LOAN AND SECURITY AGREEMENT

 

THIS LOAN AND SECURITY AGREEMENT (this "Agreement") dated as of June 19, 2008
(the "Effective Date") between SILICON VALLEY BANK, a California corporation
with a loan production office located at535 Fifth Avenue, 27th Floor, New York,
New York 10017 ("Bank"), and CHYRON CORPORATION, a New York corporation
("Borrower"), provides the terms on which Bank shall lend to Borrower and
Borrower shall repay Bank.  The parties agree as follows:

1                ACCOUNTING AND OTHER TERMS

Accounting terms not defined in this Agreement shall be construed following
GAAP. Calculations and determinations must be made following GAAP. Capitalized
terms not otherwise defined in this Agreement shall have the meanings set forth
in Section 13.  All other terms contained in this Agreement, unless otherwise
indicated, shall have the meaning provided by the Code to the extent such terms
are defined therein.

2              LOAN AND TERMS OF PAYMENT

 2.1          Promise to Pay.  Borrower hereby unconditionally promises to pay
Bank the outstanding principal amount of all Credit Extensions and accrued and
unpaid interest thereon as and when due in accordance with this Agreement.

 2.1.1                Revolving Advances.

(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.

(b)                Termination; Repayment.  The Revolving Line terminates on the
Revolving Line Maturity Date, when the principal amount of all Advances, the
unpaid interest thereon, and all other Obligations relating to the Revolving
Line shall be immediately due and payable.

2.1.2       Letters of Credit Sublimit.

(a)           As part of the Revolving Line, Bank shall issue or have issued
Letters of Credit for Borrower's account.  Such aggregate amounts utilized
hereunder shall at all times reduce the amount otherwise available for Advances
under the Revolving Line.  The aggregate amount available to be used for the
issuance of Letters of Credit may not exceed (i) the lesser of (A) the Revolving
Line or (B) the Borrowing Base, minus (ii) the outstanding principal amount of
any Advances (including any amounts used for Cash Management Services and the
face amount of any outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit and any Letter of Credit Reserve) and minus (iii)
the FX Reduction Amount.  If, on the Revolving Line Maturity Date, there are any
outstanding Letters of Credit, then on such date Borrower shall provide to Bank
cash collateral in an amount equal to 105% of the face amount of all such
Letters of Credit plus all interest, fees, and costs due or to become due in
connection therewith (as estimated by Bank in its good faith business judgment),
to secure all of the Obligations relating to said Letters of Credit.  All
Letters of Credit shall be in form and substance acceptable to Bank in its sole
discretion and shall be subject to the terms and conditions of Bank's standard
Application and Letter of Credit Agreement (the "Letter of Credit
Application").  Borrower agrees to execute any further documentation in
connection with the Letters of Credit as Bank may reasonably request.  Borrower
further agrees to be bound by the regulations and interpretations of the issuer
of any Letters of Credit guarantied by Bank and opened for Borrower's account or
by Bank's interpretations of any Letter of Credit issued by Bank for Borrower's
account, and Borrower understands and agrees that Bank shall not be liable for
any error, negligence, or mistake, whether of omission or commission, in
following Borrower's instructions or those contained in the Letters of Credit or
any modifications, amendments, or supplements thereto.

(b)           The obligation of Borrower to immediately reimburse Bank for
drawings made under Letters of Credit shall be absolute, unconditional, and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement, such Letters of Credit, and the Letter of Credit Application. 

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(c)                Borrower may request that Bank issue a Letter of Credit
payable in a Foreign Currency.  If a demand for payment is made under any such
Letter of Credit, Bank shall treat such demand as an Advance to Borrower of the
equivalent of the amount thereof (plus fees and charges in connection therewith
such as wire, cable, SWIFT or similar charges) in Dollars at the then-prevailing
rate of exchange in San Francisco, California, for sales of the Foreign Currency
for transfer to the country issuing such Foreign Currency.

(d)           To guard against fluctuations in currency exchange rates, upon the
issuance of any Letter of Credit payable in a Foreign Currency, Bank shall
create a reserve (the "Letter of Credit Reserve") under the Revolving Line in an
amount equal to ten percent (10.0%) of the face amount of such Letter of
Credit.  The amount of the Letter of Credit Reserve may be adjusted by Bank from
time to time to account for fluctuations in the exchange rate.  The availability
of funds under the Revolving Line shall be reduced by the amount of such Letter
of Credit Reserve for as long as such Letter of Credit remains outstanding.

2.1.3.      Foreign Exchange Sublimit.  As part of the Revolving Line, Borrower
may enter into foreign exchange contracts with Bank under which Borrower commits
to purchase from or sell to Bank a specific amount of Foreign Currency (each, a
"FX Forward Contract") on a specified date (the "Settlement Date").  FX Forward
Contracts shall have a Settlement Date of at least one (1) FX Business Day after
the contract date and shall be subject to a reserve of ten percent (10%) of each
outstanding FX Forward Contract in a maximum aggregate amount equal to One
Hundred Fifty Thousand Dollars ($150,000.00) (such maximum shall be the "FX
Reserve").  The aggregate amount of FX Forward Contracts at any one time may not
exceed ten (10) times the amount of the FX Reserve.  The amount otherwise
available for Credit Extensions under the Revolving Line shall be reduced by an
amount equal to ten percent (10%) of each outstanding FX Forward Contract (the
"FX Reduction Amount").  Any amounts needed to fully reimburse Bank will be
treated as Advances under the Revolving Line and will accrue interest at the
interest rate applicable to Advances.

 2.1.4       Cash Management Services Sublimit.  Borrower may use up to One
Million Five Hundred Dollars ($1,500,000.00), inclusive of Credit Extensions
relating to Sections 2.1.3 and 2.1.4 of the Revolving Line for Bank's cash
management services which may include merchant services, direct deposit of
payroll, business credit card, and check cashing services identified in Bank's
various cash management services agreements (collectively, the "Cash Management
Services").  Any amounts Bank pays on behalf of Borrower for any Cash Management
Services will be treated as Advances under the Revolving Line and will accrue
interest at the interest rate applicable to Advances.

 2.1.5.                Equipment Advances.

(a)                Availability.  Subject to the terms and conditions of this
Agreement, during the Draw Period, Bank shall make advances (each, an "Equipment
Advance" and, collectively, "Equipment Advances") not exceeding the Equipment
Line.  Equipment Advances may only be used to finance Eligible Equipment
purchased within one hundred twenty days (120) days (determined based upon the
applicable invoice date of such Eligible Equipment) before the date of each
Equipment Advance.  Notwithstanding the foregoing, the initial Equipment Advance
(the "Initial Equipment Advance") hereunder may be used to reimburse Borrower
for Eligible Equipment purchased on or after January 1, 2008, provided that such
Initial Equipment Advance is made within ten (10) days of the Effective Date. 
All Eligible Equipment must have been new when purchased by Borrower, except for
such Eligible Equipment that is disclosed in writing to Bank by Borrower, and
that Bank in its sole discretion has agreed to finance, prior to being financed
by Bank.  No Equipment Advance may exceed one hundred percent (100.0%) of the
total invoice for Eligible Equipment (excluding taxes, shipping, warranty
charges, freight discounts and installation expenses relating to such Eligible
Equipment except to the extent such are allowed to be financed pursuant hereto
as Other Equipment).  Unless otherwise agreed to by Bank, not more than
twenty-five percent (25%) of the proceeds of the Equipment Line shall be used to
finance Other Equipment.  Each Equipment Advance must be in an amount equal to
the lesser of Two Hundred Thousand Dollars ($200,000.00) or the amount that has
not yet been drawn under the Equipment Line.  After repayment, no Equipment
Advance may be reborrowed.

(b)                Repayment.  Each Equipment Advance shall be payable in (i)
thirty-six (36) consecutive equal monthly installments of principal plus (ii)
monthly payments of accrued interest at the rate set forth in Section
2.3(a)(ii), beginning on the Payment Date of the month following the Funding
Date of such Equipment Advance and continuing on the Payment Date of each month
thereafter.  All unpaid principal and interest on each Equipment Advance shall
be due and payable in full on the applicable Equipment Maturity Date.

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(c)                Prepayment Upon an Event of Loss.  Borrower shall bear the
risk of any loss, theft, destruction, or damage of or to the Financed
Equipment.  If, during the term of this Agreement, any item of Financed
Equipment becomes obsolete or is lost, stolen, destroyed, damaged beyond repair,
rendered permanently unfit for use, or seized by a governmental authority for
any reason for a period ending beyond the Equipment Maturity Date with respect
to such Financed Equipment (an "Event of Loss"), then, within ten (10) days
following such Event of Loss, Borrower shall (i) pay to Bank on account of the
Obligations all accrued interest to the date of the prepayment, plus all
outstanding principal owing with respect to the Financed Equipment subject to
the Event of Loss; or (ii) if no Event of Default has occurred and is
continuing, at Borrower's option, repair or replace any Financed Equipment
subject to an Event of Loss provided the repaired or replaced Financed Equipment
is of equal or like value to the Financed Equipment subject to an Event of Loss
and provided further that Bank has a first priority perfected security interest
in such repaired or replaced Financed Equipment.  Any partial prepayment of an
Equipment Advance paid by Borrower on account of an Event of Loss shall be
applied to prepay amounts owing for such Equipment Advance in inverse order of
maturity.

 2.2                Overadvances.  If, at any time, the sum of (a) the
outstanding principal amount of any Advances (including any amounts used for
Cash Management Services), plus (b) the face amount of any outstanding Letters
of Credit (including drawn but unreimbursed Letters of Credit and any Letter of
Credit Reserve), plus (c) the FX Reduction Amount exceeds the lesser of either
the Revolving Line or the Borrowing Base, Borrower shall immediately pay to Bank
in cash such excess.

 2.3          Payment of Interest on the Credit Extensions.

(a)           Interest Rate.

(i)                Advances.  Subject to Section 2.3(b), the principal amount
outstanding under the Revolving Line shall accrue interest at a floating per
annum rate equal to the greater of (A) one and one half of one percentage points
(1.50%) above the Prime Rate and (B) six and one half of one percent (6.50%),
which interest shall be payable monthly in accordance with Section 2.3(f) below.

(ii)                Equipment Advances.  Subject to Section 2.3(b), the
principal amount outstanding for each Equipment Advance shall accrue interest at
a floating per annum rate equal to the greater of (A) two percentage points
(2.0%) above the Prime Rate and (B) seven percent (7.0%), which interest shall
be payable monthly in accordance with Section 2.3(f) below.

(b)           Default Rate.  Immediately upon the occurrence and during the
continuance of an Event of Default, Obligations shall bear interest at a rate
per annum which is five percentage points (5.0%) above the rate that is
otherwise applicable thereto (the "Default Rate").  Payment or acceptance of the
increased interest rate provided in this Section 2.3(b) is not a permitted
alternative to timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of Bank.

(c)                Adjustment to Interest Rate.  Changes to the interest rate of
any Credit Extension based on changes to the Prime Rate shall be effective on
the effective date of any change to the Prime Rate and to the extent of any such
change.

(d)           360-Day Year.  Interest shall be computed on the basis of a
360-day year for the actual number of days elapsed.

(e)           Debit of Accounts.  Bank may debit any of Borrower's deposit
accounts, including the Designated Deposit Account, for principal and interest
payments or any other amounts Borrower owes Bank when due.  These debits shall
not constitute a set-off.

