-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T8xla4SRBBFbdsw/TQMvhuYoisp/J+227HyaAqNKotW1O6WWPszsC0PjEWKkbTI1 fd6loLjsq8zxvC04oA44Fg== 0000020232-96-000014.txt : 19960430 0000020232-96-000014.hdr.sgml : 19960430 ACCESSION NUMBER: 0000020232-96-000014 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960426 ITEM INFORMATION: Changes in control of registrant FILED AS OF DATE: 19960429 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHYRON CORP CENTRAL INDEX KEY: 0000020232 STANDARD INDUSTRIAL CLASSIFICATION: PHOTOGRAPHIC EQUIPMENT & SUPPLIES [3861] IRS NUMBER: 112117385 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09014 FILM NUMBER: 96552994 BUSINESS ADDRESS: STREET 1: 5 HUB DR CITY: MELVILLE STATE: NY ZIP: 11747 BUSINESS PHONE: 5168452000 MAIL ADDRESS: STREET 1: 5 HUB DRIVE CITY: MELVILLE STATE: NY ZIP: 11747 FORMER COMPANY: FORMER CONFORMED NAME: COMPUTER EXCHANGE INC DATE OF NAME CHANGE: 19760114 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT - April 26, 1996 (Date of Earliest Event Reported) CHYRON CORPORATION (Exact name of registrant as specified in its charter) New York (State or other jurisdiction of incorporation) 1-9014 (Commission File Number) 11-2117385 (I.R.S. Employer Identification No.) 5 Hub Drive Melville, New York 11747 (Address of principal executive offices) Registrant's telephone number, including area code: (516) 845- 2000 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On April 12, 1996 (the "Closing Date"), Chyron Corporation, a New York Corporation ("Chyron"), acquired all of the issued and outstanding capital stock of Pro-Bel Limited, a corporation organized under the laws of England ("Pro-Bel"), from the shareholders of Pro-Bel. Chyron purchased all of the issued and outstanding capital stock of Pro-Bel in exchange for (i) 4,500,071.37 pounds sterling in cash; (ii) promissory notes (the "Notes") of Chyron in an aggregate principal amount of 3,500,000 pounds sterling; and (iii) 3,146,205 restricted shares of Chyron Common Stock. The acquisition was made pursuant to an agreement (the "Agreement"), dated as of April 12, 1996. Payment of principal of the Notes is due on or before April 15, 1998. Interest on the Notes is payable quarterly and accrues at a rate equal to one-year LIBOR. Upon consummation of the exchange, Pro-Bel became a wholly-owned subsidiary of Chyron. In connection with the above transaction, Chyron entered into a Registration Rights Agreement (the "Registration Agreement"), dated as of April 12, 1996, with Messrs. Bronsens, as administrator on behalf of each of the shareholders of Pro-Bel who received shares of Chyron Common Stock under the Agreement. Pursuant to the Registration Rights Agreement, such shareholders have, under certain circumstances, incidental (piggyback) and demand registration rights with respect to the 3,146,205 shares of Common Stock received by them, commencing 12 months and 15 months, respectively, after the Closing Date. On April 16, 1996, Chyron entered into a term loan agreement with NatWest Bank, N.A. in the amount of $8 Million. The proceeds of such loan were used to fund the acquisition. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS The audited historical financial statements of Pro-Bel Limited and a quantified reconciliation of the "measurement" difference between U.K. and U.S. GAAP will be filed on or about June 15, 1996 under cover of a Form 8-K/A. The Pro-Forma financial information required pursuant to Article 11 of Regulation S-X will also be filed on or about June 15, 1996 under cover of the same Form 8-K/A. Item 7(a)(4) of Form 8-K provides for an automatic 60 day extension of the deadline for filing the financial statements and pro-forma financial information regarding the acquired business. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CHYRON CORPORATION By: Patricia Lampe Name: Patricia Lampe Title: Chief Financial Officer and Treasurer Date: April 26, 1996 EXHIBITS Exhibit I. Agreement for the sale and purchase of the entire issued share capital of Pro-Bel Limited, dated April 12, 1996. Exhibit II. Registration Rights Agreement, dated April 12, 1996 and by and between Chyron Corporation and the Shareholders. DATED 12TH APRIL 1996 (1) R.W. HARTMAN AND OTHERS (2) CHYRON CORPORATION AGREEMENT for the sale and purchase of the entire share capital of Pro- Bel Limited Charles Russell 8-10 New Fetter Lane London EC4A IRS Ref: MACM/SJC/19826/1 INDEX CLAUSE PAGE 1. DEFINITIONS.............................. 1 2. INTERPRETATION........................... 10 3. SALE OF SHARES........................... 11 4. CONSIDERATION............................ 12 5. CONDITIONS............................... 13 6. COMPLETION............................... 14 7. WARRANTIES AND WAIVER OF RIGHTS.......... 18 8. PURCHASER'S REMEDIES..................... 20 9. PURCHASER'S WARRANTIES AND INDEMNITY..... 21 10. ACTIONS PENDING COMPLETION............. . 22 11. NON-SOLICITATION......................... 27 12. RESTRICTIVE TRADE PRACTICES ACTS......... 29 13. PENSION SCHEMES AND EMPLOYEES............ 29 14. ANNOUNCEMENTS AND CONFIDENTIALITY........ 30 15. FURTHER ASSURANCE........................ 32 16. WAIVER................................... 32 17. ENTIRE AGREEMENT AND VARIATIONS.......... 32 18. PROVISIONS RELATING TO THIS AGREEMENT.... 33 19. PROVISIONS RELATING TO THE VENDORS' REPRESENTATIVE........................... 34 20. PROVISIONS RELATING TO THE VENDORS' ADMINISTRATOR............................ 35 21. NOTICES.................................. 36 22. LAWS..................................... 37 The First Schedule........................... 39 Part 1 - The Vendors....................... 39 Part 2 - The Warrantors.................... 55 Part 3 - Relevant Employees................ 56 The Second Schedule.......................... 57 Part 1 - The Company....................... 57 Part 2 - The Subsidiaries.................. 58 The Third Schedule........................... 66 The Pension Schemes........................ 66 The Fourth Schedule.......................... 67 The Properties............................. 67 The Fifth Schedule........................... 70 The Tax Deed............................... 70 The Sixth Schedule........................... 85 The Warranties............................. 85 The Seventh Schedule......................... 129 The Promissory Notes....................... 129 Part 1..................................... 129 Part 2..................................... 138 The Eighth Schedule.......................... 145 Intellectual Property...................... 145 The Ninth Schedule........................... 146 List of people and firms whom Warrantors should consult............................. 146 The Tenth Schedule........................... 147 Part 1 - Limitations on liability under the Warranties and the Tax Deed....... 147 Part 2 - Limitations on liability under the Purchaser's Warranties........ 156 The Eleventh Schedule........................ 161 The Guarantee.............................. 161 EXHIBIT A.................................... 162 Actuary's Letter........................... 162 EXHIBIT B.................................... 163 Registration Rights Agreement.............. 163 EXHIBIT C.................................... 164 Service Agreement Amendments............... 164 EXHIBIT D.................................... 165 Trilogy Acquisition Agreement.............. 165 THIS AGREEMENT is made the 12th day of April 1966 BETWEEN (1) THE SEVERAL PERSONS whose names and addresses are set out in columns 1 and 2 respectively of Part 1 of the First Schedule ("the Vendors"); and (2) CHYRON CORPORATION, a company incorporated in New York, United States of America whose principal office is located at Hub Drive, Melville, New York U.S.A. 11747 ("the Purchaser"). WHEREAS: (A) Pro-Bel Limited ("the Company") is a private company limited by shares incorporated in England further information about which is contained in Part 1 of the Second Schedule. (B) The Vendors will have immediately prior to Completion full title guarantee of or are otherwise able to procure the transfer, free from all liens, charges, and encumbrances, of all the issued shares in the capital of the Company in the numbers set opposite their names in column 3 of Part 1 of the First Schedule. (C) The Vendors have agreed to sell with full title guarantee and the Purchaser has agreed to purchase all the issued shares in the capital of the Company subject to and on the terms and conditions set forth herein. (D) In consideration of the Purchaser agreeing to acquire all the issued shares in the capital of the Company, the Warrantors have agreed to give the Warranties and to enter into the Tax Deed. NOW IT IS HEREBY AGREED as follows: 1. DEFINITIONS 1.1 In this Agreement the following expressions shall have the following meanings unless the context requires otherwise:- "Actuary's Letter" the letter dated 27 March 1996 from the Vendors' Actuary to the Company annexed hereto and marked "Exhibit A"; "Administration Agreement" the agreement to be entered into between the Vendors and the Vendors' Administrator on completion of this Agreement; "the Audited Accounts" the audited consolidated balance sheet of the Company and the Subsidiaries made up as at the Balance Sheet Date and the audited consolidated profit and loss account of the Company and the Subsidiaries for the year ended on that date, and the notes, reports and other documents which are or are required by law to be annexed thereto and the audited balance sheet of each of the Subsidiaries made up as at the Balance Sheet Date and the audited profit and loss account of each of the Subsidiaries for the year ended on that date and the notes, reports and other documents which are or are required by law to be annexed thereto; "the Balance Sheet Date" 31 October 1995; "CAA 1990" the Capital Allowances Act 1990; "the Companies Acts" statues for the time being regulating the activities of companies in the United Kingdom including without limitation the Companies Act 1985; "Completion" completion of the sale and purchase of the Shares in accordance with the provisions of Clause 6; "the Completion Date" the date upon which Completion takes place; "the Conditions" the conditions referred to in Clause 5; "the Consideration" the consideration for the sale and purchase of the shares; "Consideration Shares" 3,146,205 restricted shares of common stock par value of $0.01 per share in the capital of the Purchaser credited as fully paid; "Covenantors" the Warrantors; "the Disclosure Letter" a letter of even date herewith from the Warrantors to the Purchaser disclosing inter alia certain exceptions to the Warranties; "Employee Shares" restricted shares of common stock par value of $0.01 per share in the capital of the Purchaser credited as fully paid; "Final Date" 11 April 1996 or such later date as shall be agreed in writing between the Vendor's Representative and the Purchaser; "the First Promissory Note" the promissory note in the form set out in Part 1 of the Seventh Schedule; "Guarantee" a standby letter of credit given by NatWest Bank N.A. in the form set out in the Eleventh Schedule; "Mr. Hartman" Mr Raymond William Hartman; "Intellectual Property" any and all, whether currently existing or created hereafter but prior to Completion:- (i) technical information, plans, drawings, designs, and documents in whatever form, patentable or otherwise, owned by or licensed to the Company and/or any of the Subsidiaries, including, without limitation, franchises, permits, licenses, and other similar authority, processes for the manufacture, production, or utilization of any product, and know-how and trade secrets; (ii) patents and patent applications owned by or licensed to the Company and/or any of the Subsidiaries, regardless of whether registered in the United Kingdom, the United States, or elsewhere, and all continuations, extensions, renewals and continuations- in-part, and all rights in connection therewith, including all claims against third parties for past or present infringement relating to any of the foregoing; (iii) trade names, service marks, and registrations and registration applications related thereto, copyrights and copyright registrations and registration applications owned by or licensed to the Company and/or any of the Subsidiaries, and all goodwill associated therewith, and all continuations, extensions, renewals and continuations-in- part, and all rights in connection therewith, including all claims against third parties for past or present infringement relating to any of the foregoing; (iv) computer programs, including, without limitation, all source codes, algorithms, object codes, program manuals, and documentation developed by, owned by, or licensed to the Company and/or any of the Subsidiaries possesses, uses, or has authority to possess or use intangible property of others, or other process, use, or have authority to possess or use intangible property of the Company and/or any of the Subsidiaries, and recorded data of any kind or nature regardless of the medium or recording, including without limitation, all software, writings, plans, specifications, and schematics; "Loan Stock" the 700,000 pounds sterling Convertible Cumulative Unsecured Loan Stock of the Company issued in 1994; "Management Accounts" the unaudited accounts of the Company and the Subsidiaries for the period from the Balance Sheet Date to 29 February 1996, copies of which are annexed to the Disclosure Letter; "Options" share options granted pursuant to the 1986 Executive Share Option Scheme of the Company and the 1995 Executive Share Option Scheme of the Company; "the Pension Schemes" the pension schemes short particulars of which are set out in the Third Schedule; "Pre Sale Dividend" the cash dividend aggregating 608,680 (net of any associated tax credit) to be paid on or prior to Completion in respect of the Shares; "the Promissory Notes" the First Promissory Note and the Second Promissory Note; "the Properties" the properties short particulars of which are set out in the Fourth Schedule; "Purchaser's Group" the Purchaser