Document:

EMPLOYMENT AGREEMENT

employment agreement

THIS AGREEMENT (the "Agreement") is being made as of January 30, 2004, by and between CHYRON CORPORATION, a New York corporation (the "Company"), having its principal offices at 5 Hub Drive, Melville, New York 11747, and MICHAEL WELLESLEY-WESLEY ("MWW") having an address at Hall Farm House, Little Massingham, King's Lynn, Norfolk, PE322JR, United Kingdom.

W I T N E S S E T H:

WHEREAS, the Company desires to continue to employ MWW as its Chief Executive Officer and President (the "CEO"), and MWW desires to continue to hold such positions, subject to and upon the terms and conditions contained herein; and

WHEREAS, the Company and MWW have previously entered into an Employment Agreement, dated February 1, 2003, which is expiring February 21, 2004 (the "2003 Agreement"), and the parties wish to enter into this Agreement as the successor employment agreement between the parties.

NOW, THEREFORE, in consideration of the mutual premises and agreements contained herein, and intending to be legally bound hereby, the parties hereto agree as follows:

	Nature of Employment: Term of Employment

.  The Company hereby agrees to continue to employ MWW and MWW agrees to continue to serve the Company as its CEO, upon the terms and conditions contained herein, for a term commencing on February 21, 2004 (the "Commencement Date") and continuing until February 21, 2005 (the "Employment Term").  The Employment Term may be extended for a one-year period (the "Extended Employment Term") only upon both parties' consent.

	Duties and Powers as Employee

.

	During the Employment Term, MWW shall be employed by the Company as CEO, which position is, and shall remain at all times during the Employment Term, the senior executive officer position of the Company.  MWW shall devote his full working time to his duties as CEO.  In performance of his duties, MWW shall report directly to and be subject to the direction of the Board of Directors of the Company or any Committee thereof, including, without limitation, the Office of the Chairman.  As CEO, MWW shall have all the responsibilities, duties and authority as are generally associated with the position of CEO of a public company, including full executive power over, and responsibility for, managing, directing and supervising all aspects of the business of the Company worldwide.  The CEO shall also be responsible for developing the business plan and objectives of the Company and managing the execution of such plan in conjunction with the Office of the Chairman, or similar committee or office created by the Board of Directors.

	As CEO, MWW shall travel in accordance with the reasonable needs of the business, which shall require him to conduct business for the Company primarily in  Melville, New York and such other locations as he deems necessary.

	Compensation

.

	As compensation for his services hereunder, the Company shall pay MWW, during the Employment Term, a base salary (the "Base Salary") payable in equal semi-monthly installments at the annual rate of $280,000.

	In addition to the Base Salary, and subject to the sole discretion of the Compensation Committee of the Board of Directors, MWW may receive, as incentive compensation, an annual bonus (the "Incentive Bonus").  The Company shall pay the Incentive Bonus, if any, to MWW only after the issuance of the results of the annual audit of its books and records by its independent auditors.

	Expenses; Vacation; Insurance; Other Benefits

.

	MWW shall be entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in the performance of his duties hereunder, upon submission and approval of written statements and bills in accordance with the then regular procedures of the Company.

	MWW shall be entitled to twenty (20) days paid vacation time per annum or such other period as is in accordance with the regular procedures of the Company governing senior executive officers as determined from time to time by the Company's Board of Directors.

	MWW shall be entitled to participate in all employee benefit plans and programs of the Company now or hereafter made available to all senior executives of the Company as a group, to the extent eligible, (including, without limitation, each retirement plan, supplemental and excess retirement plans, annual and long-term incentive compensation plans, stock option and purchase plans, group life insurance, accident and death insurance, medical and dental insurance, sick leave, pension plans, disability plans and fringe benefit plans) on a basis which is no less favorable than is made available to any other senior executive of the Company, except as otherwise provided herein.  MWW shall participate in the Company's Executive Retention Program (the "Program") only to the extent the Program provides for the payment of a Loyalty Bonus, an Annual Bonus, if any, and Severance Benefits upon a sale of the Company or the date the participant transfers to a successor company.  MWW shall not be entitled to participate in the Program in the event he is terminated involuntarily and such termination is unrelated to the sale of the Company.  In the event MWW receives severance under the Program, then such severance shall be in lieu of any severance obligations under this Agreement, except as provided herein.

	Representations and Warranties of Employee

.  MWW represents and warrants to the Company that (a) as of the Commencement Date, MWW is under no contractual or other obligation which is inconsistent with the execution of this Agreement, the performance of his duties hereunder, or the other rights of the Company hereunder, and (b) MWW is under no physical or mental disability that would hinder his performance of duties under this Agreement.

	Non-Competition

.

	MWW agrees that he will not:  (i) during the period he is employed by the Company, engage in, or otherwise directly or indirectly be employed by, or act as a consultant to, or be a director, officer, employee, owner, member or partner of, any other business or organization that is or shall then be competing with the Business of the Company (as defined below), and (ii) for a period of one (1) year after he ceases to be employed by the Company, directly or indirectly, compete with or be engaged in the Business of the Company, or be employed by, or act as consultant to, or be a director, officer, employee, owner, member or partner of, any business or organization which, at the time of such cessation, competes with or is engaged in the Business as the Company, except that in each case the provisions of this Section 6 will not be deemed breached merely because MWW: (i) owns not more than five percent (5.0%) of the outstanding common stock of a corporation, if, at the time of its acquisition by MWW, such stock is listed on a national securities exchange, is reported on NASDAQ, or is regularly traded in the over-the-counter market by a member of a national securities exchange; or (ii) MWW is a passive investor in any fund in which he has no investment discretion.  This prohibition shall apply to the entire world in recognition of the fact that the Company operates on a multi-national basis.  "Business of the Company" shall mean the design, manufacture, sale, re-sale, distribution or maintenance of character generators that are used by the broadcast and cable industries.

