AMENDMENT NO. 8 TO LOAN AGREEMENT

 

EIGHTH AMENDMENT AGREEMENT (this "Amendment"), made as of March 13, 2003,
between:

AMSOUTH BANK,

an Alabama banking corporation (the "Bank"), with an office at 350 Park Avenue,
New York, New York 10022, and CHYRON CORPORATION, a New York corporation (the
"Borrower"), with its principal place of business at 5 Hub Drive, Melville, New
York 11747.

WITNESSETH:

WHEREAS:

(A) The Bank and the Borrower entered into a loan agreement, dated as of March
29, 1999, pursuant to which the Bank made available to the Borrower a total
credit facility of up to Twelve Million Dollars ($12,000,000) (such agreement,
as amended by the amendments described below, referred to hereinafter
collectively as the Loan Agreement");

(B) A letter amendment dated November 8, 2000 was signed by and between the Bank
and the Borrower, which, among other things, amended Section 7.3 of the Loan
Agreement to add a new Section 7.3(iv) with the former Section 7.3(iv) becoming
new Section 7.3(v);

(C) An amendment dated March 26, 2001 was signed by and between the Bank and the
Borrower pursuant to which, among other things, the Loan Agreement was amended
to permit the Borrower to purchase all of the capital stock of Interocity
Development Corporation and certain shares of common stock of Video Technics,
Inc.;

(D) An amendment dated May 15, 2001 was signed by and between the Bank and the
Borrower which, among other things, reduced the Revolving Credit Loans available
under Loan Agreement, modified certain financial covenants contained in the Loan
Agreement, and extended the term of the Revolving Credit Loans through March 31,
2003;

(E) An amendment dated August 6, 2001 was signed by and between the Bank and the
Borrower which, among other things, modified Section 6.1(b) of the Loan
Agreement;

(F) An amendment dated November 30, 2001 was signed by and between the Bank and
the Borrower which, among other things, modified Sections 4.3(c), 6.1, and 10.4
of the Loan Agreement;

(G) An amendment dated December 26, 2001 was signed by and between the Bank and
the Borrower which, among other things, modified Sections 1, 2.1, 2.8, 2.9, 6.1,
7.1 and 8 of the Loan Agreement;

(H) An amendment dated September 25, 2002 was signed by and between the Bank and
the Borrower which, among other things, modified Sections 1, 2.9 and 6.1(a) of
the Loan Agreement;

(I) The Borrower and the Bank wish to further amend the Loan Agreement as set
forth herein; and

(J) Any capitalized terms not defined herein shall have the meanings ascribed
thereto in the Loan Agreement. Reference to Sections and Subsections, unless
otherwise indicated, are references to Sections and Subsections of the Loan
Agreement.

NOW, THEREFORE

, in consideration of the mutual conditions and agreements, set forth in this
Amendment, and for good and valuable consideration, the receipt and legal
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:

Article 1

Amendment to the Loan Agreement.

Section

1.1 Incorporation By Reference.

This Amendment shall be deemed to be an amendment to the Loan Agreement and
should not be construed in any way as a replacement or substitution therefor.
All of the terms and provisions of this Amendment are hereby incorporated by
reference into the Loan Agreement as if such terms and provisions were set forth
in full therein.

Section

1.2 Definitions. Section 1 (Definitions) of the Loan Agreement is amended as
follows:

(a) The definition of the term "Borrowing Base" is hereby amended to read in its
entirety as follows:

"Borrowing Base" shall mean (1) the sum of: (a) 80% of the Borrower's Eligible
Domestic Accounts Receivable from time to time outstanding less reserves with
respect to such Accounts which the Bank may deem necessary in its sole
discretion; (b) the lesser of (i) $750,000 or (ii) 80% of the Borrower's
Eligible Foreign Accounts Receivable from time to time outstanding less the
Deferred Revenue Reserve and less other reserves with respect to such Accounts
which the Bank may deem necessary in its sole discretion; and (c) the lesser of
(i) $1,616,000.00 or (ii) twenty-two percent (22%) of the value of the
Borrower's Eligible Inventory from time to time on hand, provided, however, that
in the event Borrower's accounts receivable suffer dilution of 15% percent or
more, as determined by the Bank in its sole discretion, the Bank reserves the
right to unilaterally alter the advance rate specified in (a) and (b) above,
minus (2) at all times after all or any part of the outstanding principal
balance of the 2003 Notes has been repaid, $250,000.

(b) A new definition of the term "Deferred Revenue Reserve" shall be added in
its correct place alphabetically and shall read in its entirety as follows:

"Deferred Revenue Reserve" shall mean such reserves established by the Bank in
its sole discretion related primarily to prepaid maintenance contracts, which
reserve shall initially be in the amount of $195,000 and which is subject to
change in the sole discretion of the Bank based on the results of the Bank's
examination of the Borrower's books and records.

