REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of December 22, 2011,
between Cyalume Technologies Holdings, Inc., a Delaware corporation (the
“Company”), and Antonio Colon (the “Investor”).

 

This Agreement is made pursuant to that certain Stock Purchase Agreement (the
“Purchase Agreement”), dated as of the date hereof, between the Company, Cyalume
Technologies Inc., a Delaware corporation and wholly owned subsidiary of the
Company, Combat Training Solutions, Inc., a Colorado corporation, and the
Investor.

 

The parties accordingly agree as follows:

 

ARTICLE I
Definitions.

 

Capitalized terms used and not otherwise defined herein that are defined in the
Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:

 

1.1     “Commission” means the Securities and Exchange Commission.

 

1.2     “Common Stock” means shares of the Company’s common stock, par value
$0.001 per share.

 

1.3     “Company” is defined in the Preamble.

 

1.4     “Discontinuation Event” is defined in Section 6.2.

 

1.5     “Disputed Matter” is defined in Section 6.10(a).

 

1.6     “Dispute Proceeding” is defined in Section 6.10(b).

 

1.7     “Effective Date” means the date on which the Commission declares a
Registration Statement effective.

 

1.8     “Effectiveness Period” means the period commencing on the Effective Date
and ending on the earlier of the date when all of the Registrable Securities
covered by such Registration Statement have been sold or otherwise no longer
meet the definition of Registrable Securities.

 

1.9     “Exchange Act” means the Securities Exchange Act of 1934, as amended,
and any successor statute.

 

1.10     “Holder” or “Holders” means the Investor and any other person holding
Registrable Securities or any of their respective affiliates or transferees to
the extent any of them hold Registrable Securities, other than those purchasing
Registrable Securities in a market transaction.

 

 

 

 

 

1.11     “Indemnified Party” is defined in Section 5.3.

 

1.12     “Indemnifying Party” is defined in Section 5.3.

 

1.13      “Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

 

1.14     “Prospectus” means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.

 

1.15     “Purchase Agreement” is defined in the Preamble.

 

1.16     “Registrable Securities” means the (i) Shares and (ii) any securities
issued or issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing, provided, that
any of the foregoing securities shall cease to be Registrable Securities upon
the earliest to occur of the following: (A) a sale pursuant to an effective
Registration Statement; (B) a sale pursuant to Rule 144 (in which case, only
such security sold shall cease to be a Registrable Security); or (C) eligibility
for sale without current public information requirements and volume or manner of
sale restrictions.

 

1.17     “Registration Expenses” is defined in Section 4.1.

 

1.18     “Registration Statement” means each registration statement required to
be filed hereunder, including the Prospectus therein, amendments and supplements
to such registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.
Notwithstanding the foregoing, Registration Statement excludes a registration
statement on Form S-4 or Form S-8, or their successors, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another entity.

 

1.19     “Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

 

1.20     “Securities Act” means the Securities Act of 1933, as amended, and any
successor statute.

 

1.21     “Selling Expenses” is defined in Section 4.2.

 

 

 

 

 

1.22     “Shares” means the shares of Common Stock issued to the Investor
pursuant to the Purchase Agreement.

 

1.23     “Trading Market” means any of the FINRA Over The Counter Bulletin
Board, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global
Select Market, the NYSE Amex or the New York Stock Exchange.

 

ARTICLE II
REGISTRATION RIGHTS

 

2.1     Notice of Registration. If at any time or from time to time the Company
shall determine to register any of its Common Stock, either for its own account
or the account of security holders, other than (i) a registration on Form S-8 or
otherwise relating solely to employee benefit plans, (ii) a registration on Form
S-4, (iii) a registration on any other form which does not permit secondary
sales, or (iv) a registration on any other form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the Registrable Securities, the
Company shall:

 

(a)     promptly give to each Holder written notice thereof; and

 

(b)     except as set forth in Section 2.3 or required by applicable law or the
Securities and Exchange Commission, include in such registration (and any
related qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all Registrable Securities as are specified in a
written request or requests, actually received by the Company within 10 business
days after receipt of such written notice from the Company, by any Holder.

