8% SUBORDINATED CONVERTIBLE DEBENTURE
DUE DECEMBER 31, 2003
CHYRON CORPORATION
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ARE SUBJECT
TO RESTRICTIONS ON TRANSFERABILITY AS SET FORTH IN THIS CERTIFICATE. THE
SECURITIES REPRESENTED HEREBY MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT OR AN OPINION OF COUNSEL, REASONABLY ACCEPTABLE TO COUNSEL FOR THE
COMPANY, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER, OR DISPOSITION MAY
BE EFFECTUATED WITHOUT REGISTRATION UNDER THE ACT.
Melville, New York
$
No.
December 31, 1998
FOR VALUE RECEIVED, the undersigned, CHYRON CORPORATION, a New York
corporation (the "Company"), hereby promises to pay to or its
permitted assigns (the "Holder") the principal sum of Dollars ($ ),
together with interest thereon at the rate provided herein, and payable on
the terms set forth below. This Debenture is one of an issue of Debentures
of the Company designated as its 8% Subordinated Convertible Debentures Due
December 31, 2003 (the "Debentures").
SECTION 1. INTEREST; PAYMENT OF INTEREST AND PRINCIPAL.
1.1 Interest. This Debenture shall bear interest on the outstanding
principal amount from the date hereof (the "Issue Date"), until this
Debenture is converted, exchanged, redeemed or paid in full, at an annual
rate of 8% (computed on the basis of a 365-day year) (the "Interest Rate").
Interest on this Debenture shall be payable quarterly or the first day of
each April, July, October, and January commencing April 1, 1999, or upon
conversion, exchange, redemption or at maturity of this Debenture, whichever
occurs first.
1.2 Principal. The principal on this Debenture shall be paid upon
maturity of this Debenture, unless it has been converted, exchanged, or
redeemed in accordance with its terms prior thereto.
1.3 Maturity. All principal and unpaid interest on this Debenture shall
be due on December 31, 2003 (the "Maturity Date").
1.4 Manner of Payment. All payments of principal and interest shall be
made in lawful money of the United States of America at the time of any such
payment either by wire transfer to the account designated by the Holder for
such purpose or by check mailed to the Holder at the address shown in the
register maintained by the Company for such purpose, at the option of the
Holder.
1.5 Subordination.
(a) Upon any distribution of assets of the Company in connection with any
dissolution, winding-up or liquidation of the Company (whether or not in
bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors) or any other marshaling of the assets and
liabilities of the Company or upon the reorganization of the Company, the
holders of Senior Indebtedness (as hereinafter defined) shall first be
entitled to receive payment in full in money or money's worth, in accordance
with the terms of such Senior Indebtedness, of all sums due in respect
thereto, before the Holder shall be entitled to receive from the Company any
payment hereunder and, upon such dissolution, winding-up, liquidation,
marshaling of assets or reorganization, any payment from the Company to
which the Holder would otherwise be entitled, except for the provisions
hereof, shall be made by the person making such payment or distribution,
whether an officer of the Company, an assignee, a trustee in bankruptcy,
debtor in possession, a receiver or liquidating trustee or otherwise (which
person is hereby directed to make payment) to the holders of Senior
Indebtedness to the extent necessary to pay in full in money or money's
worth all Senior Indebtedness remaining unpaid after giving effect to any
concurrent payment or distribution to the holders of such Senior
Indebtedness, and to the full extent necessary for that purpose, the Holder
hereby assigns to the holders of Senior Indebtedness all of the Holder's
rights to any payments or distributions to which the Holder otherwise would
be entitled from the Company.