(c) The definition of the term Fixed Charge Ratio is hereby amended to read in
its entirety as follows:

"Fixed Charge Ratio" shall mean the ratio of (i) EBITDA to the sum of cash
interest and principal due and payable with respect to any Indebtedness of the
Borrower, paid taxes and actual Capital Expenditures, each for the applicable
period of determination. For the purposes of computing this ratio, (i) EBITDA
shall be calculated on a quarterly basis for all test periods and (ii)
commencing with the calculation for the test period ending in September 2004 and
for all test periods thereafter, the denominator shall include the then entire
outstanding principal balance of the 2004 Notes.

(d) A new definition of the term "Net Proceeds" shall be added in its correct
place alphabetically and shall read in its entirety as follows:

"Net Proceeds" with respect to any event shall mean (a) the cash proceeds
received in respect of such event, including any cash received in respect of any
non-cash proceeds, but only as and when received, (b) net of the sum of (i) all
reasonable fees and out-of-pocket expenses paid by the Borrower to third parties
in connection with such event, (ii) the amount of all taxes paid (or reasonably
estimated to be payable) by the Borrower during the year that such event
occurred or the next succeeding year and that are directly attributable to such
event (as determined reasonably and in good faith by the chief financial officer
of the Borrower) and (iii) with respect to any asset that is subject to a lien
and are also being transferred pursuant to such event, amounts owing to the
applicable secured party to the extent such amount is required to be paid in
order to release such lien on such asset in order to consummate such event.

(e) The definition of the term "Termination Date" is hereby amended by deleting
the reference to "December 26, 2003" in its entirety and replacing it with
"January 31, 2005."

(f) A new definition of the term "2003 Notes" shall be added in its correct
place alphabetically and shall read in its entirety as follows:

"2003 Notes" shall mean those certain senior subordinated convertible promissory
notes evidencing Indebtedness payable by the Borrower to certain of the holders
of such notes, which notes mature on or around December 31, 2003.

(g) A new definition of the term "2004 Notes" shall be added in its correct
place alphabetically and shall read in its entirety as follows:

"2004 Notes" shall mean those certain subordinated convertible debentures
evidencing Indebtedness payable by the Borrower to certain of the holders of the
debentures, which debentures mature on or around December 31, 2004.

Section

1.3 Amendment to Section 2.1

Section 2.1 of the Loan Agreement (Revolving Credit Commitment) is amended, by
replacing the phrase "$5,275,000.00 less the then outstanding Term Loan Balance"
with the amount $4,000,000.00". It is expressly agreed that the Commitment is
reduced to this amount notwithstanding that the face amount of the Revolving
Credit Note may reflect a higher amount.

Section

1.4 Amendment to Section 2.9

Section

2.9 of the Loan Agreement (Term Note) is hereby amended to read in its entirety
as follows:

2.9

Term Note; Scheduled Payments; Excess Cash Flow Payments

(a) Scheduled Payments. The Term Loan made by the Bank to the Borrower pursuant
to this Agreement is evidenced by a promissory note of the Borrower
substantially in the form of Exhibit "A" to Amendment No. 6 to this Loan
Agreement between the Bank and the Borrower dated as of December 26, 2001, with
appropriate insertions (the "Term Note"). As of February 28, 2003 the Term Loan
had an outstanding principal balance of $1,125,000. It is hereby agreed that
such current outstanding principal balance of the Term Note, notwithstanding
anything to the contrary contained in any Loan Document, shall be payable as
follows: (i) on or before March 13, 2003, the sum of $100,000, (ii) on the last
Business Day of each month beginning March 31, 2003 through and including August
31, 2003, the sum of $150,000 and (iii) on September 30, 2003 the then unpaid
balance of the Term Note, together with all accrued and unpaid interest. The
Term Note shall bear interest on the unpaid principal amount thereof from time
to time outstanding at a rate per annum equal to the Prime Rate plus 2% (which
interest rate shall change when and as the Prime Rate changes). In all cases
interest shall be computed on the basis of a 360 day year for actual days
elapsed and shall be payable as provided in this Agreement. After any stated or
accelerated maturity thereof, the Term Note shall bear interest at the rate set
forth in this Agreement.

(b) Excess Cash Flow Payments. Together with the delivery of the financial
statements pursuant to section 5.2(a) hereof, and in any event not later than
120 days after the last day of each Fiscal Year of the Borrower (commencing with
the Fiscal Year ending on December 31, 2002), twenty five percent (25%) of the
Excess Cash Flow of the Borrower for the Fiscal Year then last ended shall be
applied as a mandatory payment of principal of the then outstanding principal
amount of the Term Loan.