 

2.2     Selling Stockholder Questionnaire. Each Holder desiring to have its
Registrable Securities included in a Registration Statement under this Article
II agrees to furnish to the Company a completed selling stockholder
questionnaire in the form attached as Schedule 2.2 (the “Selling Stockholder
Questionnaire”) within 10 business days after receipt by such Holder of the
written notice specified in Section 2.1(b) from the Company. The Company shall
notify a Holder if it requires additional information from that Holder other
than the information contained in the Selling Stockholder Questionnaire, which
additional information shall be completed and delivered to the Company promptly
following such request. Each Holder further agrees that it shall not be entitled
to be named as a selling security holder in the Registration Statement or use
the Prospectus for offers and resales of Registrable Securities at any time,
unless such Holder has returned to the Company a completed and signed Selling
Stockholder Questionnaire and a response to any requests for further information
as described in the previous sentence. If a Holder of Registrable Securities
returns a Selling Stockholder Questionnaire or a request for further
information, in either case, after its respective deadline, the Company shall
use its commercially reasonable efforts at the expense of the Holder who failed
to return the Selling Stockholder Questionnaire or to respond for further
information to take such actions as are required to name such Holder as a
selling security holder in the Registration Statement or any pre-effective or
post-effective amendment thereto and to include (to the extent not theretofore
included) in the Registration Statement the Registrable Securities identified in
such late Selling Stockholder Questionnaire or request for further information.
Each Holder acknowledges and agrees that the information in the Selling
Stockholder Questionnaire or request for further information as described in
this Section 2.2 will be used by the Company in the preparation of the
Registration Statement and hereby consents to the inclusion of such information
in the Registration Statement.

 

 

 

 

2.3     Underwritten Offerings. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 2.1. In such event the right of any Holder to registration
pursuant to Section 2.1 shall be conditioned upon such Holder’s participation in
such underwriting and the inclusion of such Holder’s Registrable Securities in
the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company and the other holders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
managing underwriter selected for such underwriting by the Company. The
foregoing shall include, without limitation, such powers of attorney and escrow
agreements as the underwriters may require. Notwithstanding any other provision
of this Article II, if the managing underwriter determines that marketing
factors require a limitation of the number of shares to be underwritten, the
managing underwriter may limit the Registrable Securities to be included in such
registration, it being understood that the shares proposed to sold by the
Company in such underwriting shall be given priority and shall not be subject to
any such limitation vis-a-vis the Registrable Securities. The Company shall so
advise all Holders and other holders distributing their securities through such
underwriting, and the number of shares of Registrable Securities that may be
included in the registration and underwriting shall be allocated among all
Holders and such other holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Holders and such other
holders at the time of filing the registration statement. To facilitate the
allocation of shares in accordance with the above provisions, the Company may
round the number of shares allocated to any Holder to the nearest 100 shares. If
any Holder disapproves of the terms of any such underwriting, such Holder may
elect to withdraw therefrom by written notice to the Company and the managing
underwriter.

 

The Registrable Securities so excluded or withdrawn shall also be excluded or
withdrawn from registration, and neither such Registrable Securities nor any
securities convertible into or exchangeable or exercisable for Common Stock
shall be sold in any public sale or other distribution, without the prior
written consent of the Company or such underwriters, for such period of time
before and after (not to exceed thirty (30) days before and one hundred eighty
(180) days after) the effective date of the registration statement relating
thereto as the underwriters may require.

 

2.4     Company Termination of Registration. The Company reserves the right to
terminate any registration under this Article II at any time and for any reason
without liability to any Holder.

