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Exhibit 10.2
 
SEVENTH LOAN MODIFICATION AGREEMENT
 
This Seventh Loan Modification Agreement (this “Loan Modification Agreement”) is
entered into as of March 1, 2013 by and between SILICON VALLEY BANK, a
California corporation, with its principal place of business at 3003 Tasman
Drive, Santa Clara, California 95054 and with a loan production office located
at 505 Fifth Avenue, 11th Floor, New York, New York 10017 (“Bank”) and CHYRON
CORPORATION, a New York corporation with its chief executive office located at 5
Hub Drive, Melville, New York 11747 (“Borrower”).
 
1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS.  Among other
indebtedness and obligations which may be owing by Borrower to Bank, Borrower is
indebted to Bank pursuant to a loan arrangement dated as of June 19, 2008,
evidenced by, among other documents, a certain Loan and Security Agreement dated
as of June 19, 2008, between Borrower and Bank, as amended by a certain First
Loan Modification Agreement dated as of April 16, 2009, between Borrower and
Bank, as further amended by a certain Second Loan Modification Agreement dated
as of June 18, 2009, between Borrower and Bank, as further amended by a certain
Third Loan Modification Agreement dated as of March 24, 2010, between Borrower
and Bank, as further amended by a certain Fourth Loan Modification Agreement
dated as of March 24, 2011, between Borrower and Bank, as further amended by a
certain Fifth Loan Modification Agreement dated as of December 28, 2011, between
Borrower and Bank, and as further amended by a certain Sixth Loan Modification
Agreement dated as of August 13, 2012, between Borrower and Bank (as amended,
the “Loan Agreement”).  Capitalized terms used but not otherwise defined herein
shall have the same meaning as in the Loan Agreement.
 
2. DESCRIPTION OF COLLATERAL.  Repayment of the Obligations is secured by the
Collateral as described in the Loan Agreement (together with any other
collateral security granted to Bank, the “Security Documents”).  Hereinafter,
the Security Documents, together with all other documents evidencing or securing
the Obligations, shall be referred to as the “Existing Loan Documents”.
 
3. DESCRIPTION OF CHANGE IN TERMS.
 
A.  
Modifications to Loan Agreement.

 
1.  
The Loan Agreement shall be amended by deleting the following provision
appearing as Section 2.1.1(a) (Revolving Advances; Availability) thereof:

 
“           (a)           Availability.  Subject to the terms and conditions of
this Agreement, Bank shall make Advances not exceeding the Availability
Amount.  Amounts borrowed under the Revolving Line may be repaid and, prior to
the Revolving Line Maturity Date, reborrowed, subject to the applicable terms
and conditions precedent herein.”
 
and inserting in lieu thereof the following:
 
“           (a)           Availability.  Subject to the terms and conditions of
this Agreement and to deduction of Reserves, Bank shall make Advances not
exceeding the Availability Amount.  Amounts borrowed under the Revolving Line
may be repaid and, prior to the Revolving Line Maturity Date, reborrowed,
subject to the applicable terms and conditions precedent herein.”
 
 
Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
 
 
 

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2.  
The Loan Agreement shall be amended by inserting the following new Section
2.3(g) (entitled “Application of Payments”) to appear immediately following the
existing Section 2.3(f) (Payments) thereof:

 
“           (g)           Application of Payments.  Subject to Section 6.11(c)
hereof, Bank shall apply the whole or any part of collected funds against the
Revolving Line or credit such collected funds to a depository account of
Borrower with Bank (or an account maintained by an Affiliate of Bank), the order
and method of such application to be in the sole discretion of Bank.  Borrower
shall have no right to specify the order or the accounts to which Bank shall
allocate or apply any payments required to be made by Borrower to Bank or
otherwise received by Bank under this Agreement when any such allocation or
application is not specified elsewhere in this Agreement.”
 
 
3.  
The Loan Agreement shall be amended by deleting the following provisions
appearing in Section 3.2 (Conditions Precedent to all Credit Extensions)
thereof:

 
 “           (a)           except as otherwise provided in Section 3.4(a),
timely receipt of an executed Payment/Advance Form;
 
(b)           the representations and warranties in Section 5 shall be true in
all material respects on the date of the Payment/Advance Form and on the Funding
Date of each Credit Extension; provided, however, that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof; and
provided, further that those representations and warranties expressly referring
to a specific date shall be true, accurate and complete in all material respects
as of such date, and no Event of Default shall have occurred and be continuing
or result from the Credit Extension.  Each Credit Extension is Borrower’s
representation and warranty on that date that the representations and warranties
in Section 5 remain true in all material respects; provided, however, that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof; and provided, further that those representations and warranties
expressly referring to a specific date shall be true, accurate and complete in
all material respects as of such date; and”
 
and inserting in lieu thereof the following:
 