(f)                Payments.  Unless otherwise provided, interest is payable
monthly on the Payment Date of each month.  Payments of principal and/or
interest received after 12:00 p.m. Eastern time are considered received at the
opening of business on the next Business Day.  When a payment is due on a day
that is not a Business Day, the payment is due the next Business Day and
additional fees or interest, as applicable, shall continue to accrue.

2.4          Fees.  Borrower shall pay to Bank: 

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(a)                Revolving Line Commitment Fee.  A fully earned,
non‑refundable Revolving Line commitment fee of Seven Thousand Five Hundred
Dollars ($7,500.00), on the Effective Date;

(b)                Equipment Line Commitment Fee.  A fully earned,
non‑refundable Equipment Line commitment fee of Six Thousand Two Hundred Fifty
Dollars ($6,250.00), on the Effective Date;

(c)           Letter of Credit Fee.  Bank's customary fees and expenses for the
issuance or renewal of Letters of Credit, upon the issuance, each anniversary of
the issuance, and the renewal of such Letter of Credit by Bank; and

(d)           Bank Expenses.  All Bank Expenses (including reasonable attorneys'
fees and expenses, plus expenses, for documentation and negotiation of this
Agreement) incurred through and after the Effective Date, when due.

3                CONDITIONS OF LOANS

 3.1                Conditions Precedent to Initial Credit Extension.  Bank's
obligation to make the initial Credit Extension is subject to the condition
precedent that Borrower shall consent to or shall have delivered, in form and
substance satisfactory to Bank, such documents, and completion of such other
matters, as Bank may reasonably deem necessary or appropriate, including,
without limitation:

(a)           duly executed original signatures to the Loan Documents to which
it is a party;

(b)           its Operating Documents and a good standing certificate of
Borrower certified by the Secretary of State of the State of New York as of a
date no earlier than thirty (30) days prior to the Effective Date;

(c)           duly executed original signatures to the completed Borrowing
Resolutions for Borrower;

(d)                Intentionally omitted;

(e)           certified copies, dated as of a recent date, of financing
statement searches, as Bank shall request, accompanied by written evidence
(including any UCC termination statements) that the Liens indicated in any such
financing statements either constitute Permitted Liens or have been or, in
connection with the initial Credit Extension, will be terminated or released;

(f)            the Perfection Certificate executed by Borrower;

(g)           a legal opinion of Borrower's counsel dated as of the Effective
Date together with the duly executed original signatures thereto;

(h)           evidence satisfactory to Bank that the insurance policies required
by Section 6.5 hereof are in full force and effect, together with appropriate
evidence showing lender loss payable and/or additional insured clauses or
endorsements in favor of Bank; and

(i)            payment of the fees and Bank Expenses then due as specified in
Section 2.4 hereof.

3.2                Conditions Precedent to all Credit Extensions.  Bank's
obligations to make each Credit Extension, including the initial Credit
Extension, is subject to the following:

(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

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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

(c)           in Bank's reasonable discretion, there has not been any material
impairment in the general affairs, management, results of operation, financial
condition or the prospect of repayment of the Obligations, or there has not been
any material adverse deviation by Borrower from the most recent business plan of
Borrower presented to and accepted by Bank.

3.3                Covenant to Deliver.

Borrower agrees to deliver to Bank each item required to be delivered to Bank
under this Agreement as a condition to any Credit Extension.  Borrower expressly
agrees that a Credit Extension made prior to the receipt by Bank of any such
item shall not constitute a waiver by Bank of Borrower's obligation to deliver
such item, and any such Credit Extension in the absence of a required item shall
be made in Bank's sole discretion.

3.4                Procedures for Borrowing.

(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.

(b)                Equipment Advances.  Subject to the prior satisfaction of all
other applicable conditions to the making of an Equipment Advance set forth in
this Agreement, to obtain an Equipment Advance, Borrower must notify Bank (which
notice shall be irrevocable) by electronic mail or facsimile no later than 12:00
p.m. Eastern time one (1) Business Day before the proposed Funding Date.  The
notice shall be a Payment/Advance Form, must be signed by a Responsible Officer
or designee, and shall include a copy of the invoice for the Equipment being
financed.  If Borrower satisfies the conditions of each Equipment Advance, Bank
shall disburse such Equipment Advance by transfer to the Designated Deposit
Account.

4                CREATION OF SECURITY INTEREST

 4.1          Grant of Security Interest.  Borrower hereby grants Bank, to
secure the payment and performance in full of all of the Obligations, a
continuing security interest in, and pledges to Bank, the Collateral, wherever
located, whether now owned or hereafter acquired or arising, and all proceeds
and products thereof.  Borrower represents, warrants, and covenants that the
security interest granted herein is and shall at all times continue to be a
first priority perfected security interest in the Collateral (subject only to
Permitted Liens that may have superior priority to Bank's Lien under this
Agreement).  If Borrower shall acquire a commercial tort claim, Borrower shall
promptly notify Bank in a writing signed by Borrower of the general details
thereof and grant to Bank in such writing a security interest therein and in the
proceeds thereof, all upon the terms of this Agreement, with such writing to be
in form and substance reasonably satisfactory to Bank.

If this Agreement is terminated, Bank's Lien in the Collateral shall continue
until the Obligations (other than inchoate indemnity obligations) are repaid in
full in cash.  Upon payment in full in cash of the Obligations and at such time
as Bank's obligation to make Credit Extensions has terminated, Bank shall, at
Borrower's sole cost and expense, release its Liens in the Collateral and all
rights therein shall revert to Borrower.

4.2                Authorization to File Financing Statements.  Borrower hereby
authorizes Bank to file financing statements, without notice to Borrower, with
all appropriate jurisdictions to perfect or protect Bank's interest or rights
hereunder, including a notice that any disposition of the Collateral, by either
Borrower or any other Person, shall be deemed to violate the rights of Bank
under the Code. 

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5                REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants as follows:

5.1          Due Organization, Authorization; Power and Authority.  Borrower and
each of its Subsidiaries are duly existing and in good standing as Registered
Organizations in their respective jurisdictions of formation and are qualified
and licensed to do business and are in good standing in any jurisdiction in
which the conduct of their business or their ownership of property requires that
they be qualified except where the failure to do so could not reasonably be
expected to have a material adverse effect on Borrower's business.  In
connection with this Agreement, Borrower has delivered to Bank a completed
certificate signed by Borrower (the "Perfection Certificate").  Borrower
represents and warrants to Bank that (a) Borrower's exact legal name is that
indicated on the Perfection Certificate and on the signature page hereof;
(b) Borrower is an organization of the type and is organized in the jurisdiction
set forth in the Perfection Certificate; (c) the Perfection Certificate
accurately sets forth Borrower's organizational identification number or
accurately states that Borrower has none; (d) the Perfection Certificate
accurately sets forth Borrower's place of business, or, if more than one, its
chief executive office as well as Borrower's mailing address (if different than
its chief executive office); (e) Borrower (and each of its predecessors) has
not, in the past five (5) years, changed its jurisdiction of formation,
organizational structure or type, or any organizational number assigned by its
jurisdiction; and (f) all other information set forth on the Perfection
Certificate pertaining to Borrower and each of its Subsidiaries is accurate and
complete (it being understood and agreed that Borrower may from time to time
update certain information in the Perfection Certificate after the Effective
Date to the extent permitted by one or more specific provisions in this
Agreement).  If Borrower is not now a Registered Organization but later becomes
one, Borrower shall promptly notify Bank of such occurrence and provide Bank
with Borrower's organizational identification number.

The execution, delivery and performance by Borrower of the Loan Documents to
which it is a party have been duly authorized, and do not (i) conflict with any
of Borrower's organizational documents, (ii) contravene, conflict with,
constitute a default under or violate any material Requirement of Law,
(iii) contravene, conflict or violate any applicable order, writ, judgment,
injunction, decree, determination or award of any Governmental Authority by
which Borrower or any of its Subsidiaries or any of their property or assets may
be bound or affected, (iv) require any action by, filing, registration, or
qualification with, or Governmental Approval from, any Governmental Authority
(except such Governmental Approvals which have already been obtained and are in
full force and effect),or (v) constitute an event of default under any material
agreement by which Borrower is bound.  Borrower is not in default under any
agreement to which it is a party or by which it is bound in which the default
could reasonably be expected to have a material adverse effect on Borrower's
business.

 5.2                Collateral.  Borrower has good title to, has rights in, and
the power to transfer each item of the Collateral upon which it purports to
grant a Lien hereunder, free and clear of any and all Liens except Permitted
Liens.  Borrower has no deposit accounts other than the deposit accounts with
Bank, the deposit accounts, if any, described in the Perfection Certificate
delivered to Bank in connection herewith, or of which Borrower has given Bank
notice and taken such actions as are necessary to give Bank a perfected security
interest therein.  The Accounts are bona fide, existing obligations of the
Account Debtors.

The Collateral is not in the possession of any third party bailee (such as a
warehouse) except as otherwise provided in the Perfection Certificate.  None of
the components of the Collateral shall be maintained at locations other than as
provided in the Perfection Certificate or as permitted pursuant to Section 7.2. 
In the event that Borrower, after the date hereof, intends to store or otherwise
deliver any portion of the Collateral to a bailee, then Borrower will first
receive the written consent of Bank and such bailee must execute and deliver a
bailee agreement in form and substance satisfactory to Bank in its sole
discretion.

All Financed Equipment is new, except for such Financed Equipment that has been
disclosed in writing to Bank by Borrower as "used" and that Bank, in its sole
discretion, has agreed to finance.  All Inventory is in all material respects of
good and marketable quality, free from material defects.

Except as noted on the Perfection Certificate, Borrower is not a party to, nor
is bound by, any material license or other material agreement with respect to
which Borrower is the licensee (a) that prohibits or otherwise restricts
Borrower from granting a security interest in Borrower's interest in such
license or agreement or any other property, or (b) for which a default under or
termination of could interfere with the Bank's right to sell any Collateral. 
Borrower shall provide written notice to Bank within ten (10) days of entering
or becoming bound by any such license or agreement (other than over-the-counter
software that is commercially available to the public). 

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Borrower shall take such steps as Bank requests to obtain the consent of, or
waiver by, any person whose consent or waiver is necessary for (x) all such
licenses or agreements to be deemed "Collateral" and for Bank to have a security
interest in it that might otherwise be restricted or prohibited by law or by the
terms of any such license or agreement, whether now existing or entered into in
the future, and (y) Bank to have the ability in the event of a liquidation of
any Collateral to dispose of such Collateral in accordance with Bank's rights
and remedies under this Agreement and the other Loan Documents.

 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,
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.

 5.4                Litigation.  There are no actions or proceedings pending or,
to the knowledge of the Responsible Officers, threatened in writing by or
against Borrower or any of its Subsidiaries involving more than Two Hundred
Thousand Dollars ($200,000.00).

 5.5          No Material Deviation in Financial Statements.  All consolidated
financial statements for Borrower and any of its Subsidiaries delivered to Bank
fairly present in all material respects Borrower's consolidated financial
condition and Borrower's consolidated results of operations.  There has not been
any material deterioration in Borrower's consolidated financial condition since
the date of the most recent financial statements submitted to Bank.