	It is the intent of the parties to this Agreement that the provisions of this Section 6 shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought.  If any particular provisions or portions of this Section 6 shall be adjudicated to be invalid or unenforceable, such provisions or portion thereof shall be deemed amended to the minimum extent necessary to render such provision or portion valid and enforceable, such amendment to apply only with respect to the operation of such provisions or portions in the particular jurisdiction in which such adjudication is made.

	The parties acknowledge that damages and remedies at law for any breach of this Section 6 will be inadequate and that the Company shall be entitled to specific performance and other equitable remedies (including injunction) and such other relief as a court or tribunal may deem appropriate in addition to any other remedies the Company may have.  MWW also waives the posting of any bond in connection with the issuance of any injunctive relief.

	Patents; Copyrights

.  Any interest in patents, patent applications, inventions, copyrights, developments, and processes ("Such Inventions") which MWW now or hereafter during the period he is employed by the Company may own or develop relating to the fields in which the Company may then be engaged shall belong to the Company; and forthwith upon request of the Company, MWW shall execute all such assignments and other documents and take all such other action as the Company may reasonably request in order to vest in the Company all his right, title, and interest in and to Such Inventions, free and clear of all liens, charges and encumbrances.  The Company will reimburse MWW for any reasonable fees and expenses (including fees and expenses of counsel) incurred by MWW in connection with executing such assignments and documents and taking any such action at the request of the Company.

	Confidential Information

.  All confidential information which MWW may now possess or may obtain during the Employment Term relating to the business of the Company shall not be published, disclosed, or made accessible by him to any other person, firm, corporation or entity during the Employment Term or anytime thereafter without the prior written consent of the Company; provided that the foregoing shall not apply to information which is not unique to the Company or which is generally known to the industry or the public, other than as a result of MWW's breach of this covenant, and shall not preclude MWW from disclosing any such information to the extent such disclosure is required by law, disclosure would, in the reasonable judgment of MWW, be in the best interest of the Company or is reasonably necessary in order to defend MWW or to enforce MWW's rights under this Agreement in connection with any action or proceeding to which the Company or its affiliates is a party.  MWW shall return all tangible evidence of such confidential information to the Company prior to or at the termination of his employment.

	Termination

.

	Notwithstanding anything herein contained, if on or after the date hereof and prior to the end of the Employment Term, MWW is terminated "For Cause" (as defined below) then the Company shall have the right to give notice of termination of MWW's services hereunder as of a date to be specified in such notice, and this Agreement shall terminate on the date so specified.  Termination "For Cause" shall mean MWW shall:  (i) be convicted of a felony crime; (ii) willfully commit any act or willfully omit to take any action in bad faith and to the material detriment of the Company; (iii) commit an act of active and deliberate fraud against the Company; or (iv) materially breach any term of this Agreement and fail to correct such breach within ten (10) days after written notice of the commission thereof.  In the event that this Agreement is terminated "For Cause", then MWW shall be entitled to receive only his Base Salary at the rate provided in Section 3 to the date on which termination shall take effect.

	In the event that MWW shall be physically or mentally incapacitated or disabled or otherwise unable fully to discharge his duties hereunder for a period of ninety (90) consecutive days, then this Agreement shall terminate upon an additional thirty (30) days' written notice to MWW, and no further compensation shall be payable to MWW, except as may otherwise be provided under any disability insurance policy and that pro rata portion of the Base Salary not previously paid through the date of termination.

	In the event that MWW shall die, then this Agreement shall terminate on the date of MWW's death, and no further compensation shall be payable to MWW, except as may otherwise be provided under any insurance policy or similar instrument and that pro rata portion of the Base Salary not previously paid through the date of termination.

	If MWW's employment is terminated by the Company other than pursuant to subparagraphs 9(a), 9(b) or 9(c) hereof, MWW shall be entitled to receive from the Company: (i) the Base Salary for the period equal to one month following the date of termination; (ii) MWW shall have an exercise period for the options granted pursuant to the 2003 Agreement (the "Options") equal to the remaining term of the Options without regard to any shorter exercise period set forth in the 1999 Stock Option Plan (the "SOP") as a result of termination, and this provision shall be in addition to any severance being received by MWW under the Program; (iii) all benefits to which MWW is entitled under this Agreement for the period equal to one month following the date of termination; (iv) any accrued but unpaid Base Salary and/or Incentive Bonus; and (v) any previously incurred but unpaid business expenses and/or other amounts due under Paragraph 4 of this Agreement. All amounts payable in accordance with this subsection shall be made in accordance with Company policy as if MWW had not been terminated.  The Company shall give written notice of termination to MWW which shall state the date the termination is to be effective.

	If the Company does not extend this Agreement, then the Options shall have an exercise period equal to the remaining term of the Options without regard to any shorter exercise period set forth in the SOP.

	Nothing contained in this Paragraph 9 shall be deemed to limit any other right the Company may have to terminate MWW's employment hereunder upon any ground permitted by law.

	Survival

.  The covenants, agreements, representations and warranties contained in or made pursuant to this Agreement shall survive MWW's termination of employment, irrespective of any investigation made by or on behalf of any party.

	Modification

.  This Agreement sets forth the entire understanding of the parties with respect to the subject matter hereof, supersedes all existing agreements between them concerning such subject matter, and may be modified only by a written instrument duly executed by each party.