“           (a)           except as otherwise provided in Section 3.4(a), timely
receipt of an executed Transaction Report;
 
(b)           the representations and warranties in Section 5 shall be true in
all material respects on the date of the Transaction Report and on the Funding
Date of each Credit Extension; provided, however, that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof; and
provided, further that those representations and warranties expressly referring
to a specific date shall be true, accurate and complete in all material respects
as of such date, and no Default or Event of Default shall have occurred and be
continuing or result
 
 
-2-
 
Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
 
 
 

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from the Credit Extension.  Each Credit Extension is Borrower’s representation
and warranty on that date that the representations and warranties in Section 5
remain true in all material respects; provided, however, that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof; and
provided, further that those representations and warranties expressly referring
to a specific date shall be true, accurate and complete in all material respects
as of such date; and”
 
4.  
The Loan Agreement shall be amended by deleting the following provision
appearing as Section 3.4(a) (Procedures for Borrowing; Advances) thereof:

 
“           (a)           Advances.  Subject to the prior satisfaction of all
other applicable conditions to the making of an Advance set forth in this
Agreement, to obtain an Advance (other than Advances under Sections 2.1.2 or
2.1.4), Borrower shall notify Bank (which notice shall be irrevocable) by
electronic mail, facsimile, or telephone by 12:00 noon Eastern time on the
Funding Date of the Advance.  Together with any such electronic or facsimile
notification, Borrower shall deliver to Bank by electronic mail or facsimile a
completed Payment/Advance Form executed by a Responsible Officer or his or her
designee.  Bank may rely on any telephone notice given by a person whom Bank
believes is a Responsible Officer or designee.  Bank shall credit Advances to
the Designated Deposit Account.  Bank may make Advances under this Agreement
based on instructions from a Responsible Officer or his or her designee or
without instructions if the Advances are necessary to meet Obligations which
have become due.”
 
and inserting in lieu thereof the following:
 
“           (a)           Advances.  Subject to the prior satisfaction of all
other applicable conditions to the making of an Advance set forth in this
Agreement, to obtain an Advance, Borrower shall notify Bank (which notice shall
be irrevocable) by electronic mail, facsimile, or telephone by 12:00 noon
Eastern time on the Funding Date of the Advance.  In connection with such
notification, Borrower must promptly deliver to Bank by electronic mail a
completed Transaction Report executed by an Authorized Signer together with such
other reports and information, including without limitation, sales journals,
cash receipts journals, accounts receivable aging reports, as Bank may request
in its sole discretion.  Bank shall credit proceeds of an Advance to the
Designated Deposit Account.  Bank may make Advances under this Agreement based
on instructions from an Authorized Signer or without instructions if the
Advances are necessary to meet Obligations which have become due.”
 
5.  
The Loan Agreement shall be amended by deleting the following provision
appearing as Section 5.3 (Accounts Receivable) thereof in its entirety:

 
“           5.3           Accounts Receivable.  For any Eligible Account in any
Borrowing Base Certificate, all statements made and all unpaid balances
appearing in all invoices, instruments and other documents evidencing such
Eligible Accounts are and shall be true and correct and all such invoices,
 
-3-
 
Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
 
 
 
 

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instruments and other documents, and all of Borrower's Books are genuine and in
all respects what they purport to be.  After an Event of Default has occurred
and is continuing, Bank may notify any Account Debtor owing Borrower money of
Bank’s security interest in such funds and verify the amount of such Eligible
Account.  All sales and other transactions underlying or giving rise to each
Eligible Account shall comply in all material respects with all applicable laws
and governmental rules and regulations.  Borrower has no knowledge of any actual
or imminent Insolvency Proceeding of any Account Debtor whose accounts are
Eligible Accounts in any Borrowing Base Certificate.  To the best of Borrower’s
knowledge, all signatures and endorsements on all documents, instruments, and
agreements relating to all Eligible Accounts are genuine, and all such
documents, instruments and agreements are legally enforceable in accordance with
their terms.”
 
and inserting in lieu thereof the following:
 
“           5.3           Accounts Receivable.
 
(a)           For each Account with respect to which Advances are requested, on
the date each Advance is requested and made, such Account shall be an Eligible
Account.
 
(b)           All statements made and all unpaid balances appearing in all
invoices, instruments and other documents evidencing the Eligible Accounts are
and shall be true and correct and all such invoices, instruments and other
documents, and all of Borrower's Books are genuine and in all respects what they
purport to be.  All sales and other transactions underlying or giving rise to
each Eligible Account shall comply in all material respects with all applicable
laws and governmental rules and regulations.  Borrower has no knowledge of any
actual or imminent Insolvency Proceeding of any Account Debtor whose accounts
are Eligible Accounts in any Transaction Report.  To the best of Borrower’s
knowledge, all signatures and endorsements on all documents, instruments, and
agreements relating to all Eligible Accounts are genuine, and all such
documents, instruments and agreements are legally enforceable in accordance with
their terms.”
 