 5.6                Solvency.  The fair salable value of Borrower's assets
(including goodwill minus disposition costs) exceeds the fair value of its
liabilities; Borrower is not left with unreasonably small capital after the
transactions in this Agreement; and Borrower is able to pay its debts (including
trade debts) as they mature.

5.7                Regulatory Compliance.  Borrower is not an "investment
company" or a company "controlled" by an "investment company" under the
Investment Company Act of 1940, as amended.  Borrower is not engaged as one of
its important activities in extending credit for margin stock (under Regulations
X, T and U of the Federal Reserve Board of Governors).  Borrower has complied in
all material respects with the Federal Fair Labor Standards Act.  Neither
Borrower nor any of its Subsidiaries is a "holding company" or an "affiliate" of
a "holding company" or a "subsidiary company" of a "holding company" as each
term is defined and used in the Public Utility Holding Company Act of 2005. 
Borrower has not violated any laws, ordinances or rules, the violation of which
could reasonably be expected to have a material adverse effect on its business. 
None of Borrower's or any of its Subsidiaries' properties or assets has been
used by Borrower or any Subsidiary or, to the best of Borrower's knowledge, by
previous Persons, in disposing, producing, storing, treating, or transporting
any hazardous substance other than legally.  Borrower and each of its
Subsidiaries have obtained all consents, approvals and authorizations of, made
all declarations or filings with, and given all notices to, all Government
Authorities that are necessary to continue their respective businesses as
currently conducted.

 5.8                Subsidiaries; Investments.  Borrower does not own any stock,
partnership interest or other equity securities except for Permitted
Investments.

 5.9          Tax Returns and Payments; Pension Contributions.  Borrower 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.  Borrower may defer payment of any contested
taxes, provided that Borrower (a) in good faith contests its obligation to pay
the taxes by appropriate proceedings promptly and diligently instituted and
conducted, (b) notifies Bank in writing of the commencement of, and any material
development in, the proceedings, (c) posts bonds or takes any other steps
required to prevent the governmental authority levying such contested taxes from
obtaining a Lien upon any of the Collateral that is other than a "Permitted
Lien".  Borrower is unaware of any claims or adjustments proposed for any of
Borrower's prior tax years which could result in additional taxes becoming due
and payable by Borrower.  Borrower has paid all amounts necessary to fund all

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present pension, profit sharing and deferred compensation plans in accordance
with their terms, and Borrower has not withdrawn from participation in, and has
not permitted partial or complete termination of, or permitted the occurrence of
any other event with respect to, any such plan which could reasonably be
expected to result in any liability of Borrower, including any liability to the
Pension Benefit Guaranty Corporation or its successors or any other governmental
agency.

 5.10        Use of Proceeds.  Borrower shall use the proceeds of the Credit
Extensions solely as working capital, to purchase Eligible Equipment, and to
fund its general business requirements and not for personal, family, household
or agricultural purposes.

 5.11        Full Disclosure.  No written representation, warranty or other
statement of Borrower in any certificate or written statement given to Bank, as
of the date such representation, warranty, or other statement was made, taken
together with all such written certificates and written statements given to
Bank, contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained in the certificates or
statements not misleading (it being recognized by Bank that the projections and
forecasts provided by Borrower in good faith and based upon reasonable
assumptions are not viewed as facts and that actual results during the period or
periods covered by such projections and forecasts may differ from the projected
or forecasted results).

6                AFFIRMATIVE COVENANTS

Borrower shall do all of the following:

 6.1                Government Compliance. 

(a)           Maintain its and all its Subsidiaries' legal existence and good
standing in their respective jurisdictions of formation and maintain
qualification in each jurisdiction in which the failure to so qualify would
reasonably be expected to have a material adverse effect on Borrower's business
or operations.  Borrower shall comply, and have each Subsidiary comply, with all
laws, ordinances and regulations to which it is subject, noncompliance with
which could have a material adverse effect on Borrower's business.

(b)           Obtain all of the Governmental Approvals necessary for the
performance by Borrower of its obligations under the Loan Documents to which it
is a party and the grant of a security interest to Bank in all of its property. 
Borrower shall promptly provide copies of any such obtained Governmental
Approvals to Bank.

 6.2                Financial Statements, Reports, Certificates.

(a)           Deliver to Bank:  (i) as soon as available, but no later than
thirty (30) days after the last day of each month, a company prepared
consolidated balance sheet and income statement covering Borrower's and each of
its Subsidiary's operations for such month certified by a Responsible Officer
and in a form acceptable to Bank; (ii) as soon as available, but no later than
ninety (90) days after the last day of Borrower's fiscal year, audited
consolidated financial statements prepared under GAAP, consistently applied,
together with an unqualified opinion on the financial statements from an
independent certified public accounting firm acceptable to Bank in its
reasonable discretion; (iii) within five (5) business days of delivery, copies
of all statements, reports and notices made available to Borrower's security
holders or to any holders of Subordinated Debt to the extent such notices are
not publicly available; (iv) a prompt report of any legal actions pending or
threatened against Borrower or any of its Subsidiaries that could result in
damages or costs to Borrower or any of its Subsidiaries of Two Hundred Thousand
Dollars ($200,000.00) or more; and (v) budgets, sales projections, operating
plans as Borrower may prepare in the normal course and Bank shall from time to
time request in its good faith judgment, and other financial information
reasonably requested by Bank.

(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).

(c)           Within thirty (30) days after the last day of each month, deliver
to Bank with the monthly financial statements, a duly completed Compliance
Certificate signed by a Responsible Officer setting forth calculations showing
compliance with the financial covenants set forth in this Agreement.

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(d)           Allow Bank to audit Borrower's Collateral at Borrower's expense. 
Such audits shall be conducted no more often than once every twelve (12) months
unless an Event of Default has occurred and is continuing.  Borrower hereby
agrees that the first such audit shall be conducted within ninety (90) days of
the Effective Date.

 6.3                Inventory; Returns.  Keep all Inventory in good and
marketable condition, free from material defects.  Returns and allowances
between Borrower and its Account Debtors shall follow Borrower's customary
practices as they exist at the Effective Date.  Borrower must promptly notify
Bank of all returns, recoveries, disputes and claims that involve more than One
Hundred Thousand Dollars ($100,000.00).

6.4          Taxes; Pensions.  Timely file, and require each of its Subsidiaries
to timely file, all required tax returns and reports and timely pay, and require
each of its Subsidiaries to timely file, all foreign, federal, state and local
taxes, assessments, deposits and contributions owed by Borrower and each of its
Subsidiaries, except for deferred payment of any taxes contested pursuant to the
terms of Section 5.9 hereof, and shall deliver to Bank, on demand, appropriate
certificates of Borrower attesting to such payments, and pay all amounts
necessary to fund all present pension, profit sharing and deferred compensation
plans in accordance with their terms.

 

6.5                Insurance.  Keep its business and the Collateral insured for
risks and in amounts standard for companies in Borrower's industry and location
and as Bank may reasonably request.  Insurance policies shall be in a form, with
companies, and in amounts that are satisfactory to Bank.  All property policies
relating to Collateral shall have a lender's loss payable endorsement showing
Bank as the sole loss payee and waive subrogation against Bank, and all
liability policies shall show, or have endorsements showing, Bank as an
additional insured.  All policies (or the loss payable and additional insured
endorsements) shall provide that the insurer must give Bank at least twenty (20)
days notice before canceling, amending, or declining to renew its policy.  At
Bank's request, Borrower shall deliver certified copies of policies and evidence
of all premium payments.  Except as otherwise provided in Section 2.1.5(c),
proceeds payable under any policy shall, at Bank's option, be payable to Bank on
account of the Obligations.  Notwithstanding the foregoing, (a) so long as no
Event of Default has occurred and is continuing, Borrower shall have the option
of applying the proceeds of any casualty policy up to Two Hundred Fifty Thousand
Dollars ($250,000.00) with respect to any loss, but not exceeding Five Hundred
Thousand Dollars ($500,000.00) in the aggregate for all losses under all
casualty policies in any one year, toward the replacement or repair of destroyed
or damaged property; provided that any such replaced or repaired property
(i) shall be of equal or like value as the replaced or repaired Collateral and
(ii) shall be deemed Collateral in which Bank has been granted a first priority
security interest, and (b) after the occurrence and during the continuance of an
Event of Default, all proceeds payable under such casualty policy shall, at the
option of Bank, be payable to Bank on account of the Obligations.  If Borrower
fails to obtain insurance as required under this Section 6.5 or to pay any
amount or furnish any required proof of payment to third persons and Bank, Bank
may make all or part of such payment or obtain such insurance policies required
in this Section 6.5, and take any action under the policies Bank deems prudent.

6.6                Operating Accounts.

(a)           Maintain its and its Subsidiaries' and its parent's primary
operating and other deposit accounts with Bank.  In addition, all of Borrower's
and its Subsidiaries' and its parent's cash or securities in excess of that
amount used for Borrower's and such Subsidiary's and parent's current operations
shall be maintained with Bank or Bank's affiliates, provided, however, Borrower
may maintain accounts with other financial institutions or brokerages so long as
the aggregate balance of such funds does not exceed Three Hundred Fifty Thousand
Dollars ($350,000.00) (the "Non-SVB Accounts").  Except for funds held in
Non-SVB Accounts, any Guarantor shall maintain all depository, operating and
securities accounts with Bank, or SVB Securities. 

(b)           Provide Bank five (5) days prior written notice before
establishing any Collateral Account at or with any bank or financial institution
other than Bank or Bank's Affiliates.  For each Collateral Account that Borrower
or Guarantor at any time maintains, Borrower shall cause the applicable bank or
financial institution (other than Bank) at or with which any Collateral Account
is maintained to execute and deliver a Control Agreement or other appropriate
instrument with respect to such Collateral Account to perfect Bank's Lien in
such Collateral Account in accordance with the terms hereunder, which Control
Agreement may not be terminated without the prior written consent of Bank.  The
provisions of the previous sentence shall not apply to the Non-SVB Accounts, or
deposit accounts exclusively used for payroll, payroll taxes and other employee
wage and benefit payments to or for the benefit of Borrower's employees and
identified to Bank by Borrower as such.

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6.7                Financial Covenants.  Borrower shall maintain at all times,
to be tested as of the last day of each month, unless otherwise noted:

(a)           Adjusted Quick Ratio.  An Adjusted Quick Ratio of at least 1.25 to
1.0.

(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 Six Million Five
Hundred Thousand Dollars ($6,500,000.00),  Notwithstanding the foregoing, the
amount required in the prior sentence shall increase by an amount equal to sixty
percent (60.0%) of the sum of the (i) gross proceeds received by Borrower from
the sale of its equity or the incurrence of Subordinated Debt after the
Effective Date, and (ii) any positive quarterly Net Income earned by Borrower
during any of Borrower's fiscal quarters ending after the Effective Date.

6.8                Protection of Intellectual Property Rights.  Borrower shall
use commercially reasonable efforts to:  (a) protect, defend and maintain the
validity and enforceability of its intellectual property; (b) promptly advise
Bank in writing of material infringements of its intellectual property; and (c)
not allow any intellectual property material to Borrower's business to be
abandoned, forfeited or dedicated to the public without Bank's written consent,
which consent shall not be unreasonably withheld.

6.9                Litigation Cooperation.  From the date hereof and continuing
through the termination of this Agreement, make available to Bank, without
expense to Bank, Borrower and its officers, employees and agents and Borrower's
books and records, to the extent that Bank may deem them reasonably necessary to
prosecute or defend any third-party suit or proceeding instituted by or against
Bank with respect to any Collateral or relating to Borrower.

