Document:

Unassociated Document

Exhibit 10.22

 

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of October 15, 2009 by and between NovaBay Pharmaceuticals, Inc. (“Company”) and Mark Anderson (“Executive”).

 

RECITAL

 

The Company and Executive desire to formalize and reflect Executive’s employment under the terms and conditions of this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing recital, the mutual covenants herein contained and for other good and valuable consideration, the parties hereto hereby agree as follows:

 

	
I.

	
EMPLOYMENT.

 

A.          Position and Responsibilities.  The Company hereby employs the Executive as its Chief Scientific Officer.  Executive shall do and perform all such services and acts as necessary or advisable to fulfill the duties and obligations of said position and/or such other and/or additional responsibilities as reasonably delegated to Executive by Executive’s superior and/or the Company’s Board of Directors (the “Board”).

 

B.           Term.  Executive’s employment with the Company is at-will and shall be governed by the terms of this Agreement, commencing on October 15, 2009 and continuing to and including December 31, 2011, unless this Agreement is terminated at some earlier time in accordance with the terms of this Agreement.

 

C.           Devotion.  Except as heretofore or hereafter excepted by the Company in writing, during the term of this Agreement, Executive (i) shall devote full time and attention to the foregoing responsibilities, (ii) shall not engage in any other business or other activity which may materially interfere with Executive’s performance of said responsibilities, and (iii) except as to any investment made in a publicly traded entity not amounting to more than 1% of its outstanding equity, shall not, directly or indirectly, as an employee, consultant, partner, principal, director or in any other capacity, engage or participate in any business that is in competition with the Company.

 

D.           Services’ Uniqueness.  It is agreed that Executive’s services to be performed under this Agreement are special, unique and extraordinary and give rise to peculiar value, the loss of which may not be reasonably or adequately compensated by a damages award, in any legal action.  Accordingly, in addition to any other rights or remedies available to the Company, the Company shall be entitled to injunctive and other equitable relief to prevent or remedy a breach of the terms of this Agreement by Executive.

 

  

  

  

 

	
II.

	
PROPRIETARY RIGHTS, CONFIDENTIAL INFORMATION, NONSOLICITATION, ETC.

 

Executive has executed an agreement relating to the treatment of (and Executive’s obligations as to) proprietary rights, confidential information, and certain nonsolicitation and other matters.  It is further understood and agreed that said agreement is deemed to continue in full force and effect, binding and not affected, in any manner, by the terms in this Agreement.

 

	
III.

	
COMPENSATION AND BENEFITS.

 

Executive’s compensation and bonus rights are as follow:

 

A.           Salary.  Executive shall be entitled to an annual salary of $220,000 (subject to such deductions, withholding and other charges as required by law), payable in accordance with the Company’s standard payroll schedule.  Executive’s salary shall be subject to periodic review by the Company and may be adjusted upward by action of the Board, after such periodic review.

 

B.           Bonus. The Executive shall be eligible for any bonus plan that is deemed appropriate by the Board of Directors of the Company.

 

1.           Annual Bonus.  Executive shall be entitled to such amount of bonus payment, if any, as considered and approved by the Board annually (for each year of services) during the term of this Agreement, which bonus amount shall be determined by all factors deemed relevant for that purpose by Board and shall include (i) the fulfillment, during the relevant year, of specific milestones and tasks delegated, for such year, to Executive by the Company’s President and/or the Board, (ii) the evaluation of Executive by the Company’s President and/or the Board, (iii) the Company’s financial, product and expected progress and (iv) other pertinent matters relating to the Company’s business and valuation.  The amount of any annual bonus determined with respect to performance during a calendar year or the Company’s fiscal year, as the case may be, will be paid in full on or before the date that is 21⁄2 months following the end of the year for which the bonus was earned. Such bonus entitlement shall be pro-rated to time devoted by the Executive during each year.

 

C.           Other Benefits.  Executive shall be entitled to five weeks vacation (25 business days) for each calendar year to be taken pursuant to the Company’s vacation benefits policy.  Executive is also entitled to other benefits as (i) are generally available to the Company’s other similar, high level, executives, consisting of such medical, retirement and similar benefits as are so available and (ii) are deemed special to Executive and approved by the Board.

