Unassociated Document


    


    
      
         

        THIS NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

         

        UNSECURED
PROMISSORY NOTE

         

        
          	
                  $1,818,065

                	
                  New
      York, New York

                
	 
      	
                  Original
      Issuance Date: December 31, 2008

                


        

         

        FOR VALUE RECEIVED, the
undersigned, CYALUME
TECHNOLOGIES HOLDINGS, INC., a Delaware corporation (the “Company”), hereby promises to
pay to the order of RODMAN
PRINCIPAL INVESTMENTS, LLC (the “Holder”), or his registered
assigns, on the Maturity Date (as hereinafter defined) (or earlier as
hereinafter provided) the principal sum of One Million Eight Hundred Eighteen
Thousand Sixty Five Dollars ($1,818,065), plus all “PIK Amounts” (as hereinafter
defined) added to the principal amount hereof pursuant to the terms of this
Unsecured Promissory Note (this “Note”), with interest on the
unpaid principal amount of this Note from time to time as provided
herein.  For the purposes of this Note, the term “Maturity Date” shall mean June
30, 2014.

         

        
          	
                  1.

                	
                  Interest.

                


        

         

        
          	
                   
      

                	
                  (a)

                	
                  Interest
      on this Note shall accrue from the Original Issuance Date of this Note (as
      set forth on the face of this Note above) at a rate of eight percent (8%)
      per annum until repayment of the Accreted Principal Amount (as hereinafter
      defined) and payment of all accrued interest in full.  Interest
      shall accrue and be computed on the basis of the actual number of days in
      the related period over 360 days.  The Company shall pay accrued
      interest quarterly on the last business day of each March, June, September
      and December during the term hereof and on the Maturity Date, commencing
      on March 31, 2009, by the addition of such accrued interest amount to the
      principal amount outstanding under this Note (any such amount, a “PIK
      Amount”).  At any time, the outstanding principal amount
      of this Note, including all PIK Amounts added thereto through such time is
      referred to in this Note as the “Accreted Principal
      Amount”.

                


        

         

        
          	
                   
      

                	
                  (b)

                	
                  Notwithstanding
      subsection (a) of this Section 1, but subject to applicable law, upon and
      during the occurrence of an Event of Default (as defined in Section 6
      below), the Accreted Principal Amount of this Note shall bear interest,
      from the date of the occurrence of such Event of Default until such Event
      of Default is cured or waived, payable on demand at a rate equal to the
      applicable interest rate in effect hereunder plus two percent (2%) (the
      “Default Rate”)
      (and such interest shall be paid by adding a PIK Amount to the Accreted
      Principal Amount of this Note in respect of such interest).  In
      addition, any overdue interest on this Note shall bear interest, payable
      on demand at a rate equal to the applicable interest rate in effect
      hereunder plus two percent (2%) (and such interest shall be paid by adding
      a PIK Amount to the Accreted Principal Amount of this Note in respect of
      such interest).

                


        

         

        
          	
                   
      

                	
                  (c)

                	
                  In
      the event that any interest rate provided for herein shall be determined
      to be unlawful, such interest rate shall be computed at the highest rate
      permitted by applicable law.  Any payment by the Company of any
      interest amount in excess of that permitted by law shall be considered a
      mistake, with the excess being applied to the principal of this Note
      without prepayment premium or
penalty.

                


        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                  2.

                	
                  Principal. The
      Company shall pay the principal amount due under this Note including all
      PIK Amounts and all accrued and unpaid interest (all of which shall be
      payable in cash and no portion of which shall be payable by addition of a
      PIK Amount to the Accreted Principal Amount) on the Maturity
      Date.

                


        

         

        
          	
                  3.

                	
                  Voluntary
      Prepayment.  This Note is subject to prepayment at the
      option of the Company, in whole or in part, at any time and from time to
      time without premium or penalty.  All prepayments under this
      Section 3 shall include payment of accrued interest on the Accreted
      Principal Amount so prepaid (which interest shall be paid entirely in cash
      and no portion of which shall be payable by the addition of a PIK Amount
      to the Accreted Principal Amount) and shall be applied first to the
      payment of default interest, if any, then to payment of accrued and unpaid
      interest, if any, to but not including the date of prepayment, and
      thereafter to principal.  The Company agrees, subject to the
      approval of its lenders or the lenders of its subsidiary, to use a portion
      of the proceeds of any debt or equity financing to pay off a portion of
      this Note.

                


        

         

        
          	
                  4.

                	
                  Amendment.
      Amendments and modifications of this Note shall be made only by written
      agreement signed by the Company and the
Holder.

                


        

         

        
          	
                  5.

                	
                  Transfer;
      Registration.

                


        

         

        
          	
                   
      

                	
                  (a)

                	
                  The
      term “Holder” as
      used herein shall also include any registered transferee of this
      Note.  The initial Holder by its acceptance hereof and each
      transferee of this Note acknowledges that this Note has not been
      registered under the Securities Act (as hereinafter defined) and the
      Holder agrees that, prior to any proposed transfer of this Note, if such
      transfer is not made pursuant to either an effective registration
      statement under the Securities Act or pursuant to an exemption from
      registration under the Securities Act, the Holder will, if requested by
      the Company, deliver to the
Company:

                


        

         

        
          	
                   
      

                	
                  (i)

                	
                  investment
      representations, in customary substance and form, reasonably acceptable to
      the Company, signed by the proposed
transferee;

                


        

         

        
          	
                   
      

                	
                  (ii)

                	
                  an
      agreement by such transferee to the inclusion of and compliance with the
      restrictive investment legend set forth on this Note;
  and

                


        

         

        
          	
                   
      

                	
                  (iii)

                	
                  an
      agreement by such transferee to be bound by the provisions of this Section
      5 relating to the transfer of such
Note.

                


        

         

        
          	
                   
      

                	
                  (b)

                	
                  The
      Company shall maintain a register (the “Note Register”) in its
      principal offices for the purpose of registering this Note and any
      transfer thereof, which register shall reflect and identify, at all times,
      the ownership of any interest in this Note.  Upon the issuance
      of this Note, the Company shall record the name of the initial Holder of
      this Note in the Note Register as the first Holder.  Upon
      surrender for registration of transfer or exchange of this Note at the
      principal offices of the Company, the Company shall, at the Company’s
      expense, execute and deliver a new Note of like tenor and of a like
      aggregate principal amount, registered in the name of the Holder or a
      transferee or transferees.  Every Note surrendered for
      registration of transfer or exchange shall be duly endorsed, or be
      accompanied by written instrument of transfer duly executed by the Holder
      of such Note or such holder’s attorney duly authorized in
      writing.  The Company shall not have any obligation hereunder to
      any person other than the registered Holder of this
  Note.

                


        

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

         

        
          	
                   
      

                	
                  (c)

                	
                  This
      Note may be transferred or assigned by the Holder at any time subject to
      Sections 5(a), 5(b) and 8 hereof.

                


        

         

        
          	
                   
      

                	
                  (d)

                	
                  In
      the event that the Holder intends to transfer this Note to more than one
      transferee, the Company shall, in good faith, cooperate with the Holder to
      effectuate such a transfer and to issue replacement Notes in the
      appropriate denominations.

                


        

         

        
          	
                  6.

                	
                  Events of
      Default. The occurrence of any one or more of the following events
      shall constitute an “Event of Default”
      hereunder:

                


        

         

        
          	
                   
      

                	
                  (a)

                	
                  a
      default shall be made in the payment of any amount due and owing under
      this Note when and as the same shall become due and payable and such
      default shall continue unremedied for a period of three (3) business
      days;

                


        

         

        
          	
                   
      

                	
                  (b)

                	
                  default
      shall be made in the due observance or performance by the Company of any
      covenant, condition or agreement contained in this Note (other than those
      specified in paragraph (a) immediately above) and such default shall
      continue unremedied or shall not be waived for a period of 30 days after
      written notice thereof from the Holder to the
  Company;

                


        

         

        
          	
                   
      

                	
                  (c)

                	
                  this
      Note or any material provision hereof in favor of the Holder shall at any
      time and for any reason be declared by a court of competent jurisdiction
      to be null and void, or a proceeding shall be commenced by any person who
      is not affiliated with or an agent of the Holder, seeking to establish the
      invalidity or unenforceability of this Note or any material provision
      hereof in favor of the Holder (exclusive of questions of interpretation of
      any provision hereof), or the Company shall repudiate or deny any portion
      of its liability or obligation for its obligations
    hereunder;

                


        

         

        
          	
                   
      

                	
                  (d)

                	
                  an
      involuntary proceeding shall be commenced or an involuntary petition shall
      be filed in a court of competent jurisdiction seeking (i) relief in
      respect of the Company, or of a substantial part of the property of the
      Company, under the provisions of Title 11 of the United States Code, 11
      U.S.C., §§101 et seq., as now and hereafter in effect, any successors to
      such statute and any other applicable insolvency or similar law of any
      jurisdiction including, without limitation, any law of any jurisdiction
      permitting a debtor to obtain a stay or a compromise of the claims of its
      creditors against it (the “Bankruptcy Code”), as
      now constituted or hereafter amended, or any other federal, state or
      foreign bankruptcy, insolvency, receivership or similar law; (ii) the
      appointment of a receiver, trustee, custodian, sequestrator, conservator
      or similar official for the Company or for a substantial part of the
      property of the Company; or (iii) the winding-up or liquidation of the
      Company; and such proceeding or petition shall continue undismissed for 60
      consecutive days or an order or decree approving or ordering any of the
      foregoing shall be entered; or

                


        

         

        
          	
                   
      

                	
                  (e)

                	
                  the
      Company shall (i) voluntarily commence any proceeding or file any petition
      seeking relief under the Bankruptcy Code, as now constituted or hereafter
      amended, or any other federal, state or foreign bankruptcy, insolvency,
      receivership or similar law; (ii) consent to the institution of, or fail
      to contest in a timely and appropriate manner, any proceeding or the
      filing of any petition described in clause (d) above; (iii) apply for or
      consent to the appointment of a receiver, trustee, custodian,
      sequestrator, conservator or similar official for the Company or for a
      substantial part of the property of the Company; (iv) file an answer
      admitting the material allegations of a petition filed against it in any
      such proceeding; (v) make a general assignment for the benefit of
      creditors; (vi) become unable, admit in writing its inability or fail
      generally to pay its debts as they become due; (vii) take any action for
      the purpose of effecting any of the foregoing; or (viii) wind up or
      liquidate.

                


        

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

         

        At any
time on or after an Event of Default, and notwithstanding anything in this Note
to the contrary, and in addition to any rights or remedies available to the
Holders (or its affiliates) at law or in equity, the Holder, in its sole and
absolute discretion, may: (A) declare the whole Accreted Principal Amount then
outstanding with accrued interest and any outstanding PIK Amounts (which PIK
Amounts shall be payable in cash) to be immediately due and payable; and (B)
from time to time, increase the rate of interest hereunder to the Default Rate;
provided, however, in
the case of an Event of Default under clauses (d) or (e) of this Section 6, all
such amounts shall immediately, without notice, further action or deed become
due and payable.  The exercise of any rights by the Holder under this
Section 6 shall not be deemed an election of remedies precluding the further
exercise of any rights or remedies in response to or in connection with the
events giving rise to such exercise.

         

        
          	
                  7.

                	
                  Replacement of
      Note. On receipt by the Company of an affidavit of an authorized
      representative of the Holder stating the circumstances of the loss, theft,
      destruction or mutilation of this Note (and in the case of any such
      mutilation, on surrender and cancellation of this Note), the Company, at
      its expense, will promptly execute and deliver, in lieu thereof, a new
      Note of like tenor.

                


        

         

        
          	
                  8.

                	
                  Successors and
      Assigns; Assignment. All the covenants, stipulations, promises and
      agreements in this Note shall inure to the benefit of and be binding upon
      the successors and permitted assigns of the Holder and the
      Company.  The Company shall not assign any of its rights under
      this Note without the prior written consent of the Holder, any such
      purported assignment without such consent being null and
    void.

                


        

         

        
          	
                  9.

                	
                  GOVERNING LAW.
      THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
      OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF
      LAW OF SUCH STATE OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
      OF THE STATE OF NEW YORK.

                


        

         

        
          	
                  10.

                	
                  Waivers. The
      Company hereby waives presentment, demand for payment, protest and notice
      of protest and notice of dishonor of this
Note

                


        

         

        
          	
                  11.

                	
                  RIGHTS, CUMULATIVE;
      FORBEARANCE.  The rights, powers and remedies given to
      the Holder under this Note shall be in addition to and not in lieu of all
      rights, powers and remedies given to it under the law or in
      equity.  Any forbearance, failure or delay by the Holder in
      exercising any right, power or remedy under this Note, or that may
      otherwise be available to the Holder shall not be deemed to be a waiver of
      such right, power or remedy, nor shall any single or partial exercise of
      any right, power or remedy preclude the further exercise
      thereof.

                


        

         

        
          
            
            

          

          
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                  12.

                	
                  WAIVER OF JURY TRIAL;
      CONSENT TO JURISDICTION.  EACH OF THE COMPANY AND THE
      HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF HEREBY WAIVES, TO THE EXTENT
      PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LITIGATION IN ANY COURT
      WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS NOTE OR ANY
      AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY OR THE VALIDITY,
      PROTECTION, INTERPRETATION, OR ENFORCEMENT HEREOF OR
      THEREOF.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE
      ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT
      AND THAT RELATE TO THIS NOTE, INCLUDING WITHOUT LIMITATION, CONTRACT
      CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND
      STATUTORY CLAIMS.  EACH OF THE COMPANY AND THE HOLDER OF THIS
      NOTE ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO
      A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN
      ENTERING INTO THIS TRANSACTION, AND THAT EACH WILL CONTINUE TO RELY ON
      THIS WAIVER IN ITS RELATED FUTURE DEALINGS.  EACH OF THE COMPANY
      AND THE HOLDER OF THIS NOTE FURTHER WARRANTS AND REPRESENTS THAT EACH HAS
      REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH HAS KNOWINGLY
      AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH
      LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
      NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY
      TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
      THE TRANSACTION DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
      RELATING TO THIS NOTE.  IN THE EVENT OF LITIGATION, THIS
      AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
      COURT.  EACH OF THE COMPANY AND THE HOLDER OF THIS NOTE ALSO
      WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND THAT MIGHT, BUT FOR
      THIS WAIVER, BE REQUIRED OF EACH.  EACH OF THE COMPANY AND THE
      HOLDER OF THIS NOTE HEREBY IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR
      PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE OR ANY AGREEMENTS OR
      TRANSACTIONS CONTEMPLATED HEREBY MAY BE BROUGHT IN THE COURTS OF THE STATE
      OF NEW YORK LOCATED IN NEW YORK COUNTY OR OF THE UNITED STATES OF AMERICA
      FOR THE SOUTHERN DISTRICT OF NEW YORK AND HEREBY EXPRESSLY SUBMITS TO THE
      PERSONAL JURISDICTION AND VENUE OF SUCH COURTS FOR THE PURPOSES THEREOF
      AND EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE AND ANY CLAIM THAT SUCH
      COURTS ARE AN INCONVENIENT FORUM.  EACH OF THE COMPANY AND THE
      HOLDER OF THIS NOTE HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
      OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING
      BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
      PREPAID, TO ITS ADDRESS SET FORTH IN THE PREAMBLE TO THIS NOTE (OR AT SUCH
      OTHER ADDRESS AS THE COMPANY OR THE HOLDER MAY PROVIDE IN WRITING TO THE
      OTHER), SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH
      MAILING.

                


        

         

        
          	
                  13.

                	
                  Headings. The
      headings in this Note are for convenience of reference only and shall not
      limit or otherwise affect the meaning
hereof.

                


        

         

        
          	
                  14.

                	
                  Severability.
      If any one or more of the provisions contained herein, or the application
      thereof in any circumstance, is held invalid, illegal or unenforceable in
      any respect for any reason, the validity, legality and enforceability of
      any such provision in every other respect and of the remaining provisions
      hereof shall not be in any way impaired, unless the provisions held
      invalid, illegal or unenforceable shall substantially impair the benefits
      of the remaining provisions hereof.

                


        

         

        [Signature Page
Follows]

         

        
          
            
            

          

          
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        IN WITNESS WHEREOF, the
Company has caused this Unsecured Promissory Note to be duly executed as of the
date first written above.

         

         

        
          
            
              
                	 	COMPANY	 
	 	 	 
	 	CYALUME TECHNOLOGIES HOLDINGS,
      INC.	 
	 	 	 	 
	
                         

                      	
                        By:
      

                      	/s/ Derek
      Dunaway	 
	 	 	Name:
      Derek Dunaway	 
	 	 	Title:
      Chief Executive Officer & President	 
	 	 	 	 


              

            

          

        

         

        
          
            
            

          

          
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