6.10        Further Assurances.  Execute any further instruments and take
further action as Bank reasonably requests to perfect or continue Bank's Lien in
the Collateral or to effect the purposes of this Agreement.  Deliver to Bank,
within five (5) days after the same are sent or received, copies of all
correspondence, reports, documents and other filings with any Governmental
Authority regarding compliance with or maintenance of Governmental Approvals or
Requirements of Law or that could reasonably be expected to have a material
effect on any of the Governmental Approvals or otherwise on the operations of
Borrower or any of its Subsidiaries.

7                NEGATIVE COVENANTS

Borrower shall not do any of the following without Bank's prior written consent,
which consent shall not be unreasonably withheld:

 7.1                Dispositions.  Convey, sell, lease, transfer or otherwise
dispose of (collectively, "Transfer"), or permit any of its Subsidiaries to
Transfer, all or any part of its business or property, except for Transfers
(a) of Inventory in the ordinary course of business; (b) of worn‑out or obsolete
Equipment that does not constitute Financed Equipment; (c) in connection with
Permitted Liens and Permitted Investments; and (d) of non-exclusive licenses for
the use of the property of Borrower or its Subsidiaries in the ordinary course
of business.

 7.2          Changes in Business, Management, Ownership, or Business
Locations.  (a) Engage in or permit any of its Subsidiaries to engage in any
business other than the businesses currently engaged in by Borrower and such
Subsidiary, as applicable, or reasonably related thereto; (b) liquidate or
dissolve; or (c) enter into any transaction or series of related transactions in
which the stockholders of Borrower who were not stockholders immediately prior
to the first such transaction own more than forty percent (40.0%) of the voting
stock of Borrower immediately after giving effect to such transaction or related
series of such transactions (other than by the sale of Borrower's equity
securities in a public offering or to venture capital investors so long as
Borrower identifies to Bank the venture capital investors prior to the closing
of the transaction).  Borrower shall not, without at least ten (10) days prior
written notice to Bank: (1) add any new offices or business locations, including
warehouses (unless such new offices or business locations contain less than
Fifty Thousand Dollars ($50,000.00) in Borrower's assets or property), (2)
change its jurisdiction of organization, (3) change its organizational structure
or type, (4) change its legal name, or (5) change any organizational number (if
any) assigned by its jurisdiction of organization.  Notwithstanding the
foregoing, Borrower may, without Bank's consent, maintain demo units at customer
sites in the ordinary course of business consistent with Borrower's existing
practices.

 7.3          Mergers or Acquisitions.  Merge or consolidate, or permit any of
its Subsidiaries to merge or consolidate, with any other Person, or acquire, or
permit any of its Subsidiaries to acquire, all or substantially all of

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the capital stock or property of another Person.  A Subsidiary may merge or
consolidate into another Subsidiary or into Borrower.

 7.4                Indebtedness.  Create, incur, assume, or be liable for any
Indebtedness, or permit any Subsidiary to do so, other than Permitted
Indebtedness.

 7.5                Encumbrance.  Create, incur, allow, or suffer any Lien on
any of its property, or assign or convey any right to receive income, including
the sale of any Accounts, or permit any of its Subsidiaries to do so, except for
Permitted Liens, permit any Collateral not to be subject to the first priority
security interest granted herein, or enter into any agreement, document,
instrument or other arrangement (except with or in favor of Bank) with any
Person which directly or indirectly prohibits or has the effect of prohibiting
Borrower or any Subsidiary from assigning, mortgaging, pledging, granting a
security interest in or upon, or encumbering any of Borrower's or any
Subsidiary's intellectual property, except as is otherwise permitted in Section
7.1 hereof and the definition of "Permitted Liens" herein.

7.6                Maintenance of Collateral Accounts.  Maintain any Collateral
Account except pursuant to the terms of Section 6.6(b) hereof.

 7.7                Distributions; Investments.  (a) Pay any dividends or make
any distribution or payment or redeem, retire or purchase any capital stock; or
(b) directly or indirectly make any Investment other than Permitted Investments,
or permit any of its Subsidiaries to do so.

 7.8                Transactions with Affiliates.  Directly or indirectly enter
into or permit to exist any material transaction with any Affiliate of Borrower,
except for transactions that are in the ordinary course of Borrower's business,
upon fair and reasonable terms that are no less favorable to Borrower than would
be obtained in an arm's length transaction with a non-affiliated Person.

 7.9                Subordinated Debt.  (a) Make or permit any payment on any
Subordinated Debt, except under the terms of the subordination, intercreditor,
or other similar agreement to which such Subordinated Debt is subject, or
(b) amend any provision in any document relating to the Subordinated Debt which
would increase the amount thereof or adversely affect the subordination thereof
to Obligations owed to Bank.

 7.10                Compliance.  Become an "investment company" or a company
controlled by an "investment company", under the Investment Company Act of 1940,
as amended, or undertake as one of its important activities extending credit to
purchase or carry margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System), or use the proceeds of any Credit
Extension for that purpose; fail to meet the minimum funding requirements of
ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA,
to occur; fail to comply with the Federal Fair Labor Standards Act or violate
any other law or regulation, if the violation could reasonably be expected to
have a material adverse effect on Borrower's business, or permit any of its
Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from
participation in, permit partial or complete termination of, or permit the
occurrence of any other event with respect to, any present pension, profit
sharing and deferred compensation plan which could reasonably be expected to
result in any liability of Borrower, including any liability to the Pension
Benefit Guaranty Corporation or its successors or any other governmental agency.

8              EVENTS OF DEFAULT

Any one of the following shall constitute an event of default (an "Event of
Default") under this Agreement:

 8.1          Payment Default.  Borrower fails to (a) make any payment of
principal or interest on any Credit Extension on its due date, or (b) pay any
other Obligations within three (3) Business Days after such Obligations are due
and payable (which three (3) Business Day grace period shall not apply to
payments due on the Maturity Date).  During the cure period, the failure to cure
the payment default is not an Event of Default (but no Credit Extension will be
made during the cure period);

 8.2                Covenant Default. 

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(a) Borrower fails or neglects to perform any obligation in Sections 6.2, 6.4,
6.5, 6.6, 6.7, or violates any covenant in Section 7; or

(b) Borrower fails or neglects to perform, keep, or observe any other term,
provision, condition, covenant or agreement contained in this Agreement or any
Loan Documents, and as to any default (other than those specified in this
Section 8) under such other term, provision, condition, covenant or agreement
that can be cured, has failed to cure the default within ten (10) days after the
occurrence thereof; provided, however, that if the default cannot by its nature
be cured within the ten (10) day period or cannot after diligent attempts by
Borrower be cured within such ten (10) day period, and such default is likely to
be cured within a reasonable time, then Borrower shall have an additional period
(which shall not in any case exceed thirty (30) days) to attempt to cure such
default, and within such reasonable time period the failure to cure the default
shall not be deemed an Event of Default (but no Credit Extensions shall be made
during such cure period).  Grace periods provided under this section shall not
apply, among other things, to financial covenants or any other covenants set
forth in subsection (a) above;

 8.3          Material Adverse Change.  A Material Adverse Change occurs;

 8.4                Attachment; Levy; Restraint on Business. 

(a) (i) The service of process seeking to attach, by trustee or similar process,
any funds of Borrower or of any entity under control of Borrower (including a
Subsidiary) on deposit with Bank or any Bank Affiliate, or (ii) a notice of
lien, levy, or assessment is filed against any of Borrower's assets by any
government agency, and the same under subclauses (i) and (ii) hereof are not,
within ten (10) days after the occurrence thereof, discharged or stayed (whether
through the posting of a bond or otherwise); provided, however, no Credit
Extensions shall be made during any ten (10) day cure period; and

(b) (i) any material portion of Borrower's assets is attached, seized, levied
on, or comes into possession of a trustee or receiver, or (ii) any court order
enjoins, restrains, or prevents Borrower from conducting any part of its
business;

 8.5                Insolvency  (a) Borrower is unable to pay its debts
(including trade debts) as they become due or otherwise becomes insolvent; (b)
Borrower begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is
begun against Borrower and not dismissed or stayed within thirty (30) days (but
no Credit Extensions shall be made while of any of the conditions described in
clause (a) exist and/or until any Insolvency Proceeding is dismissed);

 8.6          Other Agreements.  There is a default in any agreement to which
Borrower or any Guarantor is a party with a third party or parties resulting in
a right by such third party or parties, whether or not exercised, to accelerate
the maturity of any Indebtedness in an amount in excess of Two Hundred Thousand
Dollars ($200,000.00) or that could have a material adverse effect on Borrower's
or any Guarantor's business; 

 8.7                Judgments.  One or more judgments, orders, or decrees for
the payment of money in an amount, individually or in the aggregate, of at least
Two Hundred Thousand Dollars ($200,000.00) (not covered by independent
third-party insurance as to which liability has been accepted by such insurance
carrier) shall be rendered against Borrower and shall remain unsatisfied,
unvacated, or unstayed for a period of thirty (30) days after the entry thereof
(provided that no Credit Extensions will be made prior to the satisfaction,
vacation, or stay of such judgment, order, or decree);

8.8                Misrepresentations.  Borrower or any Person acting for
Borrower makes any representation, warranty, or other statement now or later in
this Agreement, any Loan Document or in any writing delivered to Bank or to
induce Bank to enter this Agreement or any Loan Document, and such
representation, warranty, or other statement is incorrect in any material
respect when made;

 8.9                Subordinated Debt.  A default or breach occurs under any
agreement between Borrower and any creditor of Borrower that signed a
subordination, intercreditor, or other similar agreement with Bank, or any
creditor that has signed such an agreement with Bank breaches any terms of such
agreement;

8.10                Guaranty.  (a) Any guaranty of any Obligations terminates or
ceases for any reason to be in full force and effect; (b) any Guarantor does not
perform any obligation or covenant under any guaranty of the Obligations; (c)
any circumstance described in Sections 8.3, 8.4, 8.5, 8.7, or 8.8. occurs with
respect to any Guarantor, or (d) the death, liquidation, winding up, or
termination of existence of any Guarantor; or (e) (i) a

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material impairment in the perfection or priority of Bank's Lien in the
collateral provided by Guarantor or in the value of such collateral or (ii) a
material adverse change in the general affairs, management, results of
operation, condition (financial or otherwise) or the prospect of repayment of
the Obligations occurs with respect to any Guarantor; or

8.11                Governmental Approvals.  Any Governmental Approval shall
have been (a) revoked, rescinded, suspended, modified in an adverse manner or
not renewed in the ordinary course for a full term or (b) subject to any
decision by a Governmental Authority that designates a hearing with respect to
any applications for renewal of any of such Governmental Approval or that could
result in the Governmental Authority taking any of the actions described in
clause (a) above, and such decision or such revocation, rescission, suspension,
modification or non-renewal (i) has, or could reasonably be expected to have, a
Material Adverse Change, or (ii) adversely affects the legal qualifications of
Borrower or any of its Subsidiaries to hold such Governmental Approval in any
applicable jurisdiction and such revocation, rescission, suspension,
modification or non-renewal could reasonably be expected to affect the status of
or legal qualifications of Borrower or any of its Subsidiaries to hold any
Governmental Approval in any other jurisdiction.