 

IV.           TERMINATION.

 

A.           At-Will Employment.  It is understood and agreed by the Company and Executive that this Agreement does not contain any promise or representation concerning the duration of Executive's employment with the Company. Executive specifically acknowledges that his employment with the Company is at-will and may be altered or terminated by either Executive or the Company at any time, with or without cause and with or without notice.  In addition, that the rate of salary, any bonuses, paid time off, other compensation, or vesting schedules are stated in units of years or months or weeks does not alter the at-will nature of the employment, and does not mean and should not be interpreted to mean that Executive is guaranteed employment to the end of any period of time or for any period of time. In the event of conflict between this disclaimer and any other statement, oral or written, present or future, concerning terms and conditions of employment, the at-will relationship confirmed by this disclaimer shall control. This at-will status cannot be altered except in a writing signed by Executive and approved by the Board.

 

  

  

  

 

B.           Termination of Employment.  Although Executive’s employment hereunder shall be deemed “at will,” any termination shall be subject to the following terms:

 

1.           For Cause.  In the event that Executive is terminated for cause, as hereinafter defined, Executive shall be entitled an amount equal to $15,000 which will be paid in a lump sum within 60 days of such termination for cause.  This amount is in addition to Executive’s earned wages through the date his employment with the Company is terminated, his accrued but unused vacation, reimbursements of his outstanding expenses incurred and submitted in compliance with Company policies and any other portion of his compensation earned through the termination date.

 

2.           Without Cause.  In the event that Executive is terminated without cause, as hereinafter defined, Executive shall be entitled to an amount equal to three (3) months of the rate of salary then being paid to Executive as of the date of such termination plus the amount of the bonus (if any) paid or payable to Executive relative to services performed by Executive during the previous calendar year.  The amounts payable under this Section IV.B.2 shall be in addition to Executive’s earned wages through the date his employment is terminated from the Company, his accrued but unused vacation, reimbursements of his outstanding expenses incurred and submitted in compliance with Company policies and any other portion of his compensation earned through the termination date.

 

C.           Related Provisions.  The following terms, conditions and definitions shall apply to the termination of Executive:

 

1.           “Termination Without Cause.”  For purposes of Section IV.B above, a termination without cause shall be deemed to constitute any termination of Executive’s employment hereunder by the Company, or by Executive, other than a termination for cause as defined below.  Notwithstanding any contrary provision herein, it is understood that a termination without cause also shall include a termination which either:

 

(a)           occurs due to the death of Executive or to any physical or mental Long-Term Disability that would prevent the performance of Executive’s duties under this Agreement.  For the purposes of this Agreement, a “Long-Term Disability” shall mean a long-term disability that after consideration and implementation of reasonable accommodations (provided that no accommodation that imposes undue hardship on the Company will be required), renders or will render Executive unable to perform his essential job functions for a period longer than four (4) months.  The determination of Executive’s Long-Term Disability shall be made by Executive’s attending physician unless the Board disagrees with such determination, in which case Executive’s Long-Term Disability shall be determined by a majority of three physicians qualified to practice medicine in the State of the Executive’s residence, one to be selected by each of the Executive (or his authorized representative) and the Board and the third to be selected by such two designated physicians;

 

  

  

  

 

(b)           is effected, for any reason, by the Company, with or without cause, within one year after a single party (other than Executive) obtains control of the Company, whether by a purchase or purchases of its stock, by merger, by an acquisition of the Company’s assets, or otherwise; or

 

(c)           is effected by Executive and is attributable to the Company’s treatment of Executive in the manner as referenced in paragraph 2(b) immediately below.

 

2.           “Termination For Cause.”  Subject to the notice requirement as provided in paragraph 4 below, for purposes of Section IV.B.2 (and Section IV.C.1) above, a termination for cause shall be a termination of Executive’s employment hereunder made:

 

(a)           by the Company, if Executive:

 

(i)           materially breaches, or habitually neglects, the duties either that are required to be performed under the terms specified herein or as delegated to Executive as provided herein;

 

(ii)           commits such acts of dishonesty, fraud, misrepresentation, or other acts of moral turpitude as would prevent the effective performance of Executive’s duties;

 

(iii)           is indicted or convicted of any felony or any crime involving dishonesty, or any crime which would adversely affect the reputation of the Company in a material manner;

 

(iv)           intentionally damages any property, of a substantial value or nature, of the Company;

 

(v)           exhibits conduct which demonstrates unfitness to serve;

 

(vi)           fails to achieve milestones and tasks, referred to in Section III.B.2 above, including but not limited to failure to perform, or continuing to neglect the performance of duties assigned to Executive, which failure or neglect will significantly and adversely affect the Company’s business or business prospects.

