this Agreement and all matters concerning Contractor’s engagement hereunder (or the termination
thereof). Contractor and the Company further agree that either of them may file a copy of this Agreement with any court as written
evidence of the knowing, voluntary, and bargained agreement between Contractor and the Company irrevocably to waive trial by jury,
and that any dispute or controversy whatsoever between Contractor and the Company Group shall instead be tried in a court of competent
jurisdiction by a judge sitting without a jury.

 

20.9         Notices.

 

(a)          Any
notice or other communication under this Agreement shall be in writing and shall be delivered by hand, email or mailed by overnight
courier or by registered or certified mail, postage prepaid:

 

(i)          If
to Contractor, to Contractor’s address on the books and records of the Company, with a copy to Bruce I. March, Greenberg
Traurig, P.A., 401 East Las Olas Blvd., Suite 2000, Fort Lauderdale, FL 33301, marchb@gtlaw.com.

 

(ii)         If
to the Company, to the Chairman of the Board of Directors, 96 Windsor Street, West Springfield, Massachusetts, 01089, or at such
other mailing address or email address as it may have furnished in writing to Contractor, with a copy to Mark J. Goldberg, Loeb
& Loeb LLP, 345 Park Avenue, New York, N.Y. 10154, mgoldberg@loeb.com.

 

(b)          Any
notice so addressed shall be deemed to be given: if delivered by hand or email, on the date of such delivery; if mailed by overnight
courier, on the first business day following the date of such mailing; and if mailed by registered or certified mail, on the third
business day after the date of such mailing.

 

20.10        Survival of Terms. All provisions of this Agreement that, either expressly or impliedly, contain obligations that extend beyond
termination of Contractor’s engagement hereunder, including without limitation those in Sections 9, 11-16 and 18-20 hereof,
shall survive the termination of this Agreement and of Contractor’s engagement hereunder for any reason.

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	19

    	 

    
 

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

 

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

 

20.13         Waivers
and Amendments. This Agreement may be altered, amended, modified, superseded or canceled, and the terms hereof may be waived,
only by a written instrument signed by the Parties or, in the case of a waiver, by the Party alleged to have waived compliance.
Any such signature of the Company must be by an authorized signatory for the Board. No delay by any Party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any Party of any such right,
power or privilege, nor any single or partial exercise of any such right, power or privilege, preclude any other or further exercise
thereof or the exercise of any other such right, power or privilege.

 

20.14         Third
Party Beneficiary. Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give
any person other than the Company, the Parties, other members of the Company Group, Nedivi and their respective heirs, personal
representatives, legal representatives, successors and permitted assigns, any rights or remedies under or by reason of this Agreement.

 

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

 

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

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	20

    	 

    

 

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

 

	EAST SHORE VENTURES LLC	 
	 	 	 
	By:	/s/ Zivi Nedivi	 
	 	Name: Zivi Nedivi	 
	 	Title: President	 
	 	 	 
	CYALUME TECHNOLOGIES, INC.	 
	 		 
	By:	/s/ Yaron Eitan	 
	 	Name: Yaron Eitan, on behalf of the special committee	 
	 		 
	 	 	 
	CYALUME TECHNOLOGIES HOLDINGS, INC.	 
	 	 	 
	By:	/s/ Yaron Eitan	 
	 	Name: Yaron Eitan, on behalf of the special committee	 
	 		 

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	21

    	 

    

 

Exhibit A

 

INDUCEMENT AGREEMENT

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	 

    	 

    

 

Exhibit B – Form of General Release
of Claims for Contractor

 

GENERAL RELEASE OF CLAIMS

 

1.          For
good and valuable consideration, including without limitation the payments provided by Section 9.2 of the Services Agreement (“Services
Agreement”), effective as of April 2, 2012, by and between Cyalume Technologies, Inc. (the “Company”),
Cyalume Technologies Holdings, Inc. (“Holdings”) and East Shore Ventures, LLC, (“Contractor”),
Contractor hereby voluntarily, knowingly and willingly releases, acquits and forever discharges the Company, Holdings and their
former and current parents, subsidiaries, divisions, affiliates, predecessors, successors and assigns, and each of their current
and former agents, employees, officers, directors, shareholders, members, trustees, heirs, attorneys, representatives, owners and
servants, (collectively, the “Released Parties”) from any and all claims, costs or expenses of any kind or nature
whatsoever (collectively, “Claims”), whether known or unknown, foreseen or unforeseen, that Contractor ever
had, now has or may have based upon any matter, fact, cause or thing, occurring from the beginning of time up to and including
the date Contractor executes this General Release of Claims, including, without limitation, all Claims regarding or arising out
of the Services Agreement, Contractor’s independent contractor relationship with the Company, Nedivi’s service as the
Chief Executive Officer of the Company, any events that may have occurred during the course of Contractor’s and/or Nedivi’s
respective relationships with the Company or the termination of such relationships, or any other matters or Claims of any kind
or nature, whether based in tort, breach of express or implied contract, wrongful termination or other type of legal theory. Notwithstanding
anything in this paragraph 1 to the contrary, this General Release of Claims shall not apply to (i) any rights to receive any payments
or benefits pursuant to Section 9 of the Services Agreement, (ii) any rights or claims that may arise as a result of events occurring
after the date this General Release of Claims is executed, (iii) any indemnification rights Contractor may have against Company,
Holdings and any and all of their respective subsidiaries and affiliates (collectively, the “Company Group”),
(iv) any claims for benefits under any directors’ and officers’ liability policy maintained by any member of the Company
Group in accordance with the terms of such policy, and (v) any rights as a holder of equity securities of Holdings.