	Notices

.  Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be delivered in person, by telecopier with electronic confirmation of delivery or by delivery to an internationally recognized carrier for overnight delivery to the party to whom it is to be given at the address of such party as set forth in the preamble to this Agreement (or to such other address as the party shall have furnished in writing in accordance with the provisions of this Section 12).  In the case of a notice to the Company, a copy of such notice (which copy shall not constitute notice) shall be delivered to Thelen Reid & Priest LLP, 875 Third Avenue, New York, New York 10022, Attn. Robert S. Matlin, Esq.  Any notice or other communication given by overnight delivery shall be deemed given at the time of delivery to the carrier, except for a notice changing a party's address which shall be deemed given at the time of receipt thereof.  Any notice given by telecopier shall be deemed given at the time the notice or other communication is delivered with electronic confirmation of delivery.

	Waiver

.  Any waiver by either party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision of this Agreement.  The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.  Any waiver must be in writing.

	Binding Effect

.  MWW's rights and obligations under this Agreement shall not be transferable by assignment or otherwise, such rights shall not be subject to encumbrance or the claims of MWW's creditors, and any attempt to do any of the foregoing shall be void.  The provisions of this Agreement shall be binding upon and inure to the benefit of MWW and his heirs and personal representatives, and shall be binding upon and inure to the benefit of the Company and its successors and assigns.

	Headings

.  The headings in this Agreement are solely for the convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

	Counterparts; Governing Law

.  This Agreement may be executed in any number of counterparts (and by facsimile), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  It shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the rules governing the conflicts of laws.

	Prior Agreements

.  All prior agreements between the Company and MWW with respect to compensation and services are hereby terminated as of the Commencement Date, except that all prior agreements concerning the terms of options previously granted shall remain in full force and effect and shall not be affected by the fact that MWW has become an employee of the Company.

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above.
CHYRON CORPORATION

By   /s/  Wesley W. Lang, Jr.___

Name: Wesley W. Lang, Jr.

Title: Chairman

   /s/  Michael Wellesley-Wesley___

Name: Michael Wellesley-WesleyEXHIBIT 99.3 Amendment to Credit Facility with National Bank of Canada

  EXHIBIT 10.15(c)
March 19, 2004 

StockerYale Canada Inc

275 Kesmark Street
Dollard Des Ormeaux, QC H9B 3J1 

 

Attention: 
  

Mark W. Blodgett, Chairman & CEO 
  

Francis J O’Brien,
Executive Vice President and CFO

Dear Sirs, 

RE: OFFER OF FINANCING

     

     

We
are pleased to present to you the terms and conditions under which National Bank of Canada
(the Bank) will make the financing below available to StockerYale Canada Inc. (the
Borrower) totalizing $ CDN 4,071,666; 

"A"       $2,500,000      Operating credit (renewal)

"B"       $1,396,666      Term loan (renewal)

"C"          $75,000      MasterCard BusinessCard (renewal)

>"D"        $100,000      Exchange risk operating credit (renewal)

	

  This
Offer of Financing amends the former second amendment to offer of financing dated August
27, 2003 the whole without novation and derogation, except as hereinafter set forth. 

1.     
          FACILITY “A” — OPERATING CREDIT   

  
1.1. Credit Facility  

  

	  	
Subject
to the provisions hereof, the Bank agrees to make available to the Borrower an operating
credit facility for a principal amount not exceeding CDN $2,500,000, which is to be used
to finance the Borrower’s usual operating requirements. 

  
1.2. Financing Options  

  

	  	
Subject
to the terms and conditions hereof, the Borrower may use and reuse this credit facility,
up to the maximum allowed, by means of variable-rate advances. 

  
1.3. Interest Rate  

  

	  	
The
variable-rate advances shall bear interest, from the time of disbursement until payment in
full, at the Canadian Prime rate of the Bank plus 2.00%, or 6.00% as at the date hereof.
Interest shall be calculated daily and payable monthly on the 26th day of each month. 

  
1.4. Standby fees  

  

	  	
Standby
fees calculated at an annual rate of 0.50% on the unused portion of the operating credit
shall be payable monthly by the Borrower. 

  
1.5. Disbursement and
Repayment  

  

	  	
The
credit facility is repayable on demand and may be reviewed periodically by the Bank, the
next review being scheduled on or before April 30, 2005. 

   

          Disbursements
and payments shall be made to or collected in equal multiples of $250,000. 

  
1.6. Financing Conditions  

  

	  	
Notwithstanding
the amount of the credit facility, the aggregate amount of advances shall at no time
exceed the total of: 

	
75% of the Borrower’s net Canadian accounts receivable (excluding holdbacks
receivable, contra or inter-company accounts, accounts of doubtful quality and those aged
90 days or more); and

	65% of the Borrower’s net U.S. accounts receivable (excluding holdbacks receivable,
contra or inter-company accounts, accounts of doubtful quality and those aged 90 days or
more); and

	85%
of the Borrower’s net foreign accounts receivable insured by EDC (excluding holdbacks
receivable, contra or inter-company accounts, accounts of doubtful quality and those aged
90 days or more); and 
	25% of the Borrower's inventory
(finished goods and raw materials) up to a maximum amount of $750,000. The
Borrower's inventories will be calculated as declare goods less a reserve of
500,000$ for obsolete inventories;

	60% of the Borrower's R& D provincial
tax credit 

	  	
The
value of the Borrower’s accounts receivable and inventory shall be established, from
time to time, by taking into account claims ranking prior to the security of the Bank.
Each month, on the 20th day of the following month, the Borrower shall furnish to the Bank
a detailed list of its accounts receivable by identifying Canadian, American and foreign
accounts, a detailed list of its accounts payable according to age, and a detailed list of
its inventory. Fixed monthly fees of $350.00 shall be charged to the Borrower for
monitoring accounts receivable and inventory and a monthly fee of $250 shall be charged
for the general monitoring of the file. 

     2.     
          FACILITY “B” — TERM LOAN   

  
2.1. Credit Facility 

  

	  	
Subject
to the provisions hereof, the Bank agrees to renew this existing a term loan for an amount
of CDN $1,396,666 which is the outstanding capital balance as to the date of the present
offer of financing to finance 60% of the value of the real estate on 275 Kesmark Street at
Dollard Des Ormeaux. 