 

(b)           by Executive, unless such termination by Executive is

 

(i)           reasonably attributable to the Company’s treatment of Executive in a demeaning nature or in a manner inconsistent with Executive’s duties referenced herein (in which event, so attributable, the termination is deemed without cause, as referenced in paragraph 1(c) immediately above), or

 

  

  

  

 

(ii)           subsequent to a change of control of the Company, or

 

(iii)           subsequent to a significant change in the responsibilities of the Executive, except as has been already indicated to Executive in writing, or

 

D.           Company Actions.  All relevant determinations to be made by the Company under paragraph C.2(a) above shall be made in the reasonable discretion of the Board (or, if so delegated by said Board, by a committee of the Board), acting in good faith, and, except as otherwise specified herein, shall be conclusive and binding, but shall be subject to arbitration in accordance with Section V below.  This Agreement is intended to comply with the requirements of Internal Revenue Code Section 409A and the Board and the Board committee will interpret its provisions accordingly.  Executive understands and agrees that the Company makes no assurances with respect to the tax consequences arising as a result of this Agreement and the payment of any tax liabilities or related penalties arising out of this Agreement is solely and exclusively the responsibility of Executive, without any expectation or understanding that the Company will pay or reimburse Executive for such taxes or other items.

 

E.           Notice and Remedy.  In the event that any reason for termination by the Company under paragraph C.2(a) above, or by Executive under paragraph C.2(b) above, may be cured by Executive, or the Company, as the case may be, then the Company, or Executive, shall first give a written notice to the other (by mail, or by email, or by fax, to the last known address of the recipient; said notice being deemed given, if by mail, as of the earlier of four days after mailing or as of the date when actually received, or, if by email or fax, when sent), specifying the reason for termination and providing a period of 30 days to cure the fault or reason specified.  Lacking such cure within said 30 days, or if the notified party earlier refuses to effect the cure, the termination shall then be deemed effective.  If such cure is so made, the termination shall not then be deemed effective, but any later conduct of a similar nature constituting a reason for termination shall allow the Company, or Executive, as the case may be, the right to cause the termination effectiveness without need for any further period of time to cure.  All communications shall be sent to the address as set forth on the signature page hereof, or to such other address as a party may designate by ten days’ advance written notice to the other party hereto.

 

	
V.

	
ARBITRATION.

 

A.           Arbitration.  Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, or any of the rights, benefits or obligations resulting from its terms, shall be settled by arbitration in San Francisco, California. .  Except for the right of the Company and Executive to seek injunctive relief in court, any controversy, claim or dispute of any type arising out of or relating to Executive’s employment or the provisions of this Agreement shall be resolved in accordance with this Section V of the Agreement, regarding resolution of disputes, which will be the sole and exclusive procedure for the resolution of any such disputes.  This Agreement shall be enforced in accordance with the Federal Arbitration Act, the enforcement provisions of which are incorporated by this reference.  Matters subject to these provisions include, without limitation, claims or disputes based on statute, contract, common law and tort and will include, for example, matters pertaining to termination, discrimination, harassment, compensation and benefits.  Matters to be resolved under these procedures also include claims and disputes arising out of statutes such as the Fair Labor Standards Act, Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the California labor code, and the California Fair Employment and Housing Act.  Nothing in this provision is intended to restrict Executive from submitting any matter to an administrative agency with jurisdiction over such matter.

 

  

  

  

 