 

2.          Contractor
represents that it has not filed against any of the Released Parties any Claims that it has released in paragraph 1 above, and
covenants and agrees that it will never individually or with any person file, or commence the filing of, any such Claim with any
governmental agency, or against the Released Parties.

 

3.          Contractor
acknowledges and agrees that, if it breaches the terms of this General Release of Claims by filing, bringing or participating in
any Claims or actions contrary to its general release of claims and representations herein, in addition to any other rights and
remedies the Company and any other members of the Company Group may have against Contractor, Contractor agrees to pay the costs
and expenses (including reasonable attorney’s fees) incurred by the Company or another member of the Company Group, as the
case may be, in defending against such Claims or actions brought by Contractor or on Contractor’s behalf or in enforcing
the terms of this General Release of Claims.

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	 

    	 

    

 

4.          Contractor
hereby acknowledges and hereby reaffirms its continuing obligations to members of the Company Group pursuant to the Services Agreement
(including without limitation pursuant to Sections 9, 11-16 and 20 thereof). Contractor acknowledges, represents and warrants that
it has complied and will continue to comply with the terms of Section 11 of the Services Agreement.

 

5.          Contractor
acknowledges and agrees that (i) this General Release of Claims shall be interpreted and enforced in accordance with the laws of
the State of Delaware, without regard to its conflict-of-law principles, and (ii) any dispute concerning or arising out of this
General Release of Claims or Contractor’s engagement under the Services Agreement (or termination thereof) shall be tried
exclusively in an appropriate state or federal court in the state of Delaware and hereby consents, and waives any objection, to
the jurisdiction of any such court.

 

6.          Contractor
acknowledges that it has read this General Release of Claims, that it has been advised by an attorney with respect to the meaning
and effect of the terms of this General Release of Claims, and that it executes this General Release of Claims voluntarily and
with full knowledge of its significance and the consequences thereof.

 

7.          This
General Release of Claims shall take effect upon Contractor’s execution of this General Release of Claims.

  

	EAST SHORE VENTURES LLC	 
	 	 	 
	By:	 	 
	 	Name:	 
	 	Title:	 

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	2

    	 

    

 

Exhibit C – Form of General Release
of Claims for Nedivi

 

GENERAL RELEASE OF CLAIMS

 

1.          For
good and valuable consideration, including without limitation the payments made to East Shore Ventures, LLC, (“Contractor”),
of which Zivi Nedivi (“Nedivi”) is a member, pursuant to Section 9.2 of the Services Agreement, effective as
of April 2, 2012, by and between Cyalume Technologies, Inc. (the “Company”), Cyalume Technologies Holdings,
Inc. (“Holdings”) and Contractor, Nedivi hereby voluntarily, knowingly and willingly releases, acquits and forever
discharges the Company, Holdings and their former and current parents, subsidiaries, divisions, affiliates, predecessors, successors
and assigns, and each of their current and former agents, employees, officers, directors, shareholders, members, trustees, heirs,
attorneys, representatives, owners and servants, (collectively, the “Released Parties”) from any and all claims,
costs or expenses of any kind or nature whatsoever (collectively, “Claims”), whether known or unknown, foreseen
or unforeseen, that Nedivi ever had, now has or may have based upon any matter, fact, cause or thing, occurring from the beginning
of time up to and including the date Nedivi executes this General Release of Claims, including, without limitation, all Claims
regarding Contractor’s independent contractor relationship with the Company, Nedivi’s appointment as the Chief Executive
Officer (“CEO”) of the Company, Holdings and their respective subsidiaries and affiliates (the “Company
Group”), any events that may have occurred during the course of Contractor’s and/or Nedivi’s respective relationships
with the Company Group or the termination of such relationships, whether for tort, breach of express or implied employment contract,
wrongful discharge, intentional infliction of emotional distress, or defamation or injuries incurred in connection Contractor’s
or Nedivi’s provision of services to the members of the Company Group or the termination of their respective relationships
with the Company Group. Nedivi acknowledges that the Company has encouraged him to consult with an attorney of his choosing, and
through this General Release of Claims encourages him to consult with his attorney with respect to possible claims under the Age
Discrimination in Employment Act (“ADEA”) and that he understands that the ADEA is a federal statute that, among
other things, prohibits discrimination on the basis of age in employment and employee benefits and benefit plans. Without limiting
the generality of the release provided above, Nedivi expressly waives any and all claims under ADEA that he may have as of the
date hereof. Nedivi further understands that, by signing this General Release of Claims, he is in fact waiving, releasing and forever
giving up any claim under the ADEA, as well as all other laws within the scope of this paragraph 1 that may have existed on or
prior to the date hereof. Notwithstanding anything in this paragraph 1 to the contrary, this General Release of Claims shall not
apply to (i) any rights to receive any payments or benefits pursuant to Section 9 of the Services Agreement, (ii) any rights or
claims that may arise as a result of events occurring after the date this General Release of Claims is executed, (iii) any indemnification
rights Nedivi may have against a member of the Company Group, (iv) any claims for benefits under any directors’ and officers’
liability policy maintained by any member of the Company Group in accordance with the terms of such policy, and (v) any rights
as a holder of equity securities of Holdings.