2.2. Term  

        The
term of this loan expired June 26th 2008. 

  
2.3. Interest Rate 

  

	  	
This
variable-rate loan shall bear interest from the date of disbursement until payment in
full, at the Canadian Prime rate of the Bank plus 2.75%, or 6.75% as at the date hereof,
calculated daily. Interest shall be payable monthly on the 26th day of each month as of
the 26th day of the month following the disbursement. 

  
2.4. Disbursement  

  

	  	
The
Borrower shall use the amount made available to it subject to meeting the conditions
specified herein and executing any document that may reasonably be requested by the Bank,
including, but not limited to, a term note. Any sum hereunder which has not been advanced
to the Borrower on that date shall no longer be available to the Borrower and the Bank
shall have no further obligation to advance such sum to the Borrower. 

  
2.5. Repayment  

  

	  	
The
Borrower shall repay the principal of this term loan based on equal and consecutive
monthly instalments of $19,166.67, which shall be payable on the 26th day of each month as
of the month following the first disbursement. The balance of principal($419,166.47)
interest, fees and incidental charges on the loan shall be repaid in full with the last
instalment, namely, on the term expiry date June 26th 2008, without further notice. 

  
2.6. Prepayment  

  

	  	
The
Borrower may repay all or part of the variable-rate term loan at any time without penalty
provided the repayment is from funds generated by the company or from the proceeds of a
capital stock issue. If repayment is directly or indirectly from any other source, a
penalty of three months’ interest shall then be payable and deducted by the Bank from
the repayment. Partial repayments shall be applied to the last instalment of principal
and/or interest or to any other sum due by the Borrower, at the Bank’s discretion. 

     3.     FACILITY ” C ” – MASTERCARD BUSINESSCARD
      

        The
MasterCard BusinessCard shall be issued for business development purposes. 

     4.     
          FACILITY “D ” — EXCHANGE RISK OPERATING CREDIT 
      

  
4.1. Credit Facility  

  

	  	
Subject
to the terms and conditions hereof, the Bank agrees to renew the currency conversion risk
facility previously made available to the Borrower for an amount not exceeding CDN
$100,000, which shall serve to enable the Borrower to conclude transactions with the Bank
for contracts with respect to the sale or purchase of foreign currencies freely negotiated
by the Bank, the whole subject to the following conditions: 

   

  	4.1.1. 	  	
          The Borrower may sell or buy foreign currencies through the Bank, giving prior
          notice thereof to the Bank, in accordance with the customs and practices of the
          market, specifying the amount, currency and effective date of delivery of the
          chosen currency; 

             

  	4.1.2. 	  	
          The maximum amount of foreign currency which the Borrower may sell or buy by
          reason hereof shall not exceed the permitted amount, as determined hereinafter;
          the said permitted amount shall be determined by the Bank by multiplying the
          face value of the chosen currency by the level of risk, as per the schedule in
          effect at the Bank expressed as a percentage (for illustration purposes only:
          chosen currency $50,000 at a risk level of 10% equals a currency conversion risk
          amount of $5,000); 

             

  	4.1.3. 	  	
          The Borrower undertakes to deposit in its US$ current account held at the Bank
          sufficient amounts to pay for the foreign currencies bought or sold, no later
          than on the date of their delivery, failing which, the Bank shall be authorized
          to make a variable-rate advance in Canadian dollars under Credit Facility E
          hereof for an amount equal to the US$ amount necessary to pay for said
          currencies and any fees and expenses incurred by the Bank due to insufficient
          funds in the Borrower’s US$ current account on the date of delivery. 

             

  	 . 	  	
Moreover,
if such advance exceeds the credit amount authorized under Credit Facility E, the Bank
shall then be authorized to debit said current account for an amount equal to such excess
amount; all overdrafts in the Borrower’s current account shall bear interest, until
payment in full, at the rate on overdrafts prevailing from time to time at the Bank; 

     

  	4.1.4. 	  	
          The Borrower shall execute, upon presentation, any agreement, contract, document
          or other writing required by the Bank, including, without limitation, the
          International Swap and Derivatives Association (ISDA) contract, the
          International Foreign Exchange Master Agreement (IFEMA) and confirmation, as
          applicable, of such contract, in accordance with the documents in use at the
          Bank, providing for, inter alia, the terms and conditions, amount, currency and
          fees payable to the Bank; 

             

  	4.1.5. 	  	
          Acceptance by the Bank of any request for the sale or purchase of foreign
          currencies is subject to the availability of such funds on the foreign exchange
          market and approval of each request is at the Bank’s discretion. 

             

  	4.2. 	  
          	
          Term 

             

  	  	  
          	
          This
credit facility may be revised from time to time by the Bank and may be revoked by the
Bank at any time. 

5.      SECURITY  

  

As
a general and continuing security for the performance by the Borrower of all its
obligations, present and future, towards the Bank, including, without limitation, the
repayment of advances granted hereunder and the payment of interest, fees and incidental
charges provided for hereunder and under the security documents, the Borrower undertakes
to grant to the Bank the following security, if deemed satisfactory by the Bank, in
accordance with the forms in use at the Bank: 

  

     	5.1. 	  	
          Facilities “A & D” 

             

  	5.1.1. 	  	
          First-ranking general movable hypothec of $2,600,000 on the universality of the
          Borrower’s inventory and accounts receivable, present and future, wherever
          the inventory and debtors of these receivables are located; 

             

  	5.1.2. 	  	
          The security on all goods in inventory under section 427 of the Bank Act; 

             

  	5.2. 	  	
          Facility “B” 

             

  	5.2.1. 	  	
          First-ranking general immovable hypothec on the land and building of $2,300,000; 

             

  	5.2.2. 	  	
          First-ranking general movable hypothec of $2,300,000 on all the customer’s
          equipment and office furniture, present and future 

             

  	5.2.3. 	  	
          Fired Insurance policy on the building 

             

  	5.3. 	  	
          Facilities “A” and ” B “ 

             

  	5.3.1. 	  	
          Commitment from the mother-company to refund losses if occurred within 30 days
          of the bank request. 