(b) For purposes of this Debenture, the term "Senior Indebtedness" shall
mean Indebtedness (as hereinafter defined) of the Company whether
outstanding on the Issue of this Debenture or thereafter created, incurred,
assumed or guaranteed (including, without limitation, interest that accrues
on or after the filing of a petition in bankruptcy or for reorganization,
if a claim for post-petition interest is allowed in such proceeding), except
for: (i) any Indebtedness outstanding after the date of this Debenture as
to which, by the express terms of the instrument creating or evidencing the
same, it is provided that such Indebtedness is not senior or superior in
right of payment to the Debentures, (ii) the Debentures, (iii) any
Indebtedness of the Company owed to any Subsidiary or to any Affiliate of
the Company, (iv) Indebtedness incurred in connection with the purchase of
goods, assets, materials or services in the ordinary course of business or
representing amounts recorded as accounts payable, trade payables or other
current liabilities on the books of the Company (other than the current
portion of any long-term Indebtedness of the Company that but for this
clause (iv) would constitute Senior Indebtedness), and (v) any Indebtedness
of or amount owed by the Company to employees for services rendered to the
Company.
(c) "Indebtedness" is defined as, with respect to any person, any of the
following (without duplication): (i) the principal of, premium, if any, and
interest on and all other amounts owing with respect to any indebtedness
(including any such indebtedness representing any deferred payment
obligation for the payment of the purchase price of property or assets) of
such person for money borrowed or evidenced by bonds, indentures, debentures
or similar obligations, including any guaranty by such person of any
indebtedness for money borrowed of any other person, whether any such
indebtedness or guaranty is outstanding on the date of this Debenture or is
thereafter created, assumed or incurred, (ii) the principal of, premium, if
any, and interest on and all other amounts owing with respect to any
indebtedness for money borrowed, incurred, assumed or guaranteed by such
person in connection with the acquisition by it or any of its subsidiaries
of any other businesses, properties or other assets, (iii) lease obligations
which such person capitalizes in accordance with generally accepted
accounting principles and (iv) any amounts payable by such person under or
in respect of any interest rate exchange agreement, interest rate swap
agreement or other similar agreement entered into in respect of all or any
portion of the above.
(d) "Subsidiary" or "Subsidiaries" shall mean any corporation or other
organization, whether incorporated or unincorporated, in which the Company
owns, directly or indirectly, any equity or other ownership interest and in
which such ownership interest entitles the Company to elect a majority of
the Board of Directors or similar governing body.
(e) "Affiliate" shall have the meaning set forth in Rule 144 promulgated
under the Securities Act of 1933, as amended.
(f) Moreover, should it become necessary in any bankruptcy or other
proceedings or in connection with any assignment for the benefit of the
Company's creditors or the execution by the Company of any other creditor's
agreement, or the dissolution of or the winding up of the Company's
business, for the Holder to file one or more claims against the Company on
account of or arising hereunder, the Holder will file such claim or claims
and will assign to the holders of Senior Indebtedness the Holder's rights
thereunder. If for any reason the Holder does not file such claim or
claims, any holder of Senior Indebtedness shall have the right as the
Holder's agent and attorney-in-fact, to sign and file such proof of claim
in the Holder's name, or in the discretion of such holder of Senior
Indebtedness, to assign the claim to and to file proof thereof in the name
of the holders of Senior Indebtedness or their nominee.
(g) If, notwithstanding anything herein to the contrary, upon any such
dissolution, winding-up, liquidation, marshaling of assets or
reorganization, any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or security shall be received
by the Holder before all Senior Indebtedness is paid in full in money or
money's worth, such payment or distribution shall be held in trust by the
Holder and, immediately upon notice to such effect from any holder of Senior
Indebtedness, turned over by the Holder for payment on all Senior
Indebtedness remaining until all such Senior Indebtedness shall have been
paid in full in money or money's worth, after giving effect to any
concurrent payment or distribution to the holders of such Senior
Indebtedness.
(h) Neither the payments or distributions to the holders of Senior
Indebtedness to which the Holder would be entitled except for the provisions
hereof, nor the payment to the holders of Senior Indebtedness from the
Holder pursuant to the provisions hereof, shall be deemed, as between the
Company, its creditors (other than the holders of Senior Indebtedness) and
the Holder, a payment by the Company to or on account of the Holder; it
being understood that the provisions hereof are intended solely for the
purposes of defining relative rights of the Holder on the one hand, and the
holders of Senior Indebtedness on the other hand; and, except as otherwise
expressly set forth herein, nothing contained herein is intended to or shall
abrogate the obligations of the Company to pay the Holder or to affect the
relative rights of the Holder and the creditors of the Company other than
the holders of Senior Indebtedness.