6.  
The Loan Agreement shall be amended by deleting the following provision
appearing as Section 6.2 (b) thereof:

 
“           (b)           Within thirty (30) days after the last day of each
month, deliver to Bank a duly completed Borrowing Base Certificate signed by a
Responsible Officer, with aged listings of accounts receivable and accounts
payable (by invoice date).”
 
and inserting in lieu thereof the following:
 
“           (b)           within twenty (20) days after the end of each month,
(A) monthly accounts receivable agings, aged by invoice date , and (B) monthly
accounts payable agings, aged by invoice date, and outstanding or held check
registers, if any, as requested by Bank.”
 
 
 
-4-
 
Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
 
 
 
 
 

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7.  
The Loan Agreement shall be amended by inserting the following new Section
6.2(e) to appear immediately following the existing Section 6.2(d) thereof:

 
“           (e)           a Transaction Report (and any schedules related
thereto) (i) with each request for an Advance,  and (ii) within thirty (30) days
after the end of each month.”
 
8.  
The Loan Agreement shall be amended by deleting the following provision
appearing as Section 6.7(b) (Tangible Net Worth) thereof:

 
 
 
“
(b)
Tangible Net Worth.  To be tested as of the last day of each of Borrower’s
fiscal quarters, Tangible Net Worth of at least: (i) prior to 2009 Effective
Date No. 2, Six Million Five Hundred Thousand Dollars ($6,500,000.00), provided,
however, that such required amount shall increase by an amount equal to sixty
percent (60.0%) of the sum of the (A) gross proceeds received by Borrower from
the sale of its equity or the incurrence of Subordinated Debt after the
Effective Date, and (B) any positive quarterly Net Income earned by Borrower
during any of Borrower’s fiscal quarters ending after the Effective Date, (ii)
on and after 2009 Effective Date No. 2 through and including the date that is
one (1) day prior to the 2010 Effective Date, Twenty-Four Million Dollars
($24,000,000.00), provided, however, that such required amount shall increase by
an amount equal to sixty percent (60.0%) of the sum of the (A) gross proceeds
received by Borrower from the sale of its equity or the incurrence of
Subordinated Debt after 2009 Effective Date No. 2, and (B) any positive
quarterly Net Income earned by Borrower during any of Borrower’s fiscal quarters
ending after 2009 Effective Date No. 2, (iii) (x) on and after the 2010
Effective Date through and including the date that is one (1) day prior to the
2011 Effective Date, Twenty-Two Million Dollars ($22,000,000.00), and (y) on and
after the 2011 Effective Date, Eighteen Million Five Hundred Thousand Dollars
($18,500,000.00), provided, however, that such amount shall increase by an
amount equal to sixty percent (60.0%) of the sum of the (A) gross proceeds
received by Borrower from the sale of its equity or the incurrence of
convertible or other indebtedness for borrowed money after the 2011 Effective
Date, plus (B) any positive quarterly Net Income earned by Borrower during any
of Borrower’s fiscal quarters ending after the 2011 Effective Date.”

 
and inserting in lieu thereof the following:
 
 
 
“
(b)
Tangible Net Worth.  To be tested as of the last day of each of Borrower’s
fiscal quarters, Tangible Net Worth of at least: (i) prior to 2009 Effective
Date No. 2, Six Million Five Hundred Thousand Dollars ($6,500,000.00), provided,
however, that such required amount shall increase by an amount equal to sixty
percent (60.0%) of the sum of the (A) gross proceeds received by Borrower from
the sale of its equity or the incurrence of Subordinated Debt after the
Effective Date, and (B) any positive quarterly Net Income earned by Borrower
during any of Borrower’s fiscal quarters ending after the Effective Date, (ii)
on and after 2009 Effective Date No. 2 through and including the date that is
one (1) day prior to the 2010 Effective Date, Twenty-Four Million Dollars
($24,000,000.00), provided, however, that such required

 
 
-5-
 
 
Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
 
 
 
 
 

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amount shall increase by an amount equal to sixty percent (60.0%) of the sum of
the (A) gross proceeds received by Borrower from the sale of its equity or the
incurrence of Subordinated Debt after 2009 Effective Date No. 2, and (B) any
positive quarterly Net Income earned by Borrower during any of Borrower’s fiscal
quarters ending after 2009 Effective Date No. 2, (iii) (x) on and after the 2010
Effective Date through and including the date that is one (1) day prior to the
2011 Effective Date, Twenty-Two Million Dollars ($22,000,000.00), and (y) on and
after the 2011 Effective Date through and including December 31, 2012, Eighteen
Million Five Hundred Thousand Dollars ($18,500,000.00), provided, however, that
such amount shall increase by an amount equal to sixty percent (60.0%) of the
sum of the (A) gross proceeds received by Borrower from the sale of its equity
or the incurrence of convertible or other indebtedness for borrowed money after
the 2011 Effective Date, plus (B) any positive quarterly Net Income earned by
Borrower during any of Borrower’s fiscal quarters ending after the 2011
Effective Date.”
 