9              BANK'S RIGHTS AND REMEDIES

9.1          Rights and Remedies.  While an Event of Default occurs and
continues Bank may, without notice or demand, do any or all of the following:

(a)           declare all Obligations immediately due and payable (but if an
Event of Default described in Section 8.5 occurs all Obligations are immediately
due and payable without any action by Bank);

(b)           stop advancing money or extending credit for Borrower's benefit
under this Agreement or under any other agreement between Borrower and Bank;

(c)           demand that Borrower (i) deposits cash with Bank in an amount
equal to the aggregate amount of any Letters of Credit remaining undrawn, as
collateral security for the repayment of any future drawings under such Letters
of Credit, and Borrower shall forthwith deposit and pay such amounts, and (ii)
pay in advance all Letter of Credit fees scheduled to be paid or payable over
the remaining term of any Letters of Credit;

(d)                terminate any FX Forward Contracts;

(e)           settle or adjust disputes and claims directly with Account Debtors
for amounts on terms and in any order that Bank considers advisable, notify any
Person owing Borrower money of Bank's security interest in such funds, and
verify the amount of such account; 

(f)            make any payments and do any acts it considers necessary or
reasonable to protect the Collateral and/or its security interest in the
Collateral.  Borrower shall assemble the Collateral if Bank requests and make it
available as Bank designates.  Bank may enter premises where the Collateral is
located, take and maintain possession of any part of the Collateral, and pay,
purchase, contest, or compromise any Lien which appears to be prior or superior
to its security interest and pay all expenses incurred. Borrower grants Bank a
license to enter and occupy any of its premises, without charge, to exercise any
of Bank's rights or remedies;

(g)           apply to the Obligations any (i) balances and deposits of Borrower
it holds, or (ii) any amount held by Bank owing to or for the credit or the
account of Borrower;

(h)           ship, reclaim, recover, store, finish, maintain, repair, prepare
for sale, advertise for sale, and sell the Collateral.  Bank is hereby granted a
non-exclusive, royalty-free license or other right to use, without charge,
Borrower's labels, patents, copyrights, mask works, rights of use of any name,
trade secrets, trade names, trademarks, service marks, and advertising matter,
or any similar property as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and, in
connection with Bank's exercise of its rights under this Section, Borrower's
rights under all licenses and all franchise agreements inure to Bank's benefit;

(i)            place a "hold" on any account maintained with Bank and/or deliver
a notice of exclusive control, any entitlement order, or other directions or
instructions pursuant to any Control Agreement or similar agreements providing
control of any Collateral;

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(j)            demand and receive possession of Borrower's Books; and

(k)           exercise all rights and remedies available to Bank under the Loan
Documents or at law or equity, including all remedies provided under the Code
(including disposal of the Collateral pursuant to the terms thereof).

 9.2          Power of Attorney.  Borrower hereby irrevocably appoints Bank as
its lawful attorney-in-fact, exercisable upon the occurrence and during the
continuance of an Event of Default, to:  (a) endorse Borrower's name on any
checks or other forms of payment or security; (b) sign Borrower's name on any
invoice or bill of lading for any Account or drafts against Account Debtors; (c)
settle and adjust disputes and claims about the Accounts directly with Account
Debtors, for amounts and on terms Bank determines reasonable; (d) make, settle,
and adjust all claims under Borrower's insurance policies; (e) pay, contest or
settle any Lien, charge, encumbrance, security interest, and adverse claim in or
to the Collateral, or any judgment based thereon, or otherwise take any action
to terminate or discharge the same; and (f) transfer the Collateral into the
name of Bank or a third party as the Code permits.  Borrower hereby appoints
Bank as its lawful attorney-in-fact to sign Borrower's name on any documents
necessary to perfect or continue the perfection of Bank's security interest in
the Collateral regardless of whether an Event of Default has occurred until all
Obligations have been satisfied in full and Bank is under no further obligation
to make Credit Extensions hereunder.  Bank's foregoing appointment as Borrower's
attorney in fact, and all of Bank's rights and powers, coupled with an interest,
are irrevocable until all Obligations have been fully repaid and performed and
Bank's obligation to provide Credit Extensions terminates.

 9.3                Protective Payments.  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.

9.4                Application of Payments and Proceeds.  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.  If an Event of Default has occurred and
is continuing, Bank may apply 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 in such order as Bank shall determine in its sole discretion.  Any
surplus shall be paid to Borrower or other Persons legally entitled thereto;
Borrower shall remain liable to Bank for any deficiency.  If Bank, in its good
faith business judgment, 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.

 9.5          Bank's Liability for Collateral.  So long as Bank complies with
reasonable banking practices regarding the safekeeping of the Collateral in the
possession or under the control of Bank, Bank shall not be liable or responsible
for: (a) the safekeeping of the Collateral; (b) any loss or damage to the
Collateral; (c) any diminution in the value of the Collateral; or (d) any act or
default of any carrier, warehouseman, bailee, or other Person.  Borrower bears
all risk of loss, damage or destruction of the Collateral.

 9.6          No Waiver; Remedies Cumulative.  Bank's failure, at any time or
times, to require strict performance by Borrower of any provision of this
Agreement or any other Loan Document shall not waive, affect, or diminish any
right of Bank thereafter to demand strict performance and compliance herewith or
therewith.  No waiver hereunder shall be effective unless signed by Bank and
then is only effective for the specific instance and purpose for which it is
given.  Bank's rights and remedies under this Agreement and the other Loan
Documents are cumulative.  Bank has all rights and remedies provided under the
Code, by law, or in equity.  Bank's exercise of one right or remedy is not an
election, and Bank's waiver of any Event of Default is not a continuing waiver. 
Bank's delay in exercising any remedy is not a waiver, election, or
acquiescence. 

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9.7          Demand Waiver.  Borrower waives demand, notice of default or
dishonor, notice of payment and nonpayment, notice of any default, nonpayment at
maturity, release, compromise, settlement, extension, or renewal of accounts,
documents, instruments, chattel paper, and guarantees held by Bank on which
Borrower is liable.

10                NOTICES

All notices, consents, requests, approvals, demands, or other communication by
any party to this Agreement or any other Loan Document must be in writing and
shall be deemed to have been validly served, given, or delivered: (a) upon the
earlier of actual receipt and three (3) Business Days after deposit in the U.S.
mail, first class, registered or certified mail return receipt requested, with
proper postage prepaid; (b) upon transmission, when sent by electronic mail or
facsimile transmission; (c) one (1) Business Day after deposit with a reputable
overnight courier with all charges prepaid; or (d) when delivered, if
hand-delivered by messenger, all of which shall be addressed to the party to be
notified and sent to the address, facsimile number, or email address indicated
below.  Bank or Borrower may change its mailing or electronic mail address or
facsimile number by giving the other party written notice thereof in accordance
with the terms of this Section 10.

If to Borrower:     

Chyron Corporation
                5 Hub Drive
                Melville, New York  11747
                Attn:  Jerry Kieliszak Senior Vice President and CFO
                Fax:  (631) 845-2058
                Email:  jerryk@chyron.com

with a copy to:     

Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C.
                One Financial Center
                Boston, Massachusetts  02110
                Attn:   Scott Samuels
                Fax:    (617) 542-2241
                Email:  ssamuels@mintz.com

If to Bank:             

Silicon Valley Bank
                535 Fifth Avenue, 27th Floor
                New York, New York  10017
                Attn: Mr. Michael Moretti
                Fax:  (212) 688-5994
                Email:  MMoretti@svb.com

with a copy to:     

Riemer & Braunstein, LLP
                Three Center Plaza
                Boston, Massachusetts  02108
                Attn:  David A. Ephraim, Esquire
                Fax:   (617) 880-3456
                Email: DEphraim@riemerlaw.com

11           CHOICE OF LAW, VENUE, JURY TRIAL WAIVER AND JUDICIAL REFERENCE

New York law governs the Loan Documents without regard to principles of
conflicts of law.  Borrower and Bank each submit to the exclusive jurisdiction
of the State and Federal courts in New York; provided, however, that nothing in
this Agreement shall be deemed to operate to preclude Bank from bringing suit or
taking other legal action in any other jurisdiction to realize on the Collateral
or any other security for the Obligations, or to enforce a judgment or other
court order in favor of Bank.  Borrower expressly submits and consents in
advance to such jurisdiction in any action or suit commenced in any such court,
and Borrower hereby waives any objection that it may have based upon lack of
personal jurisdiction, improper venue, or forum non conveniens and hereby
consents to the granting of such legal or equitable relief as is deemed
appropriate by such court.  Borrower hereby waives personal service of the
summons, complaints, and other process issued in such action or suit and agrees
that service of such summons, complaints, and other process may be made by
registered or certified mail addressed to Borrower at the address set forth in
Section 10 of this Agreement and that service so made shall be deemed completed
upon

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the earlier to occur of Borrower's actual receipt thereof or three (3) days
after deposit in the U.S. mails, proper postage prepaid.

 TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND BANK EACH WAIVE
THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR
BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION,
INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A
MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.  EACH PARTY
HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

12                GENERAL PROVISIONS

 12.1                Successors and Assigns.  This Agreement binds and is for
the benefit of the successors and permitted assigns of each party.  Borrower may
not assign this Agreement or any rights or obligations under it without Bank's
prior written consent (which may be granted or withheld in Bank's discretion). 
Bank has the right, without the consent of or notice to Borrower, to sell,
transfer, negotiate, or grant participation in all or any part of, or any
interest in, Bank's obligations, rights, and benefits under this Agreement and
the other Loan Documents.

 12.2                Indemnification.  Borrower agrees to indemnify, defend and
hold Bank and its directors, officers, employees, agents, attorneys, or any
other Person affiliated with or representing Bank (each, an "Indemnified
Person") harmless against:  (a) all obligations, demands, claims, and
liabilities (collectively, "Claims") asserted by any other party in connection
with the transactions contemplated by the Loan Documents; and (b) all losses or
Bank Expenses incurred, or paid by such Indemnified Person from, following, or
arising from transactions between Bank and Borrower (including reasonable
attorneys' fees and expenses), except for Claims and/or losses directly caused
by such Indemnified Person's gross negligence or willful misconduct.

 12.3        Time of Essence.  Time is of the essence for the performance of all
Obligations in this Agreement.

 12.4                Severability of Provisions.  Each provision of this
Agreement is severable from every other provision in determining the
enforceability of any provision.

12.5                Correction of Loan Documents.  Bank may correct patent
errors and fill in any blanks in this Agreement and the other Loan Documents
consistent with the agreement of the parties.

 12.6                Amendments in Writing; Integration.  All amendments to this
Agreement must be in writing and signed by both Bank and Borrower.  This
Agreement and the Loan Documents represent the entire agreement about this
subject matter and supersede prior negotiations or agreements.  All prior
agreements, understandings, representations, warranties, and negotiations
between the parties about the subject matter of this Agreement and the Loan
Documents merge into this Agreement and the Loan Documents.

12.7                Counterparts.  This Agreement may be executed in any number
of counterparts and by different parties on separate counterparts, each of
which, when executed and delivered, are an original, and all taken together,
constitute one Agreement.

 12.8        Survival.  All covenants, representations and warranties made in
this Agreement continue in full force until this Agreement has terminated
pursuant to its terms and all Obligations (other than inchoate indemnity
obligations and any other obligations which, by their terms, are to survive the
termination of this Agreement) have been satisfied.  The obligation of Borrower
in Section 12.2 to indemnify Bank shall survive until the statute of limitations
with respect to such claim or cause of action shall have run.