             

  	5.3.2. 	  	
          Hypothecation of securities on a term deposit in the amount of CDN $250,000 held
          at the National Bank ; 

             

  	  	
*
At the end of the 2004 financial year, the term deposit of 250,000$ will be released on
presentation of auditor financials statements if the borrower reaches 90% of its
projections of EBITDA and net profit, show 3 subsequent quarter of positive EBITDA and is
in compliance with other terms and conditions. 

     

  	5.3.3. 	  	
          First-ranking general movable hypothec of $ 4,800,000 on all the Client’s
          corporeal and incorporeal movable property (including intellectual property),
          present and future, regardless of the location of such property; 

             

  	5.3.4. 	  	
          Subordination agreement of Stockeryale US’s advances. 

6.     REPRESENTATIONS AND WARRANTIES OF THE BORROWER
 

The
Borrower represents and warrants to the Bank that: 

          	6.1. 	  	
               It is a duly constituted or incorporated, and registered and organized business
               in compliance with the legislation governing it, and that it has the powers,
               permits and licenses required to operate its business or enterprise and to own,
               manage and administer its property; 

                  

  	6.2. 	  	
               It is not involved in any dispute or legal proceedings likely to materially
               affect its financial position or its capacity to operate its business; 

                  

  	6.3. 	  	
               It has valid title to all its goods and property, which have a good market value
               and are free and clear of any prior claims, mortgages, hypothecs, charges or
               other similar encumbrances other than the mortgages, hypothecs and other charges
               previously granted to the Bank; 

                  

  	6.4. 	  	
               It is not in default under the contracts to which it is a party or under the
               applicable legislation and regulations governing the operation of its business
               or its property, including, without limitation, all environmental requirements;
               and 

                  

  	6.5. 	  	
               Any taxes, assessments, deductions at source, income taxes or other levies, the
               payment of which is secured by a legal privilege, prior claim or legal hypothec,
               have been/will be paid by the Borrower without subrogation or consolidation. 

               7.     
               
               CONDITIONS PRECEDENT TO ANY DISBURSEMENT OF FUNDS 

               	  	
Before
any disbursement, renewal or maintenance of this credit facility, the Borrower shall meet
the following conditions to the satisfaction of the Bank: 

     

  	7.1. 	  	
               The Borrower shall sign all documents that the Bank may reasonably request in
               order to give full effect to the provisions hereof; 

                  

  	7.2. 	  	
               The Borrower and the guarantors, as applicable, shall meet all of the conditions
               hereof and execute all documents that the Bank may reasonably request in order
               to give full effect to the provisions hereof; 

                  

  	7.3. 	  	
               All collateral security shall be duly published in accordance with the
               above-mentioned ranking and any other required formality shall be fulfilled, as
               applicable; 

                  

  	7.4. 	  	
               The Borrower shall furnish to the Bank any other document, certificate and
               opinion that it may reasonably require, including, but not limited to, any
               incorporating instrument related to the Borrower and the guarantor, and any
               other document and opinion related to the hypothecated property, as applicable; 

                  

  	7.5. 	  	
               The Borrower shall present its audited financial statements dated December 31,
               2003 showing no material change compared to the in-house financial statements 

8.      
               POSITIVE COVENANTS 

        During
the entire term of this financing agreement, the Borrower shall: 

          	8.1. 	  	
               Use the proceeds of the financing for the purposes provided for herein; 

                  

  	8.2. 	  	
               Operate its business in a diligent and continuous manner; 

                  

  	8.3. 	  	
               Keep and maintain proper books of account and other accounting records in
               accordance with generally accepted accounting principles; 

                  

  	8.4. 	  	
               Furnish to the Bank its internal quartely financial statements within 20 days of
               the end of each quarter; 

                  

  	8.5. 	  	
               Furnish to the Bank two copies of its audited annual financial statements within
               90 days of the end of its fiscal year; 

                  

  	8.6. 	  	
               At all times, give the Bank’s representatives the right to inspect its
               establishments and provide access thereto, and further permit the Bank’s
               representatives to examine its books of account and other records, and take
               excerpts therefrom or make copies thereof; 

                  

  	8.7. 	  	
               Maintain, at all times, insurance coverage on its property against loss or
               damage caused by fire and any other risk as is customarily maintained by
               companies carrying on a similar business; 

                  

  	8.8. 	  	
               Maintain, at the end of each quarter for the duration of this financing
               agreement, the following financial ratios: 

                  

  	8.8.1. 	  	
               a working capital ratio greater than 1.1:1 at all time and 1.50:1.00 at
               September 30, 2004 and thereafter; this is defined as total current assets over
               total current liabilities; 

                  

  	8.8.2. 	  	
               net worth greater than or equal to $8,000,000 at all time and greater than or
               equal to $10,000,000 at September 30, 2004 and thereafter and a ratio of total
               debt to tangible network of less than 1.0.1; net worth is defined as total
               shareholder equity and advances subordinated to the Bank less advances to
               directors and affiliated companies, less intangible assets; 

                  

  	8.8.3. 	  	
               maximum of $ 75,000 in capital expenditures; 

                  

  	8.8.4. 	  	
               a minimum coverage ratio of 1.1 ( EBITDA – non financed CAPEX –
               Dividends / Capital + interest) at December 31, 2005 and thereafter; 

                  

  	8.8.5. 	  	
               The Borrower shall respect the cumulative net profit indicated in the budgeted
               income statement for the year ending December 31, 2004 up to a maximum deviation
               of $150,000 CAN. If not respected, this event will constitute a default. 