 
 
9.  
The Loan Agreement shall be amended by inserting the following new Section
6.7(c) (entitled “Maximum EBITDA Loss”) to appear immediately following the
existing Section 6.7(b) (Tangible Net Worth) thereof:

 
“           (c)           Maximum EBITDA Loss.  Reported as of the last day of
each quarter, the cumulative maximum EBITDA loss for each of the following
periods shall not exceed the following:  (i) [***] Dollars ($[***]) for the
quarter ending March 31, 2013; (ii) [***] Dollars ($[***]) for the six-month
period ending on June 30, 2013; (iii) [***] Dollars ($[***]) for the nine-month
period ending on September 30, 2013; and (iv) [***] Dollars ($[***]) for the
twelve-month period ending on December 31, 2013.”
 
10.  
The Loan Agreement shall be amended by inserting the following new Section 6.11
(entitled “Accounts Receivable”) to appear immediately following the existing
Section 6.10 (Further Assurances) thereof:

 
“           6.11           Accounts Receivable.
 
(a)           Schedules and Documents Relating to Accounts. Borrower shall
deliver to Bank transaction reports and schedules of collections, as provided in
Section 6.2, on Bank’s standard forms; provided, however, that Borrower’s
failure to execute and deliver the same shall not affect or limit Bank’s Lien
and other rights in all of Borrower’s Accounts, nor shall Bank’s failure to
advance or lend against a specific Account affect or limit Bank’s Lien and other
rights therein.  If requested by Bank, Borrower shall furnish Bank with copies
(or, at Bank’s request, originals) of all contracts, orders, invoices, and other
similar documents, and all shipping instructions, delivery receipts, bills of
lading, and other evidence of delivery, for any goods the sale or disposition of
which gave rise to such Accounts.  In addition, Borrower shall deliver to Bank,
on its request, the originals of all instruments, chattel paper, security
agreements, guarantees and other documents and property evidencing or securing
any Accounts, in the same form as received, with all necessary endorsements, and
copies of all credit memos.
 
 
-6-
 
Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
 
 
 
 
 

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(b)           Disputes.  Borrower shall promptly notify Bank of all disputes or
claims relating to Accounts.  Borrower may forgive (completely or partially),
compromise, or settle any Account for less than payment in full, or agree to do
any of the foregoing so long as (i) Borrower does so in good faith, in a
commercially reasonable manner, in the ordinary course of business, in
arm’s-length transactions, and reports the same to Bank in the regular reports
provided to Bank; (ii) no Default or Event of Default has occurred and is
continuing; and (iii) after taking into account all such discounts, settlements
and forgiveness, the total outstanding Advances will not exceed the lesser of
the Revolving Line or the Borrowing Base.
 
(c)           Collection of Accounts.  Borrower shall have the right to collect
all Accounts, unless and until a Default or an Event of Default has occurred and
is continuing.  Bank shall require that Borrower direct Account Debtors to
deliver or transmit all proceeds of Accounts into a lockbox account, or via
electronic deposit capture into a “blocked account” as specified by Bank (either
such account, the “Cash Collateral Account”), pursuant to a blocked account
agreement in form and substance satisfactory to as Bank.  Whether or not an
Event of Default has occurred and is continuing, Borrower shall immediately
deliver all payments on and proceeds of Accounts to the Cash Collateral Account
to be applied to immediately reduce the Obligations; provided that during a
Streamline Period, such payments and proceeds shall be transferred to the
Designated Deposit Account.
 
(d)Returns.  Provided no Event of Default has occurred and is continuing, if any
Account Debtor returns any Inventory to Borrower, Borrower shall promptly
(i) determine the reason for such return, (ii) issue a credit memorandum to the
Account Debtor in the appropriate amount, and (iii) provide a copy of such
credit memorandum to Bank, upon request from Bank.  In the event any attempted
return occurs after the occurrence and during the continuance of any Event of
Default, Borrower shall hold the returned Inventory in trust for Bank,
and immediately notify Bank of the return of the Inventory.  
 