12.9                Confidentiality.  In handling any confidential information,
Bank shall exercise the same degree of care that it exercises for its own
proprietary information, but disclosure of information may be made: (a) to
Bank's Subsidiaries or Affiliates; (b) to prospective transferees or purchasers
of any interest in the Credit Extensions (provided, however, Bank shall use
commercially reasonable efforts to obtain such prospective transferee's or
purchaser's agreement to the terms of this provision); (c) as required by law,
regulation, subpoena, or other order; (d) to Bank's regulators or as otherwise
required in connection with Bank's examination or audit; (e) as Bank considers
appropriate in exercising remedies under the Loan Documents; and (f) to
third-party service providers of Bank so long as such service providers have
executed a confidentiality agreement with Bank with terms no less

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restrictive than those contained herein.  Confidential information does not
include information that either: (i) is in the public domain or in Bank's
possession when disclosed to Bank, or becomes part of the public domain after
disclosure to Bank; or (ii) is disclosed to Bank by a third party, if Bank does
not know that the third party is prohibited from disclosing the information.

Bank may use confidential information for any purpose, including, without
limitation, for the development of client databases, reporting purposes, and
market analysis, so long as Bank does not disclose Borrower's identity or the
identity of any person associated with Borrower unless otherwise expressly
permitted by this Agreement.  The provisions of the immediately preceding
sentence shall survive the termination of this Agreement.

 12.10      Right of Set Off.   Borrower hereby grants to Bank, a lien, security
interest and right of set off as security for all Obligations to Bank, whether
now existing or hereafter arising upon and against all deposits, credits,
collateral and property, now or hereafter in the possession, custody,
safekeeping or control of Bank or any entity under the control of Bank
(including a Bank subsidiary) or in transit to any of them.  At any time after
the occurrence and during the continuance of an Event of Default, without demand
or notice, Bank may set off the same or any part thereof and apply the same to
any liability or obligation of Borrower even though unmatured and regardless of
the adequacy of any other collateral securing the Obligations.  ANY AND ALL
RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY
OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF
SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER ARE
HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

13                DEFINITIONS

 

13.1                Definitions.  As used in this Agreement, the following terms
have the following meanings:

"Account" is any "account" as defined in the Code with such additions to such
term as may hereafter be made, and includes, without limitation, all accounts
receivable and other sums owing to Borrower.

"Account Debtor" is any "account debtor" as defined in the Code with such
additions to such term as may hereafter be made.

"Adjusted Quick Ratio" is a ratio of (a) Quick Assets to (b) Current Liabilities
minus Deferred Revenue.

"Advance" or "Advances" means an advance (or advances) under the Revolving Line.

"Affiliate" of any Person is a Person that owns or controls directly or
indirectly the Person, any Person that controls or is controlled by or is under
common control with the Person, and each of that Person's senior executive
officers, directors, partners and, for any Person that is a limited liability
company, that Person's managers and members.

"Agreement" is defined in the preamble hereof.

"Availability Amount" is (a) the lesser of (i) the Revolving Line or (ii) the
amount available under the Borrowing Base minus (b) the amount of all
outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit) plus an amount equal to the Letter of Credit Reserve, minus (c) the FX
Reduction Amount, minus (d) any amounts used for Cash Management Services, and
minus (e) the outstanding principal balance of any Advances.

"Bank" is defined in the preamble hereof.

"Bank Expenses" are all audit fees and expenses, costs, and expenses (including
reasonable attorneys' fees and expenses) for preparing, amending, negotiating,
administering, defending and enforcing the Loan Documents (including, without
limitation, those incurred in connection with appeals or Insolvency Proceedings)
or otherwise incurred with respect to Borrower.

"Borrower" is defined in the preamble hereof.

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"Borrower's Books" are all Borrower's books and records including ledgers,
federal and state tax returns, records regarding Borrower's assets or
liabilities, the Collateral, business operations or financial condition, and all
computer programs or storage or any equipment containing such information.

"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.

"Borrowing Base Certificate" is that certain certificate in the form attached
hereto as Exhibit C.

"Borrowing Resolutions" are, with respect to any Person, those resolutions
adopted by such Person's board of directors and delivered by such Person to Bank
approving the Loan Documents to which such Person is a party and the
transactions contemplated thereby, together with a certificate executed by its
secretary on behalf of such Person certifying that (a) such Person has the
authority to execute, deliver, and perform its obligations under each of the
Loan Documents to which it is a party, (b) that attached as Exhibit A to such
certificate is a true, correct, and complete copy of the resolutions then in
full force and effect authorizing and ratifying the execution, delivery, and
performance by such Person of the Loan Documents to which it is a party, (c) the
name(s) of the Person(s) authorized to execute the Loan Documents on behalf of
such Person, together with a sample of the true signature(s) of such Person(s),
and (d) that Bank may conclusively rely on such certificate unless and until
such Person shall have delivered to Bank a further certificate canceling or
amending such prior certificate.

"Business Day" is any day that is not a Saturday, Sunday or a day on which Bank
is closed.

"Cash Equivalents" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States or any agency or any State
thereof having maturities of not more than one (1) year from the date of
acquisition; (b) commercial paper maturing no more than one (1) year after its
creation and having the highest rating from either Standard & Poor's Ratings
Group or Moody's Investors Service, Inc.; (c) Bank's certificates of deposit
issued maturing no more than one (1) year after issue; and (d) money market
funds at least ninety-five percent (95%) of the assets of which constitute Cash
Equivalents of the kinds described in clauses (a) through (c) of this
definition.

 "Cash Management Services" is defined in Section 2.1.4.

"Claims" is defined in Section 12.2.

"Code" is the Uniform Commercial Code, as the same may, from time to time, be
enacted and in effect in the State of New York; provided, that, to the extent
that the Code is used to define any term herein or in any Loan Document and such
term is defined differently in different Articles or Divisions of the Code, the
definition of such term contained in Article or Division 9 shall govern;
provided further, that in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection, or priority of, or remedies with
respect to, Bank's Lien on any Collateral is governed by the Uniform Commercial
Code in effect in a jurisdiction other than the State of New York, the term
"Code" shall mean the Uniform Commercial Code as enacted and in effect in such
other jurisdiction solely for purposes of the provisions thereof relating to
such attachment, perfection, priority, or remedies and for purposes of
definitions relating to such provisions.

"Collateral" is any and all properties, rights and assets of Borrower described
on Exhibit A.

"Collateral Account" is any Deposit Account, Securities Account, or Commodity
Account.

"Commodity Account" is any "commodity account" as defined in the Code with such
additions to such term as may hereafter be made.

"Compliance Certificate" is that certain certificate in the form attached hereto
as Exhibit D.

"Contingent Obligation" is, for any Person, any direct or indirect liability,
contingent or not, of that Person for (a) any indebtedness, lease, dividend,
letter of credit or other obligation of another such as an obligation directly
or indirectly guaranteed, endorsed, co‑made, discounted or sold with recourse by
that Person, or for which that Person is directly or indirectly liable; (b) any
obligations for undrawn letters of credit for the account of that Person; and
(c) all obligations from any interest rate, currency or commodity swap
agreement, interest rate cap or

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collar agreement, or other agreement or arrangement designated to protect a
Person against fluctuation in interest rates, currency exchange rates or
commodity prices; but "Contingent Obligation" does not include endorsements in
the ordinary course of business.  The amount of a Contingent Obligation is the
stated or determined amount of the primary obligation for which the Contingent
Obligation is made or, if not determinable, the maximum reasonably anticipated
liability for it determined by the Person in good faith; but the amount may not
exceed the maximum of the obligations under any guarantee or other support
arrangement.

"Control Agreement" is any control agreement entered into among the depository
institution at which Borrower maintains a Deposit Account or the securities
intermediary or commodity intermediary at which Borrower maintains a Securities
Account or a Commodity Account, Borrower, and Bank pursuant to which Bank
obtains control (within the meaning of the Code) over such Deposit Account,
Securities Account, or Commodity Account.

"Credit Extension" is any Advance, Equipment Advance, Letter of Credit, FX
Forward Contract, amount utilized for Cash Management Services, or any other
extension of credit by Bank for Borrower's benefit.

"Current Liabilities" are all obligations and liabilities of Borrower to Bank,
plus, without duplication, the aggregate amount of Borrower's Total Liabilities
that mature within one (1) year.

"Default Rate" is defined in Section 2.3(b).

"Deferred Revenue" is all amounts received or invoiced in advance of performance
under contracts and not yet recognized as revenue.

"Deposit Account" is any "deposit account" as defined in the Code with such
additions to such term as may hereafter be made.

"Designated Deposit Account" is Borrower's deposit account, account number
3300433681, maintained with Bank.

"Dollars," "dollars" and "$" each mean lawful money of the United States.

"Draw Period" is the period of time from the Effective Date through the earlier
to occur of (a) May 31, 2009, or (b) an Event of Default.

"Effective Date" is defined in the preamble of this Agreement.

"Eligible Accounts" means Accounts which arise in the ordinary course of
Borrower's business that meet all Borrower's representations and warranties in
Section 5.3.  Bank reserves the right at any time after the Effective Date to
adjust any of the criteria set forth below and to establish new criteria in its
good faith business judgment.  Unless Bank agrees otherwise in writing, Eligible
Accounts shall not include:

(a)                Accounts that the Account Debtor has not paid within ninety
(90) days of invoice date regardless of invoice payment period terms;

(b)                Accounts owing from an Account Debtor, fifty percent (50%) or
more of whose Accounts have not been paid within ninety (90) days of invoice
date;

(c)                Accounts owing from an Account Debtor which does not have its
principal place of business in the United States;

(d)                Accounts billed and/or payable outside of the United States;

(e)                Accounts owing from an Account Debtor to the extent that
Borrower is indebted or obligated in any manner to the Account Debtor (as
creditor, lessor, supplier or otherwise - sometimes called "contra" accounts,
accounts payable, customer deposits or credit accounts), with the exception of
customary credits, adjustments and/or discounts given to an Account Debtor by
Borrower in the ordinary course of its business;

(f)                Accounts for which the Account Debtor is Borrower's
Affiliate, officer, employee, or agent;

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(g)                Accounts with credit balances over ninety (90) days from
invoice date;

(h)                Accounts owing from an Account Debtor, including Affiliates,
whose total obligations to Borrower exceed twenty-five percent (25%) of all
Accounts, for the amounts that exceed that percentage, unless Bank approves in
writing;

(i)                Accounts owing from an Account Debtor which is a United
States government entity or any department, agency, or instrumentality thereof
unless Borrower has assigned its payment rights to Bank and the assignment has
been acknowledged under the Federal Assignment of Claims Act of 1940, as
amended;

(j)                Accounts for demonstration or promotional equipment, or in
which goods are consigned, or sold on a "sale guaranteed", "sale or return",
"sale on approval", or other terms if Account Debtor's payment may be
conditional;

(k)                Accounts owing from an Account Debtor that has not been
invoiced or where goods or services have not yet been rendered to the Account
Debtor (sometimes called memo billings or pre-billings);