 

 

 

 

 

ARTICLE III
Registration Procedures

 

3.1     Registration Procedures. If and whenever the Company is required by the
provisions of Article II hereof to effect the registration of any Registrable
Securities under the Securities Act, the Company will, as expeditiously as
possible:

 

(a)     prepare and file with the Commission a Registration Statement with
respect to such Registrable Securities, respond as promptly as possible to any
comments received from the Commission, and use its commercially reasonable
efforts to cause such Registration Statement to become and remain effective for
the Effectiveness Period with respect thereto, and the Investor shall have the
opportunity to object to any information pertaining to itself that is contained
therein and the Company will make the corrections reasonably requested by the
Investor with respect to such information prior to filing any Registration
Statement or amendment thereto or any Prospectus or any supplement thereto;

 

(b)     prepare and file with the Commission such amendments and supplements to
such Registration Statement and the Prospectus used in connection therewith as
may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by such
Registration Statement and to keep such Registration Statement effective until
the expiration of the Effectiveness Period applicable to such Registration
Statement;

 

(c)     furnish to the Investor such number of copies of the Registration
Statement and the Prospectus included therein (including each preliminary
Prospectus and any amendments and supplements to the Registration Statement and
the Prospectus) and such other documents as the Investor reasonably may
reasonably request to facilitate the public sale or disposition of the
Registrable Securities covered by such Registration Statement;

 

(d)     use its commercially reasonable efforts to register or qualify the
Investor’s Registrable Securities covered by such Registration Statement under
the securities or “blue sky” laws of such jurisdictions within the United States
as the Investor may reasonably request and do any and all other acts and things
which may be reasonably necessary or advisable to enable the Investor to
consummate the disposition in such jurisdiction of the Registrable Securities,
provided, however, that the Company shall not for any such purpose be required
to qualify generally to transact business as a foreign corporation in any
jurisdiction where it is not so qualified or to consent to general service of
process in any such jurisdiction;

 

(e)     list the Registrable Securities covered by such Registration Statement
with any securities exchange on which the Common Stock of the Company is then
listed; and

 

(f)     immediately notify the Investor at any time when a Prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event as a result of which the Prospectus contained in such Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and, at the request of the Investor,
the Company shall prepare a supplement or amendment to such Prospectus so that,
as thereafter delivered to the purchasers of Registrable Securities, such
Prospectus shall not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statement therein not misleading.

 

 

 

 

 

ARTICLE IV
Registration Expenses.

 

4.1     Registration Expenses. All expenses relating to the Company’s compliance
with Article II hereof, including, without limitation, all registration, filing
and listing application fees, costs of distributing any prospectuses and
supplements thereto, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees and expenses (including
counsel fees for the Company) incurred in connection with complying with state
securities or “blue sky” laws, fees of FINRA, fees of transfer agents and
registrars (collectively, the “Registration Expenses”) shall be borne by the
Company. The obligation of the Company to bear the Registration Expenses shall
apply irrespective of whether a registration, becomes effective, is withdrawn or
suspended, is converted to another form of registration and irrespective of when
any of the foregoing shall occur.

 

4.2     Selling Expenses. All customary and reasonable underwriting discounts
and selling commissions applicable to the sale of Registrable Securities, and
any fees and disbursements of any counsel to the Holders (collectively, the
“Selling Expenses”) shall be borne by the Holders in proportion to the aggregate
selling price of the Registrable Securities of each Holder to be so registered.

 

ARTICLE V
Indemnification.

 

5.1     Company Indemnification. In the event of a registration of any
Registrable Securities under the Securities Act pursuant to this Agreement, the
Company shall indemnify and hold harmless each Holder, and its officers,
directors and each other person, if any, who controls such Holder within the
meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such Holder, or such persons may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement under which such Registrable Securities
were registered under the Securities Act pursuant to this Agreement, any
preliminary Prospectus or final Prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or any violation or
alleged violation by the Company of the Securities Act, the Exchange Act or
applicable “blue sky” laws, and shall reimburse such Holder, and each such
person for any legal or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable in any such case if and
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished in writing and
executed by or on behalf of a Holder specifically for use in any such document.