(e) Verification.  Bank may, from time to time, upon the occurrence and during
the continuance of a Default or an Event of Default, verify directly with the
respective Account Debtors the validity, amount and other matters relating to
the Accounts, either in the name of Borrower or Bank or such other name as Bank
may choose, and notify any Account Debtor of Bank’s security interest in such
Account.
 
(f)           No Liability.  Bank shall not be responsible or liable for any
shortage or discrepancy in, damage to, or loss or destruction of, any goods, the
sale or other disposition of which gives rise to an Account, or for any error,
act, omission, or delay of any kind occurring in the settlement, failure to
settle, collection or failure to collect any Account, or for settling any
Account in good faith for less than the full amount thereof, nor shall Bank be
deemed to be responsible for any of Borrower's obligations under any contract or
agreement giving rise to an Account.  Nothing herein shall, however, relieve
Bank from liability for its own gross negligence or willful misconduct.”
 
 
-7-
 
Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
 
 
 
 

--------------------------------------------------------------------------------

 
 
11.  
The Loan Agreement shall be amended by inserting the following new Section 6.12
(entitled “Remittance of Proceeds”) to appear immediately following Section 6.11
(Accounts Receivable) thereof:

 
“           6.12           Remittance of Proceeds.  Except as otherwise provided
in Section 6.11(c), deliver, in kind, all proceeds arising from the disposition
of any Collateral to Bank in the original form in which received by Borrower not
later than the following Business Day after receipt by Borrower, to be applied
to the Obligations (a) prior to an Event of Default, pursuant to the terms of
Section 2.3(g) hereof, and (b) after the occurrence and during the continuance
of an Event of Default, pursuant to the terms of Section 9.4 hereof; provided
that, if no Event of Default has occurred and is continuing, Borrower shall not
be obligated to remit to Bank the proceeds of the sale of worn out or obsolete
Equipment disposed of by Borrower in good faith in an arm’s length transaction
for an aggregate purchase price of Twenty Five Thousand Dollars ($25,000.00) or
less (for all such transactions in any fiscal year).  Borrower agrees that it
will not commingle proceeds of Collateral with any of Borrower’s other funds or
property, but will hold such proceeds separate and apart from such other funds
and property and in an express trust for Bank.  Nothing in this Section limits
the restrictions on disposition of Collateral set forth elsewhere in this
Agreement.”
 
12.  
The Loan Agreement shall be amended by deleting the following provision
appearing as Section 9.4 (Application of Payments and Proceeds) thereof in its
entirety:

 
“           9.4           Application of Payments and Proceeds.  If Borrower
fails to obtain the insurance called for by Section 6.5 or fails to pay any
premium thereon or fails to pay any other amount which Borrower is obligated to
pay under this Agreement or any other Loan Document, Bank may obtain such
insurance or make such payment, and all amounts so paid by Bank are Bank
Expenses and immediately due and payable, bearing interest at the then highest
applicable rate charged by Bank, and secured by the Collateral.  Bank will make
reasonable efforts to provide Borrower with notice of Bank obtaining such
insurance at the time it is obtained or within a reasonable time thereafter.  No
payments by Bank are deemed an agreement to make similar payments in the future
or Bank’s waiver of any Event of Default.”
 
and inserting in lieu thereof the following:
 
“           9.4           Application of Payments and Proceeds.  Pursuant to the
terms of Section 6.11(c), Bank shall have the right to apply in any order any
funds in its possession, whether from Borrower account balances, payments,
proceeds realized as the result of any collection of Accounts or other
disposition of the Collateral, or otherwise, to the Obligations.  Bank shall pay
any surplus to Borrower by credit to the Designated Deposit Account or to other
Persons legally entitled thereto; Borrower shall remain liable to Bank for any
deficiency.  If Bank, directly or indirectly, enters into a deferred payment or
other credit transaction with any purchaser at any sale of Collateral, Bank
shall have the option, exercisable at any time, of either reducing the
Obligations by the principal amount of the purchase price or deferring the
reduction of the Obligations until the actual receipt by Bank of cash therefor.”
 
 
-8-
 
Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
 
 
 
 

--------------------------------------------------------------------------------

 
 
13.  
The Loan Agreement shall be amended by deleting the following definitions
appearing in Section 13.1 thereof:

 
“           “Availability Amount” is (a) the lesser of (i) the Revolving Line or
(ii) the amount available under the Borrowing Base minus (b) the outstanding
principal balance of any Advances.”
 
“           “Borrowing Base” is eighty percent (80.0%) of Eligible Accounts, as
determined by Bank from Borrower’s most recent Borrowing Base Certificate;
provided, however, that Bank may decrease the foregoing percentage in its good
faith business judgment based on events, conditions, contingencies, or risks
which, as determined by Bank, may adversely affect Collateral.”
 