and its subsidiaries from time to time (including after Completion only, the Company and the Subsidiaries); "the Purchaser's Solicitors" Messrs Charles Russell of 8-10 New Fetter Lane, London EC4A IRS; "Purchaser's Warranties" the warranties of the Purchaser set out in Part 2 of the Sixth Schedule; "Relevant Claim" a claim in respect of any of the Warranties (including without limitation any claim under subclause 8.1) and/or any claim against the Convenantors under the Tax Deed; "the Relevant Employees" the employees listed in Part 3 of the First Schedule; "the Registration Rights the registration rights Agreement" agreement to be entered into between the Purchaser and the Vendor's Administrator on behalf of each of the Vendors, such registration rights agreement to be in the same or substantially the same form as the draft agreement annexed hereto and marked "EXHIBIT B"; "the Second Promissory Note" the promissory note in the form set out in Part 2 of the Seventh Schedule; "the Service Agreement the amendments to the Amendments" service agreements entered into between the Company and each of the Warrantors listed in Part 2 of the First Schedule (and marked with an asterisk), such amendments to be in the same or substantially the same form as the draft annexed hereto and marked "EXHIBIT C"; "the Shares" all of the issued shares in the capital of the Company immediately prior to completion, being the 5,188,685 ordinary shares of 25p each; "SSAPs" statements of standard accounting practice produced by the Accounting Standards Board, including reporting standards adopted or issued by such board or other relevant body; "the Subsidiaries" the companies particulars of which are set out in Part 2 of the Second Schedule; "the Tax Deed" the deed in the form set out in the Fifth Schedule; "Taxation" all forms of taxation, duties, imposts, and levies whenever imposed and whether of the United Kingdom or elsewhere and in particular (but without prejudice to the generality of the foregoing) including income tax, withholding taxes, corporation tax, capital transfer tax, inheritance tax, value added tax, custom duties, excise duties, stamp duty, stamp duty reserve tax, national insurance contributions and generally any other taxes, duties, imposts, levies or other amounts (whether of a like nature or not) excluding for the avoidance of doubt any general and water rates and National Non-Domestic rate and any interest, penalty or fine in connection therewith; "the Taxes Act 1988" the Income and Corporation Taxes Act 1988; "TCGA 1992" the Taxation of Chargeable Gains Act 1992; "Trilogy Acquisition the Agreement between (1) Agreement" Roger Stanwell, Ian Malcolmson and Timothy Hardistry and (2) the Company relating to the acquisition by the Company of the remaining shares of Trilogy Broadcast Limited not held by the Company at all date of this Agreement in the same or substantially the same terms as the agreement annexed hereto and marked Exhibit "D"; "United States" or "US" the United States of America, its territories and possessions; "VATA 1994" the Value Added Tax 1994; "the Vendors' Actuary" David Seagul of Punter Southall and Co of 126 Jermyn Street, London SW1Y 4UJ or such other actuary appointed for the time being by the Vendors; "the Vendors' Administrator" Messrs Bronsens of 26 Beaumont Street, Oxford, OX1 2NP; "the Vendors' Counsel" Messrs Brobeck Hale and Dorr International of Veritas House, 125 Finsbury Pavement, London EC2A 1NQ; "the Vendors' Representative" Mr Harman or such other person as may be appointed in writing by a majority of the Vendors in accordance with sub-clause 19.2; "the Warranties" the statements contained in sub-clauses 7.1, 7.2 and 7.3 and Part 1 of the Sixth Schedule; "the Warrantors" those persons whose names and addresses are set out in Part 2 of the First Schedule. 1.2 In paragraph 11 of Part 1 of the Sixth Schedule:- 1.2.1 the expressions "waste" and "harm" shall be defined in accordance with the Environmental Protection Act 1990 or (if the same are used in the context of any other applicable Environmental Law such other applicable Environmental Laws); and; 1.2.2 the following expression shall have the following meanings unless the context requires otherwise:- "Dangerous Substance" any natural or artificial substance (whether in a solid or liquid form or in the form of a gas or vapour and whether alone or in combination with any other substance) (including but not limited to electricity or heat) capable of causing harm to man or any other living organism supported by the Environment, or polluting or damaging the Environment or damaging public health or welfare, including but not limited to any controlled, special, hazardous, toxic, radioactive or dangerous waste and oil, petroleum and substances derived from oil or petroleum; "Environment: all or any of the air, water and land and air includes the air within buildings and the air within other natural or man-made structures above or below ground; "Environmental Law" all laws, regulations, directives, treaties, codes of practice, circulars, notices, guidance notes and the like (whether of the United Kingdom Parliament or other official bodies having jurisdiction in relation to such matters) concerning the protection of or harm to human health or safety or the Environment including but not limited to those relating to:- (a) the generation, transportation, storage, treatment, packaging, labelling, recycling or disposal of Dangerous Substances; (b) the carrying on of any activity or process; (c) civil or criminal liability in respect of pollution or contamination of any description; (d) discharge or emissions onto, into or from the Environment; (e) noise; "Environmental License" any permit, license, authorization, consent or other approval required by the Company or any of the Subsidiaries under any Environmental Law. 2. INTERPRETATION In this Agreement where the context so admits:- 2.1 references to statutory provisions shall be construed as references to those provisions as amended or re-enacted or as their application is modified by other provisions (before the date hereof) from time to time and shall include references to any provisions of which they are re-enactments (whether with or without modification) before the date hereto but shall exclude any new provisions enacted after the date hereof to the extent that any such provisions alter the law as at the date hereof; 2.2 references to Clauses and Schedules and references to Clauses hereof and Schedules hereto; references to sub- clauses are, unless otherwise stated, reference to sub-clauses of the Clause in which such reference appear; references to paragraphs, are, unless otherwise stated, to paragraphs in the Schedule hereto in which such references appear; references to sub-paragraphs are, unless otherwise stated, to sub-paragraphs of the paragraph in which such references appear; and reference to this Agreement include the Schedules; 2.3 the plural includes the singular (and vice versa) and the masculine includes the feminine; 2.4 the headings in this Agreement are for convenience only and shall not affect the interpretation hereof; 2.5 the Warranties apply to each of the Subsidiaries (other than Pro-Bel Inc) as well as to the Company as if the expression "the Company" when used in the Sixth Schedule was defined to mean each of the Subsidiaries (other than Pro-Bel Inc) and the Company; 2.6 if any Warranty is qualified by the expression "so far as the Warrantors are aware" or the expression "to the best of the information, knowledge and belief of Warrantors" or any similar expression, the Warrantors shall be required to make enquiry with respect thereto only of those persons or firms set out in the Ninth Schedule; 2.7 references in this Agreement to "pounds sterling" shall mean pounds sterling and reference to "$" or "Dollars" shall mean the lawful currency of the United States; 2.8 references to documents "in the agreed form" are to documents in terms agreed between the parties and signed (for the purposes of identification only) by the Vendors' Counsel and the Purchaser's Solicitors; 2.9 words and phrases, the definition of which is contained or referred to in Part XXVI of the Companies Act 1985, shall be construed as having the meaning therein attributed to them. 3. SALE OF SHARES 3.1 Subject to sub-clause 3.3, the Vendors shall sell with full title guarantee for the purposes of the Law of Property (Miscellaneous Provisions) Act 1994 and the Purchaser shall purchase with effect from the Completion Date the Shares free from all charges, liens, encumbrances, options and equities of any nature whatsoever and together with all rights attaching or accruing thereto after Completion. For the avoidance of doubt the Purchaser shall not be entitled to any rights in connection with the Pe-Sale Dividend. 3.2 The Vendors hereby waive all rights of pre-emption over any of the shares conferred either by the Articles of Association of the Company or in any other way. 3.3 The Purchaser shall not be obliged to complete the purchase of any of the Shares unless the purchase of all the Shares is completed simultaneously and the Vendors shall not be obliged to complete the sale of the Shares unless the Purchaser complies with all of its obligations under sub-clause 6.4. 4. CONSIDERATION 4.1 Save as deemed reduced herein, the consideration for the sale and purchase of the Shares shall be:- 4.1.1 the cash sum of 4,500,071.37 pounds; 4.1.2 the issue and delivery of the Promissory Notes for the aggregate principal sum of 3,500,000 pounds secured by the Guarantee; and 4.1.3 the allotment and issue of the Consideration Shares. 4.2 The cash sum referred to in sub-clause 4.1.1 shall be divisible among the Vendors as set out opposite each Vendor's name in column 4 of Part 1 of the First Schedule and paid on Completion to the Vendors' Counsel (who are authorized to receive the same on behalf of the Vendors and payment to whom shall be a good discharge to the Purchaser). 4.3 The Vendors' Administrator shall have issued and delivered to him at Completion as trustee for the Vendors the First Promissory Note and the Second Promissory Note for the aggregate of the principal sums set out opposite each Vendor's name in column 5 of Part 1 of the First Schedule and the delivery to the Vendors' Administrator (who is authorized to receive the same on behalf of the Vendors) of such Promissory Notes shall be a good discharge to the Purchaser. 4.4 Each Vendor shall have allotted and issued to him by the Purchaser at Completion the Consideration Shares set opposite his name in column 6 of Part 1 of the First Schedule and the delivery to the Vendors' Administrator (who is authorized to receive the same on behalf of the Vendors) of share certificates for such number of Consideration Shares issued to each such Vendor shall be a good discharge to the Purchaser. 4.5 The Consideration Shares to be delivered hereunder shall not be registered under the United States Securities Act of 1933, as amended (the "1933 ACT"). The Vendor acknowledgement that they may not sell or otherwise dispose of such shares in the absence of either a registration statement under the 1933 Act or an exemption from the registration provisions of the 1933 Act. The certificates representing such shares will contain a legend substantially to the effect that such shares have not been registered under the 1933 Act, and may not be sold or transferred without an effective registration statement under the 1933 Act or an exemption from the registration provisions under the 1933 Act. The Consideration Shares to be delivered to the Vendors pursuant to this Agreement shall be subject to incidental or "piggyback" registration rights commencing 12 months after the Completion Date and one demand registration right commencing 15 months after the Completion Date, pursuant to the Registration Rights Agreement which shall be executed and delivered on the Completion Date by the Purchaser and the Vendors' Administrator. 5. CONDITIONS 5.1 The provisions of Clause 3, 4 and 6 of this Agreement shall be conditional upon the following having occurred by the Final Date:- 5.1.1 the obtaining in a form reasonably satisfactory to the Vendors of clearances in respect of the transactions herein described pursuant to Section 707 of the Taxes Act 1988 and Section 138 of the TCGA 1992; 5.1.2 there not having been instituted proceedings for the liquidation, winding up, dissolution or insolvency of the Company or any Subsidiary, or the appointment of a liquidator, receiver, administrator or administrative receiver of the Company or any Subsidiary or any part of its respective property; and 5.1.3 there not having been instituted by or against the Purchaser any proceedings under the United States Bankruptcy Code or any other federal or state bankruptcy, reorganization, receivership, insolvency or other similar law affecting the rights of creditors generally on a composition or an assignment or trust mortgage for the benefit of creditors. 5.2 The Vendors shall use their reasonable endeavors to satisfy the Condition in sub-clause 5.1.1. 5.3 If the Condition set out in sub-clause 5.1.2 (in so far as such sub-clause relates to the Company and the Subsidiaries) is not satisfied or waived in writing by the Purchaser or in sub-clauses 5.1.1 and 5.1.3 by the Vendors' Representative, as the case may be, on or before the Final Date this Agreement may be terminated by the Purchaser or, as the case may be the Vendors' Representative, by notice in writing given to each of the other parties. 5.4 In the event of a termination of this Agreement as aforesaid, this Agreement shall lapse and shall be null and void ab initio (other than sub-clauses 10.2, 10.3 and 10.4 and Clause 14) and no party shall have any claim against any other in respect thereof, save for any antecedent breach. 