(l)                Accounts subject to contractual arrangements between Borrower
and an Account Debtor where payments shall be scheduled or due according to
completion or fulfillment requirements where the Account Debtor has a right of
offset for damages suffered as a result of Borrower's failure to perform in
accordance with the contract (sometimes called contracts accounts receivable,
progress billings, milestone billings, or fulfillment contracts);

(m)                Accounts owing from an Account Debtor the amount of which may
be subject to withholding based on the Account Debtor's satisfaction of
Borrower's complete performance (but only to the extent of the amount withheld;
sometimes called retainage billings);

(n)                Accounts subject to trust provisions, subrogation rights of a
bonding company, or a statutory trust;

(o)                Accounts owing from an Account Debtor that has been invoiced
for goods that have not been shipped to the Account Debtor unless Bank,
Borrower, and the Account Debtor have entered into an agreement acceptable to
Bank in its sole discretion wherein the Account Debtor acknowledges that (i) it
has title to and has ownership of the goods wherever located, (ii) a bona fide
sale of the goods has occurred, and (iii) it owes payment for such goods in
accordance with invoices from Borrower (sometimes called "bill and hold"
accounts);

(p)                Accounts for which the Account Debtor has not been invoiced;

(q)                Accounts that represent non-trade receivables or that are
derived by means other than in the ordinary course of Borrower's business;

(r)                Accounts for which Borrower has permitted Account Debtor's
payment to extend beyond ninety (90) days;

(s)                Accounts subject to chargebacks or others payment deductions
taken by an Account Debtor (but only to the extent the chargeback is determined
invalid and subsequently collected by Borrower);

(t)                Accounts in which the Account Debtor disputes liability or
makes any claim (but only up to the disputed or claimed amount), or if the
Account Debtor is subject to an Insolvency Proceeding, or becomes insolvent, or
goes out of business;

(u)                Accounts for which Bank in its good faith business judgment
determines collection to be doubtful; and

(v)           other Accounts Bank deems ineligible in the exercise of its good
faith business judgment.

"Eligible Equipment" is the following to the extent it complies with all of
Borrower's representations and warranties to Bank, is acceptable to Bank in all
respects, is located at the location of Borrower's chief executive office or
such other location of which Bank has approved in writing, and is subject to a
first priority Lien in favor of

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Bank: (a) computer equipment, office equipment, and furnishings, subject to the
limitations set forth herein, and (b) Other Equipment. 

"Equipment" is all "equipment" as defined in the Code with such additions to
such term as may hereafter be made, and includes without limitation all
machinery, fixtures, goods, vehicles (including motor vehicles and trailers),
and any interest in any of the foregoing.

"Equipment Advance" is defined in Section 2.1.5(a).

"Equipment Line" is an Equipment Advance or Equipment Advances in an aggregate
amount of up to One Million Two Hundred Fifty Thousand Dollars ($1,250,000.00).

"Equipment Maturity Date" is, for each Equipment Advance, the first calendar day
of the month that is thirty-six (36) months after the month in which such
Equipment Advance was made.

"ERISA" is the Employee Retirement Income Security Act of 1974, and its
regulations.

"Event of Default" is defined in Section 8.

"Event of Loss" is defined in Section 2.1.5(c).

"Financed Equipment" is all present and future Eligible Equipment in which
Borrower has any interest which is financed by an Equipment Advance.

"Foreign Currency" means lawful money of a country other than the United States.

"Funding Date" is any date on which a Credit Extension is made to or on account
of Borrower which shall be a Business Day.

"FX Business Day" is any day when (a) Bank's Foreign Exchange Department is
conducting its normal business and (b) the Foreign Currency being purchased or
sold by Borrower is available to Bank from the entity from which Bank shall buy
or sell such Foreign Currency.

"FX Forward Contract" is defined in Section 2.1.3.

"FX Reduction Amount" is defined in Section 2.1.3.

"FX Reserve" is defined in Section 2.1.3.

"GAAP" is generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other Person as
may be approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of the date of determination.

"General Intangibles" is all "general intangibles" as defined in the Code in
effect on the date hereof with such additions to such term as may hereafter be
made, and includes without limitation, all copyright rights, copyright
applications, copyright registrations and like protections in each work of
authorship and derivative work, whether published or unpublished, any patents,
trademarks, service marks and, to the extent permitted under applicable law, any
applications therefor, whether registered or not, any trade secret rights,
including any rights to unpatented inventions, payment intangibles, royalties,
contract rights, goodwill, franchise agreements, purchase orders, customer
lists, route lists, telephone numbers, domain names, claims, income and other
tax refunds, security and other deposits, options to purchase or sell real or
personal property, rights in all litigation presently or hereafter pending
(whether in contract, tort or otherwise), insurance policies (including without
limitation key man, property damage, and business interruption insurance),
payments of insurance and rights to payment of any kind.

"Governmental Approval" is any consent, authorization, approval, order, license,
franchise, permit, certificate, accreditation, registration, filing or notice,
of, issued by, from or to, or other act by or in respect of, any Governmental
Authority.

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"Governmental Authority" is any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization.

"Guarantor" is any present or future guarantor of the Obligations.

"Indebtedness" is (a) indebtedness for borrowed money or the deferred price of
property or services, such as reimbursement and other obligations for surety
bonds and letters of credit, (b) obligations evidenced by notes, bonds,
debentures or similar instruments, (c) capital lease obligations, and (d)
Contingent Obligations.

"Indemnified Person" is defined in Section 12.2.

"Initial Equipment Advance" is defined in Section 2.1.5(a).

"Insolvency Proceeding" is any proceeding by or against any Person under the
United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.

"Inventory" is all "inventory" as defined in the Code in effect on the date
hereof with such additions to such term as may hereafter be made, and includes
without limitation all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products, including without
limitation such inventory as is temporarily out of Borrower's custody or
possession or in transit and including any returned goods and any documents of
title representing any of the above.

"Investment" is any beneficial ownership interest in any Person (including
stock, partnership interest or other securities), and any loan, advance or
capital contribution to any Person.

"Letter of Credit" means a standby letter of credit issued by Bank or another
institution based upon an application, guarantee, indemnity or similar agreement
on the part of Bank as set forth in Section 2.1.2.

"Letter of Credit Application" is defined in Section 2.1.2(a).

"Letter of Credit Reserve" has the meaning set forth in Section 2.1.2(d).

"Lien" is a claim, mortgage, deed of trust, levy, charge, pledge, security
interest or other encumbrance of any kind, whether voluntarily incurred or
arising by operation of law or otherwise against any property.

"Loan Documents" are, collectively, this Agreement, the Perfection Certificate,
any subordination agreement, any note, or notes or guaranties executed by
Borrower or any Guarantor, and any other present or future agreement between
Borrower any Guarantor and/or for the benefit of Bank in connection with this
Agreement, all as amended, restated, or otherwise modified.

"Material Adverse Change" is (a) a material impairment in the perfection or
priority of Bank's Lien in the Collateral or in the value of such Collateral;
(b) a material adverse change in the business, operations, or condition
(financial or otherwise) of Borrower; (c) a material impairment of the prospect
of repayment of any portion of the Obligations or (d) Bank determines, based
upon information available to it and in its reasonable judgment, that there is a
reasonable likelihood that Borrower shall fail to comply with one or more of the
financial covenants in Section 6 during the next succeeding financial reporting
period.

"Maturity Date" is, as applicable, the Revolving Line Maturity Date or the
Equipment Maturity Date.

"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.

"Non-SVB Accounts" is defined in Section 6.6(a).

"Obligations" are Borrower's obligation to pay when due any debts, principal,
interest, Bank Expenses and other amounts Borrower owes Bank now or later,
whether under this Agreement, the Loan Documents, or otherwise,

22

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including, without limitation, all obligations relating to letters of credit
(including reimbursement obligations for drawn and undrawn letters of credit),
cash management services, and foreign exchange contracts, if any, and including
interest accruing after Insolvency Proceedings begin and debts, liabilities, or
obligations of Borrower assigned to Bank, and the performance of Borrower's
duties under the Loan Documents.

 "Operating Documents" are, for any Person, such Person's formation documents,
as certified with the Secretary of State of such Person's state of formation on
a date that is no earlier than 30 days prior to the Effective Date, and, (a) if
such Person is a corporation, its bylaws in current form, (b) if such Person is
a limited liability company, its limited liability company agreement (or similar
agreement), and (c) if such Person is a partnership, its partnership agreement
(or similar agreement), each of the foregoing with all current amendments or
modifications thereto.

"Other Equipment" is leasehold improvements, intangible property such as
transferable software licenses, and other similar property and soft costs
approved by Bank, including sales taxes, freight discounts and installation
expenses.

"Payment/Advance Form" is that certain form attached hereto as Exhibit B.

"Payment Date" is the first (1st) calendar day of each month.

"Perfection Certificate" is defined in Section 5.1.

"Permitted Indebtedness" is:

(a)                Borrower's Indebtedness to Bank under this Agreement and the
other Loan Documents;

(b)                Indebtedness existing on the Effective Date and shown on the
Perfection Certificate;

(c)                Subordinated Debt;

(d)                unsecured Indebtedness to trade creditors incurred in the
ordinary course of business;

(e)                Indebtedness secured by Permitted Liens; and

(f)                extensions, refinancings, modifications, amendments and
restatements of any items of Permitted Indebtedness (a) through (d) above,
provided that the principal amount thereof is not increased or the terms thereof
are not modified to impose more burdensome terms upon Borrower or its
Subsidiary, as the case may be.

"Permitted Investments" are:

(a)                Investments shown on the Perfection Certificate and existing
on the Effective Date;

(b)           Cash Equivalents; and

(c)                Investments permitted by Borrower's investment policy, as
amended from time to time, provided that such investment policy (and any such
amendment thereto) has been approved by Bank.

"Permitted Liens" are:

(a)           Liens existing on the Effective Date and shown on the Perfection
Certificate or arising under this Agreement and the other Loan Documents;

(b)           Liens for taxes, fees, assessments or other government charges or
levies, either not delinquent or being contested in good faith and for which
Borrower maintains adequate reserves on its Books, provided that no notice of
any such Lien has been filed or recorded under the Internal Revenue Code of
1986, as amended, and the Treasury Regulations adopted thereunder;

23

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(c)                purchase money Liens (i) on Equipment (other than Financed
Equipment) acquired or held by Borrower incurred for financing the acquisition
of the Equipment securing no more than One Million Two Hundred Fifty Thousand
Dollars ($1,250,000.00), inclusive of all outstanding Equipment Advances
hereunder, in the aggregate amount outstanding, or (ii) existing on Equipment
(other than Financed Equipment) when acquired, if the Lien is confined to the
property and improvements and the proceeds of the Equipment;

(d)           Liens incurred in the extension, renewal or refinancing of the
indebtedness secured by Liens described in (a) through (c), but any extension,
renewal or replacement Lien must be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness may not increase; 

(e)           leases or subleases of real property granted in the ordinary
course of business, and leases, subleases, non-exclusive licenses or sublicenses
of property (other than real property or intellectual property) granted in the
ordinary course of Borrower's business, if the leases, subleases, licenses and
sublicenses do not prohibit granting Bank a security interest;

(f)            non-exclusive license of intellectual property granted to third
parties in the ordinary course of business; and

(g)           Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 8.4 or 8.7.

"Person" is any individual, sole proprietorship, partnership, limited liability
company, joint venture, company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or government agency.

"Prime Rate" is Bank's most recently announced "prime rate," even if it is not
Bank's lowest rate.