The Executive and the Company agree that any disputes related to or arising out of the Executive’s employment with the Company will be determined by arbitration in accordance with the then-current JAMS employment arbitration rules and procedures, except as modified herein.  The arbitration will be conducted by a sole neutral arbitrator who has had both training and experience as an arbitrator of general employment and commercial matters and who is, and for at least ten (10) years has been, a partner, a shareholder, or a member in a law firm.  If the Company and Executive cannot agree on an arbitrator, then the arbitrator will be selected by JAMS in accordance with Rule 12 of the JAMS employment arbitration rules and procedures.  Reasonable discovery will be permitted by both parties and the arbitrator may decide any issue as to discovery.  The arbitrator may decide any issue as to whether or as to the extent to which any dispute is subject to arbitration in this Section V and the arbitrator may award any relief permitted by law.  The arbitrator must render the award in writing, including an explanation of the reasons for the award.  Judgment upon the award may be entered by any court having jurisdiction of the matter, and the decision of the arbitrator will be final and binding.  The parties hereto hereby waive to the fullest extent permitted by law any rights to appeal or to review of such award by any court.  The statute of limitations applicable to the commencement of a lawsuit will apply to the commencement of an arbitration under Section V of this Agreement.  At the request of any party, the arbitrator, attorneys, parties to the arbitration, witnesses, experts, court reporters or other persons present at the arbitration shall agree in writing to maintain the strict confidentiality of the arbitration proceedings.  The arbitrator’s fees will be paid in full by the Company, unless Executive agrees in writing to pay some or all of such fees.

 

B.           Fees.  Unless otherwise agreed, the prevailing party (if a prevailing party is determined to exist by the arbitrator or judge) will be entitled to its costs and attorneys’ fees incurred in any arbitration or other proceeding relating to the interpretation or enforcement of this Agreement.

 

C.           Acknowledgement.  EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION V, WHICH DISCUSSES ARBITRATION.  EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO ARBITRATION, AND THAT THE PROVISIONS SET FORTH IN THIS SECTION V CONSTITUTE A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL.

 

  

  

  

 

	
VI.

	
LEGAL ADVICE.

 

Executive acknowledges that an opportunity has been afforded to Executive to consult with legal counsel with respect to this Agreement and that no individual representing the Company has given legal advice with respect to this Agreement.

 

	
VII.

	
MISCELLANEOUS AND CONSTRUCTION.

 

Except as otherwise specifically provided herein, this Agreement:

 

A.           and any benefits or obligations herein may not be assigned or delegated by Executive (but may be so assigned or delegated by the Company);

 

B.           contains the entire understandings of the parties as to its subject matter, and replaces and supersedes any existing employment agreement and any and all contrary prior understandings or agreements;

 

C.           may be amended or modified only by a written amendment or modification signed by the Company and Executive;

 

D.           is made in, and shall be construed under the laws of, the State of California;

 

E.           inures to the benefit of, and is binding upon, the permitted successors, assigns, distributees, personal representatives, heirs and other successors-in-interest to and of the parties hereto;

 

F.           shall not be interpreted by reference to any of the captions or headings of the paragraphs herein, which captions or headings have been inserted for convenience purposes only;

 

G.           shall be fully effectuated in accordance with its tenor, effect and purposes by each of the parties hereto by executing such further documents or taking such other actions as may be reasonably requested by the other party hereto; and

 

H.           shall be interpreted, as to its remaining provisions, to be fully lawful and operative, to the extent reasonably required to fulfill its principal tenor, effect and purposes, in the event that any provision either is found by any court of competent jurisdiction to be unlawful or inoperative or violates any statutory or legal requirement, and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

 

I.           may be executed in more than one counterpart, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

[Signature Page Follows]

 

  

  

  

 

IN WITNESS WHEREOF, the Company and Executive have executed this Agreement as of the day and year first above written.

 

	 	 	 	COMPANY:	 
	 	 	 	 	 
	 	 	 	NOVABAY PHARMACEUTICALS, INC.	 
	 	 	 	 	 
	
 

	 	By:	
/s/ Ramin Najafi  

	 
	
 

	 	
Name:

Title: 

	
 
Ramin “Ron” Najafi, Ph.D.

Chairman and CEO

	 
	 	 	 	 	 
	
 

	 	Address: 	
5980 Horton Street, Suite 550

Emeryville, CA 94608

	 
	 	 	Fax No.: 	(510) 740-3629	 
	 	 	E-mail: 	rnajafi@novabaypharma.com	 
	 	 	 	 	 

 

	 	 	 	EXECUTIVE:	 
	 	 	 	 	 
	 	 	 	MARK ANDERSON	 
	 	 	 	 	 
	
 

	 	By:	
/s/ Mark Anderson 

	 
	
 

	 	Address: 	
 
 

	 
	
 

	 	Fax No.:   	
 

	 
	 	 	E-mail:ex10-1.htm

Exhibit 10.1

 

THIRD LOAN MODIFICATION AGREEMENT

 

This Third Loan Modification Agreement (this “Loan Modification Agreement”) is entered into as of March 24, 2010, but is effective as of March 31, 2010, by and between SILICON VALLEY BANK, a California corporation, with its principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan production office located at 535 Fifth Avenue, 27th Floor, New York, New York 10017 (“Bank”) and CHYRON CORPORATION, a New York corporation with its chief executive office located at 5 Hub Drive, Melville, New York 11747 (“Borrower”).