6. COMPLETION Subject as hereinafter provided Completion shall take place at the office of the Purchaser's Solicitors immediately following execution by all parties to this Agreement or at such other place or on such other date as may be agreed between the Purchaser and the Vendors' Representative on behalf of the Vendors, whereupon:- 6.1 the Vendors who are holders of the Options shall exercise their respective Options and the Vendors who are holders of Loan Stock shall convert their Loan Stock and the Company shall issue to such Vendors the relevant number of Shares; 6.2 the Vendors' Representative shall deliver to the Purchaser:- 6.2.1 duly executed transfers of the shares in favor of the Purchaser or its nominees together with the relative share certificates. 6.2.2 shares certificates in the Subsidiaries registered in the name of the Company; 6.2.3 the Tax Deed duly executed by the Covenantors; 6.2.4 the resignations as a deed of each of John Fergus Graham Wilson and Kenneth A Olisa as directors of the Company in the agreed form; 6.2.5 the written resignation of the auditors of the Company and the Subsidiaries in the agreed form; 6.2.6 all the statutory and other books of the Company and of the Subsidiaries together with their certificates of incorporation and common seals; 6.2.7 a letter from Charles Russell in Cheltenham in the form confirming that they hold the deeds and documents constituting title to the Properties; 6.2.9 the Registration Rights Agreement duly executed by the Vendors' Administrator; and 6.2.10 the Service Agreement Amendments duly executed by each of the relevant Warrantors (in the case of the Service Agreement Amendment in which he is named as a party); 6.3 The Warrantors shall procure that Board Meetings of the Company and of the Subsidiaries (as the same may be required for effecting the following) shall be held at which it shall be resolved that:- 6.3.1 the transfer in respect of the Shares be approved for registration and that share certificates in respect thereof be executed under the common seal of the Company and delivered to the Purchaser subject only to the said transfer being duly stamped; 6.3.2 the resignations of the persons whose names are set out in sub-clause 6.2.4 shall be tabled and approved; 6.3.3 the resignations of the auditors of the Company and the Subsidiaries shall be tabled and approved; 6.3.4 Messrs Michael Wellesley-Wesley and Isaac Hersly shall be appointed additional directors of the Company; 6.3.5 Price Waterhouse shall be appointed as auditors of the Company and of the Subsidiaries; 6.3.6 the execution of the Tax Deed shall be approved and ratified by the Company and the Subsidiaries; 6.3.7 the Service Agreement Amendments shall be approved and executed by the Company; 6.4 against compliance with the foregoing provisions, the Purchaser shall deliver:- 6.4.1 to the Vendors' Counsel:- 6.4.1.1 the sum of 4,500,071.37 pounds by way of telegraphic transfer in immediately available funds; and 6.4.1.2 the sum of 40,000 pounds way of telegraphic transfer in immediately available funds,such sum to be divisible among the Relevant Employees as set out opposite each Relevant Employee's name in column 3 of Part 3 of the First Schedule; and 6.4.2 to the Vendors' Representative who is authorized to receive the same on behalf of the Vendors and the Relevant Employees, as the case may be, and delivery to whom shall be a good discharge to the Purchaser:- 6.4.2.1 a counterpart of the Tax Deed, duly executed by the Purchaser; 6.4.2.2 a written action of the board of the Purchaser in the agreed from approving the issue of the Consideration Shares to the Vendors and of the Employee Shares to the Relevant Employees and authorizing the execution of this Agreement and all other agreements and documents referred to in this Agreement to which the Purchaser is a party; and 6.4.2.3 certificates for the number of Employee Shares for each of the Relevant Employees, set out opposite each Relevant Employee's name in column 4 of Part 3 of the First Schedule (such certificates to be delivered as soon as reasonably practicable and in any event within 5 days after Completion); 6.4.3 to the Vendors' Administrator who is authorized to receive the same on behalf of the Vendors and the Relevant Employees, as the case may be, and delivery to whom shall be a good discharge to the Purchaser:- 6.4.3.1 certificates for the Promissory Notes in the name of the Vendors' Administrator to hold as trustee for each Vendor as referred to in sub-clause 4.3; 6.4.3.2 certificates for the Consideration Shares for each Vendor as referred to in sub-clause 4.4; 6.4.3.3 a counterpart of the Registration Rights Agreement duly executed by the Purchaser; and 6.4.3.4 the Guarantee duly executed by National Westminster Bank. 6.5 If for any reason the provisions of sub-clause 6.4 are not fully compiled with, the Vendors shall be entitled (in addition and without prejudice to any other right or remedy available to them) to elect (by written notice to the Purchaser signed by the Vendors' Representative):- 6.5.1 to rescind this Agreement in which case the Vendors shall not be obliged to sell or to procure the sale of any of the Shares; or 6.5.2 to fix a new date for Completion; or 6.5.3 to proceed to Completion so far as practicable, the Purchaser then being obliged to use its best endeavours to perform or procure the performance of any of the outstanding provisions of sub-clause 6.4. 6.6 If for any reason the provisions of sub-clauses 6.2 and 6.3 are not fully compiled with the Purchaser shall be entitled (in addition and without prejudice to any other right or remedy available to them) to elect (by written notice to the Vendors):- 6.6.1 to rescind this Agreement in which case the Purchaser shall not be obliged to purchase or to procure the purchase of any of the Shares; or 6.6.2 to fix a new date for Completion; or 6.6.3 to proceed to Completion so far as practicable, the Vendors then being obliged to use their best endeavors to perform or procure the performance of any of the outstanding provisions of sub-clauses 6.1, 6.2 and 6.3. 6.7 For the avoidance of doubt, neither the cash sum referred to in sub-clause 6.4.1.2 nor the Employees Shares referred to in sub-clause 6.4.2.3 comprise any part of the Consideration. 6.8 The Purchaser shall at the next regular scheduled meeting of its board following Completion appoint Mr Hartman as an additional director to its board. 7. WARRANTIES AND WAIVER OF RIGHTS 7.1 The Warrantors hereby warrant jointly and severally to the Purchase that save as disclosed in the Disclosure Letter:- 7.1.1 the Warranties are at the date hereof and will at Completion be true accurate and complete in all respects; and 7.1.2 they will forthwith disclose in writing to the Purchaser any matter or thing which may become known to them after the date hereof and prior to Completion which is inconsistent with any of the Warranties. 7.2 Each of the Vendors hereby severally warrants to the Purchaser that:- 7.2.1 he has full power and authority to enter into and perform the obligations to be performed by him under this Agreement; 7.2.2 this Agreement, when executed, will constitute valid and binding obligations upon him in accordance with its terms; 7.2.3 the execution and delivery of and performance by him of his obligations under this Agreement will not result in a breach of any provision of the memorandum and articles of association of the Company (other than the pre-emption provisions expressly waived by sub-clause 3.2) or a breach of any order, judgment or decree of any court to which he is a party or by which he is bound; 7.2.4 he will at Completion be entitled to sell and transfer to the Purchaser the ownership with full title guarantee of the Shares set opposite his name in column 3 of the First Schedule on the terms of this Agreement without the consent of any third party; 7.2.5 no person has the right (whether exercisable now or in the future and whether contingent or not) to call for the sale of transfer of any of the Shares set opposite his name in column 3 of the First Schedule under any option or other agreement (including conversion rights and pre-emption rights) and there are no claims, charges, liens, equities or encumbrances of such Shares. 7.3 The Covenantors hereby warrant jointly and severally to the Purchaser that:- 7.3.1 the Covenantors have full power and authority to enter into and perform the Tax Deed; 7.3.2 the Tax Deed, when executed, will constitute valid and binding obligations upon the Covenantors in accordance with its terms; 7.3.3 the execution and delivery of and performance by the Covenantors of their obligations under the Tax Deed will not result in a breach of any provision of the memorandum and articles of association of the Company or a breach of any order, judgment or decree of any court to which they are a party or by which they are bound. 7.4 Any amount payable hereunder by virtue of a breach of any Warranty or by virtue of sub-clause 7.2 or sub-clause 7.3 or any amounts deducted from sums due under the First Promissory Note for whatever reason shall be deemed to be a reduction in the consideration for the relevant Shares. 7.5 The Purchaser may release or comprise the liability of any of the Warrantors hereunder or grant to any Warrantor time or other indulgence without affecting the liability of any other Warrantor hereunder. 7.6 The provisions of Part 1 of the Tenth Schedule shall have effect in relation to the Warranties. 7.7 Each of the Vendors hereby waivers any rights and actions he or she has now or may hereafter have against the Company in respect of:- 7.7.1 the amendments to the Loan Stock proposed to holders of the Loan Stock in a letter from the Vendors' Counsel dated 15 March 1996 to holders of the Loan Stock to convert their Loan Stock into ordinary shares of 25p each on terms other than those set out in the Circular of the Company dated 10 October 1994; and 7.7.2 the variation of the 1995 Executive Share Option Scheme of the Company. 8. PURCHASER'S REMEDIES 8.1 Subject to Completion taking place and to the provisions of Part 1 of the Tenth Schedule, eachof the Warrantors hereby agrees with the Purchaser:- 8.1.1 to pay to the Purchaser within fourteen days of receipt by the Warrantors of a written demand:- 8.1.1.1 the amount necessary to put the Company and the Subsidiaries into the position which would have existed but for any beach of Warranty; and 8.1.1.2 all reasonable cost and expenses incurred bythe Company or any of the Subsidiaries as a result of such breach of Warranty; 8.1.2 to indemnify the Purchaser against any costs (including legal costs on an indemnity basis), or expenses which the Purchaser may reasonably incur either before or after the commencement of any action in connection with:- 8.1.2.1 the settlement of any bona fide claim that any of the Warranties have been breached; 8.1.2.2 any legal proceedings in which the Purchaser claims that any of the Warranties have been breached and in which judgment is given for the Purchaser; or 8.1.2.3 the enforcement of any such settlement or judgment. The rights of the Purchaser referred to in this sub-clause 8.1 shall not restrict any of the rights of the Purchaser or the ability of the Purchaser to claim damages on any basis available to it in the event of a breach of any of the Warranties (or any of them) proving to be untrue, inaccurate or incomplete. 8.2 The Purchaser shall be entitled to deduct (whether in full or in part and whether in respect of some or all of the Vendors) such amounts to which it is entitled in respect of a Relevant Claim, from payments which are or are to become due under the First Promissory Note in accordance with and subject to the terms of such Note. The parties hereto agree that, to the extent possible, the amount of any liability due under a Relevant Claim shall be satisfied firstly by setting off any amounts due to the Vendors under the First Promissory Note and thereafter by the Warrantors in accordance with this Agreement. The Vendors acknowledge that any such deduction may be madeby the Purchaser notwithstanding that the Relevant Claim shall be against a Warrantor or Warrantors. 8.3 The Purchaser may (without any liability of its part) rescind this Agreement by notice in writing to the Vendors to that effect as soon as reasonably practicable after the Purchase becomes aware of a material breach of Warranty but in any event prior to completion. 8.4 The rights, including any such rights of rescission conferred on the Purchaser by this Clause 8, shall be in addition to and without prejudice to all other rights and remedies available to the Purchaser. 8.5 No failure to exercise, and no delay in exercising on the part of the Purchaser any right or remedy in respect of any Warranty or on the part of the Vendors any right or remedy in respect of any Purchaser's Warranty, shall operate as a waiver ofsuch right, remedy or Warranty or any Purchaser's Warranty (as the case may be) nor shall a single or partial exercise of such rights or remedy preclude the exercise of such or any other right or remedy. 9. PURCHASER'S WARRANTIES AND INDEMNITY 9.1 The Purchaser hereby warrants to the Vendors that:- 9.1.1 the Purchaser's Warranties are at the date hereof and will at Completion be true accurate and complete in all respects; and 9.1.2 it will forthwith disclose in writing to the Vendors any matter or thing which may become known to it after the date hereof and priorto Completion which is inconsistent with any of the Purchaser's Warranties. 9.2 The provisions of Part 2 of the Tenth Schedule shall have effect in relation to the Purchasers' Warranties. 9.3 The Vendors may (without any liability on their respective parts) rescind this Agreement by notice in writing to the Purchaser to that effect as soon as reasonable practicable after the Vendors become aware of a material breach of the Purchaser's Warranties but in any event prior t completion. 9.4 The rights, including any such right of rescission conferred on the Vendors by this Clause 9 shall be in additional to and without prejudice to all other rights and remedies available to the Vendors. 10. ACTIONS PENDING COMPLETION In the period from the date of this Agreement to Completion:- 10.1 the Warrantors shall procure that each of the Company and the Subsidiaries shall:- 10.1.1 continue its business in the ordinary and usual course and so as to maintain the same as a going concern; 10.1.2 not enter into an contract, transaction or arrangements with the Vendors or any person connected with the Vendors other than as contemplated by this Agreement or as set out in the Disclosure Letter; 10.1.3. not increase or agree to increase the remuneration (including, without limitation, pension contributions, bonuses, commissions and benefits in kind) of its directors or employees (other than minor increases or increases as a result of normal annual reviews of staff other than directors as specified in the Disclosure Letter, which the Vendors shall notify to the Purchaser as soon as reasonably possible) or provide or agree to provide any gratuitous payment or benefit to any such person or any of their dependents and no employees (other than casual employees) shall be engaged (other than as set out in the business plans of the Company and the Subsidiaries and as specified in the Disclosure Letter) or dismissed over their terms of employment altered; 10.1.4 not amend or discontinue any of the Pension Schemes or communicate to any employee any plan, proposal or intention to amend or discontinue any o the Pension Schemes; 10.1.5 not (i) acquire or agree to acquire or (ii) dispose or agree to dispose of any assets (other than in the normal course of business) or (iii) (other than in the normal course of business) enter into any contract or arrangement involving expenditure or liabilities, in each case in excess of in the aggregate 100,000 pounds without the prior consent of the Purchaser (such consent not to be unreasonably withheld or delayed); 10.1.6 not make any payments out of any bank or deposit account exceeding in aggregate 5,000 pounds (except for payments in the normal course of business or other than as envisaged in the capital expenditure plans of the Company and the Subsidiaries and as specified in the Disclosure Letter); 10.1.7 not create or agree to create any further security over or encumber or agree to encumber any of its assets (otherwise than pursuant to lease arrangements as envisaged in the business plans of the Company and the Subsidiaries and as specified in the Disclosure Letter) or redeem or agree to redeem any existing security or give or agree to give any guarantees or indemnities, other than any guarantee or indemnity given in the ordinary course of business in connection with the sale of goods and provisions of services; 10.1.8 not alter or agree to alter the terms of any existing borrowing facilities or arrange additional borrowing facilities (otherwise than pursuant to lease arrangements as envisaged in the business plans of the Company and the Subsidiaries and as specified in the Disclosure Letter); 10.1.9 not alter or agree to alter or terminate or agree to terminate any material agreement to which it is a party without the prior consent of the Purchaser, such consent not to be unreasonably withheld ("material meaning for this purpose any party to such agreement havin to make payment to the other amounts in excess of, in the aggregate, more than 100,000 pounds; 10.1.10 not enter into any material litigation or arbitration proceedings without the prior consent of the Purchaser, such consent not to be unreasonably withheld ("material" meaning for this purpose proceedings involving a claim of, in the aggregate, more than 10,000 pounds); 10.1.11 not declare, pay or make any dividend or other distribution of capital within the meaning of the Taxes Act 1988; 10.1.12 not create, allot or issue any share or loan capital other than pursuant to the Trilogy Acquisition Agreement, the exercise of the Options and the conversion of the Loan Stock; 10.1.13 not pass any resolution in general meeting; 10.1.14 continue its insurance policies and do nothing to render such policies void or voidable; 10.1.15 give all reasonable co-operation to the Purchaser so as to ensure a smooth, orderly and efficient continuation of management of the Company and the Subsidiaries after Completion; 10.1.16 afford the officers, employees, agents, lawyers, investment bankers, accountants, and other representatives of the Purchaser reasonable access to the plants, properties, books and records of the Company and the Subsidiaries during normal office hours and on receipt of reasonable prior notice, and permit them to make copies of such books and records, and shall from time to time furnish the Purchaser with such additional financial and operating data and other information as to the financial condition, results of operations, businesses, properties, assets, liabilities, or future prospects of the Company and the Subsidiaries as the Purchaser may from time to time reasonably request. 10.2 the Vendors shall not, and shall not authorize nor knowingly permit any officer, director, employee, agent, lawyer, investment banker, accountant, or other representative or any of them directly or indirectly, to:- 10.2.1 initiate contact with any persons or entity in an effort to solicit any Takeover Proposal (as hereinafter defined); 10.2.2 co-operate with, or furnish or cause to be furnished any confidential information relating to the financial conditions, results of operations, business, properties, assets, liabilities, or future prospects of the Company or any Subsidiary to any person or entity in connection with any Takeover Proposal; 10.2.3 negotiate with any person or entity with respect to any Takeover Proposal; or 10.2.4 enter into any agreement or understanding with the intent to effect a Takeover Proposal; For the purposes this sub-clause 10.2, "Takeover Proposal" shall mean any proposal of which the Company, its Directors or Vendors are aware, other than as contemplated by this Agreement:- (i) for a merger, consolidation, reorganization, other business combination, or recapitalization involving the Company, for the acquisition of a five per cent. (5%) or greater interest in the issued share capital or in any class or series of shares in the capital of the Company, for the acquisition of the right to hold five per cent. (5%) or more of the voting rights on any matter with respect to the Company, or for the acquisition of a substantial portion of any of its assets other than in the ordinary course of its businesses; or (ii) the effect of which may be to prohibit, restrict, or delay the completion of any of the transactions contemplated by this Agreement; 10.3 the Vendors shall use all their voting rights to which they are entitled in respect of their shares in the Company to vote against:- 10.3.1 any merger, consolidation, reorganization, other business combination, or capitalization involving the Company; 10.3.2 any sale of assets of the Company; 10.3.3 any sub-division of shares; scrip dividend, or reverse stock split relating to any class or services of the Company's shares; 10.3.4 any issue of any shares in the capital of the Company, any option, warrant, or other right calling for the issuance of any such share, or any security convertible into or exchangeable for any such share; 10.3.5 any authorization or creation of any other class or series of share of the Company (except as contemplated herein); 10.3.6 any amendment of the Memorandum and Articles of Association of the Company (except as contemplated herein); 10.3.7 any other proposition the effect of which may be to prohibit, restrict, or delay the completion of any of the transactions contemplated by this Agreement; PROVIDED THAT nothing in this sub-clause 10.3 shall prevent the Vendors using their voting rights to vote in favor of the Resolutions and any resolutions (which have been approved in writing by the Purchaser) in connection with the exercise of the Options, the conversion of the Loan Stock and/or the completion of the Trilogy Acquisition Agreement. 10.4 In the event that any Vendor shall accept another offer for the purchase of the Shares the Vendors will forthwith pay to the Purchaser the sum of 400,000 pounds, by telegraphic transfer of immediately available funds to an account designated by the Purchaser for such purpose. 11. NON-SOLICITATION 11.1 The Warrantors and each of them hereby undertakes with the Purchaser that they will not whether directly or indirectly or whether on their own account or for the account of any other person, firm or company, or as agent, director, partner, manager, employee, consultant or shareholder of or in any other person, firm or company:- 11.1.1 during the period from the date hereof to the second anniversary of the Completion Date carry on or be engaged or concerned or interested in any business which is directly or indirectly in competition with any business of the Company or of the Subsidiaries (or any of them) carried on at the date of this Agreement in such countries in which such business is carried on at the date of this Agreement; 11.1.2. during the period from the date hereof to the second anniversary of the Completion Date seek in competition with any business of the Purchaser or the Company or any of the Subsidiaries to procure orders from or do business with any person firm or company who has been a customer of any of them (other than Anna Valley Electronics Limited provided that such company does not at any relevant time compete with any business of the Purchaser or the Company or any of the Subsidiaries) at any time during the period of twelve months prior to the Completion Date and in this context the Purchaser shall provide (for information purposes only) a list of its customers during such period; 11.1.3 during a period from the date hereof to the second anniversary of the Completion Date, solicit or endeavor to entice away from or discourage from being employed by the Company, or any of the Subsidiaries, any person who is at the date hereof an employee of the Company or of any of the Subsidiaries, or whom any of such companies may at the date hereof have agreed to engage as an employee; or 11.1.4 during the period from the date hereof to the second anniversary of the Completion Date, attempt to employ or negotiate or arrange the employment of or engagement by any other person of, any person who is at the date hereof or at the Completion Date shall be an employee of the Company or of any of the Subsidiaries or whom any of such companies may at the date hereof have agreed to engage as an employee; or 11.1.5 (subject as may otherwise be agreed by the Purchaser in writing) save for Mr JFG Wilson, during the period from the date hereof to the second anniversary of the Completion Date, be employed by or act as a consultant to Annal Valley Electronics Limited. 11.2 It is agreed by the parties that, whilst the restrictions set out in sub-clause 11.1 are considered fair and reasonable, if it should be found that any of the restrictions be void as going beyond what is fair and reasonable in al the circumstances and if by deleting part of the wording or substituting a shorter period of time or a different geographical limit or more restricted ranges of activities set out in sub-clause 11.1 it would not be void, then there shall be substituted such ext less extensive period and/or limit and/or activities for the period of time, geographical limits or ranges of activities or such deletions shall be made as shall render sub-clause 11.1 valid and enforceable. 11.3 Nothing in this Clause 11 shall prohibit any person subject to the restrictions contained herein from (1) being the holder of not more than five percent. (5%) of any class of stock, shares or debentures or other securities in any company which is listed and/or dealt in on the London Stock Exchange or Alternative Investment Market of such Stock Exchange or any recognized securities exchange or (2) being interested as a shareholder or director only in Anna Valley Electronics Limited (provided that such company shall at all relevant times not compete with any business of the Purchaser, the Company or any of the Subsidiaries) and in any such company as the Purchaser may from time to time (at its discretion) in writing agree. For the purposes of this Clause the Purchaser shall be deemed to have agreed to the Warrantors being interested to the extent permitted above in companies details of which have been specifically disclosed to the Purchaser in the Disclosure Letter. 12. RESTRICTIVE TRADE PRACTICES ACTS The restrictions contained in Clause 11 shall not take effect until the day after the day upon which particulars of this Agreement have been duly furnished to the Director General of Fair Trading pursuant to Section 24 Restrictive Trade Practices Act 1976. The parties shall use all reasonable endeavors to procure the furnishings of such particulars as soon as reasonable possible after the execution of this Agreement and any party may request (and the other shall support such a request) that this Agreement or parts thereof do not become open to public inspection. 13. PENSION SCHEMES AND EMPLOYEES 13.1 Within one calendar month of Completion, the Purchaser shall instruct the Vendors' Actuary to carry out an actuarial valuation of the Pension Schemes as at Completion based on the methods and assumptions set out in proposed Actuarial Basis 2 of the Actuary's Letter and in accordance with sub-clause 13.5 and to provide a copy of the actuarial valuation to the Purchaser and the Vendors' Representative. 13.2 If the Purchaser or the Vendors' Representative dispute the conclusions contained in the actuarial valuation prepared in accordance with sub-clause 13.1, the issue or issues in dispute shall be referred for determination to an independent actuary appointed by agreement between the Vendors' Representative and the Purchaser or in default of agreement by the president for the time being of the Institute of Actuaries. Such actuary shall act as an expert and not an arbitrator and his decision shall be final and binding (in the absence of manifest error). 13.3 The Vendors and the Purchaser shall procure that all such information as the Vendor's Actuary may require for the purpose of compiling the actuarial valuation for the purposes of sub- clause 13.1, or as the Purchaser or the Vendors' Representative or the independent actuary may require for the purposes of sub- clause 13.2, shall be made available promptly and that all such information shall be accurate and complete. 13.4 For the purposes of Part 1 of the Tenth Schedule the Pension Surplus shall mean an amount equal to the lesser of:- 13.4.1 1,000,000 pounds, and 13.4.2. the difference between the actuarial value of the liabilities and the actuarial value of the assets both calculated, subject as provided below, in accordance with the Proposed Actuarial Basis 2 of the Actuary's Letter (for the purposes of Part 1 of the Tenth Schedule and without prejudice to Part 1 of he Sixth Schedule, for the avoidance of doubt the Pension Surplus shall not be less than zero). 13.5.1 For the purpose of determining the actuarial value of the assets, for the purposes of sub-clauses 13.1 and 13.4.2 the Purchaser shall instruct Pension Schemes' auditor to compile an audited schedule of the values of the Pension Schemes' asset as at Completion. 13.5.2 For the purpose of compiling the audited schedule referred to in sub-clause 13.5.1:- (i) each of the Pension Schemes' freehold property investments shall be valued as at 31 march 1996 by a chartered surveyor (approved for the purposes of this Clause by the Purchaser) on an open market valuation basis; and (ii) other assets of Pension Schemes will be valued in accordance with the accounting policies used in preparing the most recent audited accounts for the Pension Schemes. 13.6 All costs relating to the actuarial valuation and any disputes connected with such valuation shall be met by the Purchaser of the Company. 13.7 The Purchaser hereby acknowledges that it shall issue and allot up to a maximum of 47,340 Employee Shares and pay a bonus of up to a maximum in aggregate of 10,000 pounds, to certain employees of the Company and Subsidiaries to be agreed, in accordance with and subject to performance related criteria to be agreed between the purchaser and the Vendors' Representative as soon as practicable following Completion. 14. ANNOUNCEMENTS AND CONFIDENTIALITY 14.1 Other than to the extent required by law (including US law) or by the Rules of the New York Stock Exchange, no announcement or disclosure concerning the matters provided for in this Agreement shall be made or issued by or on behalf of the Vendor or the Purchaser without the prior written approval of the Purchaser, in the case of the Vendors, or the Vendors' Representative, in the case of the Purchaser. 14.2 The Vendors shall ensure that all confidential information which the Vendors, the Company, any of its respective officers, directors, employees, agents, lawyers, investment bankers, or accountants, may now possess or may hereafter create or obtain relating to the financial condition, results of operation, business, properties, assets, liabilities, or future prospects of the Purchaser shall not be published, disclosed, or made accessible by any of them to any other person or entity at any time or used by any of them without the prior written consent of the Purchaser PROVIDED THAT the restrictions contained in this sub-clause shall not apply (a) as may otherwise be required to be disclosed by law or relevant regulations (b) as may be necessary or appropriate in connection with the enforcement of this Agreement, (c) to the extent the information shall have otherwise become publicly available or in the public domain at the date of this Agreement or (d) to information which was lawfully in the possession of the Vendors or any of their advisers, bankers, employers or accountants and which was not directly acquired from the Purchaser or any of its directors, officers, advisers, and employees. 14.3 In the event of the termination or rescission of this Agreement, the Purchaser shall ensure that all confidential information which the Purchaser, any of its respective Officers, directors, employees, agents, lawyers, investment bankers, or accountants, may now possess or may hereafter create or obtain relating to the financial condition, results of operations, business, properties, assets, liabilities, or future prospects of the Company and the Subsidiaries shall not be published, disclosed, or made accessible by it to any other person or entity at any time or used by it without the prior written consent of the Vendors' Representative PROVIDED THAT the restrictions contained in this sub-clause shall not apply (a) as may otherwise be required to be disclosed by law or relevant regulations (b) as may be necessary or appropriate in connection with the enforcement of this Agreement, (c) to the extent the information shall have otherwise become publicly available or in the public domain at the date of this Agreement or (d) to information which was lawfully in the possession of the purchaser or any of its advisers, bankers, employees or accountants and which was not directly acquired from the Vendors or any of their directors, officers, advisers, and employees. 15. FURTHER ASSURANCE The Vendors and the Purchasers shall do and execute, and shall use their respective reasonable endeavors to procure any other necessary party to do and execute, all such further acts, things, deeds and documents as may be necessary to give effect to the terms of this Agreement. 16. WAIVER No waiver by any of the parties of any of the requirements hereof or of any of its rights hereunder shall have effect unless given in writing and signed by such party or, in the case of the Purchaser, by a director or other duly authorized officer of such party. 17. ENTIRE AGREEMENT AND VARIATIONS 17.1 This Agreement and any documents in the agreed form contain the entire agreement and understanding of the parties in connection with the subject matter thereof and supersede and extinguish all and any representations and warranties previously given and/or made and all prior oral and written and contemporaneous oral negotiations, commitments and understandings between such parties (including without limitation the Letter of Intent dated 4th January 1995 between the Company and the Purchaser) other than those expressly set forth herein and also other than any misrepresentation or breach of warranty which constitutes fraud, wilful misconduct or gross negligence. 17.2 In particular (but without prejudice to the generality of the other provisions of this Clause) each party acknowledges to the other (to the intent that the other shall execute this Agreement and any documents in the agreement from in reliance upon such acknowledgement) that it has not been induced to enter into this Agreement and such other documents by nor relied upon any representation or warranty other than the representations and/or warranties expressly set forth in this Agreement or in any document in the agreed form. This acknowledgement shall not apply to any misrepresentations and or breaces of warranty which constitute fraud, wilful misconduct or gross negligence. 17.3 Without prejudice to the generality of the other provisions of this Cause each party hereby irrevocably and unconditionally waives any right it may have to claim damages or to rescind this Agreement and such other documents in the agreed form by reason of any misrepresentation and/or warranty not set forth in this Agreement or in any such document (unless such misrepresentation and/or breach of warranty constitutes fraud, wilful misconduct or gross negligence). 17.4 It is expressly declared that no variations hereof shall be effective unless made in writing and signed by each of the parties or, in the case of the Purchaser, by a director or other duly authorized officer of such arty or, in the case of the Vendors, by the Vendors' Representative. 18. PROVISIONS RELATING TO THIS AGREEMENT 18.1 This Agreement shall be binding upon and enure for the benefit of the successor and permitted assigns of the parties. 18.2 The provisions of this Agreement insofar as the same shall not have been performed or waived at Completion (including but not limited to the Warranties and the Purchaser's Warranties) shall remain in full force and effect notwithstanding Completion. 18.3 Save where otherwise specifically sated, each party to this Agreement shall pay its own costs of and incidental to this Agreement and the sale and purchase hereby agreed to be made. The Vendors shall on Completion pay the fees of Broadview Associates in full in cash or by telegraphic transfer in immediate available funds (or, to the extent already paid by the Company, reimburse the Company for such fees and Value Added Tax on Completion) and all fees due and owing as at Completion to Interregnum Venture Marketing Limited save for fees payable at the rate of 20,000 pounds per annum for consultancy services provided by Mr Olisa to the Company. The fees of Broadview Associates are estimated to be 395,082 pounds (exclusive of Value Added Tax). In no circumstances shall the Purchaser or the Company be liable for such fees. 18.4 This Agreement may be entered into in any number of counterparts and by the parties to it on separate counterparts each of which when so executed and delivered shall be an original, but all the counterparts shall together constitute one and the same instrument. 18.5 The rights of the Purchaser under or arising pursuant to this Agreement or the Tax Deed or any documents in agreed form may not be assigned in whole in part other than to a holder for the time being of the Shares being a Subsidiary of the Purchaser for so long as it remains such. 18.6 The Purchaser shall be labile for all stamp duty due on the transfer of the shares. 19. PROVISIONS RELATING TO THE VENDORS' REPRESENTATIVE 19.1 In order to administer efficiently the waiver of any Condition or any provision of Clause 6 or the obligations of the Vendors to complete the transactions contemplated hereby, the Vendors hereby designate the Vendors' Representative s their representative. 19.2 In the event that the Vendors' Representative dies, becomes unable to perform his responsibilities hereunder or resigns from such position, the Vendors holding a majority of the Shares as set out in the First Schedule shall select another representative to fill such vacancy and such substituted representative shall be deemed to be the Vendors' Representative for all purposes of this Agreement. 19.3 The Purchaser shall be able to rely conclusively on the instructions and decisions of the Vendors' Representative prior to or following Completion or any other actions required to be taken by the Vendors' Representative hereunder prior to Completion (including, without limitation, the execution and delivery b the Vendors' Representative of any agreement, certificate, instrument or other document required hereunder on behalf of any Vendor), and no party hereunder shall have any cause of action against the Purchaser for any action taken by the Purchaser in Reliance upon any instruction or decision of the Vendors' Representative. 19.4 All actions, decisions and instructions of the Vendors' Representative (including, without limitation, the execution and delivery by the Vendors' Representative of any agreement, certificate, instrument or other document required hereunder on behalf of any Vendor) shall be conclusive and binding upon all of the Vendors and no Vendor shall have any cause of action against the Vendors' Representative for any action taken, decision made or instruction given by the Vendors' Representative under this Agreement, provided the Vendors' Representative acts in good faith. 19.5 The Vendors' Representative is hereby authorized by each of the Vendors to act in the way contemplated by this Agreement and to take such decisions as he shall at his entire discretion determine and, provide he acts in good faith, the Vendors' Representative shall have and accepts no liability to any of the Vendors or to any other person (other than the purchaser) in connection with or as a result of anything which the Vendors' Representative does, refrains from doing or neglects or omits to do in connection with any matter relating to the Agreement. 19.6 The provisions of this Clause 19 shall be binding upon the executors, heirs, legal representatives and successors of each Vendor, and any reference in this Agreement to a Vendor or the Vendors shall mean and include the successors to the Vendors' rights hereunder, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. 19.7 The Vendors' Representative shall not be required to expend any of his own money on or in relation to the matters referred to in this Agreement unless the Vendors' Representative has been indemnified by the Vendors to his full satisfaction in respect of the maximum amount of the expenses and other liabilities of any kind which he considers that he will or may incur in connection with or as a result of such proceedings and such indemnity shall be such as to ensure that the Vendors' Representative has immediate access to all such funds as he may require in order to meet all such expenses or other liabilities as the fall due PROVIDED THAT the Vendors' Representative shall be obliged to bear his proportion of such expenses and liabilities. 19.8 Subject to the provision to sub-clause 19.7, if the Vendors' Representative shall expend his own money in relation to such matters he shall be entitled to be reimbursed by the Vendors' Administrator from the proceeds (if any) of the Promissory Note(s) prior to the release thereof by the Vendors' Administrator to the Vendors Representative shall have and accepts no liability to any of the Vendors or to any other persons (other than the Purchaser) in connection with or as a result of anything which the Vendors' Representative does, refrain from doing or neglects or omits to do in connection with any matter relating to the Agreement. 19.6 The provisions of this Clause 19 shall be binding upon the executors, heirs, legal representatives and successors of each Vendor, and any references in this Agreement to a Vendor or the Vendors shall mean and include the successors to the Vendors' rights hereunder, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. 19.7 The Vendors' Representative shall not be required to expense any of his own money on or in relation to the matters referred to in this Agreement unless the Vendors' Representative has been indemnified by the Vendors to his full satisfaction in respect of the maximum amount of the expenses and other liabilities of any kind which he considers that he will or may incur in connection with or as a result of such proceedings and such indemnity shall be such as to ensure that the Vendors' Representative has immediate access to all such funds as he may require in order to meet all such expenses or other liabilities as they fall due PROVIDED THAT the Vendors' Representative shall be obliged to bear his proportion of such expenses and liabilities. 19.8 Subject to the provision to sub-clause 19.7, if the Vendors' Representative shall expend his own money in relation to such matters he shall be entitled to be reimbursed by the Vendors Administrator from the Proceeds (if any) of the Promissory Note(s) prior to the release thereof by the Vendors' Administrator to the Vendors. 20, PROVISIONS RELATING TO THE VENDORS' ADMINISTRATOR 20.1 Each Vendor irrevocably authorizes the Purchaser to deposit all share certificates evidencing the Consideration Shares and any additions and substitutes to the Consideration Shares and the Promissory Notes with the Vendors' Administrator to be held by the Vendors' Administrator pursuant to the Administration Agreement. 20.2 Delivery of any document or payment (other than payments referred to in sub-clause 6.4.1) required to be made to the Vendors or any of them under this Agreement may be made to the Vendors' Administrator whose receipt for such delivery or payment shall be an absolute discharge of the party making the same who shall not be concerned as to the application thereof. 20.3 Without prejudice to the generality of the foregoing provisions of this Clause 20, in order to administer efficiently the giving or the receiving of notices or other communications required under the terms of the Promissory Note(s) or the Registration Rights Agreement, the Vendors hereby designate and appoint the Vendors' Administrator as the agent of each Vendor for the sole purpose of giving and receiving such notices and communications. 20.4 The Purchaser shall be able to rely conclusively on the instructions and decisions of the Vendors' Administrator after Completion or any other actions required to be taken by the Vendors' Administrator hereunder after Completion (including, without limitation, the execution and delivery by the Vendors' Administrator of any agreement, certificate, instrument or other document required hereunder on behalf of any Vendor) in connection with the Registration Rights Agreement, the Promissory Notes or the Guaranty, and no party hereunder shall have any cause of action against the Purchaser for any action taken by the Purchaser in reliance upon any instruction or decision of the Vendors' Administrator. 21. NOTICES 21.1 Any notice to be given hereunder shall either be delivered personally or sent by first class recorded delivery post or airmail or facsimile to the party to be served (in the case of Purchaser at 5 Hub Drive, Melville, New York, U.S.A. 11747, for the attention of Chief Executive Officer, with a copy (which copy shall not constitute notice) to Daniel I. DeWolf, Esq., Camhy Karlinsky & Stein LLP, 1740 Broadway, 16th Floor, New York, U.S.A. 10019 and (in the case of the Vendors) at the address set out opposite his/its name in the First Schedule or such address as may from time to time be notified to the other parties hereto for this purpose with a copy (which copy shall not constitute notice) to Donald J. Guiney Esq., Brobeck Hale and Dorr International, Veritas House, 125 Finsbury Pavement, London EC2A 1NQ and to the Vendors' Representative at the principal offices of the Company at Pro- Bel House, Danehill, Lower Earley, Reading, Bershire. A notice shall be deemed to have been served as follows:- 21.1.1 if personally delivered, at the time of delivery; 21.1.2 if posted in England to an address in England by overland mail at the expiration of two business days after the envelope containing the same was delivered into the custody of the posal authorities; 21.1.3 if posted by airmail at the expiration of five business days after the envelope containing the same was delivered into the custody of the postal authorities; 21.1.4 if sent by facsimile, at the expiration of one business day after the same was despatched. 21.1.2 In proving such service it shall be sufficient to prove that personal delivery was made, or that the envelope containing such notice was properly addressed and delivered into the custody of the postal authority as a pre-paid first class recorded delivery letter, or airmail letter, or that the facsimile was properly addressed and despatched and the sender's machine shall have indicated that the message has been received at the addresee's machine, as the case may be. 22. LAWS 22.1 The constructions, validity and performance of this Agreement shall be governed by the laws of England. The parties hereto irrevocably agree to submit to the non-exclusive jurisdiction of the courts of England and Wales in relation to disputes arising in connection with this Agreement. Notwithstanding the foregoing, the parties irrevocably agree to submit to the non-exclusive jurisdiction of New York arbitrators (in accordance with the terms of the Promissory Notes) in respect of any Relevant Claim in relation to which the Purchaser wishes to exercise its right under this Agreement. 22.2 The Purchaser hereby appoints Messrs Charles Russell of 8-10 New Fetter Lane, London EC4A IRS to be its agent for service of proceedings for the purpose of any legal proceedings before the courts of England and Wales arising out of or in connection with this Agreement or such other personal having an address with London, England as the Purchaser may notify to the other parties in writing in accordance with Clause 19. IN WITNESS this Agreement has been signed by or on behalf of each of the parties hereto the day and year first before written. ANY EXHIBITS OR SCHEDLES REFERRED TO IN THIS AGREEMENT WILL BE PROVIDED TO THE S.E.C UPON YOUR REQUEST. REGISTRATION RIGHTS AGREEMENT This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered into as of the 12th of April, 1996, by and between CHYRON CORPORATION, a New York Corporation (the "Company") and MESSRS. BRONSENS, as administrator (the "Administrator") on behalf of each of the parties listed on Schedule A hereto (the "Shareholders"). RECITALS: WHEREAS, the Shareholders are acquiring shares of the common stock, par value $.01 per share, of the Company (the "shares"), pursuant to the agreement for the sale and purchase of the entire issued share capital of Pro-Bel Limited, by and among Chyron Corporation, and all of the Shareholders of Pro-Bel Limited, dated as of April 12, 1996 (the "Purchase Agreement"); WHEREAS, the Company desires to grant to the Shareholders certain registration rights relating to the Shares and the Shareholders desire to obtain such registration rights, subject to the terms and conditions set forth herein; and WHEREAS, pursuant to an Administration Agreement, dated April 12, 1996, attached as Exhibit A hereto and incorporated herein, the Shareholders have appointed the Administrator as their representative to administer the provisions relating to the Shareholders under this Agreement; and NOW, THEREFORE, in consideration of the mutual parties, representations, warranties and conditions set forth in this Agreement, the parties hereto, intending to be legally bound, hereby agree as follows: 1. Definitions and References. For purposes of this Agreement, in addition to the definitions set forth above and elsewhere herein, the following terms shall have the following meanings: (a) The term "Commission" shall mean the Securities and Exchange Commission and any successor agency. (b) The terms "register", "registered" and "registration" shall refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the 1933 Act (as herein defined) and the declaration or ordering of effectiveness of such registration statement or document. (c) For purposes of this Agreement, the term "Registrable Stock" shall mean (i) the Shares, (ii) any shares of the common stock of the Company, par value $.01 per share (the "Common Stock") issued as (or issuable upon the conversion or exercise of any warrant, right, option or other convertible security which is issued as) a dividend or other distribution with respect to, or in exchange for, or in replacement of, the Shares, and (iii) any Common Stock issued by way of a stock split of the Shares. For purposes of this Agreement, any Registrable Stock shall cease to be Registrable Stock when (W) a registration statement covering such Registrable Stock has been declared effective and such Registrable Stock has been disposed of pursuant to such effective registration statement, (x) such Registrable Stock is sold pursuant to Rule 144 (or any similar provision then in force) under the 1933 Act, (y) such Registrable Stock has been otherwise transferred, no stop transfer order affecting such stock is in effect and the Company has delivered new certificates or other evidences of ownership for such Registrable Stock not bearing any legend indicating that such shares have not been registered under the 1933 Act, or (z) such Registrable Stock is sold by a person in a transaction in which the rights under the provisions of this Agreement are not assigned. (d) The term "Holder" shall mean the Shareholders or any transferee or assignee thereof to whom the rights under this Agreement are assigned in accordance with Section 10 hereof, provided that the Shareholders or such transferee or assignee shall then own the Registrable Stock. (e) The term "1933 Act" shall mean the Securities Act of 1933, as amended. (f) AN "affiliate of such Holder" shall mean a person who controls, is controlled by or is under common control with such Holder, or the spouse or children (or a trust exclusively for the benefit of the spouse and/or children) of such Holder, or, in the case of a Holder that is a partnership, its partners. (g) The term "Person" shall mean an individual, corporation, partnership, trust, limited liability company, unincorporated organization or association or other entity, including any governmental entity. (h) The term "Requesting Holders" shall mean a Holder or Holders of in the aggregate of at least a majority of the Registrable Stock. (i) References in this Agreement to any rules, regulations or forms promulgated by the Commission shall include rules, regulations and forms succeeding to the functions thereof, whether or not bearing the same designation. 2. Demand Registration. (a) Commencing fifteen (15) months after the Completion Date (as defined in the Purchase Agreement), any Requesting Holders may make a written request to the Company (specifying that it is being made pursuant to this Section 2) that the Company file a registration statement under the 1933 Act (or a similar document pursuant to any other statute then in effect corresponding to the 1933 Act) covering the registration of Registrable Stock. In such event, the Company shall (x) within ten (10) days thereafter notify in writing all other Holders of Registrable Stock of such request, and (y) use its best efforts to cause to be registered under the 1933 Act all Registrable Stock that the Requesting Holders and such other Holders have, within thirty (30) days after the Company has given such notice, requested be registered. Unless a majority in interest of the Holders requesting to participate in such registration shall consent in writing, no other party, including the Company (but excluding another Holder), shall be permitted to offer securities in connection with such registration. (b) If the Requesting Holders intend to distribute the Registrable Stock covered by their request by means of an underwritten offering, they shall so advise the Company as a part of their request pursuant to Section 2(a) above, and the Company shall include such information in the written notice referred to in clause (x) of Section 2(a) above. In such event, the Holder's right to include its Registrable Stock in such registration shall be conditioned upon such Holder's participation in such underwritten offering and the inclusion of such Holder's Registrable Stock in the underwritten offering to the extent provided in this Section 2. All Holders proposing to distribute Registrable Stock through such underwritten offering shall enter into an underwriting agreement in customary form with the underwriter or underwriters. Such underwriter or underwriters shall be selected by a majority in interest of the Requesting Holders and shall be approved by the Company, which approval shall not be unreasonably withheld; provided, that all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of such Holders and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement shall be conditions precedent to the obligations of such Holders; and provided further, that no Holder shall be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding such Holder, the Registrable Stock of such Holder and such Holder's intended method of distribution and any other representation required by law or reasonably required by the underwriter. (c) Notwithstanding any other provision of this Section 2 to the contrary, if the managing underwriter of an underwritten offering of the Registrable Stock requested to be registered pursuant to this Section 2 advises the Requesting Holders in writing that in its opinion marketing factors require a limitation of the number of shares to be underwritten, the Requesting Holders shall so advise all Holders of Registrable Stock that would otherwise be underwritten pursuant hereto, and the number of shares of Registrable Stock that may be included in such underwritten offering shall be allocated among all such Holders, including the Requesting Holders, in proportion (as nearly as practicable) to the amount of Registrable Stock requested to be included in such registration by each Holder at the time of filing the registration statement; provided, that in the event of such limitation of the number of shares of Registrable Stock to be underwritten, the Holders shall be entitled to an additional demand registration pursuant to this Section 2. If any Holder of Registrable Stock disapproves of the terms of the underwriting, such Holder may elect to withdraw by written notice to the Company, the managing underwriter and the Requesting Holders. The securities so withdrawn shall also be withdrawn from registration. (d) Notwithstanding any provision of this Agreement to the contrary, the Company shall not be required to effect a registration pursuant to this Section 2 during the period starting with the fourteenth (14th) day immediately preceding the date of an anticipated filing by the Company of, and ending on a date ninety (90) days following the effective date of, a registration statement pertaining to a public offering of securities for the account of the Company; provided, that the Company shall actively employ in good faith all reasonable efforts to cause such registration statement to become effective; and provided further, that the Company's estimate of the date of filing such registration statement shall be made in good faith. (e) The Company shall be obliged to effect and pay for a total of only one (1) registration pursuant to this Section 2, unless increased pursuant to Section 2(c) hereof; provided, that a registration requested pursuant to this Section 2 shall not be deemed to have been effected for purposes of this Section 2(e), unless (i) it has been declared effective by the Commission, (ii) if it is a shelf registration, it has remained effective for the period set forth in Section 3(b), (iii) the offering of Registrable Stock pursuant to such registration is not subject to any stop order, injunction or other order or requirement of the Commission (other than any such action prompted by any act or omission of the Holders), and (iv) no limitation of the number of shares of Registrable Stock to be underwritten has been required pursuant to Section 2(c) hereof. 3. Obligations of the Company. Whenever required under Section 2 to use its best efforts to effect the registration of any Registrable Stock, the Company shall, as expeditiously as possible: (a) prepare and file with the Commission, not later than ninety (90) days after receipt of a request to file a registration statement with respect to such Registrable Stock, a registration statement on any form for which the Company then qualifies or which counsel for the Company shall deem appropriate and which form shall be available for the sale of such issue of Registrable Stock in accordance with the intended method of distribution thereof, and use its best efforts to cause such registration statement to become effective as promptly as practicable thereafter; provided that before filing a registration statement or prospectus or any amendments or supplements thereto, the Company will (i) furnish to one counsel selected by the Requesting Holders copies of all such documents proposed to be filed, and (ii) notify each such Holder of any stop order issued or threatened by the Commission and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered; (b) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period of not less than one hundred twenty (120) days or such shorter period which will terminate when all Registrable Stock covered by such registration statement has been sold (but not before the expiration of the forty (40) or ninety (90) day period referred to in Section 4(3) of the 1933 Act and Rule 174 thereunder, it applicable), and comply with the provisions of the 1933 Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement; (c) furnish to each Holder and any underwriter of Registrable Stock to be included in a registration statement copies of such registration statement as filed and each amendment and supplement thereto (in each case including all exhibits thereto), the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as such Holder may reasonably request in order to facilitate the disposition of the Registrable Stock owned by such Holder; (d) use its best efforts to register or qualify such Registrable Stock under such other securities or blue sky laws in such jurisdictions as any selling Holder or any underwriter of Registrable Stock reasonably requests, and do any and all other acts which may be reasonably necessary or advisable to enable such Holder to consummate the disposition in such jurisdiction of the Registrable Stock owned by such Holder; provided that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d) hereof, (ii) subject itself to taxation in any such jurisdiction, or (iii) consent to general service of process in any such jurisdiction; (e) use its best efforts to cause the Registrable Stock covered by such registration statement to be registered with or approved by such other governmental agencies or other authorities as may be necessary by virtue of the business and operations of the Company to enable the selling Holders thereof to consummate the disposition of such Registrable Stock; (f) notify each selling Holder of such Registrable Stock and any underwriter thereof, at any time when a prospectus relating thereto is required to be delivered under the 1933 Act (even if such time is after the period referred to in Section 3(b)), of the happening of any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein in light of the circumstances being made not misleading, and prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Stock, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein in light of the circumstances being made not misleading. (g) make available for inspection by any selling Holder, any underwriter participating in any disposition pursuant to such registration statement, and any attorney, accountant or other agent retained by any such seller or underwriter (collectively, the "Inspectors"), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the "Records"), and cause the Company's officers, directors and employees to supply all information reasonably requested by any such Inspector, as shall be reasonably necessary to enable them to exercise their due diligence responsibility, in connection with such registration statement. Records or other information which the Company determines, in good faith, to be confidential and which it notifies the Inspectors are confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records or other information is necessary to avoid or correct a misstatement or omission in the registration statement, or (ii) the release of such Records or other information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction. Each selling Holder shall, upon learning that disclosure of such Records or other information is sought in a court of competent jurisdiction, give notice to the Company and allow the Company, at the Company's expense, to undertake appropriate action to prevent disclosure of the Records or other information deemed confidential; (h) furnish, at the request of any Requesting Holder, on the date that such shares of Registrable Stock are delivered to the underwriters for sale pursuant to such registration or, if such Registrable Stock is not being sold through underwriters, on the date that the registration statement with respect to such shares of Registrable Stock becomes effective, (1) a signed opinion, dated such date, of the legal counsel representing the Company for the purposes of such registration, addressed to the underwriters, if any, and if such Registrable Stock is not being sold through underwriters, then to the Requesting Holders as to such matters as such underwriters or the Requesting Holders, as the case may be, may reasonably request and as would be customary in such a transaction; and (2) a letter dated such date, from the independent certified public accountants of the Company, addressed to the underwriters, if any, and if such Registrable Stock is not being sold through underwriters, then to the Requesting Holders and, if such accountants refuse to deliver such letter to such Holder, then to the Company (i) stating that they are independent certified public accountants within the meaning of the 1933 Act and that, in the opinion of such accountants, the financial statements and other financial data of the Company included in the registration statement or the prospectus, or any amendment or supplement thereto, comply as to form in all material respects with the applicable accounting requirements of the 1933 Act, and (ii) covering such other financial matters (including information as to the period ending not more than five (5) business days prior to the date of such letter) with respect to the registration in respect of which such letter is being given as the Requesting Holders may reasonably request and as would be customary in such a transaction. (i) enter into customary agreements (including if the method of distribution is by means of an underwriting, an underwriting agreement in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of the Registrable Stock to be so included in the registration statement; (j) otherwise use its best efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, but not later than eighteen (18) months after the effective date of the registration statement, an earnings statement covering the period of at least twelve (12) months beginning with the first full month after the effective date of such registration statement, which earnings statements shall satisfy the provisions of Section 11(a) of the 1933 Act; and (k) use its best efforts to cause all such Registrable Stock to be listed on the New York Stock Exchange and/or any other securities exchange on which similar securities issued by the Company are then listed, or traded on the National Association of Securities Dealers Automated Quotations Systems, if such listing or trading is then permitted under the rules of such exchange or system, respectively. The Company may require each selling Holder of Registrable Stock as to which any registration is being effected to furnish to the Company such information regarding the distribution of such Registrable Stock as the Company may from time to time reasonably request in writing. Each Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(f) hereof, such Holder will forthwith discontinue disposition of Registrable Stock pursuant to the registration statement covering such Registrable Stock until such Holder's receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(f) hereof, and, if so directed by the Company, such Holder will deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such Holder's possession, of the prospectus covering such Registrable Stock current at the time of receipt of such notice. In the event the Company shall give any such notice, the Company shall extend the period during which such registration statement shall be maintained effective pursuant to this Agreement (including the period referred to in Section 3(b)) by the number of days during the period from and including the date of the giving of such notice pursuant to Section 3(f) hereof to and including the date when each selling Holder of Registrable Stock covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by Section 3(f) hereof. 4. Incidental Registration. Commencing twelve (12) months after the Completion Date (as defined in the Purchase Agreement), if the Company determines that it shall file a registration statement under the 1933 Act (other than a registration statement on a Form S-4 or S-8 or filed in connection with an exchange offer or an offering of securities solely to the Company's existing stockholders) on any form that would also permit the registration of the Registrable Stock and such filing is to be on its behalf and/or on behalf of selling holders of its securities for the general registration of its common stock to be sold for cash, at each such time the Company shall promptly give each Holder written notice of such determination setting forth the date on which the Company proposes to file such registration statement, which date shall be no earlier than forty (40) days from the date of such notice, and advising each Holder of its right to have Registrable Stock included in such registration. Upon the written request of any Holder received by the Company no later than twenty (20) days after the date of the Company's notice, the Company shall use its best efforts to cause to be registered under the 1933 Act all of the Registrable Stock that each such Holder has so requested to be registered. If, in the written opinion of the managing underwriter or underwriters (or, in the case of a non-underwritten offering, in the written opinion of the placement agent, or if there is none, the Company), the total amount of such securities to be so registered, including such Registrable Stock, will exceed the maximum amount of the Company's securities which can be marketed (i) at a price reasonably related to the then current market value of such securities, or (ii) without otherwise materially and adversely affecting the entire offering, then the amount of Registrable Stock to be offered for the accounts of Holders shall be reduced pro rata to the extent necessary to reduce the total amount of securities to be included in such offering to the recommended amount; provided, that if securities are being offered for the amount of other Persons as well as the Company, such reduction shall not represent a greater fraction of the number of securities intended to be offered by Holders than the fraction of similar reductions imposed on such other Persons other than the Company over the amount of securities they intended to offer. 5. Holdback Agreement - Restrictions on Public Sale by Holder. (a) To the extent not inconsistent with applicable law, each Holder whose Registrable Stock is included in a registration statement agrees not to effect any public sale or distribution of the issue being registered or a similar security of the Company, or any securities convertible into or exchangeable or exercisable for such securities, including a sale pursuant to Rule 144 under the 1933 Act, during the fourteen (14) days prior to, and during the ninety (90) day period beginning on, the effective date of such registration statement (except as part of the registration), if and to the extent requested by the Company in the case of a non-underwritten public offering or if and to the extent requested by the managing underwriter or underwriters in the case of an underwritten public offering. (b) Restrictions on Public Sale by the Company and Others. The Company agrees (i) not to effect any public sale or distribution of any securities similar to those being registered, or any securities convertible into or exchangeable or exercisable for such securities, during the fourteen (14) days prior to, and during the ninety (90) day period beginning on, the effective date of any registration statement in which Holders are participating (except as part of such registration), if and to the extent requested by the Holders in the case of a non-underwritten public offering or if and to the extent requested by the managing underwriter or underwriters in the case of an underwritten public offering; and (ii) that any agreement entered into after the date of this Agreement pursuant to which the Company issues or agrees to issue any securities convertible into or exchangeable or exercisable for such securities (other than pursuant to an effective registration statement) shall contain a provision under which holders of such securities agree not to effect any public sale or distribution of any such securities during the periods described in (i) above, in each case including a sale pursuant to Rule 144 under the 1933 Act. 6. Expenses of Registration. All expenses incurred in connection with each registration pursuant to Sections 2 and 4 of this Agreement, excluding underwriters' discounts and commissions, but including, without limitation, all registration, filing and qualification fees, word processing, duplicating, printers' and accounting fees (including the expenses of any special audits or "cold comfort" letters required by or incident to such performance and compliance), exchange listing fees or National Association of Securities Dealers fees, messenger and delivery expenses, all fees and expenses of complying with securities or blue sky laws, fees and disbursements of counsel for the Company, and the reasonable fees and disbursements of one (1) counsel for the selling Holders shall be paid by the Company. The selling Holders shall bear and pay the underwriting commissions and discounts applicable to the Registrable Stock offered for their account in connection with any registrations, filings and qualifications made pursuant to this Agreement. 7. Indemnification and Contribution. (a) Indemnification by the Company. The Company agrees to indemnify, to the full extent permitted by law, each Holder, its officers, directors and agents and each Person who controls such Holder (within the meaning of the 1933 Act) against all losses, claims, damages, liabilities and expenses caused by any untrue or alleged untrue statement of material fact contained in any registration statement, prospectus or preliminary prospectus or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement therein (in case of a prospectus or preliminary prospectus, in the light of the circumstances under which they were made) not misleading. The Company will also indemnify any underwriters of the Registrable Stock, their officers and directors and each Person who controls such underwriters (within the meaning of the 1933 Act) to the same extent as provided above with respect to the indemnification of the selling Holders. (b) Indemnification by Holders. In connection with any registration statement in which a Holder is participating, each such Holder will furnish to the Company in writing such information with respect to such Holder as the Company reasonably requests for use in connection with any such registration statement or prospectus and agrees to indemnify, to the extent permitted by law, the Company, its directors and officers and each Person who controls the Company (within the meaning of the 1933 Act) against any losses, claims, damages, liabilities and expenses resulting from any untrue or alleged untrue statement of material fact or any omission or alleged omission of a material fact required to be stated in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or necessary to make the statements therein (in the case of a prospectus or preliminary prospectus, in the light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information with respect to such Holder so furnished in writing by such Holder. Notwithstanding the foregoing, the liability of each such Holder under this Section 7(b) shall be limited to an amount equal to the initial public offering price of the Registrable Stock sold by such Holder, unless such liability arises out of or is based on willful misconduct of such Holder. (c) Conduct of Indemnification Proceedings. Any Person entitled to indemnification hereunder agrees to give prompt written notice to the indemnifying party after the receipt by such Person of any written notice of the commencement of any action, suit, proceeding or investigation or threat thereof made in writing for which such Person will claim indemnification or contribution pursuant to this Agreement and, unless in the reasonable judgment of such indemnified party, a conflict of interest may exist between such indemnified party and the indemnifying party with respect to such claim, permit the indemnifying party to assume the defense of such claims with counsel reasonably satisfactory to such indemnified party. Whether or not such defense is assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld). Failure by such Person to provide said notice to the indemnifying party shall itself not create liability except to the extent of any injury caused thereby. No indemnifying party will consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation. If the indemnifying party is not entitled to , or elects not to, assume the defense of a claim, it will not be obligated to pay the fees and expenses of more than one (1) counsel with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the fees and expenses of such additional counsel or counsels. (d) Contribution. If for any reason the indemnify provided for in this Section 7 is unavailable to, or is insufficient to hold harmless, an indemnified party, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities or expenses, (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party on the one hand and the indemnified party on the other, (ii) if the allocation provided by clause (i) above is not permitted by applicable law, or provides a lesser sum to the indemnified party than the amount hereinafter calculated, in such proportion as is appropriate to reflect not only the relative benefits received by the indemnifying party on the one hand and the indemnified party on the other but also the relative fault of the indemnifying party and the indemnified party as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified parties shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such indemnifying party or indemnified parties; and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 7(c), any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding. These parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 7(d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. If indemnification is available under this Section 7, the indemnifying parties shall indemnify each indemnified party to the full extent provided in Sections 7(a) and (b) without regard to the relative fault of said indemnifying party or indemnified party or any other equitable consideration provided for in this Section 7. 8. Participation in Underwritten Registrations. No Holder may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder's securities on the basis provided in any underwriting arrangements approved by the Holders entitled hereunder to approve such arrangements, and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 9. Rule 144. The Company covenants that it will file the reports required to be filed by it under the 1933 Act and the Securities Exchange Act of 1934, as amended, and the rules and regulations adopted by the Commission thereunder; and it will take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Stock without registration under the 1933 Act within the limitation of the exemptions provided by (a) Rule 144 under the 1933 Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the Commission. Upon the request of any Holder, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements. 10. Transfer of Registration Rights. The registration rights of any Holder under this Agreement with respect to any Registerable Stock may be transferred to any transferee of such Registrable Stock; provided that such transfer may otherwise be effected in accordance with applicable securities laws; provided further, that the transferring Holder shall give the Company written notice at or prior to the time of such transfer stating the name and address of the transferee and identifying the securities with respect to which the rights under this Agreement are being transferred; provided further, that such transferee shall agree in writing, in form and substance satisfactory to the Company, to be bound as a Holder by the provisions of this Agreement; and provided further, that such assignment shall be effective only if immediately following such transfer the further disposition of such securities by such transferee is restricted under the 1933 Act. Except as set forth in this Section 10, no transfer of Registrable Stock shall cause such Registrable Stock to lose such status. 11. Mergers, Etc. The Company shall not, directly or indirectly, enter into any merger, consolidation or reorganization in which the Company shall not be the surviving corporation unless the proposed surviving corporation shall, prior to such merger, consolidation or reorganization, agree in writing to assume the obligations of the Company under this Agreement, and for that purpose references hereunder to "Registrable Stock" shall be deemed to be references to the securities which the Holders would be entitled to receive in exchange for Registrable Stock under any such merger, consolidation or reorganization; provided, however, that the provisions of this Section 11 shall not apply in the event of any merger, consolidation or reorganization in which the Company is not the surviving corporation if each Holder is entitled to receive in exchange for its Registrable Stock consideration consisting solely of (i) cash, (ii) securities of the acquiring corporation which may be immediately sold to the public without registration under the 1933 Act, or (iii) securities of the acquiring corporation which the acquiring corporation has agreed to register within ninety (90) days of completion of the transaction for resale to the public pursuant to the 1933 Act. 12. Miscellaneous. (a) No Inconsistent Agreements. The Company shall not hereafter enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Holders in this Agreement. (b) Remedies. Each Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive (to the extent permitted by law) the defense in any action for specific performance that a remedy of law would be adequate. (c) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provision hereof may not be given unless the Company has obtained the written consent of the Holders of at least a majority of the Registrable Stock then outstanding affected by such amendment, modification, supplement, waiver or departure. (d) Successors and Assigns. Except as otherwise expressly provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties hereto. Nothing in this Agreement, express or implied, is intended to confer upon any Person other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. (e) Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to contracts made and to be performed wholly within that state, without regard to the conflict of law rules thereof. (f) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. (g) Headings. The headings in this Agreement are used for convenience of reference only and are not to be considered in construing or interpreting this Agreement. (h) Notices. Any notice required or permitted under this Agreement shall be given in writing and shall be delivered in person or by telecopy or by overnight courier guaranteeing no later than second business day delivery, directed to (i) the Company at the address set forth below its signature hereof or (ii) a Holder at the address of the Administrator set forth below its signature hereof. Any party may change its address for notice by giving ten (10) days advance written notice to the other parties. Every notice or other communication hereunder shall be deemed to have been duly given or served on the date on which personally delivered, or on the date actually received, if sent by telecopy or overnight courier service, with receipt acknowledged. (i) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be in any way impaired thereby, it being intended that all of the rights and privileges of the Holders shall be enforceable to the fullest extent permitted by law. (j) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings other than those set forth or referred to herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. (k) Enforceability. This Agreement shall remain in full force and effect notwithstanding any breach or purported breach of, or relating to, the Purchase Agreement. (1) Recitals. The recitals are hereby incorporated in the Agreement as if fully set forth herein. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. CHYRON CORPORATION By: Michael Wellesley-Wesley Chairman and CEO 5 Hub Drive Melville, New York 11747 U.S.A. BRONSENS By: Peter Bronsen Partner 26 Beaumont Street Oxford OX1 2NP ENGLAND -----END PRIVACY-ENHANCED MESSAGE-----