(i) Until there shall occur a default under Senior Indebtedness (which
shall include the occurrence of any event or existence of any circumstances
as a result of which any amount is due and payable under any guarantee
thereof), the Holder shall be entitled to receive and retain any payment of
principal or interest made by the Company in respect of its obligations
under this Debenture. In the event of and during the continuance of any
such default, no payment of the principal of or interest on the Debenture
shall be made by the Company or, to the extent made by the Company, retained
by Holder. Specifically, except with the written consent of the holder or
holders of all of the then-outstanding principal amount of Senior
Indebtedness, the Holder may take no action against the Company to enforce
payment of this Debenture (i) unless and until the holders of Senior
Indebtedness shall have received payment in full of all principal and
interest on such Senior Indebtedness, and/or (ii) for so long as there is
any obligation, absolute or contingent, under any guarantee of such Senior
Indebtedness; provided, however, that nothing herein shall be deemed to
affect the time at which an event of default occurs under the terms of the
documents evidencing Senior Indebtedness.
(j) The Holder shall have no right of subrogation until such Senior
Indebtedness has been paid in full. The subordination shall be effective
notwithstanding the presence or absence of security granted to the holder
of Senior Indebtedness with respect to its enforcement of any rights against
the Company or against any security, or the intentional or unintentional
release, waiver or compromise of any such claim.
1.6 Priority. The Debentures shall be equal to, or pari passu with, the
Private Placement Debentures, as defined herein, with respect to any
distribution of assets of the Company in connection with any dissolution,
winding-up or liquidation of the Company.
SECTION 2 EVENTS OF DEFAULT
2.1 Nature of Events. An "Event of Default" shall exist if any of the
following occurs and is continuing:
(a) Failure to pay interest on this Debenture on or before the date such
payment is due and such failure to pay remains uncured for a period of 10
days after such date (whether or not such payment is prohibited by Section
1.5);
(b) Failure to pay principal on this Debenture on or before the date such
payment is due (whether or not such payment is prohibited by Section 1.5);
(c) Failure to perform or observe any other covenant or agreement of the
Company contained in this Debenture which remains uncured for the period and
after the notice specified below and the holders of more than 50% in
principal amount of the Debentures then outstanding notify the Company of
the default and the Company does not cure the default within 45 days after
receipt of the notice, which notice must specify the default, demand that
it be remedied and the state that the notice is a "Notice of Default;"
(d) A custodian, receiver, liquidator or trustee of the Company, or of any
of its property, is appointed or takes possession and such appointment or
possession remains in effect for more than 60 days; or the Company is
adjudicated bankrupt or insolvent; or an order for relief is entered under
the Federal Bankruptcy Code against the Company; or any of the property of
the Company is sequestered by court order and the order remains in effect
for more than 60 days; or an involuntary petition is filed against the
Company under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of indebtedness, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, and is not dismissed
within 60 days after filing;
(e) The Company files a petition in voluntary bankruptcy or seeking relief
under any provision of any bankruptcy, reorganization, arrangement,
insolvency, readjustment of indebtedness, dissolution or liquidation law of
any jurisdiction, whether now or hereafter in effect, or consents to the
filing of any petition against it under any such law; or
(f) The Company makes an assignment for the benefit of its creditors, or
generally fails to pay its obligations as they become due, or consents to
the appointment of or taking possession by a custodian, receiver, liquidator
or trustee of the Company or all or any substantial part of its property;
or
2.2 Default Remedies.
(a) In case an Event of Default (other than an Event of Default described
in paragraphs (d), (e) and (f)) has occurred and is continuing, the holders
of Debentures, by notice to the Company from the holders of more than 50%
of the principal amount of the Debentures then outstanding, may declare the
principal of the Debentures, plus accrued interest, to be immediately due
and payable, and upon any such declaration such principal and accrued
interest shall become due and payable immediately. In case an Event of
Default described in paragraphs (d), (e) and (f) occurs, such amounts will
become due and payable without any declaration or any act on the part of the
holders of the Debentures. Such declaration of acceleration may be
rescinded and past defaults may be waived by the holders of at least 50% of
the principal amount of the Debentures then outstanding as provided herein.