                  

  	8.9. 	  	
               Pay, when due, all taxes, assessments, deductions at source, income tax or
               levies for which payment is guaranteed by legal privilege or legal hypothec,
               without subrogation or consolidation; 

                  

  	8.10. 	  	
               Furnish to the Bank any other document that it may reasonably require; 

                  

  	8.11. 	  	
               Conduct all or the greater part of its banking business with the Bank; 

                  

  	8.12. 	  	
               Obtain and maintain in effect the permits and licences required for the
               operation of its company; 

                  

  	8.13. 	  	
               Notify the Bank forthwith of any default or event which, following a notice or
               on expiry of a deadline, could constitute an event of default. 

9.      
               NEGATIVE COVENANTS  

	 	
The
Borrower undertakes to refrain from carrying out the following transactions or operations
without obtaining the prior written consent of the Bank: 

     

  	9.1. 	  	
               Materially change the nature of its operations or business; 

                  

  	9.2. 	  	
               Change the control of the company, merge with another company, dissolve or wind
               up the company; 

                  

  	9.3. 	  	
               Create or permit the existence of security interests in property granted as
               security to the Bank; 

                  

  	9.4. 	  	
               Grant advances to its officers, directors, shareholders or persons with no
               relation to the normal course of its business; 

                  

  	9.5. 	  	
               Grant financial assistance, an investment or a guarantee on behalf a third
               party; 

                  

  	9.6. 	  	
               Declare or pay out dividends on its shares, purchase or sell its shares, or
               otherwise reduce its capital. 

10.      
               ENVIRONMENTAL OBLIGATIONS 

               	10.1. 	  	
               The Borrower shall comply with the requirements of all legislative and
               regulatory environmental provisions (the “Environmental Requirements”)
               and shall at all times maintain the authorizations, permits and certificates
               required under these provisions. 

                  

  	10.2. 	  	
               The Borrower shall immediately notify the Bank in the event a contaminant spill
               or emission occurs or is discovered with respect to its property, operations or
               those of any neighbouring property. In addition, it shall report to the Bank
               forthwith any notice, order, decree or fine that it may receive or be ordered to
               pay with respect to the Environmental Requirements relating to its business or
               property. 

                  

  	10.3. 	  	
               At the request of and in accordance with the conditions set forth by the Bank,
               the Borrower shall, at its own cost, provide any information or document which
               the Bank may require with respect to its environmental situation, including any
               study or report prepared by a firm acceptable to the Bank. In the event that
               such studies or reports reveal that any Environmental Requirements are not being
               respected, the Borrower shall effect the necessary work to ensure that its
               business and property comply with the Environmental Requirements within a period
               acceptable to the Bank. 

                  

  	10.4. 	  	
               The Borrower undertakes to indemnify the Bank for any damage which the Bank may
               suffer or any liability which it may incur as a result of any non-compliance
               with Environmental Requirements. 

                  

  	10.5. 	  	
               The provisions, undertakings and indemnification set out in this section shall
               survive the satisfaction and release of the security, and payment and
               satisfaction of the indebtedness and liability of the Borrower to the Bank
               pursuant to the terms hereof. 

               11.     
               
               DEFAULT 
	11.1. 	  	
               Events of Default 

        The
occurrence of one or more of the following events shall constitute a default under this
Offer: 

     	11.1.1. 	  	
          If the Borrower fails to make a payment of principal, interest, fees, incidental
          charges or any other amount which may become due hereunder or under any of the
          security documents, when they become due and payable; 

             

  	11.1.2. 	  	
          If the Borrower and/or the guarantors fail to perform or otherwise breach any
          obligation hereunder or pursuant to any of the security documents or any other
          related document; 

             

  	11.1.3. 	  	
          If the Borrower and/or any guarantor, if applicable, becomes insolvent, bankrupt
          or is in the process of winding up, assigns its assets for the benefit of its
          creditors, files a proposal or gives notice of its intention to file such
          proposal or if a material, adverse change occurs in the financial position or
          operations of the Borrower; 

             

  	11.1.4. 	  	
          If proceedings are instituted by the Borrower and/or any guarantor, if
          applicable, or a third party for the Borrower’s and/or any guarantor’s
          dissolution, winding-up or reorganization of its operations or the arrangement
          or readjustment of its debts; 

             

  	11.1.5. 	  	
          If a creditor, trustee in bankruptcy, sequestrator, receiver or trustee takes
          possession of the Borrower’s and/or any guarantor’s assets or, in the
          opinion of the Bank, a major portion thereof or if such assets are subject to a
          prior notice of the exercise of a hypothecary right or a notice to withdraw
          authorization to collect claims or are seized; 

             

  	11.1.6. 	  	
          If the Borrower and/or any guarantor is in default under the terms of any other
          contracts, agreements or writings with the Bank or any other bank or financial
          institution or any other creditor with rights to the assets of the Borrower
          and/or any guarantor, as applicable; 

             

  	11.1.7. 	  	
          If any representation or warranty made by the Borrower and/or any guarantor
          herein or in a security document or any other document furnished to the Bank in
          connection herewith proves to be incorrect or erroneous; or 

             

  	11.1.8. 	  	
          If the Bank receives from any present or future guarantor a notice proposing to
          terminate, limit or otherwise modify such guarantor’s liability hereunder,
          under a security document, or under any other related document. 

