SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT - July 25, 1995
(Date of Earliest Event Reported)
CHYRON CORPORATION
(Exact name of registrant as specified in its charter)
New York
(State or other jurisdiction
of incorporation)
1-9014
(Commission File Number)
11-2117385
(I.R.S. Employer
Identification No.)
5 Hub Drive
Melville, New York 11747
(Address of principal executive offices)
Registrant's telephone number, including area code: (516) 845-2000
Control in Registrant.
On July 25, 1995, Pesa, Inc. a Delaware corporation ("Pesa") sold
49,414,732 shares of common stock ("Common Stock") of Chyron Corporation
("Chyron" or the "Company") to the entities listed below, for an
aggregate purchase price of $24,719,071. Additionally, on July 25, 1995,
Sepa Technologies, Ltd., a Georgia limited liability company ("Sepa"),
and an affiliate of Pesa, sold 5,000,000 shares to the entities listed
below for an aggregate purchase price of $2.6 million. On May 26, 1995,
Pesa sold 10,000,000 shares of Chyron to CC Acquisition Company A,
L.L.C., a Delaware limited liability company ("CCACA"), for an aggregate
purchase price of $5,000,000.
The sales were made pursuant to two agreements entered into on
May 26, 1995. On May 26, 1995, CCACA, and CC Acquisition Company B,
L.L.C., a Delaware limited liability company ("CCACB"), and an affiliate
of CCACA, entered into a stock purchase agreement with Pesa (the "Pesa
Agreement") pursuant to which (i) CCACA immediately acquired 10,000,000
shares of Chyron and (ii) CCACA and CCACB agreed to acquire an additional
49,414,732 shares. On May 26, 1995, CCACA also entered into a stock
purchase agreement with Sepa (the "Sepa Agreement") pursuant to which
CCACA agreed to acquire 5,000,000 shares of Chyron, and the voting rights
and a right of first refusal to an additional 9,000,000 shares. CCACA
and CCACB are collectively referred to herein as CCAC.
On July 25, 1995, CCACA entered into an agreement, dated July 25,
1995 (the "Leubert Agreement"), between CCACA and Albert O.P. Leubert
Ltd., a New York corporation ("Leubert"), pursuant to which CCACA was
granted voting rights and a right of first refusal to acquire 300,000
shares of Common Stock, which shares were acquired by Leubert from Sepa
and which reduced CCACA's right of first refusal to acquire shares of
Common Stock, as set forth in the Sepa Agreement, from 9,000,000 to
8,700,000 shares.
On July 25, 1995, CCACA and CCACB entered into an assignment and
assumption agreement (the "Assignment Agreement") by and among CCACA,
CCACB, WPG Corporate Development Associates IV, L.P., a Delaware limited
partnership ("CDA"), WPG Corporate Development Associates IV (Overseas),
L.P., a Cayman Islands exempt limited partnership ("CDAO"), WPG
Enterprise Fund II, L.P., a Delaware limited partnership ("WPGII"),
Weiss, Peck & Greer Venture Associates III, L.P., a Delaware limited
partnership ("WPGIII"), Westpool Investment Trust plc., a public limited
partnership organized under the laws of England ("WIT"), Lion Investments
Limited, a limited company organized under the laws of England ("Lion")
and Charles M. Diker (such individual together with CDA, CDAO, WPGII,
WPGIII, WIT and Lion, the "WPG/Westpool Investor Group") and certain
other persons (such persons together with the WPG/Westpool Investor
Group, the "Assignees"), pursuant to which (i) CCACA assigned to the
Assignees its rights under the Pesa Agreement to acquire 20,000,000
Shares, (ii) CCACA assigned its rights under the Sepa Agreement to
acquire 5,000,000 shares of Common Stock, (iii) CCACA assigned its voting
rights and its right of first refusal to acquire 5,400,000 of the
9,000,000 shares of Common Stock as set forth in the Sepa Agreement and
the Leubert Agreement described above, and (iv) CCACB assigned its rights
under the Pesa Agreement to acquire 17,648,840 shares of Common Stock.
CCAC and the Assignees are collectively referred to herein as the
Purchasers. The Purchasers utilized their own capital for these
acquisitions.
CDA, CDAO, WPGII, and WPGIII are affiliated entities of Weiss,
Peck & Greer, L.L.C. ("Weiss, Peck & Greer"). Weiss, Peck and Greer is
a private investment firm which manages in excess of $12 billion in
public equities and fixed income securities for institutions and
individuals and has a twenty-four year history as an investor of risk
capital, having managed ten private equity and venture capital funds with
$700 million in aggregate capital and over 200 investments.
WIT and Lion are affiliated entities of Westpool Investment Trust
plc. ("Westpool"). Westpool is a wholly owned subsidiary of London
Merchant Securities plc., a company listed on the London Stock Exchange.
Mr. Allan R. Tessler is the President and sole manager of CCACA
and CCACB. Mr. Michael Wellesley-Wesley, Chairman and Chief Executive
Officer of Chyron Corporation, is Vice President of CCACA and CCACB.
The closing (the "Closing"), as contemplated by the Pesa
Agreement and the Sepa Agreement occurred on July 25, 1995.