“           “Net Income” means, as calculated for Borrower for any period as at
any date of determination, the net profit (or loss), after provision for taxes,
of Borrower for such period taken as a single accounting period.”
 
 “           “Revolving Line” is an Advance or Advances in an amount equal to
Three Million Dollars ($3,000,000.00).”
 
and inserting in lieu thereof the following:
 
“           “Availability Amount” is (a) the lesser of (i) the Revolving Line or
(ii) the amount available under the Borrowing Base, minus (b) the outstanding
principal balance of any Advances, and minus (c) the outstanding principal
amount of all Term Loan Advances.”
 
“           “Borrowing Base” is eighty percent (80.0%) of Eligible Accounts, as
determined by Bank from Borrower’s most recent Transaction Report; provided,
however, that Bank has the right to decrease the foregoing percentage in its
good faith business judgment to mitigate the impact of events, conditions,
contingencies, or risks which may adversely affect the Collateral or its value.”
 
“           “Net Income” means, as calculated on a consolidated basis for
Borrower and its Subsidiaries for any period as at any date of determination,
the net profit (or loss), after provision for taxes, of Borrower and its
Subsidiaries for such period taken as a single accounting period.”
 
“           “Revolving Line” is an Advance or Advances in an amount equal to Two
Million Dollars ($2,000,000.00).”
 
14.  
The Loan Agreement shall be amended by inserting the following new definitions
to appear alphabetically in Section 13.1 thereof:

 
“           “2013 Effective Date” is March 1, 2013.”
 
“           “Default” means any event which with notice or the passage of time,
or both, would constitute an Event of Default.”
 
 
-9-
 
Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
 
 
 
 

--------------------------------------------------------------------------------

 
 
 
“           “EBITDA” shall mean (a) Net Income, plus (b) net Interest Expense,
plus (c) to the extent deducted in the calculation of Net Income, depreciation
expense and amortization expense, plus (d) income tax expense.”
 
“           “Interest Expense” means for any fiscal period, interest expense
(whether cash or non-cash) determined in accordance with GAAP for the relevant
period ending on such date, including, in any event, interest expense with
respect to any Credit Extension and other Indebtedness of Borrower and its
Subsidiaries, including, without limitation or duplication, all commissions,
discounts, or related amortization and other fees and charges with respect to
letters of credit and bankers’ acceptance financing and the net costs associated
with interest rate swap, cap, and similar arrangements, and the interest portion
of any deferred payment obligation (including leases of all types).”
 
“           “Reserves” means, as of any date of determination, such amounts as
Bank may from time to time establish and revise in its good faith business
judgment, reducing the amount of Advances and other financial accommodations
which would otherwise be available to Borrower (a) to reflect events,
conditions, contingencies or risks which, as determined by Bank in its good
faith business judgment, do or may adversely affect (i) the Collateral or any
other property which is security for the Obligations or its value (including
without limitation any increase in delinquencies of Accounts), (ii) the assets,
business or prospects of Borrower or any Guarantor, or (iii) the security
interests and other rights of Bank in the Collateral (including the
enforceability, perfection and priority thereof); or (b) to reflect Bank's
reasonable belief that any collateral report or financial information furnished
by or on behalf of Borrower or any Guarantor to Bank is or may have been
incomplete, inaccurate or misleading in any material respect; or (c) in respect
of any state of facts which Bank determines constitutes an Event of Default or
may, with notice or passage of time or both, constitute an Event of Default.”
 
“           “Streamline Period” is, on and after the 2013 Effective Date,
provided no Event of Default has occurred and is continuing, the period of time
(a) commencing on the first (1st) day of the month following the month in which
Borrower reports to Bank that Borrower has maintained an Adjusted Quick Ratio of
greater than or equal to 1.50 to 1.00, as confirmed by Bank in its sole
discretion (the “Streamline Threshold”); and (b) ending on the earlier to occur
of (i) an Event of Default, and (ii) the first day thereafter in which Borrower
fails to maintain the Streamline Threshold, as determined by Bank in its sole
discretion. Upon the termination of a Streamline Period, Borrower must maintain
the Streamline Threshold each consecutive day for thirty (30) consecutive days,
as determined by Bank, in its sole discretion, prior to entering into a
subsequent Streamline Period.  Borrower shall give Bank prior-written notice of
Borrower’s intention to enter into any such Streamline Period.”
 
“           “Streamline Threshold” is defined in the definition entitled
“Streamline Period” appearing alphabetically in this Section 13.1.”
 
“           “Transaction Report” is that certain report of transactions and
schedule of collections in the form attached hereto as Exhibit E.”
 
 
 
-10-
 
Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
 
 
 

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15.  
The Borrowing Base Certificate appearing as Exhibit C to the Loan Agreement is
hereby deleted in its entirety.

 
16.  
The Compliance Certificate appearing as Exhibit D to the Loan Agreement is
hereby replaced with the Compliance Certificate attached as Exhibit 1 hereto.

 
17.  
The Transaction Report appearing as Exhibit 2 hereto is hereby added to the Loan
Agreement as Exhibit E.

 
B.  
Waivers.

 
 
1.  
Bank hereby waives Borrower’s existing default under the Loan Agreement by
virtue of Borrower’s failure to comply with the Tangible Net Worth covenant set
forth in Section 6.7(b) thereof as of the quarter ending December 31,
2012.  Bank’s waiver of Borrower’s compliance of said affirmative covenant shall
apply only to the foregoing specific period.

 
4. FEES.  Borrower shall pay to Bank a modification fee equal to Five Thousand
Dollars ($5,000.00), which fee shall be due on the date hereof and shall be
deemed fully earned as of the date hereof.  Borrower shall also reimburse Bank
for all legal fees and expenses incurred in connection with this amendment to
the Existing Loan Documents.
 
5. RATIFICATION OF PERFECTION CERTIFICATE.  Borrower hereby ratifies, confirms
and reaffirms, all and singular, the terms and disclosures contained in a
certain Perfection Certificate dated as of December 28, 2011, between Borrower
and Bank (the “Perfection Certificate”), and acknowledges, confirms and agrees
the disclosures and information Borrower provided to Bank in the Perfection
Certificate have not changed, as of the date hereof.
 
6. CONSISTENT CHANGES.  The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
 
7. RATIFICATION OF LOAN DOCUMENTS.  Borrower hereby ratifies, confirms, and
reaffirms all terms and conditions of all security or other collateral granted
to Bank and confirms that the indebtedness secured thereby includes, without
limitation, the Obligations.
 
8. NO DEFENSES OF BORROWER.  Borrower hereby acknowledges and agrees that
Borrower has no offsets, defenses, claims, or counterclaims against Bank with
respect to the Obligations, or otherwise, and that if Borrower now has, or ever
did have, any offsets, defenses, claims, or counterclaims against Bank, whether
known or unknown, at law or in equity, all of them are hereby expressly WAIVED
and Borrower hereby RELEASES Bank from any liability thereunder.
 
9. CONTINUING VALIDITY.  Borrower understands and agrees that in modifying the
existing Obligations, Bank is relying upon Borrower’s representations,
warranties, and agreements, as set forth in the Existing Loan Documents.  Except
as expressly modified pursuant to this Loan Modification Agreement, the terms of
the Existing Loan Documents remain unchanged and in full force and
effect.  Bank’s agreement to modifications to the existing Obligations pursuant
to this Loan Modification Agreement in no way shall obligate Bank to make any
future modifications to the Obligations.  Nothing in this Loan Modification
Agreement shall constitute a satisfaction of the Obligations.  It is the
intention of Bank and Borrower to retain as liable parties all makers of
Existing Loan Documents, unless the party is expressly released by Bank in
writing.  No maker will be released by virtue of this Loan Modification
Agreement.
 
 
 
-11-
 
 
Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
 
 

--------------------------------------------------------------------------------

 
 
 
10. CONFIDENTIALITY.  Bank may use confidential information for the development
of databases, reporting purposes, and market analysis, so long as such
confidential information is aggregated and anonymized prior to distribution
unless otherwise expressly permitted by Borrower.  The provisions of the
immediately preceding sentence shall survive the termination of the Loan
Agreement.
 
11. COUNTERSIGNATURE.  This Loan Modification Agreement shall become effective
only when it shall have been executed by Borrower and Bank.
 
[The remainder of this page is intentionally left blank]
 
 
 
-12-
 
 
Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
 
 
 

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This Loan Modification Agreement is executed as of the date first written above.
 
BORROWER:
 
CHYRON CORPORATION
 
By: /s/ Jerry Kieliszak
 
Name: Jerry Kieliszak
 
Title: SVP & CFO, Treasurer and Corporate Secretary
 

 
BANK:
 
SILICON VALLEY BANK
 
By: /s/ A. Bonnie Ryan Arrante
 
Name: A. Bonnie Ryan Arrante
 
Title: Vice President
 

-13-
 
Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
 

 
 
 

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EXHIBIT 1

EXHIBIT D - COMPLIANCE CERTIFICATE

 
TO:           SILICON VALLEY
BANK                                                                                           Date:                                           
 