 

2.          Nedivi
represents that he has not filed against any of the Released Parties any Claims that he has released in paragraph 1 above, and
covenants and agrees that he will never individually or with any person file, or commence the filing of, any such Claim against
the Released Parties; provided, however, Nedivi shall not have relinquished his right to commence a proceeding to challenge
whether he knowingly and voluntarily waived his rights, if any, under ADEA.

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	 

    	 

    
 

3.          Nedivi
confirms that he either has or hereby resigns his appointment as CEO of the members of the Company Group and all other officer
or director positions (other than as a shareholder) that he may have with any and all members of the Company Group.

 

4.          Nedivi
acknowledges and agrees that, if he breaches the terms of this General Release of Claims by filing, bringing or participating in
any Claims or actions contrary to his general release of claims and representations herein, in addition to any other rights and
remedies the Company and any other members of the Company Group may have against Nedivi, Nedivi agrees to pay the costs and expenses
(including reasonable attorney’s fees) incurred by the Company or another member of the Company Group, as the case may be,
in defending against such Claims or actions brought by Nedivi or on Nedivi’s behalf or in enforcing the terms of this General
Release of Claims. This paragraph 4 shall not apply to any Claims that Employee files under ADEA or any challenge that Employee
makes to the validity of the ADEA waiver contained in this General Release of Claims.

 

5.          Nedivi
hereby acknowledges and hereby reaffirms his continuing obligations to members of the Company Group pursuant to the Inducement
Agreement, effective as of April 2, 2012, between himself and Contractor (including without limitation pursuant to Sections 4 through
8 thereof). Nedivi acknowledges, represents and warrants he has complied and will continue to comply Section 4 of the Inducement
Agreement.

 

6.          Nedivi
hereby acknowledges that the Company has informed him that he has up to fifty (50) days following the termination of Contractor’s
engagement under the Services Agreement to sign this General Release of Claims and he may knowingly and voluntarily waive that
fifty (50) day period by signing this General Release of Claims earlier. Nedivi also understands that he shall have seven (7) days
following the date on which he signs this General Release of Claims within which to revoke it by providing a written notice of
his revocation to the Chairman of the Board of Directors of the Company, with a copy to Mark J. Goldberg, Esq., Loeb & Loeb
LLP, 345 Park Avenue, New York, NY 10154, mgoldberg@loeb.com.

 

7.          Nedivi
acknowledges and agrees that (i) this General Release of Claims shall be interpreted and enforced in accordance with the laws of
the State of Delaware, without regard to its conflict-of-law principles, and (ii) any dispute concerning or arising out of this
General Release of Claims or Contractor’s engagement under the Services Agreement (or termination thereof) shall be tried
exclusively in an appropriate state or federal court in the state of Delaware and hereby consents, and waives any objection, to
the jurisdiction of any such court.

 

8.          Nedivi
acknowledges that he has read this General Release of Claims, that he has been advised that he should consult with an attorney
before he executes this General Release of Claims, and that he understands all of its terms and executes it voluntarily and with
full knowledge of its significance and the consequences thereof.

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	2

    	 

    

 

9.          This
General Release of Claims shall take effect on the eighth day following Nedivi’s execution of this General Release of Claims,
unless previously revoked by Nedivi pursuant to paragraph 6 above.

 

	 	 	 	Dated:___________
	 	Zivi Nedivi	 	 

 

	 	Company Initials:____
	 	Contractor Initials:____

 

    	3

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