Consequently, as of July 25, 1995 the following entities beneficially own
the following shares:
Name of Owner<PAGE>
Number of
Shares (1) <PAGE>
Date of
Acquisition Percentage of
Beneficial
Ownership
CCACA 10,000,000 May 26, 1995 11.4% CCACB
11,765,892 July 25, 1995 13.4% CDA 17,770,615
July 25, 1995 20.3% CDAO 4,285,120 July 25, 1995 4.9%
WPGII 4,415,557 July 25, 1995 5.1% WPGIII 3,671,545
July 25, 1995 4.2% WIT 6,984,311 July 25, 1995 8.0%
Lion 3,308,366 July 25, 1995 3.8% C.M. Diker 1,470,382
July 25
Total: 64,414,732 73.6%(1) Does not include 9,000,000
shares for which the voting rights have
been assigned to CCAC and the WPG/Westpool Investor Group.
In connection with the aforementioned transactions, the Company
entered into a Registration Rights Agreement with the Purchasers, dated
as of July 25, 1995, pursuant to which the Purchasers have, under certain
circumstances, demand and incidental (piggyback) registration rights with
respect to the 64,414,732 shares of Common Stock acquired.
On July 25, 1995, CCAC and the WPG/Westpool Investor Group,
entered into a Stockholders' Agreement pursuant to which, the parties
agreed, among other things, (i) that the Board would be constituted to
have nine members (ii) that until such date as CCACA and CCACB
collectively ceases to own beneficially 8% of the issued and outstanding
shares of Common Stock, they shall have the right to nominate three
members to the Board (the "CCAC Directors"), (iii) that until such date
as the WPG/Westpool Investor Group cease to own beneficially 8% of the
issued and outstanding shares of Common Stock, CDA, CDAO, WPGII, and
WPGIII (collectively, the "WP Group") have the right to nominate one
member to the Board, WIT and Lion (collectively, "WIT/Lion") have the
right to nominate one member to the Board, and the WP Group and WIT/Lion
shall together have the right to nominate one member to the Board (such
three members are referred to as the "WP Group Directors"), (iv) that
they would agree on who should serve as the three other directors, and
(v) to vote or cause to be voted all of the shares of Common Stock of
which such party is the beneficial owner in favor of the actions
contemplated by (i), (ii), and (iii) above.
On July 25, 1995, immediately after the Closing, a special
meeting of the Board of Directors was held. At such meeting, the
following actions were taken:
(a) The resignations of Adolfo Nunez Astray, Alfred O.P.
Leubert, and Miguel Moraga as Directors were accepted;
(b) The Board was increased from seven to nine members;
(c) Steven N. Hutchinson, Wesley W. Lang, Jr., Eugene M. Weber,
Alan J. Hirschfield, and Sheldon D. Camhy were appointed as
Directors;
(d) John Servizio resigned as Chairman of the Board of Directors
but remained a Director of the Company;
(e) Michael Wellesley-Wesley was elected Chairman of the Board
of Directors;
(f) The Board appointed Michael Wellesley-Wesley as Chief
Executive Officer;
(g) The Board authorized Mr. Wellesley-Wesley to terminate
Mr. Mark C. Gray as President and Chief Operating Officer;
(h) The Board appointed Isaac Hersly as President and Chief
Operating Officer;
(i) The Board terminated Peter Lance as Secretary and he was
replaced by Daniel DeWolf; and
(j) The Board appointed the following Directors to the following
committees:
(1) Audit Committee:
(i) Robert E. Mulcahy;
(ii) Alan J. Hirschfield; and
(iii) Eugene M. Weber.
(2) Compensation and Stock Option Committee:
(i) Frederick D. Brown;
(ii) Sheldon D. Camhy; and
(iii) Wesley W. Lang, Jr.
Set forth below is a table setting forth the Directors of the
Corporation as of July 25, 1995.
Name of Director or
Nominee Date First Elected
Director
Frederick D. Brown 1971 Robert E. Mulcahy 1987
John A. Servizio 1991 Michael Wellesley-Wesley<PAGE>
May 26,
1995 (1) Alan J. Hirschfield<PAGE>
July 25, 1995 (1) Sheldon D. Camhy
July 25, 1995 (1) Steven N. Hutchinson July 25, 1995 (2)
Wesley W. Lang, Jr. July 25, 1995 (2) Eugene M. Weber July 25, 1995 (2)
_________________
(1) CCAC Director
(2) WP Group Director
<PAGE>
Item 7. Financial Statements and Exhibits.
Exhibit No. Document
4.1 Registration Rights Agreement, dated July 25, 1995.
4.2 Stockholders' Agreement, dated July 25, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
CHYRON CORPORATION
By:
Name: Patricia Lampe
Title: Chief Financial Officer
and Treasurer
Date: August 7, 1995
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of the 25th day of July, 1995, by and between CHYRON
CORPORATION, a New York corporation (the "Company"), and CC ACQUISITION
COMPANY A, L.L.C., a Delaware limited liability company, CC ACQUISITION
COMPANY B, L.L.C., a Delaware limited liability company, WPG CORPORATE
DEVELOPMENT ASSOCIATES, IV, L.P., a Delaware limited partnership, WPG
CORPORATE DEVELOPMENT ASSOCIATES IV (Overseas), L. P., a Cayman Islands
exempted limited partnership, WPG ENTERPRISES FUND II, L.P., a Delaware
limited partnership, WEISS, PECK & GREER VENTURE ASSOCIATES, III, L.P.,
a Delaware limited partnership, WESTPOOL INVESTMENT TRUST PLC, a public
limited company organized under the laws of England, LION INVESTMENTS
LIMITED, a limited company organized under the laws of England, CHARLES
DIKER, MINT HOUSE NOMINEES LIMITED, PINE STREET VENTURES, L.L.C., a
Delaware limited liability company, ISAAC HERSLY, ALAN I. ANNEX, ILAN
KAUFTHAL, Z FOUR PARTNERS L.L.C., a Delaware limited liability company,
and A.J.L. BEARE, (collectively, the "Purchasers").
R E C I T A L S
WHEREAS, the Purchasers are purchasing 64,414,732 shares of the
common stock, par value $.01 per share, of the Company (the "Shares") from
Pesa, Inc., a Delaware corporation ("PESA"),
pursuant to a Stock Purchase Agreement by and among CC Acquisition Company A,
L.L.C., CC Acquisition Company B, L.L.C., and PESA, dated as of May 26, 1995
and pursuant to a stock purchase agreement by and among Sepa Technologies Ltd.,
Co., John A. Servizio, and CC Acquisition Company A, L.L.C., dated as of
May 26, 1995 (collectively, the "Stock Purchase Agreements");
WHEREAS, it is in the best interests of the Company that the Stock
Purchase Agreements
be closed;
NOW, THEREFORE, in consideration of the mutual premises,
representations, warranties and conditions set forth in this Agreement, the
parties hereto, intending to be legally bound, hereby agree as follows:
a. Definitions and References. For purposes of this Agreement,
in addition to the definitions set forth above and elsewhere herein, the
following terms shall have the following meanings:
(i) The term "Commission" shall mean the Securities and
Exchange Commission and any successor agency.
(ii) The terms "register", "registered" and
"registration" shall refer to a registration effected by
preparing and filing a registration statement or similar
document in compliance with the 1933 Act (as herein defined) and
the declaration or ordering of effectiveness of such
registration statement or document.
(iii) For purposes of this Agreement, the term
"Registrable Stock" shall mean (i) the Shares, (ii) any shares
of the common stock of the Company, par value $.01 per share
(the "Common Stock") issued as (or issuable upon the conversion
or exercise of any warrant, right, option or other convertible
security which is issued as) a dividend or other distribution
with respect to, or in exchange for, or in replacement of, the
Shares, and (iii) any Common Stock issued by way of stock split
of the Shares. For purposes of this Agreement, any Registrable
Stock shall cease to be Registrable Stock when (w) a
registration statement covering such Registrable Stock has been
declared effective and such Registrable Stock has been disposed
of pursuant to such effective registration statement, (x) such
Registrable Stock is sold pursuant to Rule 144 (or any similar
provision then in force) under the 1933 Act, (y) such
Registrable Stock has been otherwise transferred, no stop
transfer order affecting such stock is in effect and the Company
has delivered new certificates or other evidences of ownership
for such Registrable Stock not bearing any legend indicating
that such shares have not been registered under the 1933 Act, or
(z) such Registrable Stock is sold by a person in a transaction
in which the rights under the provisions of this Agreement are
not assigned.
(iv) The term "Holder" shall mean the Purchasers or any
transferee or assignee thereof to whom the rights under this
Agreement are assigned in accordance with the provisions of
Section 11 hereof, provided that the Purchasers or such
transferee or assignee shall then own Registrable Stock.
(v) The term "1933 Act" shall mean the Securities Act of
1933, as amended.
(vi) An "affiliate of such Holder" shall mean a person
who controls, is controlled by or is under common control with
such Holder, or the spouse or children (or a trust exclusively
for the benefit of the spouse and/or children) of such Holder,
or, in the case of a Holder that is a partnership, its partners.
(vii) The term "Person" shall mean an individual,
corporation, partnership, trust, limited liability company,
unincorporated organization or association or other entity,
including any governmental entity.
(viii) The term "Requesting Holders" shall mean a Holder or
Holders of in the aggregate of at least five (5) million shares
of Registrable Stock.
(ix) References in this Agreement to any rules,
regulations or forms promulgated by the Commission shall include
rules, regulations and forms succeeding to the functions
thereof, whether or not bearing the same designation.
b. Demand Registration.
(i) At any time after January 25, 1996, any Requesting
Holders may make a written request to the Company (specifying
that it is being made pursuant to this Section 2) that the
Company file a registration statement under the 1933 Act (or a
similar document pursuant to any other statute then in effect
corresponding to the 1933 Act) covering the registration of
Registrable Stock. In such event, the Company shall (x) within
ten (10) days thereafter notify in writing all other Holders of
Registrable Stock of such request, and (y) use its best efforts
to cause to be registered under the 1933 Act all Registrable
Stock that the Requesting Holders and such other Holders have,
within twenty (20) days after the Company has given such notice,
requested be registered. Unless a majority in interest of the
Holders requesting to participate in such registration shall
consent in writing, no other party, including the Company (but
excluding another Holder), shall be permitted to offer
securities in connection with such registration; provided,
however, that this limitation shall not restrict or limit any
registrations or rights to participate in any registration
provided under or contained in the Registration Rights Agreement
by and between the Company and Pesa, dated December 27, 1991.
(ii) If the Requesting Holders intend to distribute the
Registrable Stock covered by their request by means of an
underwritten offering, they shall so advise the Company as a
part of their request pursuant to Section 2(a) above, and the
Company shall include such information in the written notice
referred to in clause (x) of Section 2(a) above. In such event,
the Holder's right to include its Registrable Stock in such
registration shall be conditioned upon such Holder's
participation in such underwritten offering and the inclusion of
such Holder's Registrable Stock in the underwritten offering to
the extent provided in this Section 2. All Holders proposing to
distribute Registrable Stock through such underwritten offering
shall enter into an underwriting agreement in customary form
with the underwriter or underwriters. Such underwriter or
underwriters shall be selected by a majority in interest of the
Requesting Holders and shall be approved by the Company, which
approval shall not be unreasonably withheld; provided, that all
of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of
such underwriters shall also be made to and for the benefit of
such Holders and that any or all of the conditions precedent to
the obligations of such underwriters under such underwriting
agreement shall be conditions precedent to the obligations of
such Holders; and provided further, that no Holder shall be
required to make any representations or warranties to or
agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such Holder,
the Registrable Stock of such Holder and such Holder's intended
method of distribution and any other representation required by
law or reasonably required by the underwriter.
(iii) Notwithstanding any other provision of this Section
2 to the contrary, if the managing underwriter of an
underwritten offering of the Registrable Stock requested to be
registered pursuant to this Section 2 advises the Requesting
Holders in writing that in its opinion marketing factors require
a limitation of the number of shares to be underwritten, the
Requesting Holders shall so advise all Holders of Registrable
Stock that would otherwise be underwritten pursuant hereto, and
the number of shares of Registrable Stock that may be included
in such underwritten offering shall be allocated among all such
Holders, including the Requesting Holders, in proportion (as
nearly as practicable) to the amount of Registrable Stock
requested to be included in such registration by each Holder at
the time of filing the registration statement; provided, that in
the event of such limitation of the number of shares of
Registrable Stock to be underwritten, the Holders shall be
entitled to an additional demand registration pursuant to this
Section 2. If any Holder of Registrable Stock disapproves of
the terms of the underwriting, such Holder may elect to withdraw
by written notice to the Company, the managing underwriter and
the Requesting Holders. The securities so withdrawn shall also
be withdrawn from registration.
(iv) Notwithstanding any provision of this Agreement to
the contrary, the Company shall not be required to effect a
registration pursuant to this Section 2 during the period
starting with the fourteenth day immediately preceding the date
of an anticipated filing by the Company of, and ending on a date
ninety (90) days following the effective date of, a registration
statement pertaining to a public offering of securities for the
account of the Company; provided, that the Company shall
actively employ in good faith all reasonable efforts to cause
such registration statement to become effective; and provided
further, that the Company's estimate of the date of filing such
registration statement shall be made in good faith.
(v) The Company shall be obligated to effect and pay for a
total of only four (4) registrations pursuant to this Section 2,
unless increased pursuant to Section 2(c) hereof; provided, that
a registration requested pursuant to this Section 2 shall not be
deemed to have been effected for purposes of this Section 2(e),
unless (i) it has been declared effective by the Commission,
(ii) if it is a shelf registration, it has remained effective
for the period set forth in Section 4(b), (iii) the offering of
Registrable Stock pursuant to such registration is not subject
to any stop order, injunction or other order or requirement of
the Commission (other than any such action prompted by any act
or omission of the Holders), and (iv) no limitation of the
number of shares of Registrable Stock to be underwritten has
been required pursuant to Section 2(c) hereof.
c. Incidental Registration. If at any time the Company
determines that it shall file a registration statement under the 1933 Act
(other than a registration statement on a Form S-4 or S-8 or filed in
connection with an exchange offer or an offering of securities solely to
the Company's existing stockholders) on any form that would also permit
the registration of the Registrable Stock and such filing is to be on its
behalf and/or on behalf of selling holders of its securities for the
general registration of its common stock to be sold for cash, at each
such time the Company shall promptly give each Holder written notice of
such determination setting forth the date on which the Company proposes
to file such registration statement, which date shall be no earlier than
forty (40) days from the date of such notice, and advising each Holder
of its right to have Registrable Stock included in such registration.
Upon the written request of any Holder received by the Company no later
than twenty (20) days after the date of the Company's notice, the Company
shall use its best efforts to cause to be registered under the 1933 Act
all of the Registrable Stock that each such Holder has so requested to
be registered. If, in the written opinion of the managing underwriter
or underwriters (or, in the case of a non-underwritten offering, in the
written opinion of the placement agent, or if there is none, the
Company), the total amount of such securities to be so registered,
including such Registrable Stock, will exceed the maximum amount of the
Company's securities which can be marketed (i) at a price reasonably
related to the then current market value of such securities, or (ii)
without otherwise materially and adversely affecting the entire offering,
then the amount of Registrable Stock to be offered for the accounts of
Holders shall be reduced pro rata to the extent necessary to reduce the
total amount of securities to be included in such offering to the
recommended amount; provided, that if securities are being offered for
the account of other Persons as well as the Company, such reduction shall
not represent a greater fraction of the number of securities intended to
be offered by Holders than the fraction of similar reductions imposed on
such other Persons other than the Company over the amount of securities
they intended to offer.
d. Obligations of the Company. Whenever required under Section
2 to use its best efforts to effect the registration of any Registrable
Stock, the Company shall, as expeditiously as possible:
(i) prepare and file with the Commission, not later than
sixty (60) days after receipt of a request to file a
registration statement with respect to such Registrable Stock,
a registration statement on any form for which the Company then
qualifies or which counsel for the Company shall deem
appropriate and which form shall be available for the sale of
such issue of Registrable Stock in accordance with the intended
method of distribution thereof, and use its best efforts to
cause such registration statement to become effective as
promptly as practicable thereafter; provided that before filing
a registration statement or prospectus or any amendments or
supplements thereto, the Company will (i) furnish to one counsel
selected by the Requesting Holders copies of all such documents
proposed to be filed, and (ii) notify each such Holder of any
stop order issued or threatened by the Commission and take all
reasonable actions required to prevent the entry of such stop
order or to remove it if entered;
(ii) prepare and file with the Commission such amendments
and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to
keep such registration statement effective for a period of not
less than one hundred twenty (120) days or such shorter period
which will terminate when all Registrable Stock covered by such
registration statement has been sold (but not before the
expiration of the forty (40) or ninety (90) day period referred
to in Section 4(3) of the 1933 Act and Rule 174 thereunder, if
applicable), and comply with the provisions of the 1933 Act with
respect to the disposition of all securities covered by such
registration statement during such period in accordance with the
intended methods of disposition by the sellers thereof set forth
in such registration statement;
(iii) furnish to each Holder and any underwriter of
Registrable Stock to be included in a registration statement
copies of such registration statement as filed and each
amendment and supplement thereto (in each case including all
exhibits thereto), the prospectus included in such registration
statement (including each preliminary prospectus) and such other
documents as such Holder may reasonably request in order to
facilitate the disposition of the Registrable Stock owned by
such Holder;
(iv) use its best efforts to register or qualify such
Registrable Stock under such other securities or blue sky laws
of such jurisdictions as any selling Holder or any underwriter
of Registrable Stock reasonably requests, and do any and all
other acts which may be reasonably necessary or advisable to
enable such Holder to consummate the disposition in such
jurisdictions of the Registrable Stock owned by such Holder;
provided that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph 4(d),
(ii) subject itself to taxation in any such jurisdiction, or
(iii) consent to general service of process in any such
jurisdiction;
(v) use its best efforts to cause the Registrable Stock
covered by such registration statement to be registered with or
approved by such other governmental agencies or other
authorities as may be necessary by virtue of the business and
operations of the Company to enable the selling Holders thereof
to consummate the disposition of such Registrable Stock;
(vi) notify each selling Holder of such Registrable Stock
and any underwriter thereof, at any time when a prospectus
relating thereto is required to be delivered under the 1933 Act
(even if such time is after the period referred to in Section
4(b)), of the happening of any event as a result of which the
prospectus included in such registration statement contains an
untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances being made
not misleading, and prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of
such Registrable Stock, such prospectus will not contain an
untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances being made
not misleading;
(vii) make available for inspection by any selling Holder,
any underwriter participating in any disposition pursuant to
such registration statement, and any attorney, accountant or
other agent retained by any such seller or underwriter
(collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the
Company (collectively, the "Records"), and cause the Company's
officers, directors and employees to supply all information
reasonably requested by any such Inspector, as shall be
reasonably necessary to enable them to exercise their due
diligence responsibility, in connection with such registration
statement. Records or other information which the Company
determines, in good faith, to be confidential and which it
notifies the Inspectors are confidential shall not be disclosed
by the Inspectors unless (i) the disclosure of such Records or
other information is necessary to avoid or correct a
misstatement or omission in the registration statement, or (ii)
the release of such Records or other information is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction. Each selling Holder shall, upon learning that
disclosure of such Records or other information is sought in a
court of competent jurisdiction, give notice to the Company and
allow the Company, at the Company's expense, to undertake
appropriate action to prevent disclosure of the Records or other
information deemed confidential;
(viii) furnish, at the request of any Requesting Holder, on
the date that such shares of Registrable Stock are delivered to
the underwriters for sale pursuant to such registration or, if
such Registrable Stock is not being sold through underwriters,
on the date that the registration statement with respect to such
shares of Registrable Stock becomes effective, (1) a signed
opinion, dated such date, of the legal counsel representing the
Company for the purposes of such registration, addressed to the
underwriters, if any, and if such Registrable Stock is not being
sold through underwriters, then to the Requesting Holders as to
such matters as such underwriters or the Requesting Holders, as
the case may be, may reasonably request and as would be
customary in such a transaction; and (2) a letter dated such
date, from the independent certified public accountants of the
Company, addressed to the underwriters, if any, and if such
Registrable Stock is not being sold through underwriters, then
to the Requesting Holders and, if such accountants refuse to
deliver such letter to such Holder, then to the Company (i)
stating that they are independent certified public accountants
within the meaning of the 1933 Act and that, in the opinion of
such accountants, the financial statements and other financial
data of the Company included in the registration statement or
the prospectus, or any amendment or supplement thereto, comply
as to form in all material respects with the applicable
accounting requirements of the 1933 Act, and (ii) covering such
other financial matters (including information as to the period
ending not more than five (5) business days prior to the date of
such letter) with respect to the registration in respect of
which such letter is being given as the Requesting Holders may
reasonably request and as would be customary in such a
transaction;
(ix) enter into customary agreements (including if the
method of distribution is by means of an underwriting, an
underwriting agreement in customary form) and take such other
actions as are reasonably required in order to expedite or
facilitate the disposition of the Registrable Stock to be so
included in the registration statement;
(x) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably
practicable, but not later than eighteen (18) months after the
effective date of the registration statement, an earnings
statement covering the period of at least twelve (12) months
beginning with the first full month after the effective date of
such registration statement, which earnings statements shall
satisfy the provisions of Section 11(a) of the 1933 Act; and
(xi) use its best efforts to cause all such Registrable
Stock to be listed on the New York Stock Exchange and/or any
other securities exchange on which similar securities issued by
the Company are then listed, or traded on the National
Association of Securities Dealers Automated Quotations System,
if such listing or trading is then permitted under the rules of
such exchange or system, respectively.
The Company may require each selling Holder of Registrable Stock
as to which any registration is being effected to furnish to the Company
such information regarding the distribution of such Registrable Stock as
the Company may from time to time reasonably request in writing.
Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
4(f) hereof, such Holder will forthwith discontinue disposition of
Registrable Stock pursuant to the registration statement covering such
Registrable Stock until such Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 4(f) hereof,
and, if so directed by the Company, such Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file
copies then in such Holder's possession, of the prospectus covering such
Registrable Stock current at the time of receipt of such notice. In the
event the Company shall give any such notice, the Company shall extend
the period during which such registration statement shall be maintained
effective pursuant to this Agreement (including the period referred to
in Section 4(b)) by the number of days during the period from and
including the date of the giving of such notice pursuant to Section 4(f)
hereof to and including the date when each selling Holder of Registrable
Stock covered by such registration statement shall have received the
copies of the supplemented or amended prospectus contemplated by Section
4(f) hereof.
e. Holdback Agreement.
(i) Restrictions on Public Sale by Holder. To the extent
not inconsistent with applicable law, each Holder whose
Registrable Stock is included in a registration statement agrees
not to effect any public sale or distribution of the issue being
registered or a similar security of the Company, or any
securities convertible into or exchangeable or exercisable for
such securities, including a sale pursuant to Rule 144 under the
1933 Act, during the fourteen (14) days prior to, and during the
ninety (90) day period beginning on, the effective date of such
registration statement (except as part of the registration), if
and to the extent requested by the Company in the case of a non-
underwritten public offering or if and to the extent requested
by the managing underwriter or underwriters in the case of an
underwritten public offering.
(ii) Restrictions on Public Sale by the Company and
Others. The Company agrees (i) not to effect any public sale or
distribution of any securities similar to those being
registered, or any securities convertible into or exchangeable
or exercisable for such securities, during the fourteen (14)
days prior to, and during the ninety (90) day period beginning
on, the effective date of any registration statement in which
Holders are participating (except as part of such registration),
if and to the extent requested by the Holders in the case of a
non-underwritten public offering or if and to the extent
requested by the managing underwriter or underwriters in the
case of an underwritten public offering; and (ii) that any
agreement entered into after the date of this Agreement pursuant
to which the Company issues or agrees to issue any securities
convertible into or exchangeable or exercisable for such
securities (other than pursuant to an effective registration
statement) shall contain a provision under which holders of such
securities agree not to effect any public sale or distribution
of any such securities during the periods described in (i)
above, in each case including a sale pursuant to Rule 144 under
the 1933 Act.
f. Expenses of Registration. All expenses incurred in
connection with each registration pursuant to Sections 2 and 3 of this
Agreement, excluding underwriters' discounts and commissions, but
including, without limitation, all registration, filing and qualification
fees, word processing, duplicating, printers' and accounting fees
(including the expenses of any special audits or "cold comfort" letters
required by or incident to such performance and compliance), exchange
listing fees or National Association of Securities Dealers fees,
messenger and delivery expenses, all fees and expenses of complying with
securities or blue sky laws, fees and disbursements of counsel for the
Company, and the reasonable fees and disbursements of one (1) counsel for
the selling Holders shall be paid by the Company. The selling Holders
shall bear and pay the underwriting commissions and discounts applicable
to the Registrable Stock offered for their account in connection with any
registrations, filings and qualifications made pursuant to this
Agreement.
g. Indemnification and Contribution.
(i) Indemnification by the Company. The Company agrees to
indemnify, to the full extent permitted by law, each Holder, its
officers, directors and agents and each Person who controls such
Holder (within the meaning of the 1933 Act) against all losses,
claims, damages, liabilities and expenses caused by any untrue
or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or
any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statement therein (in case of a prospectus or preliminary
prospectus, in the light of the circumstances under which they
were made) not misleading, except insofar as the same are caused
by or contained in any information with respect to such Holder
furnished in writing to the Company by such Holder expressly for
use therein or by such Holder's failure to deliver a copy of the
registration statement or prospectus or any amendments or
supplements thereto after the Company's compliance with Section
4(c) hereof. The Company will also indemnify any underwriters
of the Registrable Stock, their officers and directors and each
Person who controls such underwriters (within the meaning of the
1933 Act) to the same extent as provided above with respect to
the indemnification of the selling Holders.
(ii) Indemnification by Holders. In connection with any
registration statement in which a Holder is participating, each
such Holder will furnish to the Company in writing such
information with respect to such Holder as the Company
reasonably requests for use in connection with any such
registration statement or prospectus and agrees to indemnify, to
the extent permitted by law, the Company, its directors and
officers and each Person who controls the Company (within the
meaning of the 1933 Act) against any losses, claims, damages,
liabilities and expenses resulting from any untrue or alleged
untrue statement of material fact or any omission or alleged
omission of a material fact required to be stated in the
registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or necessary to make
the statements therein (in the case of a prospectus or
preliminary prospectus, in the light of the circumstances under
which they were made) not misleading, to the extent, but only to
the extent, that such untrue statement or omission is contained
in any information with respect to such Holder so furnished in
writing by such Holder. Notwithstanding the foregoing, the
liability of each such Holder under this Section 7(b) shall be
limited to an amount equal to the initial public offering price
of the Registrable Stock sold by such Holder, unless such
liability arises out of or is based on willful misconduct of
such Holder.
(iii) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder agrees to give prompt
written notice to the indemnifying party after the receipt by
such Person of any written notice of the commencement of any
action, suit, proceeding or investigation or threat thereof made
in writing for which such Person will claim indemnification or
contribution pursuant to this Agreement and, unless in the
reasonable judgment of such indemnified party, a conflict of
interest may exist between such indemnified party and the
indemnifying party with respect to such claim, permit the
indemnifying party to assume the defense of such claims with
counsel reasonably satisfactory to such indemnified party.
Whether or not such defense is assumed by the indemnifying
party, the indemnifying party will not be subject to any
liability for any settlement made without its consent (but such
consent will not be unreasonably withheld). Failure by such
Person to provide said notice to the indemnifying party shall
itself not create liability except to the extent of any injury
caused thereby. No indemnifying party will consent to entry of
any judgment or enter into any settlement which does not include
as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation. If the
indemnifying party is not entitled to, or elects not to, assume
the defense of a claim, it will not be obligated to pay the fees
and expenses of more than one (1) counsel with respect to such
claim, unless in the reasonable judgment of any indemnified
party a conflict of interest may exist between such indemnified
party and any other such indemnified parties with respect to
such claim, in which event the indemnifying party shall be
obligated to pay the fees and expenses of such additional
counsel or counsels.
(iv) Contribution. If for any reason the indemnity
provided for in this Section 7 is unavailable to, or is
insufficient to hold harmless, an indemnified party, then the
indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such losses,
claims, damages, liabilities or expenses (i) in such proportion
as is appropriate to reflect the relative benefits received by
the indemnifying party on the one hand and the indemnified party
on the other, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, or provides a lesser
sum to the indemnified party than the amount hereinafter
calculated, in such proportion as is appropriate to reflect not
only the relative benefits received by the indemnifying party on
the one hand and the indemnified party on the other but also the
relative fault of the indemnifying party and the indemnified
party as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified
parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged
untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates
to information supplied by, such indemnifying party or
indemnified parties; and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as
a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include, subject
to the limitations set forth in Section 7(c), any legal or other
fees or expenses reasonably incurred by such party in connection
with any investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7 (d) were
determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable
considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation.
If indemnification is available under this Section 7, the
indemnifying parties shall indemnify each indemnified party to
the full extent provided in Sections 7(a) and (b) without regard
to the relative fault of said indemnifying party or indemnified
party or any other equitable consideration provided for in this
Section
7.
h. Participation in Underwritten Registrations. No Holder may
participate in any underwritten registration hereunder unless such Holder
(a) agrees to sell such Holder's securities on the basis provided in any
underwriting arrangements approved by the Holders entitled hereunder to
approve such arrangements, and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents reasonably required under the terms of such
underwriting arrangements.
i. Rule 144. The Company covenants that it will file the
reports required to be filed by it under the 1933 Act and the Securities
Exchange Act of 1934, as amended, and the rules and regulations adopted
by the Commission thereunder; and it will take such further action as any
Holder may reasonably request, all to the extent required from time to
time to enable such Holder to sell Registrable Stock without registration
under the 1933 Act within the limitation of the exemptions provided by
(a) Rule 144 under the 1933 Act, as such Rule may be amended from time
to time, or (b) any similar rule or regulation hereafter adopted by the
Commission. Upon the request of any Holder, the Company will deliver to
such Holder a written statement as to whether it has complied with such
requirements.
j. Transfer of Registration Rights. The registration rights
of any Holder under this Agreement with respect to any Registerable stock
may be transferred to any transferee of such Registrable Stock; provided
that such transfer may otherwise be effected in accordance with
applicable securities laws; provided further, that the transferring
Holder shall give the Company written notice at or prior to the time of
such transfer stating the name and address of the transferee and
identifying the securities with respect to which the rights under this
Agreement are being transferred; provided further, that such transferee
shall agree in writing, in form and substance satisfactory to the
Company, to be bound as a Holder by the provisions of this Agreement; and
provided further, that such assignment shall be effective only if
immediately following such transfer the further disposition of such
securities by such transferee is restricted under the 1933 Act. Except
as set forth in this Section 10, no transfer of Registrable Stock shall
cause such Registrable Stock to lose such status.
k. Miscellaneous.
(i) No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its
securities which is inconsistent with the rights granted to the
Holders in this Agreement. Except for the Registration Rights
Agreement by and between the Company and Pesa dated December 27,
1991, the Company has not previously entered into any agreement
with respect to any of its securities granting any registration
rights to any Person, other than agreements which by reason of
lapse of time do not require the Company as a practical matter
to register any securities for any Person.
(ii) Remedies. Each Holder, in addition to being
entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of
its rights under this Agreement. The Company agrees that
monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this
Agreement and hereby agrees to waive (to the extent permitted by
law) the defense in any action for specific performance that a
remedy of law would be adequate.
(iii) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may
not be given unless the Company has obtained the written consent
of the Holders of at least a majority of the Registrable Stock
then outstanding affected by such amendment, modification,
supplement, waiver or departure.
(iv) Successors and Assigns. Except as otherwise
expressly provided herein, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties hereto.
Nothing in this Agreement,, express or implied, is intended to
confer upon any Person other than the parties hereto or their
respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
(v) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of
New York applicable to contracts made and to be performed wholly
within that state, without regard to the conflict of law rules
thereof.
(vi) Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
(vii) Headings. The headings in this Agreement are used
for convenience of reference only and are not to be considered
in construing or interpreting this Agreement.
(viii) Notices. Any notice required or permitted under
this Agreement shall be given in writing and shall be delivered
in person or by telecopy or by air courier guaranteeing no later
than second business day delivery, directed to (a) the Company
at the address set forth below its signature hereof or (b) to a
Holder at the address therefor as set forth in the Company's
records. Any party may change its address for notice by giving
10 days advance written notice to the other parties. Every
notice or other communication hereunder shall be deemed to have
been duly given or served on the date on which personally
delivered, or on the date actually received, if sent by telecopy
or overnight courier service, with receipt acknowledged.
(ix) Severability. In the event that any one or more of
the provisions contained herein, or the application thereof in
any circumstances, is held invalid, illegal or unenforceable in
any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and
of the remaining provisions contained herein shall not be in any
way impaired thereby, it being intended that all of the rights
and privileges of the Holders shall be enforceable to the
fullest extent permitted by law.
(x) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises,
warranties or undertakings other than those set forth or
referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect
to such subject matter.
(xi) Attorneys' Fees. In an action or proceeding brought
to enforce any provision of this Agreement where any provision
hereof is validly asserted as a defense, the successful party
shall be entitled to recover reasonable attorneys' fees in
addition to any other available remedy.
(xii) Enforceability. This Agreement shall remain in full
force and effect notwithstanding any breach or purported breach
of, or relating to, the Stock Purchase Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
CHYRON CORPORATION,
By:s/ John A. Servizio
Name: John A. Servizio
Title: CEO
5 Hub Drive
Melville, New York 11087
Attention: Secretary
CC ACQUISITION COMPANY A, L.L.C.
By:s/ Michael Wellesley-Wesley
Name: Michael Wellesley-Wesley
Title: Vice President
CC ACQUISITION COMPANY B, L.L.C.
By:s/ Michael Wellesley-Wesley
Name: Michael Wellesley-Wesley
Title: Vice President
<PAGE>
WPG CORPORATE DEVELOPMENT
ASSOCIATES IV, L.P.
By: WPG PRIVATE EQUITY PARTNERS,
L.P., its general partner
By:s/ Wesley W. Lang,
Jr.
Name: Wesley W. Lang, Jr.
Title: General Partner
WPG CORPORATE DEVELOPMENT
ASSOCIATES IV (OVERSEAS),
L.P.
By: WPG CDA IV (OVERSEAS), LTD.,
its general partner
By:s/ Wesley W. Lang,
Jr.
Name: Wesley W. Lang,
Jr.
Title: Director
WPG ENTERPRISE FUND II,
L.P.
By: WPG VENTURE PARTNERS III,
L.P., its general partner
By:s/ Philip Greer
Name: Philip Greer
Title: General Partner
<PAGE>
WEISS, PECK & GREER VENTURE
ASSOCIATES III, L.P.
By: WPG VENTURE PARTNERS III,
L.P., its general partner
By:s/ Philip Greer
Name: Philip
Greer
Title: General
Partner
WESTPOOL INVESTMENT TRUST
PLC
By:s/ Wesley W. Lang, Jr.
Name: Wesley W. Lang,
Jr.
Title: Attorney-in-
Fact
LION INVESTMENTS LIMITED
By:s/ Wesley W. Lang, Jr.
Name: Wesley W.
Lang, Jr.
Title: Attorney-in-Fact
Charles M. Diker
CHARLES M. DIKER
<PAGE>
MINT HOUSE NOMINEES LIMITED
By:s/ Michael Wellesley-Wesley
Name: Michael Wellesly-
Wesley
Title: Attorney-in-Fact
PINE STREET VENTURES, L.L.C.
By:s/ Michael Wellesly-Wesley
Name: Michael Wellesly-
Wesley
Title: Attorney-in-Fact
s/ Michael Wellesly-Wesley Attorney-in-Fact
ISAAC HERSLY
s/ Michael Wellesley -Wesley Attorney-in-Fact
ALAN I. ANNEX
s/ Michael Wellesley-Wesley Attorney-in-
Fact
ILAN KAUFTHAL
Z FOUR PARTNERS L.L.C.
By: s/ Michael Wellesly-Wesley Attorney-in-
Fact
Name: Michael Wellesly-Wesley
Title: Attorney-in-Fact
s/ Michael Wellesly-Wesley Attorney-in-Fact
A.J.L. BEARE
