10-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1999

Commission File Number 1-9014

CHYRON CORPORATION
(Exact name of registrant as specified in its charter)
New York	11-2117385
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
5 Hub Drive, Melville, New York	11747
(Address of principal executive offices)	(Zip Code)
Registrant's telephone number, including area code (631) 845-2000
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, par value $.01	New York Stock Exchange
(Title of Class)	(Name of exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES X NO

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ( )

The aggregate market value of voting stock held by non-affiliates of the Company on March 1, 2000 was $59,823,555 The number of shares outstanding of the issuer's common stock, par value $.01 per share, on March 1, 2000 was 32,115,687.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the Annual Meeting of Shareholders to be held May 24, 2000 are incorporated by reference into Part III.

Exhibit index is located on page 49

This document consists of 53 pages

From time to time, including in this Annual Report on Form 10-K, the Company may publish forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, changes in the industry, new products, research and development activities and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause the Company's actual results to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements. The risks and uncertainties that may affect the operations, performance, development and results of the Company's business include, without limitation, the following: product concentration in a mature market, dependence on the emerging digital market and the industry's transition to DTV and HDTV, consumer acceptance of DTV and HDTV, resistance within the broadcast or cable industry to implement DTV and HDTV technology, rapid technological changes, new technologies that could render certain Chyron products to be obsolete, a highly competitive environment, competitors with significantly greater financial resources, new product introductions by competitors, seasonality, fluctuations in quarterly operating results, ability to maintain adequate levels of working capital, ability to maintain its NYSE listing, expansion into new markets and the Company's ability to successfully implement its acquisition and strategic alliance strategy.

PART I

ITEM 1. BUSINESS

General Information Regarding the Company

Chyron Corporation ("Chyron" or the "Company") was incorporated under the laws of the State of New York on April 8, 1966 under the name The Computer Exchange, Inc., which was changed to the present name on November 28, 1975. On April 12, 1996, Chyron acquired Pro-Bel Limited ("Pro-Bel"). The Company's principal executive offices are located at 5 Hub Drive, Melville, New York 11747 and its telephone number is (631) 845-2000. Its executive offices in the United Kingdom are located at Danehill, Lower Earley, Reading, Berkshire RG6 4PB and its telephone number is 44-118-986-6123.

The Company develops, manufactures, markets and supports a broad range of equipment, software and systems that facilitate the production and enhance the presentation of live and pre-recorded video, audio and other data. The Company's products enable users to (i) create and manipulate text, logos and other graphic images using special effects such as 3D transforming, compositing and painting; (ii) manage, monitor and distribute video, audio and other data signals; and (iii) control edit processes and automate broadcast equipment. The worldwide market for equipment, software and systems used in the production and presentation of video and audio content encompasses major television networks, cable television broadcasters, direct to home satellite program distributors, production companies and post-production houses, as well as organizations and individuals creating materials such as corporate and specialized video and audio presentations. The Company has recently expanded its efforts to create products and services that will address the growing new media and Internet marketplace.

Industry Transition to Digital Standards

In October 1996, the Federal Communications Commission ("FCC") adopted a rule that requires broadcasters to utilize digital advanced television transmission. This ruling requires broadcasters to adopt one of eighteen formats deemed acceptable as broadcast standards for digital television ("DTV"), as opposed to the current analog equipment, and sets a timetable for the adoption of DTV.

This decision has set in motion the evaluation of which digital transmission formats are acceptable and will be used for replacing the current analog National Television Standards Committee ("NTSC") standards for broadcasting, news, entertainment and other program sources. Today, broadcasters are examining the performance of each of these formats, as well as their technical requirements. By the year 2006, all the current analog NTSC equipment will have to be upgraded or replaced as broadcasters discontinue their analog NTSC broadcasts in order to comply with the recent FCC ruling.

The method and timing of broadcasters' conversion to digital television is very important to the future profitability of Chyron. As an equipment manufacturer, Chyron plans to provide broadcasters with innovative DTV and HDTV equipment. Management views this industry transition as a great opportunity. However, broadcasters' failure to convert on a timely basis could have a negative impact on the future financial condition of the Company.

Products

The Company offers a broad range of products that address the needs of the video and audio production, post-production and distribution markets. In addition, the Company is extending its product range to address the Internet market. The convergence of traditional media and the Internet is providing opportunities for the Company to develop new products and services to address customers' needs in the e-commerce, security and streaming media markets.

The Company's line of high performance graphics systems are used by many of the world's leading broadcast stations to display news flashes, election results, sports scores, stock market quotations, programming notes and weather information. The Company's signal management systems interconnect video, audio and data signals to and from equipment within a studio's control room or edit suite, as well as to and from signal transmission sites. The Company's line of control and automation systems are used to automate the steps used in the management, editing and distribution of video and audio content. In the area of new media, the Company currently has an arrangement with Microsoft Corporation for the development of interactive graphics products. In addition, an Internet coder has recently been launched that will enable companies to encode video and audio on the Internet.

New Media and Internet

Clarinet: Clarinet is a broadcast-compliant streaming media coder used to encode video and audio for use on the Internet. Clarinet provides a simple solution for applications such as webcasting a broadcast station's output or an on-line corporate briefing for shareholders. Available in a number of configurations, Clarinet has dual power supplies with internal cooling and an integral liquid crystal display ("LCD") screen for set-up, monitoring and status information, all in a 2U rack-mounted frame. For optimum audio quality, the Pro-Bel digital audio signal processing module incorporates a moveable sharp low-pass filter that reduces the effects of aliasing. It also features automatic compression and limits the dynamic range of the audio to eliminate the need for external signal equalization. Clarinet's LCD screen also displays useful navigational information including Internet Service Provider ("ISP") target address, streaming rate and basic digital signal processing parameters. Along with broadcast-compliant inputs, Clarinet accepts professional phono connections and can be used with a VGA and keyboard for live event confidence monitoring. A simple HTML set-up wizard is supplied for effortless system configuration. Remote control facilities also enable security and monitoring applications.

Graphic Systems

DuetJ and Duet HD: Duet/Duet HD is a real-time 2D/3D serial digital video graphics processing platform that integrates open standards, a Windows NT⁷ front end, and provides real-time performance for a variety of television graphics applications. Configurable as digital standard definition or digital HDTV, it is the most significant new graphics product introduction from Chyron since the iNFiNiT!⁷ nine years ago, representing the next generation of video graphics engines. Currently shipped with LyricJ graphics composition application, Duet HD offers the first ever serial digital high definition character generator capability. Lyric provides full text, graphics and object oriented animation capabilities in a Windows NT application. Lyric may be used on-line for real-time applications when installed on Chyron Duet hardware or off-line for composition and preview purposes when installed on standard PCs. New features of Lyric 1.1, released in 1999, include iNFiNiT! file import, Aprisa⁷ Still Store import and export, live video capture, animation of independent characters, multiple edge support for 2D fonts, control of external devices via GPIs and control of DDRs and VTRs via BVW-75 protocol, grid alignment functions, clocks and timers, and indexed fonts. Lyric is a fast and easy-to-use package, with familiar features such as preference menus, undo/re-do and spell-checking. Import of numerous formats are supported, including True Type⁷ fonts, TIFF and TGA bitmaps as well as iNFiNiT! messages, making Lyric a universal graphics tool.

Duet addresses the requirements of state-of-the-art installations, bringing together the proprietary operating system necessary to execute broadcast quality graphics and the Windows NT interface, which is increasingly becoming the standard in broadcast and production facilities. Extending the reach of Duet, CAL (Chyron Abstraction Layer) allows third party software developers to use standard Open GL code to create custom applications, making Duet as accessible for software product development as a personal computer.

iNFiNiT! Family of Graphics and Character Generators: Chyron's family of iNFiNiT! products has long been the standard for broadcast quality character generators. Largely due to the iNFiNiT! family line, Chyron believes that it has a 60-70% share of the installed base of the high-end broadcast character generator market in the U.S.

The flagship iNFiNiT! is a dual-user graphics workstation with one to three output channels, each with a dedicated key signal. MAX!>⁷ is a single-user graphics system with one or two separate video and key channels. MAXINE!⁷ is a single channel/single-user character generator. MAX!> and MAXINE! have similar feature sets and effective resolution as the iNFiNiT!. All systems can be configured with analog or digital outputs. WiNFiNiT!, an optional PC-based graphical user interface, utilizes the Microsoft Windows⁷ 95 or Windows NT operating systems. In 1998, CLYPS, a live video/key capture/playback system, was launched. Files are stored in JPEG format on a SCSI express drive, eliminating the need for external playback devices. Version 11.0 software, released in 1999, features Dynamic Graph Drawing, allowing real-time up-to-the-second display of graphs drawn via data embedded in commands from Chyron's Intelligent Interface⁷ remote control. Up to 50 graphs can be drawn in a single display. An ideal tool for financial or other statistical reporting, Dynamic Graph Drawing provides strong visuals to enhance coverage. Also new to Version 11.00 is an extended networking server command set which includes extended listing, enhanced interaction with Chyron's Aprisa, Liberty⁷ and other systems, and the ability to interact with off-the-shelf applications such as Microsoft⁷ Internet Explorer, Netscape Communications Corporation Netscape Navigator⁷ and GlobalSCAPE CuteFTPJ.

Other options include TransformJ animation, Intelligent Interface remote control, iNFiNiT! Third Channel Output option, MAXINE! Preview, IMAGESTOR! still store and various paint and composition packages.

Chyron Aprisa Still Store Systems: The Chyron Aprisa 100 is a Windows NT based family of still and clip store systems. Providing sophisticated database functions, the Chyron Aprisa 100 allows play list creation and playback with effects, search, sort and editing. Options include the Aprisa 200 Digital Disk Recorder and the Aprisa 300 Video Replay System (advanced playback capability). The latest addition to the Chyron Aprisa family is the Aprisa 250 Integrated Clip/Still Store, providing the combined functionality of a 90-minute, dual-stream digital disk recorder and a single channel Aprisa 100 Still Store in one chassis. This combo offers an affordable and feature-packed solution for delivering animated on-air graphics.

Compact Graphics and Character Generators: The Company's compact character generators, sold under the CODI⁷ and PC-CODI names, provide real-time text, titling and logo generation which are used for broadcasting time, temperature, weather warnings, sports statistics, scoreboards, news updates and financial information. CODI products may operate through touch screens for real-time on-screen drawing. They can work with standard computer platforms regardless of operating system or system performance.

Liberty Paint and Animation: Chyron's Liberty family of paint and animation tools provides resolution-independent, non-linear, digital image processing for creating, editing and compositing special visual effects in an on-line, real-time environment. Liberty was used to create award-winning CNN graphics and special effects in major feature films, including Batman and Robin, Independence Day, Casino, Broken Arrow and Godzilla. Liberty products operate on various Silicon Graphics workstations as well as the Windows NT platform, and support all popular file formats. Liberty offers a menu of video graphic creation tools, such as painting, compositing, morphing, titling, 3D transforming, layering, coloring, cycle animation, rotoscoping and cell animation. In 1998, three new versions of Liberty were introduced: Liberty 6.5, running on the SGI⁷ platform; Liberty NT, running on the Windows NT platform, providing Liberty graphics power previously available only on more expensive SGI workstations; and Liberty HDTV, a full-featured serial digital high definition graphics and animation system. In December 1999, Liberty 7.0 was released. In this version of Liberty software, support has been added for operation on Chyron's Duet hardware, including single-frame and real-time Video Show, and for operation on SGI's Visual NT Workstation, including integrated Video I/O. Support has also been added for SCSI DDR interfaces for Liberty NT: Sierra's next-generation HDTV DDR under IRIX⁷; Medea's newly introduced VideoRaid RT; and Chyron's Aprisa DDR.

Media Management - Signal Management Systems

Pro-Bel Routing Switchers and Controllers: Under the Pro-Bel name, the Company provides a complete range of control solutions for matrix systems which process and distribute multimedia signals.

Eclipse: An expandable digital video routing switcher. Provides a high performance, cost effective and compact switcher with dual outputs, redundant power supply units and controllers.

XD: The XD series of digital routing switchers are large-scale routing systems that can produce high-performance signal distribution across a wide spectrum of applications.

16 x 16 HDTV Router: It provides a 16 x 16 HDTV router in 3RU and 1.485 Gb/s SMPTE 292M compatibility. This product may operate as a standalone router or as part of a larger routing system under Pro-Bel control.

Freeway: Mid-range routing switcher which is designed for facilities in the process of converting from analog to digital operations.

Gemini: 16 x 2 compact multi-format routers designed for monitor switching and similar applications. It also operates as a standalone router or integrates with Pro-Bel control systems.

System 3J and Procion⁷ Controllers: System 3 provides a push button control panel which can utilize simple signal matrix solutions and multi-matrix installations with integrated tie-line management. Procion offers a range of IBM PC/Windows touch screen control systems which are easy to use and configure. System 3 and Procion can be integrated with each other and with Pro-Bel routing systems for maximum flexibility.

Digital Master Control Switchers - TX 320 and TX 310: Compact and cost effective, these switchers process serial digital video and digital analog or embedded audio inputs. For sophisticated transitions, an optional 3D DVE may be added. TX Series master control switchers provide unique built-in integration with Pro-Bel Compass/Sextant automation and maximum flexibility, where one panel can control many channels, or a number of panels can share channels. With its multi channel capability, the TX Series panels can control HDTV channels along side standard definition digital channels, permitting a seamless migration to high definition operation.

Media Management - Control and Automation Systems

Asset Management - MAPPJ: Pro-Bel has developed a suite of products which are designed to process video, audio and related data signals, integrating with Pro-Bel automation for signal playout. MAPP is a Windows⁷ based, video server management and control system. MAPP provides facilities the ability to record, track, cache and replay broadcast material according to a user-defined schedule. MAPP easily interfaces with disk based video servers manufactured by many different vendors. Recent product introductions include:

Pro-Bel MAPPJ WAN Manager: A first from Pro-Bel, providing automatic transport of video server media between remote sites via Wide Area Networks.

Pro-Bel MAPP Media Browse Acquisition/WAN Manager: Provides a simple method to transfer the media from high bandwidth to low bandwidth server environments, across standard WANs, for cost effective remote media browsing and review applications.

Pro-Bel MAPP Version 5: New NT platform for MAPP Asset Management software. MAPP tracks every storage device and item of material within the broadcast operation. Database is available over a standard computer network with multiple workstations. Multiple users enter, direct, monitor and control each item and prepare it for manual or automated playout.

Pro-Bel MAPPEX (MAPP Exchange Interface): Provides interface to MIS systems. Used primarily for tracking commercial airings for subsequent billing to advertisers.

Automation Compass and Sextant: Each provides comprehensive station automation for single and multi-channel operations, with Compass controlling a larger number of devices including large cart machines. Sextant can be upgraded to Compass functionality. Unique real-time hardware platform with redundant controllers and power supplies provides reliability. Users edit schedules and interface to traffic systems via standard NT workstations that provide familiar and intuitive operation. Extensive use of icons and graphical techniques provide readable schedules with at-a-glance status.

Marketing and Sales

The Company markets its products and systems to traditional broadcast, production and post-production facilities, government agencies, educational institutions and telecommunications and corporate customers.

In order to maintain and increase awareness of its products, the Company displays its products at the major domestic and international trade shows of the broadcast and computer graphics industries. In the United States, the Company exhibits at the National Association of Broadcasters (NAB) and Society of Motion Picture and Television Engineers (SMPTE) conventions. It also exhibits at the International Broadcasters Convention (IBC) in Europe. The Company uses direct-mail campaigns and places advertisements in broadcast, post-production and computer industry publications.

Sales of the Company's products in the United States and the United Kingdom are made through Company direct sales personnel, dealers, independent representatives, systems integrators and OEMs. Direct sales, marketing and product specialists serving these markets act as links between the customer and the Company's development teams.

Sales of the Company's products outside of the United States and United Kingdom are made through dealers and sales representatives covering specific territories. The Company maintains sales offices in Hong Kong, China and Paris, France in an effort to increase foreign sales. In some territories, dealers sell products from all of the Company's product categories; in other territories, dealers handle only specific products.

Service, Support and Training

The Company offers comprehensive technical service, support and training to its customers through 24 hours per day, seven days per week access to trained service and support professionals.

Training courses are available through the Company and range in length from a few days to a few weeks and consist of a mix of classroom discussions and hands-on training. The Company offers training courses for many of its products at its Melville (New York) headquarters and its Reading (United Kingdom) and Atlanta (Georgia) centers. The Company also conducts on-site training. Installation assistance, hardware and software maintenance contracts and spare parts are made available by the Company. The Company believes support contracts and a responsive spare parts supply service facilitate customer satisfaction. Service is provided both domestically and internationally by the Company or its appointed dealers and representatives. The Company also provides sales and service support to its dealers from time to time. The Company provides warranties on all of its products ranging from ninety days to three years.

Research and Development

The Company's research and product development, conducted in Melville, New York, Reading, United Kingdom and Cupertino, California, is focused on the continued enhancement of its existing products and the development of new ones. Recent efforts have focused on products and services to serve the new media and Internet marketplace. Product development efforts also include both graphic products and routers and switchers which will comply with the FCC ruling of October 1996. The Company believes this ruling will affect the broadcast industry across the next decade and beyond, specifically the adoption of digital television. Historically, the Company has focused its efforts toward the development of complete systems rather than of either hardware or software standing alone.

During 1999, 1998 and 1997, the Company expensed approximately $7.3 million, $9.5 million and $6.8 million, respectively, for research and development. Such amounts were net of amounts capitalized with respect to software development costs incurred in connection with the development of new products and the modification and enhancement of existing products.

Manufacturing

The Company has final assembly and system integration operations located in Melville and Reading. The Company primarily uses third-party vendors to manufacture and supply all of the hardware components and sub-assemblies utilized in the Company's graphics systems and relies upon a combination of third-party vendors and internal manufacturing for components and sub-assemblies utilized in the Company's signal management systems. The Company designs many of its system components to its own specifications, including metal and electronic parts and components, circuit boards and certain sub-assemblies. It assembles such items and standard parts, together with internally-developed software, to create final products. The Company then performs testing and quality inspections of each product.

Competition

The markets for graphics imaging, editing and animation systems, signal routing systems and media storage systems are highly competitive and are characterized by rapid technological change and evolving industry standards. Rapid obsolescence of products, frequent development of new products and significant price erosion are all features of the industry in which the Company operates. The FCC's recent ruling requiring broadcasters to utilize DTV transmission beginning in 1998 will require large future capital expenditures by the broadcast industry. Management recognizes this as an opportunity for the Company in the market place, but, as a result, the Company also anticipates increased competition from both existing companies and new market entrants. The Company is currently aware of several major and a number of smaller competitors. In the graphics area, the Company believes its primary competitors are Aston Electronic Designs Limited, Pixel Power, Pinnacle Systems Inc., Quantel Inc. and Accom. In the signal management area, the Company believes its primary competitors are nVision, Leitch Incorporated, Philips Electronics N.V., Sony Corporation and Grass Valley Group. In the control and automation area, the Company believes its primary competitors are Drake, Louth Automation, Philips Electronics N.V., Sony Corporation and Omnibus. Many of these companies have significantly greater financial, technical, manufacturing and marketing resources than the Company. In addition, certain product categories and market segments, on a region-by-region basis, in which the Company does or may compete, are dominated by certain vendors.

Employees

As of December 31, 1999, the Company employed 312 persons on a full-time basis, including 56 in sales and marketing, 98 in manufacturing and testing, 42 in customer support, service and training, 45 in finance and administration and 71 in research and development. None of these employees are represented by a labor union.

Patents and Proprietary Rights

The Company's success depends upon its ability to protect its proprietary software technology and operate without infringing the rights of others. It relies on a combination of patent, trademark and trade secret laws to establish and protect its proprietary rights in its technology.

The names Chyron, Scribe, Chyron Scribe, Chyron Scribe Junior, Chyron SuperScribe, iNFiNiT!, MAX!>, MAXINE!, CODI, I², Chyron Care, Intelligent Interface, Intelligent Interface (I²), CMX, CMX AEGIS, CMX OMNI, Aurora, Liberty and Liberty Aurora and Design are registered trademarks of the Company. The Company also has rights in trademarks and service marks which are not federally registered. The Company does not have registered copyrights on any of its intellectual property.

Government Regulations

The telecommunications and television industries are subject to extensive regulation in the United States and other countries. For example, The United States Federal Communications Commission has issued regulations relating to shielding requirements for electromagnetic interface in electronic equipment. The Company's products are in compliance with these regulations. Furthermore, television operators are subject to extensive government regulation by the FCC and other federal and state regulatory agencies.

ITEM 2. PROPERTIES

The executive offices and principal office of the Company and its graphics business are located in Melville, New York pursuant to a lease that expires on June 30, 2004. This facility consists of approximately 47,000 square feet and is used for manufacturing, research and development, marketing and the executive offices. The Company also leases approximately 7,000 square feet in Cupertino, California and 4,300 square feet in Torrance, California for research and development, which expire on December 31, 2002 and November 30, 2000, respectively. The Company also maintains sales offices in Atlanta and Dunwoody, Georgia of 1,000 and 2,700 square feet, respectively, and in Hong Kong of 2,000 square feet pursuant to leases which expire on January 31, 2001, November 30, 2002 and April 26, 2001, respectively. In the United Kingdom, the Company's executive office is located in Reading, United Kingdom where it owns a facility of approximately 19,000 square feet. This facility is used for manufacturing, research and development and marketing. The Company occupies additional facilities in the United Kingdom in Reading and Andover, used primarily for research and development and manufacturing, which total approximately 28,000 square feet pursuant to leases which expire from December 25, 2012 through September 29, 2020. The Company currently utilizes 90% to 100% of the space of all of its facilities. Management currently believes that each facility is suitable for its existing operations and does not foresee the need for any significant expansion of its current facilities.

ITEM 3. LEGAL PROCEEDINGS

The Company from time to time is involved in routine legal matters incidental to its business. In the opinion of management, the ultimate resolution of such matters will not have a material adverse effect on the Company's financial position, results of operations or liquidity.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During the fourth quarter of the year ended December 31, 1999, there were no matters submitted to a vote of the Chyron shareholders through the solicitation of proxies or otherwise.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDERS MATTERS

Chyron's common stock is traded on the New York Stock Exchange ("NYSE") under the ticker symbol "CHY". The approximate number of holders of record of the Company's common stock at March 1, 2000 was 5,400.

The following table sets forth the high and low reported sales price for the Company's common stock:

Price Range of Common Stock

	High	Low
Year ended December 31, 1999
Fourth quarter	$4.250	$0.656
Third quarter	1.938	1.125
Second quarter	3.125	1.438
First quarter	2.750	1.500
Year ended December 31, 1998
Fourth quarter	$3.000	$1.250
Third quarter	3.625	1.625
Second quarter	4.938	3.125
First quarter	4.813	3.125

On March 1, 2000, the closing price of the Company's common stock as reported on the NYSE was $4 3/16.

In August 1999, the Company received a notice from the NYSE indicating that it did not currently meet the new continued listing standards issued in late July 1999. The new criteria revised and raised the minimum requirement of stockholders' equity to $50 million from $12 million of net tangible assets and global market capitalization to $50 million from $12 million. Companies below these levels must submit a business plan to the NYSE demonstrating how the Company anticipates meeting the new standards within an eighteen month period. The Company submitted its plan to the NYSE and received approval on December 28, 1999. The Company will be working closely with the NYSE over the next eighteen months as the exchange monitors the Company's compliance with the plan on a quarterly basis.

The Company has not declared or paid any cash dividend since November 27, 1989. The Company currently plans to retain its future earnings, if any, for use in the operation and expansion of its business and does not anticipate paying cash dividends on the common stock in the foreseeable future. In connection with the Company's term loan and revolving credit facility, the Company is prohibited from paying dividends in excess of 25% of its net income in any fiscal year.

During late 1998 and 1999 the Company raised $7.7 million through the issuance of 8% subordinated convertible debentures, due December 31, 2003, to certain persons and entities, including certain directors, affiliates and shareholders of the Company. The Series A debentures, totaling $1.2 million, are convertible, at any time, at the option of the holders thereof, into Common Stock of the Company at a conversion price of $2.466 per share (which is equal to 120% of the average of the closing selling prices of the Common Stock for the 90 trading days immediately preceding the issue date of the debentures). The Series A debentures may be redeemed by the Company at any time after December 31, 1999 for a price equal to the principal and accrued but unpaid interest on the debentures at the redemption date. The net proceeds from the sale of the debentures were used for general working capital purposes.

The Series B debentures, totaling $6.5 million, are convertible, at any time, at the option of the holders thereof, into common stock of the Company at a conversion price of $1.625 per share. The Series B debentures may be redeemed by the Company, commencing one year from issue date, for a price equal to the principal and accrued but unpaid interest at the redemption date. Interest, which is payable quarterly, may be paid in the form of additional debentures until July 15, 2001. Through December 31, 1999, approximately $0.2 million of interest was paid in the form of additional debentures issued by the Company. These funds are being used to build the Company's restructured operations and to fund research and development, particularly for certain Internet initiatives.

The debentures have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. In addition, in order for the debentures purchased by funds managed by Weiss Peck & Greer LLC to be converted into shares of common stock, under the rules of the New York Stock Exchange, shareholder approval is required. In the event that shareholder approval is not given, the debentures owned by such funds will not be convertible. The Company intends to seek such shareholder approval. The sales of the debentures were made in reliance upon the exemption from the registration provisions of the Securities Act of 1933, as amended, afforded by Section 4(2) thereof and/or Regulation D promulgated thereunder, as a transaction by an issuer not involving a public offering. To the best of the Company's knowledge, the purchasers of the debentures acquired them for their own accounts, and not with a view to any distribution thereof.

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth selected data regarding the Company's operating results and financial position. The data should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and Notes thereto, all of which are contained in this Annual Report on Form 10-K.

SUMMARY FINANCIAL DATA

(In thousands, except per share amounts)

	Year Ended December 31,
	1999	1998	1997	1996(1)	1995
Statement of Operations Data:
Net sales	$60,709	$83,710	$86,774	$82,608	$53,971
Gross profit	26,058	39,460	39,830	42,667	31,225
Operating expenses:
Selling, general and administrative	28,166	31,420	29,662	22,349	17,066
Research and development	7,315	9,537	6,822	5,253	4,105
Non-recurring charges	6,681	3,979	3,082
Management fee					2,911
West Coast restructuring recapture					(1,339)
Total operating expenses	42,162	44,936	39,566	27,602	22,743
Operating (loss) income	(16,104)	(5,476)	264	15,065	8,482
Gain on sale of investments	541	1,194
Interest and other expense, net	(1,272)	(1,786)	(1,242)	(1,666)	(536)
Net (loss) income	(29,784)	(4,447)	(760)	8,654	7,476
Net (loss) income per common share (2) (3)-
Basic	$ (.93)	$ (.14)	$ (.02)	$ .27	$ .26
Diluted	$ (.93)	$ (.14)	$ (.02)	$ .27	$ .25
Weighted average number of common shares outstanding (2) (3) -
Basic	32,084	32,058	32,538	31,825	29,379
Diluted	32,084	32,058	32,538	32,327	30,382
	As of December 31,
	1999	1998	1997	1996(1)	1995
Balance Sheet Data:
Cash and cash equivalents	$ 5,453	$1,585	$2,968	$4,555	$5,012
Working capital	17,761	30,036	38,955	45,362	28,221
Total assets	58,381	83,116	94,080	91,403	44,332
Long-term obligations	21,622	17,315	21,959	21,226	4,911
Shareholders' equity	22,512	49,770	53,962	53,946	29,983

(1) Includes the operations of Pro-Bel since its acquisition on April 12, 1996.

(2) Adjusted to reflect the reverse stock split effected on February 7, 1997.

(3) Adjusted to reflect FASB Statement No. 128, "Earnings Per Share".

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Overview

The Company develops, manufactures, markets and supports a broad range of equipment, software and systems that facilitate the production and enhance the presentation of live and pre-recorded video, audio and other data. Recently, the Company has expanded its efforts to focus on products and services that address the new media and Internet marketplace. Clarinet, the first in the range of products employing Internet technologies, has already been purchased by the BBC and Virtue Interactive TV. In the fourth quarter of 1998 the Company delivered the first Duet HD systems, featuring Lyric software, to major broadcast and production facilities. Duet HD is a real-time, HDTV video graphics processing platform that integrates open standards, a Windows NT front-end, and provides real-time performance for a variety of television graphics applications. Chyron's family of iNFiNiT! products continues to be the standard for broadcast quality character generators. These products superimpose text, logos and other graphics onto a primary video image or create an independent image to be televised by itself. The Company expects that revenue from its current graphics and character generator systems will continue to constitute a substantial percentage of its net sales for at least the near future. The Company's Pro-Bel signal management systems interconnect video, audio and data signals to and from equipment within a studio's control room or edit suite, as well as to and from signal transmission sites.

Non-recurring Charges

The delay in the rollout of HDTV by broadcasters and their reluctance to purchase analog equipment has significantly impacted the Company's ability to achieve desired levels of operating results. To weather this difficult time and to better position itself for the future, the Company has critically evaluated its product lines and its position in the industry. The results of this evaluation are a more focused strategy on products that serve a broader spectrum of delivery options and the elimination of certain non-producing products which management believes will allow the Company to be in a better position to remain competitive through the difficult times facing the industry. During the second quarter of 1999, the Company recorded non-recurring charges totaling $6.7 million, of which $5.0 million was directly related to the change in strategy. These primarily non-cash restructuring and non-recurring charges include the write-down of certain capitalized software of $3.6 million, inventory write-downs due to changes in product strategy of $1.0 million, severance costs of $0.4 million resulting from staff reductions, the write-down of $1.0 million of an equity investment and other charges related to an adjustment to deferred maintenance revenue totaling $0.7 million. The only component of the charge that required a cash outlay was severance of approximately $0.4 million.

In the second quarter of 1999, the Company established a full valuation allowance of $14.1 million against its net deferred tax assets. The Company's net deferred tax assets include substantial amounts of net operating loss carryforwards. Inability to generate taxable income within the carryforward period would affect the ultimate realization of such assets. Consequently, management determined that sufficient uncertainty exists regarding the realization of these assets to warrant the establishment of the allowance.

Investment in RT-SET

During 1996, the Company purchased a 19% interest in RT-SET, which develops, markets and sells real time virtual studio set software and proprietary communications hardware and is located in Israel. Since then, the Company's investment was modified, by mutual agreement of the parties, to its most recent form whereby Chyron owned 336,030 shares of common stock with a book value of $1.2 million. In early November 1999, RT-SET completed an initial public offering ("IPO") on the Neurer market in Germany. In connection with the IPO, the Company sold a portion of its investment, which resulted in a net gain of approximately $0.5 million.

The remaining investment in RT-SET has been reflected in the Company's balance sheet at December 31, 1999 at fair market value of $3.6 million.

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

Net Sales. Net sales were $60.7 million in 1999, a decrease of $23.0 million, or 27%, over the $83.7 million reported in 1998. The decrease resulted from the lower volume of U.S. and international graphics and Pro-Bel product sales resulting from the industry-wide softness in equipment purchases by broadcasters, primarily as a result of the delay in the rollout of HDTV and their reluctance to purchase analog equipment. The Company believes that the later part of 1999 was also impacted by customer concerns over Y2K. Sales in international markets have also been lower in 1999 as compared to 1998 primarily due to weak economic conditions in Eastern Europe and Asia. Like their American counterparts, many international broadcasters have postponed purchases of equipment. Sales in 1999 were also impacted by the loss in revenues, which totaled $3.0 million in 1998, associated with the Trilogy division which was sold in August 1998.

Gross Profit. Gross margins as a percentage of sales decreased to 43% in 1999 versus 47% in 1998. The margins in 1999 were not as favorable as the comparable margins in 1998 primarily due to the inventory write-downs of $2.2 million taken in the second quarter of 1999 and reduced margins in the graphics business due to a lower level of absorption of overhead costs resulting from lower sales volumes. These factors were offset, to a lesser degree, by reduced material costs of mature products and improved project management.

Selling, General and Administrative Expenses. Selling, general and administrative (SG&A) expenses decreased by $3.2 million or 10%, to $28.2 million in 1999 compared to $31.4 million in 1998. SG&A expenses in 1999 were lower due to the elimination of operating costs associated with the Trilogy and Concerto divisions and the reduced level of expenses as a result of the restructuring that occurred in the second quarter of 1999. Overall headcount in 1999 has been reduced by approximately 20%.

Research and Development Expenses. Research and development (R&D) costs decreased by $2.2 million, or 23%, during 1999 as compared to $9.5 million in 1998. The decrease in R&D expenses is directly related to the elimination of R&D efforts associated with the Trilogy and Concerto divisions, reduced material costs of new projects and reduced headcount as a result of the 1999 second quarter restructuring.

Non-recurring Charges. In the second quarter of 1999, the Company adopted a more focused strategy on products that serve a broader spectrum of delivery options and eliminated certain non-producing products. Consequently, included in the results for 1999 were non-recurring charges totaling $6.7 million, of which $5.0 million was directly related to this change in strategy. These primarily non-cash restructuring and non-recurring charges included the write-down of certain capitalized software, inventory write-downs due to changes in product strategy, severance costs resulting from staff reductions and the write-down of an equity investment.

During 1998, management determined that it would be in the Company's best interest to implement a restructuring plan and refocus its efforts on its core products of graphics, routing and automation for television broadcast, cable and post production industries. This product line restructuring included the sale of Trilogy; the modification of the Company's investment in RT-SET; the reorganization of Chyron's sales and marketing organization; and the disposition of the Concerto Division. As a result, the Company recorded restructuring and other non-recurring charges of approximately $4.0 million during 1998.

Gain on Sale of Investments. In November 1999, the Company sold approximately 18% of its investment in RT-SET. This transaction resulted in a net gain of approximately $0.5 million. During 1998, the Company completed the sale of Trilogy to its management. This transaction resulted in an overall gain of approximately $1.2 million.

Interest and Other Expense, Net. Interest and other expense, net, decreased by $0.5 million in 1999 as compared to 1998. This decrease is primarily due to foreign exchange gains included in 1999 as a result of favorable rates between the U.S. dollar and the British pound sterling. This was offset, somewhat, by an increase in interest expense during 1999 due to slightly higher rates and greater average borrowings.

Provision/Benefit for Income Taxes. The Company's 1999 provision for income taxes increased by $14.6 million from the $1.6 million benefit recorded in 1998. This is primarily due to the establishment, in the second quarter, of a valuation reserve against its net deferred tax assets in the U.S. of $14.1 million.

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997

Net Sales. Net sales decreased 3.6% to $83.7 million in 1998 from $86.8 million in 1997. The decrease was a result of lower international sales, primarily in the UK and Asia, and the loss of revenues resulting from the sale in August 1998 of the Company's Trilogy division which represented $2.4 million of the decline. The decrease was offset by an increase in sales of Chyron graphics products and Pro-Bel products in the U.S. by $10 million. The Company's net sales consisted of product sales, upgrades and enhancements and rental income, as well as customer service revenue.

Gross Profit. Gross profit decreased to $39.5 million in 1998 from $39.8 million in 1997. Gross margin as a percentage of net sales increased to 47% in 1998 from 46% in 1997. The increase in gross margin as a percentage of net sales was the result of improved margins on the sales of the Company's core products offset by greater than anticipated costs on one large customer contract. Customer service costs were included in selling, general and administrative expenses and were not material.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased 6% to $31.4 million in 1998 from $29.7 million in 1997. As a percentage of net sales, SG&A expenses increased to 38% in 1998 from 34% in 1997. The growth in overall SG&A expenses was directly related to the continued efforts to improve customer service and to focus on sales and marketing initiatives, specifically directed at supporting and growing the Pro-Bel product lines in America and the establishment of the sales office in France. Offsetting this growth was the benefit of reduced SG&A expenses related to the sale of Trilogy.

Research and Development Expenses. Research and development expenses increased 40% to $9.5 million in 1998 from $6.8 million in 1997. Increases in R&D occurred as the Company has focused its attention on new product development related to the digital and HDTV markets.

Non-recurring Charges. During the second quarter of 1998, management determined that it would be in the Company's best interest to implement a restructuring plan and refocus its efforts on its core products of graphics, routing and automation for the television broadcast, cable and post production industries. This product line restructuring included the sale of Trilogy, the modification of the Company's investment in RT-SET, the reorganization of Chyron's sales and marketing organization and the disposition of the Concerto Division. As a result, the Company recorded restructuring and other non-recurring charges of $4 million during fiscal 1998.

The restructuring charge included the write-down of Concerto assets, accrued severance, legal costs and costs of disposition of such division totaling $2.9 million. Other non-recurring charges totaled $1.1 million and related to management's initiative to refocus on the Company's core products. Included in other non-recurring charges were costs related to the sales reorganization, accrued severance of $0.2 million and other miscellaneous costs of $0.3 million, all of which required cash outlays. Additional accruals were made for litigation and other legal costs.

Gain on Sale of Trilogy. In conjunction with the Company's decision to refocus its efforts on core products, the Company sold its Trilogy division, a wholly-owned subsidiary of Pro-Bel, to the management of Trilogy. This transaction was completed in August 1998 and resulted in an overall gain of approximately $1.2 million.

Interest and Other Expense, Net. Interest and other expense, net, increased 44% to $1.8 million in 1998 from $1.2 million in 1997. Included in interest and other expense, net, were gains and losses resulting from foreign exchange transactions. In fiscal 1998 an overall foreign exchange loss of $0.3 million was recognized, as opposed to a $0.4 million gain recognized in 1997. This was due primarily to the rate differential between U.S. Dollars and British Pounds Sterling (BPS) and the increased level in value and number of transactions in such currencies. This increase was offset by a decrease in interest expense due to lower average borrowings in 1998 as compared to 1997, as well as slightly lower interest rates.

Provision/Benefit for Income Taxes. The Company recognized a $1.6 million tax benefit for the twelve months ended December 31, 1998 compared to $0.2 million in 1997. The Company's effective tax benefit rate was 27% in 1998 as compared to 22% in 1997. The primary difference resulted from the effects of foreign income taxed at lower rates.

Liquidity and Capital Resources

At December 31, 1999, the Company had cash on hand of $5.4 million and working capital of $17.8 million.

As set forth in the Consolidated Statements of Cash Flows, the Company generated $1.2 million in cash from operations during 1999 as compared to generating $6.8 million in cash in 1998. The reduction in cash flows from operations is principally due to the realization of the cumulative net loss. Cash receipts were also reduced in 1999 as compared to 1998 due to the lower sales volume. Inventory levels decreased in both periods from their respective prior year end balances. These reductions are driven by a greater effort toward managing inventory. Corresponding levels of accounts payable were also reduced primarily as a result of the reduced inventory levels.

During 1999, the Company raised $6.5 million through the issuance of 8% Series B subordinated convertible debentures due December 31, 2003, to certain of its existing shareholders, some of whom are directors of the Company. The debentures are convertible, at any time, at the option of the holders thereof, into common stock of the Company at a conversion price of $1.625 per share. The debentures may be redeemed by the Company, commencing one year from issue date, for a price equal to the principal and accrued but unpaid interest at the redemption date. Interest is payable quarterly. Interest may be paid in the form of additional debentures until July 15, 2001. Through December 31, 1999 approximately $0.2 million of interest was paid in the form of additional debentures issued by the Company. These funds are being used to build the Company's restructured operations and to fund research and development, particularly for certain Internet initiatives.

On March 29, 1999, the Company entered into a new $12 million credit facility which expires March 31, 2002. Under this facility, the Company borrowed $2 million in the form of a term loan and can obtain revolving credit loans based on its eligible accounts receivable and inventory for the balance of the facility. Total borrowings at closing were $8.7 million. These borrowings were used primarily to pay down the outstanding balance under the expiring credit facility of $8.5 million, including $0.5 million outstanding on a term loan.

The term loan required no principal payments through September 30, 1999, $25,000 per month for the period October 1, 1999 through September 30, 2000, $75,000 per month for the period October 1, 2000 through September 30, 2001 and $133,333 per month from October 1, 2001 through March 31, 2002. Interest is payable monthly at LIBOR plus 2.125% (8.23% at December 31, 1999), or at a rate based on Prime. The Company must pay a monthly commitment fee equal to one half of 1% per annum on the daily unused portion of the facility.

At December 31, 1999, the Company had operating and capital lease commitments totaling $10.3 million and $1.2 million, respectively, of which $1.4 million and $0.6 million, respectively, is payable within one year. Such lease commitments were for equipment, factory and office space and are expected to be paid out of operating cash flows of the Company.

The Company believes that it will have sufficient cash to fund its operations during 2000.

Impact of Inflation and Changing Prices

Although the Company cannot accurately determine the precise effect of inflation, the Company has experienced increased costs of materials, supplies, salaries and benefits and increased general and administrative expenses. The Company attempts to pass on increased costs and expenses by developing more useful and cost effective products for its customers that can be sold at more favorable profit margins.

Industry Transition to Digital Standards

As discussed above, in October 1996, the FCC adopted a new digital television standard. Conversion to the new standard will produce a potentially great opportunity to companies involved in the broadcast industry and related business; however, this change has caused uncertainty, hesitation and confusion for broadcasters and other customers in their decisions on capital spending. The delay in capital spending by broadcasters has affected the level of the Company's sales. The method and timing of broadcasters' conversion to digital television is very important to the future profitability of the Company.

Quantitative and Qualitative Disclosure about Market Risk

The Company is exposed to currency risk in the normal course of business related to investments in its foreign subsidiaries and the level of sales to foreign customers. For the years ended December 31, 1999 and 1998, sales to foreign customers were 44% and 45% of total sales, respectively. Substantially all sales generated outside of the U.S. are denominated in British pounds sterling. The net impact of foreign exchange transactions for the years ended December 31, 1999 and 1998 were a gain of $319,000 and a loss of $307,000, respectively. Foreign currency hedging activity is not material to the Company's consolidated financial position, results of operations, or its cash flow.

Year 2000 Update

The Company began preparation for the Year 2000 date transition in 1998. In connection with this effort, the Company established a Year 2000 Committee whose members included senior management and functional area leaders. The Committee's objective was to establish a plan to assess the Year 2000 impact in order to minimize any interruption of its operations or its ability to serve its customers.

The Company structured its plan to address internal systems, infrastructure, facilities, suppliers and vendors as well as products and services. Contingency plans were prepared, as needed. The Company utilized internal resources in its efforts and the associated costs were expensed as incurred. Total costs associated with this effort are estimated at $0.5 million, which were funded by cash flow from operations. As of the date of this filing, the Company has not experienced any material Year 2000 problems with its IT or non-IT systems or products, nor has the Company experienced any material problems with any of its key customers or suppliers.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Financial Statements

Financial Statements:	Page
Report of Independent Auditors - PricewaterhouseCoopers LLP	22
Consolidated Balance Sheets at December 31, 1999 and 1998	23
Consolidated Statements of Operations for the Years Ended December 31, 1999,
1998 and 1997	24
Consolidated Statements of Cash Flows for the Years Ended December 31, 1999,
1998 and 1997	25
Consolidated Statements of Shareholders' Equity for the Years Ended December
31, 1999, 1998 and 1997	26
Notes to the Consolidated Financial Statements	27-46
Financial Statement Schedules:
II - Valuation and Qualifying Accounts	52

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and

Shareholders of Chyron Corporation

In our opinion, the consolidated financial statements listed in the index appearing under Items 14(a)(1) and (2) on page 48 present fairly, in all material respects, the financial position of Chyron Corporation and its subsidiaries at December 31, 1999 and 1998 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1999 in conformity with accounting principles generally accepted in the United States. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above.

/s/PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Melville, New York

February 23, 2000

CHYRON CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

	December 31,
Assets	1999	1998
Current assets:
Cash and cash equivalents	$ 5,453	$ 1,585
Accounts receivable, net	11,751	18,396
Inventories, net	13,766	19,378
Deferred tax assets	65	4,726
Prepaid expenses and other current assets	973	1,982
Total current assets	32,008	46,067
Property and equipment	10,583	12,545
Excess of purchase price over net tangible assets acquired	4,561	5,104
Investments	3,725	2,286
Software development costs	2,491	4,458
Deferred tax assets		8,343
Other assets	5,013	4,313
TOTAL ASSETS	$58,381	$83,116
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued expenses	$10,469	$14,136
Current portion of long-term debt	3,180	1,512
Capital lease obligations	598	383
Total current liabilities	14,247	16,031
Long-term debt	9,749	12,353
Convertible debentures	7,954	1,133
Capital lease obligations	367	515
Pension and other liabilities	3,552	3,314
Total liabilities	35,869	33,346
Commitments and contingencies
Shareholders' equity:
Preferred stock, par value without designation
Authorized - 1,000,000 shares, Issued - none
Common stock, par value $.01
Authorized - 150,000,000 shares,
Issued and outstanding - 32,092,533 and 32,058,020 at
1999 and 1998, respectively	321	321
Additional paid-in capital	44,184	44,021
Accumulated deficit/retained earnings	(24,994)	4,790
Accumulated other comprehensive income	3,001	638
Total shareholders' equity	22,512	49,770
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$58,381	$83,116

See Notes to Consolidated Financial Statements

CHYRON CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

	Year Ended December 31,
	1999	1998	1997
Net sales	$60,709	$83,710	$86,774
Cost of products sold	34,651	44,250	46,944
Gross profit	26,058	39,460	39,830
Operating expenses:
Selling, general and administrative	28,166	31,420	29,662
Research and development	7,315	9,537	6,822
Non-recurring charges	6,681	3,979	3,082
Total operating expenses	42,162	44,936	39,566
Operating (loss) income	(16,104)	(5,476)	264
Gain on sale of investments	541	1,194
Interest and other expense, net	(1,272)	(1,786)	(1,242)
Loss before provision for income taxes	(16,835)	(6,068)	(978)
(Provision) benefit for income taxes	(12,949)	1,621	218
Net loss	$(29,784)	$(4,447)	$(760)
Net loss per common share - basic
and diluted	$ (.93)	$ (.14)	$ (.02)
Weighted average shares used in computing net
loss per common share:
Basic	32,084	32,058	32,538
Diluted	32,084	32,058	32,538

See Notes to Consolidated Financial Statements

CHYRON CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Year Ended December 31,
	1999	1998	1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$(29,784)	$(4,447)	$(760)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Gain on sale of investments	(541)	(1,194)
Restructuring and other non-recurring charges	6,256	3,019	890
Depreciation and amortization	5,556	4,719	4,137
Provision (benefit) for deferred income taxes	13,269	(1,102)	(1,241)
Changes in operating assets and liabilities:
Accounts receivable	6,435	2,071	3,851
Inventories	3,609	5,196	(3,575)
Prepaid expenses and other assets	350	(293)	(1,638)
Accounts payable and accrued expenses	(3,936)	(644)	1,382
Other liabilities	22	(556)	936
Net cash provided by operating activities	1,236	6,769	3,982
CASH FLOWS FROM INVESTING ACTIVITIES:
Business acquisitions			(413)
Gross proceeds from sale of investments	750	2,746
Acquisition of property and equipment	(439)	(2,323)	(1,621)
Capitalized software development	(3,129)	(3,181)	(2,678)
Net cash used in investing activities	(2,818)	(2,758)	(4,712)
CASH FLOWS FROM FINANCING ACTIVITIES:
Paydown of expiring credit facility	(8,493)
Net proceeds from new credit facility	8,688
Payments of term loan	(1,225)	(3,500)	(2,000)
Borrowings from (payments of) revolving credit agreement, net	415	(2,691)	1,374
Proceeds from issuance of convertible debentures	6,611	1,133
Payments of capital lease obligations	(547)	(338)	(290)
Proceeds from exercise of stock options and common
stock purchase warrants, net			108
Other			(52)
Net cash provided by (used in) financing activities	5,449	(5,396)	(860)
Effect of foreign currency rate fluctuations on cash and
cash equivalents	1	2	3
Change in cash and cash equivalents	3,868	(1,383)	(1,587)
Cash and cash equivalents at beginning of year	1,585	2,968	4,555
Cash and cash equivalents at end of year	$ 5,453	$ 1,585	$ 2,968
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid	$ 859	$ 1,126	$ 1,348
Income taxes paid	$ 203	$ 391	$ 697

See Notes to Consolidated Financial Statements

CHYRON CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(In thousands)

					Accumulated
			Additional		Other
			Paid-In	Retained	Comprehensive
	Shares	Amount	Capital	Earnings	Income	Total
Balance at January 1, 1997	32,385	$ 324	$43,124	$ 9,997	$ 501	$53,946
Net loss				(760)		(760)
Cumulative translation adjustment					(118)	(118)
Total comprehensive loss						(878)
Exercise of stock options	22		108			108
Issuance of stock in connection with
acquisition of Axis Holdings	174	2	748			750
Issuance of stock in connection with a
litigation settlement	25		88			88
Payment of truncated shares as a result
of reverse stock split	(15)		(52)			(52)
Balance at December 31, 1997	32,591	326	44,016	9,237	383	53,962
Net loss				(4,447)		(4,447)
Cumulative translation adjustment					255	255
Total comprehensive loss						(4,192)
Contingent shares canceled	(533)	(5)	5
Balance at December 31, 1998	32,058	321	44,021	4,790	638	49,770
Net loss				(29,784)		(29,784)
Cumulative translation adjustment					(284)	(284)
Unrealized gain on available for
sale securities					2,647	2,647
Total comprehensive loss						(27,421)
Issuance of common stock
as compensation	35		52			52
Warrants issued for consulting services
and in connection with debenture
issuance			111			111
Balance at December 31, 1999	32,093	$321	$44,184	$(24,994)	$3,001	$22,512

See Notes to Consolidated Financial Statement

CHYRON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Chyron Corporation and its wholly-owned subsidiaries ("Chyron" or the "Company") develop, manufacture, market and support a broad range of equipment, software and systems, including paint and animation systems, character generators, signal distribution systems, master control switchers and broadcast automation and media management packages. The worldwide market for equipment, software and systems used in the production and presentation of video and audio content encompasses major television networks, cable television broadcasters, direct to home satellite program distributors, production companies and post-production houses, as well as organizations and individuals creating materials such as corporate and specialized video and audio presentations. The Company has recently expanded its efforts toward developing new products and services that will address the new media and Internet marketplace.

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany amounts have been eliminated. Investments in affiliates of less than 20% are stated at cost.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, costs and expenses during the periods presented. Actual results could differ from those estimates.

Restatement and Reclassification

On January 24, 1997, the Company's shareholders ratified a one-for-three reverse stock split which was effected on February 7, 1997. (Loss)/income per share, weighted average shares used in computing net (loss)/income per common share, common stock issued and outstanding, additional paid-in-capital and all other common stock transactions presented in these consolidated financial statements have been restated to reflect the one-for-three reverse stock split. In addition, certain prior year amounts have been reclassified to conform to the current year presentation.

Cash and Cash Equivalents

Cash includes cash on deposit and amounts invested in a highly liquid money market fund. Cash equivalents consist of short term investments with original maturities of three months or less. The carrying amount of cash and cash equivalents approximates their fair value.

Inventories

Inventories are stated at the lower of cost or market, cost being determined on the first-in, first-out method. The need for inventory obsolescence provisions is evaluated by the Company and, when appropriate, provisions for technological obsolescence, non-profitability of related product lines and excess quantities on hand are made.

Property, Equipment and Depreciation

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are provided on the straight line method over the following estimated useful lives:

Building	35 years
Machinery and equipment	3-10 years
Furniture and fixtures	5-10 years
Leasehold improvements	Shorter of the life of improvement or remaining life of the lease

Excess of Cost over Net Tangible Assets Acquired

The Company continually evaluates whether changes have occurred that would require revision of the remaining estimated useful life of the assigned excess of cost over the value of net tangible assets acquired (goodwill) or its carrying amount. In making such determinations, the Company evaluates undiscounted cash flows of the underlying business which gave rise to such amount. As of December 31, 1999, all of the Company's goodwill relates to the 1996 acquisition of Pro-Bel Limited. Costs in excess of net assets are being amortized over 12 years using the straight line method. Amortization in 1999, 1998 and 1997 amounted to $526,000, $577,000 and $603,000, respectively.

Investments

The Company accounts for its investments in accordance with the provisions of Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" (SFAS No. 115). This standard requires that certain debt and equity securities be adjusted to market value at the end of each accounting period. Management determines the appropriate classification of marketable securities at the time of purchase and reevaluates such designation as of each balance sheet date. At December 31, 1999, all securities covered by SFAS No. 115 were designated as available for sale. Accordingly, these securities are stated at fair value, with unrealized gains and losses reported as a separate component of comprehensive income, net of tax. There were no securities covered by SFAS No. 115 as of December 31, 1998. Realized gains and losses on sales of investments, as determined by the specific identification method, are included in the Consolidated Statement of Operations.

Software Development Costs

Certain software development costs are capitalized when incurred. Capitalization of software development costs begins upon the establishment of technological feasibility in excess of management defined threshold amounts. The establishment of technological feasibility and the ongoing assessment of recoverability of capitalized software development costs are continually monitored by management with respect to anticipated future revenues and estimated economic life. Amortization of capitalized software development costs is provided on a product-by-product basis using the straight line method over each product's estimated economic life, which ranges from 2-3 years.

Impairment of Long-Lived Assets

The Company continually evaluates whether changes have occurred that would require revisions to the carrying amounts of its long-lived assets. In making such determination, the Company reassesses market value, assesses recoverability and replacement values and evaluates undiscounted cash flows of the underlying business. Currently, management does not believe any of its long-lived assets are impaired.

Revenue Recognition

Net sales, which include revenue derived from product sales and upgrades, as well as service revenue, are recorded upon shipment of product or performance of service. Service revenue is generally recognized ratably over a period of twelve months. Customer service costs are included in selling, general and administrative expenses and are not material. Revenues and costs associated with long-term (generally six months or longer) contracts are recognized on the percen tage-of-completion method. Revisions in profit estimates are reflected in the period in which the facts that give rise to the revision become known. Provisions for anticipated losses are charged to earnings when identified.

In the first quarter of 1998, the Company adopted AICPA Statement of Position 97-2 ("SOP 97-2"), "Software Revenue Recognition." This SOP provides guidance on when revenue should be recognized for licensing, selling, leasing, or otherwise marketing computer software. The adoption of SOP 97-2 did not have a material effect on the results of operations of the Company for the years ended December 31, 1999 and 1998, respectively.

Income Taxes

The Company accounts for income taxes in accordance with the provisions of Statement of Financial Accounting Standards No. 109 ("SFAS 109"), "Accounting for Income Taxes." Under SFAS 109, deferred income taxes are recorded to reflect the tax consequences on future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end.

Foreign Currencies

Assets and liabilities of the Company's foreign subsidiaries are translated into U.S. dollars at the current rate of exchange, while revenues and expenses are translated at the average exchange rate during the year. Adjustments from translating foreign subsidiaries' financial statements are reported as a separate component of shareholders' equity. Transaction gains or losses are included in interest and other expenses.

Net (Loss) Income Per Share

The Company reports its net (loss) income per share in accordance with Financial Accounting Standards Board Statement No. 128, "Earnings Per Share." Basic net (loss)/income per common share is computed based on the weighted average number of common shares outstanding during the year. Diluted net (loss) income per common share is computed based on the weighted average number of common shares outstanding during the year plus, when dilutive, additional shares issuable upon the assumed exercise of outstanding common stock equivalents. For 1999, 1998 and 1997 common stock equivalents of 7,197,176, 2,765,304 and 2,458,423 respectively, were not included in the computation of diluted net (loss) income per common share because their effect would have been anti-dilutive.

Stock-Based Compensation Plans

The Company accounts for stock based compensation awards pursuant to Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and its related interpretations which prescribe the use of the intrinsic value based method. Accordingly, no compensation cost has been recognized for its fixed stock option plans. However, the Company has adopted the disclosure requirements of Statement of Financial Accounting Standards No. 123, "Accounting for Stock Based Compensation."

Segment Information

In 1998, the Company adopted Statement of Financial Accounting Standards No. 131 ("SFAS 131"), Disclosures about Segments of an Enterprise and Related Information. SFAS 131 replaces the "industry segment" approach with the "management" approach. The management approach designates the internal organization that is used by management for making operating decisions and assessing performance as the source of the Company's reportable segments. SFAS 131 also requires disclosures about products and services, geographic areas, and major customers.

Comprehensive Income

Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive Income." As required by SFAS 130, the Company displays the accumulated balance of other comprehensive income or loss separately in the equity section of the consolidated balance sheets. Total comprehensive loss, which is comprised of net loss and other comprehensive income (loss), amounted to approximately $(27.4) million, $(4.2) million and $(0.9) million for the years ended December 31, 1999, 1998 and 1997, respectively.

2. ACQUISITIONS

Pro-Bel Limited

On April 12, 1996, the Company acquired Pro-Bel Limited ("Pro-Bel") in exchange for $6.9 million in cash, 3.5 million British Pounds Sterling ("BPS") in notes ($5.3 million at the exchange rate on date of acquisition) and 1,048,735 shares of Chyron common stock valued at $6.9 million. The acquisition of Pro-Bel was accounted for as a purchase. Accordingly, the cost of the acquisition was allocated to the net assets acquired based upon their estimated fair values.

Axis Holdings Incorporated

On March 31, 1997, the Company acquired Axis Holdings Incorporated ("Axis") located in Los Angeles, California. Axis developed professional video and audio software specifically for use on the Microsoft Windows NT Operating System. The total consideration, which consisted of cash, notes and common stock of Chyron, totaled $1.8 million. As of December 31, 1999, $83,000 of the total consideration remains unpaid. This amount relates to one shareholder of Axis that has filed suit against the Company for breach of obligation with regard to the stock purchase agreement. Chyron is vigorously defending such claims, has denied all material allegations and has asserted counter claims for fraud and breach of contract. In the opinion of management, the ultimate disposition of this matter will not have a material impact on the financial position of the Company.

The acquisition was accounted for as a purchase. Accordingly, the costs of the acquisition were allocated to the net assets acquired based on their estimated fair values. The majority of the purchase price was capitalized as software development costs.

During the second quarter of 1998, as a result of this division's inability to meet revenue and operating targets, this division, Concerto, was discontinued and all related software development costs were written off (see Note 3).

3. NON-RECURRING CHARGES

During the second quarter of 1999 the Company critically evaluated its product lines and its position in the industry. The results of this evaluation were a more focused strategy on products that serve a broader spectrum of delivery options and the elimination of certain non-producing products which will allow the Company to be in a better position to remain competitive through the difficult times facing the industry. In connection therewith, the Company recorded non-recurring charges totaling $6.7 million, of which $5.0 million was directly related to the change in strategy. These primarily non-cash restructuring and non-recurring charges include the write-down of certain capitalized software of $3.6 million, inventory write-downs due to changes in product strategy of $1.0 million, severance costs of $0.4 million resulting from staff reductions, the write-down of $1.0 million of an equity investment and other charges related to an adjustment to deferred maintenance revenue totaling $0.7 million. The only component of the charge that required a cash outlay was severance of approximately $0.4 million. As of December 31, 1999, all cash outlays have been made.

During the second quarter of 1998, management determined that it would be in the Company's best interest to implement a restructuring plan and refocus its efforts on its core products of graphics, routing and automation for the television broadcast, cable and post production industries. As a result, the Company recorded restructuring and other non-recurring charges of $4.0 million. The restructuring charge includes the write-down of Concerto assets, accrued severance, legal costs and costs of disposition of such division totaling $2.9 million. Other non-recurring charges relate to management's initiative to refocus on the Company's core products and total $1.1 million. Included in other non-recurring charges are costs related to the sales reorganization, accrued severance of $0.2 million and other miscellaneous costs of $0.3 million, all of which required cash outlays. Additional accruals have been made for litigation and other legal costs. As of December 31, 1999, cash outlays of approximately $1 million have been made.

During the first six months of 1997, non-recurring charges totaling $3.1 million were incurred by the Company. A non-recurring charge of $0.7 million incurred in the first quarter of 1997 was attributable to the Company's planned secondary offering of common stock, which was terminated due to the change in the market valuation of the stock. During the second quarter of 1997, in an effort to position Chyron to meet the domestic television market's need for high definition and multichannel standard definition equipment, the Company underwent a repositioning which, together with several other items, resulted in non-recurring charges totaling $2.4 million. Included in this charge was a write-down of inventory related to product lines which have been discontinued as a result of a new market positioning strategy, severance expense related to staff reductions, the write-off of software development projects related to products not within the new strategy, the consolidation of certain Chyron offices, the settlement of litigation and the write-off of costs related to a potential acquisition that was abandoned due to the new strategy. As of December 31, 1998, all cash outlays, which totaled $2.1 million, were made.

4. INVESTMENT IN RT-SET

During 1996, the Company purchased a 19% interest in RT-SET, which develops, markets and sells real time virtual studio set software and proprietary communications hardware and is located in Israel. Since then, the Company's investment was modified, by mutual agreement of the parties, to its most recent form whereby Chyron owned 336,030 shares of common stock with a book value of $1.2 million. In early November 1999, RT-SET completed an initial public offering ("IPO") on the Neurer market in Germany. In connection with the IPO, the Company sold a portion of its investment, which resulted in a net gain of approximately $0.5 million.

The remaining investment in RT-SET has been reflected in the Company's balance sheet at December 31, 1999 at fair market value of $3.6 million. The unrealized gain of $2.6 million is reported as a separate component of shareholders' equity and other comprehensive income.

In connection with the underwriting agreement, the Company's remaining shares are being held in escrow, subject to a lockup agreement which prohibits their sale until May 2000.

5. SALE OF TRILOGY BROADCAST LIMITED

On August 19, 1998, the Company completed the sale of Trilogy, a wholly-owned subsidiary of Pro-Bel, to its management. The Company received gross proceeds of 2.0 million BPS ($2.7 million at the exchange rate at closing), an interest bearing note for 300,000 BPS ($0.5 million at December 31, 1999) due August 2003 with interest payable quarterly at LIBOR and a 19% interest in the new company that results from this transaction. This transaction resulted in an overall gain of approximately $1.2 million.

As a result of this sale, the Company's assets and liabilities decreased by approximately $2.9 million and $0.8 million, respectively. For the year ended December 31, 1998, Trilogy contributed sales, gross profit and operating income of $2.9 million, $1.6 million and $.02 million, respectively.

6. ACCOUNTS RECEIVABLE

Accounts receivable are stated net of an allowance for doubtful accounts of $3.3 million and $3.9 million at December 31, 1999 and 1998, respectively. The provision for doubtful accounts amounted to $0.4 million, $1.2 million and $0.5 million for 1999, 1998 and 1997, respectively.

Accounts receivable are principally due from customers in, and dealers serving, the broadcast video industry and non-broadcast display markets. At December 31, 1999 and 1998, receivables included approximately $6.3 million and $8.6 million, respectively, due from foreign customers.

Accounts receivable include costs and estimated earnings in excess of billings on uncompleted contracts accounted for on the percentage of completion method of approximately $0.4 million and $2.3 million at December 31, 1999 and 1998, respectively. Such amounts represent revenue recognized on a long-term contract that have not been billed pursuant to contract terms.

The Company periodically evaluates the credit worthiness of its customers and determines whether collateral (in the form of letters of credit or liens on equipment sold) should be taken or whether reduced credit limits are necessary. Credit losses have consistently been within management's expectations. The carrying amounts of accounts receivable approximate their fair values.

7. INVENTORIES

Inventories consist of the following (in thousands):

	December 31,
	1999	1998
Finished goods	$ 6,262	$ 7,266
Work-in-progress	1,228	3,048
Raw material	6,276	9,064
	$13,766	$19,378

8. PROPERTY AND EQUIPMENT

Property and equipment consist of the following (in thousands):

	December 31,
	1999	1998
Land	$ 782	$ 819
Building	1,712	1,777
Machinery and equipment	22,532	16,706
Furniture and fixtures	2,177	2,626
Leasehold improvements	920	699
	28,123	22,627
Less: Accumulated depreciation
and amortization	17,540	10,082
	$10,583	$12,545

Machinery and equipment at December 31, 1999 and 1998 includes $1,838,000 and $1,556,000, respectively, of assets held under capital lease obligations. Accumulated depreciation and amortization at December 31, 1999 and 1998 includes $958,000 and $968,000, respectively, attributable to assets held under capital lease obligations.

Depreciation expense, which includes amortization of assets under capital lease, was $3,546,000, $2,495,000 and $2,362,000 in 1999, 1998 and 1997, respectively.

9. SOFTWARE DEVELOPMENT COSTS

The following amounts were capitalized, amortized and written off (in thousands):

	1999	1998	1997
Amounts capitalized	$ 3,129	$3,181	$4,425
Less: Amortization	(1,484)	(1,647)	(1,172)
Non-recurring charge-write-down
to net realizable value	(3,612)	(2,300)	(205)
Net increase (decrease) in software
development costs	$(1,967)	$ (766)	$3,048

Capitalized amounts for 1997 include $1.7 million arising from the purchase of Axis. Accumulated amortization at December 31, 1999 and 1998 was $7,900,000 and $4,186,000, respectively.

10. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following (in thousands):

	December 31,
	1999	1998
Accounts payable	$ 5,259	$ 7,554
Compensation	813	1,630
Income taxes payable	234	257
Other accrued items	4,163	4,695
	$10,469	$14,136

11. LONG-TERM DEBT

Long term debt consists of the following (in thousands):

	December 31,
	1999	1998
Term loan (a)	$1,275	$1,000
Revolving credit facility (a)	7,356	7,693
Commercial mortgage term loan (b)	1,710	1,909
Trade finance facility (c)	2,505	2,846
Promissory notes (d)	83	417
	12,929	13,865
Less amounts due in one year	(3,180)	(1,512)
	$ 9,749	$12,353

(a) On March 29, 1999, the Company entered into a new $12 million credit facility which expires March 31, 2002. Under this facility, the Company borrowed $2 million in the form of a term loan and can obtain revolving credit loans based on its eligible accounts receivable and inventory for the balance of the facility. Total borrowings at closing were $8.7 million. These borrowings were used primarily to pay down the outstanding balance under the expiring credit facility of $8.5 million, including $0.5 million outstanding on a term loan.

The term loan required no principal payments through September 30, 1999, $25,000 per month for the period October 1, 1999 through September 30, 2000, $75,000 per month for the period October 1, 2000 through September 30, 2001 and $133,333 per month from October 1, 2001 through March 31, 2002. Interest is payable monthly at LIBOR plus 2.125% (8.23% at December 31, 1999), or at a rate based on Prime. The Company must pay a monthly commitment fee equal to one half of 1% per annum on the daily unused portion of the facility.

The entire facility is secured by Chyron's accounts receivable and inventory and the Common Stock of Pro-Bel. The agreement contains requirements for levels of operating income and prohibits the Company from paying dividends in excess of 25% of net income in any fiscal year.

(b) Pro-Bel has a commercial mortgage term loan with a bank. The loan is secured by a building and property located in the United Kingdom. Interest is equal to LIBOR plus 2% (7.76% at December 31, 1999) . The loan is payable in quarterly installments of 22,000 BPS ($35,000, converted at the December 31, 1999 exchange rate) plus interest.

(c) Pro-Bel has an agreement with a bank for an overdraft facility that has been renewed on an annual basis and expires on December 31, 2000. This agreement, provides for an overdraft facility of 3 million BPS. Total borrowings are limited to amounts computed under a formula for eligible accounts receivable. Interest is equal to the bank's base rate plus 1.5% (7.0% at December 31, 1999) and is payable quarterly. It is currently the Company's intention to refinance this facility prior to its expiration date.

(d) On March 31, 1997, the Company issued promissory notes to the shareholders of Axis for $667,000, with interest at 6%, in conjunction with the acquisition. As of December 31, 1999 all notes, except for $83,000, have been paid. The remaining amount relates to one shareholder of Axis that has filed suit against the Company in connection with the Axis stock purchase agreement.

Aggregate maturities of long term debt are as follows (in thousands):

2000	3,180
2001	967
2002	7,498
2003	142
2004	142
2005 and thereafter	1,000

The carrying amounts of long-term debt instruments approximate their fair values.

Net interest expense was $1,591,000, $1,479,000 and $1,665,000 in 1999, 1998 and 1997, respectively.

12. SUBORDINATED CONVERTIBLE DEBENTURES

During late 1998 and 1999 the Company raised $7.7 million through the issuance of 8% subordinated convertible debentures, due December 31, 2003, to certain persons and entities, including certain directors, affiliates and shareholders of the Company. The Series A debentures, totaling $1.2 million, are convertible, at any time, at the option of the holders thereof, into Common Stock of the Company at a conversion price of $2.466 per share (which is equal to 120% of the average of the closing selling prices of the Common Stock for the 90 trading days immediately preceding the issue date of the debentures). The Series A debentures may be redeemed by the Company at any time after December 31, 1999 for a price equal to the principal and accrued but unpaid interest on the debentures at the redemption date. The net proceeds from the sale of the debentures were used for general working capital purposes.

The Series B debentures, totaling $6.5 million, are convertible, at any time, at the option of the holders thereof, into common stock of the Company at a conversion price of $1.625 per share. The Series B debentures may be redeemed by the Company, commencing one year from issue date, for a price equal to the principal and accrued but unpaid interest at the redemption date. Interest, which is payable quarterly, may be paid in the form of additional debentures until July 15, 2001. Through December 31, 1999, approximately $210,000 of interest was paid in the form of additional debentures issued by the Company. These funds are being used to build the restructured operations and to fund research and development, particularly for certain Internet initiatives.

In connection with this fund raising, costs of $375,000 are being amortized over a five year period. Included in such costs are 123,631 warrants to purchase common stock of the Company at a price of $1.625 that were issued to the placement agent. The warrants will expire in September 2004.

The debentures have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. In addition, in order for the debentures purchased by funds managed by Weiss Peck & Greer LLC to be converted into shares of common stock, under the rules of the New York Stock Exchange, shareholder approval is required. In the event that shareholder approval is not given, the debentures owned by such funds will not be convertible. The Company intends to seek such shareholder approval. The sales of the debentures were made in reliance upon the exemption from the registration provisions of the Securities Act of 1933, as amended, afforded by Section 4(2) thereof and/or Regulation D promulgated thereunder, as a transaction by an issuer not involving a public offering. To the best of the Company's knowledge, the purchasers of the debentures acquired them for their own accounts, and not with a view to any distribution thereof.

13. LONG-TERM INCENTIVE PLAN

In May 1999, the Company's shareholders approved the 1999 Incentive Compensation Plan ("the Plan"). The Plan allows for a maximum of 1,500,000 shares of common stock to be available with respect to the grant of awards under the Plan, plus the number of shares remaining available under pre-existing plans. The Plan allows for the award of incentive and non-incentive options to employees and non-incentive options to non-employee members of the Company's Board of Directors ("BOD"). The Plan allows for a committee, designated by the BOD, to determine the time and circumstances under which an employee option may be exercised. The terms of all previously granted options remained. All options granted under the plan have a term of ten years.

In December 1998, the Company offered option holders who were current employees of the Company the opportunity to exchange certain of their existing options for new options. As a result, options to purchase shares of Common Stock were granted with the following terms: (a) fifty percent of such new stock options were granted with an exercise price of $2.125 and shall vest in equal installments over three years; and (b) the remaining fifty percent of such new stock options were granted with the same exercise price; all of such stock options shall vest in their entirety on December 15, 2003; provided, however, that such options shall vest earlier upon the attainment of certain Company performance criteria related to earnings per share. All other options issued to employees, other than the Company's current and former Chief Executive Officer ("CEO") and another officer, vest over a three year period. Certain options issued to the current and former CEO and the other officer vest one third at issuance, with the remaining two thirds vesting over two years.

Transactions involving stock options are summarized as follows:

	Stock Options	Range of Option
	Outstanding	Price per Share
Balance, January 1, 1997	1,340,313	$4.875 - $16.125
Granted	1,767,498	$4.250 - $ 5.875
Exercised	(22,220)	$ 4.875
Canceled	(627,168)	$9.000 - $12.750
Balance, December 31, 1997	2,458,423	$4.250 - $16.125
Granted	2,227,070	$2.000 - $ 4.000
Canceled	(1,920,189)	$3.938 - $ 5.875
Balance, December 31, 1998	2,765,304	$2.000 - $16.125
Granted	1,161,012	$0.750 - $ 2.000
Exercised	(4,500)	$ 1.625
Canceled	(1,521,892)	$1.625 - $ 5.375
Balance at December 31, 1999	2,399,924	$0.750 - $16.125

The following table summarizes information concerning currently outstanding and exercisable stock options:

Exercise Price	Outstanding at December 31, 1999	Weighted Average Contractual Life	Exercisable at December 31, 1999
$ 4.88	44,669	0.57 years	44,669
5.63	26,664	0.73 years	26,664
9.38	6,666	1.16 years	6,666
16.13	23,331	1.60 years	23,331
12.75	3,333	1.74 years	3,333
5.88	6,667	2.21 years	4,400
4.50	23,331	2.62 years	23,331
5.38	24,000	7.94 years	15,840
3.75	30,000	8.29 years	30,000
3.94	2,000	8.49 years	660
2.50	30,000	8.71 years	30,000
2.00	395,000	8.96 years	134,310
2.13	722,263	9.08 years	197,332
1.94	300,000	9.58 years	99,000
1.63	243,500	9.69 years	185,500
1.38	30,000	9.72 years	30,000
0.75	488,500	9.97 years
	2,399,924		855,036

If the Company had elected to recognize compensation expense based upon the fair values at the grant date for awards under this plan consistent with the methodology prescribed by SFAS No. 123, "Accounting for Stock Based Compensation", the Company's net loss and net loss per share would be reduced to the pro forma amounts indicated below:

	1999	1998	1997
Net loss (in thousands):
As reported	$(29,784)	$(4,447)	$(760)
Pro forma	(31,293)	(6,401)	(2,866)
Net loss per common share:
As reported	$(.93)	$(.14)	$(.02)
Pro forma	(.98)	(.20)	(.09)

These pro forma amounts may not be representative of future disclosures since the estimated fair value of stock options is amortized to expense over the vesting period for purposes of future pro forma disclosures, and additional options may be granted in future years. The fair value of these options was estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions for 1999, 1998 and 1997: dividend yield of 0; expected volatility of 50% and expected life of 4-5 years in 1999 and 1998 and 4 years in 1997. The weighted average risk free interest rates for 1999, 1998 and 1997 were 5.96%, 4.20%, and 6.19%, respectively. The weighted average fair values of options granted during 1999, 1998 and 1997, for which the exercise price equaled the market price on the grant dates, were $1.31, $2.07 and $5.25 per option, respectively.

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including expected price volatility. Because the Company's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of employee stock options.

14. INCOME TAXES

The provision (benefit) for income taxes consists of the following (in thousands):

	1999	1998	1997
Current:
Federal and State	$ 45	$(65)	$(607)
Foreign		142	1,036
	45	77	429
Deferred:
Federal and State	(4,865)	(1,777)	(647)
Foreign	(503)	79
Valuation reserve	18,272
	12,904	(1,698)	(647)
Total provision (benefit)	$12,949	$(1,621)	$ (218)

The effective income tax rate differed from the Federal statutory rate as follows (in thousands):

	1999		1998		1997
	Amount	%	Amount	%	Amount	%
Federal income tax benefit
at statutory rate	$(5,724)	(34.0)	$(2,063)	(34.0)	$(333)	(34.0)
State income taxes, net
of federal tax benefit	30	0.2	16	0.3	3	0.3
Permanent differences	45	0.3	44	0.7	35	3.6
Foreign income tax provision			406	6.7
International rate differences	36	0.2	(130)	(2.1)	169	17.2
Effect of valuation allowance of
deferred tax assets	18,272	108.5
Other, net	290	1.7	106	1.7	(92)	(9.4)
	$12,949	76.9	$(1,621)	(26.7)	$(218)	(22.3)

The components of the Company's deferred tax assets and deferred tax liabilities are presented in the tables below.

	December 31,
	1999	1998
Post-reorganization net operating loss carryforward	$ 6,427	$5,094
Pre-reorganization net operating loss carryforward	4,631	4,631
Pre-reorganization deductible temporary differences	3,067	3,067
Other	4,508	1,691
Total deferred tax assets	18,633	14,483
Pre-reorganization taxable temporary differences	83	83
Software development costs		1,331
Other	213
Total deferred tax liabilities	296	1,414
Deferred tax valuation allowance	18,272	______
Net deferred tax asset	$ 65	$13,069

At December 31, 1999, the Company had net operating loss carryforwards ("NOLs") of approximately $30.9 million expiring between the years 2000 through 2019. In connection with the Company's emergence in 1991 from its reorganization under Chapter 11 of the U.S. Bankruptcy Code, the benefit of the Company's pre-reorganization NOLs were not reflected in net income, but rather recorded as an increase to paid-in capital. In addition, such NOLs ($13.6 million) are subject to annual limitations under U.S. income tax rules as a result of the changes in control of the Company.

In the second quarter of 1999, the Company established a full valuation allowance of $14.1 million against its net deferred tax assets. The Company's net deferred tax assets include substantial amounts of net operating loss carryforwards. Inability to generate taxable income within the carryforward period would affect the ultimate realization of such assets. Consequently, management determined that sufficient uncertainty exists regarding the realization of these assets to warrant the establishment of the allowance.

15. BENEFIT PLANS

Chyron Corporation has a domestic defined benefit pension plan (the "U.S. Pension Plan") covering substantially all U.S. employees meeting minimum eligibility requirements. Benefits paid to retirees are based upon age at retirement, years of credited service and average compensation. Pension expense is actuarially determined using the projected unit credit method. The Company's policy is to fund the minimum contributions required under the Employee Retirement Income Security Act. The assets of the U.S. Pension Plan at December 31, 1999 include government bonds, equities, mutual funds and cash and cash equivalents.

Effective July 1, 1998, the Company amended its defined benefit plan for its U.S. operations. The amendment included a change in the determination of average annual compensation for the calculation of the defined pension benefit. In addition, the vesting period has decreased from 6 to 5 years of service.

Benefit plan information for the U.S. Pension Plan is as follows (in thousands):

	1999	1998
Reconciliation of benefit obligation
Obligation at January 1	$4,183	$4,502
Service cost	524	425
Interest cost	164	285
Plan amendments		(283)
Actuarial (gain) loss	(1,721)	(42)
Benefit payments	(1,509)	(704)
Obligation at December 31	$1,641	$4,183
Reconciliation of fair value of plan assets
Fair value of plan assets at January 1	$2,803	$2,895
Actual return on plan assets	280	301
Employer contributions	338	311
Benefit payments	(1,509)	(704)
Fair value of plan assets at December 31	$1,912	$2,803
Funded Status
Funded status at December 31	$ 271	$(1,380)
Unrecognized prior-service cost	(478)	(512)
Unrecognized (gain) loss	(1,975)	(261)
Net amount recognized	$(2,182)	$(2,153)

	1999	1998	1997
Components of net periodic pension cost
Service cost	$ 523	$ 424	$ 444
Interest cost	164	285	294
Expected return on plan assets	(216)	(248)	(277)
Amortization of prior service cost	(34)	(26)	(18)
Amortization of net (gain) loss	(69)	(11)	21
Net periodic benefit cost	$ 368	$ 424	$ 464
Weighted-average assumptions as of
December 31
Discount rate	8.0%	7.0%	7.5%
Expected return on plan assets	9.0%	9.0%	9.0%
Rate of compensation increase	5.0%	5.0%	5.0%

Pro-Bel has a non-contributory defined benefit pension plan (the "U.K. Pension Plan") covering all its permanent employees. Contributions are determined on the basis of valuations using the projected unit method. Pro-Bel's policy is to fund minimum contributions required pursuant to U.K. rules and regulations. The assets of the U.K. Pension Plan at December 31, 1999 and 1998 include cash equivalents and land and a building.

Benefit plan information for the U.K. Pension Plan is as follows (in thousands):

	1999	1998
Reconciliation of benefit obligation
Obligation at January 1	$8,884	$7,505
Service cost	739	706
Interest cost	531	576
Plan amendments		730
Actuarial (gain) loss	1,220	(610)
Benefit payments	(53)	(23)
Obligation at December 31	$11,321	$8,884
Reconciliation of fair value of plan assets
Fair value of plan assets at January 1	$10,547	$9,588
Actual return on plan assets	779	190
Employer contributions	783	792
Benefit payments	(53)	(23)
Fair value of plan assets at December 31	$12,056	$10,547
Funded status
Funded status at December 31	$ 735	$1,663
Unrecognized prior-service cost	2,367	683
Unrecognized loss	633	1,170
Net amount recognized	$3,735	$3,516

	1999	1998	1997
Components of net periodic pension cost
Service cost	$ 739	$ 706	$ 548
Interest cost	531	576	446
Expected return on plan assets	(763)	(799)	(420)
Amortization of prior service cost	48	49
Amortization of net (gain) loss	8	15	(224)
Net periodic pension cost	$ 563	$ 547	$ 350
Weighted-average assumptions as of December 31
Discount rate	6.0%	6.0%	7.0%
Expected return on plan assets	7.0%	7.0%	8.0%
Rate of compensation increase	4.0%	4.0%	5.0%

The Company has adopted a 401(k) Plan exclusively for the benefit of participants and their beneficiaries. All U.S. employees of Chyron Corporation are eligible to participate in the 401(k) Plan. Effective July 1, 1998, the Company amended its 401(k) Plan by increasing the matching contribution of the Company to 20% and changing its matching contributions from cash to Company common stock and the vesting period for the matching contribution to three years. An employee may elect to contribute a percentage of his or her current compensation to the 401(k) Plan, subject to a maximum of 20% of compensation or the Internal Revenue Service annual contribution limit ($10,000 in 1999 and 1998), whichever is less. Total compensation that can be considered for contribution purposes is limited to $160,000.

Chyron Corporation can elect to make a contribution to the 401(k) Plan on behalf of those participants who have made salary deferral contributions. During 1999, 1998 and 1997, the Company contributed $104,000, $97,000 and $63,000, respectively, to the 401(k) Plan.

16. COMMITMENTS AND CONTINGENCIES

At December 31, 1999, the Company was obligated under operating and capital leases covering facility space and equipment as follows (in thousands):

	Operating	Capital
2000	1,382	633
2001	1,159	308
2002	1,118	123
2003	835	109
2004	631	72
2005 and thereafter	5,147

The operating leases contain provisions for escalations and for maintenance and real estate taxes. Total rent expense was $1,259,000, $1,125,000 and $965,000 for 1999, 1998 and 1997, respectively. The cumulative imputed interest in the capital lease obligation was $83,000 at December 31, 1999.

The Company from time to time is involved in routine legal matters incidental to its business. In the opinion of management, the ultimate resolution of such matters will not have a material adverse effect on the Company's financial position, results of operations or liquidity.

17. RELATED PARTY TRANSACTIONS

The secretary of the Company, a non-executive position, and an individual who held a board seat through May 1997 are affiliated with a law firm that rendered various legal services to the Company for which the Company incurred costs of $495,000, $248,000 and $783,000 during 1999, 1998 and 1997, respectively.

18. NYSE CONTINUED LISTING STATUS

In August 1999, the Company received a notice from the New York Stock Exchange ("NYSE") indicating that it did not currently meet the new continued listing standards issued in late July 1999. The new criteria revised and raised the minimum requirement of stockholders' equity to $50 million from $12 million of net tangible assets and global market capitalization to $50 million from $12 million. Companies below these levels must submit a business plan to the NYSE demonstrating how the Company anticipates meeting the new standards within an eighteen month period. The Company submitted its plan to the NYSE and received approval on December 28, 1999. The Company will be working closely with the NYSE over the next eighteen months as the exchange monitors the Company's compliance with the plan on a quarterly basis.

19. SEGMENT INFORMATION

In 1998, the Company adopted SFAS 131. Prior period segment information has been restated to conform to the requirements of this statement. Chyron's businesses are organized, managed and internally reported as two segments. The segments, which are based on differences in products and technologies, are Graphics Products and Media Management Systems.

The accounting policies of the segments are the same as those described in the "Summary of Significant Accounting Policies." The Company is an integrated organization characterized by interdivisional cooperation, cost allocations and inventory transfers. Therefore, management does not represent that these segments, if operated independently, would report the financial information shown below.

Business Segment Information

(In thousands)

		Media
	Graphics*	Management
Net sales
1999	$28,054	$32,655
1998	38,447	45,263
1997	40,716	46,058
Operating (loss) income
1999	$(13,415)	$(2,689)
1998	(4,165)	(1,311)
1997	(2,884)	3,148
Identifiable assets
1999	$24,535	$33,846
1998	44,481	38,635
1997	49,500	44,580
Depreciation and amortization
1999	$2,481	$3,075
1998	2,548	2,171
1997	2,193	1,944

Geographic Areas

(In thousands)

	United States*	Europe	Other
Net sales
1999	$33,955	$24,110	$2,644
1998	45,954	33,640	4,116
1997	35,901	40,745	10,128
Operating (loss) income
1999	$(12,206)	$(3,439)	$ (459)
1998	(4,055)	(1,187)	(234)
1997	(2,817)	3,157	(76)
Identifiable assets
1999	$26,231	$32,090	$ 60
1998	48,512	34,539	65
1997	51,160	42,860	60

* Operating income includes non-recurring charges in 1999, 1998 and 1997 of $6,681, $3,979 and $3,082, respectively.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

PART III

In connection with the Annual Meeting of Shareholders of the Company, the Company intends to furnish Shareholders with proxy material which sets forth the information required by Items 10, 11, 12 and 13 of this Part III. Copies of such material will be duly filed with the U.S. Securities and Exchange Commission pursuant to Rule 14a-(6)/(c) promulgated under the Securities Exchange Act of 1934, as amended, not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND

REPORTS ON FORM 8-K

(a) (1) Financial Statements

See index to Consolidated Financial Statements on page 21.

(2) Financial Statement Schedules

The following Consolidated Financial Statement schedule of Chyron Corporation and subsidiaries is included in Item 14(d) found on page 52:

Schedule II - Valuation and Qualifying Accounts for the Years Ended December 31, 1999, 1998 and 1997.

All other schedules called for under Regulation S-X are not submitted because they are not applicable or not required or because the required information is not material or is included in the Consolidated Financial Statements or notes thereto.

(3) Financial Statement Exhibits

See list of exhibits to the Financial Statements in Section (c) below:

(b) Reports on Form 8-K

None

	Note
(c) Exhibits
3. Articles of Incorporation and By-Laws.
(a) Restated Certificate of Incorporation of Chyron Corporation	(1)
(b) Amended and Restated By-Laws of Chyron Corporation,
adopted October 28, 1998	(8)
(c) Amendment of Certificate of Incorporation of Chyron Corporation,
adopted January 24, 1997	(5)
4. Instruments defining rights of security holders, including debentures
(a) Registration Rights Agreement dated July 25, 1995 by and between
Chyron Corporation and CC Acquisition Company A, L.L.C., CC
Acquisition Company B, L.L.C., WPG Corporate Development Associates,
IV, L.P., WPG Corporate Development Associates IV (Overseas), L.P.,
WPG Enterprise Fund II, L.P., Weiss, Peck & Greer Venture Associates, III,
L.P., Westpool Investment Trust PLC, Lion Investment Limited, Charles
Diker, Mint House Nominees Limited, Pine Street Ventures, L.L.C., Isaac
Hersly, Alan I. Annex, Ilan Kaufthal, Z Four Partners L.L.C. and A.J.L.
Beare	(4)
(b) Form of 8% Subordinated Convertible Debenture Due
December 31, 2003	(8)
(c) Form of Subscription Agreement and Investment Representation for the
purchase of the 8% Subordinated Convertible Debenture Due
December 31, 2003	(8)
(d) Form of 8% Series B Subordinated Convertible Debenture Due
December 31, 2003	(9)
(e) Form of Subscription Agreement and Investment Representation for the
purchase of the Series B Subordinated Convertible Debenture Due
December 31, 2003	(9)

10. Material Contracts.
(a) Loan Agreement between Pro-Bel Limited and Barclays Bank, PLC
dated December 19, 1996 effective January 1997	(5)
(b) Indemnification Agreement between Chyron Corporation and
Charles M. Diker dated November 19, 1996	(5)
(c) Indemnification Agreement between Chyron Corporation and
Donald P. Greenberg dated November 19, 1996	(5)
(d) Indemnification Agreement between Chyron Corporation and
Roger Henderson dated November 19, 1996	(5)
(e) Indemnification Agreement between Chyron Corporation and
Alan J. Hirschfield dated November 19, 1996	(5)
(f) Indemnification Agreement between Chyron Corporation and
Wesley W. Lang, Jr. dated November 19, 1996	(5)
(g) Indemnification Agreement between Chyron Corporation and
Eugene M. Weber dated November 19, 1996	(5)
(h) Indemnification Agreement between Chyron Corporation and
Michael Wellesley-Wesley dated November 19, 1996	(5)
(i) Loan Agreement between Chyron Corporation and AmSouth Bank
dated March 29, 1999	(9)
(j) Employment Agreement between Chyron Corporation and
Roger Henderson dated June 10, 1999	(9)
23. Consents and experts of counsel.
(a) Consent of PricewaterhouseCoopers dated March 9, 2000	(9)

(1) Incorporated herein in its entirety by reference to the Annual Report for the Fiscal Year ended June 30, 1991 on Form 10-K dated January 31, 1992.

(2) Incorporated herein in its entirety by reference to the report on Form 8-K dated December 27, 1991.

(3) Incorporated herein in its entirety by reference to the Annual Report for the fiscal year ended December 31, 1994 on Form 10-K dated March 24, 1995.

(4) Incorporated herein in its entirety by reference to the Annual Report for the fiscal year ended December 31, 1995 on Form 10-K dated March 14, 1996.

(5) Incorporated herein in its entirety by reference to the Annual Report for the fiscal year ended December 31, 1996 on Form 10-K dated March 20, 1997.

(6) Incorporated herein in its entirety by reference to the Form 10-Q for the quarter ended June 30, 1997 dated August 12, 1997

(7) Incorporated herein in its entirety by reference to the Annual Report for the fiscal year ended December 31, 1997 on Form 10-K dated March 16, 1998.

(8) Incorporated herein in this Annual Report for the fiscal year ended December 31, 1998 on Form 10-K dated March 30, 1999.

(9) Incorporated herein in this Annual Report for the fiscal year ended December 31, 1999 on Form 10-K dated March 9, 2000.

d) Financial Statement Schedules

Schedule II

CHYRON CORPORATION AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS

(In thousands)

Column A	Column B	Column C	Column D	Column E
	Balance at	Charged to		Balance at
	Beginning	Costs and		End of
Description	of Period	Expenses	Deductions	Period
Reserves and allowances deducted from
asset accounts:
YEAR ENDED DECEMBER 31, 1999
Allowance for doubtful accounts	$ 3,881	$ 400	$ 957	$ 3,324
Inventory reserves	10,066	4,177	783	13,460
Deferred tax valuation allowance	0	18,272	0	18,272
YEAR ENDED DECEMBER 31, 1998
Allowance for doubtful accounts	3,124	1,176	419	3,881
Inventory reserves	8,162	2,996	1,092	10,066
YEAR ENDED DECEMBER 31, 1997
Allowance for doubtful accounts	2,850	533	259	3,124
Inventory reserves	12,041	1,887	5,766	8,162

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CHYRON CORPORATION

/s/ Roger Henderson

Roger Henderson

President and

Chief Executive Officer

Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below on March 9, 2000, by the following persons on behalf of the registrant and in the capacities on the date indicated.

/s/ Michael Wellesley-Wesley	Chairman of the Board of Directors
Michael Wellesley-Wesley
/s/ Charles Diker	Director
Charles Diker
/s/ Joseph Flaherty	Director
Joseph Flaherty
/s/ Donald Greenberg	Director
Donald Greenberg
/s/ Roger Henderson	President, CEO and Director
Roger Henderson
/s/ Alan Hirschfield	Director
Alan Hirschfield
/s/ Dawn Johnston	Chief Financial Officer
Dawn Johnston
/s/ Christopher Kelly	Director
Christopher Kelly
/s/ Wesley Lang	Director
Wesley Lang
/s/ Eugene Weber	Director
Eugene Weber

EX-27

 

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the December 31, 1999 company's consolidated financial
statements and is qualified in its entirety by reference to such
financial statements.

<MULTIPLIER> 1,000

                             
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          DEC-31-1999
<PERIOD-END>                               DEC-31-1999
<CASH>                                           5,453
<SECURITIES>                                         0
<RECEIVABLES>                                   15,075
<ALLOWANCES>                                     3,324
<INVENTORY>                                     13,766
<CURRENT-ASSETS>                                32,008
<PP&E>                                          28,123
<DEPRECIATION>                                  17,540
<TOTAL-ASSETS>                                  58,381
<CURRENT-LIABILITIES>                           14,247
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                           321
<OTHER-SE>                                      22,191
<TOTAL-LIABILITY-AND-EQUITY>                    58,381
<SALES>                                         60,709
<TOTAL-REVENUES>                                60,709
<CGS>                                           34,651
<TOTAL-COSTS>                                   34,651
<OTHER-EXPENSES>                                42,162
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                               1,272
<INCOME-PRETAX>                               (16,835)
<INCOME-TAX>                                    12,949
<INCOME-CONTINUING>                           (29,784)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                  (29,784)
<EPS-BASIC>                                       (93)
<EPS-DILUTED>                                     (93)


 

EX-4

SERIES B 8% SUBORDINATED CONVERTIBLE DEBENTURE

DUE DECEMBER 31, 2003

CHYRON CORPORATION

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE AACT@), AND ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AS SET FORTH IN THIS CERTIFICATE. THE SECURITIES REPRESENTED HEREBY MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL, REASONABLY T THAT THE PROPOSED SALE, TRANSFER, OR DISPOSITION MAY BE EFFECTUATED WITHOUT REGISTRATION UNDER THE ACT.

Melville, New York

$___________

No. _________ _____________, 1999

FOR VALUE RECEIVED, the undersigned, CHYRON CORPORATION, a New York corporation (the ACompany@), hereby promises to pay to ______________ ____________________or its permitted assigns (the AHolder@) the principal sum of ______________________________________Dollars ($____________), together with interest thereon at the rate provided herein, and payable on the terms set forth below. This Debenture is one of an issue of Debentures of the Company designated as its 8% Subordinated Convertible Debentures, Issued Commencing July 26, 1999, Due December 31, 2003 (the ADebentures@).

SECTION 1. INTEREST; PAYMENT OF INTEREST AND PRINCIPAL.

1.1 Interest. This Debenture shall bear interest on the outstanding principal amount from the date hereof (the AIssue Date@), until this Debenture is converted, exchanged, redeemed or paid in full, at an annual rate of 8% (computed on the basis of a 365-day year) (the AInterest Rate@). Interest on this Debenture shall be payable quarterly or the first day of each April, July, October, and January commencing October 1, 1999, or upon conversion, redemption or at maturity of this Debenture, whichever occurs first. Until July 15, 2001, at the Company's sole option, all interest payable hereunder, either in whole or in part, may be satisfied by increasing the amount of principal owed hereunder to include the interest that is payable.

1.2 Principal. The principal on this Debenture shall be paid upon maturity of this Debenture, unless it has been converted, or redeemed in accordance with its terms prior thereto.

1.3 Maturity. All principal and unpaid interest on this Debenture shall be due on December 31, 2003 (the AMaturity Date@).

1.4 Manner of Payment. All payments of principal and interest shall be made in lawful money of the United States of America at the time of any such payment either by wire transfer to the account designated by the Holder for such purpose or by check mailed to the Holder at the address shown in the register maintained by the Company for such purpose, at the option of the Holder.

1.5 Subordination.

(a) Upon any distribution of assets of the Company in connection with any dissolution, winding-up or liquidation of the Company (whether or not in bankruptcy, insolvency or receivership proceedings or upon an assignment for the benefit of creditors) or any other marshaling of the assets and liabilities of the Company or upon the reorganization of the Company, the holders of Senior Indebtedness (as hereinafter defined) shall first be entitled to receive payment in full in money or money=s worth, in accordance with the terms of such Senior Indebtedness, of all sums due in respect thereto, before the Holder shall be entitled to receive from the Company any payment hereunder and, upon such dissolution, winding-up, liquidation, marshaling of assets or reorganization, any payment from the Company to which the Holder would otherwise be entitled, except for the provisions hereof, shall be made by the person making such payment or distribution, whether an officer of the Company, an assignee, a trustee in bankruptcy, debtor in possession, a receiver or liquidating trustee or otherwise (which person is hereby directed to make payment) to the holders of Senior Indebtedness to the extent necessary to pay in full in money or money=s worth all Senior Indebtedness remaining unpaid after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness, and to the full extent necessary for that purpose, the Holder hereby assigns to the holders of Senior Indebtedness all of the Holder=s rights to any payments or distributions to which the Holder otherwise would be entitled from the Company.

(b) For purposes of this Debenture, the term ASenior Indebtedness@ shall mean Indebtedness (as hereinafter defined) of the Company whether outstanding on the Issue Date of this Debenture or thereafter created, incurred, assumed or guaranteed (including, without limitation, interest that accrues on or after the filing of a petition in bankruptcy or for reorganization, if a claim for post-petition interest is allowed in such proceeding), except for: (i) any Indebtedness outstanding after the date of this Debenture as to which, by the express terms of the instrument creating or evidencing the same, it is provided that such Indebtedness is not senior or superior in right of payment to the Debentures, (ii) the Debentures, (iii) any Indebtedness of the Company owed to any Subsidiary or to any Affiliate of the Company, (iv) Indebtedness incurred in connection with the purchase of goods, assets, materials or services in the ordinary course of business or representing amounts recorded as accounts payable, trade payables or other current liabilities on the books of the Company (other than the current portion of any long-term Indebtedness of the Company that but for this clause (iv) would constitute Senior Indebtedness), and (v) any Indebtedness of or amount owed by the Company to employees for services rendered to the Company.

(c) AIndebtedness@ is defined as, with respect to any person, any of the following (without duplication): (i) the principal of, premium, if any, and interest on and all other amounts owing with respect to any indebtedness (including any such indebtedness representing any deferred payment obligation for the payment of the purchase price of property or assets) of such person for money borrowed or evidenced by bonds, indentures, debentures or similar obligations, including any guaranty by such person of any indebtedness for money borrowed of any other person, whether any such indebtedness or guaranty is outstanding on the date of this Debenture or is thereafter created, assumed or incurred, (ii) the principal of, premium, if any, and interest on and all other amounts owing with respect to any indebtedness for money borrowed, incurred, assumed or guaranteed by such person in connection with the acquisition by it or any of its subsidiaries of any other businesses, properties or other assets, (iii) lease obligations which such person capitalizes in accordance with generally accepted accounting principles and (iv) any amounts payable by such person under or in respect of any interest rate exchange agreement, interest rate swap agreement or other similar agreement entered into in respect of all or any portion of the above.

(d) ASubsidiary@ or ASubsidiaries@ shall mean any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership interest and in which such ownership interest entitles the Company to elect a majority of the Board of Directors or similar governing body.

(e) AAffiliate@ shall have the meaning set forth in Rule 144 promulgated under the Securities Act of 1933, as amended.

(f) Moreover, should it become necessary in any bankruptcy or other proceedings or in connection with any assignment for the benefit of the Company=s creditors or the execution by the Company of any other creditor=s agreement, or the dissolution of or the winding up of the Company=s business, for the Holder to file one or more claims against the Company on account of or arising hereunder, the Holder will file such claim or claims and will assign to the holders of Senior Indebtedness the Holder=s rights thereunder. If for any reason the Holder does not file such claim or claims, any holder of Senior Indebtedness shall have the right as the Holder=s agent and attorney-in-fact, to sign and file such proof of claim in the Holder=s name, or in the discretion of such holder of Senior Indebtedness, to assign the claim to and to file proof thereof in the name of the holders of Senior Indebtedness or their nominee.

(g) If, notwithstanding anything herein to the contrary, upon any such dissolution, winding-up, liquidation, marshaling of assets or reorganization, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or security shall be received by the Holder before all Senior Indebtedness is paid in full in money or money=s worth, such payment or distribution shall be held in trust by the Holder and, immediately upon notice to such effect from any holder of Senior Indebtedness, turned over by the Holder for payment on all Senior Indebtedness remaining until all such Senior Indebtedness shall have been paid in full in money or money=s worth, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness.

(h) Neither the payments or distributions to the holders of Senior Indebtedness to which the Holder would be entitled except for the provisions hereof, nor the payment to the holders of Senior Indebtedness from the Holder pursuant to the provisions hereof, shall be deemed, as between the Company, its creditors (other than the holders of Senior Indebtedness) and the Holder, a payment by the Company to or on account of the Holder; it being understood that the provisions hereof are intended solely for the purposes of defining relative rights of the Holder on the one hand, and the holders of Senior Indebtedness on the other hand; and, except as otherwise expressly set forth herein, nothing contained herein is intended to or shall abrogate the obligations of the Company to pay the Holder or to affect the relative rights of the Holder and the creditors of the Company other than the holders of Senior Indebtedness.

(i) Until there shall occur a default under Senior Indebtedness (which shall include the occurrence of any event or existence of any circumstances as a result of which any amount is due and payable under any guarantee thereof), the Holder shall be entitled to receive and retain any payment of principal or interest made by the Company in respect of its obligations under this Debenture. In the event of and during the continuance of any such default, no payment of the principal of or interest on the Debenture shall be made by the Company or, to the extent made by the Company, retained by Holder. Specifically, except with the written consent of the holder or holders of all of the then-outstanding principal amount of Senior Indebtedness, the Holder may take no action against the Company to enforce payment of this Debenture (i) unless and until the holders of Senior Indebtedness shall have received payment in full of all principal and interest on such Senior Indebtedness, and/or (ii) for so long as there is any obligation, absolute or contingent, under any guarantee of such Senior Indebtedness; provided, however, that nothing herein shall be deemed to affect the time at which an event of default occurs under the terms of the documents evidencing Senior Indebtedness.

(j) The Holder shall have no right of subrogation until such Senior Indebtedness has been paid in full. The subordination shall be effective notwithstanding the presence or absence of security granted to the holder of Senior Indebtedness with respect to its enforcement of any rights against the Company or against any security, or the intentional or unintentional release, waiver or compromise of any such claim.

1.6 Priority. The Debentures shall be equal to, or pari passu with, $1,292,000 aggregate principal amount of 8% subordinated convertible debentures issued by the Company commencing December 31, 1998, with respect to any distribution of assets of the Company in connection with any dissolution, winding-up or liquidation of the Company.

SECTION 2. EVENTS OF DEFAULT

2.1 Nature of Events. An AEvent of Default@ shall exist if any of the following occurs and is continuing:

(a) Failure to pay interest on this Debenture on or before the date such payment is due and such failure to pay remains uncured for a period of 10 days after such date (whether or not such payment is prohibited by Section 1.5);

(b) Failure to pay principal on this Debenture on or before the date such payment is due (whether or not such payment is prohibited by Section 1.5);

(c) Failure to perform or observe any other covenant or agreement of the Company contained in this Debenture which remains uncured for the period and after the notice specified below and the holders of more than 50% in principal amount of the Debentures then outstanding notify the Company of the default and the Company does not cure the default within 45 days after receipt of the notice, which notice must specify the default, demand that it be remedied and state that the notice is a ANotice of Default;@

(d) A custodian, receiver, liquidator or trustee of the Company, or of any of its property, is appointed or takes possession and such appointment or possession remains in effect for more than 60 days; or the Company is adjudicated bankrupt or insolvent; or an order for relief is entered under the Federal Bankruptcy Code against the Company; or any of the property of the Company is sequestered by court order and the order remains in effect for more than 60 days; or an involuntary petition is filed against the Company under any bankruptcy, reorganization, arrangement, insolvency, readjustment of indebtedness, dissolution or liquidation law of any jurisdiction, whether now or hereafter in effect, and is not dismissed within 60 days after filing;

(e) The Company files a petition in voluntary bankruptcy or seeking relief under any provision of any bankruptcy, reorganization, arrangement, insolvency, readjustment of indebtedness, dissolution or liquidation law of any jurisdiction, whether now or hereafter in effect, or consents to the filing of any petition against it under any such law; or

(f) The Company makes an assignment for the benefit of its creditors, or generally fails to pay its obligations as they become due, or consents to the appointment of or taking possession by a custodian, receiver, liquidator or trustee of the Company or all or any substantial part of its property; or

2.2 Default Remedies.

(a) In case an Event of Default (other than an Event of Default described in paragraphs (d), (e) and (f)) has occurred and is continuing, the holders of Debentures, by notice to the Company from the holders of more than 50% of the principal amount of the Debentures then outstanding, may declare the principal of the Debentures, plus accrued interest, to be immediately due and payable, and upon any such declaration such principal and accrued interest shall become due and payable immediately. In case an Event of Default described in paragraphs (d), (e) and (f) occurs, such amounts will become due and payable without any declaration or any act on the part of the holders of the Debentures. Such declaration of acceleration may be rescinded and past defaults may be waived by the holders of at least 50% of the principal amount of the Debentures then outstanding as provided herein.

(b) No course of dealing or delay or failure on the part of the Holder to exercise any right under this Section 2.2 shall operate as a waiver of such right or otherwise prejudice such Holder= s rights, powers and remedies. The Company will pay or reimburse the Holder, to the extent permitted by law, for all costs and expenses, including but not limited to reasonable attorneys= fees, incurred by it in collecting any sums due on this Debenture or in otherwise enforcing any of its rights.

(c) The holders of more than 50% in principal amount of the outstanding Debentures may on behalf of the holders of all Debentures waive certain past defaults, except a default in payment of principal of or interest on any Debenture, or in respect of certain provisions of the Debentures which cannot be modified or amended without the consent of the holder of each outstanding Debenture affected thereby in accordance with Section 5.5.

SECTION 3. CONVERSION

3.1 Conversion Privilege. Subject to and upon compliance with the provisions of this Section 3, at the option of the Holder, this Debenture or any portion of the principal amount thereof, may, at any time and from time to time, be converted into fully paid and nonassessable whole shares of Common Stock of the Company, at the Conversion Price (as defined herein) in effect at the date of such conversion.

3.2 Manner of Exercise of Conversion Privilege. To exercise the conversion privilege, the Holder shall surrender this Debenture, together with a written conversion notice, in the form attached hereto, to the Company at its principal office. This Debenture or portion thereof shall be deemed to have been converted immediately prior to the close of business on the date of receipt of such Debenture and notice by the Company, even if the Company=s stock transfer books are on that date closed, and the Holder, or the nominee or nominees of such Holder, shall be treated for all purposes as the record holder of the shares of Common Stock deliverable upon such conversion as of the close of business on such date. Promptly after receipt by the Company of this Debenture and proper notice, the Company shall issue and deliver, at its expense, to the Holder, or to the nominee or nominees of such Holder, a certificate or certificates for the number of shares of its Common Stock due on such conversion. Interest shall accrue on the unpaid principal amount of this Debenture converted to the date of conversion, and the Company shall pay such interest at the time of conversion; provided, however, that in the case of a conversion of only a portion of the outstanding principal amount of this Debenture, the Company shall execute and deliver to the Holder (or its nominee or nominees), at the expense of the Company, a replacement Debenture in a principal amount equal to and in exchange for the unconverted portion of such Debenture and dated and bearing interest from the date to which interest has been paid on such Debenture or dated the date of such Debenture if no interest has been paid thereon.

3.3 Fractional Shares. No fractional shares of Common Stock shall be issued, at any time, upon conversion of this Debenture. Instead of any fractional share of Common Stock which would otherwise be issuable upon conversion of this Debenture, the Company shall pay a cash adjustment in respect of such fractional interest (in accordance with the Conversion Price, as defined herein, then in effect). The Holder, by its acceptance thereof, expressly waives any right to receive any fractional share upon conversion of this Debenture.

3.4 Conversion Price. The conversion price (the AConversion Price@) at which Common Stock shall be issuable upon the conversion of this Debenture shall initially be $1.625 (which amount is the closing price of the Common Stock, as such price was reported by the New York Stock Exchange, for the trading day immediately preceding the initial Issue Date) in principal amount of this Debenture for each share of Common Stock; provided, however, that the Conversion Price and the conversion terms shall be subject to adjustment as follows:

(a) In the event the Company should at any time or from time to time after the Issue Date, fix a record date for the effectuation of a forward split or subdivision of the outstanding shares of Common Stock or the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock (hereinafter referred to as ACommon Stock Equivalents@), without payment of any consideration by such holder for the additional shares of Common Stock or the Common Stock Equivalents (including the additional shares of Common Stock issuable upon conversion or exercise thereof), then, as of such record date (or the date of such dividend distribution, split or subdivision if no record date is fixed), the Conversion Price shall be appropriately decreased so that the number of shares of Common Stock issuable on conversion of this Debenture shall be increased in equal proportion to such increase of outstanding shares of Common Stock.

(b) If the number of shares of Common Stock outstanding at any time after the Issue Date is decreased by a combination of the outstanding shares of Common Stock, then following the record date of such combination, the Conversion Price shall be appropriately increased so that the number of shares of Common Stock issuable on conversion of this Debenture shall be decreased in equal proportion to such decrease in outstanding shares of Common Stock.

3.5 Other Distributions. In the event the Company shall declare a distribution payable in securities of other persons, evidences of indebtedness issued by the Company or other persons, assets (excluding cash dividends) or options or rights not referred to in subsection 3.4(a), then, in each such case for the purpose of this Section 3.5, the Holder, upon conversion of this Debenture, shall be entitled to a proportionate share of any such distribution as though it were the holder of the number of shares of Common Stock of the Company into which this Debenture was then convertible as of the record date fixed for the determination of the holders of Common Stock of the Company entitled to receive such distribution.

3.6 Fundamental Change. In the event that the Company shall be a party to (i) any recapitalization or reclassification of the Common Stock (other than a change in par value or as a result of a subdivision or combination of the Common Stock); (ii) any consolidation or merger of the Company with or into another corporation as a result of which holders of Common Stock shall be entitled to receive securities or other property or assets (including cash) with respect to or in exchange for Common Stock (other than a merger which does not result in a reclassification, conversion, exchange or cancellation of the outstanding Common Stock); (iii) any sale or transfer of all or substantially all of the assets of the Company; or (iv) any compulsory share exchange, pursuant to any of which holders of Common Stock shall be entitled to receive other securities, cash or other property (each, a AFundamental Change@), then appropriate provision shall be made so that the holder of each Debenture then outstanding shall have the right thereafter to convert such Debentures only into the kind and amount of the securities, cash or other property that would have been receivable upon such Fundamental Change by a holder of the number of shares of Common Stock issuable upon conversion of such Debenture immediately prior to such Fundamental Change at the Conversion Price (subject to adjustment pursuant to Section 3.4).

3.7 No Impairment. The Company will not, by amendment of its Certificate of Incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Section 3 and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the Holder of this Debenture against impairment.

3.8 Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section 3, the Company, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request at any time of the Holder, furnish or cause to be furnished to such Holder a like certificate setting forth (A) such adjustment and readjustment, (B) the Conversion Price at the time in effect, and (C) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of the then outstanding principal amount of this Debenture.

3.9 Notices of Record Date. In the event of any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, any right to subscribe for, purchase or otherwise acquire any shares of stock or any class of any other securities or property, or to receive any other right, the Company shall mail to the Holder, at least 20 days prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right.

3.10 Reservation of Stock Issuable Upon Conversion. The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the conversion of the aggregate principal amount of the Debentures such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of the then outstanding aggregate principal amount of the Debentures; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of the then outstanding aggregate principal amount of the Debentures, in addition to such other remedies as shall be available to the Holder, the Company will promptly take all reasonable corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes.

3.11 Limitation on Conversion. If under the rules of the New York Stock Exchange with regard to purchasers of convertible instruments who are affiliates of the Company, the Company is unable to issue shares of Common Stock upon all or any part of the conversion of the Debenture, then the Debenture shall not be convertible as to such amount and such amount shall be payable only in cash by the Company at maturity. The Company shall use all reasonable efforts to make the Debenture convertible in full.

SECTION 4. REDEMPTION

4.1 Call Provision. This Debenture may be redeemed by the Company at any time or from time to time commencing one year from the Issue Date, at the Company=s option, in whole or in part, upon written notice to the registered Holder hereof at their last registered address, for the then outstanding principal of this Debenture, plus accrued and unpaid interest to the redemption date provided that the average closing price for the Common Stock as reported by the New York Stock Exchange shall have, for any twenty (20) trading days within a period of thirty (30) consecutive trading days prior to the date on which notice of redemption is given, equaled or exceeded 150 percent of the Conversion Price then in effect. Notice of redemption having been given as provided in Section 4.2, the Debentures to be redeemed, shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the Company shall default in the payment of the redemption price and any accrued but unpaid interest) such Debentures shall cease to bear interest and the Company shall have no further obligation under such Debentures.

4.2 Notice of Redemption. Notice of redemption shall be given, in accordance with Section 5.4 hereof, not less than fifteen (15) nor more than forty-five (45) days prior to the redemption date, to each registered Holder of Debentures to be redeemed, at such Holder=s address in the register maintained by the Company. All notices of redemption shall state: (a) the redemption date, (b) the redemption price, (c) if less than all the outstanding Debentures are to be redeemed, the principal amounts of the Debentures to be redeemed, (d) that on the redemption date the redemption price will become due and payable upon each Debenture (or portion thereof) to be redeemed and that interest thereon will cease to accrue on and after such said date, (e) the Conversion Price, the date on which the right to convert the principal of the Debentures to be redeemed will terminate and the manner in which such Debentures may be surrendered for conversion, and (f) the manner in which the Debentures are to be surrendered for payment of the redemption price.

4.3 Deposit of Redemption Price. On or prior to any redemption date, the Company shall segregate and hold in trust an amount of money sufficient to pay the redemption price of, and accrued but unpaid interest on, all Debentures to be redeemed on that date other than any Debentures called for redemption on that date which have been converted prior to the date of such deposit. If any Debenture called for redemption is converted, any money so segregated and held in trust for redemption of such Debenture(s) shall be discharged from such trust.

4.4 Debentures Redeemed in Part. Any Debenture which is to be redeemed only in part shall be surrendered to the Company at its principal office. In such instance, the Company shall execute and deliver to the Holder (or its nominee(s)), at the expense of the Company, a replacement Debenture in a principal amount equal to and in exchange for the unredeemed portion of such Debenture.

SECTION 5. MISCELLANEOUS

5.1 Successors and Assigns. The terms and conditions of this Debenture shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Debenture, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Debenture, except as expressly provided in this Debenture. This Debenture may not be assigned by the Holder hereof without the written consent of the Company.

5.2 Governing Law. This Debenture shall be governed by, and construed under the laws of the State of New York as applied to agreements entered into and to be performed entirely within New York, without giving effect to the laws of such State governing conflicts of laws.

5.3 Headings. The titles and subtitles used in this Debenture are used for convenience only and are not to be considered in construing or interpreting this Debenture.

5.4 Notices.  All notices, authorizations, demands or requests required or permitted to be delivered to any party in connection with this Debenture shall be in writing and shall be deemed to have been duly given if personally delivered, if sent by facsimile transmission (with receipt confirmed by automatic transmission report), if sent by a nationally-recognized overnight courier with charges prepaid, if sent by registered or certified mail, return receipt requested and postage prepaid (or by the most nearly comparable method if mailed from or to a location outside the United States), addressed as follows:

If to the Company, to:

Chyron Corporation

5 Hub Drive

Melville, New York 11747

Attn: President

Fax: (516) 845-5210

With copies (which copies shall not constitute notice) to:

Camhy Karlinsky & Stein LLP

1740 Broadway

New York, New York 10019

Attn: Robert S. Matlin, Esq.

Fax: 212-977-8389

If to the Holder, to: the address shown in the register maintained by the Company for such purpose; or to such other address as the party to whom the notice is to be given may have furnished to the other party hereto in writing in accordance with the provisions of this Section 5.4. Any such notice or communication shall be deemed to have been received (i) in the case of personal delivery, on the date of such delivery, (ii) in the case of facsimile transmission (with receipt confirmed by automatic transmission report), on the date of such transmission, (iii) in the case of a nationally-recognized overnight courier, on the next business day after the date when delivered to such courier, and (iv) in the case of mailing (or by the most nearly comparable method if mailed from or to a location outside the United States), on the third business day following that on which the piece of mail containing such communication is posted; provided, however, that three additional business days shall be added to the time any notice or communication sent from or to a location outside the United States shall be deemed to have been received in (iii) or (iv) above.

5.5 Amendments and Waivers. Any term of this Debenture may be amended or supplemented and the observance of any term of this Debenture may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and at least a majority in principal amount of the outstanding Debentures; provided, however, that without the consent of each Holder of the Debentures affected, an amendment, waiver or supplement may not (i) extend the final maturity of any Debenture; (ii) reduce the principal amount of any Debenture; (iii) reduce the rate or extend the time of payment of any interest on any Debenture; (iv) impair or affect the right of any Holder of any Debenture to institute suit for the payment or conversion of any Debenture; (v) change the currency for payment of principal of, or interest on, any Debenture; or (vi) materially and adversely affect the right to convert the Debentures in accordance herewith; and further, provided, however, that an amendment, waiver or supplement may not reduce the percentage of Debentures, the consent of the Holders of which is required for any such supplemental indenture or waiver, without the consent of the Holders of all Debentures then outstanding.

5.6 Severability. If one or more provisions of this Debenture are held to be unenforceable under applicable law, such provision shall be excluded from this Debenture and the balance of this Debenture shall be interpreted as if such provision was so excluded and shall be enforceable in accordance with its terms.

5.7 Replacement of Debenture. If the Holder loses this Debenture, the Company shall issue an identical replacement Debenture to the Holder upon the Holder=s delivery to the Company of a customary agreement to indemnify the Company for any losses resulting from issuance of the replacement Debenture.

5.8 Unsecured. This Debenture is an unsecured obligation of the Company.

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IN WITNESS WHEREOF, CHYRON CORPORATION has caused this Debenture to be dated, executed and issued on its behalf by its officer or officers thereto duly authorized.

CHYRON CORPORATION

Attest:

By:_________________________ By:______________________________

Name: Dawn R. Johnston Name: Roger Henderson

Title: Sr. Vice President, Finance Title: President and Chief Executive Officer

FORM OF

NOTICE OF CONVERSION OF

SERIES B 8% SUBORDINATED CONVERTIBLE DEBENTURE

OF CHYRON CORPORATION

Chyron Corporation

5 Hub Drive

Melville, New York 11747

Attention: President

Dear Sir:

I am the Holder of Chyron Corporation Series B 8% Subordinated Convertible Debenture number ____ (the ADebenture@). As of the date hereof, $___________ aggregate principal amount of the Debenture remains unconverted.

I hereby give notice to Chyron Corporation (the ACompany@) of my desire and intent to convert $____________ aggregate principal amount of the Debenture into common stock, par value $.01 per share, of the Company in accordance with the provisions of Section 3 of the Debenture.

Very truly yours,

Date:______________ ________________________

Name:

EX-4

NAME OF SUBSCRIBER: ____________________

To: CHYRON CORPORATION

5 HUB DRIVE

MELVILLE, NEW YORK 11747

CHYRON CORPORATION

SUBSCRIPTION AGREEMENT AND INVESTMENT REPRESENTATION

SECTION 1.

1.1 Subscription. The undersigned, intending to be legally bound, hereby subscribes for and agrees to purchase the amount of Series B 8% Subordinated Convertible Debentures (each a "Debenture") issued by Chyron Corporation, a New York corporation (the "Company"), indicated on page 9 hereof. Each Debenture shall be convertible, subject to the limitations imposed by the Rules of the New York Stock Exchange, at the option of the holder thereof, into shares of common stock, par val

1.2 Purchase of Debentures. The undersigned understands and acknowledges that the purchase price to be remitted to the Company in exchange for the Debentures, if any, shall be one-thousand United Stated Dollars ($1,000) per Debenture. Payment for the Debenture(s) shall be made by certified check or wire transfer in accordance with the instructions of the Company, together with an executed copy of this Agreement and any other required documents.

SECTION 2.

2.1 Acceptance or Rejection.

(a) The undersigned understands and agrees that the Company reserves the right to reject this subscription for the Debenture(s) in whole or part in any order, if, in its reasonable judgment, it deems such action in the best interests of the Company, at any time prior to the applicable Closing (as defined herein), notwithstanding prior receipt by the undersigned of notice of acceptance of the undersigned's subscription.

(b) The undersigned understands and agrees that subscriptions may be revoked provided that written notice of revocation is sent by certified or registered mail, return receipt requested, and is received by the Company at least two business days prior to the applicable Closing.

(c) In the event of rejection of this subscription, or in the event the sale of the Debenture(s) subscribed for by the undersigned is not consummated by the Company for any reason (in which event this Subscription Agreement shall be deemed to be rejected), this Subscription Agreement and any other agreement entered into between the undersigned and the Company relating to this subscription shall thereafter have no force or effect and the Company shall promptly return or cause to be returned to the undersigned the purchase price remitted to the Company by the undersigned, without interest thereon or deduction therefrom.

2.2 Closing; Closing Date.

The initial closing shall take place at the offices of the Company or such other place as determined by the Company, on such date as is set by the Company. The Company's acceptance of the undersigned's subscription shall be evidenced by the Company's execution of this Agreement and execution of the Debenture(s) subscribed for. Subsequent closings, if any, will be held at such times, and in such places, as are determined by the Company (each a "Closing"). At the Closing of the purchase and sale of the Debenture(s) subscribed to by the undersigned, the Company shall prepare for delivery to the undersigned the certificate(s) for the Debenture(s) to be issued and sold to the undersigned, duly registered in the undersigned's name against payment in full by the undersigned of the aggregate principal amount of the Debenture(s).

SECTION 3

3.1 Investor Representations and Warranties.

The undersigned hereby acknowledges, represents and warrants to, and agrees with, the Company and its affiliates as follows:

(a) The undersigned is acquiring the Debenture(s) for his own account as principal, not as a nominee or agent, for investment purposes only, and not with a view to, or for, resale, distribution or fractionalization thereof in whole or in part. Further, the undersigned does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to the Debenture(s), or the Common Stock into which same may convert, for which the undersigned is subscribing.

(b) The undersigned has full power and authority to enter into this Agreement, the execution and delivery of this Agreement has been duly authorized, if applicable, and this Agreement constitutes a valid and legally binding obligation of the undersigned.

(c) The undersigned acknowledges his understanding that the offering and sale of the Debentures is intended to be exempt from registration under the Securities Act of 1933, as amended (the "Securities Act") by virtue of Section 4(2) of the Securities Act and the provisions of Regulation D promulgated thereunder ("Regulation D"). In furtherance thereof, the undersigned represents and warrants to and agrees with the Company and its affiliates as follows:

(i) The undersigned realizes that the basis for the exemption may not be present if, notwithstanding such representations, the undersigned has in mind merely acquiring the Debenture(s) for a fixed or determinable period in the future, or for a market rise, or for sale if the market does not rise. The undersigned does not have any such intention;

(ii) The undersigned has the financial ability to bear the economic risk of his investment, has adequate means for providing for his current needs and personal contingencies and has no need for liquidity with respect to his investment in the Company;

(iii) ___________________________________ (insert name of Purchaser Representative: if none, so state) has acted as the undersigned's Purchaser Representative for purposes of the private placement exemption under the Securities Act. If the undersigned has appointed a Purchaser Representative (which term is used herein with the same meaning as given in Rule 501(h) of Regulation D), the undersigned has been advised by his Purchaser Representative as to the merits and risks of an investment in the Company in general and the suitability of an investment in the Debenture(s) for the undersigned in particular; and

(iv) The undersigned (together with his Purchaser Representative(s), if any) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the prospective investment in the Debenture(s). If other than an individual, the undersigned also represents it has not been organized for the purpose of acquiring the Debenture(s).

(d) The undersigned is an "accredited investor," as that term is defined in Rule 501 of Regulation D, a copy of which is attached hereto as Exhibit B.

(e) The undersigned and his Purchaser Representative(s), if any:

(i) Have been furnished with copies of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998 and all Quarterly Reports on Form 10-Q filed thereafter to date, including all exhibits thereto, and any documents which may have been made available upon request for a reasonable period of time prior to the date hereof (collectively, the "Documents"). The undersigned or his Purchaser Representative(s) have carefully read the Documents and have relied solely (except as indicated in subsections (ii) and (iii) below) on the information contained in the Documents (including all exhibits thereto);

(ii) Have been provided an opportunity for a reasonable period of time prior to the date hereof to obtain additional information concerning the offering of the Debentures, the Company and all other information to the extent the Company possesses such information or can acquire it without unreasonable effort or expense;

(iii) Have been given the opportunity for a reasonable period of time prior to the date hereof to ask questions of, and receive answers from, the Company or its representatives concerning the terms and conditions of the offering of the Debentures and other matters pertaining to this investment, and have been given the opportunity for a reasonable period of time prior to the date hereof to obtain such additional information necessary to verify the accuracy of the information contained in the Documents or that which was otherwise provided in order for him to evaluate the merits and risks of purchase of the Debenture(s) to the extent the Company possesses such information or can acquire it without unreasonable effort or expense;

(iv) Have not been furnished with any oral representation or oral information in connection with the offering of the Debentures which is not contained herein or in the Documents; and

(v) Have determined that the Debenture(s) are a suitable investment for the undersigned and that at this time the undersigned could bear a complete loss of such investment.

(f) The undersigned is not relying on the Company, or its affiliates with respect to economic considerations involved in this investment. The undersigned has relied on the advice of, or has consulted with only those persons, if any, named as Purchaser Representative(s) herein. Each Purchaser Representative is capable of evaluating the merits and risks of an investment in the Debentures and each Purchaser Representative has disclosed to the undersigned in writing (a copy of which is annexed to this Agreement) the specific details of any and all past, present or future relationships, actual or contemplated, between himself and the Company or any affiliate or subsidiary thereof.

(g) The undersigned represents, warrants and agrees that he will not sell or otherwise transfer the Debenture(s), or the Common Stock into which the Debenture(s) may convert, without registration under the Securities Act or an exemption therefrom and fully understands and agrees that he must bear the economic risk of his purchase because, among other reasons, the Debenture(s), and the Common Stock into which the Debenture(s) may convert have not been registered under the Securities Act or under the securities laws of any state and, therefore, cannot be resold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Securities Act and under the applicable securities laws of such states or an exemption from such registration is available. In particular, the undersigned is aware that the Debenture(s) and Common Stock into which the Debenture(s) may convert are "restricted securities," as such term is defined in Rule 144 promulgated under the Securities Act ("Rule 144"), and they may not be sold pursuant to Rule 144 unless all of the conditions of Rule 144 are met. The undersigned also understands that, except as otherwise provided herein, the Company is under no obligation to register the Debenture(s), or the Common Stock into which same may convert, on his behalf or to assist him in complying with any exemption from registration under the Securities Act or applicable state securities laws. The undersigned further understands that sales or transfers of the Debenture(s), or the Common Stock into which same may convert, are further restricted by state securities laws and the provisions of this Agreement.

(h) No representations or warranties have been made to the undersigned by the Company, or any officer, employee, agent, affiliate or subsidiary of the Company, other than the representations of the Company contained herein, and in subscribing for the Debentures the undersigned is not relying upon any representations other than those contained herein.

(i) Any information which the undersigned has heretofore furnished to the Company with respect to his financial position and business experience is correct and complete as of the date of this Agreement and if there should be any material change in such information he will immediately furnish such revised or corrected information to the Company.

(j) The undersigned understands and agrees that the certificates for the Debenture(s), or the Common Stock into which same may convert, shall bear, substantially, the following legend until (i) such securities shall have been registered under the Securities Act and effectively been disposed of in accordance with a registration statement that has been declared effective; or (ii) in the opinion of counsel for the Company such securities be may sold without registration under the Securities Act as well as any applicable "Blue Sky" or state securities laws:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AS SET FORTH IN THIS CERTIFICATE. THE SECURITIES REPRESENTED HEREBY MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL, REASONABLY ACCEPTABLE TO COUNSEL FOR THE COMPANY, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER, OR DISPOSITION MAY BE EFFECTUATED WITHOUT REGISTRATION UNDER THE ACT."

(k) The undersigned understands that an investment in the Debentures is a speculative investment which involves a high degree of risk and the potential loss of his entire investment.

(l) The undersigned's overall commitment to investments which are not readily marketable is not disproportionate to the undersigned's net worth, and an investment in the Debentures will not cause such overall commitment to become excessive.

(m) The foregoing representations, warranties and agreements shall survive the Closing.

SECTION 4

4.1 Company Representations and Warranties.

The Company hereby acknowledges, represents and warrants to, and agrees with, the undersigned as follows:

(a) Chyron Corporation is a corporation duly organized, validly existing and in good standing under the laws of the State of New York.

(b) The Company has taken, or will take with respect to Section 5.2 hereof only, all corporate action necessary for the authorization, execution and delivery of this Agreement, and for the performance by the Company of its obligations (including without limitation its obligations under Section 5.2 hereof) under this Agreement and the Debenture(s) to be issued in connection herewith. This Agreement, and the Debenture(s) to be issued in connection herewith, constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms. The execution, delivery and performance of this Agreement, including the appointment of the undersigned to the Board of Directors pursuant to Section 5.2 hereof, and the issuance of the Debenture(s), by the Company will not result in a breach of or default under the articles of incorporation, bylaws of the Company or any material contract or agreement to which the Company is a party.

SECTION 5.

5.1 Registration Rights.

(a) The Company covenants and agrees that it will use its best efforts to file a registration statement with the United States Securities and Exchange Commission (the "SEC"), relating to the sale of the shares of Common Stock underlying the Debentures (the "Registrable Securities"), within 120 days after the final Closing. In addition, the Company further covenants and agrees that it will (i) use its best efforts to have such registration statement declared effective by the SEC in a timely manner, and (ii) maintain the effectiveness of the registration statement until such time as all Registrable Securities have been sold. The Company shall not be obligated to effect and maintain more than one registration under this Section 5.1(a). Assuming such registration statement is declared effective by the SEC and such registration remains effective in accordance with this Section 5.1(a), holders shall have no further registration right pursuant to this Section 5.1(a).

(b) The Company has agreed that the all expenses incurred with a registration statement pursuant to this Section 5 (exclusive of underwriting discounts and marketing expenses), including without limitation all federal and "blue sky" registration and qualification fees, printer's and accounting fees, shall be borne by the Company.

SECTION 6.

6.1 Indemnification of the Company.

(a) The undersigned agrees to indemnify and hold harmless the Company, its officers and directors, employees, agents and affiliates and each other person, if any, who controls any thereof, against any loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all expenses whatsoever reasonably incurred in investigating, preparing or defending against any litigation commenced or threatened or any claim whatsoever) arising out of or based upon any false representation or warranty or breach or failure by the undersigned to comply with any covenant or agreement made by the undersigned herein or in any other document furnished by the undersigned to any of the foregoing in connection with this transaction.

(b) In addition to the indemnity in Section 6.1(a) above, the holder(s) of the Registrable Securities to be sold pursuant to a registration statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company, its officers, directors and agents and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act, against all loss, claim, damage or expense or liability (including all expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which they may become subject under the Securities Act, the Exchange Act or otherwise, arising from written information furnished by or on behalf of such Holders, or their successors or assigns, for specific inclusion in such registration statement; provided, however, that each holder shall be liable under this Section 6.1(b) only up to and including the principal amount of the Debenture(s) purchased by such holder.

6.2 Indemnification of Holders of Registrable Securities. In connection with any registration statement filed pursuant to Section 5.1(a) hereof, the Company agrees to indemnify, to the fullest extent permitted by law, each holder of Registrable Securities, its officers, directors and agents and each person who controls such holder of Registrable Securities against all losses, claims, damages, liabilities and expenses caused by any untrue or alleged untrue statement of material fact contained in such registration statement 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 the light of the circumstances under which they made, not misleading.

6.3 Modification. Neither this Agreement nor any provisions hereof shall be modified, discharged or terminated except by an instrument in writing signed by the party against whom any waiver, change, discharge or termination is sought.

6.4 Notices. All notices, authorizations, demands or requests required or permitted to be delivered to any party in connection with this Agreement shall be in writing and shall be deemed to have been duly given if personally delivered, if sent by facsimile transmission (with receipt confirmed by automatic transmission report), if sent by a nationally-recognized overnight courier with charges prepaid, if sent by registered or certified mail, return receipt requested and postage prepaid (or by the most nearly comparable method if mailed from or to a location outside the United States), or addressed as follows:

If to the Company, to:

Chyron Corporation

5 Hub Drive

Melville, New York 11747

Attn: President

Fax: (516) 845-5210

With copies (which copies shall not constitute notice) to:

Camhy Karlinsky & Stein LLP

1740 Broadway

New York, New York 10019

Attn: Robert S. Matlin, Esq.

Fax: 212-977-8389

If to the undersigned, to: the address shown on page 10 or 11 hereof;

or to such other address as the party to whom the notice is to be given may have furnished to the other party hereto in writing in accordance with the provisions of this Section 6.4. Any such notice or communication shall be deemed to have been received (i) in the case of personal delivery, on the date of such delivery, (ii) in the case of facsimile transmission (with receipt confirmed by automatic transmission report), on the date of such transmission, (iii) in the case of a nationally-recognized overnight courier, on the next business day after the date when delivered to such courier, and (iv) in the case of mailing (or by the most nearly comparable method if mailed from or to a location outside the United States), on the third business day following that on which the piece of mail containing such communication is posted; provided, however, that three additional business days shall be added to the time any notice or communication sent from or to a location outside the United States shall be deemed to have been received in (iii) or (iv) above.

6.5 Counterparts. This Agreement may be executed through the use of separate signature pages or in any number of counterparts (and by facsimile signature), and each of such counterparts shall, for all purposes, constitute one agreement binding on all parties, notwithstanding that all parties are not signatories to the same counterpart.

6.6 Binding Effect. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives and assigns. If the undersigned is more than one person, the obligation of the undersigned shall be joint and several and the agreements, representations, warranties and acknowledgments herein contained shall be deemed to be made by and be binding upon each such person and his heirs, executors, administrators and successors.

6.7 Entire Agreement. This Agreement and the documents referenced herein contain the entire agreement of the parties and there are no representations, covenants or other agreements except as stated or referred to herein and therein .

6.8 Assignability. This Agreement is not transferable or assignable by the undersigned.

6.9 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflicts of law principles of such State.

6.10 Pronouns. The use herein of the masculine pronouns "he", "him" or "his" or similar terms shall be deemed to include the feminine and neuter genders as well and the use herein of the singular pronoun shall be deemed to include the plural as well.

ALL SUBSCRIBERS MUST COMPLETE THIS PAGE

IN WITNESS WHEREOF, the undersigned has executed this Agreement on the _____ day of __________, 1999.

	X $1,000 Per Debenture	= $
Debentures Subscribed For		Purchase Price

Manner in which Title is to be held (Please Check One):

1.	Individual	7.	Trust/Estate/Pension or Profit Sharing Plan Date Opened:
2.	Joint Tenants with Right of Survivorship	8.	As a Custodian for Under the Uniform Gift to Minors Act of the State of
3.	Community Property	9.	Married with Separate Property
4.	Tenants in Common	10.	Keogh
5.	Corporation/Partnership/ Limited Liability Company	11.	Tenants by the Entirety
6.	IRA

IF MORE THAN ONE SUBSCRIBER, EACH SUBSCRIBER MUST SIGN.

INDIVIDUAL SUBSCRIBES MUST COMPLETE PAGE 11.

SUBSCRIBERS WHICH ARE ENTITIES MUST COMPLETE PAGE 12.

EXECUTION BY NATURAL PERSONS

Exact Name in Which Title is to be Held

__________________________________

Name: (Please Print)	Name of Additional Purchaser: (Please Print)
Residence: Number and Street	Address of Additional Purchaser: Number and Street
City, State and Zip Code	City, State and Zip Code
Social Security Number	Social Security Number
(Signature)	(Signature)

ACCEPTED this ______ day of ________, 1999 on behalf of the Company.

BY:

Name: Roger Henderson

Title: President and Chief Executive Officer

EXECUTION BY SUBSCRIBER WHICH IS AN ENTITY

(Corporation, Partnership, Trust, LLC, Etc.)

Name of Entity (Please Print)

____________________________________

Date of Incorporation or Organization: ___________________________________

State of Principal Offices: _____________________________________________

Federal Taxpayer Identification Number: _________________________________

BY:_______________________________

Name:

Title:

[seal]

Attest:

(If Entity is a Corporation)

Address:

______________________________

______________________________

______________________________

ACCEPTED this ______ day of _______, 1999 on behalf of the Company.

BY:

Name: Roger Henderson

Title: President and Chief Executive Officer

EXHIBIT B

DEFINITION OF ACCREDITED INVESTORS

Each investor must represent in writing that he or she qualifies as an "accredited investor," as such term is defined in Rule 501(a) of Regulation D under the Securities Act, and must demonstrate the basis for such qualification. To be an accredited investor, an investor must fall within any of the following categories at the time of the sale of the Securities to that investor:

(1) A bank as defined in Section 3(a)(2) of the Securities Act, or a savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity; a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended; an insurance company as defined in Section 2(13) of the Securities Act; an investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that act; a Small Business Investment Company dealer by the United States Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of that act, which is either a bank, savings and loan association, insurance company or registered investment advisor, or if the employee benefit plan has total assets in excess of $5,000,000, or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

(2) A private business development company as defined in Section 2(a)(22) of the Investment Advisers Act of 1940;

(3) An organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, a corporation, a Massachusetts or similar business trust, or a partnership, not formed for the specific purpose of acquiring the Debentures, with total assets in excess of $5,000,000;

(4) A director or executive officer of the Company;

(5) A natural person whose individual net worth, or joint net worth with that person's spouse, at the time of such person's purchase of the Debentures exceeds $1,000,000;

(6) A natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;

(7) A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D; or

(8) An entity in which all of the equity owners are accredited investors (as defined above). As used in this Memorandum, the term "net worth" means the excess of total assets over total liabilities. In computing net worth for the purpose of (5) above, the principal residence of the investor must be valued at cost, including cost of improvements, or at recently appraised value by an institutional lender making a secured loan, net of encumbrances. In determining income, an investor should add to the investor's adjusted gross income, as reported in a federal income tax return, any amounts attributable to tax-exempt income received, losses claimed as a limited partner in any limited partnership, deductions claimed for depletion, contributions to an IRA or Keogh retirement plan, alimony payments and any amount by which income for long-term capital gains has been reduced in arriving at adjusted gross income.

EX-10

EXECUTION COPY

LOAN AGREEMENT

Loan Agreement dated as of March 29, 1999 between CHYRON CORPORATION, a New York corporation with its principal place of business at 5 Hub Drive, Melville, New York 11747 (the "Borrower") and AMSOUTH BANK, an Alabama banking corporation (the "Bank"), with an office at 350 Park Avenue, New York, New York 10022.

The parties hereto hereby agree as follows:

SECTION 1. DEFINITIONS.

1.1 Defined Terms. As used herein the following terms shall have the following meanings:

"Accounts" shall mean, wherever the same may be located, those now existing and future accounts receivable, other receivables, contract rights, chattel paper, notes or other instruments evidencing indebtedness to the Borrower.

"Account Debtor" shall mean the person who is obligated on or under an Account.

"Adjusted Libor Rate" means with respect to any Eurodollar Loan Interest Period, the rate per annum at which U.S. dollar deposits are offered by a Reference Bank (as selected by the Bank) in the London interbank market for Eurodollars at approximately 11:00 a.m. (London time) two Business Days before the first day of such Interest Period in an amount approximately equal to the principal amount of the Eurodollar Loan to which such Interest Period is to apply and for a period of od divided by one minus the Eurodollar Reserve Percentage.

"Affiliate" as applied to any Person, means any other Person directly or indirectly through one or more intermediaries controlling, controlled by, or under common control with, that Person. For the purposes of this definition, "control" (including with correlative meanings, the terms "controlling", "controlled by" and "under common control with"), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.

"Agreement" shall mean this Loan Agreement, as the same from time to time may be amended, supplemented or modified.

"Borrowing Base" shall mean the sum of: (a) 80% of the Borrower's Eligible Domestic Accounts Receivable from time to time outstanding less reserves with respect to such Accounts which the Bank may deem necessary in its sole discretion; (b) 80% of the Borrower's Eligible Foreign Accounts Receivable from time to time outstanding less reserves with respect to such Accounts which the Bank may deem necessary in its sole discretion; and (c) the lesser of (i) $3,750,000 or (ii) 50% of the value of the Borrower's Eligible Inventory from time to time on hand, minus the principal amount then outstanding under the Term Loan provided, however, that in the event Borrower's accounts receivable suffer dilution of 15% or more, Bank reserves the right to unilaterally alter the advance rate specified in (a) and (b) above.

"Borrowing Base Certificate" shall mean a certificate substantially in the form of Exhibit A hereto.

"Business Day" shall mean a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are required or permitted by law to remain closed.

"Capital Expenditures" shall mean for any period, the aggregate amount of all payments made by any Person directly or indirectly for the purpose of acquiring, constructing or maintaining fixed assets, real property or equipment which, in accordance with GAAP, would be added as a debit to the fixed asset account of such Person, including, without limitation, all amounts paid or payable with respect to Capitalized Lease Obligations and interest which are required to be capitalized in accordance with GAAP.

"Capitalized Lease" shall mean any lease the obligations to pay rent or other amounts under which constitute Capitalized Lease Obligations.

"Capitalized Lease Obligations" shall mean as to any Person, the obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) real and/or personal property which obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.

"Closing Fee" shall mean a fee of $100,000.00 payable by the Borrower to the Bank simultaneously with the execution and delivery of this Agreement, which closing Fee shall be deemed fully earned and non-refundable upon payment thereof.

"Collateral" shall mean the collateral described in Section 9 of this Agreement.

"Collateral Management Fee" shall mean $20,000.00 which shall be paid to the Bank at the closing and thereafter annually on the anniversary of the date of this Agreement to offset the expenses and costs of the Bank.

"Commitment" shall mean the obligation of the Bank to make Revolving Credit Loans to the Borrower during the Commitment Period pursuant to the terms hereof as such Commitment is described in Section 2.1 hereof and as subject to reduction in accordance with the terms hereof.

"Commitment Period" shall mean the period from and including the date hereof to and including the Termination Date or such earlier date as the Commitment shall terminate as provided herein.

"Contractual Obligations" shall mean as to any Person, any provision of any security issued by such Person or of any agreement, instrument or undertaking to which such Person is a party or by which it or any of its property is bound.

"Controlled" and "Control" shall mean any partnership, corporation, limited liability company or other entity of which the Borrower, alone, or the Borrower or one or more of its Subsidiaries, either has the power to direct the management thereof or the power to direct at least a majority of the voting interests.

"Default" shall mean any of the events specified in this Agreement under "Events of Default", whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

"Dollars" and "$" shall mean dollars in lawful currency of the United States of America.

"Eligible Domestic Accounts Receivable" shall mean those Accounts arising in the ordinary course of business with respect to the sale of goods or rendering of services by the Borrower from Persons (other than Pro-Bel and other Subsidiaries or Affiliates or from any government entity) domiciled in the United States of America which are not more than 60 days past due nor more than 120 days from invoice date and in which the Bank has a first priority security interest and which are otherwise satisfactory to the Bank in its reasonable discretion, provided, that, if fifty percent (50%) or more of the Accounts due from an Account Debtor are deemed by the Bank to be ineligible, then all Accounts from such Account Debtor shall be deemed ineligible. Credits associated with past due ineligible Accounts shall not reduce the total of all such ineligible Accounts.

"Eligible Foreign Accounts Receivable" shall mean those Accounts arising in the ordinary course of business with respect to the sale of goods or rendering of services by Borrower or its Affiliates from Persons (other than Subsidiaries or Affiliates) domiciled outside of the United States of America which are not more than 60 days past due and which have been outstanding for not more than 120 days from invoice date in which the Bank has a first priority security interest, which are covered by insurance protecting the Bank against political and commercial risks on terms reasonably acceptable to the Bank and which are otherwise satisfactory to the Bank in its reasonable discretion, provided, that, if fifty (50%) percent or more of the Accounts due from an Account Debtor are deemed by the Bank to be ineligible, then all Accounts from such Account Debtor shall be deemed ineligible. Credits associated with past due ineligible Accounts shall not reduce the total of all such ineligible accounts.

"Eligible Inventory" shall mean all unencumbered inventory or work-in-process and finished goods (other than slow-moving, obsolete or consigned inventory or office supplies) from time to time on hand in which the Bank has a first priority security interest and which is otherwise satisfactory to the Bank in its sole discretion, valued at the lower of (a) cost, (b) market value, or (c) the valuation consistent with that employed in the preparation of the financial statements of the Borrower referred to in this Agreement.

"Environmental Laws" shall mean any federal, state or local statute or regulation relating to hazardous or toxic wastes or substances or the removal thereof.

"Eurodollar Loans" shall mean Loans hereunder that bear interest for the Interest Period applicable thereto at a rate of interest based upon the Adjusted Libor Rate.

"Eurodollar Reserve Percentage" shall mean for any day that percentage (expressed as a decimal) which is in effect on such day, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement for a member bank of the Federal Reserve System in New York City with deposits exceeding one billion dollars in respect of "Eurocurrency liabilities" (or in respect of any other category of liabilities which includes deposits by reference to which the interest rate on Eurodollar Loans is determined or any category of extensions of credit or other assets which includes loans by a non-United States office of the Bank to United States residents). In the event of any increase in the Eurodollar Reserve Percentage, the Adjusted Libor Rate shall be adjusted automatically on and as of the effective date of any such increase.

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time and the rules and regulations promulgated thereunder from time to time.

"Event of Default" shall mean any of the events specified in this Agreement under "Events of Default", provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied.

"Fixed Charge Ratio" shall mean the ratio of earnings before interest, taxes, depreciation and amortization and before extraordinary charges or gains to the total of interest and principal due and payable with respect to any Indebtedness of the Borrower plus taxes and actual Capital Expenditures.

"Fluctuating Rate Loans" shall mean Loans hereunder that bear interest at a rate of interest based upon the Prime Rate.

"GAAP" shall mean generally accepted accounting principles applied in a manner consistent with that employed in the preparation of the financial statements described in Section 3.l. Except as otherwise provided in this Agreement, all computations and determinations as to accounting or financial matters and all financial statements to be delivered pursuant to this Agreement shall be prepared in accordance with GAAP and all accounting or financial terms shall have the meanings ascribed to such terms by GAAP

"General Security Agreement" shall have the meaning assigned thereto in Section 4.1(b) hereof and any UCC-l financing statements or UCC-3 assignments or amendments executed in connection therewith.

"Governmental Authority" shall mean any nation or government, any state or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled (through stock or capital ownership or otherwise) by any of the foregoing.

"Guarantees" shall mean the guarantees to be executed by the Guarantors on the Bank's standard form.

"Guarantors" shall mean, collectively, the entities required to guarantee pursuant to Section 5.9 hereof.

"Indebtedness" shall mean, with respect to any Person, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person for the deferred purchase price of property or services, except current accounts payable arising in the ordinary course of business and not overdue beyond such period as is commercially reasonable for such Person's business, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person, (e) all payment obligations of such Person with respect to interest rate or currency protection agreements, (f) all obligations of such Person as an account party under any letter of credit or in respect of bankers' acceptances, (g) all obligations of any third party secured by property or assets of such Person (regardless of whether or not such Person is liable for repayment of such obligations) and (h) the redemption price of all redeemable preferred stock of such Person, but only to the extent that such stock is redeemable at the option of the holder or requires sinking fund or similar payments at any time prior to the Termination Date.

"Installment Payment Date" shall mean any date on which all or any portion of the principal amount of the Term Loan is due and payable.

"Interest Period" shall mean any period during which a Loan bears interest at an Adjusted Libor Rate as elected by the Borrower in accordance with the terms of this Agreement.

(a) If any Interest Period would otherwise end on a day which is not a Business Day, that Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Business Day.

(b) No Interest Period shall extend beyond a stated Maturity Date.

(c) No portion of the Term Loan shall be continued as or converted into a Eurodollar Loan with an Interest Period which extends beyond an Installment Payment Date if, after giving effect to the continuation or conversion of such Eurodollar Loan, the amount payable on any Installment Payment Date would exceed the sum of (i) the aggregate principal amount of the outstanding portion of the Term Loan constituting Eurodollar Loans with Interest Periods ending prior to such Installment Payment Date and (ii) the aggregate outstanding portion of the Term Loan constituting Fluctuating Rate Loans.

"Letters of Credit" shall mean, collectively, all standby letters of credit issued for the account of the Borrower pursuant to Section 2.2 hereof.

"LIBOR Spread" shall mean 187.5 basis points, provided, however that for any fiscal quarter for which the Fixed Charge Coverage Ratio (as determined at the beginning of such quarter) is greater than 1.25 to 1, the LIBOR Spread shall be 162.5 basis points.

"Lien" shall mean any mortgage, pledge, security interest, hypothecation, assignment, deposit arrangement, encumbrance or preference, priority or other security agreement or preference arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction).

"Loan" or "Loans" shall mean any loan made by the Bank to the Borrower hereunder, whether a Revolving Credit Loan or the Term Loan.

"Loan Documents" shall mean this Agreement, the Notes, the Security Agreements, the Pledge Agreement and each document, agreement and instrument executed in connection herewith or pursuant hereto, together with each document, agreement and instrument made by the Borrower or any Guarantor with or in favor of or owing to the Bank further evidencing or securing the Loans.

"Material Adverse Effect" shall mean (a) a materially adverse effect on the business, assets, operations, prospects or condition, financial or otherwise, of the Borrower and its Subsidiaries taken as a whole, (b) material impairment of the ability of the Borrower or any Subsidiary to perform any of its obligations under any Loan Document to which it is or will be a party or (c) material impairment of the rights of or benefits available to the Bank under any Loan Document.

"Maturity Date" shall mean the date that all or a portion of the outstanding principal balance of a Loan is due and payable pursuant to the terms hereof which shall include without limitation (i) with respect to Revolving Credit Loans, the Termination Date, and (ii) with respect to the Term Loan, each Installment Payment Date and the final Maturity Date of the Term Loan.

"Non-Restricted Subsidiary" shall mean any Subsidiary other than a Restricted Subsidiary.

"Notes" shall mean collectively the Revolving Credit Note referred to in Section 2.3 hereof and the Term Note referred to in Section 2.9 hereof.

"Obligations" shall mean any and all sums owing under the Loan Documents and all other obligations, direct or contingent, joint, several or independent, of the Borrower now or hereafter existing due or to become due to, or held or to be held by the Bank, whether created directly or acquired by assignment or otherwise.

"Patent Security Agreement" shall have the meaning assigned thereto in Section 4.1(d) hereof.

"Permitted Acquisitions" shall mean the acquisition by the Borrower of a similar or complementary business so long as: (i) the target company has a positive operating profit for its most recent fiscal year and interim period and it's assets or business are not otherwise subject to any material indebtedness or encumbrance (contingent or otherwise), (ii) the purchase price for the acquisition is in the form of equity capital or junior debt (the economic terms and subordination provisions to be reasonably satisfactory to the Bank), and (iii) to the extent that the Revolving Credit Loan will be utilized to finance all or portion of the purchase price of the acquisition, after giving effect to the payment of such purchase price, the Borrower would have remaining undrawn Borrowing Base availability of not less than $4.0 million.

"Permitted Convertible Debt" shall have the meaning specified in Section 7.01 hereof.

"Person" shall mean any individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated organization or any other juridical entity, or a government or state or any agency or political subdivision thereof.

"Plan" shall mean any plan of a type described in Section 4021(a) of ERISA in respect of which the Borrower is an "employer" as defined in Section 3(5) of ERISA.

"Pledge Agreement" shall have the meaning assigned thereto in Section 4.2(c) hereof.

"Post Default Rate" shall mean at any time a rate of interest equal to 2% per annum in excess of the rate that would then be applicable to Fluctuating Rate Loans.

"Prime Rate" shall mean the rate of interest established from time to time by the Bank as its "prime rate".

"Prime Spread" shall mean the LIBOR Spread less 150 basis points.

"Pro-Bel" shall mean Pro-Bel Limited, a corporation formed under the laws of the United Kingdom.

"Real Property" shall mean any real property owned or leased by the Borrower or any of its Subsidiaries or any Guarantor or any of its Subsidiaries.

"Reference Bank" shall mean a bank appearing on the display designated as page "LIBOR" on the Reuters Monitor Money Rates Service (or such other page as may replace the LIBOR page on that service for the purpose of displaying London interbank offered rates of major banks); provided that if no such offered rate shall appear on such display, "Reference Bank" shall mean a bank in the London interbank market as reasonably selected by the Bank.

"Reportable Event" shall mean any of the events set forth in Section 4043(b) of ERISA or the regulations thereunder.

"Requirements of Law" shall mean as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation, or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

"Restricted Subsidiary" shall mean any Subsidiary of the Borrower incorporated under the laws of any state of the United States.

"Revolving Credit Loan" shall mean a Loan made pursuant to Section 2.3 hereof.

"Revolving Credit Note" shall mean the Note referred to in Section 2.2 hereof.

"Security Agreement" or "Security Agreements" shall mean, collectively, the General Security Agreement, the Trademark Security Agreement and the Patent Security Agreement and, in the case of any Guarantor, shall mean any agreement substantially in the same form as the General Security Agreement.

"Subsidiary" or "Subsidiaries" of any Person shall mean from time to time and at any time any corporation or corporations, partnership or partnerships, limited liability company or companies or other business entity or entities of which the Person alone, or the Person and/or one or more of its Subsidiaries, owns, directly or indirectly, at least a majority of the securities having ordinary voting power for the election of directors or at least a majority of the beneficial economic interest of such entity.

"Tangible Net Worth" shall mean the sum of capital surplus, earned surplus and capital stock minus deferred charges, intangibles and treasury stock, all determined in accordance with GAAP.

"Termination Date" shall mean March 31, 2002 or, if such date is not a Business Day, the Business Day next succeeding such date.

"Term Loan" shall mean the Loan made pursuant to Section 2.8 hereof.

"Term Note" shall mean the Note referred to in Section 2.9 hereof.

"Trademark Security Agreement" shall have the meaning assigned thereto in Section 4.1(c) hereof.

1.2 Accounting Terms. As used herein and in any certificate or other document made or delivered pursuant hereto, accounting terms not specifically defined herein shall have the respective meanings given to them under GAAP .

SECTION 2 . AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENT AND TERM NOTE.

2.1 Revolving Credit Commitment. Subject to the terms and conditions hereof, the Bank agrees to extend credit to or on behalf of the Borrower (a) by making revolving credit loans the "Revolving Credit Loans") from time to time during the Commitment Period and (b) by issuing Letters of Credit for the account of the Company up to an aggregate stated amount at any one time not to exceed the lesser of (i) $12,000,000 less the then outstanding term loan balance or (ii) the Borrowing Base, as such amounts may be reduced as provided in this Agreement (the "Commitment"). During the Commitment Period, the Borrower may use the Commitment for (i) obtaining Revolving Credit Loans by borrowing, paying, prepaying in whole or in part and re-borrowing on a revolving basis, all in accordance with the terms and conditions hereof and (ii) for the issuance of Letters of Credit (up to an aggregate of $250,000) in accordance with the provisions of Section 2.2 hereof. To the extent that the Borrower raises any proceeds from Permitted Convertible Debt, the $3,750,000.00 sublimit on the Revolving Credit Loans arising out of Eligible Inventory shall be reduced by an amount equal to 50% of any Permitted Convertible Debt in excess of $2,000,000.00.

2.2 Letters of Credit.

(a) Subject to the limitations of Section 2.1 hereof, the Borrower may from time to time during the Commitment Period request the issuance by the Bank of Letters of Credit. Each Letter of Credit shall be issued by the Bank upon receipt and processing of the Bank's normal letter of credit application provided that the Bank need not issue any Letter of Credit that would extend beyond the Termination Date. The Borrower shall pay the Bank, upon issuance of the Letter of Credit, the Bank's standard letter of credit and processing fees (including a 0.25% issuance fee). Letters of Credit so issued shall be priced under the Adjusted LIBOR RATE option.

(b) Notwithstanding anything to the contrary herein, if any restriction is imposed on the Bank (including, without limitation, any change in or limitation upon letters of credit) which would prevent the Bank from issuing Letters of Credit or maintaining its obligation to issue Letters of Credit, then the Bank may, by notice to the Borrower in writing, terminate such obligations hereunder.

2.3 Revolving Credit Note. The Revolving Credit Loans made by the Bank to the Borrower pursuant to Section 2.1 hereof shall be evidenced by a promissory note of the Borrower substantially in the form of Exhibit B hereto with appropriate insertions (the "Revolving Credit Note"), payable to the order of the Bank and representing the obligation of the Borrower to pay the lesser of (a) the amount of the Commitment or, (b) the aggregate unpaid principal amount of all Revolving Credit Loans made by the Bank to the Borrower, with interest thereon as hereinafter prescribed. The Revolving Credit Note shall (i) be dated the date of the first Revolving Credit Loan evidenced thereby, (ii) be stated to mature on the Termination Date and (iii) bear interest with respect to the unpaid principal balance thereof from time to time outstanding at a rate per annum to be elected by the Borrower in accordance with the notice provisions set forth in Section 2.4 hereof, and in the case of Eurodollar Loans for the Interest Period therein specified, equal to either (1) Adjusted Libor Rate plus the LIBOR Spread (which rate will be fixed for the period referred to in the notice delivered pursuant to Section 2.4) or (2) the Prime Rate plus the Prime Spread (which interest rate will change when and as the Prime Rate changes). In all cases interest shall be computed on the basis of a 360-day year for actual days elapsed and shall be payable as provided in this Agreement. After any stated or accelerated maturity, the Revolving Credit Note shall bear interest at the Post Default Rate.

2.4 Procedure for Borrowings. The Borrower may borrow under the Commitment during the Commitment Period on any Business Day, by giving the Bank irrevocable notice of a request for a loan hereunder (a) in the case of Eurodollar Loans three Business Days before a proposed borrowing or continuation or conversion and (b) in the case of Fluctuating Rate Loans, not less than one nor more than five Business Days before a proposed borrowing or continuation or conversion, setting forth (i) the amount of the Loan requested, which shall not be less than $100,000, (ii) the requested borrowing date or Interest Period commencement date, as the case may be, (iii) whether the borrowing or Interest Period is to be for a Eurodollar Loan, Fluctuating Rate Loan or a combination thereof, and (iv) if entirely or partially a Eurodollar Loan, the length of the Interest Period therefor, which shall be one, two, three or six months. As used in this Section 2.4, "conversion" shall mean the conversion from one interest rate to another interest rate as more fully described in this Agreement. Such notice shall be written and shall be sufficient if received (including, without limitation, via facsimile transmission) by 1 p.m. on the date on which such notice is to be given. If any such request is sent by facsimile it shall be confirmed in writing sent by the Borrower to the Bank within two Business Days thereafter. Unless notification is otherwise furnished by the Borrower to the Bank (in a manner consistent with the requirements of this Section), Loans will be made by credits to the Borrower's demand deposit account maintained with an institution agreed to by Borrower and Bank after closing, which institution agrees to execute the "blocking agreement" required by the Bank. If the Borrower furnishes such notice but no election is made as to the type of Loan or the Interest Period to be applicable thereto, the Loan will automatically then be made as a Fluctuating Rate Loan until such required information is furnished pursuant to the terms hereof.

2.5 Commitment Fee. As additional compensation for the Commitment on the revolving basis provided for herein, the Borrower agrees to pay the Bank a commitment fee for the Commitment Period at the rate of 1/2 of 1% per annum on the average daily unused portion of the Commitment hereunder. Such commitment fee shall be payable monthly in arrears, on the last day of each month during the Commitment Period, commencing April 30, 1999, and on the Termination Date. If the Borrower so fails to pay any such amount to the Bank the obligations to make such payment shall bear interest from such date not paid when due at the Post Default Rate. The obligation to so pay interest shall not be construed so as to waive the requirement to pay the commitment fees as hereinabove set forth.

2.6 Regulatory Changes in Capital Requirements. If any existing or future law, regulation or guideline or the interpretation thereof by any court or administrative or governmental authority charged with the administration thereof, or compliance by the Bank with any request or directive (whether or not having the force of law) of any such authority, imposes, modifies, deems applicable or results in the application of, any capital maintenance, capital ratio or similar requirement against loan commitments made by the Bank (or participations therein) or the Bank in anticipation of the effectiveness of any capital maintenance, capital ratio or similar requirement takes reasonable action to enable itself to comply therewith, and the result thereof is to impose upon the Bank or increase any capital requirement applicable as a result of the making or maintenance of the Commitment or participation therein (which imposition of or increase in capital requirements may be determined by the Bank's reasonable allocation of the aggregate of such capital impositions or increases) then, upon demand by the Bank, the Borrower shall immediately pay to the Bank from time to time as specified by the Bank additional commitment fees which shall be sufficient to compensate the Bank for such impositions of or increases in capital requirements, together with interest on each such amount from the date demanded until payment in full thereof at the Post Default Rate. A certificate setting forth in reasonable detail the amounts necessary to compensate the Bank as a result of an imposition of or increase in capital requirements submitted by the Bank to the Borrower shall be conclusive, absent manifest error or bad faith, as to the amount thereof. For purposes of this Section, (a) in calculating the amount necessary to compensate the Bank for any imposition of or increase in capital requirements, the Bank shall be deemed to be entitled to a rate of return on capital (after federal, state and local taxes) of fifteen per cent per annum, and (b) all references to the "Bank" shall be deemed to include any participant in the Commitment.

2.7 Termination or Reduction of Commitment. The Borrower shall have the right, upon not less than three Business Days' irrevocable written notice, to terminate the Commitment or, from time to time, to reduce the amount of the Commitment, provided that (a) any such reduction (i) shall be in the minimum amount of $100,000 or a multiple thereof, (ii) shall reduce permanently the amount of the Commitment then in effect, and (iii) shall be accompanied by prepayment of the Revolving Credit Loans outstanding to the extent, if any, that the Loans then outstanding exceed the amount of the Commitment as then reduced, together with accrued interest or the amount so prepaid to and including the dates of each such prepayment and any amounts payable pursuant to Section 2.13 in connection therewith and the payment of any unpaid commitment fee then accrued hereunder, and (b) any such termination of the Commitment shall be accompanied by prepayment in full of the Revolving Credit Loans outstanding and together with accrued interest thereon to and including the date of prepayment and any amounts payable pursuant to Section 2.15 in connection therewith and the payment of any unpaid commitment fee then accrued hereunder.

2.8 Term Loan. Subject to the terms and conditions hereof, the Bank agrees to make a term loan to the Borrower (the "Term Loan") in the principal amount of $2,000,000.

2.9 Term Note. The Term Loan made by the Bank to the Borrower pursuant to Section 2.8 hereof shall be evidenced by a promissory note of the Borrower substantially in the form of Exhibit C hereto with appropriate insertions (the "Term Note") and dated the date of the Term Loan. The principal amount of the Term Note shall be payable on the first Business Day of each month as follows: (i) for the period from April 1, 1999 through September 30, 1999, there will be no principal payments, (ii) for the period of October 1, 1999 through September 30, 2000, the principal payments will be $25,000.00 per month, (iii) for the period of October 1, 2000 through September 30, 2000, the principal payments will be $75,000.00 per month and (iv) for the period of October 1, 2001, through March 31, 2002, the principal payments will be $133,333.00 per month. The final installment equal to the then unpaid balance of the Term Note, together with all interest accrued and unpaid shall be payable on March 31, 2002. The Term Note shall bear interest on the unpaid principal amount thereof from time to time outstanding at a rate per annum, to be elected pursuant to the provisions of this Agreement equal to either (i) Adjusted Libor Rate plus the LIBOR Spread or (ii) the Prime Rate plus the Prime Spread (which interest rate shall change when and as the Prime Rate changes). In all cases interest shall be computed on the basis of a 360 day year for actual days elapsed and shall be payable as provided in this Agreement. After any state or accelerated maturity thereof, the Term Note shall bear interest at the rate set forth in this Agreement.

2.10 Continuation and Conversion of Loans. The Borrower shall have the right at any time on prior irrevocable written or telex notice to the Bank as specified in this Agreement (i) to continue any Loan into a subsequent Interest Period, (ii) to convert any Eurodollar Loan into a Fluctuating Rate Loan and (iii) to convert any Fluctuating Rate Loan into a Eurodollar Loan (specifying the Interest Period to be applicable thereto), subject to the following:

(a) in the case of a conversion of less than all of the outstanding Loans, the aggregate principal amount of Loans converted shall not be less than $100,000 and shall be an integral multiple thereof;

(b) no Loan (other than a Fluctuating Rate Loan) shall be converted at any time other than at the end of an Interest Period applicable thereto; and

(c) any portion of a Loan maturing or required to be prepaid in less than one month may not be converted into or continued as a Eurodollar Loan.

In the event that the Borrower shall not give notice to continue any Eurodollar Loan into a subsequent Interest Period or convert any such Loan into a Loan of another type, on the last day of the Interest Period thereof, such Loan (unless prepaid) shall automatically be converted into a Fluctuating Rate Loan. The Interest Period applicable to any Eurodollar Loan resulting from a conversion or continuation shall be specified by the Borrower in the irrevocable notice delivered by the Borrower pursuant to this Agreement; provided, however, that, if such notice does not specify either the type of Loan or the Interest Period to be applicable thereto, the Loan shall automatically be converted into, or continued as, as the case may be, a Fluctuating Rate Loan until such required information is furnished pursuant to the terms hereof. Notwithstanding anything to the contrary contained above, if an Event of Default shall have occurred and is continuing no Eurodollar Loan may be continued into a subsequent Interest Period and no Fluctuating Rate Loan may be converted into a Eurodollar Loan.

2.11 Prepayment.

(a) Voluntary. The Borrower may prepay any Fluctuating Rate Loan in whole or in part without premium or penalty; provided, however, that each partial prepayment on account of any Fluctuating Rate Loan shall be in an amount not less than $100,000. Except as provided otherwise in Section 2.15 hereof, the Borrower may not prepay any Eurodollar Loan prior to the last day of the Interest Period therefor. Any amount prepaid on account of a Revolving Credit Loan may be reborrowed in accordance with the provisions of Section 2.1 hereof. Any partial prepayment of the Term Loan shall be applied to the last maturing installments in inverse order or their respective maturities.

(b) Mandatory. If, at any time, the aggregate outstanding principal balance of Loans exceeds the Borrowing Base, the Borrower shall immediately make payment to the Bank in an amount equal to such excess together with any amounts payable pursuant to Section 2.15 in connection therewith. Such payment shall be applied to reduce the aggregate unpaid principal balance of Loans then outstanding. Any partial prepayment of the Term Loan shall be applied to the last maturing installments in inverse order of their respective maturities.

Each prepayment shall be made together with payment of accrued interest on the amount prepaid to and including the date of prepayment.

2.12 Interest Payments; Manner of Payments; Rate After Default; Schedule to Note.

(a) Interest accrued on each Loan shall be payable, without duplication, on:

(i) the Maturity Date of such Loan (excluding any Installment Payment Date unless interest would otherwise be payable on such Installment Payment Date pursuant to subsections (ii) - (vi) below);

(ii) with respect to any portion of any Loan repaid or prepaid pursuant to this Agreement, the date of such repayment or prepayment, as the case may be;

(iii) with respect to that portion of the outstanding principal amount of all Loans maintained as Fluctuating Rate Loans, the first day of each month, commencing with the first such date following the date of the making of such Loans;

(iv) with respect to that portion of the outstanding principal amount maintained as Eurodollar Loans, the last day of each applicable Interest Period (and, if such Interest Period shall exceed three months, on the last day of each three-month period occurring during such Interest Period);

(v) with respect to that portion of the outstanding principal amount converted into Fluctuating Rate loans or Eurodollar Loans on a day when interest would not otherwise have been payable pursuant to Subsections (a) (iii) or (a) (iv), the date of such conversion.

(b) All payments (including prepayments) to be made by the Borrower on account of principal or interest with respect to any Loan or on account of fees or any other obligations of the Borrower to the Bank hereunder shall be made to the Bank at the office of the Bank set forth in Section 10.1 hereof or at such other place as the Bank may from time to time designate in writing in lawful money of the United States of America in immediately available funds. The Borrower hereby authorizes and directs the Bank to charge any account of the Borrower maintained at any office of the Bank for any such payments. Subject to the provisions of subparagraph (a) in the definition of Interest Period set forth in Section 1.1 hereof, if any payment to be so made hereunder, or under either Note, becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day and, to the extent permitted by applicable Law, interest thereon shall be payable at the then applicable rate during such extension.

(c) Upon and following an Event of Default, all Loans, and any and all accrued and unpaid interest, fee or amount due hereunder, to the extent permitted by applicable law, shall bear interest (payable on demand, and in any event on the last day of each month, and computed daily on the basis of a 360-day year for actual days elapsed) (i) in the case of Fluctuating Rate Loans at the Post Default Rate until paid and (ii) in the case of Eurodollar Loans at a rate which shall be 2% per annum in excess of the rate applicable to such Eurodollar Loan until the expiration of the Interest Period applicable to such Loan, at which time the Loan will automatically be converted into a Fluctuating Rate Loan and until paid shall bear interest at the Post Default Rate. In no event, however, shall interest payable hereunder be in excess of the maximum rate of interest permitted under applicable law. The obligation to so pay interest upon any obligation of the Borrower to the Bank shall not be construed so as to waive the requirement for payment on the same date that payment is to be made to the Bank as set forth in this Agreement.

(d) The Borrower hereby expressly authorizes the Bank to record on the schedule attached to the Revolving Credit Note the amount and date of each Revolving Credit Loan, the rate of interest thereon, the date and amount of each payment of principal and the unpaid principal balance; provided, however, that the failure of the Bank to make any such notation shall not in any manner affect the obligation of the Borrower to repay any Loan in accordance with the terms hereof. All such notations shall be presumed to be correct absent manifest error.

2.13 Use of Proceeds. Proceeds of the Revolving Credit Loans shall be used for working capital purposes and for Permitted Acquisitions or other acquisitions approved by the Bank (such approval not to be unreasonably withheld). All or a portion of the proceeds of the initial Revolving Credit Loan shall be used to repay in full all indebtedness owing to NATWest Bank N.A (n/k/a Fleet Bank) provided, however, that at closing after such payment to NATWest, Borrower shall have a remaining availability of not less than $1,000,000.00. Proceeds of the Term Loan shall be used for payout of the NATWest facility.

2.14 Increased Costs. If the Bank reasonably determines that the effect of any applicable law or government regulation, guideline or order or the interpretation thereof by any Governmental Authority charged with the administration thereof (such as, for example, a change in official reserve requirements which the Bank is required to maintain in respect of loans or deposits or other funds procured for funding such loans) is to increase the cost to the Bank of making or continuing Eurodollar Loans hereunder or to reduce the amount of any payment of principal or interest receivable by the Bank thereon, then the Borrower will pay to the Bank on demand such additional amounts as the Bank may reasonably determine to be required to compensate the Bank for such additional cost or reduction. Any additional payment under this Section will be computed from the effective date at which such additional costs have to be borne by the Bank. A certificate as to any additional amounts payable pursuant to this Section setting forth the basis and method of determining such amounts shall be conclusive, absent manifest error, as to the determination by the Bank set forth therein if made reasonably and in good faith. The Borrower shall pay any amounts so certified to it by the Bank within 10 days of receipt of any such certificate. For purposes of this Section, all references to the "Bank" shall be deemed to include any participant in the Commitment or Loans.

2.15 Indemnities. The Borrower hereby indemnifies the Bank against any and all loss and reasonable expenses which the Bank may sustain or incur as a consequence of any of the following:

(a) default in payment of the principal amount of any Eurodollar Loan or any part thereof or interest accrued thereon, or any other amount due in connection with the Loan Documents;

(b) the occurrence of any other Default under this Agreement;

(c) the failure of the Borrower to borrow a Eurodollar Loan after sending notice of the amount and requested interest rate with respect to the making of any such Loan;

(d) the receipt or recovery by the Bank of all or any part of a Eurodollar Loan on any Installment Payment Date or prior to the maturity or the last day of the Interest Period thereof (whether by prepayment, acceleration or otherwise); or

(e) the conversion, prior to the last day of an applicable Interest Period, of a Eurodollar Loan into a Fluctuating Rate Loan.

Without limiting the effect of the foregoing, the amount to be paid by the Borrower to the Bank in order to so indemnify the Bank for any loss occasioned by any of the events described in the preceding paragraph, and as liquidated damages therefor, shall be equal to the excess, discounted to its present value as of the date paid to the Bank, of (i) the amount of interest which otherwise would have accrued on the principal amount so received, recovered, converted or not borrowed during the period (the "Indemnity Period") commencing with the date of such receipt, recovery, conversion or failure to borrow to the last day of the applicable Interest Period for such Eurodollar Loan at the rate of interest applicable to such Loan (or the rate of interest agreed to in the case of a failure to borrow) provided for herein (prior to a Default) over (ii) the amount of interest which would be earned by the Bank during the Indemnity Period if it invested the principal amount so received, recovered, converted or not borrowed at the rate per annum determined by the Bank as the rate it would bid in the London interbank market for a deposit of Eurodollars in an amount approximately equal to such principal amount for a period of time comparable to the Indemnity Period.

A certificate as to any additional amounts payable pursuant to this Section setting forth the basis and method of determining such amounts shall be conclusive, absent manifest error, as to the determination by the Bank set forth therein if made reasonably and in good faith. The Borrower shall pay any amounts so certified to it by the Bank within 10 days of receipt of any such certificate. For purposes of this Section, all references to the "Bank" shall be deemed to include any participant in the Commitment or Loans.

2.16 Alternate Rate of Interest. In the event, and on each occasion, that on the day two Business Days prior to the commencement of any Interest Period for a Eurodollar Loan, the Bank shall have determined (i) that dollar deposits in the amount of the requested principal amount of such Eurodollar Loan are not generally available in the London Interbank Market, (ii) that the rate at which such dollar deposits are being offered will not adequately and fairly reflect the cost to the Bank of making or maintaining such Eurodollar Loan during such Interest Period, or (iii) that reasonable means do not exist for ascertaining the Adjusted Libor Rate, the Bank shall, as soon as practicable thereafter, give written or telex notice of such determination to the Borrower. In the event of any such determination, until the circumstances giving rise to such notice no longer exist, no Eurodollar Loans will be made hereunder. Each determination by the Bank hereunder shall be conclusive absent manifest error.

2.17 Change in Legality.

(a) Notwithstanding anything to the contrary herein contained, if any change in any law or regulation or in the interpretation thereof by any governmental authority charged with the administration or interpretation thereof shall make it unlawful for the Bank to make or maintain any Eurodollar Loan, then, by written notice to the Borrower, the Bank may:

(i) declare that Eurodollar Loans will not thereafter be made by the Bank hereunder, whereupon the Borrower shall be prohibited from requesting Eurodollar Loans from the Bank hereunder unless such declaration is subsequently withdrawn; and

(ii) require that all outstanding Eurodollar Loans made by it be converted to Fluctuating Rate Loans, in which event (x) all such Eurodollar Loans shall be automatically converted to Fluctuating Rate Loans as of the effective date of such notice as provided in paragraph (b) below and (y) all payments and prepayments of principal which would otherwise have been applied to repay the converted Eurodollar Loans shall instead be applied to repay the Fluctuating Rate Loans resulting from the conversion of such Eurodollar Loans.

(b) For purposes of this Section, (i) a notice to the Borrower by the Bank pursuant to paragraph (a) above shall be effective, if lawful, on the last day of the then current Interest Period; in all other cases, such notice shall be effective on the day of receipt by the Borrower and (ii) all references to the "Bank" shall be deemed to include any participant in the Commitment and/or the loans.

SECTION 3. REPRESENTATIONS AND WARRANTIES.

In order to induce the Bank to enter into this Agreement and to make the financial accommodations herein provided for, the Borrower hereby covenants, represents and warrants to the Bank that:

3.1 Financial Condition. (a) The unaudited consolidated balance sheet of the Borrower (which include Pro-Bel) as of December 31, 1998 and the related statements of operations, shareholders' equity and cash flows for the fiscal year ended on such date, have heretofore been furnished to the Bank (with statements certified by Price Waterhouse Coopers to follow within 32 days of closing), are complete and correct and present fairly the financial condition of the Borrower and Pro-Bel as at such date, and the results of its operations for the fiscal year then ended and the interim financial statements of the Borrower and Pro-Bel as at September 30, 1998 and the related consolidated statements of operations, shareholders' equity and cash flows for the fiscal quarter then ended on such date prepared by management of the Borrower and certified as true and correct by the chief financial officer of the Borrower, copies of which statements have heretofore been furnished to the Bank, are complete and correct and present fairly the financial condition of the Borrower and Pro-Bel as at such date, and the results of its operations for the fiscal quarter then ended. Such financial statements, including schedules and notes thereto, have been prepared in accordance with GAAP. Neither the Borrower nor Pro-Bel has any material contingent obligations, contingent liabilities or liabilities for taxes, long-term leases or unusual forward or long-term commitments, which are not reflected in the foregoing certified statements or in the notes thereto. Since the date of the aforementioned financial statements, there has been no material adverse change in the business, operations, assets or financial or other condition of the Borrower or Pro-Bel.

(b) The Consolidating balance sheet of Borrower as of December 31, 1998 and the related statements shareholders' equity and cash flows (to be provided by Borrower within 32 days of closing) and the consolidating statement of operations (heretofore provided to Bank) for the fiscal year ended on such date are complete and correct and present fairly the financial condition of the Borrower as at such date.

3.2 Corporate Existence; Compliance with Law. Each of the active Subsidiaries of the Borrower is indicated on Schedule A attached hereto. The Borrower and each of its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, (b) has the corporate power and authority and the legal right to own and operate its property, and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign corporation and in good standing under the laws of each jurisdiction where its ownership or operation of property or the conduct of its business require such qualification, and (d) is in compliance with all Requirements of Law; except to the extent that the failure to so qualify as a foreign corporation as required by clause (c) of this Section or to comply with all Requirements of Law as required by clause (d) of this Section could not, in the aggregate, have a material adverse effect on the business, operations, property or financial or other condition of any such Person, and could not materially adversely affect the ability of the Borrower or any Guarantor to perform its obligations under any Loan Document to which it is a party .

3.3 Corporate Power; Authorization; Enforceable Obligations. The Borrower has the corporate power and authority and the legal right to make, execute, deliver and perform its obligations under the Loan Documents to which it is a party and to borrow hereunder and has taken all necessary corporate action to authorize the borrowings on the terms and conditions of the Loan Documents and to authorize the execution, delivery and performance of the Loan Documents. No consent or authorization of, filing with, or other act by or in respect of any other Person (including, without limitation, stockholders and creditors of the Borrower) or any Governmental Authority, is required in connection with the borrowings hereunder or with the execution, delivery, performance, validity or enforceability of the Loan Documents. The Loan Documents will be duly executed and delivered on behalf of the Borrower and, when executed and delivered, will each constitute a legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally.

3.4 Power, Authorization, Enforceable Obligations of Guarantors. Each Guarantor, if any, has the power and authority and the legal right to make, deliver and perform its Guarantee and Security Agreement and the transactions contemplated thereby and has taken all necessary corporate action to authorize the execution, delivery and performance of its Guarantee and Security Agreement. No consent or authorization of, filing with, or other act by or in respect of any other Person (including stockholders and creditors of the Guarantors) or any Governmental Authority is required in connection with the execution, delivery, performance, validity or enforceability of such Guarantee or Security Agreement. Each Guarantee and each Security Agreement have been duly executed and delivered by the respective parties thereto, and each such document constitutes a legal, valid and binding obligation of the respective Guarantor enforceable against such Guarantor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditor's rights generally.

3.5 No Legal Bar. The execution, delivery and performance of the Loan Documents and the borrowings hereunder and the use of the proceeds thereof by the Borrower and the execution, delivery and performance of the Guarantees and Security Agreements by the Guarantors, if any, will not violate any Requirement of Law or any Contractual Obligation of the Borrower or the Guarantors, and will not result in, or require, the creation or imposition of any lien on any of its properties or revenues pursuant to any Requirement of Law or Contractual Obligation except those in favor of the Bank provided herein.

3.6 No Material Litigation. Except as previously disclosed to Bank, no litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending by or against the Borrower or any Subsidiary or against any of their properties or revenues with respect to the Loan Documents or any of the transactions contemplated hereby or thereby, which would have a Material Adverse Effect.

3.7 No Default. Neither the Borrower nor any Subsidiary is in default under or with respect to any Contractual Obligation in any respect which could have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing.

3.8 No Burdensome Restrictions. No Contractual Obligation of the Borrower or any Subsidiary and no Requirement of Law would have a Material Adverse Effect.

3.9 Taxes. The Borrower and its Subsidiaries have filed or caused to be filed all tax returns which to the knowledge of the Borrower are required to be filed, and have paid all taxes shown to be due and payable on said returns or on any assessments made against them or any of their property except such taxes, if any, as are being contested in good faith and by proper proceedings and as to which adequate reserves have been maintained.

3.10 Federal Regulations. The Borrower is not engaged nor will it engage, principally or as one of its important activities, in the business of extending credit for the purpose of "purchasing" or "carrying" any "margin stock" within the respective meanings of each of the quoted terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect. No part of the proceeds of any Loans hereunder will be used for "purchasing" or "carrying" "margin stock" as so defined or for any purpose which violates, or which would be inconsistent with, the provisions of the Regulations of such Board of Governors.

3.11 Environmental Matters.

(a) To the knowledge of the Borrower, none of the Real Property contains, or has previously contained, any hazardous or toxic waste or substances or underground storage tanks except in compliance with all applicable Environmental Laws.

(b) The Borrower's and each Subsidiary's use of the Real Property is in compliance with all applicable Environmental Laws affecting such Real Property, and, to the knowledge of the Borrower and each Subsidiary, there are no environmental conditions which could interfere with the continued use of the Real Property.

(c) Neither the Borrower nor any of its Subsidiaries has received any notices of violations or advisory action by regulatory agencies regarding environmental control matters or permit compliance which would have a Material Adverse Effect.

(d) To the knowledge of the Borrower and each Subsidiary, hazardous waste has not been transferred from any of the Real Property to any other locations which is not in compliance with all applicable Environmental Laws or permit requirements.

(e) With respect to the Real Property, to the knowledge of the Borrower, there are no proceedings, governmental administrative actions or judicial proceedings pending or, to the best knowledge of the Borrower, contemplated under any federal, state or local law regulating the discharge of hazardous or toxic materials or substances into the environment, to which the Borrower or any of its Subsidiaries is named as a party.

SECTION 4. CONDITIONS PRECEDENT.

4.1 Conditions to Initial Revolving Credit Loan. The obligation of the Bank to make the initial Revolving Credit Loan to the Borrower hereunder is subject to the satisfaction of the following conditions precedent:

(a) Revolving Credit Note. The Bank shall have received the Revolving Credit Note conforming to the requirements hereof and duly executed by the Borrower.

(b) General Security Agreement. The Bank shall have received a general security agreement (the "General Security Agreement") duly executed by the Borrower together with

- UCC-1 financing statements

- UCC-3 termination statements, if required

- insurance certificate naming the Bank as loss payee

- an assignment to the Bank of the Ex-Im Bank insurance policy (to the extent Eligible Foreign Accounts Receivable)

(c) Trademark Security Agreement. The Bank shall have received a trademark collateral security agreement (the "Trademark Security Agreement") duly executed by the Borrower together with a trademark registration form and same shall have been submitted for filing with the U.S. Commissioner of Patents and Trademarks together with

- trademark searches

- evidence of termination or assignment of any security interests in

the trademarks

(d) Patent Security Agreement. The Bank shall have received a patent collateral security agreement (the "Patent Security Agreement") duly executed by NATWest Bank N.A. and acknowledged by the Borrower together with a patent registration form and same shall have been submitted for filing with the U.S. Commissioner of Patents and Trademarks together with

- patent searches

- evidence of termination or assignment of any security interests in the patents

(e) Landlord Waivers. The Bank shall have received executed landlord waivers from all landlords of premises leased by the Borrower where equipment or inventory of the Borrower is located.

(f) Borrowing Base Certificate. The Bank shall have received and satisfactorily reviewed a Borrowing Base Certificate as set forth in Section 5.2(c) hereof.

(g) Legal Opinion. The Bank shall have received a favorable opinion of counsel to the Borrower substantially in the form of Exhibit D hereto. Such opinion shall also cover such other matters incident to the transactions contemplated by this Agreement as the Bank shall reasonably require.

(h) Certified Copies and Other Documents: The Bank shall have received such certificates and other documents relating to the Borrower with respect to the matters herein contemplated as the Bank may request, including but not limited to:

(1) Certificate of good standing from the New York Secretary of State and certificates of authority to do business from each other jurisdiction in which the Borrower conducts business;

(2) Certificate of incorporation certified by the New York Secretary of State;

(3) An Officers' Certificate dated the date of this Agreement certifying, (x) true and correct copies of the by-laws of the Borrower as in effect on the date of adoption of the resolutions referred to in (y) of this subsection (3), (y) true and correct copies of resolutions adopted by the board of directors of the Borrower (i) authorizing the borrowings from the Bank hereunder, the execution and delivery by the Borrower of the Loan Documents to which it is a party and the performance by the Borrower of its obligations under the Loan Documents and the granting of the lien and security interest contemplated thereby, (ii) approving forms in substantially execution form of the Loan Documents, and (iii) authorizing officers of the Borrower to execute and deliver the Loan Documents and any related documents, and (z) the incumbency and specimen signatures of the officers of the Borrower executing any documents delivered to the Bank by the Borrower in connection with the Loans.

(i) Fees. There shall have been delivered to the Bank evidence of payment of the Closing Fee, the initial installment of the Collateral Management Fee and the Bank's attorneys' fees and disbursements.

(j) Minimum Availability. The Borrower shall be required to have a minimum undrawn Borrowing Base availability of $1,000,000.00 after giving effect to the Term Loan and the initial borrowing under the Revolving Credit Loan.

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

4.2 Conditions to the Term Loan. The obligation of the Bank to make the Term Loan to the Borrower hereunder is subject to the satisfaction of the following conditions precedent:

(a) Section 4.1 Conditions. Each of the conditions set forth in Section 4.1 shall have been satisfied.

(b) Term Note. The Bank shall have received the Term Note conforming to the requirements hereof and duly executed by the Borrower.

(c) Pledge Agreement. The Bank shall have received a pledge agreement (the "Pledge Agreement") duly executed by the Borrower pledging all of the shares of stock of Pro-Bel together with

- the original share certificates of Pro-Bel

- stock powers

(d) Borrowing Base Certificate. The Bank shall have received a Borrowing Base Certificate as set forth in Section 5.2 (c) hereof.

(e) Legal Opinion. The Bank shall have received a favorable opinion of counsel to the Borrower substantially in the form of Exhibit D hereto as it pertains to the Term Loan. Such opinions shall also cover such other matters incident to the transactions contemplated by this Agreement as the Bank shall reasonably require.

(f) Certified Copies and Other Documents. The Bank shall have received such certificates and other documents relating to Pro-Bel with respect to the matters herein contemplated as the Bank may request, including, but not limited to:

(1) certificate of good standing (or equivalent) from the applicable United Kingdom authority; (2) certificate of incorporation (or equivalent) certified by the applicable United Kingdom authority; (3) an Officers' Certificate dated the date of this Agreement certifying, true and correct copies of the by-laws of Pro-Bel as in effect on the date of this Agreement; (4) an opinion of counsel to Pro-Bel as to its corporate existence.

4.3 Conditions to All Loans. The obligation of the Bank to take any Loan (including the initial Revolving Credit Loan and the Term Loan) to be made by it hereunder is subject to the satisfaction of the following conditions precedent:

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

(b) No Default or Event of Default. No Default or Event of Default shall have occurred and be continuing on the date an extension of credit is to be made or after giving effect to the extension of credit to be made on such date.

(c) Compliance with Borrowing Base. After taking into account the Loan or extension of credit to be made, all outstanding extensions of credit together with the requested extension of credit shall not exceed the Borrowing Base. In addition, in order to request any advance under the Revolving Credit Loan that would cause either (i) the undrawn availability under the Borrowing Base to be less than $475,000.00 or (ii) the amount of the Commitment remaining to be less than $475,000.00, the Borrower shall be required to deliver to the Bank a certificate demonstrating a Fixed Charge Coverage Ratio of not less than 1.25.

(d) Pro-Bel shall have executed and delivered a Guaranty in the form of Exhibit E hereto.

Each borrowing by the Borrower hereunder shall constitute a representation and warranty by the Borrower as of the date of each such borrowing that the conditions in clauses (a), (b) and (c) of this Section have been satisfied.

SECTION 5. AFFIRMATIVE COVENANTS.

The Borrower hereby agrees that, so long as the Commitment remains in effect, any Note remains unpaid, or any other amount is owing to the Bank hereunder, the Borrower will and will cause each Subsidiary to and, with respect to Sections 5.1, 5.3, 5.4, 5.5, 5.7, 5.8 and 5.10, each Non-Restricted Subsidiary to:

5.1 Corporate Existence and Qualification. Take the necessary steps to preserve its corporate existence and its right to conduct business in all states in which the failure to so preserve its corporate existence or right to conduct business could have a Material Adverse Effect.

5.2 Financial Information and Compliance Certificates.

(a) Keep its books of account in accordance with good accounting practices and furnish to the Bank:

(1) As soon as available, but not more than one hundred twenty (120) days after the close of each fiscal year, the certified consolidated financial statements of the Borrower (which include Pro-Bel), including a balance sheet with related statements of income, retained earnings and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all prepared in accordance with GAAP consistently applied and certified by Price waterhouse Coopers, CPAs or another firm of independent certified public accountants reasonably acceptable to the Bank.

(2) As soon as available, but not more than forty-five (45) days after the close of the first three fiscal quarters of each fiscal year, the consolidated financial statements of the Borrower and its Subsidiaries including a balance sheet with related statements of income, retained earnings and cash flows as at the end of such quarter, all prepared in accordance with GAAP consistently applied and prepared by management and certified as true and correct by the chief financial officer of the Borrower.

(3) As soon as available, but not more than one hundred twenty (120) days after the close of each fiscal year the consolidating financial statements of the Borrower and its Subsidiaries, including a consolidating balance sheet with related consolidating statements of income, retained earnings and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all prepared in accordance with GAAP consistently applied and prepared by management and certified as true and correct by the chief financial officer of the Borrower.

(4) As soon as available, but not more than forty-five (45) days after the close of the first three fiscal quarters of each fiscal year, the consolidating financial statements of the Borrower and its consolidated Subsidiaries including a consolidating balance sheet with related consolidating statements of income, retained earnings and cash flows as at the end of such quarter, all prepared in accordance with GAAP consistently applied and prepared by management and certified as true and correct by the chief financial officer of the Borrower.

(5) With reasonable promptness, such other data as may be reasonably requested by the Bank, including, but not limited to, copies of the annual reports, regular periodic and special reports, schedules or other material which the Borrower may now or hereafter be required to file with or deliver to any securities exchange or the Securities and Exchange Commission or any domestic or non-domestic regulatory body and will, during regular business hours and upon reasonable notice, permit the Bank by or through any of its officers, agents, employees, attorneys or accountants to inspect and make extracts from such Borrower's books and records.

(6) As soon as availabe, but not more than 30 days after the end of each calendar month, financial statements of Borrower (unconsolidated) including a balance sheet and related statements of income, retained earnings and cash flows as at the end of such month, prepared in accordance with GAAP consistently applied and certified as true and correct by the chief financial officer of Borrower.

(7) As soon as available, but not later than December 1 of each year, a business plan for the upcoming year (presented on a quarterly basis).

(b) At such time as Borrower considers that it is eligible to reduce its interest rate, deliver a certificate of the chief financial officer of the Borrower evidencing a computation of compliance with the provisions of Section 6 hereof and stating that in each case except as disclosed in such certificate, the person making such certificate has no knowledge of any Default or Event of Default.

(c) Deliver to the Bank an accounts receivable agings schedule reflecting aging of receivables from invoice date accompanied by a Borrowing Base Certificate indicating a computation of the Borrowing Base promptly upon request of the Bank and monthly (not later than 20 days after the last day of each month) covering the period ending the last day of the immediately preceding month.

(d) Within 5 days of any officer of the Borrower obtaining knowledge of any Default, if such Default is then continuing, Borrower shall furnish to the Bank a certificate of the chief financial officer of the Borrower setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto.

5.3 Insurance. Maintain insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which the Borrower operates and naming the Bank as an additional insured and loss payee thereon as its interest may appear and if there is any Eligible Foreign Accounts Receivable maintain an Export Credit Insurance Policy from Ex-Im Bank (or such other insurer acceptable to Bank) in amounts and coverage acceptable to the Bank and name the Bank as assignee thereunder. The Borrower will not eliminate such insurance if doing so would create and over advance condition.

5.4 Preservation of Properties; Compliance with Law. Maintain and preserve all of its properties which are used or which are useful in the judgment of the Borrower in the conduct of its business in good working order and condition, ordinary wear and tear excepted; comply with all Requirements of Law except where contested in good faith and by proper proceedings if appropriate reserves are maintained with respect thereto.

5.5 Taxes. Duly pay and discharge all taxes or other claims which might become a lien upon any of its property except to the extent that any thereof are being in good faith appropriately contested with adequate reserves provided therefor.

5.6 Maintain Operating Accounts. Maintain all of its primary operating accounts with an institution acceptable to the Bank.

5.7 Notice of Litigation. Promptly notify the Bank in writing of any litigation, legal proceeding or dispute, other than disputes in the ordinary course of business or, whether or not in the ordinary course of business, involving amounts in excess of Three Hundred Fifty Thousand and 00/100 ($350,000.00) Dollars, affecting the Borrower or any Subsidiary, whether or not fully covered by insurance, and regardless of the subject matter thereof (excluding, however, any actions relating to workers' compensation claims or negligence claims relating to use of motor vehicles, if fully covered by insurance, subject to deductibles).

5.8 Indemnity (Environmental Matters). Indemnify the Bank against any liability, loss, cost, damage, or expense (including, without limitation, reasonable attorneys' fees) arising from (i) the imposition or recording of a lien by any local, state, or federal government or governmental agency or authority pursuant to any Environmental Laws; (ii) claims of any private parties regarding violations of Environmental Laws; and (iii) costs and expenses (including, without limitation, reasonable attorneys' fees and fees incidental to the securing of repayment of such costs and expenses) incurred by the Borrower, any Subsidiary or the Bank in connection with compliance by the Borrower, any Subsidiary or the Bank with any statute, regulation or order issued pursuant to any Environmental Laws by any local, state or federal government or governmental agency or authority.

5.9 New Subsidiaries. Cause any Restricted Subsidiary of the Borrower formed after the date of this Agreement to become a guarantor of all debts and obligations of the Borrower under this Agreement and grant a security interest to the Bank in all of its personal property to secure such guarantee pursuant to a security agreement on the Bank's standard form and cause such Restricted Subsidiary to execute an agreement, in form satisfactory to the Bank, subjecting it to the affirmative and negative covenants contained in this Agreement.

5.10 Books and Records; Field Audit. Keep proper books of record and account in accordance with GAAP and permit the Bank or its duly authorized agents to examine the books and records of the Borrower at any time, such authorization to include, without limitation, the annual field audit, test or examination of any or all of the assets of the Borrower.

SECTION 6. FINANCIAL COVENANTS.

6.1 The Borrower hereby agrees that, so long as the Commitment remains in effect, any Note remains outstanding and unpaid, or any other amount is owing to the Bank hereunder, the Borrower will:

(a) Minimum Cumulative EBIT. Maintain at all times during the periods designated below minimum cumulative earnings before interest and taxes ("Minimum EBIT"):

Period Minimum EBIT

Q2 1999 $ 250,000.00

Q2 to Q3 1999 $ 800,000.00

Q2 to Q4 1999 $1,500,000.00

Q2 to Q1 2000 $1,500,000.00

4 quarters ended Q2 2000

and thereafter $2,000,000.00

SECTION 7. NEGATIVE COVENANTS.

The Borrower hereby agrees that, so long as the Commitment remains in effect, any Note remains outstanding and unpaid, or any other amount is owing to the Bank hereunder, it will not, nor will it permit any of its Restricted Subsidiaries to and with respect to Sections 7.2, 7.6, 7.7, 7.8, 7.10, and 7.12 any of its Non-Restricted Subsidiaries to:

7.1 Indebtedness for Borrowed Money. Incur, or permit to exist, any Indebtedness for borrowed money except (i) Indebtedness incurred pursuant to borrowings hereunder and under any other loans made by the Bank in its discretion to the Borrower or any Subsidiary, (ii) Indebtedness existing on the date hereof and reflected in the financial statements referred to in Section 3.1 hereof, (iii) purchase money Indebtedness incurred in connection with Permitted Acquisitions or in the acquisition of fixed assets (including capital leases) and (iv) convertible debt which is unsecured and fully subordinated, does not exceed $10 million in principal amount and has terms and conditions otherwise acceptable to the Bank ("Permitted Convertible Debt").

7.2 Mergers, Acquisitions and Sales of Assets. Other than Permitted Acquisitions, enter into any merger or consolidation or liquidate, windup or dissolve itself or sell, transfer or lease or otherwise dispose of all or substantially all of its assets (other than sales of inventory and obsolescent equipment in the ordinary course of business) or acquire by purchase or otherwise the business or assets of, or stock of, another business entity; except that any Subsidiary may merge into or consolidate with any other Subsidiary which is wholly-owned by the Borrower and any Subsidiary which is wholly-owned by the Borrower may merge with or consolidate into the Borrower provided that the Borrower is the surviving corporation. If Borrower or any Subsidiary sells less than substantially all of its assets then Borrower shall remit to Bank all proceeds of such sale in excess of $100,000 and such proceeds shall be applied to reduce the outstanding principal amount of the Term Loan.

7.3 Loans; Investments. Lend or advance money, credit or property to or invest in (by capital contribution, loan, purchase or otherwise) any firm, corporation, or other Person except (i) investments in United States Government obligations, certificates of deposit of any banking institution with combined capital and surplus of at least $200,000,000, (ii) accounts receivable arising out of sales of inventory in the ordinary course of business, (iii) commercial paper of a domestic issuer rated at least "A-l" by Standard & Poor's Ratings Group or "P-1" by Moody's Investors Service, Inc., and (iv) in addition to all other permitted investments and loans, investments in or loans to any other Person, provided that the aggregate amount of such investments, loans and guaranties permitted by Section 7.5 (ii) hereof, do not exceed in the aggregate Seven Hundred Fifty Thousand and 00/100 ($750,000.00) Dollars at any one time outstanding.

7.4 Liens. Create, assume or permit to exist, any Lien on any of its property or assets now owned or hereafter acquired except (i) Liens in favor of the Bank; (ii) other Liens incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of advances or credit and which do not materially impair the use thereof in the operation of its business; (iii) Liens for taxes or other governmental charges which are not delinquent or which are being contested in good faith and for which a reserve shall have been established in accordance with GAAP; and (iv) purchase money Liens granted to secure the unpaid purchase price of any fixed assets purchased.

7.5 Contingent Liabilities. Assume, endorse, be or become liable for or guarantee the obligations of any Person except (i) the endorsement of negotiable instruments for deposit or collection in the ordinary course of business and (ii) guaranties of obligations which when aggregated with the loans and investments permitted by Section 7.3 (v) hereof do not exceed Seven Hundred Fifty Thousand and 00/100 ($750,000.00) Dollars at any one time outstanding.

7.6 Dividends; Payments. Declare or pay any dividends on its capital stock (other than dividends payable solely in shares of its own common stock), or make any payment of principal on any Indebtedness, or purchase, redeem, retire or otherwise acquire any Indebtedness or any of its capital stock at any time outstanding, except, provided no Event of Default has occurred and is continuing thereunder, the Borrower may do any of the foregoing other than pay the principal of any Indebtedness (other then Indebtedness permitted pursuant to Section 7.1(i) and (ii), above) in any fiscal year up to an amount not exceeding, in the aggregate, twenty five (25%) percent of the Borrower's net income before extraordinary gains in such fiscal year. In addition, any Subsidiary wholly owned by the Borrower may declare and pay dividends to the Borrower, and Borrower and its Subsidiaries may purchase their stock to the extent required by their employee benefit plans.

7.7Sales of Receivables: Sale - Leasebacks. Sell, discount or otherwise dispose of notes, accounts receivable or other obligations owing to the Borrower, with or without recourse, except for the purpose of collection in the ordinary course of business; or sell any asset pursuant to an arrangement to thereafter lease such asset from the purchaser thereof.

7.8 Nature of Business. Materially alter the nature of its business.

7.9 Stock of Subsidiaries. Sell or otherwise dispose of any Subsidiary (except in connection with a merger or consolidation of a Subsidiary into the Borrower or another Subsidiary) or permit a Subsidiary to issue any additional shares of its capital stock except pro rata to its stockholders.

7.10 ERISA. (i) Terminate any Plan so as to result in any material liability to the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (the "PBGC"), (ii) engage in or permit any person to engage in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1954, as amended (the "Code")) involving any Plan which would subject a Borrower to any material tax, penalty or other liability, (iii) incur or suffer to exist any material "accumulated funding deficiency" (as defined in Section 302 of ERISA), whether or not waived, involving any Plan, or (iv) allow or suffer to exist any event or condition which presents a material risk of incurring a material liability to the PBGC by reason of termination of any Plan.

7.11 Accounting Changes. Make, or permit any Subsidiary to make any change in their accounting treatment or financial reporting practices except as required or permitted by GAAP in effect from time to time.

7.12 Transactions with Affiliates. Except as otherwise specifically set forth in this Agreement, directly or indirectly purchase, acquire or lease any property from, or sell, transfer or lease any property to, or enter into any other transaction, with any Affiliate except in the ordinary course of business and at prices and on terms not less favorable to it than those which would have been obtained in an arm's-length transaction with a non-affiliated third party. In addition, Borrower shall never become a net creditor of Pro-Bel.

SECTION 8. EVENTS OF DEFAULT.

Upon the occurrence and during the continuance of any of the following events (each an Event of Default):

(a) Borrower shall fail to pay any interest on any of the Notes, or principal of any of the Notes when due, or shall fail to pay any other amount payable hereunder within three days after written notice or the Borrower or any Guarantor shall default under any other Loan Document after the giving of notice or expiration of grace periods, if any, under such Loan Document; or

(b) Any representation or warranty made or deemed made by the Borrower herein or which is contained in any certificate, document or financial or other statement furnished at any time under or in connection with this Agreement shall prove to have been false in any material respect on or as of the date made or deemed made; or

(c) Borrower shall default in the observance or performance of any covenant or provision contained in Sections 5, 6 or 7 hereof; or

(d) Borrower shall default in the observance or performance of any other provision contained in this Agreement and such default shall continue unremedied for a period of 10 days after written notice thereof is given to the Borrower by the Bank; provided that if the default is of such nature that it cannot reasonably be cured within such 10 day period, no default shall be deemed to have occurred hereunder so long as the Borrower commences to cure such default within such 10 day period and thereafter diligently and expeditiously proceeds to cure same, provided that no extension shall be for a period beyond 30 days; or

(e) The Borrower or any Restricted Subsidiary then engaged in business shall (i) default in any payment of any indebtedness for borrowed money in excess of Two Hundred Thousand and 00/100 ($200,000.00) Dollars (other than the Notes) beyond the period of grace, if any, provided in the instrument or agreement under which such indebtedness was created; or (ii) default beyond the period of grace, if any, in the observance or performance of any other agreement or condition relating to any such indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto or any other event shall occur or condition exist, in each case the effect of which default or other event or condition is to cause or permit the holder or holders of such indebtedness (or a trustee or agent on behalf of such holder or holders) to cause such indebtedness to become due prior to its stated maturity; or

(f) (i) The Borrower or any Restricted Subsidiary then engaged in business shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets, or the Borrower or any Subsidiary shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against the Borrower or any Subsidiary any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 30 days; or (iii) there shall be commenced against the Borrower or any Subsidiary any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall have not been vacated, discharged, or stayed or bonded pending appeal within 20 days from the entry thereof; or (iv) the Borrower or any Subsidiary shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii) or (iii) of this Section 8 (f); or (v) the Borrower or any Subsidiary shall generally not, or shall be unable to or shall admit in writing its inability to, pay its debts as they become due; or

(g) (i) the Borrower or any Restricted Subsidiary then engaged in business shall engage in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Plan, which Reportable Event or institution of proceedings is , in the reasonable opinion of the Bank, likely to result in the termination of such Plan for purposes of Title IV of ERISA, and, in the case of a Reportable Event, the continuance of such Reportable Event unremedied for 20 days after notice of such Reportable Event pursuant to Section 4043 (a), (c) or (d) of ERISA is given or the continuance of such proceedings for 20 days after commencement thereof, as the case may be, or (iv) any Plan shall terminate for purposes of Title IV of ERISA, and in each case in clauses (i) through (iv) above, such event or condition could subject the Borrower to any tax, penalty or other liabilities in the aggregate material in relation to the business, operations or property of the Borrower; or

(h) any Guarantee or Security Agreement of any Guarantor shall cease to be in full force and effect; or

(i) any of the Liens created and granted pursuant to the Security Agreements or the Pledge Agreement shall fail to be valid, first, perfected Liens subject to no prior or equal Lien except as permitted by this Agreement.

then, in any such event, any or all of the following actions may be taken: (i) the Bank may, at its option, declare the Commitment and all obligations of the Bank to make Loans to the Borrower shall immediately terminate; (ii) the Bank may, at its option, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the Notes to be due and payable and the same, and all interest accrued thereon, shall forthwith become due and payable without presentment, demand, protest or notice of any kind, all of which are hereby waived, anything contained herein or in any instrument evidencing the Loans to the contrary notwithstanding.

SECTION 9. COLLATERAL SECURITY.

9.1 General Loan and Collateral Agreement. As collateral security for the payment of the Obligations, the Borrower hereby grants to the Bank a lien on and security interest in (i) all Accounts of Borrower and it Affiliates, (ii) all intangible property of Borrower and its Affiliates, (iii) any and all deposits or other sums at any time credited by or due from the Bank to the Borrower, whether in regular or special depository accounts or otherwise, and any and all monies, securities and other property of the Borrower, and the proceeds thereof, now or hereafter held or received by or in transit to the Bank from or for the Borrower, whether for safekeeping, custody, pledge, transmission, collection or otherwise, and any such deposits, sums, monies, securities and other property, may at any time after the occurrence of any Event of Default be set-off, appropriated and applied by the Bank against any of the Obligations whether or not such Obligations are then due or are secured by any collateral, or if they are so secured, whether or not such collateral held by the Bank is considered to be adequate.

9.2 Additional Collateral Security. In addition to the collateral described in Section 9.1 hereof, payment of the Obligations is also secured by a first priority security interest in (i) all personal property including trademarks and patents of the Borrower (other than application for trademarks and patents based on intent to use) whether now owned or hereafter acquired, and (ii) all outstanding shares of stock of Pro-Bel, as provided, respectively, in the Security Agreements and Pledge Agreement executed and delivered by the Borrower to the Bank.

SECTION 10. MISCELLANEOUS.

10.1 Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing unless otherwise expressly provided herein and shall be deemed to have been duly given or made when delivered by hand, or by telegram or telecopy, or when deposited in the mail addressed as follows, or to such address as may be hereafter notified in writing by the respective parties hereto and any future holders of any Note:

The Borrower:

Chyron Corporation

5 Hub Drive

Melville, New York 11747

Attn: Chief Financial Officer

with a copy to:

Camhy, Karlinsky & Stein LLP

1740 Broadway

New York, New York 10019-4315

Attn: Daniel Dewolf, Esq.

The Bank:

c/o AmSouth Capital Corp.

350 Park Avenue

New York, New York 10022

Attn: Patrick R. Brocker

Executive Vice President

with a courtesy copy to:

Siller Wilk LLP

747 Third Avenue

New York, New York 10017

Attn: Hugh P. Finnegan

10.2 No Waiver: Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Bank, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right.

10.3 Survival of Representations and Warranties. All representations and warranties made hereunder and in any Loan Document shall survive the execution and delivery of this Agreement and the Notes.

10.4 Payment of Expenses: Examination.

(a) The Borrower agrees to pay or reimburse the Bank for all its reasonable costs and expenses (including, without limitation, the reasonable fees and expense of attorneys for the Bank) incurred in connection with (i) the enforcement or preservation of any rights under any Loan Document or any other instrument or agreement entered into in connection herewith or therewith including, without limitation, the reasonable fees and disbursements of attorneys for the Bank; (ii) any claim or action threatened, made or brought against the Bank arising out of or relating to any extent to any Loan Document or any instrument or agreement entered into in connection with the transactions contemplated hereby or thereby; (iii) the perfection of any security interest in the Collateral or in the maintenance of the Collateral; (iv) any amendment or modification of any Loan Document; (v) the payment of any tax, assessment, recording fee or similar charge; (vi) any waiver of any right of the Bank under any Loan Document and (vii) the reasonable fees and disbursements of any counsel to the Bank incurred from time to time in connection with the transactions contemplated by this Agreement.

(b) The Borrower agrees that at any time and from time to time upon reasonable notice and during regular business hours the Bank may conduct, at the Borrower's expense, an examination of the Borrower's books and records (provided, if more frequently than annually, at the Bank's expense). The obligations set forth in this Section 10.4 shall be in addition to any other obligations or liabilities of the Borrower to the Bank hereunder or at common law or otherwise. The provisions of this Section 10.4 shall survive the payment of the Notes and the termination of this Agreement.

10.5 WAIVER OF JURY TRIAL, SET-OFF AND COUNTERCLAIM. THE BORROWER AND THE BANK IN ANY LITIGATION (WHETHER OR NOT ARISING OUT OF OR RELATING TO THIS AGREEMENT) IN WHICH THEY SHALL BE ADVERSE PARTIES WAIVE THE RIGHT OF TRIAL BY JURY AND THE BORROWER WAIVES THE RIGHT TO INTERPOSE ANY SET-OFF OR COUNTERCLAIM OF ANY KIND OR DESCRIPTION IN ANY SUCH LITIGATION EXCEPT COUNTERCLAIMS WHICH WILL BE LOST IF NOT ASSERTED.

10.6 WAIVER OF AUTOMATIC STAY. THE BORROWER AGREES THAT, IN THE EVENT THAT THE BORROWER, ANY GUARANTOR OR ANY OF THE PERSONS OR PARTIES CONSTITUTING THE BORROWER OR ANY GUARANTOR SHALL (i) FILE WITH ANY BANKRUPTCY COURT OF COMPETENT JURISDICTION OR BE THE SUBJECT OF ANY PETITION UNDER TITLE 11 OF THE U.S. CODE, AS AMENDED ("BANKRUPTCY CODE"), (ii) BE THE SUBJECT OF ANY ORDER FOR RELIEF ISSUED UNDER THE BANKRUPTCY CODE, (iii) FILE OR BE THE SUBJECT OF ANY PETITION SEEKING ANY REORGANIZATION, ARRANGEMENT, COMPOSITION, READJUSTMENT, LIQUIDATION, DISSOLUTION, OR SIMILAR RELIEF UNDER ANY PRESENT OR FUTURE FEDERAL OR STATE ACT OR LAW RELATING TO BANKRUPTCY, INSOLVENCY, OR OTHER RELIEF FOR DEBTORS, (iv) HAVE SOUGHT OR CONSENTED TO OR ACQUIESCED IN THE APPOINTMENT OF ANY TRUSTEE, RECEIVER, CONSERVATOR, OR LIQUIDATOR, OR (v) BE THE SUBJECT OF ANY ORDER, JUDGMENT, OR DECREE ENTERED BY ANY COURT OF COMPETENT JURISDICTION APPROVING A PETITION FILED AGAINST SUCH PARTY FOR ANY REORGANIZATION, ARRANGEMENT, COMPOSITION, READJUSTMENT, LIQUIDATION, DISSOLUTION, OR SIMILAR RELIEF UNDER ANY PRESENT OR FUTURE FEDERAL OR STATE ACT OR LAW RELATING TO BANKRUPTCY, INSOLVENCY, OR RELIEF FOR DEBTOR, THE BANK SHALL THEREUPON BE ENTITLED AND THE BORROWER IRREVOCABLY CONSENTS TO IMMEDIATE AND UNCONDITIONAL RELIEF FROM ANY AUTOMATIC STAY IMPOSED BY SECTION 362 OF THE BANKRUPTCY CODE, OR OTHERWISE, ON OR AGAINST THE EXERCISE OF THE RIGHTS AND REMEDIES OTHERWISE AVAILABLE TO THE BANK AS PROVIDED FOR HEREIN, IN ANY NOTE, OTHER LOAN DOCUMENTS DELIVERED IN CONNECTION HEREWITH AND AS OTHERWISE PROVIDED BY LAW, AND THE BORROWER HEREBY IRREVOCABLY WAVES ANY RIGHT TO OBJECT TO SUCH RELIEF AND WILL NOT CONTEST ANY MOTION BY THE BANK SEEKING RELIEF FROM THE AUTOMATIC STAY AND THE BORROWER WILL COOPERATE WITH THE BANK, IN ANY MANNER REQUESTED BY THE BANK, IN ITS EFFORTS TO OBTAIN RELIEF FROM ANY SUCH STAY OR OTHER PROHIBITION.

10.7 LIMITATION OF LIABILITY. NO CLAIM MAY BE MADE BY (i) THE BORROWER, ANY GUARANTOR, ANY SUBSIDIARY, OR ANY OTHER PERSON AGAINST THE BANK OR THE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS OF ANY OF THE FOREGOING, FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES OR, TO THE FULLEST EXTENT PERMITTED BY LAW, FOR ANY PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM OR CAUSE OF ACTION (WHETHER BASED ON CONTRACT, TORT, STATUTORY LIABILITY, OR ANY OTHER GROUND) BASED ON, ARISING OUT OF OR RELATED TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, AND THE BORROWER (FOR ITSELF AND ON BEHALF OF EACH GUARANTOR AND EACH SUBSIDIARY) AND THE BANK HEREBY WAIVE, RELEASE AND AGREE NEVER TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER SUCH CLAIM NOW EXISTS OR HEREAFTER ARISES AND WHETHER OR NOT IT IS NOW KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

10.8 Modification and Waiver. No modification or waiver of, or with respect to any provision of this Agreement or any document or instrument delivered in connection therewith shall be effective unless and until it shall be in writing and signed by the Bank, and then such modification or waiver shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on the Borrower in any case shall, of itself, entitle it to any other or further notice demand in similar or other circumstances.

10.9 Successors and Assigns. This agreement shall be binding upon and inure to the benefit of the Borrower, the Bank, all future holders of the Notes and their respective successors and assigns, except that the Borrower may not assign or transfer nay of its rights under this Agreement without the prior written consent of the Bank. The term "Bank" as used herein shall be deemed to include the Bank and its successors, endorsees and assigns.

10.10 Governing Law; Consent to Jurisdiction. This Agreement and the other Loan Documents and any documents and instruments delivered in connection herewith and therewith and the rights and duties of the parties hereunder and thereunder shall be governed by, and construed and interpreted in accordance with, the law of the State of New York and the Borrower consents to the jurisdiction of the courts of the State of New York in any action brought to enforce any rights of the Bank under this Agreement and any document or instrument related hereto.

10.11 Entire Agreement. This Agreement and any other agreements, documents and instruments executed and delivered pursuant to or in connection with the Obligations contain the entire agreement between the parties relating to the subject matter hereof and thereof. The Borrower expressly acknowledges that the Bank has not made and the Borrower is not relying on any oral representations, agreements or commitments of the Bank or any officer, employee, agent or representative thereof.

10.12 Interest Adjustment. Notwithstanding anything to the contrary contained in this Agreement or any Note, the rate of interest payable on either Note shall never exceed the maximum rate of interest permitted under applicable law. If at any time the rate of interest otherwise prescribed herein shall exceed such maximum rate, and such prescribed rate is thereafter below such maximum rate, the prescribed rate shall be increased to the maximum rated for such period of time as is required so that the total amount of interest received by the Bank is that which would have been received by the Bank except for the operation of the first sentence of this Section 10.12.

10.13 Counterparts. This Agreement may be signed in any number of counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered in New York, New York by their proper and duly authorized officer as of the day and year first above written.

CHYRON CORPORATION

By:____________________________

Name:

Title:

AMSOUTH BANK

By:__________________________

Name:

Title:

SCHEDULE A

ACTIVE SUBSIDIARIES

Pro-Bel

EXHIBIT A

BORROWING BASE CERTIFICATE

EXHIBIT B

REVOLVING CREDIT NOTE

$12,000,000 New York, New York

March __, 1999

CHYRON CORPORATION, a New York corporation (the "Borrower"), for value received, hereby promises to pay to the order of AMSOUTH BANK (the "Bank") on March 31, 2002 at the office of the Bank specified in Section 10.1 of the Loan Agreement dated as of the date hereof between the Borrower and the Bank, as amended from time to time (as so amended the "Agreement"; terms defined in the Agreement shall have their defined meaning when used in this Note), in lawful money of the United States of America and in immediately available funds the principal amount of TWELVE MILLION AND 00/100 ($12,000,000) DOLLARS or, if less than such principal amount, the aggregate unpaid principal amount of all Loans made by the Bank to the Borrower pursuant to Section 2.1 of the Agreement. The Borrower further promises to pay interest in like money on the unpaid principal balance of this Note from time to time outstanding at an annual rate as selected by the Borrower pursuant to the terms of Section 2 of the Agreement. Interest shall be computed on the basis of a 360-day year for actual days elapsed and shall be payable as provided in the Agreement. All Loans made by the Bank pursuant to subsection 2.1 of the Agreement and all payments of the principal thereon may be endorsed by the holder of this Note on the schedule annexed hereto to which the holder may add additional pages. The aggregate net unpaid amount of loans set forth in such schedule shall be presumed to be the principal balance hereof absent manifest error. After the stated or any accelerated maturity hereof, this Note shall bear interest at a rate as set forth in the Agreement, payable on demand, but in no event in excess of the maximum rate of interest permitted under applicable law.

This Note is the Revolving Credit Note referred to in the Agreement, and is entitled to the benefits thereof and may be prepaid, and is required to be prepaid, in whole or in part (subject to the indemnity provided in the Agreement) as provided therein.

Upon the occurrence of any one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Note may be declared to be immediately due and payable as provided in the Agreement. This Note is secured by the collateral described in each Security Agreement.

This note shall be construed in accordance with and governed by the laws of the State of New York.

CHYRON CORPORATION

By:____________________________

SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL

TO REVOLVING CREDIT NOTE DATED AS OF MARCH __, 1999

CHYRON CORPORATION

TO

AMSOUTH BANK

Date Amount of Loan Interest Rate Last Day of Interest Period Principal Paid Balance Remaining Unpaid Notation Made By

EXHIBIT C

TERM NOTE

$2,000,000 New York, New York

March __, 1999

CHYRON CORPORATION, a New York corporation (the "Borrower"), for value received, hereby promises to pay to the order of AMSOUTH BANK (the "Bank") at its office specified in Section 10.1 of the Loan Agreement dated as of the date hereof between the Borrower and the Bank, as amended from time to time (as so amended the "Agreement"; terms defined in the Agreement shall have their defined meanings when used in this Note) in lawful money of the United States and in immediately available funds, the principal sum of TWO MILLION AND 00/000 ($2,000,000) DOLLARS shall be payable (i) for the period from April 1, 1999 through September 30, 1999, there will be no principal payments, (ii) for the period of October 1, 1999 through September 30, 2000, the principal payments will be $25,000.00 per month, (iii) for the period of October 1, 2000 through September 30, 2000, the principal payments will be $75,000.00 per month and (iv) for the period of October 1, 2001, through March 31, 2002, the principal payments will be $133,333.00 per month. The Borrower further promises to pay interest at said office in like money on the unpaid principal balance of this Note from time to time outstanding (computed on the basis of a 360 day year for actual days elapsed) at an annual rate as selected by the Borrower pursuant to the terms of Section 2 of the Agreement. Interest shall be payable as provided in the Agreement. Whenever the entire unpaid principal amount of this Note becomes due and payable (whether at the stated maturity hereof, by acceleration or otherwise) interest hereon shall thereafter be payable on demand at a rate as set forth in the Agreement, but in no event in excess of the maximum rate of interest permitted under any applicable law.

This Note is the Term Note referred to in the Agreement, and is entitled to the benefits and subject to the terms thereof and may be prepaid in whole or in part (subject to the indemnity provided in the Agreement) as provided therein.

Upon the occurrence of any one or more of the Events of Default specified in the Agreement, all amount then remaining unpaid under this Note may be declared immediately due and payable as provided in the Agreement. This Note is secured by the collateral described in each Security Agreement.

This Note shall be construed in accordance with and governed by the laws of the State of New York.

CHYRON CORPORATION

By:______________________

EX-10

EMPLOYMENT AGREEMENT

THIS AGREEMENT (the "Agreement") is being made effective as of the 21st day of July, 1999 between CHYRON CORPORATION, a New York corporation (the "Company"), having its principal offices at 5 Hub Drive, Melville, New York 11747, and ROGER HENDERSON ("Henderson") an individual residing at Hollytree Cottage, Swallowfield Street, Swallowfield, Berks, United Kingdom.

W I T N E S S E T H:

WHEREAS, Henderson is currently employed pursuant to a Service Agreement by and among the Company, Pro-Bel Limited ("Pro-Bel") and Henderson, dated January 4, 1999 (the "Service Agreement"); and

WHEREAS, the Company desires to employ Henderson as its President and Chief Executive Officer, and Henderson desires to become the Company's President and Chief Executive Officer, subject to and upon the terms and conditions contained herein.

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

1. Nature of Employment; Term of Employment. (a) The Company hereby agrees to employ Henderson and Henderson agrees to serve the Company as its President and Chief Executive Officer, upon the terms and conditions contained herein, for a term commencing on June 10, 1999 (the "Commencement Date") and continuing until the second anniversary date of the Commencement Date (the "Initial Termination Date"). This Agreement shall automatically renew for a one year period (the tifies the other in writing on or before 90 days prior to the Initial Termination Date that it desires not to renew this Agreement for the Renewal Term. The period during which Henderson is employed by the Company pursuant to this Agreement (including the Renewal Term) shall be referred to herein as the "Employment Term."

(b) The Service Agreement shall terminate as of the Commencement Date without any liability on the part of the Company to Henderson under such agreement. All rights, liabilities and obligations of the parties shall henceforth be determined solely in accordance with the Agreement.

(c) In addition, the Company agrees to renominate Henderson as a member of the Board of Directors of the Company and each of its subsidiaries, and to each of the key committees thereof, except for the Company's Audit Committee and Compensation and Stock Option Committee (the "Compensation Committee") for so long as he is the Chief Executive Officer of the Company.

(d) Until Henderson has obtained appropriate immigration status for the United States, he shall be paid by Pro-Bel, but shall be subject to the terms and conditions of the Agreement.

2. Duties and Powers as Employee.

(a) During the Employment Term, Henderson shall be employed by the Company as President and Chief Executive Officer, which position is, and shall remain at all times during the Employment Term, the senior executive officer position of the Company. Henderson shall devote his full working time to his duties as President and Chief Executive Officer of the Company. In performance of his duties, Henderson shall report directly to and be subject to the direction of the Board of Directors of the Company. As President and Chief Executive Officer, Henderson shall have all the responsibilities, duties and authority as are generally associated with the position of President and Chief Executive Officer of a public company, including full executive power over, and responsibility for, managing, directing, and supervising all aspects of the business of the Company worldwide. The Chief Executive Officer shall also be responsible for developing the business plan and objectives of the Company and managing the execution of such plan.

(b) Henderson shall be based and shall carry out his duties from primarily a principal executive office of the Company located in Melville, New York, once his immigration status has been clarified. As President and Chief Executive Officer, Henderson shall travel in accordance with the reasonable needs of the business which shall require him to conduct business for the Company in various locations including, without limitation, London and such other locations as he deems necessary. When traveling by airplane, Henderson shall be entitled to fly no less than business class.

3. Compensation.

(a) As compensation for his services hereunder, the Company shall pay Henderson, during the Employment Term, a salary (the "Base Salary") payable in equal semi-monthly installments at the annual rate of $280,404 (which as of June 10, 1999 is equal to 175,000 pounds Sterling). Effective on each anniversary of the Commencement Date during the Employment Term, Henderson's Base Salary shall be increased to reflect increases in the Urban Consumer Price Index for all Urban Consumers for the New York metropolitan area (or any successor Consumer Price Index), based on data published by the Bureau of Labor Statistics of the United States Department of Labor for the period that corresponds with the preceding twelve month period. In addition, Henderson shall be eligible for such further increases in the Base Salary as may be determined in the sole discretion of the Compensation Committee.

(b) In addition to the Base Salary, and subject to the discretion of the Compensation Committee, Henderson shall receive, as incentive compensation, an annual bonus (the "Incentive Bonus") of up to fifty percent (50%) of the Base Salary based upon achievement of objective targeted performance goals (the "Target Goals") determined each year by the Compensation Committee in consultation with Henderson. The Compensation Committee, in its sole discretion, may increase the amounts payable to Henderson as an Incentive Bonus upon his exceeding the Target Goals. The Incentive Bonus shall be paid to Henderson within thirty (30) days after completion of the Company's annual audit.

(c) The Company hereby grants Henderson options (the "Options") to purchase 300,000 shares of common stock of the Company, par value, $.01 per share (the "Common Stock"), with an exercise price equal to the closing price for a share of Common Stock as reported on the New York Stock Exchange ("NYSE") for June 10, 1999. The Options shall be treated as incentive stock options to the extent permitted by law and the remainder shall be treated as non-incentive stock options. The Options shall vest 1/3 upon the Commencement Date, 1/3 on the 12 month anniversary of the Commencement Date and the remaining 1/3 on the 24 month anniversary of the Commencement Date. The Options shall have a term of ten (10) years from the date of grant. The Options shall be subject to the terms of the Company 1999 Stock Option Plan (the "Plan") and shall be memorialized in a stock option grant certificate to be issued by the Company.

(d) Notwithstanding any provision of the Company's Plan to the contrary, any unvested portions of the Options shall become immediately and fully vested to the extent provided in Sections 9 and 10 below. The Company shall maintain the effectiveness of a Registration Statement on Form S-8 with respect to the shares underlying the Options and shall facilitate a cashless exercise procedure with respect to such options.

4. Expenses; Vacation; Insurance; Other Benefits.

(a) Henderson shall be entitled to reimbursement for reasonable travel and other out-of-pocket expenses reasonably incurred in the performance of his duties hereunder, upon submission and approval of written statements and bills in accordance with the then regular procedures of the Company. The Company acknowledges that the duties of President and Chief Executive Officer will necessitate Henderson traveling regularly between New York, London, Europe, the Pacific Rim, and other areas where the Company conducts or intends to conduct business, and will reimburse Henderson for all costs and expenses reasonably incurred in connection therewith.

(b) Henderson shall be entitled to twenty-five days (25) days paid vacation time per annum.

(c) The Company shall provide Henderson with appropriate housing near the principal offices of the Company during the Employment Term which may be used by other employees of the Company when appropriate. It is intended that this provision shall not result in any additional taxation for Henderson and if it does then the Company shall pay Henderson a gross-up payment necessary to cover any tax liability he incurs.

(d) So long as Henderson is employed by the Company, the Company shall lease two automobiles for Henderson's exclusive use in the United States and in England. The Company shall pay for all rental, maintenance, operating and insurance costs and taxes for such automobiles.

(e) Henderson shall be entitled to participate in all employee benefit plans, programs and arrangements of the Company now or hereafter made available to senior executives of the Company (including, without limitation, each retirement plan, supplemental and excess retirement plans, annual and long-term incentive compensation plans, stock option and purchase plans, group life insurance, accident and death insurance, medical and dental insurance, sick leave, pension plans, disability plans and fringe benefit plans) on a basis which is no less favorable than is made available to any other senior executives of the Company.

(f) The Company shall pay for two (2) round trip airline flights, business class, for Henderson's wife and two (2) children between the United States and Henderson's home in England, each calendar year during the Employment Term. If Henderson does not use all of such flights in any calendar year then the unused flight shall accrue and be usable the following year or years.

(g) Henderson shall remain a member of the Pro-Bel's non-contributory pension plan subject to the rules of such plan and applicable law.

(h) With respect to all benefits described in Section 4 hereof, Henderson and the Company acknowledge that Henderson is entitled to receive a no less favorable benefits package than he currently has through Pro-Bel Limited and if it is subsequently determined that Henderson cannot receive the benefits set forth above, then the Company and Henderson agree to negotiate a suitable substitute benefits package that provides equivalent value.

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

6. Non-Competition.

(a) Henderson agrees that he will not: (i) during the period he is employed by the Company engage in, or otherwise directly or indirectly be employed by, or act as a consultant or lender to, or be a director, officer, employee, owner, member or partner of, any other business or organization that is or shall then be competing with the Company, and (ii) for a period of one (1) year after he ceases to be employed by the Company, directly compete with or be engaged in the same business as the Company (collectively, "Competing Business"), or be employed by, or act as consultant or lender to, or be a director, officer, employee, owner, member or partner of any business or organization which, at the time of such cessation, is a Competing Business, except that in each case the provisions of this Section 6 will not be deemed breached merely because (x) Henderson owns not more than five percent (5%) of the outstanding common stock of a corporation, if, at the time of its acquisition by Henderson, such stock is listed on a national securities exchange, is reported on NASDAQ, or is regularly traded in the over-the-counter market by a member of a national securities exchange, (y) Henderson is a passive investor in any fund in which he has no investment discretion, or (z) Henderson is a senior executive at a company whose business lines include a Competing Business, provided that Henderson has broad management responsibilities of a senior executive at such company over the overall business operations and is not employed to run the Competing Business. The parties acknowledge that the Company's business operates globally. Accordingly, this limitation shall also apply globally. This limitation on subsequent activities shall terminate if the Company voluntarily files for a Chapter 7 liquidation proceeding under the United States Bankruptcy Code or any similar proceeding or process under Federal or state laws.

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

(c) The parties acknowledge that damages and remedies at law for any breach of this Section 6 will be inadequate and that the Company shall be entitled to specific performance and other equitable remedies (including preliminary and permanent injunctive relief and temporary restraining order or their equivalents) and such other relief as a court or tribunal may deem appropriate in addition to any other remedies the Company may have.

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

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

9. Termination.

(a) If on or after the Commencement Date and prior to the end of the Employment Term, Henderson is terminated by the Company without cause, he shall be entitled to receive the greater of his (i) Base Salary for a period of twelve (12) months following the date of termination and (ii) the remainder of the Employment Term; this amount shall be paid in equal semi-monthly installments during the relevant period following the date of termination. In addition, all Options that have not vested as of the date of termination shall immediately vest as of such date. Furthermore, the Company shall also continue to maintain for Henderson all benefits provided under this Agreement for the remaining term of the Agreement, and shall pay in a lump sum, within five (5) business days following the date of termination (x) any accrued but unpaid compensation to the date of termination, and (y) any previously incurred but unreimbursed business expenses.

(b) Notwithstanding anything herein contained, if on or after the date hereof and prior to the end of the Employment Term, Henderson is terminated "For Cause" (as defined below) then the Company shall have the right to give notice of termination of Henderson's services hereunder as of a date to be specified in such notice, and this Agreement shall terminate on the date so specified. Termination "For Cause" shall mean that Henderson shall: (i) be convicted of a felony crime, (ii) willfully commit any act or willfully omit to take any action in bad faith and to the material detriment of the Company, (iii) intentionally violate the federal securities laws and such violation cannot be corrected and such action was not with the advice of the Company's securities counsel, (iv) commit an act of active and deliberate dishonesty or fraud against the Company, (v) fail to follow a reasonable instruction of the Board of Directors which results in a material detriment to the Company, or (vi) willfully breach any material term of this Agreement and fail to correct such breach within ten (10) days after receipt of written notice thereof. In the event that this Agreement is terminated "For Cause", then Henderson shall be entitled to receive an amount, payable in a lump sum within five (5) business days following from the date of termination, equal to the sum of (i) any accrued but unpaid compensation to the date of termination, and (ii) any previously incurred but unreimbursed business expenses and other amounts due under Section 4 of this Agreement through the date of termination. All Options which have not vested as of the date of termination shall be canceled.

(c) In the event that Henderson shall be physically or mentally incapacitated or disabled or otherwise unable fully to discharge his duties, with or without reasonable accommodations, hereunder for a period of six (6) consecutive months, then this Agreement shall terminate upon thirty (30) days' written notice to Henderson, and no further compensation shall be payable to Henderson, except that Henderson shall be entitled to receive an amount, payable in a lump sum payment within five (5) business days following the date of termination, equal to the sum of (i) any accrued but unpaid compensation to the date of such termination, and (ii) any previously incurred but unreimbursed business expenses and other amounts due under Section 4 of this Agreement through the date of termination. The Options which have not vested by the date of termination shall be canceled. Henderson shall also be entitled following such termination to receive payments provided under the disability program and insurance policies required under Section 4 hereof.

(d) In the event that Henderson shall die, then this Agreement shall terminate on the date of Henderson's death, Henderson's estate shall be entitled to receive hereunder an amount, payable in a lump sum within five (5) business days following the date of termination, equal to the sum of (i) any accrued but unpaid compensation to the date of termination, and (ii) any previously incurred but unreimbursed business expenses and other amounts due under Section 4 of this Agreement through the date of termination. Henderson's family shall be entitled to continued participation in the Company's group health plans on the same basis made available to Henderson's family hereunder during his lifetime for a period of one year from the date of termination. The Options which have not vested by the date of termination shall be canceled.

(e) If Henderson's employment with the Company shall terminate as a result of the Company's election not to extend the Agreement beyond the Initial Termination Date as provided for Section 1 hereof or the Renewal Term expires without the Company offering to extend the Agreement on terms no less favorable then set forth herein at the end of such term, then Henderson shall be entitled to receive his Base Salary at such time for twelve (12) months payable in accordance with Company's payroll policy, at such time, subject to mitigation.

10. Change-of-Control.

(a) In the event there is a Change-of-Control of the Company, as defined below, and Henderson is terminated within one year thereafter, then all payments to be paid under this Agreement, both those accrued and unpaid and those to accrue over the remainder of the Employment Term, shall accelerate and become immediately due and payable to Henderson and all Options that have not vested shall immediately vest. "Change-of-Control" shall mean:

(i) any "person" as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act") (other than a current stockholder that owns 5% or more of the Company's outstanding common stock or an affiliate of such 5% or greater stockholder (collectively, the "Controlling Shareholders") and other than the Company, any trustee, or other fiduciary holding securities under any employee benefit plan of the Company) becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company's then outstanding securities;

(ii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or

(iii) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of, or the Company sells or disposes of, all or substantially all of the Company's assets.

(b) If any amount payable or other benefit receivable by Henderson hereunder or under any other agreement or arrangement with the Company or its affiliates is deemed to constitute a "Parachute Payment" (which, for this purpose, shall mean any payment deemed to constitute a "Parachute Payment" as defined in section 280G of the Internal Revenue Code of 1986 (the "Code"), alone or when added to any other amount payable or paid to or other benefit receivable or received by Henderson which is deemed to constitute the Parachute Payment, and would result in the imposition on Henderson of an excise tax under section 4999 of the Code or any successor statute or regulation, then, in addition to any other benefits to which Henderson is entitled under this Agreement, Henderson shall be paid by the Company an amount (the "Gross-Up Amount") in cash equal to the sum of the excise taxes (and any associated interest and penalties) payable by Henderson by reason of receiving the Parachute Payments plus the amount necessary to put Henderson in the same after-tax position as if no such excise taxes, interest and penalties under section 280G of the Code had been imposed with respect to the Parachute Payment. Whether a payment or benefit results in the imposition of an excise tax and the amount of any payment under this Section 10(b) shall be determined by a nationally recognized certified public accounting firm designated by the Company. All fees and expenses of such accounting firm shall be paid by the Company. Payment of the Gross-Up Amount shall be made when any such amount is required to be paid to the Internal Revenue Service or other appropriate taxing authority.

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

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

13. Notices. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be mailed by certified mail, return receipt requested, or delivered against receipt to the party to whom it is to be given at the address of such party set forth in the preamble to this Agreement (or to such other address as the party shall have furnished in writing in accordance with the provisions of this Section 13). If notice is given to the Company then a copy, which shall not constitute notice, shall be delivered to Camhy Karlinsky & Stein LLP, 1740 Broadway, 16th Floor, New York, New York 10019, Attention: Robert S. Matlin, Esq. Notice to the estate of Henderson shall be sufficient if addressed to Henderson as provided in this Section 13. Any notice or other communication given by certified mail shall be deemed given at the time of certification thereof, except for a notice changing a party's address which shall be deemed given at the time of receipt thereof.

14. Legal Fees. In the event a dispute arises between the Company and Henderson which is resolved either through arbitration or the judicial process, then the court or the arbitration panel may award to the winning party such party's reasonable attorneys' fees and expenses incurred in connection with the dispute from the losing party.

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

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

17. Arbitration of All Disputes. Any controversy or claim arising out of or relating to this Agreement or the breach thereof, shall be settled by arbitration, before one arbitrator, held in the City of New York in accordance with the rules of the American Arbitration Association. The arbitrator may award the successful party recovery of its costs, including reasonable attorneys' fees. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.

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

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

20. Entire Agreement. No representations, oral or written, have been made regarding the subject matter hereof other than those explicitly provided in this Agreement and Henderson acknowledges that he has not relied on any oral or written representations not explicitly contained herein in executing this Agreement.

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

CHYRON CORPORATION

By:

Name: Michael Wellesley-Wesley

Title: Chairman

ROGER HENDERSON

EX-23

Consent of Independent Accountants

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-50927) of our report dated February 23, 2000, relating to the financial statements and financial statement schedule of Chyron Corporation, appearing on page 22 of this Annual Report on Form 10-K dated March 9, 2000.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Melville, New York

March 9, 2000