(c) Sale Proceeds. In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Borrower or any Subsidiary of the Borrower in
respect of any sale, transfer, lease or other disposition (including pursuant to
a sale and leaseback transaction) of any non-ordinary course property or asset
of the Borrower or any Subsidiary of the Borrower, then, immediately after such
Net Proceeds are received, 100% of such Net Proceeds shall be applied as a
mandatory payment of principal of the then outstanding principal amount of the
Term Loan.

(d) Application. Any partial prepayment of the Term Loan shall be applied to the
last maturing installments in inverse order of their respective maturities.

Section

1.5 Amendment to Section 2.12(e)

A new Section 2.12(e) shall be added immediately after current Section 2.12(d)
and shall read in its entirety as follows:

(e) Notwithstanding anything to the contrary contained in this Agreement,
commencing March 31, 2003 and on the last day of each month thereafter until
such time as both the Term Note and the Revolving Credit Note shall have been
paid in full, the Borrower shall pay additional interest to the Bank in an
amount equal to the positive difference, if any, between $12,500 and the amount
of interest paid on account of the Loans for such month then ending.
Notwithstanding the foregoing, if at any time both the Term Note and the
Revolving Credit Note shall have been paid in full and within six (6) weeks from
the first day of such full payment the Borrower has not terminated this
Agreement and satisfied in full all of the Obligations, then, such minimum
additional interest payment shall commence again for each month following the
expiration of such six (6) week period.

Section

1.6 Amendment to Section 6.1

(a) Section 6.1(a)

of the Loan Agreement is hereby amended to read in its entirety as follows:

(a) Minimum Quarterly EBITDA. Maintain at all times for the fiscal quarter of
the Borrower ending on the dates set forth below EBITDA in an amount not less
than that set forth opposite each such date:

Quarter Ending

   

Minimum EBITDA

3/31/03

   

$136,000

6/30/03

   

$167,000

9/30/03

   

$261,000

12/31/03

   

$467,000

3/31/04

   

$142,000

6/30/04

   

$175,000

9/30/04

   

$274,000

12/31/04

   

$490,000

(b) Section 6.1(b) of the Loan Agreement is hereby amended to read in its
entirety as follows:

(b) Minimum Pledged Cash. Maintain at all times for cash and cash equivalents in
an account at the Bank in an aggregate amount not less than $1,000,000 and
ensure that the Bank at all times has a first priority perfected Lien therein.

(c) Section 6.1(c)

of the Loan Agreement is hereby amended to read in its entirety as follows:

(c) Fixed Charge Ratio. Maintain as at the last day of each fiscal quarter set
forth below a Fixed Charge Ratio in a proportion not less than that indicated
opposite each such fiscal quarter:

Quarter Ending

 

Minimum Fixed Charge Ratio

3/31/03

 

.21 to 1.00

6/30/03

 

.26 to 1.00

9/30/03

 

.55 to 1.00

12/31/03

 

10.00 to 1.00

3/31/04

 

1.00 to 1.00

6/30/04

 

1.00 to 1.00

9/30/04

 

1.00 to 1.00

12/31/04

 

1.00 to 1.00

Section

1.7 Amendment to Section 9.2

Section 9.2

of the Loan Agreement is hereby amended by adding the following phrase to the
end thereof immediately before the "period" contained at the end of such
Section:

, and (iii) cash and cash equivalents maintained at the Bank in an aggregate
amount not less than $1,000,000

Article 2

Conditions to Effectiveness of this Amendment.

The effectiveness of this Amendment and the obligations of the Bank hereunder
shall be subject to the satisfaction of all of the following conditions, as
determined by the Bank in its sole discretion:

(a) Representations and Warranties. The representations and warranties made by
the Borrower herein or which are contained in any certificate, document or
financial or other statement furnished by the Borrower or any Subsidiary at any
time under or in connection herewith shall be correct in all material respects.

(b) No Default or Event of Default. No Default or Event of Default shall have
occurred and be continuing.

(c) Guaranty. The Bank shall have received the acknowledgment of Pro-Bel
Limited, as set forth at the end of this Amendment, that the guaranty of Pro-Bel
Limited in favor of the Bank dated March 29, 1999 remains unmodified and in full
force and effect with respect to the Loan Agreement, as amended hereby.

(d) Certificate of Incorporation/Good Standing. The Bank shall have received a
Certificate of good standing for Borrower from the Secretary of State of the
State of New York State and a copy of the Borrower's certificate of
incorporation certified by the Secretary of State of the State of New York
State.