(b) No course of dealing or delay or failure on the part of the Holder to
exercise any right under this Section 2.2 shall operate as a waiver of such
right or otherwise prejudice such Holder's rights, powers and remedies. The
Company will pay or reimburse the Holder, to the extent permitted by law,
for all costs and expenses, including but not limited to reasonable
attorneys' fees, incurred by it in collecting any sums due on this Debenture
or in otherwise enforcing any of its rights.
(c) The holders of more than 50% in principal amount of the outstanding
Debentures may on behalf of the holders of all Debentures waive certain past
defaults, except a default in payment of principal of or interest on any
Debenture, or in respect of certain provisions of the Debentures which
cannot be modified or amended without the consent of the holder of each
outstanding Debenture affected thereby in accordance with Section 6.5.
SECTION 3. CONVERSION
3.1 Conversion Privilege. Subject to and upon compliance with the
provisions of this Section 3, at the option of the Holder, this Debenture
or any portion of the principal amount thereof, may, at any time and from
time to time, be converted into fully paid and nonassessable whole shares
of Common Stock of the Company, at the Conversion Price (as defined herein)
in effect at the date of such conversion.
3.2 Manner of Exercise of Conversion Privilege. To exercise the
conversion privilege, the Holder shall surrender this Debenture, together
with a written conversion notice, in the form attached hereto, to the
Company at its principal office. This Debenture or portion thereof shall
be deemed to have been converted immediately prior to the close of business
on the date of receipt of such Debenture and notice by the Company, even if
the Company's stock transfer books are on that date closed, and the Holder,
or the nominee or nominees of such Holder, shall be treated for all purposes
as the record holder of the shares of Common Stock deliverable upon such
conversion as of the close of business on such date. Promptly after receipt
by the Company of this Debenture and proper notice, the Company shall issue
and deliver, at its expense, to the Holder, or to the nominee or nominees
of such Holder, a certificate or certificates for the number of shares of
its Common Stock due on such conversion. Interest shall accrue on the
unpaid principal amount of this Debenture converted to the date of
conversion, and the Company shall pay such interest at the time of
conversion; provided, however, that in the case of a conversion of only a
portion of the outstanding principal amount of this Debenture, the Company
shall execute and deliver to the Holder (or its nominee or nominees), at the
expense of the Company, a replacement Debenture in a principal amount equal
to and in exchange for the unconverted portion of such Debenture and dated
and bearing interest from the date to which interest has been paid on such
Debenture or dated the date of such Debenture if no interest has been paid
thereon.
3.3 Fractional Shares. No fractional shares of Common Stock shall be
issued, at any time, upon conversion of this Debenture. Instead of any
fractional share of Common Stock which would otherwise be issuable upon
conversion of this Debenture, the Company shall pay a cash adjustment in
respect of such fractional interest (in accordance with the Conversion
Price, as defined herein, then in effect). The Holder, by its acceptance
thereof, expressly waives any right to receive any fractional share upon
conversion of this Debenture.