"Quick Assets" is, on any date, Borrower's unrestricted cash and net billed
accounts receivable determined according to GAAP.

"Registered Organization" is any "registered organization" as defined in the
Code with such additions to such term as may hereafter be made

"Requirement of Law" is as to any Person, the organizational or governing
documents of such Person, and any law (statutory or common), treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.

"Responsible Officer" is any of the Chief Executive Officer, President, Chief
Financial Officer and Controller of Borrower.

"Revolving Line" is an Advance or Advances in an amount equal to One Million
Five Hundred Thousand Dollars ($1,500,000.00).

"Revolving Line Maturity Date" is June 18, 2009.

"Securities Account" is any "securities account" as defined in the Code with
such additions to such term as may hereafter be made.

"Settlement Date" is defined in Section 2.1.3.

"Subordinated Debt" is indebtedness incurred by Borrower subordinated to all of
Borrower's now or hereafter indebtedness to Bank (pursuant to a subordination,
intercreditor, or other similar agreement in form and substance satisfactory to
Bank entered into between Bank and the other creditor), on terms acceptable to
Bank.

"Subsidiary" means, with respect to any Person, any Person of which more than
50.0% of the voting stock or other equity interests (in the case of Persons
other than corporations) is owned or controlled directly or indirectly by such
Person or one or more of Affiliates of such Person.

24

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

 

"Tangible Net Worth" is, on any date, the total assets of Borrower minus (a) any
amounts attributable to (i) goodwill, (ii) intangible items including
unamortized debt discount and expense, patents, trade and service marks and
names, copyrights and research and development expenses except prepaid expenses,
(iii) notes, accounts receivable and other obligations owing to Borrower from
its officers or other Affiliates, and (iv) reserves not already deducted from
assets, minus (b) Total Liabilities, plus (c) Subordinated Debt.

"Total Liabilities" is on any day, obligations that should, under GAAP, be
classified as liabilities on Borrower's consolidated balance sheet, including
all Indebtedness and current portion of Subordinated Debt permitted by Bank to
be paid by Borrower, but excluding all other Subordinated Debt.

"Transfer" is defined in Section 7.1.

 

[Signature page follows.]

25

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the Effective Date.

BORROWER:

CHYRON CORPORARTION

By:

/s/ Jerry Kieliszak

Name:

Jerry Kieliszak

Title:

Senior Vice President & Chief Financial Officer

BANK:

SILICON VALLEY BANK

By:

/s/ Melissa Stepanis

Name:

Melissa Stepanis

Title:

Vice President

 

 

1

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EXHIBIT A

COLLATERAL DESCRIPTION

 

The Collateral consists of all of Borrower's right, title and interest in and to
the following personal property:

All goods, Accounts (including health-care receivables), Equipment, Inventory,
contract rights or rights to payment of money, leases, license agreements,
franchise agreements, General Intangibles (except as provided below), commercial
tort claims, documents, instruments (including any promissory notes), chattel
paper (whether tangible or electronic), cash, deposit accounts, certificates of
deposit, fixtures, letters of credit rights (whether or not the letter of credit
is evidenced by a writing), securities, and all other investment property,
supporting obligations, and financial assets, whether now owned or hereafter
acquired, wherever located; and

All Borrower's Books relating to the foregoing, and any and all claims, rights
and interests in any of the above and all substitutions for, additions,
attachments, accessories, accessions and improvements to and replacements,
products, proceeds and insurance proceeds of any or all of the foregoing.

Notwithstanding the foregoing, the Collateral does not include:  (a) any of the
following, whether now owned or hereafter acquired, any copyright rights,
copyright applications, copyright registrations and like protections in each
work of authorship and derivative work, whether published or unpublished, any
patents, patent applications and like protections, including improvements,
divisions, continuations, renewals, reissues, extensions, and
continuations-in-part of the same, trademarks, service marks and, to the extent
permitted under applicable law, any applications therefor, whether registered or
not, and the goodwill of the business of Borrower connected with and symbolized
thereby, know-how, operating manuals, trade secret rights, rights to unpatented
inventions, and any claims for damage by way of any past, present, or future
infringement of any of the foregoing; provided, however, the Collateral shall
include all Accounts, license and royalty fees and other revenues, proceeds, or
income arising out of or relating to any of the foregoing; or (b) any equipment
whose purchase is financed by any other lender (either by loan or by lease),
solely to the extent the security agreement with such lender prohibits junior
liens on such equipment, and only until the lien held by such other lender is
terminated or released with respect to such equipment.

Pursuant to the terms of a certain negative pledge arrangement with Bank,
Borrower has agreed not to encumber any of its copyright rights, copyright
applications, copyright registrations and like protections in each work of
authorship and derivative work, whether published or unpublished, any patents,
patent applications and like protections, including improvements, divisions,
continuations, renewals, reissues, extensions, and continuations-in-part of the
same, trademarks, service marks and, to the extent permitted under applicable
law, any applications therefor, whether registered or not, and the goodwill of
the business of Borrower connected with and symbolized thereby, know-how,
operating manuals, trade secret rights, rights to unpatented inventions, and any
claims for damage by way of any past, present, or future infringement of any of
the foregoing, without Bank's prior written consent.

1

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

 

EXHIBIT B - LOAN PAYMENT/ADVANCE REQUEST FORM

Deadline for same day processing is Noon E.S.T.*

 

Fax To:                                          Date: _____________________

Loan Payment:

CHYRON CORPORATION

 

From Account #_____________________                To Account
#_______________________________________

(Deposit Account #)                                 
                                                (Loan Account #)

Principal $____________________________________         and/or Interest
$_____________________________________

Authorized Signature:                                                           
Phone Number:           

Print Name/Title:         

Loan Advance:

Complete Outgoing Wire Request section below if all or a portion of the funds
from this loan advance are for an outgoing wire.

From Account #________________________________                To Account
#________________________________________

(Loan Account #)                                       
                                                (Deposit Account #)

Amount of Advance $___________________________

All Borrower's representations and warranties in the Loan and Security Agreement
are true, correct and complete in all material respects on the date of the
request for an advance; 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:

 

Authorized Signature:                                                           
Phone Number:           

Print Name/Title:         

 

Outgoing Wire Request:

Complete only if all or a portion of funds from the loan advance above is to be
wired.

Deadline for same day processing is noon, E.S.T.

Beneficiary Name:
___________________________                                        Amount of
Wire: $      

Beneficiary Bank:
___________________________                                        Account
Number:       

City and State:             

Beneficiary Bank Transit (ABA) #:         
                                        Beneficiary Bank Code (Swift, Sort,
Chip, etc.):                    

(For International Wire Only)

Intermediary Bank:                                              Transit (ABA) #:
        

For Further Credit to:

Special Instruction:    

 

By signing below, I (we) acknowledge and agree that my (our) funds transfer
request shall be processed in accordance with and subject to the terms and
conditions set forth in the agreements(s) covering funds transfer service(s),
which agreements(s) were previously received and executed by me (us).

Authorized Signature: _________________________             2nd Signature (if
required):_______________________________

Print Name/Title: ______________________________                Print
Name/Title:____________________________________

Telephone #:                                        
                                           Telephone #:
                             

                * Unless otherwise provided for an Advance bearing interest at
LIBOR.

1

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EXHIBIT C - BORROWING BASE CERTIFICATE

Borrower: Chyron Corporation
Lender:   Silicon Valley Bank
Commitment Amount:                $1,500,000.00

ACCOUNTS RECEIVABLE

1.                    ACCOUNTS RECEIVABLE (INVOICED) BOOK VALUE AS OF
____________________

$

 

2.                    ADDITIONS (PLEASE EXPLAIN ON REVERSE)

$

 

3.                    TOTAL ACCOUNTS RECEIVABLE

$

 

ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)

4.                    AMOUNTS OVER 90 DAYS DUE

$

 

5.                    BALANCE OF 50% OVER 90 DAY ACCOUNTS

$

 

6.                    FOREIGN ACCOUNTS

$

 

7.                    FOREIGN INVOICED ACCOUNTS

$

 

8.                    CONTRA/CUSTOMER DEPOSIT ACCOUNTS

$

 

9.                    INTERCOMPANY/EMPLOYEE ACCOUNTS

$

 

10.                 CREDIT BALANCES OVER 90 DAYS

$

 

11.                 CONCENTRATION LIMITS

$

 

12.                 U.S. GOVERNMENTAL ACCOUNTS

$

 

13.                 PROMOTION OR DEMO ACCOUNTS; GUARANTEED SALE OR CONSIGNMENT
SALE ACCOUNTS

$

 

14.                 ACCOUNTS WITH PROGRESS/MILESTONE/PRE-BILLINGS; CONTRACT
ACCOUNTS

$

 

15.                 ACCOUNTS FOR RETAINAGE BILLINGS

$

16.                 TRUST ACCOUNTS

$

17.                 BILL AND HOLD ACCOUNTS

$

18.                 UNBILLED ACCOUNTS

$

19.                 NON-TRADE ACCOUNTS

$

20.                 ACCOUNTS WITH EXTENDED TERM INVOICES

$

21.                 ACCOUNTS SUBJECT TO CHARGEBACKS

$

22.                 DISPUTED ACCOUNTS

$

23.                 OTHER (PLEASE EXPLAIN ON REVERSE)

$

24.                 TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS

$

25.                 ELIGIBLE ACCOUNTS (#3 MINUS #24)

$

26.                 ELIGIBLE AMOUNT OF ACCOUNTS (80.0% OF #25)

$

BALANCES

27.                 MAXIMUM LOAN AMOUNT

$

28.                 TOTAL FUNDS AVAILABLE (LESSER OF #27 OR #26)

$

29.                 PRESENT BALANCE OWING ON LINE OF CREDIT

$

30.                 OUTSTANDING UNDER SUBLIMITS

$

31.                 RESERVE POSITION (#28 MINUS #29 AND #30)

$

[Continued on following page.]

1

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

The undersigned represents and warrants that this is true, complete and correct,
and that the information in this Borrowing Base Certificate complies with the
representations and warranties in the Loan and Security Agreement between the
undersigned and Silicon Valley Bank.

COMMENTS:

By: ___________________________

Authorized Signer

Date:                                                          

BANK USE ONLY

Received by: _____________________

authorized signer

Date:   __________________________

Verified: ________________________

authorized signer

Date: ___________________________

Compliance Status:              Yes         No

2

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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

Borrowing Base Certificate (with A/R & A/P Agings)

Monthly within 30 days

Yes   No

Financial Covenant

Required

Actual

Complies

Maintain at all times:

Adjusted Quick Ratio (to be tested on the last day of each month)

1.25:1.0

____:1.0

Yes   No

Tangible Net Worth (to be tested on the last day of each quarter)

$*

$________

Yes   No

*As set forth in Section 6.7(b) of the Agreement.

 

3

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

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:    _________________________

Compliance Status:           Yes     No

 

 

4

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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:                1.25:1.00

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

$             

 

I.

Adjusted Quick Ratio (line C divided by line H)

               

Is line I equal to or greater than 1.25:1.00?

                                  No, not in compliance       
                                                                               
   Yes, in compliance

II.            Tangible Net Worth (Section 6.7(b))

Required:                $_________ (as set forth in Section 6.7(b))

Actual:                   $_________

  No, not in compliance                                       
                                                  Yes, in compliance

1080644.5

5