(e) Investment Account. The Borrower shall have opened an investment account
with the Bank, in which account there shall at all times be maintained cash and
cash equivalents in an amount not less than $1,000,000 and the Borrower shall
have executed all documentation requested by the Bank in order to grant the Bank
a first priority perfected security interest in such account and the assets
therein contained.

(f) Fees. The Borrower shall have paid (i) an administrative fee to the Bank in
the amount of $50,000 and (ii) the Bank's attorneys' fees and expenses
(including, without limitation, the fees of any paraprofessionals) in connection
with the preparation and execution of this Amendment.

(g) Additional Matters. All other documents and legal matters in connection with
the transactions contemplated by this Amendment shall be satisfactory in form
and substance to the Bank and its counsel.

Article 3

Representations and Warranties.

Section 3.1

By the Borrower's execution and delivery of this Amendment, the Borrower hereby
renews and remakes in favor of the Bank, as of the date hereof, all of the
Borrower's representations, warranties and covenants made in the Loan Documents,
with the same effect as if they were made on and as of the date of this
Amendment, other than any such representation or warranty which specifically
relates to a specified prior date.

Section 3.2

The Borrower hereby represents and warrants to the Bank that the execution,
delivery and performance of this Amendment has been duly authorized by all
necessary and proper action on the part of the Borrower, and the execution,
delivery and performance by the Borrower of this Amendment (i) will not violate
any provision of any applicable law or regulation or of any order, writ,
judgment, injunction or decree of any governmental authority, (ii) will not
violate any provisions of the certificate of incorporation or by-laws of the
Borrower, and (iii) will not violate any provision of, or constitute a default
under, or result in the creation or imposition of any lien on any asset of the
Borrower (other than the liens in favor of the Bank) pursuant to any contract,
agreement or other undertaking to which the Borrower is a party or which is
binding upon the Borrower, or upon any of the Borrower's assets.

Article 5

Miscellaneous.

Section

5.1 All references in the Loan Agreement and in all of the Loan Documents to the
Loan Agreement, shall be deemed to refer to the Loan Agreement as further
amended hereby.

Section

5.2 The Loan Agreement and all of the other Loan Documents shall each be deemed
amended, to the extent necessary, to give effect to the provisions of this
Amendment.

Section

5.3 As specifically amended herein, the Loan Agreement and all of the other Loan
Documents shall remain in full force and effect in accordance with their
respective terms.

Section

5.4 The Borrower hereby warrants and represents that as of the date hereof,
there are no offsets, counterclaims or defenses to its obligations and
agreements as they exist as of the date hereof, in each case with respect to the
performance of terms the Borrower has been required to perform to date, or to
the enforcement of the Bank's rights or remedies under the Loan Documents as
they exist as of the date hereof and, if and to the extent any of the same
exist, they are hereby waived in their entirety, it being acknowledged by each
of the Borrower and the Guarantor that each of them has received good, valuable
and sufficient consideration therefor.

Section

5.5 Subject to the provisions of the Loan Agreement, this Amendment shall be
binding upon the Borrower and its successors and assigns and shall inure to the
benefit of the Bank and its successors and assigns.

Section

5.6 Any provision of this Amendment which is prohibited or unenforceable in any
jurisdiction or prohibited or unenforceable as to any person or entity shall, as
to such jurisdiction, person or entity, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof or affecting the validity or enforceability of such provisions as against
any other person or entity.

Section

5.7 This Amendment shall be governed, construed, enforced and interpreted
according to the laws of the State of New York without giving effect to its
conflicts or choice of laws provisions.

Section 5.8

This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which counterparts
when executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument.

Section 5.9

The Borrower and the Bank hereby irrevocably waive all rights to trial by jury
in any action, proceeding or counterclaim arising out of or relating to this
Amendment, the Loan Agreement or the other Loan Documents.

Section

5.10 With regard to all dates and time periods set forth or referred to in this
Amendment, time is of the essence.

Section

5.11 This Amendment supersedes all prior agreements, whether written or oral,
between the parties with respect to its subject matter and constitutes a
complete and exclusive statement of the terms of the agreement between the
parties with respect to its subject matter.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date and year first above written.

CHYRON CORPORATION

/s/ Michael Wellesley-Wesley

Name: Michael Wellesley-Wesley

Title: Chief Executive Officer

AMSOUTH BANK

/s/ Barry S. Renow

Name: Barry S. Renow

Title: Attorney-in-Fact

The Guarantor hereby acknowledges that its Guaranty dated March 29, 1999 remains
unmodified and in full force and effect with respect to the Loan Agreement, as
amended by the foregoing Amendment to the Loan Agreement, without any offset,
defense or counterclaim.

PRO-BEL LIMITED PRO-BEL LIMITED

/s/ Michael Wellesley-Wesley

Name: Michael Wellesley-Wesley

Title: Director