3.4 Conversion Price. The conversion price (the "Conversion Price") at
which Common Stock shall be issuable upon the conversion of this Debenture
shall initially be $2.466 (which amount is 120% of the average of the
closing prices of the Common Stock, as such prices were reported by the New
York Stock Exchange, for the ninety (90) trading days immediately preceding
the initial Issue Date) in principal amount of this Debenture for each share
of Common Stock; provided, however, that the Conversion Price and the
conversion terms shall be subject to adjustment as follows:
(a) In the event the Company should at any time or from time to time after
the Issue Date, fix a record date for the effectuation of a forward split
or subdivision of the outstanding shares of Common Stock or the
determination of holders of Common Stock entitled to receive a dividend or
other distribution payable in additional shares of Common Stock or other
securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock
(hereinafter referred to as "Common Stock Equivalents"), without payment of
any consideration by such holder for the additional shares of Common Stock
or the Common Stock Equivalents (including the additional shares of Common
Stock issuable upon conversion or exercise thereof), then, as of such record
date (or the date of such dividend distribution, split or subdivision if no
record date is fixed), the Conversion Price shall be appropriately decreased
so that the number of shares of Common Stock issuable on conversion of this
Debenture shall be increased in equal proportion to such increase of
outstanding shares of Common Stock.
(b) If the number of shares of Common Stock outstanding at any time after
the Issue Date is decreased by a combination of the outstanding shares of
Common Stock, then following the record date of such combination, the
Conversion Price shall be appropriately increased so that the number of
shares of Common Stock issuable on conversion of this Debenture shall be
decreased in equal proportion to such decrease in outstanding shares of
Common Stock.
3.5 Other Distributions. In the event the Company shall declare a
distribution payable in securities of other persons, evidences of
indebtedness issued by the Company or other persons, assets (excluding cash
dividends) or options or rights not referred to in subsection 3.4(a), then,
in each such case for the purpose of this Section 3.5, the Holder, upon
conversion of this Debenture, shall be entitled to a proportionate share of
any such distribution as though it were the holder of the number of shares
of Common Stock of the Company into which this Debenture was then
convertible as of the record date fixed for the determination of the holders
of Common Stock of the Company entitled to receive such distribution.
3.6 Fundamental Change. In the event that the Company shall be a party
to (i) any recapitalization or reclassification of the Common Stock (other
than a change in par value or as a result of a subdivision or combination
of the Common Stock); (ii) any consolidation or merger of the Company with
or into another corporation as a result of which holders of Common Stock
shall be entitled to receive securities or other property or assets
(including cash) with respect to or in exchange for Common Stock (other than
a merger which does not result in a reclassification, conversion, exchange
or cancellation of the outstanding Common Stock); (iii) any sale or transfer
of all or substantially all of the assets of the Company; or (iv) any
compulsory share exchange, pursuant to any of which holders of Common Stock
shall be entitled to receive other securities, cash or other property (each,
a "Fundamental Change"), then appropriate provision shall be made so that
the holder of each Debenture then outstanding shall have the right
thereafter to convert such Debentures only into the kind and amount of the
securities, cash or other property that would have been receivable upon such
Fundamental Change by a holder of the number of shares of Common Stock
issuable upon conversion of such Debenture immediately prior to such
Fundamental Change at the Conversion Price (subject to adjustment pursuant
to Section 3.4).
3.7 No Impairment. The Company will not, by amendment of its Certificate
of Incorporation or through any reorganization, recapitalization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in the carrying out of
all the provisions of this Section 3 and in the taking of all such action
as may be necessary or appropriate in order to protect the conversion rights
of the Holder of this Debenture against impairment.
3.8 Certificate as to Adjustments. Upon the occurrence of each adjustment
or readjustment of the Conversion Price pursuant to this Section 3, the
Company, at its expense, shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to
the Holder a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is
based. The Company shall, upon the written request at any time of the
Holder, furnish or cause to be furnished to such Holder a like certificate
setting forth (A) such adjustment and readjustment, (B) the Conversion Price
at the time in effect, and (C) the number of shares of Common Stock and the
amount, if any, of other property which at the time would be received upon
the conversion of the then outstanding principal amount of this Debenture.
3.9 Notices of Record Date. In the event of any taking by the Company of
a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend
(other than a cash dividend) or other distribution, any right to subscribe
for, purchase or otherwise acquire any shares of stock or any class of any
other securities or property, or to receive any other right, the Company
shall mail to the Holder, at least 20 days prior to the date specified
therein, a notice specifying the date on which any such record is to be
taken for the purpose of such dividend, distribution or right, and the
amount and character of such dividend, distribution or right.