             

  	11.2. 	  	
          Rights and Remedies of the Bank in the Event of Default 

        Subject
to its other rights and remedies, in the event of default: 

     	11.2.1. 	  	
          The Bank may declare due and payable all of the Borrower’s monetary
          obligations that have not matured and may claim from the Borrower and/or any
          guarantor, without any other notice, the immediate payment of principal,
          interest, fees and incidental charges, including all the expenses incurred by
          the Bank for the purposes of collecting or protecting the debt, and the
          execution of any other obligation of the Borrower and/or any guarantor; 

             

  	11.2.2. 	  	
          The Borrower shall lose all rights and privileges hereunder, including, but not
          limited to, the right to receive additional advances; 

             

  	11.2.3. 	  	
          The Bank may charge the Borrower reasonable fees for analysis, administration
          and follow-up and may even incur and pay any reasonable sum for services
          rendered (including legal, accounting and any other professional fees for which
          services may be required or deemed necessary) in relation to the realization,
          sale, transfer, delivery or payment to be made with respect to exercising all
          security held by the Bank and may retain such fees and disbursements from the
          proceeds of the realization of security; 

             

  	11.2.4. 	  	
          Any amount collected or received by the Bank, including the balance of the
          proceeds of any security realized, may be retained by the Bank and may, at the
          Bank’s option, be applied to any part of the debt owed by the Borrower to
          the Bank; 

             

  	11.2.5. 	  	
          Any sum incurred and paid by the Bank in order to realize, protect or preserve
          any security pledged by the Borrower to the Bank under this agreement or
          required by law shall bear interest at the Canadian Prime rate of the Bank, plus
          3% annually until said sum is paid; 

             

  	11.2.6. 	  	
          The foregoing provisions shall be applied regardless of whether any of the
          bearers of bankers’ acceptances, issued under the terms and conditions
          hereof, has requested full or partial payment or has requested only partial
          payment from the Bank. 

             

  	11.3. 	  	
          Waiver, Omission and Cumulative Remedies 

             

  	11.3.1. 	  	
          The Bank may set deadlines, take or waive security, accept compromises, grant a
          discharge and recognition of cancellation and do business with the Borrower as
          it deems appropriate without such action reducing the Borrower’s
          responsibility or affecting the rights of the Bank with respect to the security
          provided hereunder. 

             

  	11.3.2. 	  	
          Any omission on the part of the Bank to notify the Borrower and/or any guarantor
          of any case of default under the terms and conditions hereof or to exercise its
          rights hereunder shall not be considered a waiver on the part of the Bank of its
          right to exercise its recourse in such case of default or to exercise any right. 

             

  	11.3.3. 	  	
          Acceptance by the Bank, following a default by the Borrower, of an amount owed
          to it, or the exercise by the Bank of any recourse or right shall not prevent
          the Bank from exercising any other right or recourse, the rights and recourses
          of the Bank being cumulative and non-interchangeable, and in addition to and not
          in substitution of, any other right or recourse by the Bank, whether by
          agreement or otherwise provided for by law. 

          12.     
          SUNDRY 

          	12.1. 	  	
          Definitions 

        For
the purposes hereof, the terms and expressions hereinafter listed shall be defined as
follows: 

	  	  	
“Canadian
prime rate” means the annual variable interest rate published by the Bank from time
to time and used by the Bank to determine the interest rates on commercial loans granted
by it in Canadian dollars in Canada. 

     

	12.2. 	  	
         Accounting Terms 

     

	  	  	
Each
accounting term used herein shall have the meaning ascribed to it in accordance with the
generally accepted accounting principles of the Canadian Institute of Chartered
Accountants. 

     

	12.3. 	  	
         Currency and Place
of Payment 

     

	  	  	
All
sums due by the Borrower hereunder must be paid by the Borrower to the Bank in Canadian
dollars. 

     

     	12.4. 	  	
          Calculation of Interest and Arrears 

             

  	12.4.1. 	  	
          Unless otherwise provided for herein, interest on any amount due hereunder shall
          be calculated daily and not in advance on the basis of a 365-day year. 

             

  	12.4.2. 	  	
          For the purposes of the Interest Act (Canada) in the case of a leap year, the
          annual interest rate corresponding to the interest calculated on the basis of a
          365-day year is equal to the interest rate thus calculated multiplied by 366 and
          divided by 365. 

             

  	12.4.3. 	  	
          Any amount of principal, interest, commission or discount or an amount of any
          other nature remaining unpaid at maturity shall bear interest at the rate
          provided for herein, it being understood that said interest rate on arrears
          shall not exceed the maximum rate provided for by law, if applicable. 

             

  	12.4.4. 	  	
          Interest on arrears shall be compounded monthly and payable on demand. 

             

  	12.5. 	  	
          Additional Charges 

        The
Borrower undertakes to pay the Bank the charges below, as determined by the Bank: 

     	12.5.1. 	  	
          In the event that a law, regulation, administrative policy or guideline results
          in an increase in the cost of credit for the Bank (particularly as a result of
          the imposition of reserves, taxes or requirements with respect to the
          Bank’s capital adequacy), the Borrower shall pay this additional cost on
          demand; and 

          
          
          

     

     

     	12.5.2. 	  	
          The Borrower shall pay all taxes or additional charges that could result from
          the application of the goods and services tax (Canada), the provincial sales tax
          (Quebec), or any other similar federal, provincial or municipal law. 

             

  	12.6. 	  	
          Assignment 

             

  	  	  	
No
rights or obligations of the Borrower hereunder and no proceeds of the loan may be
transferred or assigned by the Borrower. Any such transfer or assignment shall be null and
void insofar as the Bank is concerned and shall render any balance then outstanding on the
loan immediately due and payable at the Bank’s option and release the Bank from any
and all obligations of making any further advances hereunder. 

     

  	12.7. 	  	
          Records 

             

	  	  	
The
Bank shall keep records evidencing the transactions performed hereunder. Such records
shall be presumed to reflect these transactions and shall constitute conclusive evidence
of the amounts due to the Bank. 