 

1.           DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS.  Among other indebtedness and obligations which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a loan arrangement dated as of June 19, 2008, evidenced by, among other documents, a certain Loan and Security Agreement dated as of June 19, 2008, between Borrower and Bank, as amended by a certain First Loan Modification Agreement dated as of April 16, 2009, between Borrower and Bank, and as further amended by a certain Second Loan Modification Agreement dated as of June 18, 2009, between Borrower and Bank (as amended, the “Loan Agreement”).  Capitalized terms used but not otherwise defined herein shall have the same meaning as in the Loan Agreement.

 

2.           DESCRIPTION OF COLLATERAL.  Repayment of the Obligations is secured by the Collateral as described in the Loan Agreement (together with any other collateral security granted to Bank, the “Security Documents”).  Hereinafter, the Security Documents, together with all other documents evidencing or securing the Obligations, shall be referred to as the “Existing Loan Documents”.

 

3.           DESCRIPTION OF CHANGE IN TERMS.

 

	
  

	
A.

	
Modifications to Loan Agreement.

 

	
  

	
1.

	
The Loan Agreement shall be amended by deleting the following appearing as Section 2.1.5(c) thereof (entitled “Prepayment Upon an Event of Loss”) in its entirety:

 

“           (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 or, as applicable, the 2009 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 or 2009 Equipment Advance paid by Borrower on account of an Event of Loss shall be applied to prepay amounts owing for such Equipment Advance or 2009 Equipment Advance in inverse order of maturity.”

 

and inserting in lieu thereof the following:

 

“           (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, the 2009 Equipment Maturity Date, or the 2010 Equipment Maturity Date, as applicable, 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, 2009 Equipment Advance, or 2010 Equipment Advance paid by Borrower on account of an Event of Loss shall be applied to prepay amounts owing for such Equipment Advance, 2009 Equipment Advance, or 2010 Equipment Advance in inverse order of maturity.”

 

  

  

  

 

	
  

	
2.

	
The Loan Agreement shall be amended by inserting the following new Section 2.1.7 (entitled “2010 Equipment Advances”) to appear immediately following the existing Section 2.1.6 thereof (entitled “2009 Equipment Advances”):

 

“           2.1.7           2010 Equipment Advances.

 

(a)           Availability.  Subject to the terms and conditions of this Agreement, during Draw Period No. 3, Bank shall make advances (each, a “2010 Equipment Advance” and, collectively, “2010 Equipment Advances”) not exceeding the 2010 Equipment Line.  2010 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 2010 Equipment Advance.  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.  No 2010 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 thirty-five percent (35%) of the proceeds of the 2010 Equipment Line shall be used to finance Other Equipment.  Each 2010 Equipment Advance must be in an amount greater than or equal to the lesser of: (i) One Hundred Thousand Dollars ($100,000.00) or (ii) the amount that has not yet been drawn under the 2010 Equipment Line.  After repayment, no 2010 Equipment Advance may be reborrowed.

 

(b)           Repayment.  Each 2010 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)(iv), beginning on the Payment Date of the month following the Funding Date of such 2010 Equipment Advance and continuing on the Payment Date of each month thereafter.  All unpaid principal and interest on each 2010 Equipment Advance shall be due and payable in full on the applicable 2010 Equipment Maturity Date.”

 

	
  

	
3.

	
The Loan Agreement shall be amended by deleting the following text appearing in Section 2.3(a) thereof (entitled “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: (A) prior to 2009 Effective Date No. 2, the greater of: (x) one and one half of one percentage points (1.50%) above the Prime Rate, and (y) six and one half of one percent (6.50%), and (B) on and after 2009 Effective Date No. 2, the greater of: (x) one and three quarters of one percentage points (1.75%) above the Prime Rate, and (y) five and three quarters of one percent (5.75%), which interest shall in each case be payable monthly in accordance with Section 2.3(f) below.”