 

 

 

 

5.2     Holder Indemnification. Each Holder of Registrable Securities included
in a Registration Statement pursuant to this Agreement shall indemnify and hold
harmless the Company, and its officers, directors and each other person, if any,
who controls the Company within the meaning of the Securities Act, against all
losses, claims, damages or liabilities, joint or several, to which the Company
or such persons may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement of any material
fact which was furnished in writing and executed by the Investor to the Company
expressly for use in (and such information is contained in) the Registration
Statement under which such Registrable Securities were registered under the
Securities Act pursuant to this Agreement, any preliminary Prospectus or final
Prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and shall reimburse the Company and each such person for any reasonable legal or
other expenses incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that a
Holder shall be liable in any such case if and only to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or omission so made in conformity with information furnished in
writing to the Company and executed by or on behalf of such Holder specifically
for use in any such document. Notwithstanding the provisions of this paragraph,
a Holder shall not be required to indemnify any person or entity in excess of
the amount of the aggregate net proceeds received by the Holder in respect of
Registrable Securities in connection with any such registration under the
Securities Act.

 

5.3     Indemnification Procedures. Promptly after receipt by a party entitled
to claim indemnification hereunder (an “Indemnified Party”) of notice of the
commencement of any action, such Indemnified Party shall, if a claim for
indemnification in respect thereof is to be made against a party hereto
obligated to indemnify such Indemnified Party (an “Indemnifying Party”),
promptly notify the Indemnifying Party in writing thereof, but the delay or
omission so to notify the Indemnifying Party shall not relieve it from any
liability which it may have to such Indemnified Party other than under this
Section 5.3 and shall only relieve it from any liability which it may have to
such Indemnified Party under this Section 5.3 if and to the extent the
Indemnifying Party is prejudiced by such omission or delay of such notification.
In case any such action shall be brought against any Indemnified Party and it
shall notify the Indemnifying Party of the commencement thereof, the
Indemnifying Party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel reasonably
satisfactory to such Indemnified Party, and, after notice from the Indemnifying
Party to such Indemnified Party of its election so to assume and undertake the
defense thereof, the Indemnifying Party shall not be liable to such Indemnified
Party under this Section 5.3 for any legal expenses subsequently incurred by
such Indemnified Party in connection with the defense thereof; if the
Indemnified Party retains its own counsel, then the Indemnified Party shall pay
all fees, costs and expenses of such counsel; provided, however, that, if the
defendants in any such action include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party shall have reasonably concluded
that there may be reasonable defenses available to it which are different from
or additional to those available to the Indemnifying Party or if the interests
of the Indemnified Party reasonably may be deemed to conflict with the interests
of the Indemnifying Party, the Indemnified Party shall have the right to select
one separate counsel and to participate in such legal defenses, with the
reasonable expenses and fees of such separate counsel and other reasonable
expenses related to such participation to be reimbursed by the Indemnifying
Party as incurred.

 

 

 

 

5.4     Contribution. In order to provide for just and equitable contribution in
the event of joint liability under the Securities Act in any case in which
either (i) a Holder, or any officer, director or controlling person of a Holder,
makes a claim for indemnification pursuant to this Section 5.4 but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 5.4 provides for indemnification in
such case, or (ii) contribution under the Securities Act may be required on the
part of the Investor or such officer, director or controlling person of the
Investor in circumstances for which indemnification is provided under this
Section 5.4; then, and in each such case, the Company and the Investor shall
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) in such proportion so that the
Investor is responsible only for the portion represented by the percentage that
the public offering price of its securities offered by the Registration
Statement bears to the public offering price of all securities offered by such
Registration Statement, provided, however, that, in any such case, no person
guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.

 

5.5     Survival. The indemnification provided for under this Agreement shall
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and shall survive the transfer of securities.

 

ARTICLE VI
Miscellaneous.

 

6.1     Compliance. Each Holder covenants and agrees that it shall comply with
the prospectus delivery requirements of the Securities Act as applicable to it
in connection with sales of Registrable Securities pursuant to any Registration
Statement.

 

 

 

 

6.2     Discontinued Disposition. Each Holder agrees by its acquisition of
Registrable Securities that, upon receipt of a notice from the Company of the
occurrence of a Discontinuation Event (as defined below), such Holder shall
forthwith discontinue disposition of such Registrable Securities under the
applicable Registration Statement until such Holder’s receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing by the Company that the use of the applicable Prospectus may
be resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus or Registration Statement. The Company may provide
appropriate stop orders to enforce the provisions of this Section 6.2. For
purposes of this Agreement, a “Discontinuation Event” shall mean (i) when the
Commission notifies the Company whether there will be a “review” of such
Registration Statement and whenever the Commission comments in writing on such
Registration Statement (the Company shall provide true and complete copies
thereof and all written responses thereto to each of the Holders); (ii) any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to such Registration Statement or Prospectus or
for additional information; (iii) the issuance by the Commission of any stop
order suspending the effectiveness of such Registration Statement covering any
or all of the Registrable Securities or the initiation of any Proceedings for
that purpose; (iv) the receipt by the Company of any notification with respect
to the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and/or (v) receipt of notice of
the occurrence of any event or passage of time that makes the financial
statements included in such Registration Statement ineligible for inclusion
therein or any statement made in such Registration Statement or Prospectus or
any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.

 

6.3     Transfer of Registration Rights. The rights to cause the Company to
register securities granted to Holders under Article II may be assigned to a
transferee or assignee in connection with any transfer or assignment of
Registrable Securities by a Holder, provided that: (i) such transfer may
otherwise be effected in accordance with applicable securities laws, (ii) such
transferee agrees in writing to be bound by the terms of this agreement and
(iii) written notice thereof is promptly given to the Company.

 

6.4     Entire Agreement. This Agreement sets forth the entire agreement of the
parties with respect to the subject matter hereof. No provision of this
Agreement may be explained or qualified by any prior or contemporaneous
understanding, negotiation, discussion, conduct, or course of conduct or by any
trade usage, and, except as otherwise expressly stated herein, there is no
condition precedent to the effectiveness of any provision hereof. No party has
relied on any representation, warranty, or agreement of any person in entering
this Agreement, except those expressly stated herein.

 

6.5     Counterparts; Facsimile Signatures. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which shall
constitute one agreement. This Agreement shall become effective upon delivery to
each party of an executed counterpart or the earlier delivery to each party of
original, photocopied, or electronically transmitted signature pages that
together (but need not individually) bear the signatures of all other parties.

 

6.6     Amendments; Waivers; Remedies.

 

(a)     This Agreement cannot be amended, except by a writing signed by each
party, or terminated orally or by course of conduct. No provision hereof can be
waived, except by a writing signed by the party against whom such waiver is to
be enforced, and any such waiver shall apply only in the particular instance in
which such waiver shall have been given. Notwithstanding the foregoing, a waiver
or consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of certain Holders and that does not directly
or indirectly affect the rights of other Holders may be given by Holders of at
least a majority of the Registrable Securities to which such waiver or consent
relates; provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of
the immediately preceding sentence.

 

 

 

 

(b)     Neither any failure or delay in exercising any right or remedy hereunder
or in requiring satisfaction of any condition herein nor any course of dealing
shall constitute a waiver of or prevent any party from enforcing any right or
remedy or from requiring satisfaction of any condition. No notice to or demand
on a party waives or otherwise affects any obligation of that party or impairs
any right of the party giving such notice or making such demand, including any
right to take any action without notice or demand not otherwise required by this
Agreement. No exercise of any right or remedy with respect to a breach of this
Agreement shall preclude exercise of any other right or remedy, as appropriate
to make the aggrieved party whole with respect to such breach, or subsequent
exercise of any right or remedy with respect to any other breach.

 

(c)     Except as otherwise expressly provided herein, no statement herein of
any right or remedy shall impair any other right or remedy stated herein or that
otherwise may be available.

 

(d)     Notwithstanding anything else contained herein, neither shall any party
seek, nor shall any party be liable for, punitive or exemplary damages, under
any tort, contract, equity, or other legal theory, with respect to any breach
(or alleged breach) of this Agreement or any provision hereof or any matter
otherwise relating hereto or arising in connection herewith.

 

6.7     Notices. Any notice hereunder shall be sent in writing, addressed as
specified below, and shall be deemed given: if by hand or recognized courier
service, by 4:00PM on a business day, addressee’s day and time, on the date of
delivery, and otherwise on the first business day after such delivery; if by fax
or email, on the date that transmission is confirmed electronically, if by
4:00PM on a business day, addressee’s day and time, and otherwise on the first
business day after the date of such confirmation; or five days after mailing by
certified or registered mail, return receipt requested. Notices shall be
addressed to the respective parties as follows (excluding telephone numbers,
which are for convenience only), or to such other address as a party shall
specify to the others in accordance with these notice provisions:

 

To Company, at:

 

Cyalume Technologies Holdings, Inc.
96 Windsor Street
West Springfield, MA 01089
Attention: Michael Bielonko
Telecopy: (413) 788-4817

Email: mbielonko@cyalume.com

 

with a copy (not constituting notice) to:

 

 

 

 

Loeb & Loeb LLP
345 Park Avenue
New York, New York 10154
Attention: Giovanni Caruso, Esq.
Telecopy: (212) 937-3943

 

To Investor, at:

ATTN: Antonio Colon
5532 Saddle Rock Trail

Colorado Springs, CO 80918

Fax:
Telephone:
Email:

 

with a copy (not constituting notice) to:

 

Minor & Brown, P.C.

650 S. Cherry Street, Suite 1100

Denver, CO 80246

Attention: Lisa A. D’Ambrosia

Fax: 303-320-6330

Email: ldambrosia@minorbrown.com

 

To any other Person who is then the registered Holder at the address of such
Holder as it appears in the stock transfer books of the Company.

 

6.8          Successors and Assigns. Subject to the provisions of Section 6.3,
this Agreement shall inure to the benefit of and be binding upon the successors
and assigns of each of the parties, including without limitation and without the
need for an express assignment, subsequent Holders of Registrable Securities.

 

6.9          Further Assurances. Each party shall execute and deliver such
documents and take such action, as may reasonably be considered within the scope
of such party’s obligations hereunder, necessary to effectuate the transactions
contemplated by this Agreement.

 

6.10        Choice of Law and Forum; Service of Process.

 

(a)     This Agreement, any disputed matter arising hereunder, including the
construction, interpretation, or validity of any provision hereof or performance
thereof, or any other matter relating hereto or arising in connection herewith
(whether in tort, contract, equity, or otherwise) (any such matter, a “Disputed
Matter”) is and shall be governed by and enforced in accordance with the laws of
the State of Delaware, excluding its choice of law rules.

 

(b)     Subject to Section 6.10(c), no party shall bring or maintain any action
or proceeding with respect to any Disputed Matter (“Dispute Proceeding”), except
in a state or federal court sitting in Delaware. Each party irrevocably submits
and consents to the jurisdiction of such courts, and no party shall object to
the laying of venue in any such court or claim that any such court is an
inconvenient forum.

 

 

 

 

(c)     Nothing herein shall affect the right of any party to enforce any
judgment in any jurisdiction or the rule that any matter of internal governance
of a corporation or other entity is determined under the laws of the state
pursuant to which the corporation or other entity is incorporated or formed.

 

(d)     Each party irrevocably consents to service of process, by any means
authorized in Section 6.7, in respect of any Dispute Proceeding.

 

[Balance of page intentionally left blank; signature page follows]

 

 

 

 

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

 

  Cyalume Technologies Holdings, Inc.       By: /s/ Michael Bielonko   Name:
Michael Bielonko   Title:

Chief Financial Officer, Treasurer and

    Secretary           /s/ Antonio Colon     Antonio Colon

 

 

 

 

Schedule 2.2

 

Selling Stockholder Questionnaire

 

The undersigned beneficial owner of common stock (the “Common Stock”), of
Cyalume Technologies Holdings, Inc., a Delaware corporation (the “Company”),
understands that the Company has filed or intends to file with the Securities
and Exchange Commission (the “Commission”) a Registration Statement for the
registration and resale of the Registrable Securities, in accordance with the
terms of the Registration Rights Agreement, dated as of December 22, 2011 (the
“Registration Rights Agreement”), between the Company and the Investor named
therein. A copy of the Registration Rights Agreement is available from the
Company upon request at the address set forth below. All capitalized terms used
and not otherwise defined herein shall have the meanings ascribed thereto in the
Registration Rights Agreement.

 

The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:

 

QUESTIONNAIRE

 

1.        Name.

 

          (a)     Full Legal Name of Selling Stockholder

 

          (b)     Full Legal Name of Registered Holder (if not the same as (a)
above) through which Registrable Securities Listed in Item 3 below are held:

 

          (c)     Full Legal Name of Natural Control Person (which means a
natural person who directly or indirectly alone or with others has power to vote
or dispose of the securities covered by the questionnaire):

 

 

 

 

2. Address for Notices to Selling Stockholder:

 

Telephone:

 

Fax:

 

Contact Person:

 

3. Beneficial Ownership of Registrable Securities:

 

                    Type and Principal Amount of Registrable Securities
beneficially owned:

 

4. Broker-Dealer Status:

 

          (a)        Are you a broker-dealer?

 

          Yes    •¨        No • ¨

 

          Note:     If yes, the Commission’s staff has indicated that you may
need to be identified as an underwriter in the Registration Statement.

 

          (b)        Are you an affiliate of a broker-dealer?

 

          Yes    • ¨        No • ¨

 

          (c)        If you are an affiliate of a broker-dealer, do you certify
that you bought the Registrable Securities in the ordinary course of business,
and at the time of the purchase of the Registrable Securities to be resold, you
had no agreements or understandings, directly or indirectly, with any person to
distribute the Registrable Securities?

 

 

 

 

          Yes •¨        No • ¨        N/A        ¨

 

          Note: If no, the Commission’s staff has indicated that you should be
identified as an underwriter in the Registration Statement.

 

5. Beneficial Ownership of Other Securities of the Company Owned by the Selling
Securityholder.

 

Except as set forth below in this Item 5, the undersigned is not the beneficial
or registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.

 

                    Type and Amount of Other Securities beneficially owned by
the Selling Securityholder:

 

6. Relationships with the Company:

 

Except as set forth below, neither the undersigned nor any of its affiliates,
officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had
any other material relationship with the Company (or its predecessors or
affiliates) during the past three years.

 

                    State any exceptions here:

 

7. The Company has advised each Selling Stockholder that it may not use shares
registered on the Registration Statement to cover short sales of Common Stock
made prior to the date on which the Registration Statement is declared effective
by the Commission, in accordance with 1997 Securities and Exchange Commission
Manual of Publicly Available Telephone Interpretations Section A.65. If a
Selling Stockholder uses the prospectus for any sale of the Common Stock, it
will be subject to the prospectus delivery requirements of the Securities Act.
The Selling Stockholders will be responsible to comply with the applicable
provisions of the Securities Act and Exchange Act, and the rules and regulations
thereunder promulgated, including, without limitation, Regulation M, as
applicable to such Selling Stockholders in connection with resales of their
respective shares under the Registration Statement.

 

 

 

 

The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof and prior to the Effective Date for the Registration Statement.

 

By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Registration Statement
and the related prospectus.

 

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.

 

Dated: Beneficial Owner:         By:             Name:           Title:

 

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

 

Cyalume Technologies Holdings, Inc.
96 Windsor Street
West Springfield, MA 01089
Attention: Michael Bielonko
Telecopy: (413) 788-4817