3.10 Reservation of Stock Issuable Upon Conversion. The Company shall at
all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the conversion
of the aggregate principal amount of the Debentures such number of its
shares of Common Stock as shall from time to time be sufficient to effect
the conversion of the then outstanding aggregate principal amount of the
Debentures; and if at any time the number of authorized but unissued shares
of Common Stock shall not be sufficient to effect the conversion of the then
outstanding aggregate principal amount of the Debentures, in addition to
such other remedies as shall be available to the Holder, the Company will
promptly take all reasonable corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such
purposes.
SECTION 4. REDEMPTION
4.1 Call Provision. This Debenture may be redeemed by the Company at any
time or from time to time commencing one year from the Issue Date, at the
Company's option, in whole or in part, upon written notice to the registered
Holder hereof at their last registered address, for the principal of this
Debenture, plus accrued and unpaid interest to the redemption date. Notice
of redemption having been given as provided in Section 4.2, the Debentures
to be redeemed, shall, on the redemption date, become due and payable at the
redemption price therein specified, and from and after such date (unless the
Company shall default in the payment of the redemption price and any accrued
but unpaid interest) such Debentures shall cease to bear interest and the
Company shall have no further obligation under such Debentures.
4.2 Notice of Redemption. Notice of redemption shall be given, in
accordance with Section 5.4 hereof, not less than fifteen (15) nor more than
forty-five (45) days prior to the redemption date, to each registered Holder
of Debentures to be redeemed, at such Holder's address in the register
maintained by the Company. All notices of redemption shall state: (a) the
redemption date, (b) the redemption price, (c) if less than all the
outstanding Debentures are to be redeemed, the principal amounts of the
Debentures to be redeemed, (d) that on the redemption date the redemption
price will become due and payable upon each Debenture (or portion thereof)
to be redeemed and that interest thereon will cease to accrue on and after
such said date, (e) the Conversion Price, the date on which the right to
convert the principal of the Debentures to be redeemed will terminate and
the manner in which such Debentures may be surrendered for conversion, and
(f) the manner in which the Debentures are to be surrendered for payment
of the redemption price.
4.3 Deposit of Redemption Price. On or prior to any redemption date, the
Company shall segregate and hold in trust an amount of money sufficient to
pay the redemption price of, and accrued but unpaid interest on, all
Debentures to be redeemed on that date other than any Debentures called for
redemption on that date which have been converted prior to the date of such
deposit. If any Debenture called for redemption is converted, any money so
segregated and held in trust for redemption of such Debenture(s) shall be
discharged from such trust.
4.4 Debentures Redeemed in Part. Any Debenture which is to be redeemed
only in part shall be surrendered to the Company at its principal office.
In such instance, the Company shall execute and deliver to the Holder (or
its nominee(s)), at the expense of the Company, a replacement Debenture in
a principal amount equal to and in exchange for the unredeemed portion of
such Debenture.
SECTION 5. EXCHANGE
5.1 Exchange Privilege. Subject to and upon compliance with the
provisions of this Section 5, at the sole option of the Holder, this
Debenture, in whole but not in part, may be, subject to Section 5.3 hereof,
exchanged for a like principal amount of any series of convertible
subordinated debentures which the Company may issue pursuant to a private
placement, through a placement agent, within 180 days from the Issue Date
(the "Private Placement Debentures").
5.2 Manner of Exercise of Exchange Privilege. The Company shall notify
each Holder of its intent to issue the Private Placement Debentures by
giving written notice at least 15 days prior to the issue date of the
Private Placement Debentures. If the Holder intends to exchange this
Debenture then it shall surrender this Debenture, together with a written
exchange notice in the form attached hereto, to the Company at its principal
office within ten (10) days from the date of the Company's notice. This
Debenture shall be deemed to have been exchanged immediately into the
Private Placement Debenture on the first date of issue of such debenture.