 

and inserting in lieu thereof the following:

 

“           (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: (A) prior to 2009 Effective Date No. 2, the greater of: (x) one and one half of one percentage points (1.50%) above the Prime Rate, and (y) six and one half of one percent (6.50%), (B) on and after 2009 Effective Date No. 2, through and including the date that is one (1) day prior to the 2010 Effective Date, the greater of: (x) one and three quarters of one percentage points (1.75%) above the Prime Rate, and (y) five and three quarters of one percent (5.75%), and (C) on and after the 2010 Effective Date, one and three quarters of one percentage points (1.75%) above the Prime Rate, which interest shall in each case be payable monthly in accordance with Section 2.3(f) below.”

 

	
  

	
4.

	
The Loan Agreement shall be amended by inserting the following text to appear at the end of Section 2.3(a) thereof (entitled “Interest Rate”):

 

“           (iv)           2010 Equipment Advances.  Subject to Section 2.3(b), the principal amount outstanding for each 2010 Equipment Advance shall accrue interest at a floating per annum rate equal to two percentage points (2.0%) above the Prime Rate, which interest shall be payable monthly in accordance with Section 2.3(f) below.”

 

  

  

  

 

	
  

	
5.

	
The Loan Agreement shall be amended by deleting the following appearing as Section 3.4(b) thereof (entitled “Equipment Advances”) in its entirety:

 

“           (b)           Equipment Advances.  Subject to the prior satisfaction of all other applicable conditions to the making of an Equipment Advance or 2009 Equipment Advance set forth in this Agreement, to obtain an Equipment Advance or 2009 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 or 2009 Equipment Advance, Bank shall disburse such Equipment Advance or 2009 Equipment Advance by transfer to the Designated Deposit Account.”

 

and inserting in lieu thereof the following:

 

“           (b)           Equipment Advances.  Subject to the prior satisfaction of all other applicable conditions to the making of an Equipment Advance, 2009 Equipment Advance, or 2010 Equipment Advance as set forth in this Agreement, to obtain an Equipment Advance, 2009 Equipment Advance, or 2010 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.  Such 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, 2009 Equipment Advance, or 2010 Equipment Advance, Bank shall disburse such Equipment Advance, 2009 Equipment Advance, or 2010 Equipment Advance by transfer to the Designated Deposit Account.”

 

	
  

	
6.

	
The Loan Agreement shall be amended by deleting the following appearing as Section 6.7(b) thereof (entitled “Tangible Net Worth”) in its entirety:

 

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

 

 

and inserting in lieu thereof the following:

 

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

 

  

  

  

 

	
  

	
7.

	
The Loan Agreement shall be amended by inserting the following new definitions to appear alphabetically in Section 13.1 thereof:

 

“           “2010 Effective Date” is March 31, 2010.”

 

“           “2010 Equipment Advance” or “2010 Equipment Advances” is defined in Section 2.1.7(a).”

 

“           “2010Equipment Line” is a 2010 Equipment Advance or 2010 Equipment Advances in an aggregate amount of up to Five Hundred Thousand Dollars ($500,000.00).”

 

“           “2010 Equipment Maturity Date” is, for each 2010 Equipment Advance, the Payment Date that is thirty-five (35) months after the first (1st) Payment Date following the Funding Date of such 2010 Equipment Advance.”

 

“           “Draw Period No. 3” is the period of time from the 2010 Effective Date through the earlier to occur of (a) December 31, 2010, or (b) an Event of Default.”

 

	
  

	
8.

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

 

“           “Credit Extension” is any Advance, Equipment Advance, 2009 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.”

 

“           “Financed Equipment” is all present and future Eligible Equipment in which Borrower has any interest which is financed by an Equipment Advance or 2009 Equipment Advance.”

 

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

 

“           “Revolving Line Maturity Date” is March 31, 2010.”

 

and inserting in lieu thereof the following:

 

“           “Credit Extension” is any Advance, Equipment Advance, 2009 Equipment Advance, 2010 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.”

 

“           “Financed Equipment” is all present and future Eligible Equipment in which Borrower has any interest which is financed by an Equipment Advance, 2009 Equipment Advance, or 2010 Equipment Advance.”

 

“           “Maturity Date” is, as applicable, the Revolving Line Maturity Date, Equipment Maturity Date, 2009 Equipment Maturity Date, or 2010 Equipment Maturity Date.”

 

“           “Revolving Line Maturity Date” is March 30, 2011.”

 

4.           FEES.  Borrower shall pay to Bank: (a) a Revolving Line commitment fee equal to Five Thousand Six Hundred Twenty-Five Dollars ($5,625.00), and (b) a 2010 Equipment Line commitment fee equal to Two Thousand Five Hundred Dollars ($2,500.00), which fees shall each be due on the date hereof and shall each be deemed fully earned as of the date hereof.  Borrower shall also reimburse Bank for all legal fees and expenses incurred in connection with this amendment to the Existing Loan Documents.

 

5.           RATIFICATION OF PERFECTION CERTIFICATE.  Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in a certain Perfection Certificate dated as of June 18, 2009, between Borrower and Bank (the “Perfection Certificate”), and acknowledges, confirms and agrees the disclosures and information Borrower provided to Bank in the Perfection Certificate have not changed, as of the date hereof, except with respect to the changes thereto set forth on Schedule A attached hereto.

 

6.           CONSISTENT CHANGES.  The Existing Loan Documents are hereby amended wherever necessary to reflect the changes described above.

 

7.           RATIFICATION OF LOAN DOCUMENTS.  Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of all security or other collateral granted to Bank and confirms that the indebtedness secured thereby includes, without limitation, the Obligations.

 

8.           NO DEFENSES OF BORROWER.  Borrower hereby acknowledges and agrees that Borrower has no offsets, defenses, claims, or counterclaims against Bank with respect to the Obligations, or otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims against Bank, whether known or unknown, at law or in equity, all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from any liability thereunder.

 

  

  

  

 

9.           CONTINUING VALIDITY.  Borrower understands and agrees that in modifying the existing Obligations, Bank is relying upon Borrower’s representations, warranties, and agreements, as set forth in the Existing Loan Documents.  Except as expressly modified pursuant to this Loan Modification Agreement, the terms of the Existing Loan Documents remain unchanged and in full force and effect.  Bank’s agreement to modifications to the existing Obligations pursuant to this Loan Modification Agreement in no way shall obligate Bank to make any future modifications to the Obligations.  Nothing in this Loan Modification Agreement shall constitute a satisfaction of the Obligations.  It is the intention of Bank and Borrower to retain as liable parties all makers of Existing Loan Documents, unless the party is expressly released by Bank in writing.  No maker will be released by virtue of this Loan Modification Agreement.

 

10.           CONFIDENTIALITY.  Bank may use confidential information for the development of databases, reporting purposes, and market analysis, so long as such confidential information is aggregated and anonymized prior to distribution unless otherwise expressly permitted by Borrower.  The provisions of the immediately preceding sentence shall survive the termination of the Loan Agreement.

 

11.           COUNTERSIGNATURE.  This Loan Modification Agreement shall become effective only when it shall have been executed by Borrower and Bank.

 

[The remainder of this page is intentionally left blank]

 

 

 

 

  

  

  

 

This Loan Modification Agreement is executed as of the date first written above.

 

BORROWER:

 

CHYRON CORPORATION

 

By: /s/ Jerry Kieliszak

Name: Jerry Kieliszak

Title: SVP & CFO, Treasurer and Corporate Secretary

 

BANK:

 

SILICON VALLEY BANK

 

By: /s/ A. Bonnie Ryan

Name: A. Bonnie Ryan

Title: Vice President

  

  

  

 

Schedule A

[Please see attached]

 

 

 

 

 

  

  

  

 

CHYRON CORPORATION

MARCH 23, 2010 UPDATES TO PERFECTION CERTIFICATE DATED JUNE 18, 2009

 

 

 

 

 

  

  

  

 

Chyron Corporation

March 23, 2010 update to Perfection Certificate dated June 18, 2009

1.f. – States in which Chyron is qualified to do business

California

District of Columbia

Florida

Georgia

Indiana

Minnesota

New Jersey

New York

Texas

 

  

  

  

 

Chyron Corporation

March 23, 2009 update to Perfection Certificate dated June 18, 2009

3.c.           Locations where the company owns, leases or occupies any real property

REMOVE the following address:

Unit 4

Cutbush Court

Danehill, Lower Early

Reading, UK RG6 4UW

[leased office space]

ADD the following addresses:

A.02 Power Road Studios

114 Power Road

Chiswick, London W4 5PY

United Kingdom

[leased office space]

1560 Broadway, 17th floor

NY, NY 10036

[leased office space]

3.d.           Locations where the company maintains any inventory, equipment or other property

REMOVE the following address:

Unit 4

Cutbush Court

Danehill, Lower Early

Reading, UK RG6 4UW

[leased office space]

ADD the following addresses:

A.02 Power Road Studios

114 Power Road

Chiswick, London W4 5PY

United Kingdom

[fixed assets in the form of office equipment and product demo equipment worth approximately $75,000 depreciated value]

1560 Broadway, 17th floor

NY, NY 10036

[fixed assets in the form of desktop and laptop computer equipment, printers and internal use software with a depreciated value of approximately $25,000]

 

  

  

  

 

Chyron Corporation

March 23, 2010 update to Perfection Certificate dated June 18, 2009

 

7.           LITIGATION

a.           Pending litigation

On December 1, 2009, one of our distributors, International Broadcast Consultants, Inc., or IBC, filed a lawsuit against us in the Superior Court of the State of California for the County of Los Angeles, which was subsequently removed to the United States District Court for the Central District of California on January 4, 2010.  IBC’s complaint, as amended, asserts claims for defamation, intentional interference with contractual relationship, intentional interference with prospective business advantage, negligent interference with prospective business advantage, and unfair business practices relating to an email that one of our employees sent to a customer served by IBC that expressed the employee’s belief that IBC may have ceased operations, which IBC alleges caused it to lose business from that customer and other damages.  IBC seeks exemplary and punitive damages in an amount up to $30 million. On March 22, 2010, the court set a trial date of December 14, 2010.  We plan to file a motion to dismiss certain claims in the complaint in the near future.  Because the case is in its early stages and discovery has not yet begun, we cannot predict the possible outcome of the litigation, but we believe IBC’s claims lack merit and we intend to defend against them vigorously.

 

  

  

  

 

Chyron Corporation

March 23, 2010 update to Perfection Certificate dated June 18, 2009

Special Types of Property

Software not registered with the U.S. Copyright Office

Lyric software

CAMIO software

iSQ Server software

OMS (Order Management System) software

IRB software

XClyps software

HD/SD Lyric Plug-in for Avid NLE’s

Axis software

Patents and patent applications

There has been no change from 2008

Trademarks or trademark applications

See attached list

Tradenames in use for which trademark applications may be filed:

Axis

AxisHD

FastMaps

FastCharts

FastQuotes

AxisNews

Stocks, bonds or other securities

None other than the overnight repurchase agreements purchased for our account by SVB

Lease of equipment, security agreements naming such person as secured party or other chattel paper

Lessor:  IKON

Type:  capital leases

Equipment leased:  copiers, color copier, and fax machines

Location:  5 Hub Dr., Melville, NY  11747

Terms and monthly amounts:

Copier/Fax/Printer                                48 mos. [ends 3/13]                                $2,386.50

Color copier                                60 mos. [ends 3/11]                                $1,376.60

Motor vehicles

1993 Ford Econoline Van

 

  

  

  

 

Chyron Corporation

March 23, 2010 update to Perfection Certificate dated June 18, 2009

Officers of the Company and Its Subsidiaries

  

	
Office/Title

	
Name of Officer

	
Company/Subsidiary

	  	  	  
	
President & CEO

	
Michael Wellesley-Wesley

	
Company

	  	  	  
	
Senior Vice President, CFO,

	  	  
	
Treasurer & Secretary

	
Jerry Kieliszak

	
Company

	  	  	  
	
Senior Vice President &

	  	  
	
Chief Operating Officer

	
Kevin Prince

	
Company

	  	  	  
	
Vice President, Controller,

	  	  
	
Asst. Treasurer & Asst. Secretary

	
Dawn Johnston

	
Company

	  	  	  
	
President

	
Michael Wellesley-Wesley

	
CIC* (Sub.)

	  	  	  
	
Senior Vice President &

	  	  
	
Secretary

	
Jerry Kieliszak

	
CIC* (Sub.)

	  	  	  
	
VP & Controller

	
Dawn Johnston

	
CIC* (Sub.)

	  	  	  
	
Director

	
Michael Wellesley-Wesley

	
CF** (Sub.)

	  	  	  
	
Director

	
Jerry Kieliszak

	
CF** (Sub.)

 

 

*  CIC = Chyron International Corporation subsidiary

**  CF = Chyron France SARL subsidiary

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}]]