FROM:  CHYRON CORPORATION
 
The undersigned authorized officer of CHYRON CORPORATION (“Borrower”) certifies
that under the terms and conditions of the Loan and Security Agreement between
Borrower and Bank (the “Agreement”), (1) Borrower is in complete compliance for
the period ending _______________ with all required covenants except as noted
below, (2) there are no Events of Default, (3) all representations and
warranties in the Agreement are true and correct in all material respects on
this date except as noted below; provided, however, that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof; and
provided, further that those representations and warranties expressly referring
to a specific date shall be true, accurate and complete in all material respects
as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed
all required tax returns and reports, and Borrower has timely paid all foreign,
federal, state and local taxes, assessments, deposits and contributions owed by
Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of
the Agreement, and (5) no Liens have been levied or claims made against Borrower
or any of its Subsidiaries relating to unpaid employee payroll or benefits of
which Borrower has not previously provided written notification to
Bank.  Attached are the required documents supporting the certification.  The
undersigned certifies that these are prepared in accordance with GAAP
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes.  The undersigned acknowledges that no
borrowings may be requested at any time or date of determination that Borrower
is not in compliance with any of the terms of the Agreement, and that compliance
is determined not just at the date this certificate is delivered.  Capitalized
terms used but not otherwise defined herein shall have the meanings given them
in the Agreement.
 
Please indicate compliance status by circling Yes/No under “Complies” column.
 
Reporting Covenant
Required
Complies
     
Monthly financial statements with
Compliance Certificate
Monthly within 30 days
Yes   No
Annual financial statement (CPA Audited)
FYE within 90 days
Yes   No
Transaction Reports
Monthly within 30 days and with each request for an Advance
Yes   No
A/R & A/P Agings
Monthly within 20 days
Yes   No
Board-approved projections
FYE within 60 days, and contemporaneously with any updates or changes thereto
Yes   No
 

 
 
-14-
 
Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
 
 
 
 
 
 

--------------------------------------------------------------------------------

 

 
 
Financial Covenant
Required
Actual
Complies
       
Maintain at all times:
             
Adjusted Quick Ratio (to be tested on the last day of each month)
1.20:1.0
____:1.0
Yes   No
Maximum EBITDA Loss (to be reported on the last day of each quarter)
$*
$________
Yes   No

 
*As set forth in Section 6.7(c) of the Agreement.
 
The following financial covenant analyses and information set forth in Schedule
1 attached hereto are true and accurate as of the date of this Certificate.
 
The following are the exceptions with respect to the certification above:  (If
no exceptions exist, state “No exceptions to note.”)
 
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 

 
CHYRON CORPORATION
 
 
By:                                                       
Name:                                                       
Title:                                                       
 
BANK USE ONLY
 
Received by:                                                       
authorized signer
Date:                                                       
 
Verified:                                                       
authorized signer
Date:                                                       
 

-15-
 
Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
 
 
 
 

--------------------------------------------------------------------------------

 
 
 
Compliance Status:                                         Yes     No
 
 
 
 
-16-
 
Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
 
 
 
 

--------------------------------------------------------------------------------

 
 
 
 
 
Schedule 1 to Compliance Certificate
 
Financial Covenants of Borrower

In the event of a conflict between this Schedule and the Loan Agreement, the
terms of the Loan Agreement shall govern.

Dated:           ____________________

I.           Adjusted Quick Ratio (Section 6.7(a))
 
Required:                      1.20:1.00
 
Actual:                                ____:1.00
 

  A.  
Aggregate value of the unrestricted cash of Borrower
  $       B.  
Aggregate value of the net billed accounts receivable of Borrower
  $       C.  
Quick Assets (the sum of lines A through B)
  $       D.  
Aggregate value of Obligations to Bank
  $       E.  
Aggregate value of liabilities of Borrower (including all Indebtedness) that
mature within one (1) year and current portion of Subordinated Debt permitted by
Bank to be paid by Borrower
  $       F.  
Current Liabilities (the sum of lines D and E)
  $       G  
Deferred Revenue
 
  $       H  
Line F minus line G
  $          
 
       

 
 
 
-17-
 
Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
 

 
 
 

--------------------------------------------------------------------------------

 
 

I.  
Adjusted Quick Ratio (line C divided by line H)
       

 
 
 
 
 
 
 
 
 
Is line I equal to or greater than 1.20:1.00?
 
_______  No, not in
compliance                                                                                                _______  
Yes, in compliance
 

 

 
II.           Maximum EBITDA Loss (Section 6.7(c))
 
Required:                      $_________ (as set forth in Section 6.7(c) of the
Agreement)
 

 
Actual:                                $_________
 

 
_______                        No, not in
compliance                                                                                     _______                        Yes,
in compliance
 
 
 
 
-18-
 
Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
 
 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT 2

EXHIBIT E – TRANSACTION REPORT

[to be provided by Bank]

 
 
-19-
 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.