Promptly after receipt by the Company of this Debenture and proper notice,
the Company shall issue and deliver, at its expense, to the Holder, a
certificate representing the Private Placement Debenture for which this
Debenture was exchanged. Interest shall accrue on the unpaid principal
amount of this Debenture to the date immediately prior to the issuance of
the Private Placement Debenture, and the Company shall pay such interest at
the time of exchange.
5.3 Limitation of Exchange.
(a) In the event that the exchange would, in the sole discretion of the
Company, result in the Company being required to obtain shareholder approval
of the transaction under which this Debenture is issued or the Private
Placement Debenture transaction under the rules of the New York Stock
Exchange, then the Holder's ability to exchange this Debenture shall be
limited to such amount, if any (as determined solely by the Company), which
would not result in the Company being required to obtain shareholder
approval of such transaction. In the case of an exchange of only a portion
of the outstanding principal amount of this Debenture (pursuant to this
Section 5.3(a)), the Company shall execute and deliver to the Holder, at the
expense of the Company, a replacement Debenture in a principal amount equal
to and in exchange for the unexchanged portion of this Debenture. In no
event shall the Company be obligated to exchange this Debenture for a
debenture which would cause the Company to be required to obtain shareholder
approval.
(b) In the event that the Private Placement Debenture transaction is
consummated, in the sole discretion of the Company, pursuant to a exemption
under the Act for which the Holder hereof does not qualify, or, in the sole
discretion of the Company, the Private Placement Debentures contain a term
or condition which the Holder hereof does not qualify for, then, in exchange
for this Debenture, the Holder hereof shall be entitled to receive a
debenture as substantially similar to the Private Placement Debentures as
practicable under the circumstances (as determined by the Company). By way
of example, but not limitation, in the event that the Private Placement
Debentures contain provisions, which make them eligible for the NASD PORTAL
Market, and the Company, in its sole discretion, determines that the Holder
hereof is not eligible for such provision or exemption, then the Holder
shall be issued a debenture which does contain such provision but is
otherwise identical in all other material respects to the Private Placement
Debentures. In no event shall the Company be obligated to issue to the
Holder hereof in exchange for this Debenture a debenture which, in the sole
discretion of the Company (i) would cause Company to be ineligible to
consummate the Private Placement Debenture transaction, or (ii) which
contains a term or condition which the Holder hereof does not qualify for.
SECTION 6. MISCELLANEOUS
6.1 Successors and Assigns. The terms and conditions of this Debenture
shall inure to the benefit of and be binding upon the respective successors
and assigns of the parties. Nothing in this Debenture, express or implied,
is intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Debenture, except as expressly
provided in this Debenture. This Debenture may not be assigned by the Holder
hereof without the written consent of the Company.
6.2 Governing Law. This Debenture shall be governed by, and construed
under the laws of the State of New York as applied to agreements entered
into and to be performed entirely within New York, without giving effect to
the laws of such State governing conflicts of laws.
6.3 Headings. The titles and subtitles used in this Debenture are used
for convenience only and are not to be considered in construing or
interpreting this Debenture.
6.4 Notices. All notices, authorizations, demands or requests required
or permitted to be delivered to any party in connection with this Debenture
shall be in writing and shall be deemed to have been duly given if
personally delivered, if sent by facsimile transmission (with receipt
confirmed by automatic transmission report), if sent by a nationally-
recognized overnight courier with charges prepaid, if sent by registered or
certified mail, return receipt requested and postage prepaid (or by the most
nearly comparable method if mailed from or to a location outside the United
States), addressed as follows:
If to the Company, to:
Chyron Corporation
5 Hub Drive
Melville, New York 11747
Attn: President
Fax: (516) 845-5210
With copies (which copies shall not constitute notice) to:
Camhy Karlinsky & Stein LLP
1740 Broadway
New York, New York 10019
Attn: Robert S. Matlin, Esq.