     

  	12.8. 	  	Account Debits 

             

	  	
The
Borrower irrevocably authorizes the Bank to debit periodically or from time to time any
bank account it maintains at the Bank in order to pay all or part of the amounts it may
owe to the Bank hereunder. 

     

  	12.9. 	  	Non-Business Day  

             

	  	
If
the date provided for an instalment of principal or interest hereunder is not a business
day, such instalment shall be paid on the first business day thereafter. 

     

  	12.10. 	  	Final Agreement  

             

	  	
Upon
its acceptance and execution by the Borrower, this Offer shall constitute the final
agreement between the parties, with the exception of any subsequent written amendments
agreed to by the parties, and shall supersede any other previous verbal or written
agreement between the parties with respect to the financing provided for herein. 

     

  	  	
Notwithstanding
the foregoing, this Offer does not create novation or an exception to the mortgages,
hypothecs, rights and remedies of the Bank under the deeds, notes and security documents
required hereunder which were signed by the Borrower or the guarantor prior to the date
hereof. The Borrower hereby acknowledges and declares that the mortgages, hypothecs,
rights and remedies of the Bank under said deeds, notes and security documents have not
been amended and that they secure its obligations hereunder. 

     

  	12.11. 	  	Other Documents  

             

	  	
The
Borrower and the guarantors, if applicable, shall do all things and execute all documents
deemed necessary or appropriate by the Bank for the purposes of giving full force and
effect to the terms, conditions, undertakings and security granted or to be granted
hereunder. 

     

  	12.12. 	  	
          Joint and Several Liability/Solidarity  

             

	  	
If
more than one person is designated as the Borrower or the guarantor, each such person
shall be jointly and severally or solidarily liable for the obligations set out herein and
in the security documents. 

     

  	12.13. 	  	Validity of
Provisions Hereof  

             

	  	
Any
court decision to the effect that any of the provisions hereof is null or void in no way
affects the remaining provisions hereof or their validity or executory force. 

     

  	12.14. 	  	Review  

             

	  	
The
terms and conditions of the credits granted by the Bank to the Borrower hereunder are
subject to a periodic review, at the Bank’s discretion. 

     

  	12.15. 	  	Amendments  

             

	  	
Any
amendment to this Offer or resulting waiver of a right hereunder is without effect unless
it is explicitly stated in a written document signed by the parties. 

     

  	12.16. 	  	 Copies  

             

	  	
This
Offer may be signed in an indeterminate number of copies, each of which is deemed to
constitute an original, but all of which constitute a single document. 

     13.    
          ACCESS TO INFORMATION  

	  	
The
Borrower and the guarantors hereby authorize any personal information agent, financial
institution, creditor, tax authority, employer or any other person, including any public
entity, holding information concerning the Borrower or its assets, more particularly any
financial information or information with respect to any undertaking or suretyship given
by the Borrower, to supply such information to the Bank in order to verify the accuracy of
all information furnished or to be furnished from time to time to the Bank and to ensure
the solvency of the Borrower at all times. 

14.     FEES  

        Non-refundable
fees of $25,000 shall be payable upon acceptance of this Offer. 

	  	
Notwithstanding
the foregoing, during the formal annual review of the Borrower’s credit(s), the Bank
may, subject to the Borrower’s acceptance of the renewal offer, amend the amount of
said fees and apply them retroactively to the anniversary date of the previous renewal. 

     

  	  	
Any
fees and legal costs incurred in the preparation and registration or publication of the
security documents and any other document related thereto shall be payable by the Borrower
whether or not the financing is completed. 

     

  	  	
A
monthly late fee of $100.00 shall be automatically collected if the interim financial
statements and/or lists of receivables and inventories are not produced by the prescribed
date, i.e., no later than the 20th day of the following month. 

     

  	  	
If,
during a given month, the Bank temporarily tolerates a deficit in the security coverage of
the Borrower’s advances in the form of accounts receivable and inventories, such
deficit shall be tolerated as an overdraft at a rate of 21%. 

     

  	  	
Annual
review fees shall be collected on the review date for analyzing annual financial
statements and for verifying that the conditions of the authorization and Offer of
Financing are being respected. 

     15.    
          GOVERNING LAW  

        This
Offer shall be construed and governed in accordance with the laws of the Province of
Quebec. 

	  	
If
this Offer is satisfactory, please indicate your approval by returning to us the copy
attached in this regard, duly signed and initialled on each page, before 5:00 p.m. on
March 31, 2004. After that date, the Bank reserves the right to cancel or modify this
Offer, without notice. 

     

          We
trust that our financial support will contribute to the success of your company. 

Yours very truly, 

NATIONAL BANK OF CANADA

  	By:	 	                                                            
      
      	 	                                                            
      
      
	 	 	Manon Daigneault	 	Jean-Guy Paris
	 	 	Account Manager	 	Senior Manager
	 	 	(514) 394-6864	 	 

ACCEPTANCE 

	
  We
declare that we have read this Offer of Financing dated __________________2004 and we
accept the terms, conditions and obligations hereof. 
	

  
  Executed
at _____________________, province of Quebec, this __________ day of ________________,
2004. 

	 	 	StockerYale
Canada Inc.  	 	 
	 	 	 	 	 
	By:	 	                                                            
      
      	 	 
	 	 	By:                                                    
      	 	 
	 	 	Title:                                                 
      	 	 

COMMITMENT FROM
STOCKERYALE 

We
declare that we have read clause ________ of this Offer of financing and we accept the
terms and conditions.

  	 	 	StockerYale,  Inc.  
      	 	 
	 	 	 	 	 
	By:	 	                                                            
      
      	 	 
	 	 	By:                                                    
      	 	 
	 	 	Title:                                                 
      	 	 

  

 

  	
       
         Exhibit 10.15(c)  /  STKR 
       

      	
       
         END

      	
       
         2002 FORM 10-K

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