Fax: 212-977-8389
If to the Holder, to: the address shown in the register maintained by the
Company for such purpose; or to such other address as the party to whom the
notice is to be given may have furnished to the other party hereto in
writing in accordance with the provisions of this Section 6.4. Any such
notice or communication shall be deemed to have been received (i) in the
case of personal delivery, on the date of such delivery, (ii) in the case
of facsimile transmission (with receipt confirmed by automatic transmission
report), on the date of such transmission, (iii) in the case of a
nationally-recognized overnight courier, on the next business day after the
date when delivered to such courier, and (iv) in the case of mailing (or by
the most nearly comparable method if mailed from or to a location outside
the United States), on the third business day following that on which the
piece of mail containing such communication is posted; provided, however,
that three additional business days shall be added to the time any notice
or communication sent from or to a location outside the United States shall
be deemed to have been received in (iii) or (iv) above.
6.5 Amendments and Waivers. Any term of this Debenture may be amended or
supplemented and the observance of any term of this Debenture may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and at least
a majority in principal amount of the outstanding Debentures; provided,
however, that without the consent of each Holder of the Debentures affected,
an amendment, waiver or supplement may not (i) extend the final maturity of
any Debenture; (ii) reduce the principal amount of any Debenture; (iii)
reduce the rate or extend the time of payment of any interest on any
Debenture; (iv) impair or affect the right of any Holder of any Debenture
to institute suit for the payment or conversion of any Debenture; (v) change
the currency for payment of principal of, or interest on, any Debenture; or
(vi) materially and adversely affect the right to convert the Debentures in
accordance herewith; and further, provided, however, that an amendment,
waiver or supplement may not reduce the percentage of Debentures, the
consent of the Holders of which is required for any such supplemental
indenture or waiver, without the consent of the Holders of all Debentures
then outstanding.
6.6 Severability. If one or more provisions of this Debenture are held
to be unenforceable under applicable law, such provision shall be excluded
from this Debenture and the balance of this Debenture shall be interpreted
as if such provision was so excluded and shall be enforceable in accordance
with its terms.
6.7 Replacement of Debenture. If the Holder loses this Debenture, the
Company shall issue an identical replacement Debenture to the Holder upon
the Holder's delivery to the Company of a customary agreement to indemnify
the Company for any losses resulting from issuance of the replacement
Debenture.
6.8 Unsecured. This Debenture is an unsecured obligation of the Company.
IN WITNESS WHEREOF, CHYRON CORPORATION has caused this Debenture to be
dated, executed and issued on its behalf by its officer or officers thereto
duly authorized.
CHYRON CORPORATION
Attest:
By: /s/Daniel I. DeWolf By: /s/Dawn Johnston
Name: Daniel I. DeWolf Name: Dawn Johnston
Title: Secretary Title: Chief Financial Officer
FORM OF
NOTICE OF CONVERSION OF
8% SUBORDINATED CONVERTIBLE DEBENTURE
OF CHYRON CORPORATION
Chyron Corporation
5 Hub Drive
Melville, New York 11747
Attention: President
Dear Sir:
I am the Holder of Chyron Corporation 8% Subordinated Convertible Debenture
number (the "Debenture"). As of the date hereof, $ aggregate
principal amount of the Debenture remains unconverted.
I hereby give notice to Chyron Corporation (the "Company") of my desire and
intent to convert $ aggregate principal amount of the Debenture into
common stock, par value $.01 per share, of the Company in accordance with
the provisions of Section 3 of the Debenture.
Very truly yours,
Date: Name:
FORM OF
NOTICE OF EXCHANGE OF
8% SUBORDINATED CONVERTIBLE DEBENTURE
OF CHYRON CORPORATION
Chyron Corporation
5 Hub Drive
Melville, New York 11747
Attention: President
Dear Sir:
I am the Holder of Chyron Corporation 8% Subordinated Convertible Debenture
number (the "Debenture"). I hereby give notice to Chyron Corporation
(the "Company") of my desire and intent to exchange the Debenture into the
Private Placement Debentures in accordance with the provisions of Section
5 of the Debenture.
Very truly yours,
Date: Name: