chyron_prem14a-032813.htm

Annex A

Execution Copy

STOCK PURCHASE AGREEMENT

BY AND AMONG

CHYRON CORPORATION,

CHYRON HOLDINGS, INC.,

CHYRON AKTIEBOLAG,

HEGO AKTIEBOLAG,

SELLERS

AND

SELLERS’ REPRESENTATIVE

March 9, 2013

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TABLE OF CONTENTS

			Page

1.	Definitions		A-1

2.	Purchase and Sale of Shares		A-8

	2.1	Purchase and Sale of Shares	A-8
	2.2	Closingxz	A-8
	2.3	Earn-Out	A-9
	2.4	Anti-Dilution Covenants	A-13
	2.5	Tax Consequences	A-13

3.	Representations and Warranties of Hego		A-13

	3.1	Authority	A-14
	3.2	Non-Contravention	A-14
	3.3	Permits	A-15
	3.4	Financial Statements	A-15
	3.5	Capital Structure	A-15
	3.6	Absence of Certain Changes	A-16
	3.7	Absence of Undisclosed Liabilities	A-17
	3.8	Litigation	A-17
	3.9	Restrictions on Business Activities	A-17
	3.10	Intellectual Property	A-18
	3.11	Interested Person Transactions	A-18
	3.12	Hego Material Contracts	A-19
	3.13	Accounts Receivable	A-19
	3.14	Title to Property	A-19
	3.15	Taxes	A-20
	3.16	Employee Matters	A-21
	3.17	Insurance	A-22
	3.18	Compliance With Laws	A-22
	3.19	Brokers’ and Finders’ Fee	A-22
	3.20	Privacy	A-22
	3.21	International Trade Matters	A-22
	3.22	Foreign Corrupt Practices	A-23
	3.23	Bankruptcy Proceeding	A-23
	3.24	Knowledge of warranty breaches	A-23

4.	Representations and Warranties of the Sellers		A-23

	4.1	Power and Authorization	A-23
	4.2	Authorization of Governmental Entities	A-24
	4.3	Non-Contravention	A-24
	4.4	Title	A-24
	4.5	Broker Liability	A-24
	4.6	Investment Purpose	A-24

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5.	Representations and Warranties of Chyron		A-24

	5.1	Organization; Authority; Conflicts; Consents	A-25
	5.2	Non-Contravention	A-26
	5.3	Permits	A-26
	5.4	SEC and NASDAQ Compliance; Financial Statements	A-27
	5.5	Capital Structure	A-28
	5.6	Title	A-29
	5.7	Absence of Certain Changes	A-29
	5.8	Absence of Undisclosed Liabilities	A-30
	5.9	Litigation	A-30
	5.10	Restrictions on Business Activities	A-30
	5.11	Intellectual Property	A-30
	5.12	Interested Person Transactions	A-31
	5.13	Material Contracts	A-31
	5.14	Accounts Receivable	A-32
	5.15	Title to Property	A-32
	5.16	Taxes	A-33
	5.17	Employee Matters	A-34
	5.18	Insurance	A-34
	5.19	Compliance With Laws	A-35
	5.20	Brokers’ and Finders’ Fee	A-35
	5.21	Privacy	A-35
	5.22	International Trade Matters	A-35
	5.23	Foreign Corrupt Practices	A-35
	5.24	Closing Shares and Earn-Out Shares	A-36
	5.25	Knowledge of warranty breaches	A-36

5A.	Representations and Warranties of Chyron, Chyron US and Chyron AB		A-37

	5A.1	Organization; Authority; Conflicts; Consents	A-37
	5A.2	Closing Shares and Earn-Out Shares	A-37
	5A.3	Ownership and Operations of Chyron US and Chyron AB	A-38

6.	Conduct Prior to the Closing		A-38

	6.1	Conduct of Business	A-38
	6.2	Confidentiality	A-41

7.	Additional Agreements		A-41

	7.1	Access to Information	A-41
	7.2	Public Disclosure	A-41
	7.3	Regulatory Approvals; Further Assurances	A-42
	7.4	Hego Payout Spreadsheet	A-42
	7.5	Employees	A-42
	7.6	Expenses	A-42
	7.7	Resignations	A-42
	7.8	Proxy Statement	A-43
	7.9	Board Representation	A-43

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	7.10	Incentive Compensation	A-43
	7.11	Private Placement	A-44
	7.12	Rule 144	A-44
	7.13	Director Liability Release	A-44
	7.14	Tax Election	A-44
	7.15	Release of Personal Guarantees	A-45
	7.16	Registration	A-45
	7.17	Registration Expenses	A-47
	7.18	Indemnification Relating to Registration	A-47

8.	Conditions to the Closing		A-49

	8.1	Conditions to Obligations of Each Party to Effect the Stock Sale	A-49
	8.2	Additional Conditions to the Obligations of Chyron	A-50
	8.3	Additional Conditions to the Obligations of Hego and the Sellers	A-50

9.	Termination		A-51

	9.1	Termination	A-51
	9.2	Effect of Termination	A-52

10.	Indemnification		A-52

	10.1	Survival; Indemnification; Sellers’ Representative	A-52
	10.2	Sellers’ Representative	A-53
	10.3	Actions of the Sellers’ Representative	A-54
	10.4	Third-Party Claims	A-54
	10.5	Limitations on Recovery under the Representations and Warranties	A-54

11.	General Provisions		A-56

	11.1	Notices	A-56
	11.2	Taking of Necessary Action; Further Action	A-57
	11.3	LIMITATION OF LIABILITY	A-57
	11.4	Counterparts	A-59
	11.5	Entire Agreement; Parties in Interest; Assignment	A-59
	11.6	Severability	A-59
	11.7	Remedies Cumulative	A-59
	11.8	Governing Law; Dispute Resolution	A-60
	11.9	Amendment; Waiver	A-60

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LIST OF EXHIBITS AND SCHEDULES

Exhibit A	Form of Transaction Support and Lock-Up Agreement

Exhibit B	Form of General Power-of-Attorney

Schedule 3.1	Hego’s Subsidiaries

Schedule 3.10	Hego’s Material Intellectual Property Rights

Schedule 3.11	Shareholder Loans

Schedule 3.17	Insurance

Schedule 3.19	Hego Broker’s and Finders’ Fee

Schedule 5.1	Chyron’s Subsidiaries

Schedule 5.11	Chyron’s Material Intellectual Property Rights

Schedule 5.20	Chyron Broker’s and Finder’s Fee

Schedule 7.15	Release of Personal Guarantees

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STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT (the “Agreement”) is made and entered into as of March 9, 2013 by and among Chyron Corporation, a New York corporation (“Chyron”), Chyron Holdings, Inc., a Delaware corporation (“Chyron US”), Goldcup 8582 AB (pending name change to Chyron AB), corp. reg. no. 556923-9402), a Swedish company (“Chyron AB”), Hego Aktiebolag (corp. reg. no. 556074-9730), a Swedish company (“Hego”), each person who has signed this Agreement as a “Seller” (collectively, the “Sellers”) and Westhill Group AB (corp. reg. no. 556583-5948) as the representative of the Sellers (the “Sellers’ Representative”).

RECITALS

A. The Sellers are the record and beneficial owners of all of the outstanding shares of capital stock of Hego (the “Shares”).

B. The Boards of Directors of Hego and Chyron believe it is in the best interests of their respective companies and the stockholders of their respective companies that Chyron AB acquire all of the Shares (the “Stock Sale”) and, in furtherance thereof, have approved this Agreement.

C. Chyron AB desires to purchase from the Sellers and the Sellers desire to sell to Chyron AB all of the Shares, upon the terms and subject to the conditions set forth in this Agreement.

D. As a condition to the willingness of, and as an inducement to, Chyron and Hego to enter into this Agreement, contemporaneously with the execution and delivery of this Agreement, certain holders of shares of Chyron’s common stock are entering into transaction support agreements in substantially the form of Exhibit A attached hereto (the “Transaction Support Agreements”).

NOW, THEREFORE, in consideration of the covenants and representations set forth herein and for other good and valuable consideration, the parties, intending to be legally bound, hereby agree as follows:

1. DEFINITIONS. AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:

“2013 Earn-Out Consideration” has the meaning set forth in Section 2.3(a)(i).

“2013 Earn-Out Period” shall mean the period starting on January 1, 2013 and ending on December 31, 2013.

“2013 Earn-Out Shares” has the meaning set forth in Section 2.3(a)(i).

“2013/2014 Earn-Out Period” shall mean the period starting on January 1, 2013 and ending on December 31, 2014.

“2014 Earn-Out Consideration” has the meaning set forth in Section 2.3(a)(ii).

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“2014 Earn-Out Period” shall mean the period starting on January 1, 2014 and ending on December 31, 2014.

“2014 Earn-Out Shares” has the meaning set forth in Section 2.3(a)(ii).

“2015 Earn-Out Consideration” has the meaning set forth in Section 2.3(a)(iii).

“2015 Earn-Out Period” shall mean the period starting on January 1, 2015 and ending on December 31, 2015.

“2015 Earn-Out Shares” has the meaning set forth in Section 2.3(a)(iii).

“Affiliate” means, with respect to any person, any other person that is directly or indirectly controlled by, controls, or is under common control with such person; for purposes hereof, “control” of a person means (i) ownership of, or possession of the right to vote, more than twenty five percent (25%) of the outstanding voting equity of that person or (ii) the right to control the appointment of the board of directors, management or executive officers of that person.

“Agreement” has the meaning set forth in the preamble.

“Arbitration Panel” has the meaning set forth in Section 11.8.

“Base Shares” has the meaning set forth in Section 2.1.

“Capital Stock” shall mean any shares of Hego’s capital stock.

“Chyron” has the meaning set forth in the preamble.

“Chyron AB” has the meaning set forth in the preamble.

“Chyron Balance Sheet Date” has the meaning set forth in Section 5.4(b).

“Chyron Balance Sheet” has the meaning set forth in Section 5.8.

“Chyron Business” shall mean the business of Chyron as conducted as of the date of this Agreement by Chyron and its Subsidiaries.

“Chyron Common Stock” has the meaning set forth in Section 2.1.

“Chyron Financial Statements” has the meaning set forth in Section 5.4(b).

“Chyron Intellectual Property Rights” has the meaning set forth in Section 5.10(a).

“Chyron Material Contract” has the meaning set forth in Section 5.12.

“Chyron Options/RSU Shares” has the meaning set forth in Section 2.1.

“Chyron Preferred Stock” has the meaning set forth in Section 5.5(a).

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“Chyron Report” has the meaning set forth in Section 2.3(b).

“Chyron Proxy Statement” has the meaning set forth in Section 7.8.

“Chyron Pre-Closing Outstanding Shares” has the meaning set forth in Section 2.1.

“Chyron SEC Documents” has the meaning set forth in Section 5.4(a).

“Chyron Stockholder Approval” shall mean approval of this Agreement and the Stock Sale and the other transactions contemplated hereby by the holders of at least a majority of the shares of Chyron Common Stock present or represented by proxy at the meeting of Chyron stockholders at which such matter is submitted for consideration and action.

“Chyron US” has the meaning set forth in the preamble.

“Closing” has the meaning set forth in Section 2.2.

“Closing Date” has the meaning set forth in Section 2.2.

“Closing Consideration” has the meaning set forth in Section 2.1.

“Closing Consideration Measuring Date” has the meaning set forth in Section 2.1.

“Closing Shares” has the meaning set forth in Section 2.1.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Companies Act” means the Swedish Companies Act (SFS 2005:551).

“Companies Register” means the Swedish Companies Register.

“Confidentiality Agreement” has the meaning set forth in Section 6.2.

“Damages” means all direct losses incurred by an Indemnified Person.

“Dispute Notice” has the meaning set forth in Section 2.3(b).

“Earn-Out Arbiter” has the meaning set forth in Section 2.3(c).

“Earn-Out Consideration” has the meaning set forth in Section 2.3(a).

“Earn-Out Period(s)” has the meaning set forth in Section 2.3(b).

“Earn-Out Shares” has the meaning set forth in Section 2.3(a).

“Electronic Data Room” shall mean the electronic data room to which Chyron has been provided access in connection with the due diligence investigation conducted prior to the execution of this Agreement.

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“Encumbrance” shall mean any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, option, right of first refusal, title retention or title reversion agreement, preemptive right, community property interest or restriction of any nature.

“Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended.

“FCPA” has the meaning set forth in Section 3.22.

“Filing Deadline” has the meaning set forth in Section 7.16(a).

“Fraud” shall mean the making of (a) a statement which is false, known by the maker to be false, intended by the maker to be relied upon and relied upon by the recipient who is entitled to rely upon it and who does not know of its falsity, and which causes harm to the recipient, (b) an intentional misrepresentation, (c) willful wrongdoing or (d) gross negligence.

“GAAP” shall mean, with respect to a person, the applicable generally accepted accounting principles in the particular jurisdiction where such person’s financial accounts are prepared.

“Governmental Entity” has the meaning set forth in Section 3.2.

“Hego” has the meaning set forth in the preamble.

“Hego Balance Sheet Date” means December 31, 2012.

“Hego Balance Sheet” has the meaning set forth in Section 3.7.

“Hego Business” means the business of Hego as conducted as of the date of this Agreement by Hego and its Subsidiaries.

“Hego Financial Statements” has the meaning set forth in Section 3.4(a).

“Hego Intellectual Property Rights” has the meaning set forth in Section 3.10(a).

“Hego Material Contract” has the meaning set forth in Section 3.12.

“Hego Other Equity Rights” shall mean, other than Capital Stock, any other capital stock, ownership right, option, warrant, stock appreciation right, phantom stock right, purchase right, subscription right, conversion right, exchange right, in each case, with respect to shares of Hego, or provision of any other contract or commitment that could require Hego to issue, sell, or otherwise cause to become outstanding any Capital Stock (contingent or otherwise).

“Hego Payout Spreadsheet” has the meaning set forth in Section 7.4.

“Hego Products” means the prior, current and, as of the Closing, planned products of Hego or any of its Subsidiaries developed, manufactured, sold, offered for sale, distributed, hosted, or supported or proposed as of the Closing to be developed, manufactured, sold, offered for sale, distributed, hosted, or supported by Hego or any of its Subsidiaries.

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“Hego Revenue” means revenue that is recognized and recorded in the books and records of Chyron and its Subsidiaries (from time to time) (including but not limited to Hego and its Subsidiaries (from time to time)), in accordance with U.S. GAAP, for the relevant Earn-Out Period which, in each case, (i) is attributable to sales of the Milestone Products, whether such Milestone Products are sold by Hego salespeople, Chyron salespeople or otherwise, (ii) constitutes service revenue related to Milestone Products (including but not limited to extended product warranty offerings, technical service program offerings and consulting fees), and/or (iii) to the extent reasonably ascertainable in the ordinary course of the reporting of revenue of Chyron and its Subsidiaries, the pro-rata share of Milestone Products and/or related service revenue where non-Milestone Products and related services are bundled and sold with Milestone Products and related services. Where Milestone Products and/or any related services and non-Milestone Products and/or any related services are bundled and sold, any rebates and discounts offered on Milestone Products and/or related services shall be disregarded for purposes of calculating the applicable Hego Revenue, unless and to the extent such rebates and discounts are (1) offered after the Closing in a manner consistent with Hego’s established rebate and discount practices as in effect and which have been applied on a consistent basis for the preceding year prior to the Closing or (2) agreed to in advance of the applicable sales by the Sellers’ Representative. Hego Revenue shall exclude all other revenue of Chyron and its Subsidiaries.

“Hego Share Ledger” has the meaning set forth in Section 3.5(f).

“Indemnified Person” has the meaning set forth in Section 10.1(b).

“Indemnifying Person” has the meaning set forth in Section 10.1(b).

“International Trade Law” has the meaning set forth in Section 3.21.

“IRS” has the meaning set forth in Section 3.15(c).

“knowledge of Chyron”, “Chyron’s knowledge” and similar references refer to the actual knowledge of any member of Chyron’s Board of Directors and Jerry Kieliszak.

“knowledge of Hego”, “Hego’s knowledge” and similar references refer to the actual knowledge of any member of the Hego Board of Directors and Johan Apel.

“LCIA” shall have the meaning set forth in Section 11.8.

“Liabilities” shall include all obligations and liabilities of any nature whether matured or unmatured, fixed or contingent and whether or not required to be included in financial statements under GAAP.

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“Material Adverse Effect” shall mean, in the case of Hego, any event, change or effect that is, or could reasonably be expected to be, materially adverse to the Hego Business and Hego’s financial condition, properties, assets, Liabilities, operations or results of operations of Hego and its Subsidiaries, taken as a whole, and, in the case of Chyron, any event, change or effect that is, or could reasonably be expected to be, materially adverse to the Chyron Business and Chyron’s financial condition, properties, assets, Liabilities, operations or results of operations of Chyron and its Subsidiaries, taken as a whole; provided that no such event, change or effect shall be considered in determining a Material Adverse Effect to the extent it results from one or more of the following: (a) general economic or business conditions or acts of war or terrorism, in each case, that do not disproportionately affect the applicable entity and its Subsidiaries, taken as a whole, (b) factors affecting the digital and broadcast graphics industry in general which do not disproportionately affect the applicable entity and its Subsidiaries, or (c) any change in GAAP or applicable laws.

“Milestone Products” shall mean the current and, as of the Closing, current as well as planned products and related services of Hego or any of its Subsidiaries developed, manufactured, sold, offered for sale, distributed, hosted, or supported or proposed as of the Closing to be developed, manufactured, sold, offered for sale, distributed, hosted, or supported by Hego or any of its Subsidiaries, together with any products, and related services, developed and sold during the applicable Earn-Out Period which are derived from or based on Hego Products or the intellectual property of Hego and its Subsidiaries existing prior to the Closing and also any new intellectual property or products, and related services, which are developed and sold after the Closing by personnel of Hego and its Subsidiaries who remained employed by Chyron and any of its Subsidiaries (including but not limited to Hego and any of its Subsidiaries) after the Closing or by any personnel hired thereafter by Chyron or any of its Subsidiaries to work with such continuing personnel of Hego and its Subsidiaries in the development of new Hego products and services or the sale thereof.

“Pre-Closing Additional Stock” has the meaning set forth in Section 2.4(a).

“Pre-Closing Period” has the meaning set forth in Section 7.1.

“Registrable Securities” has the meaning set forth in Section 7.16(a).

“Registration Deadline” has the meaning set forth in Section 7.16(a).

“Registration Indemnified Person” has the meaning set forth in Section 7.18(a).

“Registration Period” has the meaning set forth in Section 7.16(a).

“Registration Statement” has the meaning set forth in Section 7.16(a).

“RSUs” has the meaning set forth in Section 2.1.

“SEC” shall mean the United States Securities and Exchange Commission.

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Seller” or “Sellers” has the meaning set forth in the preamble.

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“Sellers’ Representative” has the meaning set forth in the preamble.

“Selling Holder Questionnaire” has the meaning set forth in Section 7.16(a).

“Shares” has the meaning set forth in the Recitals.

“Stockholder” shall mean each holder of record of Capital Stock.

“Stock Sale” has the meaning set forth in the Recitals.

“Stock Sale Consideration” shall mean the total of the Closing Consideration and the Earn-Out Consideration, if any.

“Subsidiary” shall mean an entity of which a party directly or indirectly owns, beneficially or of record, at least 50% of the outstanding equity or financial interests of such entity.

“Tax Authority” means any Governmental Entity responsible for the imposition, determination or collection of any Tax or the review or audit of any Tax Return.

“Tax Return” means any return (including any schedule or attachment and any information return), report, statement (including but not limited to Form TD F 90-22.1, if applicable), declaration, estimate, schedule, notice, notification, form, election, certificate or other document or information (including any amendment thereof) filed with or submitted to, or required to be filed with or submitted to, any Tax Authority in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with applicable law relating to any Taxes.

“Tax” and collectively “Taxes” shall mean any and all U.S. federal, state and local, and all non-U.S., taxes, assessments and other governmental charges and duties, impositions, including taxes based upon or measured by gross receipts, gross income, net income, alternative or add-on minimum tax, gains, profits, sales, use, stamp, transfer, business and occupation, value added, customs duty, services, bulk sales, ad valorem, property taxes (real, tangible or intangible), unclaimed property, utility, telecommunications, franchise, capital stock, net worth, production, license, registration, fringe benefit, withholding, payroll, social security (or equivalent), employment, unemployment, disability, severance, recapture, excise, premium, environmental or windfall profit tax or other tax, governmental fee or other governmental assessment or charge, together with all interest, penalties and additions imposed with respect to such amounts.

“Trac AB” has the meaning set forth in Section 3.23.

“Trading Day” has the meaning set forth in Section 2.1.

“Transaction Support Agreements” has the meaning set forth in the preamble.

“UK Bribery Act” has the meaning set forth in Section 3.22.

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2. PURCHASE AND SALE OF SHARES.

2.1 Purchase and Sale of Shares. At the Closing, subject to the terms and conditions of this Agreement, the Sellers shall sell, transfer and deliver to Chyron AB all of the Shares, free and clear of all Encumbrances, and in consideration therefor, Chyron AB shall transfer and deliver to each Seller the number of shares of Chyron’s common stock, $.01 par value per share (“Chyron Common Stock”) set forth next to each such Seller’s name in the Hego Payout Spreadsheet, which shares of Chyron Common Stock to be issued to all of the Sellers in the aggregate (the “Closing Shares”) as the consideration payable therefor at the Closing (together with the One Thousand Dollar ($1,000) Closing payment by Chyron AB to Hego, the “Closing Consideration”) shall represent forty percent (40%) of the aggregate of: (a) the shares of Chyron Common Stock which are issued and outstanding on the date (the “Closing Consideration Measuring Date”) which is ten (10) calendar days prior to the Closing Date or, if such date is not a day on which the NASDAQ Stock Market, Inc. is open for trading (a “Trading Day”), the Trading Day immediately prior to such date (the “Chyron Pre-Closing Outstanding Shares”), (b) the shares of Chyron Common Stock which are issuable upon the exercise of all options and restricted stock units (“RSUs”) to purchase Chyron Common Stock which are outstanding on the Closing Consideration Measuring Date and which have exercise prices which are less than or equal to $1.25 per share (the “Chyron Options/RSU Shares”), and (c) the Closing Shares (the Chyron Pre-Closing Outstanding Shares, the Chyron Options/RSU Shares and the Closing Shares being, collectively, the “Base Shares”). For the avoidance of doubt, the Closing Shares shall be as set forth on the Hego Payout Spreadsheet and shall not be subject to change based upon any change in the trading prices of Chyron Common Stock at the time of issuance of such shares at the Closing or any other time. Each Seller that is a private person shall have the right to transfer its Shares prior to Closing to a wholly owned subsidiary owned by such Seller and shall further have the right to transfer the Closing Shares to such wholly owned subsidiary and such wholly owned subsidiary shall in either such case replace the Seller for all purposes as a party under this Agreement.

2.2 Closing. The closing of the transactions contemplated hereby (the “Closing”) shall take place three (3) business days after the satisfaction or waiver of the last of the conditions set forth in Section 8 to be satisfied or waived, or at such other date, and, in any case, at such time on such date as the parties agree (the “Closing Date”). The parties shall jointly prepare, execute and deliver a closing memorandum in accordance with which the Closing shall be conducted. For the absence of doubt, the following actions shall take place at the Closing:

(a) the parties shall confirm that the conditions to Closing set forth in Section 8 have been satisfied;

(b) Chyron AB shall, or shall cause Chyron’s transfer agent to, issue the Closing Shares to the Sellers in accordance with the Hego Payout Spreadsheet and pursuant to the terms of this Agreement, and shall pay Hego One Thousand Dollars ($1,000);

(c) the Sellers shall deliver to Chyron AB the share certificates (if issued in certificate form) representing the Shares, duly endorsed in the name of Chyron AB;

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(d) the Sellers shall deliver to Chyron AB the share register of Hego, demonstrating that Chyron AB has been duly registered as the holder of all of the Shares;

(e) the required number out of the Hego Board of Directors shall authorize and enter into and deliver to Chyron AB, a General Power-of-Attorney in the form of Exhibit B attached hereto pursuant to which Hego’s affairs shall be directed until such time as a superseding Board of Directors is elected or appointed and such election or appointment shall have been registered in the Companies Register;

(f) the Sellers shall deliver signed resignation letters from all members of the Hego Board of Directors;

(g) Chyron AB shall cause an extraordinary general meeting of Hego’s shareholders and a meeting of Hego’s Board of Directors to be held for the purpose of appointing new members of Hego’s Board of Directors and new company signatories for Hego to replace those appointed by the Sellers, who shall resign upon the Closing; and

(h) Chyron AB shall cause to be filed with the Swedish Companies Register all corporate changes of Hego contemplated by this Section 2.2 which are required to be so filed.

The Closing shall take place at the offices of the offices of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. at the Chrysler Center, 666 Third Avenue, New York, NY 10017, or at such other location as the parties hereto agree (it being understood that the Closing may be effected by the delivery of documents via e-mail, facsimile and/or overnight courier).

2.3 Earn-Out.

(a) Following the Closing, subject to Section 10, the Sellers may be entitled to receive additional consideration (the “Earn-Out Consideration”) in the form of shares of Chyron Common Stock (the “Earn-Out Shares”) up to an aggregate amount such that the sum of the Closing Shares and the Earn-Out Shares (if earned) will represent up to fifty percent (50%) of the sum of the Base Shares and the Earn-Out Shares (if earned), subject to and contingent upon the following conditions:

(i) Subject to Section 2.3(a)(iv), if Hego Revenue (as recorded and translated to US dollars under U.S. GAAP) exceeds Fifteen Million Five Hundred Thousand US Dollars ($15,500,000) for the 2013 Earn-Out Period, then the Sellers shall be entitled to receive, and Chyron AB shall cause to be issued to them, as Earn-Out Consideration (the “2013 Earn-Out Consideration”), a number of additional shares of Chyron Common Stock (the “2013 Earn-Out Shares”) which will cause the percentage of the sum of the Base Shares and the 2013 Earn-Out Shares which is represented by the sum of the Closing Shares and the 2013 Earn-Out Shares to increase by five percent (5%) over the percentage of the Base Shares which is represented by the Closing Shares (i.e., from forty percent (40%) to forty-five percent (45%)), allocated to and among the Sellers as set forth in the Hego Payout Spreadsheet.

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(ii) Subject to Section 2.3(a)(iv), if Hego Revenue (as recorded and translated to US dollars under U.S. GAAP) exceeds Sixteen Million US Dollars ($16,000,000) for the 2014 Earn-Out Period, then the Sellers shall be entitled to receive, and Chyron AB shall cause to be issued to them, as Earn-Out Consideration (the “2014 Earn-Out Consideration”), a number of additional shares of Chyron Common Stock (the “2014 Earn-Out Shares”) which will cause the percentage of the sum of the Base Shares, the 2013 Earn-Out Shares (if earned) and the 2014 Earn-Out Shares which is represented by the sum of the Closing Shares, the 2013 Earn-Out Shares (if earned) and the 2014 Earn-Out Shares to increase by two and one-half percent (2.5%) over the percentage of the sum of the Base Shares, the 2013 Earn-Out Shares (if earned) and the 2014 Earn-Out Shares which is represented by the sum of the Closing Shares and the 2013 Earn-Out Shares (if earned) (i.e., from forty-five percent (45%) to forty-seven and one-half percent (47.5%) if the 2013 Earn-Out Consideration is earned and from forty percent (40%) to forty-two and one-half percent if the 2013 Earn-Out Consideration is not earned), allocated to and among the Sellers as set forth in the Hego Payout Spreadsheet.

(iii) Subject to Section 2.3(a)(iv), if Hego Revenue (as recorded and translated to US dollars under U.S. GAAP) exceeds Sixteen Million Five Hundred Thousand US Dollars ($16,500,000) for the 2015 Earn-Out Period, then the Sellers shall be entitled to receive, and Chyron AB shall cause to be issued to them, as Earn-Out Consideration (the “2015 Earn-Out Consideration”), a number of additional shares of Chyron Common Stock (the “2015 Earn-Out Shares”) which will cause the percentage of the sum of the Base Shares, the 2013 Earn-Out Shares (if earned), the 2014 Earn-Out Shares (if earned) and the 2015 Earn-Out Shares which is represented by the sum of the Closing Shares, the 2013 Earn-Out Shares (if earned), the 2014 Earn-Out Shares (if earned) and the 2015 Earn-Out Shares to increase by two and one-half percent (2.5%) over the percentage of the sum of the Base Shares, the 2013 Earn-Out Shares (if earned) and the 2014 Earn-Out Shares (if earned) which is represented by the sum of the Closing Shares, the 2013 Earn-Out Shares (if earned) and the 2014 Earn-Out Shares (i.e., from forty-seven and one-half percent (47.5%) to fifty percent (50%) if the 2013 Earn-Out Consideration and the 2014 Earn-Out Consideration are both earned, from forty-five percent (45%) to forty-seven and one-half percent (47.5%) if the 2013 Earn-Out Consideration is earned but the 2014 Earn-Out Consideration is not earned, from forty-two and one-half percent to forty-five percent (45%) if the 2013 Earn-Out Consideration is not earned but the 2014 Earn-Out Consideration is earned, and from forty percent (40%) to forty-two and one-half percent (42.5%) if neither the 2013 Earn-Out Consideration nor the 2014 Earn-Out Consideration is earned), allocated to and among the Sellers as set forth in the Hego Payout Spreadsheet.

(iv) Notwithstanding the foregoing, if Hego Revenue (as recorded and translated to US dollars under U.S. GAAP) exceeds Thirty-Three Million US Dollars ($33,000,000) for the 2013/2014 Earn-Out Period, then the Sellers shall be entitled to receive, and Chyron AB shall cause to be issued to them (to the extent not previously issued to them), the maximum number of Earn-Out Shares without regard to the provisions of Sections 2.3(a)(i), (ii) and (iii), which provisions shall thereupon cease to be of any force or effect (i.e. such that the sum of the Closing Shares and Earn-Out Shares issued to them will represent fifty percent (50%) of the sum of the Base Shares and the Earn-Out Shares issued to them).

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(b) Reporting. Not later than the ninetieth (90th) day following the end of each of the 2013 Earn-Out Period, the 2014 Earn-Out Period, the 2015 Earn-Out Period (unless the Hego Revenue for the 2013/2014 Earn-Out Period results in Section 2.13(a)(iv) being applicable) and the 2013/2014 Earn-Out Period (each an “Earn-Out Period” and together the “Earn-Out Periods”), Chyron shall prepare and deliver to the Sellers’ Representative a report showing the Hego Revenue for each such Earn-Out Period and the resulting Earn-Out Consideration, if any, payable to the Sellers pursuant to Section 2.3(a) (in each case, the “Chyron Report”). Each Chyron Report shall be certified in writing on behalf of Chyron by Chyron’s chief executive officer. For a period of thirty (30) calendar days after receipt of each such Chyron Report, the Sellers’ Representative shall have the right, at the Sellers’ Representative’s expense and upon not less than two (2) calendar days’ prior notice to Chyron, to (a) meet with Chyron to discuss Chyron’s calculations, and (b) have reasonable access, including in electronic form, during normal business hours to inspect the records, working papers, schedules and other documentation used or prepared by Chyron in connection with the preparation of such calculations, in any such case solely for the purpose of verifying such calculations. Unless the Sellers’ Representative gives notice of its disagreement (a “Dispute Notice”) with Chyron’s calculations, detailing the amount, nature and detailed basis of such dispute within thirty (30) calendar days after the delivery of the applicable Chyron Report, Chyron’s calculations shall be final, conclusive and binding for all purposes, absent any Fraud by Chyron.

(c) Earn-Out Dispute Resolution. In the event of such a disagreement and delivery of a Dispute Notice, Chyron and the Sellers’ Representative shall first use their mutual diligent good faith efforts to resolve such dispute. If they are unable to resolve the dispute within thirty (30) calendar days after delivery of the Dispute Notice, then the dispute shall be submitted to an independent accountant or accounting firm of recognized standing, selected jointly by Chyron and the Sellers’ Representative, for resolution of the matter or matters in dispute (an “Earn-Out Arbiter”). Chyron, the Sellers and the Sellers’ Representative shall cooperate in good faith with any Earn-Out Arbiter so selected, including but not limited to providing the Earn-Out Arbiter with such documentation and other information as is reasonably requested by the Earn-Out Arbiter. The Earn-Out Arbiter shall establish and inform the parties in disagreement regarding the process for resolving the matter or matters in dispute as the Earn-Out Arbiter determines, in the Earn-Out Arbiter’s sole discretion. In the event that the matter or matters in dispute are not resolved within thirty (30) calendar days after selection of the Earn-Out Arbiter or no Earn-Out Arbiter is jointly selected within such period of thirty (30) calendar days, either Chyron or the Sellers’ Representative may, by written notice to the other and to the LCIA, invoke resolution of the matter or matters in dispute by the LCIA pursuant to Section 11.8. Chyron and the Sellers’ Representative shall instruct the Earn-Out Arbiter to make a determination as promptly as practicable but in no event later than thirty (30) calendar days after the Earn-Out Arbiter’s acceptance of appointment. The Earn-Out Arbiter shall not be authorized to award fees and expenses. Chyron, the Sellers’ and the Sellers’ Representatives shall bear their respective fees and expenses incurred in connection with resolution of the matter or matters in dispute by the Earn-Out Arbiter. Chyron and Sellers’ Representative shall enter into any engagement letter reasonably required by the Earn-Out Arbiter to perform the Earn-Out Arbiter’s services hereunder. A determination by the Earn-Out Arbiter as to the resolution of any dispute (including as to any procedural matter) shall be binding and conclusive upon the parties hereto.

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(d) Earn-Out Distributions. If the Sellers are entitled to receive, and Chyron AB is obligated to pay, any of the 2013 Earn-Out Consideration, 2014 Earn-Out Consideration or 2015 Earn-Out Consideration, as the case may be, then, on or prior to the thirtieth (30th) calendar day following the delivery of the Chyron Report, Chyron AB shall cause Chyron’s stock transfer agent to deliver such additional shares of Chyron Common Stock representing such earned Earn-Out Consideration to and among the Sellers as is set forth on the Hego Payout Spreadsheet, either directly or through the Sellers’ Representative; provided that if there is a disagreement with respect thereto under Section 2.3(c) which has not been resolved or withdrawn on or prior to such distribution date, then the portion of the applicable Earn-Out Consideration which is in dispute (and only the amount in dispute) shall not be so paid but shall be paid on or prior to the fifteenth (15th) calendar day following the final resolution or withdrawal of such dispute in accordance with Section 2.3(c).

(e) Earn-Out Standard. Neither Chyron nor Chyron AB shall act in bad faith to take any action which has the effect or purpose to prevent the issuance of any Earn-Out Consideration provided for in Section 2.3(a). Further, if any of the actions set forth below occurs without the prior consent of the Sellers’ Representative from the Closing Date until the conclusion of the 2015 Earn-Out Period (or the 2014 Earn-Out Period if the conditions in Section 2.3(a)(iv) are satisfied), Chyron and the Sellers’ Representative shall in good faith discuss and agree on how the relevant Hego Revenue amount(s) shall be adjusted in order to take into account the impact of such action(s):

(i) Chyron reduces the allocation of sales personnel who are responsible for sales of a Milestone Product (other than as mutually planned, agreed and understood by Chyron and the Sellers’ Representative prior to the Closing in connection with transition planning);

(ii) Chyron closes or shuts down a product line (other than as mutually planned, agreed and understood by Chyron and the Sellers’ Representative prior to the Closing in connection with transition planning);

(iii) Chyron changes the accounting principles (other than as required pursuant to U.S. GAAP) that have been consistently applied to recognize and record revenue in the books and records of Chyron and its Subsidiaries (including, for the avoidance of doubt, Hego and its Subsidiaries);

(iv) Chyron allocates costs relating to the business of Chyron or its Subsidiaries to Hego or its Subsidiaries,

(v) Chyron moves assets, contracts, business or business opportunities from Hego or its Subsidiaries to Chyron or its Subsidiaries. For the purposes of this item (v), a “move” shall be deemed to have occurred even if no formal transfer from Hego to Chyron has taken place; or

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(vi) Chyron takes any other actions with the intent or purpose to diminish or reduce the Hego Revenue for the purposes of reducing the Earn-Out Consideration or otherwise takes any measure with the intent or purpose to prevent the Sellers from receiving the Earn-Out Consideration.

Subject to the foregoing possible adjustments in calculating Hego Revenue for the purpose of the Earn-Out Consideration, Chyron shall be free to operate the business in the manner Chyron deems to be in the best interests of Chyron and Chyron’s stockholders. Hego, the Sellers and the Sellers’ Representative acknowledge and agree that this Section 2.3(e) is the sole standard by which Chyron’s actions shall be judged with respect to the Earn-Out Consideration.

(f) Earn-Out Consideration Rights Not Transferable. No Seller may sell, exchange, transfer, pledge, hypothecate or otherwise dispose of, in whole or in part, his, her or its right to receive any Earn-Out Consideration pursuant to this Agreement and any transfer or attempted transfer in violation of this provision shall be null and void and shall not be recognized by Chyron, Chyron AB or Hego.

(g) No Interest. The parties acknowledge and agree that no separate cash or other payment of interest will be made by Chyron AB with respect to any Earn-Out Consideration, and Chyron AB shall have no liability whatsoever with respect to any Tax obligations of the Sellers with respect to any Earn-Out Consideration.

2.4 Anti-Dilution Covenants. If any additional Chyron Common Stock, RSUs, stock options, security related incentive schemes or other equity awards are issued or granted during the period from the Closing Consideration Measuring Date until the Closing Date (together, the “Pre-Closing Additional Stock”), Chyron and Chyron AB jointly shall, at the Closing Date or as soon as practicable thereafter, take all necessary actions to ensure that additional shares of Chyron Common Stock are transferred and delivered to each Seller as listed in the Hego Payout Spreadsheet, on a pro rata basis and without any additional consideration to be paid in return, in order for the Chyron Common Stock issued to all of the Sellers in the aggregate as part of the Closing Consideration to represent forty percent (40%) of the sum of the Base Shares and the Pre-Closing Additional Stock.

2.5 Tax Consequences. No party hereto makes any representation or warranties to any other party hereto regarding the Tax treatment of the Stock Sale or any transactions contemplated by this Agreement. All parties hereto shall rely solely on their own respective Tax and legal advisors in connection with this Agreement, the Stock Sale and the other transactions or agreements contemplated by this Agreement.

3. REPRESENTATIONS AND WARRANTIES OF HEGO. SUBJECT TO ANY EXCEPTIONS OR DIFFERENCES AS REFLECTED IN ANY DOCUMENT IN THE ELECTRONIC DATA ROOM AS OF THE DATE OF THIS AGREEMENT, HEGO REPRESENTS AND WARRANTS TO CHYRON, CHYRON US AND CHYRON AB AS OF THE DAY HEREOF AND AS OF CLOSING AS SET FORTH IN THIS SECTION 3. FOR THE AVOIDANCE OF DOUBT, THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS SECTION 3 ARE MADE SOLELY FOR THE PURPOSE OF THE CONDITION TO CHYRON’S AND CHYRON AB’S OBLIGATIONS TO CONSUMMATE AND EFFECT THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, AS SET FORTH IN SECTION 8.2(A), AND NOT FOR THE PURPOSE OF INDEMNIFICATION BY HEGO PURSUANT TO SECTION 10.

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3.1 Authority. Hego is a company duly organized and validly existing under the laws of Sweden. Hego is properly registered with the Companies Register. Each of Hego’s Subsidiaries is an entity duly organized, validly existing and, to the extent “good standing” is of legal significance in the applicable jurisdiction of organization, in good standing under the laws of its jurisdiction of organization. Hego has made available in the Electronic Data Room copies of the articles of association of Hego and the equivalent organizational documents of each of its Subsidiaries, each as amended to date. Except as set forth in Schedule 3.1, Hego does not directly or indirectly own any equity or similar interest in, or any interest convertible or exchangeable or exercisable for, any equity or similar interest in, any corporation, partnership, joint venture or other business association or entity. Each entity set forth in Schedule 3.1 is a Subsidiary of Hego. Except as set forth in Schedule 3.1, in any shareholder agreements relating to the Subsidiaries or in any constitutional documents relating to the Subsidiaries, Hego owns all of the capital stock of each such Subsidiary and there is no other capital stock, ownership right, option, warrant, stock appreciation right, phantom stock right, purchase right, subscription right, conversion right, exchange right, in each case, with respect to the shares of such Subsidiary, or other contract or commitment that could require Hego or such Subsidiary to issue, sell, or otherwise cause to become outstanding any capital stock of any such Subsidiary (contingent or otherwise). Hego has not violated any of the provisions of its articles of association. Hego has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby with respect to which Hego is a party. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby with respect to which Hego is a party has been duly authorized by all necessary corporate action on the part of Hego. The Board of Directors of Hego has unanimously approved Hego’s entry into this Agreement. The execution and delivery of this Agreement by Hego does not, and the consummation of the transactions contemplated hereby will not, conflict with, or result in any violation of any provision of the Companies Act, any other law or regulation or the articles of association of Hego. This Agreement has been duly executed and delivered by Hego and, assuming due authorization, execution and delivery of the other parties hereto, constitutes the valid and binding obligation of Hego enforceable against Hego in accordance with its terms to the extent this Agreement is applicable to Hego.

3.2 Non-Contravention. The execution and delivery of this Agreement by Hego does not, and the consummation of the transactions contemplated hereby with respect to which Hego is a party will not, (i) conflict with, or result in any violation of, or default under (with or without notice or lapse of time, or both), or give rise to a right of termination, cancellation or acceleration of any obligation or loss of any benefit under any Hego Material Contract, permit, concession, franchise, license, injunction, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Hego or its Subsidiaries or any properties or assets of Hego or its Subsidiaries, (ii) trigger, contravene, conflict with or result in any third party non-compete, notification, non-solicitation, covenant not to sue, right of first refusal, right of first negotiation or other third-party right binding on Hego or its Subsidiaries, or (iii) contravene, conflict with or result in any limitation on Hego’s or its Subsidiaries’ right, or, to the knowledge of Hego, Chyron’s right after the Closing, to indirectly own any Hego Intellectual Property Rights. No consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or instrumentality (“Governmental Entity”) or other person or entity is required by or with respect to Hego or its Subsidiaries in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby with respect to which Hego is a party. Hego and each of its Subsidiaries is, to the extent that being “qualified to do business and in “good standing” is of legal significance in the applicable jurisdiction, is qualified to do business and in good standing in each jurisdiction in which it conducts business activities or has assets requiring it to be qualified to do business.

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3.3 Permits. Hego and its Subsidiaries have obtained each necessary consent, license, permit, grant or other authorization of a Governmental Entity (a) pursuant to which Hego and its Subsidiaries operates or holds any interest in any of its properties; or (b) that is required for the operation of the Hego Business or the holding of any such interest and all of such permits, grants or other authorizations are in full force and effect.

3.4 Financial Statements.

(a) Hego has made available in the Electronic Data Room its audited consolidated financial statements for each of the fiscal years ended December 31, 2012 and 2011, including a balance sheet as of December 31, 2012 (the “Hego Balance Sheet Date”) (collectively, all such financial statements, the “Hego Financial Statements”). The Hego Financial Statements have been prepared in accordance with Swedish law and Swedish GAAP applied on a consistent basis throughout the periods presented and consistent with each other or as otherwise described therein. The Hego Financial Statements fairly present the consolidated financial condition, operating results and cash flow of Hego and its Subsidiaries as of the dates, and for the periods, indicated therein, all in accordance with Swedish law and Swedish GAAP.

(b) Hego and its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of consolidated financial statements of Hego and to maintain accountability for assets; (iii) access to the assets of Hego and its Subsidiaries is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Hego and its Subsidiaries are not party to or otherwise involved in any off-balance sheet arrangements, except for Hego’s operating leasing arrangements in the amount of approximately 4.6 million SEK.

3.5 Capital Structure.

(a) The authorized capital stock of Hego consists exclusively of 1,539 common shares. As of the date of this Agreement, 1,539 Hego common shares have been issued and are outstanding. In addition, twenty-one (21) Hego common shares have been issued but not registered as of the date hereof by the Companies Register. There are no other shares of Capital Stock issued or outstanding.

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(b) All of the issued and outstanding shares of Capital Stock have been duly authorized and validly issued, are fully paid and are free of any Encumbrances. The issued and outstanding shares of Capital Stock are not subject to, and the issuance thereof has not triggered any, preemptive rights or rights of first refusal that were not complied with (or waived by the applicable Stockholder), in each case (i) created by statute, (ii) the articles of association of Hego or (iii) any agreement to which Hego is a party or by which it is bound.

(d) Hego has no obligation or right (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of Capital Stock or any interest therein or to pay any dividend or make any other distribution in respect thereof.

(e) There are no agreements of Hego or its Subsidiaries to register any securities under the Securities Act or any other securities law. There are no agreements to which Hego or any of its Subsidiaries is a party, or to which any shares of Capital Stock are subject, relating to the voting of shares of Capital Stock or otherwise granting, limiting or affecting the rights pertaining to shares of Capital Stock.

(f) The Hego share ledger in the Electronic Data Room (the “Hego Share Ledger”) sets forth a true and complete list as of the date of this Agreement of all holders of Capital Stock and the shares of Capital Stock held by each holder. Except as forth on the Hego Payout Spreadsheet, no Stockholder will be entitled to receive any payment with respect to his, her or its shares of Capital Stock as a result of this Agreement, the Stock Sale or any other of the transactions contemplated hereby.

(g) There are not now, and will not be as of the Closing, any Hego Other Equity Rights outstanding or issuable.

3.6 Absence of Certain Changes. Since December 31, 2012, Hego and its Subsidiaries have conducted the Hego Business in the ordinary course of business, consistent with past practice, and there has not occurred or been (a) any change, event or condition (whether or not covered by insurance) that (i) has resulted in, or could reasonably be expected to result in, a Material Adverse Effect, or (ii) that could reasonably be expected to prevent, materially alter or materially delay any of the transactions contemplated by this Agreement; (b) any acquisition, sale or transfer of any material asset of Hego or its Subsidiaries other than in the ordinary course of business and consistent with past practice and except for the acquisition of Cogeye AB; (c) any change in accounting methods or practices (including any change in revenue recognition, depreciation or amortization policies or rates) by Hego or its Subsidiaries, except as required by Swedish GAAP, or any revaluation by Hego or its Subsidiaries of any of its assets; (d) any declaration, setting aside, or payment of a dividend or other distribution with respect to the Capital Stock or any direct or indirect redemption, purchase or other acquisition by Hego of any Capital Stock, (e) any Hego Material Contract, other than Hego Material Contracts (I) entered into prior to the date of this Agreement in the ordinary course of business or (II) entered into on or after the date of this Agreement in compliance with Section 6.1, or (f) any material amendment or termination of, or default under, any Hego Material Contract to which Hego or any of its Subsidiaries is a party or by which it is bound other than termination of any Hego Material Contracts after the date of this Agreement in the ordinary course of business; (g) any amendment or change to the articles of association of Hego; or (h) any increase in or modification of the compensation or benefits payable or to become payable by Hego or its Subsidiaries to any of their directors or employees, except for normal adjustments in the ordinary course of business.

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3.7 Absence of Undisclosed Liabilities. Neither Hego nor any of its Subsidiaries has any Liabilities other than (a) those specifically set forth in the consolidated balance sheet of Hego as of the Hego Balance Sheet Date (the “Hego Balance Sheet”); and (b) immaterial Liabilities incurred following the Hego Balance Sheet Date in the ordinary course of business consistent with past practice; (c) Liabilities (other than for breach thereof) under Hego Material Contracts, (d) immaterial Liabilities (other than for breach thereof) under other contracts entered into in the ordinary course of business consistent with past practice; and (e) Liabilities for accounts payable, payroll and accrued vacation, in each case, incurred in the ordinary course of business since the Hego Balance Sheet Date.

3.8 Litigation. There is no private or governmental action, suit, dispute, proceeding, claim, arbitration or investigation pending before any agency, court or tribunal, foreign or domestic, or, to the knowledge of Hego, threatened, against Hego or any of its Subsidiaries or any of their properties, nor, to the knowledge of Hego, is there any reasonable basis therefor. To the knowledge of Hego, there is no private or governmental action, suit, dispute, proceeding, claim, arbitration or investigation pending before any agency, court or tribunal, foreign or domestic, or, to the knowledge of Hego, threatened, against any current or former officer or director of Hego or any of its Subsidiaries (a) in their capacities as such, or (b) affecting the Hego Business, nor, to the knowledge of Hego, is there any reasonable basis therefor. There is no injunction, judgment, decree or order against Hego or any of its Subsidiaries or any of their properties. To the knowledge of Hego, there is no injunction, judgment, decree or order against any current or former officer or director of Hego or its Subsidiaries (a) in their capacities as such or (b) affecting the Hego Business. There is no action, suit, dispute, proceeding, claim, arbitration or investigation pending before any agency, court or tribunal, foreign or domestic, that Hego or any of its Subsidiaries has pending or threatened against other parties. There is no existing or, to the knowledge of Hego, reasonably anticipated dispute between Hego or any of its Subsidiaries and any person or entity (including any employee, supplier, sales representative, distributor, customer or other party) that could reasonably be expected to result in an action, suit, proceeding, claim or arbitration brought by or against Hego or any of its Subsidiaries.

3.9 Restrictions on Business Activities. There is no injunction, judgment, decree or order by any Governmental Entity or agreement known to Hego and binding upon Hego or its Subsidiaries that has or could reasonably be expected to have the effect of prohibiting or impairing any business practice of Hego or its Subsidiaries, any acquisition of property by Hego or its Subsidiaries or the conduct of the Hego Business.

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3.10 Intellectual Property.

(a) Hego and its Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights as are necessary or required for use in connection with their respective businesses (collectively, the “Hego Intellectual Property Rights”).

(b) Schedule 3.10 lists the material intellectual property rights owned solely by Hego or its Subsidiaries. Certain of the intellectual property rights set out Schedule 3.10 shall be transferred to Hego prior to Closing.

(c) Neither Hego nor any Subsidiary has received notice that any of the Hego Intellectual Property Rights has expired, terminated or been abandoned, or is, to Hego’s knowledge, expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement. Neither Hego nor any Subsidiary has received any claim, whether written or oral, or otherwise has any knowledge of facts that could reasonably be expected to form the basis of such a claim, that any of the Hego Intellectual Property Rights is invalid or unenforceable or violates or infringes upon the intellectual property rights of any third party. Hego and its Subsidiaries have made available in the Electronic Data Room copies of all relevant correspondence concerning any alleged infringement, violation or misappropriation of any Hego Intellectual Property Rights. To the knowledge of Hego, all such Hego Intellectual Property Rights are valid and enforceable and there is no existing infringement, violation or misappropriation by a third party of any of the Hego Intellectual Property Rights. Hego and its Subsidiaries have taken all reasonable security measures to obtain ownership or assignment from their employees or independent contractors of the exclusive rights to use all of the Hego Intellectual Property Rights with respect to inventions invented or other works created by them, alone or with any others, and to protect the secrecy, confidentiality and value of all of the Hego Intellectual Property Rights. No “free software” or “open-source software” has been incorporated into or combined with any of the Hego Products, distributed or made available in connection with any of the Hego Products or used in any manner which grants, or purports to grant, to any third party any rights in any of the Hego Products or any of the Hego Intellectual Property Rights.

(d) To the knowledge of Hego, neither this Agreement nor the transactions complicated hereby will result in a loss of, adversely affect the validity, use or enforceability of, or trigger any third party rights in or to, any Hego Intellectual Property Rights.

3.11 Interested Person Transactions. Neither Hego nor any of its Subsidiaries is indebted to any director, officer, employee or agent of Hego or its Subsidiaries (except for (i) amounts due as normal salary or board remuneration for the current payroll period and in reimbursement of ordinary expenses and (ii) the shareholder loans listed in Schedule 3.11, and no such person is indebted to Hego or any of its Subsidiaries. There has been no transaction since January 1, 2011, and there is no currently proposed transaction, in which Hego was or is to be a participant and the amount involved exceeds $10,000, and in which any director, executive officer or immediate family member of any director or executive officer of Hego had or will have a direct or indirect material interest.

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3.12 Hego Material Contracts. All written Hego Material Contracts have been disclosed in the Electronic Data Room. With respect to each Hego Material Contract: (a) the Hego Material Contract is legal, valid, binding and enforceable and in full force and effect with respect to Hego or one of its Subsidiaries, except for such failures to be legal, valid, binding, enforceable or in full force and effect that, without Hego’s knowledge, have been caused by a party to such Hego Material Contract other than Hego, and, to Hego’s knowledge, is legal, valid, binding, enforceable and in full force and effect with respect to each other party thereto; (b) the Hego Material Contract will continue to be legal, valid, binding and enforceable and in full force and effect immediately following the Closing in accordance with its terms as in effect immediately prior to the Closing, except for such failures to be legal, valid, binding, enforceable or in full force and effect that, without Hego’s knowledge, have been caused by a party to such Hego Material Contract other than Hego or that prior to Closing has been terminated in the ordinary course of business; and (c) neither Hego nor any of its Subsidiaries nor, to Hego’s knowledge, any other party to such Hego Material Contract is in material breach or default, and, to the knowledge of Hego, no event has occurred that with notice or lapse of time would constitute a material breach or default by Hego or any of its Subsidiaries, or to Hego’s knowledge, by any such other party, or permit termination, modification or acceleration, under such Hego Material Contract. “Hego Material Contract” means any contract, agreement or commitment to which Hego or any of its Subsidiaries is a party with receipts or expenditures in excess of $150,000 during 2012.

3.13 Accounts Receivable. Subject to any reserves in Hego’s accounts, the accounts receivable shown on the Hego Financial Statements are valid and genuine, have arisen solely out of bona fide sales and deliveries of goods, performance of services, and other business transactions in the ordinary course of business consistent with past practices in each case with persons other than affiliates, except for transactions among Hego and its Subsidiaries in the ordinary course of business.

3.14 Title to Property. Hego and its Subsidiaries have good and marketable title to all of their properties, interests in properties and assets, real and/or personal, reflected in the Hego Balance Sheet or acquired after the Hego Balance Sheet Date (except properties, interests in properties and assets sold or otherwise disposed of since the Hego Balance Sheet Date in the ordinary course of business), or with respect to leased properties and assets, valid leasehold interests therein, free and clear of all Encumbrances of any kind or character, except (a) liens for current Taxes not yet due and payable; (b) such imperfections of title, liens and easements and similar Encumbrances as do not and will not materially detract from or interfere with the use of the properties subject thereto or affected thereby, or otherwise materially impair business operations involving such properties; (c) liens securing indebtedness for borrowed money that are reflected on the Hego Balance Sheet; (d) statutory or common law liens to secure obligations to landlords, lessors or renters under leases or rental agreements incurred in the ordinary course of business consistent with past practice; (e) deposits or pledges made in connection with, or to secure payment of, workers’ compensation, unemployment insurance or similar programs mandated by applicable law incurred in the ordinary course of business consistent with past practice; (f) statutory or common law liens in favor of carriers, warehousemen, mechanics and materialmen, to secure claims for labor, materials or supplies, and other like liens incurred in the ordinary course of business consistent with past practice; and (g) liens that follows from the floating charges (Sw. företagsinteckningar) granted to Svenska Handelsbanken AB. The plants, property and equipment of Hego which are used in the Hego Business are in all material respects in good operating condition and repair, subject to normal wear and tear. All assets owned by Hego and used in the Hego Business are reflected in the Hego Balance Sheet to the extent required by Swedish law and Swedish GAAP. Hego owns no real property.

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3.15 Taxes.

(a) Tax Returns. Hego and each of its Subsidiaries has prepared and filed, or has had prepared and filed on its behalf, all material Tax Returns required to be filed with any Tax Authority, and such Tax Returns are true, accurate and complete in all material respects. Neither Hego nor any of its Subsidiaries is currently the beneficiary of any extension of time within which to file any Tax Return. No claim has ever been made in writing by a Tax Authority in a jurisdiction where Hego or any of its Subsidiaries has not filed Tax Returns that Hego or any of its Subsidiaries is or may be subject to taxation by that jurisdiction. Neither Hego nor any of its Subsidiaries is subject to income Tax in any country other than its country of incorporation or formation by virtue of having a permanent establishment or other place of business in that country. Neither Hego nor any of its Subsidiaries has at any time made, changed or rescinded any express or deemed election relating to Taxes that is not reflected in any Tax Return. Neither Hego nor any of its Subsidiaries is party to any joint venture, partnership or other arrangement that is treated as a partnership for U.S. federal income tax purposes or as a pass-through entity for any other Tax purpose.

(b) Tax Payments; Accruals; Withholding. Hego and each of its Subsidiaries has paid all Taxes that have become due (whether or not shown on a Tax Return). Neither Hego nor any of its Subsidiaries has any Liabilities for unpaid Taxes other than (i) those reflected in the reserve for Tax liability set forth on the Hego Balance Sheet to extent required by Swedish GAAP; and (ii) those incurred following the Hego Balance Sheet Date in the ordinary course of business consistent with past practice. All Taxes that Hego and its Subsidiaries have been required to withhold or to collect for payment have been withheld or collected by Hego and to the extent required, paid to the appropriate Tax Authorities. There are no liens for Taxes upon any of the assets of Hego or its Subsidiaries other than liens for Taxes not yet due and payable.

(c) Deficiencies; Waivers; Audits; Rulings. No Tax deficiency is outstanding or assessed or, to Hego’s knowledge, proposed against Hego or any of its Subsidiaries that is not reflected as a liability on the Hego Balance Sheet. Neither Hego nor any of its Subsidiaries has executed any agreements or waivers extending any statute of limitations on or extending the period for the assessment or collection of any Tax, which waiver or extension is currently in effect. No Tax audits or administrative or judicial Tax proceedings are, to the knowledge of Hego, pending or being conducted with respect to Hego or any of its Subsidiaries. No material issues relating to Taxes were raised in writing by a Tax Authority in any completed audit or examination that would reasonably be expected to recur in a taxable period not yet audited. Neither Hego nor any of its Subsidiaries has received from any Tax Authority (including jurisdictions where Hego or any of its Subsidiaries has not filed Tax Returns) any (i) written notice indicating an intent to open an audit or other review, (ii) written request for information related to Tax matters, or (iii) written notice of deficiency or proposed adjustment for any amount of Tax proposed, asserted, or assessed by any Tax Authority against Hego or any of its Subsidiaries. Hego has made available in the Electronic Data Room correct and complete copies of all examination reports and statements of deficiencies assessed against it by a Tax Authority or agreed to by Hego or any of its Subsidiaries. Neither Hego nor any of its Subsidiaries has been the subject of an Internal Revenue Service (“IRS”) private letter ruling or similar Tax ruling under any state, local or non-U.S. law that has continuing effect. There are no requests for rulings or determinations in respect of any Tax pending between Hego or any of its Subsidiaries and any Tax Authority.

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(d) Liability for any Other Person’s Taxes. Neither Hego nor any of its Subsidiaries has ever been a member of an affiliated group of corporations within the meaning of section 1504(a) of the Code filing a consolidated U.S. federal income tax return (other than a group the common parent of which was Hego), and neither Hego nor any of its Subsidiaries has ever been a member of an affiliated group of corporations filing a consolidated, combined or unitary income tax return under provisions of state, local or non-U.S. tax law comparable to section 1504(a) of the Code (other than a group the common parent of which was Hego). Neither Hego nor any of its Subsidiaries is a party to any tax-sharing agreement, tax allocation, tax indemnity or similar arrangement with any other party. Neither Hego nor any of its Subsidiaries has assumed any obligation to pay any Tax obligations of, or with respect to any transaction relating to, any other person or agreed to indemnify any other person with respect to any Tax.

(e) Tax Incentives. Hego has made available to Chyron in the Electronic Data Room (i) any Tax exemption, Tax holiday or other Tax-sparing arrangement that Hego or any of its Subsidiaries has in any jurisdiction, including the nature, amount and lengths of such Tax exemption, Tax holiday or other Tax-sparing arrangement; and (ii) any expatriate tax programs or policies affecting Hego or any of its Subsidiaries. Hego and its Subsidiaries are in compliance with all terms and conditions required to maintain such Tax exemption, Tax holiday or other Tax-sparing arrangement or order of any Governmental Entity, and the consummation of the transactions contemplated hereby will not have any adverse effect on the continuing validity and effectiveness of any such Tax exemption, Tax holiday or other Tax-sparing arrangement or order.

(f) FIRPTA; Transfer Taxes. Inasmuch as none of them owns or has ever owned any interest in any real property, neither Hego nor any of its Subsidiaries has been at any time a “United States real property holding corporation” within the meaning of section 897(c)(2) of the Code.

3.16 Employee Matters. Hego and its Subsidiaries are in compliance, and have at all times been in compliance, in all material respects with all applicable laws and regulations respecting terms and conditions of employment, immigration and taxation. There are no proceedings pending or, to Hego’s knowledge, reasonably expected or threatened, between Hego or any of its Subsidiaries, on the one hand, and any or all of its current or former employees, consultants or independent contractors, on the other hand. There are no claims pending, or, to Hego’s knowledge, reasonably expected or threatened, against Hego or any of its Subsidiaries under any workers’ compensation or long-term disability plan or policy that is not fully offset by insurance. Hego and its Subsidiaries have no material unsatisfied obligations to any employees, former employees, or qualified beneficiaries pursuant to any law governing health care, retirement or pension schemes or coverage or the extension or continuation of any such schemes or coverage. Hego and each of its Subsidiaries have provided all employees with all wages, benefits, accrued vacation, relocation benefits, stock options, bonuses and incentives, and all other compensation that has become due and payable, to date.

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3.17 Insurance. Hego and its Subsidiaries have in place the insurance policies set out in Schedule 3.17. There is no material claim pending under any of such policies as to which coverage has been questioned, denied or disputed by the underwriters of such policies. All premiums due and payable under all such policies have been paid and Hego and its Subsidiaries are otherwise in compliance with the terms of such policies. Hego has no knowledge of any threatened termination of, or material premium increase with respect to, any of such policies.

3.18 Compliance With Laws. Hego and its Subsidiaries have complied with, are not in violation of and have not received any notices of violation with respect to, any applicable law or regulation, except for such violations as would not individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

3.19 Brokers’ and Finders’ Fee. Except as set forth Schedule 3.19, no broker, finder or investment banker is entitled to brokerage or finder’s fees or agent’s commissions or investment banker’s fees or any similar charges from or through Hego or its Subsidiaries in connection with this Agreement, the Stock Sale or any other transaction contemplated hereby.

3.20 Privacy. Hego and its Subsidiaries (i) substantially comply with any and all privacy statements published or made available by Hego or any of its Subsidiaries, (ii) comply with all applicable privacy laws and regulations regarding the collection, retention, use and disclosure of personal information; and (iii) take the appropriate and industry standard measures to protect and maintain the confidential nature of the personal information provided to Hego or any of its Subsidiaries by individuals. Hego and its Subsidiaries have adequate technological and procedural measures in place to protect personal information collected from individuals against loss, theft and unauthorized access or disclosure.

3.21 International Trade Matters. Hego and its Subsidiaries are, and at all times have been, materially in compliance with and have not been and are not in material violation of any International Trade Law applicable to the Hego Business. Neither Hego nor any of its Subsidiaries has received any written order, notice, or other communication from any Governmental Entity of any actual or potential violation or failure to comply with any International Trade Law, including pre-penalty notice, notice of penalty, subpoena or request for documents, or notice of audit, investigation or inquiry. “International Trade Law” shall mean any applicable statutes, laws and regulations governing the import or export of commodities, software or technology into any country or from any country in which the Hego Business is conducted and the payment of required duties and tariffs in connection with same.

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3.22 Foreign Corrupt Practices. Neither Hego, nor to the knowledge of Hego, any director or officer of Hego, or any consultant, agent or other person acting for or on behalf of Hego or any of its Subsidiaries has taken any action that would result in a violation by such person of the Foreign Corrupt Practices Act (15 U.S.C. §§ 78m(b), 78dd-1, 78dd-2, 78ff) (the “FCPA”), The Bribery Act of 2010 of the United Kingdom (the “UK Bribery Act”), or any other applicable anti-corruption law (but, in each case, only to the extent such applicable law is applicable to the foregoing persons), including: (a) by making use of the mails or any means or instrumentality of interstate commerce in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value, directly or indirectly, to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office to secure official action, or to any person (whether or not a foreign official) to influence that person to act in breach of a duty of good faith, impartiality or trust (“acting improperly”) or to reward the person for acting improperly, in contravention of the FCPA or the UK Bribery Act or any other applicable anti-corruption law or (b) by requesting, agreeing to receive or accepting a financial or other advantage intending that, as a consequence, anyone’s work duties will be performed improperly, or as a reward for anyone’s past improper performance. Hego and its Subsidiaries have conducted the Hego Business in compliance with the FCPA, the UK Bribery Act and any other applicable anti-corruption law, and Hego has instituted and maintained policies and procedures designed to cause each such person to comply with all such applicable anti-corruption laws (but, in each case, only to the extent any such law is applicable to Hego, its Subsidiaries or such persons).

3.23 Bankruptcy Proceeding. Hego Trac AB (previously known as Svenska Tracab AB) (“Trac AB”) has been declared bankrupt. Neither Hego nor any of its Subsidiaries has received from the bankruptcy receiver presiding over such bankruptcy proceeding any claim against it.

3.24 Knowledge of Warranty Breaches. Johan Apel is not aware of any existing or reasonably anticipated breach of any of the warranties set forth in Section 5 and Section 5A, respectively.

4. REPRESENTATIONS AND WARRANTIES OF THE SELLERS. EACH SELLER SEVERALLY, AND NOT JOINTLY, HEREBY REPRESENTS AND WARRANTS TO CHYRON, CHYRON US AND CHYRON AB, SOLELY AS TO SUCH SELLER, AS OF THE DATE HEREOF AND AS OF THE CLOSING, THAT:

4.1 Power and Authorization. If a natural person, such Seller has full legal capacity to enter into this Agreement and to consummate the transactions contemplated hereby with respect to which such Seller is a party. If a natural person, such Seller is not a U.S. tax resident and, if not a natural person, no person having any interest in or control over such Seller is a U.S. tax resident. If such Seller is not a natural person, the execution and delivery of this Agreement and consummation by such Seller of the transactions contemplated hereby with respect to which such Seller is a party have been duly authorized by all necessary organizational action on the part of such Seller. This Agreement (a) has been duly executed and delivered by such Seller and (b) is a legal, valid and binding obligation of such Seller, enforceable against such Seller in accordance with its terms, assuming due authorization, execution and delivery by other parties hereto.

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4.2 Authorization of Governmental Entities. No action by (including any authorization, consent or approval), or in respect of, or filing with, any Governmental Entity is required for, or in connection with, the valid and lawful (a) authorization, execution, delivery and performance by such Seller of this Agreement or (b) the consummation of the transactions contemplated hereby by such Seller.

4.3 Non-Contravention. Neither the execution, delivery and performance by such Seller of this Agreement nor the consummation of the transactions contemplated hereby will: (a) assuming the taking of any action by (including any authorization, consent or approval) or in respect of, or any filing with, any Governmental Entity, violate any provision of any law applicable to such Seller; (b) result in a breach or violation of, or default under, any contractual obligation of such Seller; or (c) in the case of each Seller which is not a natural person, result in a breach or violation of, or default under, such Seller’s organizational documents.

4.4 Title. Such Seller is the record and beneficial owner of the outstanding Shares set forth opposite such Seller’s name on the Hego Share Ledger, and has good and marketable title to such Shares, free and clear of all Encumbrances except as are imposed by applicable securities laws. Such Seller has full right, power and authority to transfer and deliver to Chyron AB valid title to the Shares held by such Seller, free and clear of all Encumbrances. Immediately following the Closing, Chyron AB will be the record and beneficial owner of such Shares, and have good and marketable title to such Shares, free and clear of all Encumbrances except as are imposed by applicable securities laws or created by Chyron AB. Except pursuant to this Agreement, there is no contractual obligation pursuant to which such Seller has, directly or indirectly, granted any option, warrant or other right to any person to acquire any Shares or other equity interests in Hego.

4.5 Broker Liability. Except as set forth in Schedule 3.19 and subject to Section 3.19, such Seller has no Liability of any kind to any broker, finder or agent with respect to the transactions contemplated by this Agreement.

4.6 Investment Purpose. Such Seller is acquiring shares of Chyron Common Stock for his, her or its own account for investment only, and not with a view to, or for sale in connection with, any distribution of such shares of Chyron Common Stock in violation of the Securities Act, or any rule or regulation under the Securities Act. Such Seller has had adequate opportunity to obtain from representatives of Chyron such information about Chyron as is necessary for the undersigned to evaluate the merits and risks of its acquisition of the shares of Chyron Common Stock. Such Seller has sufficient expertise in business and financial matters, and access to professional advice, to be able to evaluate the risks involved in the acquisition of the shares of Chyron Common Stock and to make an informed investment decision with respect to such acquisition.

5. REPRESENTATIONS AND WARRANTIES OF CHYRON. SUBJECT TO ANY EXCEPTIONS OR DIFFERENCES AS REFLECTED IN REPORTS FILED WITH OR OTHER SUBMISSIONS TO THE SEC PRIOR TO THE DATE HEREOF WHICH ARE OF PUBLIC RECORD, CHYRON REPRESENTS AND WARRANTS TO HEGO AND THE SELLERS, AS OF THE DATE HEREOF AND AS OF THE CLOSING, REGARDING ITSELF AND ALL OF ITS SUBSIDIARIES, THAT:

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5.1 Organization; Authority; Conflicts; Consents. Chyron is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. Chyron has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. Each of Chyron’s Subsidiaries is an entity duly organized, validly existing and, to the extent “good standing” is of legal significance in the applicable jurisdiction of organization, in good standing under the laws of its jurisdiction of organization. Chyron has made available to Hego copies of the Certificate of Incorporation of Chyron and the equivalent organizational documents of each of its Subsidiaries, each as amended to date. Except as set forth on Schedule 5.1, Chyron does not directly or indirectly own any equity or similar interest in, or any interest convertible or exchangeable or exercisable for, any equity or similar interest in, any corporation, partnership, joint venture or other business association or entity. Each entity set forth on Schedule 5.1 is a Subsidiary of Chyron. Except as set forth on Schedule 5.1, Chyron owns all of the capital stock of each such Subsidiary and there is no other capital stock, ownership right, option, warrant, stock appreciation right, phantom stock right, purchase right, subscription right, conversion right, or exchange right, in each case, with respect to the shares of such Subsidiary, or other contract or commitment that could require Chyron or such Subsidiary to issue, sell, or otherwise cause to become outstanding any capital stock of any such Subsidiary (contingent or otherwise). Chyron has not violated any of the provisions of its Certificate of Incorporation. Chyron has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby with respect to which Chyron is a party. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Chyron. This Agreement has been duly executed and delivered by Chyron and, assuming due authorization, execution and delivery by the other parties hereto, constitutes the valid and binding obligation of Chyron enforceable against Chyron in accordance with its terms. No consent, approval, order or authorization of, or registration, declaration or filing with, any third party or Governmental Entity, is required by or with respect to Chyron in connection with the execution and delivery of this Agreement by Chyron or the consummation by Chyron of the Stock Sale and the other transactions contemplated hereby, except for (i) any required filings under the Exchange Act and with the Nasdaq Capital Market and (ii) the Chyron Stockholder Approval. The execution and delivery of this Agreement by Chyron does not, and the consummation of the transactions contemplated hereby will not, conflict with, or result in any violation of any provision of any applicable law or regulation or the by-laws or certificate of incorporation of Chyron.

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5.2 Non-Contravention. The execution and delivery of this Agreement by Chyron does not, and the consummation of the transactions contemplated hereby with respect to which Chyron is a party will not, (i) conflict with, or result in any violation of, or default under (with or without notice or lapse of time, or both), or give rise to a right of termination, cancellation or acceleration of any obligation or loss of any benefit under any Chyron Material Contract, permit, concession, franchise, license, injunction, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Chyron or its Subsidiaries or any properties or assets of Chyron or its Subsidiaries, (ii) trigger, contravene, conflict with or result in any third party non-compete, notification, non-solicitation, covenant not to sue, right of first refusal, right of first negotiation or other third-party right binding on Chyron or its Subsidiaries, or (iii) contravene, conflict with or result in any limitation on Chyron’s or its Subsidiaries’ respective right to use the Chyron Intellectual Property Rights. Other than the Chyron Stockholder Approval and the consent of Silicon Valley Bank (which consent has been received as of the date of this Agreement), no consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity or other person or entity is required by or with respect to Chyron or its Subsidiaries in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby with respect to which Chyron is a party. Chyron and each of its Subsidiaries is, to the extent that being “qualified to do business” and in “good standing” is of legal significance in the applicable jurisdiction, qualified to do business and in good standing in each jurisdiction in which it conducts business activities or has assets requiring it to be qualified to do business.

5.3 Permits. Chyron and its Subsidiaries have obtained each necessary consent, license, permit, grant or other authorization of a Governmental Entity (a) pursuant to which Chyron and its Subsidiaries operates or holds any interest in any of its properties; or (b) that is required for the operation of the Chyron Business or the holding of any such interest and all of such permits, grants or other authorizations are in full force and effect.

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5.4 SEC and NASDAQ Compliance; Financial Statements.

(a) Since January 1, 2011, Chyron has at all times been in material compliance with the applicable rules and regulations of the Nasdaq Stock Market, Inc., has filed all registration statements, forms, reports, certifications and other documents required to be filed by Chyron with the SEC, and has made available to Hego copies of all registration statements, forms, reports, certifications and other documents filed by Chyron with the SEC since January 1, 2011, including all certifications and statements required by (i) Rule 13a-14 or 15d-14 of the Exchange Act or (ii) 18 U.S.C. §1350 (Section 906 of the Sarbanes-Oxley Act of 2002). For purposes only of the first sentence of this Section 5.4(a), the phrase “made available to Hego” shall be deemed to include Chyron filings and documents that are publicly available on the SEC’s EDGAR system prior to the date of this Agreement. All such registration statements, forms, reports, certifications and other documents filed prior to the date of this Agreement are referred to herein as the “Chyron SEC Documents”. All of the Chyron SEC Documents are publicly available on the SEC’s EDGAR system. The Chyron SEC Documents (x) were or will be filed on a timely basis, (y) at the time filed, or as of the date of the last amendment thereof, if any such Chyron SEC Document filed prior to the date hereof was amended after the filing and prior to the date of this Agreement, were or will be prepared in compliance in all material respects with the applicable requirements of the Securities Act and the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such Chyron SEC Documents, and (z) did not or will not at the time they were or are filed, or as of the date of such last amendment thereof, if any such Chyron SEC Document filed prior to the date hereof was amended after the filing and prior to the date of this Agreement, contain any untrue statement of a material fact or omit to state a material fact required to be stated in such Chyron SEC Documents or necessary in order to make the statements in such Chyron SEC Documents, in the light of the circumstances under which they were made, not misleading. No Subsidiary of Chyron is subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act.

(b) Chyron has made available to Hego its audited consolidated financial statements for each of the fiscal years ended December 31, 2012 and 2011, including a balance sheet, statement of operations and statement of cash flows on a consolidated basis as of and for the twelve-month period ended December 31, 2012 (the “Chyron Balance Sheet Date”) (collectively, all such financial statements, the “Chyron Financial Statements”). The Chyron Financial Statements have been prepared in accordance with U.S. law and U.S. GAAP (except that the unaudited financial statements do not contain footnotes and are subject to normal recurring year-end audit adjustments, the effect of which will not, individually or in the aggregate, be material) applied on a consistent basis throughout the periods presented and consistent with each other or as otherwise described therein. The Chyron Financial Statements fairly present the consolidated financial condition, operating results and cash flow of Chyron and its Subsidiaries as of the dates, and for the periods, indicated therein, all in accordance with U.S. law and U.S. GAAP (except that the unaudited financial statements do not contain footnotes and are subject to normal recurring year-end audit adjustments, the effect of which will not, individually or in the aggregate, be material).

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(c) Chyron and its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of consolidated financial statements of Chyron and to maintain accountability for assets; (iii) access to the assets of Chyron and its Subsidiaries is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Chyron and its Subsidiaries are not party to or otherwise involved in any “off-balance sheet arrangements” (as defined in Item 303 of Regulation S-K under the Exchange Act).

5.5 Capital Structure.

(a) The authorized capital stock of Chyron consists of 150,000,000 shares of Chyron Common Stock and 1,000,000 shares of preferred stock, $1.00 par value per share (the “Chyron Preferred Stock”). As of the date of this Agreement, 17,382,578 shares of Chyron Common Stock have been issued and are outstanding and there are no other shares of any capital stock of Chyron issued or outstanding. For the avoidance of doubt, no Chyron Preferred Stock has been issued or is outstanding.

(b) All of the issued and outstanding shares of Chyron Common Stock have been duly authorized and validly issued, are fully paid and non-assessable and are free of any Encumbrances. The issued and outstanding shares of Chyron Common Stock are not subject to, and the issuance thereof has not triggered any, preemptive rights or rights of first refusal that were not complied with (or waived by the applicable stockholder), in each case (i) created by statute, (ii) the Certificate of Incorporation of Chyron or (iii) any agreement to which Chyron is a party or by which it is bound.

(d) Chyron has no obligation or right (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of Chyron Common Stock or any interest therein or to pay any dividend or make any other distribution in respect thereof.

(e) There are no agreements of Chyron or its Subsidiaries to register any securities under the Securities Act or any other securities law that have not been satisfied or waived. There are no agreements to which Chyron or any of its Subsidiaries is a party, or to which any shares of Chyron Common Stock are subject, relating to the voting of shares of Chyron Common Stock or otherwise granting, limiting or affecting the rights pertaining to shares of Chyron Common Stock.

(f) No Chyron shareholder will be entitled to receive any payment with respect to his, her or its shares of Chyron Common Stock as a result of this Agreement, the Stock Sale or any other transaction contemplated hereby.

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5.6 Title. Prior to the Closing, Chyron AB shall be the record and beneficial owner of the Closing Shares and shall be the record and beneficial owner of the Earn-Out Shares, if any, if and when issued, and will have good and marketable title to such shares, free and clear of all Encumbrances except as are imposed by applicable securities laws. Chyron AB has full right, power and authority to transfer and deliver to the Sellers valid title to the Closing Shares and the Earn-Out Shares, if any, free and clear of all Encumbrances. Immediately following the Closing, the Sellers will be the record and beneficial owners of the Closing Shares, and have good and marketable title to the Closing Shares, free and clear of all Encumbrances, except as are imposed by this Agreement and by applicable securities laws. In the event that Earn-Out Shares are issued to the Sellers pursuant to this Agreement, immediately following such issuance, the Sellers will be the record and beneficial owners of the Earn-Out Shares, and have good and marketable title to the Earn-Out Shares, free and clear of all Encumbrances, except as are imposed by this Agreement and by applicable securities laws. In connection with the transfer of the Closing Shares and Earn-Out Shares, if any, Chyron AB shall take or cooperate in the taking of all reasonable actions necessary to cause the ownership of the Closing Shares and Earn-Out Shares, if any, following the issuance of the same to be reflected in Chyron’s stock ledger or otherwise to appear of record as the Sellers’ Representative may reasonably request.

5.7 Absence of Certain Changes. Since December 31, 2012, Chyron and its Subsidiaries have conducted the Chyron Business in the ordinary course of business consistent with past practice and there has not occurred or been (a) any change, event or condition (whether or not covered by insurance) that (i) has resulted in, or could reasonably be expected to result in, a Material Adverse Effect or (ii) that could reasonably be expected to prevent, materially alter or materially delay any of the material transactions contemplated by this Agreement; (b) any acquisition, sale or transfer of any material asset of Chyron or its Subsidiaries other than in the ordinary course of business and consistent with past practice; (c) any change in accounting methods or practices (including any change in revenue recognition, depreciation or amortization policies or rates) by Chyron or its Subsidiaries, except as required by U.S. GAAP, or any revaluation by Chyron or its Subsidiaries of any of its assets; (d) any declaration, setting aside, or payment of a dividend or other distribution with respect to the Chyron Common Stock or any direct or indirect redemption, purchase or other acquisition by Chyron of any Chyron Common Stock or any Chyron Preferred Stock; (e) any Chyron Material Contract, other than Chyron Material Contracts (I) entered into prior to the date of this Agreement in the ordinary course of business or (II) entered into on or after the date of this Agreement in compliance with Section 6.1, or (f) any material amendment or termination of, or default under, any Chyron Material Contract to which Chyron or any of its Subsidiaries is a party or by which it is bound other than termination of any Chyron Material Contracts after the date of this Agreement in the ordinary course of business; (g) any amendment or change to the Certificate of Incorporation, as amended, or Bylaws of Chyron; or (h) any increase in or modification of the compensation or benefits payable or to become payable by Chyron or its Subsidiaries to any of their directors or employees.

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5.8 Absence of Undisclosed Liabilities. Neither Chyron nor any of its Subsidiaries has any Liabilities other than (a) those specifically set forth in the consolidated balance sheet of Chyron as of the Chyron Balance Sheet Date (the “Chyron Balance Sheet”); and (b) immaterial Liabilities incurred following the Chyron Balance Sheet Date in the ordinary course of business consistent with past practice; (c) Liabilities (other than for breach thereof) under any Chyron Material Contract, (d) immaterial Liabilities (other than for breach thereof) under other contracts entered into in the ordinary course of business consistent with past practice; and (e) Liabilities for accounts payable, payroll and accrued vacation, in each case, incurred in the ordinary course of business since the Chyron Balance Sheet Date.

5.9 Litigation. There is no private or governmental action, suit, dispute, proceeding, claim, arbitration or investigation pending before any agency, court or tribunal, foreign or domestic, or, to the knowledge of Chyron, threatened, against Chyron or any of its Subsidiaries or any of their properties, nor, to the knowledge of Chyron, is there any reasonable basis therefor. To the knowledge of Chyron, there is no private or governmental action, suit, dispute, proceeding, claim, arbitration or investigation pending before any agency, court or tribunal, foreign or domestic, or, to the knowledge of Chyron, threatened, against any current or former officer or director of Chyron or any of its Subsidiaries (a) in their capacities as such, or (b) affecting the Chyron Business, nor, to the knowledge of Chyron and its Subsidiaries, is there any reasonable basis therefor. There is no injunction, judgment, decree or order against Chyron or any of its Subsidiaries or any of their properties. To the knowledge of Chyron, there is no injunction, judgment, decree or order against any current or former officer or director of Chyron or its Subsidiaries (a) in their capacities as such, or (b) affecting the Chyron Business. There is no action, suit, dispute, proceeding, claim, arbitration or investigation pending before any agency, court or tribunal, foreign or domestic, that Chyron or any of its Subsidiaries has pending or threatened against other parties. There is no existing or, to the knowledge of Chyron, reasonably anticipated dispute between Chyron or any of its Subsidiaries and any person or entity (including any employee, supplier, sales representative, distributor, customer or other party) that could reasonably be expected to result in an action, suit, proceeding, claim or arbitration brought by or against Chyron or any of its Subsidiaries.

5.10 Restrictions on Business Activities. There is no injunction, judgment, decree or order by any Governmental Entity or agreement known to Chyron and binding upon Chyron or its Subsidiaries that has or could reasonably be expected to have the effect of prohibiting or impairing any business practice of Chyron or its Subsidiaries, any acquisition of property by Chyron or its Subsidiaries or the conduct of the Chyron Business.

5.11 Intellectual Property.

(a) Chyron and its Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights as are necessary or required for use in connection with their respective businesses (collectively, the “Chyron Intellectual Property Rights”).

(b) Schedule 5.11 lists the material intellectual property rights owned by Chyron or its Subsidiaries.

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(c) Neither Chyron nor any Subsidiary has received notice that any of the Chyron Intellectual Property Rights has expired, terminated or been abandoned, or is, to Chyron’s knowledge, expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement. Neither Chyron nor any Subsidiary has received any claim, whether written or oral, or otherwise has any knowledge of facts that could reasonably be expected to form the basis of such a claim, that any of the Chyron Intellectual Property Rights is invalid or unenforceable or violates or infringes upon the intellectual property rights of any third party. Chyron and its Subsidiaries have made available to Hego copies of all relevant correspondence concerning any alleged infringement, violation or misappropriation of any Chyron Intellectual Property Rights. To the knowledge of Chyron, all such Chyron Intellectual Property Rights are valid and enforceable and there is no existing infringement, violation or misappropriation by a third party of any of the Chyron Intellectual Property Rights. Chyron and its Subsidiaries have taken all reasonable security measures to obtain ownership or assignment from their employees or independent contractors of the exclusive rights to use all of the Chyron Intellectual Property Rights with respect to inventions invented or other works created by them, alone or with any others, and to protect the secrecy, confidentiality and value of all of the Chyron Intellectual Property Rights. No “free software” or “open-source software” has been incorporated into or combined with any products sold by Chyron, distributed or made available in connection with any such products or used in any manner which grants, or purports to grant, to any third party any rights in any of the such products or any of the Chyron Intellectual Property Rights.

(d) To the knowledge of Chyron, neither this Agreement nor the transactions contemplated hereby will result in a loss of, adversely affect the validity, use or enforceability of, or trigger any third party rights in or to, any Chyron Intellectual Property Rights.

5.12 Interested Person Transactions. Neither Chyron nor any of its Subsidiaries is indebted to any director, officer, employee or agent of Chyron or its Subsidiaries (except for amounts due as normal salary for the current payroll period and in reimbursement of ordinary expenses), and no such person is indebted to Chyron or any of its Subsidiaries. There has been no transaction since January 1, 2011, and there is no currently proposed transaction, in which Chyron was or is to be a participant and the amount involved exceeds $10,000, and in which any director, executive officer or immediate family member of any director or executive officer of Chyron had or will have a direct or indirect material interest.

5.13 Material Contracts. All of Chyron’s material contracts (the “Chyron Material Contracts”) have been filed as exhibits to the Chyron SEC Documents. With respect to each Chyron Material Contract: (a) the Chyron Material Contract is legal, valid, binding and enforceable and in full force and effect with respect to Chyron or one of its Subsidiaries, except for such failures to be legal, valid, binding, enforceable or in full force and effect that, without Chyron’s knowledge, have been caused by a party to such Chyron Material Contract other than Chyron, and, to Chyron’s knowledge, is legal, valid, binding, enforceable and in full force and effect with respect to each other party thereto; (b) the Chyron Material Contract will continue to be legal, valid, binding and enforceable and in full force and effect immediately following the Closing in accordance with its terms as in effect immediately prior to the Closing, except for such failures to be legal, valid, binding, enforceable or in full force and effect that, without Chyron’s knowledge, have been caused by a party to such Chyron Material Contract other than Chyron or that prior to Closing has been terminated in the ordinary course of business; and (c) neither Chyron nor any of its Subsidiaries nor, to Chyron’s knowledge, any other party to such Chyron Material Contract is in material breach or default, and, to the knowledge of Chyron, no event has occurred that with notice or lapse of time would constitute a material breach or default by Chyron or any of its Subsidiaries, or to Chyron’s knowledge, by any such other party, or permit termination, modification or acceleration, under such Chyron Material Contract. Neither Chyron nor any of its Subsidiaries is a party to any Chyron Material Contract that is an oral contract or other legally-binding unwritten arrangement.

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5.14 Accounts Receivable. Subject to any reserves in the Chyron’s accounts, the accounts receivable shown on the Chyron Financial Statements are valid and genuine, have arisen solely out of bona fide sales and deliveries of goods, performance of services, and other business transactions in the ordinary course of business consistent with past practices in each case with persons other than affiliates, except for transactions among Chyron and its Subsidiaries in the ordinary course of business.

5.15 Title to Property. Chyron and its Subsidiaries have good and marketable title to all of their properties, interests in properties and assets, real and/or personal, reflected in the Chyron Balance Sheet or acquired after the Chyron Balance Sheet Date (except properties, interests in properties and assets sold or otherwise disposed of since the Chyron Balance Sheet Date in the ordinary course of business), or with respect to leased properties and assets, valid leasehold interests therein, free and clear of all Encumbrances of any kind or character, except (a) liens for current Taxes not yet due and payable; (b) such imperfections of title, liens and easements and similar Encumbrances as do not and will not materially detract from or interfere with the use of the properties subject thereto or affected thereby, or otherwise materially impair business operations involving such properties; (c) liens securing indebtedness for borrowed money that are reflected on the Chyron Balance Sheet; (d) statutory or common law liens to secure obligations to landlords, lessors or renters under leases or rental agreements incurred in the ordinary course of business consistent with past practice; (e) deposits or pledges made in connection with, or to secure payment of, workers’ compensation, unemployment insurance or similar programs mandated by applicable law incurred in the ordinary course of business consistent with past practice; and (f) statutory or common law liens in favor of carriers, warehousemen, mechanics and materialmen, to secure claims for labor, materials or supplies, and other like liens incurred in the ordinary course of business consistent with past practice. The plants, property and equipment of Chyron which are used in the Chyron Business are in all material respects in good operating condition and repair, subject to normal wear and tear. All assets owned by Chyron and used in the Chyron Business are reflected in the Chyron Balance Sheet to the extent required by U.S. law and U.S. GAAP. Chyron owns no real property.

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5.16 Taxes.

(a) Tax Returns. Chyron and each of its Subsidiaries has prepared and timely filed, or has had prepared and timely filed on its behalf, all material Tax Returns required to be filed with any Tax Authority, and such Tax Returns are true, accurate and complete in all material respects. Neither Chyron nor any of its Subsidiaries is currently the beneficiary of any extension of time within which to file any Tax Return. No claim has ever been made in writing by a Tax Authority in a jurisdiction where Chyron or any of its Subsidiaries has not filed Tax Returns that Chyron or any of its Subsidiaries is or may be subject to taxation by that jurisdiction. Neither Chyron nor any of its Subsidiaries is subject to income Tax in any country other than its country of incorporation or formation by virtue of having a permanent establishment or other place of business in that country. Chyron and its Subsidiaries have disclosed on all applicable Tax Returns all positions taken therein that could give rise to a substantial understatement of U.S. federal income tax within the meaning of section 6662 of the Code or any other Tax. Neither Chyron nor any of its Subsidiaries has at any time made, changed or rescinded any express or deemed election relating to Taxes that is not reflected in any Tax Return. Neither Chyron nor any of its Subsidiaries is party to any joint venture, partnership or other arrangement that is treated as a partnership for U.S. federal income tax purposes or as a pass-through entity for any other Tax purpose.

(b) Tax Payments; Accruals; Withholding. Chyron and each of its Subsidiaries has timely paid all Taxes that have become due (whether or not shown on a Tax Return). Neither Chyron nor any of its Subsidiaries has any Liabilities for unpaid Taxes other than (i) those reflected in the reserve for Tax liability set forth on the Chyron Balance Sheet to the extent required by U.S. GAAP; and (ii) those incurred following the Chyron Balance Sheet Date in the ordinary course of business consistent with past practice. All Taxes that Chyron and its Subsidiaries have been required to withhold or to collect for payment have been withheld or collected by Chyron and to the extent required, paid to the appropriate Tax Authorities. There are no liens for Taxes upon any of the assets of Chyron or its Subsidiaries other than liens for Taxes not yet due and payable.

(c) Deficiencies; Waivers; Audits; Rulings. No Tax deficiency is outstanding or assessed or, to Chyron’s knowledge, proposed against Chyron or any of its Subsidiaries that is not reflected as a liability on the Chyron Balance Sheet. Neither Chyron nor any of its Subsidiaries has executed any agreements or waivers extending any statute of limitations on or extending the period for the assessment or collection of any Tax, which waiver or extension is currently in effect. No Tax audits or administrative or judicial Tax proceedings are, to the knowledge of Chyron, pending or being conducted with respect to Chyron or any of its Subsidiaries. No material issues relating to Taxes were raised in writing by a Tax Authority in any completed audit or examination that would reasonably be expected to recur in a taxable period not yet audited. Neither Chyron nor any of its Subsidiaries has received from any Tax Authority (including jurisdictions where Chyron or any of its Subsidiaries has not filed Tax Returns) any (i) written notice indicating an intent to open an audit or other review, (ii) written request for information related to Tax matters, or (iii) written notice of deficiency or proposed adjustment for any amount of Tax proposed, asserted, or assessed by any Tax Authority against Chyron or any of its Subsidiaries. Chyron has made available to Hego correct and complete copies of all examination reports and statements of deficiencies assessed against it by a Tax Authority or agreed to by Chyron or any of its Subsidiaries. Neither Chyron nor any of its Subsidiaries has been the subject of an IRS private letter ruling or similar Tax ruling under any state, local or non-U.S. law that has continuing effect. There are no requests for rulings or determinations in respect of any Tax pending between Chyron or any of its Subsidiaries and any Tax Authority.

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(d) Liability for any Other Person’s Taxes. Neither Chyron nor any of its Subsidiaries has ever been a member of an affiliated group of corporations within the meaning of section 1504(a) of the Code filing a consolidated U.S. federal income tax return (other than a group the common parent of which was Chyron), and neither Chyron nor any of its Subsidiaries has ever been a member of an affiliated group of corporations filing a consolidated, combined or unitary income tax return under provisions of state, local or non-U.S. tax law comparable to section 1504(a) of the Code (other than a group the common parent of which was Chyron). Neither Chyron nor any of its Subsidiaries is a party to any tax-sharing agreement, tax allocation, tax indemnity or similar arrangement with any other party. Neither Chyron nor any of its Subsidiaries has assumed any obligation to pay any Tax obligations of, or with respect to any transaction relating to, any other person or agreed to indemnify any other person with respect to any Tax.

(e) Tax Incentives. Chyron has made available to Hego (i) any Tax exemption, Tax holiday or other Tax-sparing arrangement that Chyron or any of its Subsidiaries has in any jurisdiction, including the nature, amount and lengths of such Tax exemption, Tax holiday or other Tax-sparing arrangement; and (ii) any expatriate tax programs or policies affecting Chyron or any of its Subsidiaries. Chyron and its Subsidiaries are in compliance with all terms and conditions required to maintain such Tax exemption, Tax holiday or other Tax-sparing arrangement or order of any Governmental Entity, and the consummation of the transactions contemplated hereby will not have any adverse effect on the continuing validity and effectiveness of any such Tax exemption, Tax holiday or other Tax-sparing arrangement or order.

5.17 Employee Matters. Chyron and its Subsidiaries are in compliance, and have at all times been in compliance, in all material respects with all applicable laws and regulations respecting terms and conditions of employment, immigration and taxation. There are no proceedings pending or, to Chyron’s knowledge, reasonably expected or threatened, between Chyron or any of its Subsidiaries, on the one hand, and any or all of its current or former employees, consultants or independent contractors, on the other hand. There are no claims pending, or, to Chyron’s knowledge, reasonably expected or threatened, against Chyron or any of its Subsidiaries under any workers’ compensation or long-term disability plan or policy that is not fully offset by insurance. Chyron and its Subsidiaries have no material unsatisfied obligations to any employees, former employees, or qualified beneficiaries pursuant to any law governing health care, retirement or pension schemes or coverage or the extension or continuation of any such schemes or coverage. Chyron and each of its Subsidiaries have provided all employees with all wages, benefits, accrued vacation, relocation benefits, stock options, bonuses and incentives, and all other compensation that has become due and payable, to date.

5.18 Insurance. Chyron and its Subsidiaries have policies of insurance and bonds of the type and in amounts customarily carried by persons conducting businesses similar to those of Chyron. There is no material claim pending under any of such policies or bonds as to which coverage has been questioned, denied or disputed by the underwriters of such policies or bonds. All premiums due and payable under all such policies and bonds have been paid and Chyron and its Subsidiaries are otherwise in compliance with the terms of such policies and bonds. Chyron has no knowledge of any threatened termination of, or material premium increase with respect to, any of such policies.

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5.19 Compliance With Laws. Chyron and its Subsidiaries have complied with, are not in violation of and have not received any notices of violation with respect to, any applicable law or regulation, except for such violations as would not individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

5.20 Brokers’ and Finders’ Fee. Except as set forth on Schedule 5.20, no broker, finder or investment banker is entitled to brokerage or finder’s fees or agent’s commissions or investment banker’s fees or any similar charges from or through Chyron or its Subsidiaries in connection with this Agreement, the Stock Sale or any other transaction contemplated hereby.

5.21 Privacy. Chyron and its Subsidiaries (i) substantially comply with any and all privacy statements published or made available by Chyron or any of its Subsidiaries, (ii) comply with all applicable privacy laws and regulations regarding the collection, retention, use and disclosure of personal information; and (iii) take the appropriate and industry standard measures to protect and maintain the confidential nature of the personal information provided to Chyron or any of its Subsidiaries by individuals. Chyron and its Subsidiaries have adequate technological and procedural measures in place to protect personal information collected from individuals against loss, theft and unauthorized access or disclosure.

5.22 International Trade Matters. Chyron and its Subsidiaries are, and at all times have been, materially in compliance with and have not been and are not in material violation of any International Trade Law applicable to the Chyron Business. Neither Chyron nor any of its Subsidiaries has received any written order, notice, or other communication from any Governmental Entity of any actual or potential violation or failure to comply with any International Trade Law, including pre-penalty notice, notice of penalty, subpoena or request for documents, or notice of audit, investigation or inquiry.

5.23 Foreign Corrupt Practices. Neither Chyron, nor to the knowledge of Chyron, any director or officer of Chyron, or any consultant, agent or other person acting for or on behalf of Chyron or any of its Subsidiaries has taken any action that would result in a violation by such person of the FCPA, the UK Bribery Act, or any other applicable anti-corruption law (but, in each case, only to the extent such applicable law is applicable to the foregoing persons), including: (a) by making use of the mails or any means or instrumentality of interstate commerce in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value, directly or indirectly, to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office to secure official action, or to any person (whether or not a foreign official) to influence that person to act in breach of a duty of good faith, impartiality or trust (“acting improperly”) or to reward the person for acting improperly, in contravention of the FCPA or the UK Bribery Act or any other applicable anti-corruption law or (b) by requesting, agreeing to receive or accepting a financial or other advantage intending that, as a consequence, anyone’s work duties will be performed improperly, or as a reward for anyone’s past improper performance. Chyron and its Subsidiaries have conducted the Chyron Business in compliance with the FCPA, the UK Bribery Act and any other applicable anti-corruption law, and Chyron has instituted and maintained policies and procedures designed to cause each such person to comply with all such applicable anti-corruption laws (but, in each case, only to the extent any such law is applicable to Chyron, its Subsidiaries or such persons).

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5.24 Closing Shares and Earn-Out Shares. The Closing Shares and the Earn-Out Shares, if and when issued, are duly authorized and will be validly issued, fully paid and non-assessable and free of any Encumbrances other than as contemplated by this Agreement and by the Securities Act. On the Closing Date, prior to the consummation of the Closing, and on the issuance date, if any, of any Earn-Out Shares, respectively, Chyron AB will be the record and beneficial owner of the Closing Shares and any such Earn-Out Shares, and shall have good and marketable title to the Closing Shares and any such Earn-Out Shares, free and clear of all Encumbrances, except as are imposed by applicable securities laws. Chyron AB will have full right, power and authority to transfer and deliver to the Sellers valid title to the Closing Shares and any such Earn-Out Shares, respectively, free and clear of all Encumbrances. Immediately following the Closing and the issuance, if any, of any Earn-Out Shares, respectively, the Sellers will be the record and beneficial owner of the Closing Shares and any such Earn-Out Shares, and have good and marketable title to the Closing Shares and any such Earn-Out Shares, free and clear of all Encumbrances except as are imposed by applicable securities laws. Except pursuant to this Agreement, there is no contractual obligation pursuant to which Chyron has, directly or indirectly, granted any option, warrant or other right to any person to acquire any Closing Shares, Earn-Out Shares or other equity interests in Chyron. In connection with the sale and transfer of the Closing Shares and any Earn-Out Shares, Chyron AB shall take or cooperate in the taking of all reasonable actions necessary to cause the ownership of the Closing Shares and such Earn-Out Shares following the closing and the issuance, respectively, to be reflected in Chyron’s share register or otherwise to appear of record as such Sellers may reasonably request.

5.25 Knowledge of Warranty Breaches. Jerry Kieliszak and Michael Wellesley-Wesley are not aware of any existing or reasonably anticipated breach of any of the warranties set forth in Section 3 and Section 4, respectively.

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5A. REPRESENTATIONS AND WARRANTIES OF CHYRON, CHYRON US AND CHYRON AB. CHYRON, CHYRON US AND CHYRON AB, JOINTLY AND SEVERALLY, REPRESENT AND WARRANT TO HEGO AND THE SELLERS, AS OF THE DATE HEREOF AND AS OF THE CLOSING, THAT:

5A.1 Organization; Authority; Conflicts; Consents. Each of Chyron US and Chyron AB is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. Chyron US and Chyron AB have all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Chyron US and Chyron AB. The Board of Directors of each of Chyron US and Chyron AB has approved this Agreement and the transactions contemplated hereby and no other corporate action on the part of Chyron US and Chyron AB is necessary to authorize the execution, delivery and performance by Chyron US and Chyron AB of this Agreement and the transactions contemplated hereby. This Agreement has been duly executed and delivered by Chyron US and Chyron AB and, assuming due authorization, execution and delivery of the other parties hereto, constitutes the valid and binding obligations of Chyron US and Chyron AB enforceable against Chyron US and Chyron AB in accordance with its terms. The execution and delivery of this Agreement by Chyron US and Chyron AB does not, and the consummation of the transactions contemplated hereby will not, (i) conflict with, or result in any violation of any provisions of their respective organizational documents or (ii) conflict with, or result in any violation of, or default under (with or without notice or lapse or time, or both), or give rise to a right of termination, cancellation or acceleration of any obligation or loss of any benefit under any material contract, permit, concession, franchise, license, injunction, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Chyron US or Chyron AB or any properties or assets of Chyron US or Chyron AB, except, in the case of clause (ii), for any such conflicts, violations, defaults, terminations, cancellations, accelerations or losses of benefits as, individually or in the aggregate, could not reasonably be expected to prevent or materially delay or materially impair the ability of Chyron US or Chyron AB to consummate the transactions contemplated hereby. No consent, approval, order or authorization of, or registration, declaration or filing with, any third party or Governmental Entity, is required by or with respect to Chyron US or Chyron AB in connection with the execution and delivery of this Agreement by Chyron US and Chyron AB or the consummation by Chyron US and Chyron AB of the transactions contemplated hereby.

5A.2 Closing Shares and Earn-Out Shares. Chyron shall ensure that Chyron AB will have, as of the Closing, sufficient Closing Shares for issuance pursuant to this Agreement, and as of the issuance date for any Earn-Out Shares, sufficient Earn-Out Shares for issuance pursuant to this Agreement.

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5A.3 Ownership and Operations of Chyron US and Chyron AB. Chyron owns beneficially all of the outstanding capital stock of Chyron US, and Chyron US owns beneficially all of the outstanding share capital of Chyron AB. Each of Chyron US and Chyron AB were formed solely for the purpose of engaging in the transactions contemplated hereby, have engaged in no other business activities and have conducted their respective operations solely as contemplated hereby.

6. CONDUCT PRIOR TO THE CLOSING.

6.1 Conduct of Business. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Closing, the parties hereto shall take all reasonable steps to cause the Closing conditions set forth in Section 8 to be satisfied in a timely manner. Except (i) to the extent expressly required by this Agreement, or (ii) as consented to in advance and in writing (which consent shall not be withheld, delayed or conditioned if withholding, delaying or conditioning such consent would be unreasonable), by Chyron, in the case of action by Hego, and Hego, in the case of action by Chyron, each of Hego and Chyron agree, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Closing: (a) to carry on its business in the usual regular and ordinary course in substantially the same manner as heretofore conducted; (b) to pay its debts and Taxes when due subject to good faith disputes over such debts or Taxes; (c) to pay or perform other obligations when due; and (d) to use all reasonable efforts to preserve intact its present business organization, keep available the services of its present officers and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, to the end that its goodwill and ongoing business shall be unimpaired at the Closing. Hego agrees to promptly notify Chyron and Chyron agrees promptly to notify Hego of (a) any event that could reasonably be expected to have a Material Adverse Effect; (b) any event that could reasonably be expected to prevent, materially alter or materially delay, any of the transactions contemplated by this Agreement, and (c) any change in its capitalization as set forth in Section 3.5 and Section 5.5, respectively. Without limiting the foregoing, except as expressly contemplated by this Agreement, neither Hego nor Chyron nor any of their respective Subsidiaries shall do, cause or permit any of the following, except as may occur in the ordinary course of business consistent with past practice, without the prior written consent of the other party:

(a) Charter Documents. Cause or permit any amendments to its articles of association;

(b) Dividends; Changes in Capital Stock or Chyron Common Stock. Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any Capital Stock or Chyron Common Stock, as applicable, or split, combine or reclassify any of its Capital Stock or Chyron Common Stock, as applicable, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of Capital Stock or Chyron Common Stock and Chyron Preferred Stock, as applicable, or repurchase or otherwise acquire, directly or indirectly, any shares of Capital Stock or Chyron Common Stock, as applicable, except, in the case of Hego, from former employees, directors and consultants in accordance with agreements providing for the repurchase of shares in connection with any termination of service to it;

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(c) Issuance of Securities. Issue, deliver or sell or authorize or propose the issuance, delivery or sale of, or purchase or propose the purchase of, any shares of Capital Stock or Chyron Common Stock or Chyron Preferred Stock, as applicable, or securities convertible into, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue any such shares or other convertible securities; provided, however, that Chyron shall be permitted to issue additional RSUs, stock options or other equity awards (which, for the avoidance of doubt, shall include additional shares of Chyron Common Stock issuable to employees in connection with its 401(k) plan), to the extent so required by binding agreements entered into prior to the date of this Agreement and in the ordinary course of business, consistent with past practice;

(d) Intellectual Property. Transfer to any person or entity any Hego Intellectual Property Rights or Chyron Intellectual Property Rights, as the case may be, or enter into, terminate or amend, any agreement relating to the license, transfer or other disposition or acquisition of any such rights;

(e) Exclusive Rights. Enter into or amend any agreements pursuant to which any other party is granted exclusive marketing or other exclusive rights of any type or scope with respect to Hego Intellectual Property Rights or Chyron Intellectual Property Rights, as the case may be;

(f) Dispositions. Sell, lease, license or otherwise dispose of or encumber any of its material properties or assets, other than sales of inventory in the ordinary course of business consistent with past practice;

(g) Indebtedness. Incur any indebtedness for borrowed money, or guarantee any such indebtedness, or issue or sell any debt securities or guarantee any debt securities of others;

(h) Agreements. Enter into, terminate or amend, in a manner that will adversely affect the Hego Business, in the case of Hego, or the Chyron Business, in the case of Chyron, (i) any agreement involving the obligation to pay or the right to receive $50,000 or more, or (ii) any agreement that is or would be a Hego Material Contract or Chyron Material Contract, as the case may be;

(i) Payment of Obligations. Pay, discharge or satisfy, in an amount in excess of $50,000 in the aggregate, any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) not set forth on the Hego Balance Sheet or the Chyron Balance Sheet, as the case may be, or arising in the ordinary course of business;

(j) Capital Expenditures. Make any capital expenditures, capital additions or capital improvements, in excess of $50,000 in the aggregate, other than in the ordinary course of business consistent with past practice;

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(k) Insurance. Materially reduce the amount of any material insurance coverage provided by existing insurance policies;

(l) Employee Plans. Amend any compensation arrangement or other benefit plan or arrangement, or adopt any compensation arrangement or other benefit plan or arrangement, except in order to comply with applicable laws or regulations;

(m) New Hires; Pay Increases. Hire any new officer-level employee, pay any bonus, special remuneration or special noncash benefit (except payments and benefits made pursuant to written agreements outstanding on the date of this Agreement), or increase the benefits, salaries or wage rates of its employees; provided, for the absence of doubt, that Hego and Chyron may pay bonuses and other compensation to its employees in the ordinary course of business consistent with past practice and that Hego and Chyron may each increase salaries as part of a 2013 salary review in the ordinary course of business consistent with past practice;

(n) Severance Arrangements. Except for payments made pursuant to written agreements outstanding on the date of this Agreement and disclosed in the Electronic Data Room, in the case of Hego, or in the Chyron Material Contracts, in the case of Chyron, grant or pay any severance or termination pay or benefits to any director or officer or employee;

(o) Lawsuits. Commence a lawsuit other than (i) for the routine collection of bills, (ii) in such cases where Hego or Chyron, as the case may be, in good faith determines that failure to commence suit would result in the material impairment of a valuable right, provided that the applicable party consults with the other party prior to the filing of such a suit or (iii) to enforce its rights under this Agreement;

(p) Acquisitions. Acquire or agree to acquire by merging with, or by purchasing a substantial portion of the stock or assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets that are material individually or in the aggregate, to its business, taken as a whole;

(q) Taxes. Make or change any election in respect of Taxes, change any accounting method in respect of Taxes, adopt or change any period of accounting, enter into any closing agreement or similar agreement or arrangement with respect to Taxes, settle any claim or assessment in respect of Taxes, take any action to surrender any right to claim a refund or credit of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;

(r) Revaluation. Revalue any of its assets, including writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business or as required by changes in GAAP;

(s) Discounts. Grant any discount or other concession in connection with the collection of any material account receivable other than in the ordinary course of business consistent with past practice;

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(t) Collections. Collect any account receivable other than in the ordinary course of business; or

(u) Other. Take or agree in writing or otherwise to take, any of the actions described in this Section 6.1.

6.2 Confidentiality. The parties acknowledge that Chyron and Hego have previously executed a Confidentiality Agreement dated October 4, 2012 (the “Confidentiality Agreement”), which Confidentiality Agreement is hereby incorporated herein by reference and shall continue in full force and effect in accordance with its terms, notwithstanding the execution and delivery of this Agreement or any termination of this Agreement. To the extent there is any inconsistency between the terms of this Agreement and the terms of the Confidentiality Agreement, the terms of this Agreement shall prevail, except that the termination and non-termination provisions of the Confidentiality Agreement shall survive the termination of this Agreement. The Confidentiality Agreement shall be governed by Swedish law and any dispute arising under the Confidentiality Agreement shall be resolved pursuant to Section 11.8 hereof.

7. ADDITIONAL AGREEMENTS.

7.1 Access to Information. Each of Hego and Chyron covenant that it and its respective Subsidiaries and representatives will afford the other party and its accountants, counsel and other representatives, reasonable access during business hours during the period from the date of this Agreement through the Closing (the “Pre-Closing Period”), to (A) all properties, personnel, books, contracts, and records of the applicable party and its Subsidiaries and (B) all other information concerning the business, properties and personnel of the applicable party and its Subsidiaries as the other party may reasonably request. Subject to compliance with applicable law, during the Pre-Closing Period, Hego and Chyron shall confer on a regular and frequent basis with one another, and each such party’s representatives as necessary, to report regarding operational matters of materiality and the general status of Hego’s ongoing operations and/or Chyron’s ongoing operations, as the case may be. No information or knowledge obtained by either Hego or Chyron in any investigation pursuant to this Section 7.1 or otherwise shall affect or be deemed to modify any representation, warranty or covenant contained herein, the indemnification obligations set forth herein or the conditions to the obligations of the parties to consummate the Stock Sale.

7.2 Public Disclosure. Each of Hego and Chyron covenant that neither such party, nor any of its respective Subsidiaries, stockholders or affiliates shall, without the consent of the other party, issue any press release or otherwise make any public statement or make any other public (or non-confidential) disclosure (whether or not in response to an inquiry) regarding the terms of this Agreement and the transactions contemplated hereby, except as may be required by law. Any press release or other public statement relating to this Agreement or the transactions contemplated hereby by Chyron, Chyron US or Chyron AB shall be approved in advance by the Sellers’ Representative, which approval shall not be unreasonably withheld or delayed.

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7.3 Regulatory Approvals; Further Assurances. Subject to the terms hereof, the parties shall each use their reasonable best efforts to (i) take, or cause to be taken, all actions, and do, or cause to be done, and to assist and cooperate with each other in doing, all things necessary, proper or advisable to consummate and make effective the transactions contemplated hereby as promptly as practicable, (ii) as promptly as practicable, obtain from any Governmental Entity or any other third party any consents, licenses, permits, waivers, approvals, authorizations, actions, non-actions, or orders required to be obtained or made by the parties in connection with the authorization, execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, and (iii) execute or deliver any additional instruments reasonably necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement. The parties shall cooperate with each other in connection with the making of all such filings (subject to legal requirements regarding the sharing of information), including providing copies of all such documents to the other party’s advisors prior to filing and, if requested, accepting all reasonable additions, deletions or changes suggested in connection therewith. The parties shall each use their reasonable best efforts (subject to legal requirements regarding the sharing of information) to furnish to each other all information required for any application or other filing to be made pursuant to the rules and regulations of any applicable law in connection with the transactions contemplated by this Agreement.

7.4 Hego Payout Spreadsheet. Hego shall deliver to Chyron no later than three (3) business days prior to Closing the “Hego Payout Spreadsheet”, which shall set forth as of the Closing: all Stockholders, the shares of Capital Stock held by each Stockholder, the portion of the Closing Consideration to be paid to each such Stockholder, the relative percentage interest in any Earn-Out Consideration with respect to each such Stockholder. The Hego Payout Spreadsheet shall also set forth the last known address for each Stockholder.

7.5 Employees. Subject to applicable law and the terms of any existing employment agreements by and between Hego and its employees, and except as otherwise specifically set forth herein, nothing in this Agreement is intended to restrict Chyron’s rights after Closing to (a) modify the terms of any existing employment agreements by and between Hego and its employees or (b) terminate any of Hego’s or Chyron’s benefit plans in a manner consistent with their terms.

7.6 Expenses. All external transaction costs invoiced in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses; provided that, subject to and contingent upon the occurrence of the Closing, Chyron or one of its Subsidiaries shall pay or reimburse the reasonable, documented transaction expenses of Hego and the Sellers up to Five Hundred Thousand Dollars ($500,000).

7.7 Resignations. To the extent permitted by applicable law and as Chyron and Hego agree, Hego shall cause the officers and directors of Hego’s Subsidiaries to resign from such positions effective on Closing and shall, to the extent possible, cause designees jointly designated by Chyron and Hego to be appointed to such positions, effective upon the Closing.

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7.8 Proxy Statement. Chyron shall prepare and, prior to the end of the day on April 1, 2013, file with the SEC, a proxy statement for the solicitation of the approval of its stockholders describing this Agreement, the Stock Sale and the transactions contemplated hereby and thereby (the “Chyron Proxy Statement”). The Chyron Proxy Statement shall contain the recommendation of the board of directors of Chyron that its stockholders approve the Stock Sale and this Agreement and the conclusion of the Board of Directors of Chyron that the terms and conditions of the Stock Sale are fair to and in the best interests of its stockholders. Chyron shall ensure that the Chyron Proxy Statement conforms in all respects with all applicable laws. Chyron shall send the Chyron Proxy Statement to certain of its stockholders as promptly as possible following the date of this Agreement and the Chyron Proxy Statement shall not (i) contain any statement that is false or misleading with respect to any material fact, (ii) omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they are made, not false or misleading, or (iii) omit to state any material fact necessary to correct any statement in any earlier communication that has become false or misleading. Notwithstanding the foregoing, Chyron makes no representation, warranty or covenant with respect to any information supplied by Hego that is contained in any of the foregoing documents. The information provided by Hego to Chyron specifically for inclusion in the Chyron Proxy Statement, including without limitation the Hego Financial Statements and related disclosure provided for inclusion therein, shall not (i) contain any statement that is false or misleading with respect to any material fact, (ii) omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they are made, not false or misleading, or (iii) omit to state any material fact necessary to correct any statement in any earlier communication that has become false or misleading.

7.9 Board Representation. Johan Apel and one other designee of Hego who qualifies as an independent director under the rules of the Nasdaq Stock Market, Inc. shall be appointed to the Board of Directors of Chyron upon the Closing (representing two of nine board seats immediately following the Closing). The commitment of the members of the Chyron Board of Directors and affiliated stockholders to vote in favor of these appointments is set forth in and subject to the terms of the Transaction Support Agreements. Chyron shall ensure that Johan Apel and the other board member to be appointed in accordance with this provision shall be covered by Chyron’s director and officer liability insurance policy effective as of Closing.

7.10 Incentive Compensation. Subject to the Chyron Stockholder Approval, either (i) a new long-term performance-based incentive equity compensation plan will be adopted by Chyron, or (ii) one of Chyron’s existing equity compensation plans shall be amended to increase the number of shares available for issuance thereunder. The eligible participants in such new plan or in the increased number of shares under an existing plan will consist of all senior management of Hego and Chyron. The number of shares of Chyron Common Stock to be reserved for issuance under such plan or pursuant to such increase shall be not less than fifteen percent (15%) of Chyron’s Pre-Closing Outstanding Shares.

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7.11 Private Placement. Each Seller hereby acknowledges and agrees that the offer and sale of the shares of Chyron Common Stock hereunder is being made pursuant to an exemption from the registration requirements under the Securities Act and, therefore, such shares of Chyron Common Stock cannot be resold unless they are subsequently registered under the Securities Act and any applicable state securities laws or unless an exception from such registration is available. Each Seller hereby agrees that it shall not sell, assign, pledge, transfer or otherwise dispose of or encumber any shares of Chyron Common Stock received by him, her or it (i) for a period of at least fifteen (15) months from the Closing Date and (ii) except pursuant to an exemption from the registration requirements of the Securities Act and any applicable state securities laws. Any transfer or purported transfer in violation of this Section 7.11 shall be voidable by Chyron, and Chyron shall not be required or obligated to register any transfer of any shares of Chyron Common Stock in violation of this Section 7.11. Chyron may, and may instruct its transfer agent, to place such stop transfer orders as may be required on the transfer books of Chyron in order to ensure compliance with this Section 7.11. Each certificate representing shares of Chyron Common Stock issued to any Seller pursuant to this Agreement shall upon issuance be endorsed with a legend in substantially the form set forth below:

“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF (A) UNTIL THE DATE THAT IS FIFTEEN (15) MONTHS FROM THE CLOSING DATE AND (B) EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (ii) PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (iii) PURSUANT TO THE RESALE PROVISIONS OF RULE 144 PROMULGATED THEREUNDER.”

7.12 Rule 144. Chyron shall (a) use commercially reasonable efforts to timely file all reports required to be filed by it under the Securities Act or the Exchange Act (including, but not limited to, the reports under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144), and (b) take such further action as any Seller may reasonably request, to the extent required from time to time to enable such Seller to sell his, her or its shares of Chyron Common Stock following the date that is fifteen (15) months from the Closing Date without registration under the Securities Act, within the limitation of the exemptions provided by (i) Rule 144 or (ii) any similar rule or regulation hereafter adopted by the SEC.

7.13 Director Liability Release. Provided that Hego’s auditors do not recommend against it, Chyron shall, at the first and second annual general meetings of the shareholders of Hego and of its Subsidiaries following the Closing and absent Fraud, cause all members of the Board of Directors of Hego and its Subsidiaries respectively in office immediately prior to the Closing to be discharged and released from any and all personal liability for any action or inaction of Hego and the relevant Subsidiary for the period up to and including the Closing.

7.14 Tax Election. The parties agree that Chyron AB shall make an election under section 338(g) of the Code with respect to the purchase and sale of the Shares and the One Thousand Dollar ($1,000) Closing payment by Chyron AB to the Sellers pursuant to this Agreement. Hego and Chyron AB agree that the Shares will be allocated to the assets of Hego and its Subsidiaries for all purposes in a manner consistent with such Section 338 and the regulations thereunder, and agree to cooperate to make this election in a timely manner and to file all Tax Returns and information reports in a manner consistent with such allocation.

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7.15 Release of Personal Guarantees. Chyron shall ensure that the Sellers and Hego directors that have provided personal guarantees for the obligations of Hego and/or its Subsidiaries as set out in Schedule 7.15 are released from such guarantees at Closing and shall indemnify such Seller or Hego director for any claim or liability raised against such person relating to such personal guarantees after the Closing.

7.16 Registration.

(a) By the date that is not later than nine (9) months following the Closing (the “Filing Deadline”), Chyron shall prepare and file with the SEC a registration statement (the “Registration Statement”) covering the resale of all the Stock Sale Consideration held by the Sellers or their permitted transferees (the “Registrable Securities”). The Registration Statement required to be filed under this Agreement shall be filed on Form S-3 (or on such other form appropriate for such purpose and which Chyron is then eligible to use). Chyron shall use its reasonable best efforts to ensure that the Registration Statement is declared effective under the Securities Act as soon as practicable thereafter but no later than one hundred and twenty (120) days after the initial filing of such Registration Statement (the “Registration Deadline”), and shall use its reasonable best efforts to ensure that such Registration Statement is continuously effective until one (1) year after the latest date on which any Earn-Out Shares are issued (the “Registration Period”). Each Seller (for so long as it holds any of the Stock Sale Consideration, and each of its successors, assigns and direct and indirect transferees who become registered owners of the Stock Sale Consideration) will be required to furnish to Chyron a questionnaire in a form that is customarily used for such registration purposes (a “Selling Holder Questionnaire”) before such Seller’s portion of the Registrable Securities will be included in the Registration Statement. Chyron shall not be required to include the Registrable Securities in the Registration Statement until such Seller furnishes to Chyron a fully completed Selling Holder Questionnaire.

(b) Chyron shall respond promptly to any and all comments made by the staff of the SEC on the Registration Statement, and shall submit to the SEC, within three (3) business days after Chyron learns that no review of the Registration Statement will be made by the staff of the SEC or that the staff of the SEC has no further comments on the Registration Statement, as the case may be, a request for acceleration of the effectiveness of the Registration Statement to a time and date not later than two (2) business days after the submission of such request.

(i) prepare and file with the SEC such amendments (including post-effective amendments) and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective, true and correct during the Registration Period and to comply with the provisions of the Securities Act with respect to the sale or other disposition;

(ii) Furnish to the Sellers such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request to facilitate the disposition of Registrable Securities owned by them;

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(iii) Use its reasonable best efforts to register and qualify the securities covered by such Registration Statement under such other securities or blue sky laws of such jurisdictions as shall be reasonably requested by the Sellers; provided that Chyron shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, except as may be required by the Securities Act;

(iv) Notify each holder of Registrable Securities covered by such Registration Statement at any time (i) of any request by the SEC or any other Governmental Entity for amendments or supplements to the Registration Statement filed pursuant to this Agreement or related prospectus or for additional information; (ii) of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement covering any or all of the Registrable Securities or the initiation of any proceedings for that purpose; or (iii) when a prospectus relating thereto is required to be delivered under the Securities Act or the happening of any event as a result of which the prospectus included in such Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;

(v) Notify the participating Sellers at any time when a prospectus relating to its Stock Sale Consideration is required to be delivered under the Securities Act, of Chyron becoming aware that the prospectus included in the related Registration Statement, as then in effect, includes 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 not misleading in light of the circumstances then existing, and promptly prepare and furnish to the participating Sellers a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to the purchasers of such Stock Sale Consideration, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;

(vi) Otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC;

(vii) Cause all such Registrable Securities registered hereunder to be listed on the NASDAQ Capital Market or other securities exchange on which the Chyron Common Stock is then listed;

(viii) Cooperate with the Sellers who hold Stock Sale Consideration covered by the Registration Statement to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing the Stock Sale Consideration covered by the Registration Statement and enable such certificates to be in such denominations or amounts, as the case may be, as the Sellers may reasonably request and registered in such names as they may request;

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(ix) Instruct Chyron’s transfer agent to remove the restrictive legend on the stock certificates after effectiveness of the applicable Registration Statement and provide, with the cooperation of the participating Sellers, any required legal opinions at Chyron’s sole expense; and

(x) Permit counsel for the Sellers to review the Registration Statement and all amendments and supplements thereto, and any comments made by the staff of the SEC concerning such Sellers and/or the Agreement and Chyron’s responses thereto, at least two (2) business days prior to the filing thereof with the SEC (or, in the case of comments made by the staff of the SEC, within a reasonable period of time following the receipt thereof by Chyron) and shall not file any such document to which such counsel reasonably objects.

7.17 Registration Expenses. Chyron shall bear and pay all expenses incurred in connection with any registration, filing or qualification of Registrable Securities with respect to the registrations under this Agreement for each Seller, including (without limitation) all registration, filings and qualification fees, printers’ and accounting fees and fees and disbursements of counsel for Chyron, but excluding commissions and the fees of counsel for each Seller with respect to Registrable Securities to be sold for the account of the Seller, as well as stock transfer taxes and fees.

7.18 Indemnification Relating to Registration.

(a) Chyron shall, and hereby does, indemnify, to the extent permitted by law, each Seller (for the purposes of this section, a “Registration Indemnified Person”)) from and against all losses, claims, damages, liabilities and expenses, joint or several, to which such Registration Indemnified Person may become subject under the Securities Act, the Exchange Act and all rules and regulations under each such Act, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement as contemplated hereby or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary, final or summary prospectus, together with the documents incorporated by reference therein (as amended or supplemented by Chyron), or any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) any violation by Chyron of any federal, state or common law rule or regulation applicable to Chyron and relating to action of or inaction by Chyron in connection with any such registration including the failure to deliver any document required herein to be delivered, to a Seller or to the SEC; and in each such case, Chyron shall reimburse each such Registration Indemnified Person for any reasonable legal or other expenses incurred by him, her or it in connection with investigating or defending any such loss, claim, damage, liability, expense, action or proceeding; provided, however, that Chyron shall not be liable to a Registration Indemnified Person insofar as such losses, claims, damages, liabilities, expenses, actions or proceedings are caused by any untrue statement or alleged untrue statement or material omission to provide information pursuant to Section 7.18(b) made in reliance on or in conformity with any information furnished to Chyron by or on behalf of such Registration Indemnified Person to be furnished under the Section 7.18(d) or as a result of the failure of such Registration Indemnified Person to furnish a prospectus to a purchaser.

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(b) Each Seller participating in a Registration Statement shall furnish to Chyron in writing such information as shall be reasonably requested by Chyron for use in any such Registration Statement or prospectus and shall indemnify, to the extent permitted by law, Chyron, its officers and directors and each Person, if any, who controls Chyron within the meaning of Section 15 of the Securities Act, against any losses, claims, damages, liabilities, expenses, actions or proceedings resulting from any untrue statement or alleged untrue statement of a material fact or any omission or alleged omission of a material fact with respect to information expressly requested by Chyron and required to be stated in the Registration Statement or prospectus or preliminary prospectus or any amendment thereof or supplement thereto, or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission with respect to information expressly requested by Chyron is made in reliance on or in conformity with any information so furnished in writing or to be furnished under this Section 7.18(b) by such participating holder of Registrable Securities expressly for use therein.

(c) A Person entitled to indemnification under the provisions of this Section 7.18 shall (i) give prompt notice to the indemnifying person of any claim with respect to which it seeks indemnification, and (ii) unless in the reasonable judgment of counsel for such Registration Indemnified Person a conflict of interest between such indemnified and indemnifying parties may exist in respect of such claim, permit such indemnifying person to assume the defense of such claim, with counsel reasonably satisfactory to the Registration Indemnified Person. If such defense is so assumed, such indemnifying person shall not enter into any settlement without the consent of the Registration Indemnified Person if such settlement attributes liability to the Registration Indemnified Person and such indemnifying person shall not be subject to any liability for any settlement made without its consent. In the event an indemnifying person shall not be entitled, or elects not, to assume the defense of a claim, such indemnifying person shall not be obligated to pay the fees and expenses of more than one law firm for all Registration Indemnified Persons in respect of such claim. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of any Registration Indemnified Person and shall survive the transfer of a Registration Indemnified Person’s Stock Sale Consideration.

(d) If for any reason the foregoing indemnity is unavailable, then the indemnifying person shall contribute to the amount paid or payable by the Registration Indemnified Person as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying person and the Registration Indemnified Person as well as any other relevant equitable considerations. Notwithstanding the foregoing, no holder of Registrable Securities shall be required to contribute any amount in excess of the amount such Person would have been required to pay to a Registration Indemnified Person if the indemnity under Section 7.18 was available. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

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(e) An indemnifying person shall make payments of all amounts required to be made pursuant to the foregoing provisions of this Section 7.18 to or for the account of a Registration Indemnified Person from time to time promptly upon receipt of bills or invoices relating thereto or when otherwise due and payable.

8. CONDITIONS TO THE CLOSING.

8.1 Conditions to Obligations of Each Party to Effect the Stock Sale. The respective obligations of each party to this Agreement to consummate and effect this Agreement and the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of each of the following conditions, any of which may be waived, in writing, by Chyron, Hego and the Sellers:

(a) No Injunctions or Restraints; Illegality. No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal or regulatory restraint or prohibition preventing the consummation of the Stock Sale shall be and remain in effect, nor shall there be any action taken, or any statute, rule, regulation or order enacted, entered, enforced or deemed applicable to the Stock Sale, which makes the consummation of the Stock Sale illegal; provided further, that any legal obligations with respect to any relevant labor unions, including without limitation, negotiation obligations, shall have been complied with.

(b) Governmental Approval. Chyron and Hego shall have timely obtained all approvals, waivers, actions, non-actions and consents, necessary to be obtained from Governmental Entities for consummation of or in connection with the Stock Sale and the other transactions contemplated hereby.

(c) Stockholder Approval. The Chyron Stockholder Approval shall have been obtained prior to the end of the day on July 31, 2013.

(d) No Material Adverse Effect. Since the date of this Agreement, there shall not have occurred any Material Adverse Effect with respect to Hego, Chyron or Chyron AB.

(e) Fraud. With respect to Chyron’s obligation to effect this Agreement and the transactions contemplated hereby, there shall not have occurred any Fraud in the making of the representations, warranties, covenants or agreements set forth in this Agreement on the part of Hego or any Seller. With respect to the respective obligations of Hego and any Seller to effect this Agreement and the transactions contemplated hereby, there shall not have occurred any Fraud in the making of the representations, warranties, covenants or agreements set forth in this Agreement on the part of Chyron, Chyron US or Chyron AB.

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(f) No Governmental Litigation. There shall not be pending or threatened any legal proceeding in which a Governmental Entity is or is threatened to become a party or is otherwise involved, and neither Chyron, Chyron AB, Chyron US nor Hego or any Seller shall have received any communication from any Governmental Entity in which such Governmental Entity indicates the probability of commencing any legal proceeding or taking any other action: (i) challenging or seeking to restrain or prohibit the consummation of the Stock Sale; (ii) relating to the Stock Sale and seeking to obtain from Chyron or any of its Subsidiaries, or Hego or any of its Subsidiaries, or any Seller, any damages or other relief; (iii) seeking to prohibit or limit in any material respect Chyron AB’s ability to vote, receive dividends with respect to or otherwise exercise ownership rights with respect to the stock of Hego; or (iv) that would materially and adversely affect the right of Chyron AB, post-Closing, to indirectly own the assets or operate the business of Hego.

(g) No Other Litigation. There shall not be pending any legal proceeding: (i) challenging or seeking to restrain or prohibit the consummation of the Stock Sale or any of the other transactions contemplated by this Agreement; (ii) relating to the Stock Sale and seeking to obtain from Chyron or any of its Subsidiaries, or Hego or any of its Subsidiaries or any Seller, any damages or other relief; (iii) seeking to prohibit or limit in any material respect Chyron AB’s ability to vote, receive dividends with respect to or otherwise exercise ownership rights with respect to the stock of Hego; or (iv) that would materially and adversely affect the right of Chyron, post-Closing, to own the assets or operate the business of Hego.

8.2 Additional Conditions to the Obligations of Chyron. The obligations of Chyron and Chyron AB to consummate and effect this Agreement and the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of each of the following conditions, any of which may be waived, in writing, by Chyron:

(a) Representations and Warranties. The representations and warranties of Hego in Section 3 and the Sellers in Section 4 shall be true and correct in all material respects, without regard to any qualification as to materiality contained in such representations and warranties, on and as of the date of this Agreement and on and as of the Closing as though such representations and warranties were made on and as of such Closing (except for such representations and warranties that speak specifically as of the date hereof or as of another date, which shall be true and correct as of such date).

(b) Performance of Obligations. Hego and the Sellers shall have performed and complied in all material respects with all covenants, obligations and conditions of this Agreement required to be performed and complied with by them respectively as of the Closing.

(c) Purchase of All Shares. The Sellers shall have agreed to sell to Chyron AB all of the Shares, such that immediately following the Closing, Chyron AB shall own one hundred percent (100%) of the outstanding equity interests of Hego.

8.3 Additional Conditions to the Obligations of Hego and the Sellers. The obligations of Hego and the Sellers to consummate and effect this Agreement and the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of each of the following conditions, any of which may be waived, in writing, by Hego and the Sellers’ Representative:

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(a) Representations, Warranties and Covenants. The representations and warranties of Chyron in Section 5 and of Chyron US and Chyron AB in Section 5A shall be true and correct in all material respects, without regard to any qualification as to materiality contained in such representations and warranties, on and as of the date of this Agreement and on and as of the Closing as though such representations and warranties were made on and as of such Closing (except for such representations and warranties that speak specifically as of the date hereof or as of another date, which shall be true and correct as of such date).

(b) Performance of Obligations. Chyron, Chyron US and Chyron AB shall have performed and complied in all material respects with all covenants, obligations and conditions of this Agreement required to be performed and complied with by them as of the Closing.

9. TERMINATION.

9.1 Termination. This Agreement may be terminated at any time prior to the Closing (with respect to Section 9.1(b) through Section 9.1(d), by written notice by the terminating party to the other parties):

(a) by the mutual written consent of Chyron and Hego and the Sellers’ Representative;

(b) by either Chyron or Hego or the Sellers’ Representative if the Stock Sale shall not have been consummated on or before August 31, 2013; provided, however, that the right to terminate this Agreement under this Section 9.1(b) shall not be available with respect to a party if the failure to consummate the Stock Sale on or prior to such date is the result of any breach of this Agreement by the party seeking to terminate the Agreement pursuant to the terms of this Section 9.1(b);

(c) by either Chyron or Hego or the Sellers’ Representative if a court of competent jurisdiction or other Governmental Entity shall have issued a non-appealable final order, decree or ruling or taken any other action, in each case having the effect of permanently restraining, enjoining or otherwise prohibiting the Stock Sale;

(d) by either Chyron or Hego or the Sellers’ Representative, if (A) (i) there has been a breach of or inaccuracy in any representation, warranty, covenant or agreement on the part of another party set forth in this Agreement, such that the conditions set forth in Sections 8.2(a) or (b) (in the case of termination by Chyron) or Sections 8.3(a) or (b) (in the case of termination by Hego or the Sellers’ Representative) would not be satisfied and (ii) such breach or inaccuracy shall not have been cured within thirty (30) calendar days following receipt by the breaching party of written notice of such breach or inaccuracy from another party, or (B) there is any Fraud in the making of such representation, warranty, covenant or agreement on the part of another party set forth in this Agreement; or

(e) by either Chyron or Hego or the Sellers’ Representative if the Chyron Stockholder Approval is not obtained prior to the end of the day on July 31, 2013.

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9.2 Effect of Termination. In the event of termination of this Agreement as provided in Section 9.1, there shall be no Liability on the part of the Sellers, Chyron, Hego or their respective officers, directors, employees, agents or stockholders; provided that, notwithstanding the foregoing, nothing contained in this Agreement shall relieve any party to this Agreement from any liability resulting from or arising out of any intentional, material breach of any agreement or covenant hereunder; and provided, further, that the provisions of Sections 6.2, 7.2, 9.2, 11.1, 11.3 and 11.8 shall remain in full force and effect and survive any termination of this Agreement.

10. INDEMNIFICATION.

10.1 Survival; Indemnification; Sellers’ Representative.

(a) Survival of Warranties. Except for those contained in Sections 4.1, 4.4, 5.1, 5.24, and 5A.1-5A.3 which shall survive the Closing and continue in full force and effect until thirty (30) days after the expiration, if any, of all applicable statutes of limitations, all representations and warranties made herein, or in any certificate, schedule or exhibit delivered pursuant hereto, by any party, shall terminate as of the Closing.

(b) Indemnity. Subject to the limitation provisions set forth in this Section 10, from and after the Closing, Chyron, on the one hand, and the Sellers, on the other hand, severally and not jointly (each, as indemnitor of the other, an “Indemnifying Person”), shall indemnify and hold harmless each other party hereto (which, with regard to the Sellers, shall include any such Seller that has complied with its obligations under this Agreement) and, if applicable, their respective officers, directors and employees (each, as indemnitee of the other, an “Indemnified Person”) from and against any Damages arising out of or in connection with:

(i) any inaccuracy in, or any breach of, any representation or warranty made by (A) in the case of Chyron, Chyron pursuant to Section 5.24, and (B) in the case of the Sellers, by any Seller pursuant to Section 4.4; and

(ii) in the case of Chyron and Sellers, any breach of any covenant or agreement to be performed by Chyron or any Seller, respectively, prior to or as of the Closing pursuant to this Agreement and in respect of Chyron, any breach of Section 7.12, 7.13, 7.15, 7.16, 7.17 and 7.18 after Closing.

(c) Right to Bring Claim. Only an Indemnified Person (or a person or entity designated in writing by such Indemnified Person) may bring a claim to recover for Damages that are economic losses of such Indemnified Person.

(d) Tax Treatment of Indemnification Payments. Except as otherwise required by applicable law, the parties shall treat any indemnification payment made hereunder by the Sellers as an adjustment to the purchase price for the Capital Stock for income Tax purposes.

(e) Transfer of Chyron Shares. Subject to Section 11.2, the only remedy available to Chyron for a breach by a Seller of its title warranty shall be to have the relevant number of Chyron shares re-transferred by such Seller. No other remedies are available. The maximum liability is thus capped at the number of shares received.

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10.2 Sellers’ Representative.

(a) By executing and delivering a counterpart of this Agreement and receiving the benefits thereof, including the right to receive the consideration payable in connection with the Stock Sale, each Seller shall be deemed to have approved the designation of, and hereby designates, Westhill Group AB as the Sellers’ Representative under the terms set forth herein to give and receive notices and communications, to authorize delivery to Chyron of any deliverables set forth in this Agreement, to object to such deliveries, to agree to, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to any claims made pursuant to this Agreement, and to take all actions necessary or appropriate in the judgment of the Sellers’ Representative for the accomplishment of the foregoing. If the Sellers’ Representative shall die, be removed by the written direction of the holders of a majority in interest of the Capital Stock (determined as of immediately prior to the Closing), become disabled, resign or otherwise be unable to fulfill its responsibilities hereunder, a new Sellers’ Representative may be designated by the holders of a majority in interest of the Capital Stock (determined as of immediately prior to the Closing) upon not less than ten (10) days’ prior written notice to Chyron. No bond shall be required of the Sellers’ Representative, and the Sellers’ Representative shall receive no compensation for its services from Chyron, Hego or any of their Affiliates after the Closing. Notices or communications to or from the Sellers’ Representative shall constitute notice to or from each of the Sellers. Each Seller agrees to receive correspondence from the Sellers’ Representative, including in electronic form.

(b) The Sellers’ Representative shall not be liable for any act done or omitted hereunder as Sellers’ Representative while acting in good faith and without gross negligence or willful misconduct and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Sellers shall jointly and severally indemnify and hold the Sellers’ Representative harmless against any loss, liability or expense incurred without gross negligence or willful misconduct on the part of the Sellers’ Representative and arising out of or in connection with the acceptance or administration of its duties hereunder, in each case as such loss, liability or expense is incurred.

(c) The Sellers’ Representative shall have reasonable access to information about Hego and its Subsidiaries, including in electronic form to the extent reasonably available, for purposes of performing his duties and exercising his rights hereunder. The Sellers’ Representative and its members, managers, directors, officers, agents and employees shall treat confidentially and not disclose any nonpublic information from or about Hego or Chyron.

(d) The Sellers’ Representative shall be entitled to reimbursement from the Sellers for all losses, liabilities and reasonable expenses incurred by the Sellers’ Representative in connection with performing the Sellers’ Representative’s duties as set forth in this Agreement; provided that the Sellers shall not be relieved from their obligations to reimburse such losses, liabilities and expenses, nor shall the Sellers’ Representative be prevented from seeking any remedies available to the Sellers’ Representative at law or otherwise against the Sellers with respect thereto.

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10.3 Actions of the Sellers’ Representative. A decision, act, consent or instruction of the Sellers’ Representative shall constitute a decision of all Sellers and shall be final, binding and conclusive upon each Seller, and Chyron and its Subsidiaries may rely upon any decision, act, consent or instruction of the Sellers’ Representative as being the decision, act, consent or instruction of each and every such Seller. Chyron and its Subsidiaries are hereby relieved from any liability to any person for any acts done by them in accordance with such decision, act, consent or instruction of the Sellers’ Representative.

10.4 Third-Party Claims. In the event that an Indemnified Person becomes aware of a third-party claim that such Indemnified Person believes may result in an indemnifiable claim against such Indemnified Person pursuant to this Section 10, such Indemnified Person shall notify the applicable Indemnifying Person (or the Sellers’ Representative, in the event that such Indemnifying Person is a Seller) of such claim (but the failure to deliver such notice shall not limit the Indemnified Person’s rights under this Agreement except to the extent that such delay shall have prejudiced the Indemnifying Person with regard to such indemnifiable claim). The Indemnifying Person shall be entitled to defend such third-party claim with counsel of its own choosing, who shall be reasonably acceptable to the Indemnified Person. If the Indemnifying Person fails to undertake the defense of, or pay or otherwise settle (in accordance with the following provisions of this Section 10.4), the third-party claim within ten (10) days after the Indemnified Person has given written notice to the Indemnifying Person of the third-party claim, then the Indemnified Person may take any and all necessary action to dispose of the third-party claim, and any costs (including attorneys’ fees) reasonably incurred by the Indemnified Person in so doing shall be borne by the Indemnifying Person. The Indemnifying Person shall not consent to the entry of any judgment or enter into any compromise or settlement with respect to the third-party claim without the prior written consent of the Indemnified Person unless such judgment, compromise or settlement (a) provides for the payment by the Indemnifying Person of money as sole relief for the claimant, (b) results in the full and general release of the Indemnified Person from all liabilities arising or relating to, or in connection with, the third-party claim and (c) involves no finding or admission of any violation of law or any right of any Person and no adverse effect on any other claims that may be made against the Indemnified Person.

10.5 Limitations on Recovery under the Representations and Warranties.

(a) Sole and Exclusive Remedy Pursuant to this Agreement. Following the Closing, the indemnification rights provided in this Section 10 shall constitute the sole and exclusive remedy pursuant to this Agreement with respect to Damages of any kind or nature arising out of or in connection with any breach of or inaccuracy in any representation or warranty or undertaking contained in this Agreement except for Section 5.24 (in respect of Earn-Out Shares) and Section 7.12, 7.13, 7.15, 7.16, 7.17 and 7.18. Further, for the avoidance of doubt, no indemnification rights pursuant to this Section 10 shall take effect prior to the Closing.

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(b) Threshold for Certain Claims. No claim for Damages for breach of a representation or warranty shall be made by a party whereby, for the purposes of this Section 10.5 (b), the Sellers shall be regarded as one party, hereto against another party hereto pursuant to this Section 10 unless all Damages of such party for a breach of a representation or warranty and all other parties to this Agreement similarly claiming Damages for a breach of a representation or warranty against such other party hereto, in the aggregate, exceed $10,000 (provided that any series or group of Damages arising out of or based on substantially the same circumstance or event and claimed by several parties shall be aggregated for the purpose of this assessment), in which case the party or parties hereto making such claim or claims shall be entitled to seek recovery of Damages for breach of a representation or warranty from such other party from the first dollar (without regard to any limitation of liability of any party hereto as provided for in this Section 10.5(b)).

(c) Cap on Seller Liability. No Seller hereto shall be liable to any other Seller or parties hereto for Damages for breach of a representation or warranty in excess of the fair market value (measured as of the Closing Date) of the consideration actually received by such party pursuant to this Agreement. Chyron, Chyron US and Chyron AB only remedy in case of a breach by a Seller shall be that the relevant Seller returns to Chyron AB such amount of the Closing Shares and the Earn Out Shares, if any, that corresponds to the Damage, whereby such shares shall be valued at the issue price at Closing.

(d) Damages Offsets. Without limiting the effect of any other limitation contained in this Section 10, for purposes of computing the amount of any Damages for breach of a representation or warranty incurred by an Indemnified Person, there shall be deducted an amount equal to the amount of any insurance proceeds (net of any reasonably estimated increased insurance premiums and other similar amounts resulting from making the claim that resulted in payment of such proceeds), indemnification payments, contribution payments or reimbursements, in each case, actually received by the applicable Indemnified Person or any of their Affiliates (in each case other than received from any such applicable Indemnified Person) with respect to such Damages. If any portion of Damages resulting from a breach of a representation or warranty under this Agreement is tax-deductible for an Indemnified Person or any of its Affiliates, the indemnification payable by the relevant Indemnifying Person hereunder shall be reduced by the tax rate applicable in the relevant jurisdiction at the time of indemnification.

(e) Right to Remedy. An Indemnifying Person who is in default under the terms of this Agreement shall have the right to remedy the subject of a claim for Damages after receiving notice of such claim from the Indemnified Person, provided the remedy takes place within thirty (30) calendar days after the Indemnifying Person’s receipt of the Indemnified Person’s notice. The Indemnifying Person shall not be liable pursuant to this Section 10 for any breach to the extent that the subject of such claim has been so remedied by or on behalf of the Indemnifying Person within the aforementioned time period.

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(f) Sole Source of Liability. Chyron, its Subsidiaries, Hego, its Subsidiaries and the Sellers have not provided any other warranties than the warranties set forth in Section 5, Section 5A, Section 3 and Section 4, respectively, and shall not be liable in respect of any warranty, representation, indemnity, covenant, undertaking, certificate, obligation toward third parties, liability under any statute (including but not limited to the Swedish Sale of Goods Act (Sw. köplagen), legal principle or otherwise arising out of, or in connection with, the warranties given under this Agreement, except where the same is expressly contained in this Agreement; provided, for the absence of doubt and subject to Section 10.6(g), that the Sellers shall only be liable with regard to the representations and warranties contained in Section 4.4, and Chyron shall only be liable with regard to the representations and warranties contained in Section 5.24. Hego shall not be liable for any of its representations and warranties and the only remedy available to Chyron, Chyron US and Chyron AB in case of a breach of any Hego representations or warranties shall be not to close the transaction contemplated by this Agreement in accordance with Section 10. Hego shall have no liability in case of such termination.

(g) No Limitation In Case of Fraud. Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement shall limit the liability in the kinds of remedies or amounts of recovery or otherwise against Chyron with respect to Fraud by Chyron, Chyron US or Chyron AB, or Hego or a Seller with respect to Fraud by Hego or such Seller, as the case may be. A party is only liable for its own Fraud and not the Fraud of any other party.

11. GENERAL PROVISIONS.

11.1 Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly delivered and received: (i) upon receipt if delivered personally; (ii) three (3) business days (or five (5) business days if notice is from a party in one national jurisdiction to a party in another national jurisdiction) after being mailed by airmail, postage prepaid; (iii) one (1) business day after it is sent by commercial overnight courier service or (iv) upon transmission if sent via facsimile or electronic mail with confirmation of receipt at the following address (or at such other address for a party as shall be specified upon like notice):

(a) if to Chyron, Chyron US or Chyron AB, to:

Chyron Corporation

5 Hub Drive

Melville, New York 11747

Attention: Michael Wellesley-Wesley, CEO

e-mail: MWW@chyron.com

with a copy to:

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Chrysler Center

666 Third Avenue

New York, New York 10017

Attention: Daniel L. DeWolf

e-mail: DDeWolf@mintz.com

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(b) if to Hego, to:

Hego Aktiebolag

Johan Apel, CEO

Tegeluddsvägen 3

SE-115 41 Stockholm, Sweden

e-mail: johan.apel@hegogroup.com

with a copy to:

Wistrand Advokatbyrå

Regeringsgatan 65

PO Box 7543

SE 103 93 Stockholm, Sweden

Attention: Robert Kullgren

e-mail: robert.kullgren@wistrand.se

Westhill Group AB

Att: Johan Apel

11.2 Taking of Necessary Action; Further Action. Each of Chyron, Chyron AB, Chyron US, Hego and each Seller shall take all such reasonable and lawful action as may be necessary or useful in order to effectuate the Stock Sale in accordance with this Agreement as promptly as possible. If, at any time after the Closing, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest Chyron AB, post-Closing, with full right, and title to the Capital Stock, the officers and directors of Hego are fully authorized in the name of their respective corporations or otherwise to take, and will take, all such lawful and necessary action, so long as such action is not inconsistent with this Agreement. If, at any time after the Closing, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest each Seller, post-Closing, with full right, title and possession to its Closing Shares and Earn-Out Shares (if earned), the officers and directors of Chyron and Chyron AB are fully authorized in the name of their respective corporations or otherwise to take, and will take, all such lawful and necessary action, so long as such action is not inconsistent with this Agreement.

11.3 LIMITATION OF LIABILITY. NONE OF THE PARTIES HERETO SHALL BE LIABLE FOR INCIDENTAL, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES PURSUANT TO THIS AGREEMENT, THE STOCK SALE OR ANY OF THE OTHER TRANSACTIONS CONTEMPLATED HEREBY. As of and following the Closing, neither Chyron nor Chyron AB shall have any liabilities pursuant to the Stock Sale or this Agreement or the transactions contemplated hereby other than for (a) payment of the Stock Sale Consideration pursuant to the terms of this Agreement, and (b) the indemnification obligations set forth in Section 10 and Section 7. As of and following the Closing, the Sellers shall have no liabilities pursuant to the Stock Sale or this Agreement or the transaction contemplated hereby other than for their indemnification obligations set forth in Section 10. As of and following the Closing, Hego shall not have any liabilities pursuant to the Stock Sale or this Agreement or the transactions contemplated hereby. Hego and the Sellers’ sole and exclusive liability under this Agreement is explicitly and exhaustively described in this Agreement and consequently, neither Hego nor the Sellers shall have any other liability under this Agreement based on any other warranty, implied or expressed, or any other agreement, contract, statute, including under the Swedish Sale of Goods Act (Sw. Köplagen, 1990:931), or legal theory or any other ground.

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Chyron, Chyron US and Chyron AB, on the one hand, and Hego on the other hand, have been invited to carry out a legal, business, financial, contractual and accounting investigation of Hego and its Subsidiaries, and Chyron and its Subsidiaries, respectively. They have each carried out such respective investigations, during which (a) Chyron, Chyron US and Chyron AB have had access to the Electronic Data Room where they have been given the opportunity to review all documents included in the Electronic Data Room as of the date of this Agreement and other material made available by Hego; (b) Hego has been given access to the Chyron SEC Documents as of the date of this Agreement and other materials made available by Chyron, (c) each such party has had the opportunity to pose questions in relation to such documents; and (d) each such party has had the opportunity to interview any person holding a management position in the other party. The above-referenced investigation conducted by Chyron, Chyron US and Chyron AB, on the one hand, and Hego on the other hand, is hereinafter referred to as the “Due Diligence Investigation”.

Chyron, Chyron US and Chyron AB agree that the representations and warranties given by Hego and the Sellers respectively in Section 3 and Section 4 do not release Chyron, Chyron US and Chyron AB from their duty to investigate Hego and its Subsidiaries and that neither Hego nor the Sellers shall have any liability for any breach of any representation or warranty if matters relating to such breach is:

(i) contained or referred to in this Agreement or in the Electronic Data Room; or

(ii) known by Chyron, Chyron US and Chyron AB or by any of their directors, officers, or employees involved in the acquisition of Hego and its Subsidiaries (whether by the Due Diligence Investigation or any investigation made by or on behalf of them into the affairs of Hego or its Subsidiaries or otherwise).

Hego agrees that the representations and warranties given by Chyron, Chyron US and Chyron AB respectively in Section 5 and Section 5A do not release Hego from their duty to investigate Chyron, Chyron US, Chyron AB and Chyron’s Subsidiaries and that none of Chyron, Chyron US, or Chyron AB shall have any liability for any breach of any representation or warranty if matters relating to such breach is:

(i) contained or referred to in this Agreement or in the Chyron SEC Documents; or

(ii) known by Hego or by any of its directors, officers or employees involved in this transaction (whether by the Due Diligence Investigation or any investigation made by or on behalf of them into the affairs of Chyron, Chyron US, Chyron AB, or Chyron’s Subsidiaries or otherwise).

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11.4 Counterparts. This Agreement may be executed in one or more counterparts (delivered via electronic mail), all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.

11.5 Entire Agreement; Parties in Interest; Assignment. This Agreement and the documents and instruments and other agreements specifically referred to herein (including but not limited to the Confidentiality Agreement) or delivered pursuant hereto, including but not limited to the Exhibits and Schedules hereto, together constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, between or among the parties with respect to the subject matter hereof, except for the Confidentiality Agreement, which shall continue in full force and effect, and shall survive any termination of this Agreement or the Closing, in accordance with its terms. No party to this Agreement, nor any of their respective Affiliates, representatives or agents, is making any representation or warranty whatsoever, oral or written, express or implied, other than those set forth in this Agreement including but not limited to the Exhibits and Schedules hereto. The terms and provisions of this Agreement are intended solely for the benefit of each party hereto, and it is not the intention of the parties hereto to confer third-party beneficiary rights. This Agreement shall not be assigned by any party hereto by operation of law or otherwise without the written consent of the other parties hereto.

11.6 Severability. In the event that any provision of this Agreement or the application thereof becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement shall continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.

11.7 Remedies Cumulative. Except as otherwise provided herein, any and all remedies expressly conferred in this Agreement upon a party will be deemed cumulative with and not exclusive of any other remedy expressly conferred by this Agreement, and the exercise by a party of any one remedy under this Agreement will not preclude the exercise of any other remedy expressly conferred by this Agreement.

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11.8 Governing Law; Dispute Resolution. This Agreement and the transactions contemplated hereby shall be governed by the laws of Sweden, without reference to conflict of laws principles. Subject to the provisions of Section 2.3(c) in the case of any disagreement regarding Earn-Out Consideration and except as provided in the last sentence of this Section 11.8, the parties hereto agree that the legal place of any arbitration at the London Court of International Arbitration shall be London, United Kingdom (the “LCIA”), under the Rules of the LCIA for non-domestic arbitration, as the means for resolving any disputes arising in connection with this Agreement, the Stock Sale or any of the other transactions contemplated hereby, including without limitation any dispute regarding the existence, validity or termination of this Agreement; provided that any party hereto disagreeing with another party hereto as to any matter related to this Agreement, the Stock Sale or any of the other transactions contemplated hereby shall first notify the other party of such disagreement by written notice, stating the matter or matters in dispute and the notifying party’s basis for disagreement. The parties in disagreement shall thereafter mutually diligently and in good faith endeavor to resolve the disagreement through discussion; provided that, if they are unable to do so within thirty (30) days after the receipt of such notice, any party to such dispute may then submit the matter or matters in dispute to the LCIA for resolution, by written notice to the other party and the LCIA. Unless the parties in disagreement agree to a single arbitrator, each party in disagreement shall appoint one (1) arbitrator, and one (1) additional arbitrator shall be appointed by LCIA (together, the “Arbitration Panel”). The single arbitrator or the Arbitration Panel shall be authorized to award fees and expenses in accordance with the single arbitrator’s or the Arbitration Panel’s determination as to the relative extent to which the parties respectively prevailed in the arbitration of the matter or matters in dispute and such other factors or considerations as the single arbitrator or the Arbitration Panel may determine relevant, in the single arbitrator’s or the Arbitration Panel’s sole judgment; provided that, if and to the extent that the single arbitrator or the Arbitration Panel declines to award fees and expenses, the parties in disagreement shall bear their respective fees and expenses incurred in connection with such arbitration. The language to be used in the arbitration proceedings shall be English. The arbitration proceedings and any outcome thereof shall be kept confidential except as Chyron, Hego and the Sellers’ Representative may agree or as any party, after consultation with its outside legal counsel, determines is required by law or legal process. The parties in disagreement shall enter into any engagement letter reasonably required by the LCIA. A determination by the single arbitrator or the Arbitration Panel as to the resolution of any matter or matters in dispute (including any procedural matter) and any additional determination as to the award of fees and expenses shall be binding and conclusive upon the parties. Notwithstanding the foregoing, any party may seek and, if entitled, obtain from a court of competent jurisdiction, interim relief, such as an injunction or order requiring another party to perform or observe its obligations under this Agreement.

11.9 Amendment; Waiver. This Agreement may be amended and any provision hereof may be waived at any time, in each case, only by execution of an instrument in writing signed by Chyron, Hego and the Sellers’ Representative (if the amendment or waiver occurs prior to the Closing) or Chyron and the Sellers’ Representative (if the amendment or waiver occurs after the Closing). The Sellers shall be bound by any amendment or waiver signed by the Sellers’ Representative. The failure of a party to exercise any of its rights hereunder or to insist upon strict adherence to any term or condition hereof on any one occasion shall not be construed as a waiver or deprive that party of the right thereafter to insist upon strict adherence to the terms and conditions of this Agreement at a later date. Further, no waiver of any of the terms and conditions of this Agreement shall be deemed to or shall constitute a waiver of any other term of condition hereof (whether or not similar) unless explicitly waived.

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IN WITNESS WHEREOF, Chyron, Chyron Holdings, Inc., Chyron AB, Hego, the Sellers and the Sellers’ Representative have executed and delivered this Agreement, by their duly authorized respective officers in the cases of Chyron, Chyron Holdings, Inc., Chyron AB and Hego, all as of the date first written above.

CHYRON CORPORATION


By:	/s/ Michael Wellesley-Wesley
	Name: Michael Wellesley-Wesley
	Title: CEO

CHYRON HOLDINGS, INC.


By:	/s/ Michael Wellesley-Wesley
	Name: Michael Wellesley-Wesley
	Title:


CHYRON AKTIEBOLAG


By:	/s/ Michael Wellesley-Wesley
	Name: Michael Wellesley-Wesley
	Title:


HEGO AKTIEBOLAG


By:	/s/ Johan Apel
	Name: Johan Apel
	Title: CEO


SELLERS’ REPRESENTATIVE
Westhill Group AB


By:	/s/ Johan Apel
	Name: Johan Apel

A- 61

On behalf of the following Sellers:

Mucki Heyman

Stefan Fjellsten

Maxflyt AB

Ulf Bengtsson

Jesper Gawell

Peter Eriksson

Westhill Group AB

Oskar Norrman

Tomas Eriksson

Orange House AB

Tomas Bastinec

Marek Fort

Ian Wray

Timo Lapinoja

Maria Holm

Karin Dahl

Carl Lundmark

Charlotta Mallander

Mattias Edqvist

Christian Nylund

Eric Hayman

A- 62

Guarantee (Sw. Proprieborgen)

Chyron Corporation hereby irrevocably and unconditionally guarantees, as for its own debt (Sw. såsom för egen skuld), the full and timely performance by Chyron US and Chyron AB of all of their obligations under the Agreement.

This guarantee shall be governed by and construed in accordance with the laws of Sweden without reference to conflict of laws principles. Any dispute concerning or arising out of this guarantee, including without limitation its validity, scope, application or interpretation, shall be settled in accordance with the provisions of Section 11.8 of the Agreement.

Place: Melville, New York

Date: March 9, 2013

CHYRON CORPORATION


By:	/s/ Michael Wellesley-Wesley
	Name: Michael Wellesley-Wesley
	Title: CEO

A- 63

Exhibit A

Form of Transaction Support and Lock-Up Agreement

[See Annex E]

A- 64

Exhibit B

Form of General Power-of-Attorney

[Attached]

A- 65

GENERAL POWER OF ATTORNEY

The undersigned, authorized signatories of Hego AB, corp. reg. no 556074-9730 (the “Company”), hereby authorizes [name], to manage and represent all financial and other interests of the Company in Sweden and abroad.

This General Power of Attorney thus includes authorization, on behalf of the undersigned, independently and without limitations to negotiate any and all matters with authorities, individuals or legal entities, to enter into agreements or contracts of any kind, to receive and give receipt for payment, and further to represent the interests of the undersigned in all other respects and generally to take all such measures or actions as may legally be taken by the undersigned.

This power of attorney is issued due to changes in the shareholding of the Company. The power of attorney is valid from the execution hereof until and including the day on which new directors of the board and new signatories of the Company have been registered with the Swedish Companies Registrations Office (SW: Bolagsverket).

This General Power of Attorney shall be governed by and construed in accordance with the laws of Sweden

Place:

Date:


Hego AB



Johan Apel		[name]

A- 66

Annex B

CONSOLIDATED FINANCIAL STATEMENTS OF CHYRON

Index to Consolidated Financial Statements

Financial Statements:	Page

Report of BDO USA, LLP, Independent Registered Public Accounting Firm	B-2

Consolidated Balance Sheets at December 31, 2012 and 2011	B-3

Consolidated Statements of Operations for the Years Ended December 31, 2012 and 2011	B-4

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2012 and 2011	B-5

Consolidated Statements of Cash Flows for the Years Ended December 31, 2012 and 2011	B-6

Consolidated Statements of Shareholders' Equity for the Years Ended December 31, 2012 and 2011	B-7

Notes to the Consolidated Financial Statements	B-8

B-1

Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

Chyron Corporation

Melville, New York

We have audited the accompanying consolidated balance sheets of Chyron Corporation as of December 31, 2012 and 2011 and the related consolidated statements of operations, comprehensive income (loss), shareholders' equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Chyron Corporation at December 31, 2012 and 2011, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ BDO USA, LLP

Melville, New York

March 7, 2013

B-2

CHYRON CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

	December 31,
Assets	2012			2011
Current assets:
Cash and cash equivalents	$	2,483		$	4,216
Accounts receivable, net		5,630			5,727
Inventories, net		2,285			2,132
Deferred taxes		-			2,508
Prepaid expenses and other current assets		626			792
Total current assets		11,024			15,375

Property and equipment, net		1,347			1,620
Intangible assets, net		559			658
Goodwill		2,066			2,066
Deferred taxes		-			15,994
Other assets		119			93
TOTAL ASSETS	$	15,115		$	35,806

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued expenses	$	3,100		$	3,847
Deferred revenue		3,637			3,203
Current portion of pension liability		278			783
Current portion of term loan		280			135
Capital lease obligations		20			38
Total current liabilities		7,315			8,006

Pension liability		3,873			2,664
Deferred revenue		1,198			765
Term loan		397			-
Other liabilities		351			329
Total liabilities		13,134			11,764

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 – 17,135,239 and 16,639,704 at December 31, 2012 and 2011, respectively		171			166
Additional paid-in capital		84,539			83,407
Accumulated deficit		(80,404	)		(58,103	)
Accumulated other comprehensive loss		(2,325	)		(1,428	)
Total shareholders' equity		1,981			24,042
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	15,115		$	35,806

See Notes to Consolidated Financial Statements

B-3

CHYRON CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

	Years Ended December 31,
	2012			2011

Product revenues	$	21,674		$	23,877
Service revenues		8,548			7,710
Total revenues		30,222			31,587

Cost of sales		9,319			9,473
Gross profit		20,903			22,114

Operating expenses:
Selling, general and administrative		17,209			17,287
Research and development		7,443			6,775

Total operating expenses		24,652			24,062

Operating loss		(3,749	)		(1,948	)

Interest expense		(28	)		(37	)
Other income, net		15			16

Loss before income taxes		(3,762	)		(1,969	)
Income tax expense, net		(18,539	)		(2,277	)

Net loss	$	(22,301	)	$	(4,246	)

Net loss per share:
Basic	$	(1.31	)	$	(0.26	)
Diluted	$	(1.31	)	$	(0.26	)

Weighted average shares used in computing net loss per share:
Basic		16,961			16,458
Diluted		16,961			16,458

See Notes to Consolidated Financial Statements

B-4

CHYRON CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

	Years Ended December 31,
	2012			2011

Net loss	$	(22,301	)	$	(4,246	)

Other comprehensive (loss) income:

Deferred pension loss, net of tax of of $0 and $519, respectively		(910	)		(940	)

Cumulative translation adjustment		13			(1	)

Comprehensive loss	$	(23,198	)	$	(5,187	)

See Notes to Consolidated Financial Statements

B-5

CHYRON CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Years Ended December 31,
	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(22,301	)	$	(4,246	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		919			975
Deferred tax asset allowance		19,475			2,724
Deferred income tax benefit		(974	)		(495	)
Share-based compensation expense		938			1,005
Shares issued for 401(k) match		288			265
Inventory provisions		85			109
Other		(63	)		(16	)
Changes in operating assets and liabilities:
Accounts receivable		97			(1,586	)
Inventories		(238	)		(79	)
Prepaid expenses and other assets		127			(12	)
Accounts payable and accrued expenses		(747	)		865
Deferred revenue		867			480
Other liabilities		(164	)		(177	)
Net cash used in operating activities		(1,691	)		(188	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment		(546	)		(915	)
Net cash used in investing activities		(546	)		(915	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from term loan		700			-
Payments on term loan		(159	)		(325	)
Proceeds from exercise of stock options		1			112
Payments on capital lease obligations		(38	)		(33	)
Net cash provided by (used in) financing activities		504			(246	)

Change in cash and cash equivalents		(1,733	)		(1,349	)
Cash and cash equivalents at beginning of year		4,216			5,565
Cash and cash equivalents at end of year	$	2,483		$	4,216

SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid	$	15		$	36
Taxes paid		29			50
Deferred pension loss, net of tax in 2011		910			940

See Notes to Consolidated Financial Statements

B-6

CHYRON CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(In thousands)

											Accumulated
					Additional						Other
	Common Stock				Paid-In			Accumulated			Comprehensive
	Shares		Amount		Capital			(Deficit)			Income (loss)			Total

Balance at January 1, 2011		16,054	$	161	$	81,793		$	(53,857	)	$	(487	)	$	27,610

Net loss									(4,246	)					(4,246	)

Other comprehensive loss												(941	)		(941	)

Share-based compensation						1,005									1,005

Shares issued upon exercise of stock
options		105		1		90									91


Shares issued for vesting of restricted stock units and restricted stock		350		3		255									258

Shares issued for 401(k) match		130		1		264									265

Balance at December 31, 2011		16,639		166		83,407			(58,103	)		(1,428	)		24,042

Net loss									(22,301	)					(22,301	)

Other comprehensive loss												(897	)		(897	)

Share-based compensation						938									938

Shares issued upon exercise of stock options		2				1									1

Shares issued for vesting of restricted stock units and restricted stock		261		3		(93	)								(90	)

Shares issued for 401(k) match		233		2		286									288

Balance at December 31, 2012		17,135	$	171	$	84,539		$	(80,404	)	$	(2,325	)	$	1,981

See Notes to Consolidated Financial Statements

B-7

CHYRON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Chyron is a provider of Graphics as a Service for on-air and digital video applications including newsrooms, studios, sports broadcasting facilities, and corporate video environments. Chyron's graphics solutions include the Axis World Graphics online content creation software and order management system, on-air graphics systems, clip servers, channel branding, and graphics asset management solutions, and social media editors, all of which may be incorporated into the Company's BlueNet™ end-to-end graphics workflow.

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany amounts have been eliminated.

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. Estimates made by management include inventory valuations, stock compensation, allowances for doubtful accounts, income taxes, pension assumptions and reserves for warranty and incurred but not reported health insurance claims. Actual results could differ from those estimates. The Company has not segregated its cost of sales between costs of products and costs of services as it is not practicable to segregate such costs. Certain prior amounts have been reclassified to conform to the current year presentation.

Cash and Cash Equivalents

Cash includes cash on deposit, overnight repurchase agreements, and amounts invested in highly liquid money market funds. Cash equivalents consist of short term investments with original maturities of three months or less. Cash and cash equivalents include $1.7 million and $3.7 million of investments in overnight repurchase agreements at December 31, 2012 and 2011, respectively. Repurchase agreements are collateralized by U.S. Treasury and federal agency securities with a fair value of 102% of the securities sold. This credit risk is divided among five financial institutions that management believes to be of high quality. The carrying amount of cash and cash equivalents approximates their fair value.

B-8

Accounts Receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest. Accounts receivable are stated net of an allowance for doubtful accounts. Our allowance for doubtful accounts considers historical experience, the age of amounts due, current economic conditions and other factors that may affect customers' ability to pay.

Inventories

Inventories are stated at the lower of cost or market, cost being determined primarily on the basis of FIFO and average cost. The need for inventory obsolescence provisions is evaluated by the Company and when appropriate, reserves for technological obsolescence, non-profitability of product lines and excess quantities are established.

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:

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

When assets are retired or disposed of, the assets and related accumulated depreciation are removed from the accounts and the resulting gain or loss is reflected in operations.

Capitalized Software Costs

For development costs related to the Company's on line web-based solutions, the Company capitalizes costs incurred during the application development stage. Costs related to preliminary project activities and post implementation activities were expensed as incurred. The Company has not capitalized any software development costs for the years ended December 31, 2012 and 2011.

Self Insurance

The Company is self-insured for healthcare costs up to certain stop-loss limits. Such costs are accrued based on known claims and an estimate of incurred, but not reported ("IBNR") claims. IBNR claims are estimated using historical lag information and other data provided by claims administrators. This estimation process is subjective, and to the extent that future actual results differ from original estimates, adjustments to recorded accruals may be necessary.

B-9

Research, Development and Engineering

Technological feasibility for the Company's products is reached shortly before the products are released to manufacturing. Consequently, costs incurred after technological feasibility is established have not been material, and accordingly, the Company expenses all research and development costs when incurred. The Company re-evaluates the materiality of these costs on an on-going basis. Research and development costs include wages and other personnel costs, material costs and an allocation of certain indirect costs related to facilities.

Long-Lived Assets and Intangible Assets

Long-lived assets and certain identifiable intangible assets to be held and used are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written down to their estimated fair values. There was no impairment of long-lived assets and intangible assets for the years ended December 31, 2012 and 2011.

Goodwill

Goodwill is not amortized, but is tested at least annually, on October 1, for impairment at the reporting unit level. The reporting unit is the single operating segment presented in these financial statements. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The first step in the impairment process is to determine the fair value of the reporting unit and then compare it to the carrying value, including goodwill. If the fair value exceeds the carrying value, no further action is required and no impairment loss is recognized. Additional impairment assessments may be performed on an interim basis if the Company encounters events or changes in circumstances that would indicate that, more likely than not, the carrying value of goodwill has been impaired. There was no impairment of goodwill in 2012.

Revenue Recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, title has transferred, product payment is not contingent upon installation or other service obligations, the price is fixed and determinable, and collectability is reasonably assured. This condition is normally met when the product has been delivered or upon performance of services. In instances where final acceptance of the product or service is specified by the customer, revenue is deferred until all acceptance criteria have been met.

B-10

The Company also enters into arrangements that contain multiple elements such as equipment, installation and service. For multiple-element arrangements, revenue is recognized based on an allocation of the total amount of the arrangement to each deliverable based on fair value. Fair value is determined using vendor-specific objective evidence ("VSOE") if available, third-party evidence ("TPE") if VSOE is not available, or best estimate of selling price ("BESP") if neither VSOE or TPE is available. BESP must be determined in a manner that is consistent with that used to determine the price to sell the specific elements on a standalone basis. The Company's best estimate of selling price is established considering multiple factors including, but not limited to, pricing practices in different geographies and through different sales channels, gross margin objectives, competitor pricing pressures and other factors contemplated in negotiating the arrangement with the customer.

Revenue from training, installation and services is recognized upon the performance of services. The Company also provides one year maintenance contracts with certain equipment sales and defers a portion of the revenue from the equipment sale based on the relative fair value as determined above. Multiple year maintenance contracts are also offered. Deferred maintenance revenue is recognized ratably, on a straight line basis over the contract period, generally one to three years.

In connection with the Company's on-line web-based solutions, the Company recognizes revenue on a monthly basis for use of its subscription based products. The Company recognizes set-up or other up-front fees, if any, ratably over the longer of the contract or the expected customer relationship period, generally one to three years. Revenues from these web-based solutions are included in service revenues in the Company's statements of operations.

Approximately 35% and 32% of 2012 and 2011 consolidated revenues, respectively, were made through third-party dealers and system integrators (collectively, dealers). The Company recognizes revenue from sales to dealers when the product is shipped and all other revenue recognition criteria are met.

Shipping and Handling Fees and Costs

All amounts billed to a customer in a sales transaction related to shipping and handling represent revenues earned and are reported as revenue, and the costs incurred by the Company for shipping and handling are reported as a component of cost of sales.

Advertising Costs

Advertising costs are expensed as incurred. Advertising expense was $74 thousand in 2012 and $96 thousand in 2011.

Income Taxes

We account for income taxes under an asset and liability approach, which recognizes deferred tax assets and liabilities based on the difference between the financial reporting and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the net deferred tax assets will not be realized.

B-11

The Company recognizes tax benefits associated with the exercise of stock options directly to stockholders' equity only when realized. A tax benefit occurs when the actual tax benefit realized by the Company upon an employee's disposition of a share-based award exceeds the deferred tax asset, if any, associated with the award that the Company had recorded. When assessing whether a tax benefit relating to share-based compensation has been realized, the Company follows the tax law ordering method, under which current year share-based compensation deductions are assumed to be utilized before net operating loss carryforwards and other tax attributes.

The Company recognizes the financial statement impact of tax positions, taken or expected to be taken, utilizing a more-likely-than not recognition threshold. We also recognize any interest and penalties related to tax uncertainties as income tax expense. At December 31, 2012 there are no unrecognized tax benefits, or related accrued interest and penalties, recorded in the financial statements.

Sales Taxes

We account for sales taxes imposed on the Company's goods and services on a net basis in the Company's Consolidated Statements of Operations. Since the Company primarily acts as an agent for the governmental authorities, the amount charged to the customer is collected and remitted directly to the appropriate jurisdictional entity.

Foreign Currencies

Assets and liabilities of the Company's foreign subsidiary, which are of immaterial amounts, are translated into U.S. dollars at the period end rate of exchange, while revenues and expenses are translated at the average exchange rate during the period. Adjustments from translating the Company's foreign subsidiary's financial statements are reported as a component of other comprehensive income or loss. Transaction gains or losses are included in other income and expense, net. The net impact of foreign exchange transactions for the years ended December 31, 2012 and 2011 were gains of $13 thousand and $16 thousand, respectively.

Earnings (Loss) Per Share

Basic earnings (loss) per share is computed based on the weighted average number of common shares outstanding. Diluted earnings per share is based on the sum of the weighted average number of common shares outstanding and common stock equivalents. Potentially dilutive shares are excluded from the computation of diluted earnings per share when their effect is anti-dilutive. Shares used to calculate earnings (loss) per share are as follows (in thousands):

B-12

	Years Ended December 31,
	2012		2011
Basic weighted average shares outstanding		16,961		16,458
Effect of dilutive stock options		-		-
Diluted weighted average shares outstanding		16,961		16,458

Weighted average shares which are not included in the calculation of diluted earnings per share because their impact is antidilutive
Stock options		3,087		1,361
Restricted stock units		173		510

Other Comprehensive Loss

The Company reports comprehensive income (loss) in accordance with ASC 220-10. ASC 220-10 establishes guidelines for the reporting and display of comprehensive income (loss), net income (loss) and its components in financial statements. Included in other comprehensive loss for the Company is a charge for deferred losses on the Company's pension plan and translation adjustments related to the Company's foreign subsidiary.

Share-Based Compensation

The Company's share-based compensation programs consist of grants of share-based awards to employees and non-employee directors, including stock options, restricted stock, restricted stock units and other equity awards. The estimated fair value of these awards, including the effect of forfeitures, is charged to income over the requisite service period, which is generally the vesting period.

The fair value of stock options is estimated at the grant date using the Black-Scholes option valuation model. The fair value of restricted stock units is based on the market value of the Company's common stock on the date of grant.

Fair Value Measurements

Financial assets and liabilities are classified as Level 1, 2 or 3 within the fair value hierarchy. Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs utilize unobservable data points for the asset or liability.

B-13

Retirement-Related Benefits

The Company recognizes in its balance sheet as an asset or liability the overfunded or underfunded status of its defined benefit plan. This asset or liability is measured as the difference between the fair value of plan assets and the benefit obligation of the plan. For the pension plan, the benefit obligation is the projected benefit obligation, which is calculated based on actuarial computations of current and future benefits for employees. Actuarial gains or losses and prior service costs or credits that arise during the period, but are not included as components of net periodic benefit (expense), are recognized as a component of Accumulated Other Comprehensive Income (Loss). Pension expense is charged to operating expenses.

Recent Accounting Pronouncements

In July 2012, the Financial Accounting Standards Board issued Accounting Standard Update No. 2012-01, Testing Indefinite-Lived Intangible Assets for Impairment. This guidance gives companies the option to perform a qualitative assessment to determine whether it is more likely than not that an asset might be impaired and whether it is necessary to perform a quantitative test. The updated accounting guidance is effective for fiscal years beginning after September 15, 2012, with early adoption permitted. The Company believes that this guidance will have no impact on its consolidated financial statements.

2. ACCOUNTS RECEIVABLE

Accounts receivable are stated net of an allowance for doubtful accounts of $0.40 million at December 31, 2012 and 2011. Accounts receivable are principally due from customers in, and dealers serving, the broadcast video industry. At December 31, 2012 and 2011, receivables included approximately $2.2 million and $1.4 million, respectively, due from foreign customers.

Bad debt expense amounted to zero in 2012 and 2011. We record an allowance for doubtful accounts based on specifically identified amounts that management believes to be uncollectible and an additional allowance based on historical experience and management's assessment of the general financial conditions affecting the Company's customer base. We also evaluate the credit worthiness of the Company's customers and determine whether collateral (in the form of letters of credit or credit insurance) 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.

3. INVENTORIES

Inventory is comprised of the following (in thousands):

	December 31,
	2012		2011
Finished goods	$	465	$	653
Work-in-progress		468		170
Raw material		1,352		1,309
	$	2,285	$	2,132

Inventories are stated net of reserves of approximately $5.1 million and $5.0 million at December 31, 2012 and 2011, respectively.

B-14

4. GOODWILL AND INTANGIBLE ASSETS

The carrying amount of goodwill is not amortized but subject to annual impairment testing at the reporting unit level. We evaluate goodwill for impairment on October 1, or more frequently if impairment indicators are present. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The first step in the impairment process is to determine the fair value of the reporting unit and then compare it to the carrying value, including goodwill. We determined that the market capitalization approach is the most appropriate method of measuring fair value of the reporting unit, assuming a controlling interest. Under this approach, fair value is calculated based on the market price of common stock, multiplied by the number of outstanding shares. A control premium, which is representative of premiums paid in the marketplace to acquire a controlling interest in a company, is then added to the market capitalization to determine the fair value of the reporting unit. If the fair value exceeds the carrying value, no further action is required and no impairment loss is recognized. We monitor changes in the Company's closing market price and its effect on fair value and the relationship to the carrying value. Additional impairment assessments may be performed on an interim basis if the Company encounters events or changes in circumstances that would indicate that, more likely than not, the carrying value of goodwill has been impaired. During the years ended December 31, 2012 and 2011, the Company did not identify any potential impairment related to its goodwill.

The components and estimated useful lives of intangible assets as of December 31, 2012 and 2011 are stated below. Amortization is provided on a straight line method, or in the case of customer relationships, on an accelerated method, over the following estimated useful lives (in thousands):

	2012
	Gross Amount		Accumulated Amortization		Net Amount		Estimated Useful Life (years)
Tradenames	$	304	$	101	$	203	15
Proprietary technology		620		310		310	10
Non-compete agreement		25		25		-	3
Customer relationships		170		138		32	10
Domain name and related website		23		9		14	15
	$	1,142	$	583	$	559

	2011
	Gross Amount		Accumulated Amortization		Net Amount		Estimated Useful Life (years)
Tradenames	$	304	$	81	$	223	15
Proprietary technology		620		248		372	10
Non-compete agreement		25		25		-	3
Customer relationships		170		123		47	10
Domain name and related website		23		7		16	15
	$	1,142	$	484	$	658

B-15

Amortization expense related to intangible assets for the years ended December 31, 2012 and 2011 was $99 thousand and $105 thousand, respectively. Annual amortization expense, in thousands, for intangible assets over the next five years ending December 31 is summarized as follows (in thousands):

2013	$	95
2014		92
2015		89
2016		88
2017		87
Thereafter		108

5. PROPERTY AND EQUIPMENT

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

	December 31,
	2012		2011
Machinery and equipment	$	5,194	$	4,755
Furniture and fixtures		1,129		1,047
Leasehold improvements		167		162
		6,490		5,964
Less: Accumulated depreciation and amortization		5,143		4,344
	$	1,347	$	1,620

Depreciation expense, which includes amortization of assets under capital lease, was $0.8 million and $0.9 million in 2012 and 2011, respectively.

The value of equipment recorded under capital leases was approximately $0.15 million at December 31, 2012 and 2011.

6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

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

	December 31,
	2012		2011
Accounts payable	$	1,924	$	2,266
Accrued salaries, and other employee benefits		529		1,013
Accrued warranty (Note 12)		50		50
Accrued medical costs		197		257
Other		400		261
	$	3,100	$	3,847

B-16

7. CREDIT FACILITY

In August 2012, we entered into a loan modification agreement and amended our loan and security agreement (the "Credit Facility") with Silicon Valley Bank ("SVB") to extend the term of the Credit Facility to August 12, 2013, to increase the revolving line of credit (the "Revolving Line") from $1.5 million to $3.0 million, and to add a term loan facility that could be used to purchase equipment up to $1.0 million (the "Term Loan"). At December 31, 2012, available borrowings under the Revolving Line were approximately $2.7 million but no borrowings were outstanding. Advances under the Term Loan were available to be drawn until December 31, 2012 in minimum amounts of $0.25 million. During the fourth quarter of 2012, the Company took two advances of $0.35 million each from the Term Loan and the balance outstanding at December 31, 2012 was $0.68 million. The Term Loan bears interest at Prime +2.25% (6.25% at December 31, 2012) and principal and interest are being repaid over thirty months.

Pursuant to the Credit Facility, we were required to maintain financial covenants based on an adjusted quick ratio ("AQR") of at least 1.2 to 1.0, measured at each calendar month-end, and minimum tangible net worth of $18.5 million, increased by 60% of the sum of the gross proceeds received by us from any sale of our equity or incurrence of subordinated debt and any positive quarterly net income earned, measured at quarter-end (both as defined in the Credit Facility). Due to the significant charge of $19.5 million taken in the fourth quarter of 2012 to increase the valuation allowance for deferred tax assets, we failed the tangible net worth covenant at December 31, 2012, and obtained a waiver from SVB. Additionally, in March 2013 we entered into a loan modification agreement and amended our loan and security agreement (the "Revised Credit Facility") with SVB to modify a financial covenant and decrease the Revolving Line amount. The existing expiration date of the facility remained at August 12, 2013. The same as the Credit Facility, the Revolving Line bears interest at a floating annual rate equal to Silicon Valley Bank's prime rate ("Prime") +1.75%, and the AQR financial covenant remains at 1.2x. The tangible net worth covenant was replaced by a maximum EBITDA loss/profitability covenant (tested at end of each quarter) effective with the first quarter of 2013. The Revolving Line was reduced from $3 million to $2 million, and available borrowings under the Revolving Line was changed from 80% of eligible accounts receivable to 80% of eligible accounts receivable less the amount of principal outstanding under the Term Loan. Additionally, if the Company's AQR falls below 1.5x at any month-end during the remaining term of the facility, then any borrowings under the Revolving Line will be repaid by SVB applying collections from the Company's SVB collateral account (for receipts by wire) and SVB lockbox account (for receipts by check) to reduce the revolving loan balance on a daily basis, until such time as the month-end AQR is again 1.5x or greater. If the AQR at month-end is 1.5x or greater, the Company will maintain a static loan balance and all collections will be deposited into the Company's operating account. As is usual and customary in such lending agreements, the agreements also contain certain non-financial requirements, such as required periodic reporting to the bank and various representations and warranties. The lending agreement also restricts our ability to pay dividends without the bank's consent.

B-17

The Credit Facility was and the Revised Credit facility is collateralized by the Company's assets, except for (i) its intellectual property rights which are subject to a negative pledge arrangement with the bank, and (ii) any equipment whose purchase is financed by any other lender or lessor, solely to the extent the security agreement with such lender or lessor prohibits junior liens on such equipment, and only until the lien held by such lender or lessor is terminated or released with respect to such equipment. As is usual and customary in such lending agreements, the agreements also contain certain nonfinancial requirements, such as required periodic reporting to the bank and various representations and warranties. The lending agreement also restricts the Company's ability to pay dividends without the bank's consent.

In 2009, the Company borrowed to finance capital equipment under the then existing credit facility which resulted in a term loan (the "2009 Term Loan") of $977 thousand payable over 36 months in equal monthly installments of principal plus accrued interest. As of May 2012, the Company had repaid all principal and interest and there was no outstanding balance on the 2009 Term Loan. Interest expense related to the term loans was $7 thousand and $17 thousand for the years ended December 31, 2012 and 2011, respectively.

8. LONG-TERM INCENTIVE PLAN

Pursuant to the 2008 Long-term Incentive Plan (the "Plan"), the Company may grant stock options (non-qualified or incentive), stock appreciation rights, restricted stock and other share-based awards to employees, directors and other persons who serve the Company. The Plan is overseen by the Compensation Committee of the Board of Directors, which approves the timing and circumstances under which share-based awards may be granted. At December 31, 2012 there were 0.8 million shares available to be granted under the Plan. The Company issues new shares to satisfy the exercise or release of share-based awards. Under the provisions of Accounting Standards Codification Topic 718, Stock Compensation, all share-based payments are required to be recognized in the statement of operations based on their fair values at the date of grant.

The fair value of each option award is estimated using a Black-Scholes option valuation model. Expected volatility is based on the historical volatility of the price of the Company's stock. The risk-free interest rate is based on U.S. Treasury issues with a term equal to the expected life of the option. The Company uses historical data to estimate expected dividend yield, expected life and forfeiture rates. Options generally have a life of 10 years and have either time-based or performance-based vesting features. Time-based awards generally vest over a three year period, while the performance-based awards vest upon the achievement of specific performance targets. At December 31, 2012, there were 0.9 million options outstanding that will vest upon the achievement of certain financial conditions for 2013 or will expire if the performance criteria are not met. No expense was recognized for these awards. If in the future it is probable that these awards will be earned, the Company will commence recording an expense for them. The fair values of the options granted during the years ended December 31, 2012 and 2011, were estimated based on the following weighted average assumptions:

B-18

	2012			2011
Expected volatility		71.46	%		70.26	%
Risk-free interest rate		0.58	%		1.36	%
Expected dividend yield		0.00	%		0.00	%
Expected life (in years)		6.00			6.00
Estimated fair value per option granted	$	0.67		$	1.04

The following table presents a summary of the Company's stock options for the year ended December 31, 2012:

	Number of options			Weighted average exercise price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
Outstanding at January 1, 2012		3,224,879			$2.34
Granted		1,576,574			1.45
Exercised		(1,667	)		0.86
Forfeited and cancelled		(505,513	)		1.75
Outstanding at December 31, 2012		4,294,273			2.07		4.70	$	19,266
Exercisable at December 31, 2012		2,551,124			2.51		4.53	$	2,610

The aggregate intrinsic value of options exercised during the year ended December 31, 2012 and 2011 was approximately $1 thousand and $144 thousand, respectively.

The Company also grants restricted stock units, or RSUs, that entitle the holder to a share of Company common stock. The fair value of an RSU is equal to the market value of a share of common stock on the date of grant. All RSUs that are currently outstanding have time-based vesting features over a one to three year period.

The following table presents a summary of the Company's RSU activity for the year ended December 31, 2012:

	Shares			Weighted average grant date fair value
Nonvested at January 1, 2012		528,443		$	2.00
Granted		152,328			1.37
Vested		(327,216	)		1.96
Forfeited and cancelled		(10,394	)		2.21
Nonvested at December 31, 2012		343,161			1.76

B-19

In addition, the Company also has a Management Incentive Compensation Plan that entitles recipients to a combination of cash and equity awards based on achievement of certain performance and service conditions. During 2012 and 2011, there was no expense recognized because no amounts were earned under this plan.

The impact on the Company's results of operations of recording share-based compensation expense for the years ended December 31, 2012 and 2011 is as follows (in thousands):

	2012		2011
Cost of sales	$	75	$	101
Research and development		323		360
Selling, general and administrative		540		544
	$	938	$	1,005

As of December 31, 2012, there was approximately $0.7 million of total unrecognized share-based compensation cost related to stock options or RSUs granted under the Company's plans to employees or for services performed by non-employees that will be recognized over the next three years.

9. INCOME TAXES

The components of deferred income taxes are as follows (in thousands):

	December 31,
	2012			2011
Deferred tax assets:
Net operating loss carryforwards	$	14,491		$	16,728
Inventory		1,769			1,736
Other liabilities		3,055			2,229
Fixed assets		440			452
Other temporary differences		589			625
		20,344			21,770
Deferred tax valuation allowance		(20,344	)		(3,268	)
	$	-		$	18,502

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. At December 31, 2012, the gross deferred tax asset balance was $20.3 million and includes the $14.5 million tax effect of $40.5 million in U.S. Federal net operating loss carryforwards ("NOLs") expiring between 2018 and 2032. In accordance with accounting standards the Company has not recorded a deferred tax asset of approximately $1.0 million related to the NOLs resulting from the exercise of disqualifying stock options.

B-20

Accounting standards require that the Company continually assess the likelihood that its deferred taxes will be realizable. All available evidence, both positive and negative, must be considered in determining whether it is more likely than not that the deferred tax assets will be realized. In making such assessments, significant weight is given to evidence that can be objectively verified. A company's current or previous losses are given more weight than its future outlook. Using that standard, the loss incurred in fiscal 2012 and the consecutive losses in recent preceding fiscal years was a significant negative factor. Also in 2012, approximately $7.5 million of federal net operating losses, which had been fully reserved in 2011 as they were not deemed to be realizable based on management's expectation at such time, expired unutilized. These negative factors, combined with uncertain near-term market and economic conditions, reduced the Company's ability to rely on its projections of future taxable income in determining whether a valuation allowance was required. Accordingly, the Company concluded that a full valuation allowance of $20.3 million was required.

The Company will continue to assess the likelihood that its deferred tax assets will be realizable, and its valuation will be adjusted accordingly, which could materially impact its financial position and results of operations in future periods.

The Company's income tax expense for the years ended December 31, 2012 and 2011, consisted of the following (in thousands):

	2012			2011
Current:
State and foreign	$	(38	)	$	(48	)

Deferred:
State		53			22
Federal		921			473
		974			495
Valuation allowance		(19,475	)		(2,724	)
Income tax expense	$	(18,539	)	$	(2,277	)

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

	2012						2011
	Amount			%			Amount			%

Federal income tax benefit at statutory rate	$	1,279			34.0		$	669			34.0
Permanent differences		(150	)		(4.1	)		(197	)		(10.0	)
International taxes and rate differentials and other		(193	)		(5.0	)		(25	)		(1.2	)
Effect of increase in valuation allowance for deferred tax assets		(19,475	)		(517.7	)		(2,724	)		(138.4	)
	$	(18,539	)		(492.8	)	$	(2,277	)		(115.6	)

B-21

The Company files U.S. federal income tax returns as well as income tax returns in various states and one foreign jurisdiction. It may be subject to examination by the Internal Revenue Service ("IRS") for calendar years 2009 through 2012 under the normal statute of limitations. Additionally, any net operating losses that were generated in prior years and utilized in these years may also be subject to examination by the IRS. Generally, for state tax purposes, the Company's 2008 through 2012 tax years remain open for examination by the tax authorities under a four year statute of limitations, however, certain states may keep their statute open for six to ten years.

10. FAIR VALUE MEASUREMENTS

Financial assets and liabilities at fair value at December 31, 2012 and 2011 are classified in one of the three categories, which are described below.

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers a counterparty credit risk in its assessment of fair value.

The carrying amount of cash and cash equivalents, accounts receivables and accounts payables and other short-term financial instruments approximate their fair value due to their short-term nature. Included in cash equivalents are investments in overnight repurchase agreements which are categorized as level 2 for fair value measurement. The Company believes that borrowings outstanding under its term loan approximate fair value because such borrowings bear interest at current variable market rates. Our term loan is categorized as level 2 for fair value measurement.

Additionally, on a nonrecurring basis, the Company uses fair value measures when analyzing asset impairment. Long-lived assets and certain identifiable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If it is determined such indicators are present and the review indicates that the assets will not be fully recoverable, based on undiscounted estimated cash flows over the remaining amortization periods, their carrying values are reduced to estimated fair value. Measurements based on undiscounted cash flows are considered to be level 3 inputs. During the fourth quarter of each year, the Company evaluates goodwill and indefinite-lived intangibles for impairment at the reporting unit level using the market capitalization approach. Thus, the fair value of the reporting unit is represented by the fair value of the Company, assuming a controlling interest. As such, a premium for control is added to the non-controlling equity value, as calculated by the market price of the Company common stock which is publicly traded. This measurement would be classified based on level 3 input.

B-22

11. BENEFIT PLANS

Chyron 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. The U.S. Pension Plan was closed to new employees that joined the Company on or after October 1, 2006. 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 (ERISA), and, subject to cash flow levels, the Company may choose to make a discretionary contribution to the Pension Plan to reduce the unfunded liability. During 2012, the Company made an additional contribution of $0.39 million in order to exceed an 80% funding level as measured at January 1, 2012. The Company also made required contributions in 2012 of $0.5 million. Based on current assumptions, the Company expects to make approximately $0.3 million in contributions during 2013. The Company uses a December 31 measurement date to determine pension benefit obligations.

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

	2012			2011
Reconciliation of projected benefit obligation:
Obligation at January 1	$	7,535		$	5,866
Service cost		482			401
Interest cost		360			331
Actuarial loss		1,164			1,215
Benefit payments		(62	)		(278	)
Obligation at December 31	$	9,479		$	7,535

Reconciliation of fair value of plan assets:
Fair value of plan assets at January 1	$	4,088		$	3,643
Actual return on plan assets		407			35
Employer contributions		895			688
Benefit payments		(62	)		(278	)
Fair value of plan assets at December 31	$	5,328		$	4,088

Funded Status:
Unfunded status at December 31	$	(4,151	)	$	(3,447	)

Projected benefit obligation	$	9,479		$	7,535
Accumulated benefit obligation		8,701			6,928
Fair value of plan assets		5,328			4,088

Amounts recognized in consolidated balance sheets:
Prior service credit	$	7		$	19
Net loss		(3,093	)		(2,194	)
Accumulated other comprehensive loss		(3,086	)		(2,175	)


Net periodic benefit cost in excess of accumulated contributions		(1,065	)		(1,272	)
Net amount recognized in consolidated balance sheet	$	(4,151	)	$	(3,447	)

B-23

	2012			2011
Components of net periodic pension cost:
Service cost	$	482		$	401
Interest cost		360			331
Expected return on plan assets		(345	)		(294	)
Amortization of net loss		203			39
Amortization of prior service credit		(11	)		(25	)
Net periodic benefit cost		689			452

Other changes in plan assets and benefit obligations recognized in other comprehensive income:
Net loss		1,102			1,473
Amortization of net loss		(203	)		(39	)
Amortization of prior service cost		11			25
Total loss recognized in other comprehensive (income) loss		910			1,459

Total recognized in net periodic benefit cost and other comprehensive (income) loss	$	1,599		$	1,911

In 2013, the Company expects that a net loss of $246 thousand and a prior service cost of $7 thousand will be amortized from accumulated other comprehensive income (loss) into net periodic pension cost.

	2012			2011

Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:
Discount rate		4.61	%		5.61	%
Expected long-term return on plan assets		7.50	%		7.50	%
Rate of compensation increase		(1	)		2.00	%


Weighted-average assumptions used to determine pension benefit obligation as of December 31:
Discount rate		4.03	%		4.61	%
Rate of compensation increase		(1	)		2.00	%

(1) 0.0% in 2012 and 2013, 2.0% thereafter

The assumed expected long-term rate of return on plan assets is an estimate based on the Company's plan investment guidelines which specify the Company's strategic asset allocation, historical performance for the various asset classes in its strategic allocation, and its expectations for long-term rates of return for these various asset classes. The Company recognizes that market performance varies and that its assumed expected long-term rate of return may not be meaningful during some periods. The Company re-evaluates its assumed expected long-term rate of return on plan assets annually through discussion with its plan investment manager. The Company selects that return which it believes best reflects a reasonable expected return on funds invested and to be invested to provide for the benefits included in the projected benefit obligation. The overall investment objective for the pension plan investment portfolio is to achieve the highest level of return with the least amount of risk. The Company's actual pension plan asset allocations at December 31, 2012 and 2011 are as follows:

B-24

	Target Allocation Range				Actual Allocation
Asset Category	2012				2012			2011
Equity securities	60%	(+/- 1	to	5%)		58	%		58	%
Debt securities	35%	(+/- 1	to	5%)		33	%		33	%
Cash and cash equivalents	5%	(+/- 1	to	5%)		9	%		9	%

The following table presents estimated future benefit payments over the next ten years (in thousands):

2013	$	369
2014		220
2015		183
2016		301
2017		412
2018 to 2022		2,995

The amortization of gains and losses is determined by using a 10% corridor of the greater of the market-related value of assets and the projected benefit obligation. Total unamortized gains and losses in excess of the corridor are amortized into income over the average remaining future service. Prior service costs/(benefits) are amortized over the average remaining future service at the time the prior service was established. Average remaining future service as of January 1, 2012 was about 9 years.

The following table sets forth by level, within the fair value hierarchy, the Plan's assets measured at fair value on a recurring basis as of December 31 (in thousands):

	2012
	Level 1		Level 2		Level 3		Total
Government and other fixed income securities	$	601	$	1,158	$	-	$	1,759

Equities		3,063		-		-		3,063
	$	3,664	$	1,158	$	-	$	4,822

	2011
	Level 1		Level 2		Level 3		Total
Government and other fixed income securities	$	335	$	1,013	$	-	$	1,348

Equities		2,386		-		-		2,386
	$	2,721	$	1,013	$	-	$	3,734

B-25

The Company has adopted a 401(k) Plan exclusively for the benefit of participants and their beneficiaries. All U.S. employees of Chyron are eligible to participate in the 401(k) Plan. 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, whichever is less. The Company may make discretionary matching contributions of the compensation contributed by a participant. The discretionary matching contribution is two-thirds of the first 6% of qualifying compensation. The Company has the option of making the matching contributions in cash or through shares of Company common stock. Employees will vest in the matching contributions in equal increments annually over three years. During 2012 and 2011, the Company match was substantially made in the form of newly issued Chyron common stock. As a result, the Company issued 233 thousand and 130 thousand shares of common stock, in lieu of an aggregate cash match of $288 thousand and $265 thousand during 2012 and 2011, respectively.

The Company also has several U.K. employees that are provided with pension benefits through the Chyron International Corporation Group Personal Pension Plan (the "CIC Pension Plan"). Under the CIC Pension Plan, each member has an individual account within the defined contribution plan and the Company contributes monthly an amount equal to approximately 3% of his/her monthly salary.

12. PRODUCT WARRANTY

The Company provides product warranties for its various products, typically for one year. Liabilities for the estimated future costs of repair or replacement are established and charged to cost of sales at the time the sale is recognized. The Company established its reserve based on such historical data, taking into consideration specific product information. The following table sets forth the movement in the warranty reserve (in thousands):

	2012			2011
Balance at beginning of period	$	50		$	50
Provisions		49			38
Warranty services provided		(49	)		(38	)
	$	50		$	50

B-26

13. COMMITMENTS AND CONTINGENCIES

At December 31, 2012, the Company was obligated under operating and capital leases, expiring at various dates through 2019, covering facility space and equipment as follows (in thousands):

	Operating		Capital
2013	$	689	$	20
2014		700		14
2015		682		10
2016		705
2017		728
thereafter		1,196

The operating lease contains provisions for escalations and for facility maintenance. Total rent expense was approximately $0.7 million in each of 2012 and 2011.

The Company has severance arrangements for key and virtually all other employees of the Company that provide for payment of a portion of their salary and continuance of their benefits for their severance period, in the event they are involuntarily terminated. The severance periods range from a week to a number of months depending on the length of service and/or level of the employee within the Company. Had all such key and other covered employees been terminated at December 31, 2012, for a reason other than a change in control, the estimated total severance and benefits would have approximated $2.5 million. In addition, two executive officers have change in control agreements entitling them to certain additional benefits totaling $1.5 million that would be payable in the event of a change in control that resulted in their termination or resignation for good reason.

At December 31, 2012, the Company has firm purchase commitments for inventory components of $2.3 million to be delivered during 2013 and commitments for hosting services of $2.6 million over the next three years.

The Company received a letter of notification, dated March 10, 2011, from counsel for Turner Broadcasting System, Inc., Turner Network Television, Inc., Cable News Network, Inc., and The Cartoon Network, Inc. ("Turner") alleging that the Company is obligated to indemnify Turner as a result of a recently filed patent infringement action against Turner by Multimedia Patent Trust ("MPT") in the United States District Court for the Southern District of California. Chyron supplies various products to Turner. The Company notified Turner that its request is without merit. The Company believes Turner's request for indemnification lacks merit because its products do not infringe any of MPT's patents and it is not obligated to indemnify Turner for those portions of its products that are allegedly involved. Should any of such parts of its products be found to be infringing, then indemnification should lawfully be sought from the Company's outside supplier of such parts and not Chyron. The Company has denied Turner's request. Based on the Company's current knowledge, it believes that the amount of reasonably possible loss or range of loss is not reasonably estimable. Moreover, legal matters are inherently unpredictable and subject to significant uncertainties, some of which are beyond the Company's control. As such, there can be no assurance that the final outcome will not have a material adverse effect upon the Company's financial condition and results of operations.

B-27

The Company is not a party to any other legal proceedings that it believes will have a material impact on its business, financial condition, results of operations or liquidity.

14. SEGMENT AND GEOGRAPHIC INFORMATION

The Company operates and evaluates its business as one reporting unit. Substantially all long-lived assets are located in the United States.

Revenues by geography are based on the country in which the end user customer resides and are detailed as follows (in thousands):

	2012		2011
Revenues from external customers:
North America	$	21,218	$	24,273
Europe, Middle East and Africa (EMEA)		4,254		4,256
Latin America		2,538		2,006
Asia		2,212		1,052
	$	30,222	$	31,587

B-28

Annex C

CONSOLIDATED FINANCIAL STATEMENTS OF HEGO

INDEX

Consolidated Financial Statements for December 31, 2012, 2011 and 2010

Report of Independent Registered Public Accounting Firm	C-2

Consolidated Income Statements for the years ended December 31, 2012, 2011 and 2010	C-3

Consolidated Balance Sheets – Assets at December 31, 2012, 2011 and 2010	C-4

Consolidated Balance Sheets – Equity and Liabilities at December 31, 2012, 2011 and 2010	C-5

Pledged Assets and Contingent Liabilities	C-5

Consolidated Cash Flow Statements	C-6

Accounting Principles and Notes to the Accounts	C-7

Notes to Consolidated Financial Statements	C-10

C-1

Independent auditors’ report

The Board of Directors and Stockholders

Hego AB

We have audited the accompanying consolidated balance sheets of Hego AB and subsidiaries as of December 31, 2012, 2011 and 2010, and the related consolidated statements of income and cash flows for each of the years in the three-year period ended December 31, 2012. These consolidated financial statements are the responsibility of the Hego AB’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audit in accordance with standards generally accepted in the United States of America. Those standards 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Hego AB and subsidiaries as of December 31, 2012, 2011 and 2010, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2012, in conformity with generally accepted accounting principles in Sweden.

Accounting principles generally accepted in Sweden vary in certain significant respects from generally accepted accounting principles in the United States of America. Information relating to the nature and effect of such differences is presented in note 14 to the consolidated financial statements.

Stockholm February 28, 2013

KPMG AB

/s/ Duane J. Swanson

Duane J. Swanson

C-2

Consolidated statement of income


Amount in SEK 000s	Note		01/01/2012- 31/12/2012			01/01/2011- 31/12/2011			01/01/2010- 31/12/2010

Operating income
Net sales		1		100,295			70,388			66,050
Other operating income				3,316			21			562
				103,611			70,409			66,612
Operating expenses Production costs and supplies				(24,340	)		(20,632	)		(18,970	)
Other external costs		2		(16,708	)		(21,092	)		(12,540	)
Personnel costs		3		(48,225	)		(31,214	)		(26,371	)
Depreciation and amortization of tangible and intangible fixed assets		5,6,7,8		(3,221	)		(2,378	)		(2,173	)
Other costs				(320	)		-			-
Operating profit (loss)				10,797			(4,907	)		6,558
Profit (loss) from financial items
Share of income (loss) from associated companies		9		-			(6,436	)		(4,880	)
Profit (loss) from non-current receivables				-			(250	)		-
Interest income and foreign exchange gains				253			242			700
Interest expense and foreign exchange loss				(2,290	)		(1,955	)		(1,034	)
Profit (loss) before income taxes and minority interests				8,760			(13,306	)		1,344
Income taxes		4		(919	)		950			(1,462	)
Minority share of profit for the year				(113	)		(29	)		(619	)
Net profit (loss) for the year				7,728			(12,385	)		(737	)

The accompanying notes are an integral part of these financial statements.

C-3

Consolidated balance sheet - Assets


Amount in SEK 000s	Note		31/12/2012		31/12/2011		31/12/2010

ASSETS

Non-current assets

Intangible fixed assets
Capitalized software development cost		5		287		338		406
Goodwill		6		2,483		2,952		440
				2,770		3,290		846
Tangible fixed assets
Leasehold improvements		8		-		66		133
Equipment, tools, fixtures and fittings		7		7,166		3,784		3,595
				7,166		3,850		3,728
Financial non-current assets
Investment in associated companies		9		-		-		-
Deferred tax assets				109		204		104
Other long-term receivables		10		348		431		710
Other long-term investments				7		8		8
				464		643		822
Total non-current assets				10,400		7,783		5,396

Current assets
Supplies				5		76		9
				5		76		9
Current receivables
Accounts receivable				11,132		9,868		12,000
Receivables from associated companies				-		-		4,950
VAT and other receivables				1,376		1,201		370
Prepaid expenses and accrued income		11		6,694		2,678		2,181
				19,202		13,747		19,501
Cash and bank				5,148		5,216		8,299

Total current assets				24,355		19,039		27,809

TOTAL ASSETS				34,755		26,822		33,205

The accompanying notes are an integral part of these financial statements.

C-4

Consolidated balance sheet – Equity and Liabilities


Amount in SEK 000s	Note		31/12/2012			31/12/2011			31/12/2010

Equity and liabilities

Equity		12

Share capital				154			154			122
New share issue being registered				-			-			4,975
Restricted reserves				185			20			4,208
Non-restricted reserves				(117	)		12,565			3,071
Net profit (loss) for the year				7,728			(12,385	)		(737	)
Total equity				7,950			354			11,639

Minority shares				1,419			907			2,588

Provisions
Provisions for deferred taxes				58			-			1,494
				58			-			1,494
Long-term liabilities
Liabilities to credit institutions		13		949			1,823			1,060
				949			1,823			1,060

Current liabilities
Liabilities to credit institutions		13		3,738			2,663			1,891
Accounts payable				6,631			6,402			4,486
Loans from shareholders				4,458			4,371			2,615
Taxes payable				595			1,317			544
Other current liabilities				3,206			1,410			1,856
Accrued expenses and deferred income		12		5,751			7,575			5,032
				24,379			23,738			16,424

TOTAL EQUITY AND LIABILITIES				34,755			26,822			33,205

Pledged assets and contingent liabilities

Other pledged assets and collateral
Chattel mortgages	4,000	3,000	2,000
Total	4,000	3,000	2,000

The accompanying notes are an integral part of these financial statements.

C-5

Consolidated statement of cash flows


Amount in SEK 000s	31/12/2012			31/12/2011			31/12/2010

Cash flows from operating activities
Profit (loss) after financial items		8,760			(13,306	)		1,344
Adjustments for non-cash transactions		2,756			9,205			7,043
		11,516			(4,101	)		8,387

Taxes (paid) received		(1,488	)		228			(2,086	)

Cash flow from operating activities, before changes in working capital		10,028			-3,873			6,301

Cash flow from changes in working capital
Increase(-)/Decrease (+) of supplies		71			67			1
Increase(-)/Decrease (+) of operating receivables		(6,241	)		2,158			(8,179	)
Increase(-)/Decrease (+) of operating liabilities		692			5,242			770
Cash flow from operating activities		4,550			3,595			(1,107	)
Investment activities
Acquisition of intangible fixed assets		(473	)		(221	)		(309	)
Acquisition of tangible fixed assets		(5,615	)		(647	)		(2,199	)
Acquisition of non-current assets		-			(2,518	)		(4,880	)
Acquisition of business, net of cash acquired		-			(3,010	)		(360	)
Investments in other non-current assets		22			(107	)		709
Cash flow from investment activities		(6,066	)		(6,503	)		(7,039	)

Financing activities
Proceeds from new share issue		-			-			4,975
Proceeds from stock rights issue and sale of shares to minority shareholders		1,262			-			-
Proceeds from loans issued		186			1,535			1,851
Dividends paid		-			(1,710	)		-
Cash flow from financing activities		1,448			(175	)		6,826

Net cash flow for the year		(68	)		(3,083	)		(1,320	)

Cash and bank at beginning of year		5,216			8,299			9,619
Cash and bank at end of year		5,148			5,216			8,299

Additional Information

Depreciation, amortization and impairment	3,541		9,205		7,043
Net profit from stock rights issue	(785	)	-		-
	2,756		9,205		-

Interest received	253		242		700
Interest paid	(2,290	)	(1,955	)	(1,034	)

Liquid assets
Cash and bank	5,148	4,209	5,611
Short term investments classified as liquid assets	-	1,007	2,688
Cash and bank	5,148	5,216	8,299

The classification above is done on the following basis:

- Small risk of fluctuation in valuation

- Can easily be converted into cash

- A term of maximum three months

The accompanying notes are an integral part of these financial statements.

C-6

Accounting principles and notes to the accounts

Amounts in SEK 000s unless stated otherwise

General accounting principles

The same accounting principles as for the previous year have been applied. The annual report has been prepared in accordance with the Annual Accounts Act and the general recommendations of Swedish Accounting Standards Board (“BFNAR”), except for BFNAR 2008:1 Financial statements in small limited liabilities companies (“Swedish GAAP”). If no guideline has been issued by the Swedish Accounting Standards Board, guidance has been taken from the standards issued by the Financial Accounting Standards Council.

Valuation principles, etc.

Assets, allocations and liabilities have been valued at historical cost unless stated otherwise below.

Revenue recognition

Revenue recognition is made in accordance with BFNAR 2003:3 Revenue. The company reports its revenue as the value of consideration received or to be received.

Compensation for services rendered is recognized as they are performed. Revenue not yet invoiced is reported under accrued income. Compensation for product sales are recorded at delivery. License revenue is distributed linearly over the contract period.

Interest, royalties and dividends are recognized when it is probable that the company will have the economic benefits associated with the transaction and that the income can be measured reliably. Interest income is recognized using the interest rate that provides a consistent return for the assets in question. Royalty revenue is accrued in accordance with the relevant agreement. Dividend is recognized when the shareholder's right to receive dividend is deemed secure.

Tax

The Company and Group apply the BFNAR 2001:1 Income tax. Total tax comprises current and deferred tax.

Taxes are reported in the income statement. Current tax is tax which will be paid or received in regard to the current year. This also includes the adjustment of current tax attributable to previous periods.

Deferred tax is calculated in accordance with the balance sheet method based on temporary differences between reported and fiscal values on assets and liabilities with the exception of tax losses which are not valued. The amount is calculated based on how the temporary differences are expected to be settled and with application of those tax rates and tax regulations that have been determined or instructed as of the balance sheet date. Temporary differences are not taken into consideration in consolidated goodwill and neither are differences attributable to investments in subsidiaries and associated companies that are not expected to be reverse in the foreseeable future.

Intangible assets

Capitalized software development costs

In the balance sheet the development costs for software in some subsidiaries are recorded as actual cost less amortization and impairment. All other costs are recorded in the income statement.

C-7

Tangible assets

Tangible fixed assets are reported as assets in the balance sheet when, based on available information, it is likely that the future financial benefits that are associated with the holdings will be realised by the group/company and when the acquisition value for the asset can be calculated in a reliable way.

Depreciation of tangible and amortization of intangible fixed assets

Depreciation is based on the historical cost less any calculated residual value. Depreciation is calculated on a straight-line basis over the assets useful life.

The following useful lives are used:

Tangible fixed assets:

- Leasehold improvements	20	%
- Equipment	20	%
- Goodwill	20	%

Impairment

At each reporting period it is analysed whether there is any indication of impairment of the assets. If so is the case the estimated recoverable amount is calculated which is the higher of net realizable value and value in use. Value in use is calculated based on the estimated future cash flows the asset is expected to generate. If the book value of the asset exceeds the recoverable amount of the asset it is reduced down to the last value.

Leasing - lessee

The Swedish Accounting Standards Board's general recommendation, BFNAR 2000:4, is applied and all leasing agreements are reported as operating leases.

Receivables

Accounts receivable are recorded at the invoiced amount and do not bear interest. Accounts receivable are stated net of an allowance for doubtful accounts. The allowance for doubtful accounts is based on an individual assessment of the receivable considering factors such as the age of the amounts due, historical experience of collection and other factors which may affect the customers’ ability to pay.

Accounts payable

Accounts payable are short-term and are valued at nominal value.

Receivables and liabilities in foreign currency

Receivables and liabilities in foreign currencies have been translated to exchange rates prevailing on the balance sheet day in accordance with the Swedish Financial Accounting Standards Council's recommendation no. 8. Exchange rate differences on operating receivables and liabilities are included in the operating profit/loss, while differences in financial receivables and liabilities are reported as financial items.

For those cases when receivables or payables in foreign currency have been hedged, the receivables or payables have been translated using the rate in the hedging instrument. The group has no outstanding derivatives as of the balance sheet dates.

C-8

Foreign currency

The Swedish krona is the functional currency of Hego AB and also the presentation currency of the consolidated accounts. The assets and liabilities of foreign subsidiaries are translated to Swedish kronor at the exchange rates prevailing on the balance sheet date. The income and expenses are translated at average exchange rates which approximate the exchange rate for the respective transaction. The differences arising on the translation of the financial statements of a foreign subsidiary are recognized directly in equity.

Cash and cash equivalents

Cash and cash equivalents include cash, immediately available bank balances and other money market instruments with maturities of three months or less. These items are generally valued at amortized cost.

Provisions

A provision is recognized in the balance sheet when the company has a legal or constructive obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made.

Consolidated accounting

The consolidated accounts have been prepared in accordance with the Swedish Accounting Standards Board’s recommendation RR1:00.

Basis of consolidation

Subsidiaries are companies in which the parent company directly or indirectly holds more than 50% of the voting rights, or in another way has a deciding influence over the operation and finances of the company.

Subsidiaries are normally reported in accordance with the acquisition method. The acquisition method means that an acquisition of a subsidiary is considered to be a transaction whereby the parent company indirectly acquires the subsidiary’s assets and takes over its liabilities. From the date of the acquisition, the acquired company’s income and costs, identifiable assets and liabilities as well as possible goodwill or negative goodwill are included in the consolidated accounts.

Goodwill

Group goodwill arises when the acquisition value, for the acquisition of shares in subsidiaries exceeds the fair value of the acquired company's identifiable net assets. Goodwill is reported at the acquisition value with deductions for accumulated amortization and possible impairment.

C-9

Notes

Note 1 Net sales per operating branch and geographic market

	01/01/2012- 31/12/2012	01/01/2011- 31/12/2011	01/01/2010- 31/12/2010
Net sales per country

Sweden	58,468	39,937	34,073
Finland	22,379	18,078	16,555
Norway	3,457	2,705	5,087
Czech Republic	7,442	7,679	8,098
Slovakia	1,230	1,238	2,117
Denmark	35	276	120
Great Britain	823	496	-
USA	6,461	-	-
	100,295	70,409	66,050

Revenue by type

Services	65,440	46,627	41,832
Products	25,241	13,875	15,055
Licenses	4,894	3,909	3,326
Others	4,720	5,998	5,837
	100,295	70,409	66,050

Note 2 Operating leases

	01/01/2012- 31/12/2012		01/01/2011- 31/12/2011		01/01/2010- 31/12/2010
Assets that are used via operating leasing agreements
Leasing costs excluding rent for premises		1,216		757		556
Future leasing fees < 5 years excl. rent for premises		4,637		-		-

There are no future lease payments under non-cancellable leases exceeding 5 years.

Note 3 Employees and personnel costs

	01/01/2012- 31/12/2012	01/01/2011- 31/12/2011	01/01/2010- 31/12/2010
Average number of employees
Men	84	54	47
Women	14	10	10
	98	64	57

Salaries, other remuneration and social costs

Board and Managing Director	6,411	3,894	4,836
Other employees	28,671	16,704	14,995
Total	35,082	20,598	19,831
Social fees	10,321	6,509	4,908
(of which pension costs)	2,887	1,498	1,370

Of the groups pension costs 449’ (2011: 320’, 2010: 422’) is attributable to corporate management. The group's outstanding pension obligations to these total SEK 0 (2011: 0, 2010: 0).

C-10

Note 4 Income taxes

	01/01/2012- 31/12/2012			01/01/2011- 31/12/2011			01/01/2010- 31/12/2010
Current tax charge		(766	)		(545	)		1,275
Deferred tax (charge) credit		(153	)		1,495			187
		(919	)		950			1,462

Tax losses of 5,553, 19 and 0 were utilized in 2012, 2011 and 2010 respectively and were primarily related to tax losses in Sweden and the UK. The group does not record deferred taxes benefits on tax losses. Unused tax losses amounted to 551, 5,866 and 0 as of December 31st 2012, 2011 and 2010 respectively.

Reconciliation of effective tax rate

	2012					2011					2010
Profit (Loss) before taxes				8,760					(13,306	)				1,344
Income tax using the corporate tax rate for the Parent company		26.3	%	(2,304	)		26.3	%	3,499			26.3	%	(353	)
Non-deductible expenses		0.2	%	(20	)		(4.8	%)	(639	)		97.8	%	(1,314	)
Standard interest on tax allocation reserves		-		-			(0.2	%)	(31	)		2.2	%	(30	)
International taxes and rate differentials		-		-			(0.3	%)	(36	)		-		-
Effect of increase in valuation allowance for deferred tax assets		-		-			(11.0	%)	(1,463	)		-		-
Tax loss carry forwards not recognized as deferred tax asset		(15.1	%)	1,323			-		-			-		-
Effect due to change in tax rate/ and tax regulations		(0.1	%)	9			-		-			-		-
Other		(0.8	%)	73			(1.5	%)	(381	)		(17.5	) %	236
Reported tax expense		10.5	%	(919	)		3,9	%	950			108.8	%	(1,462	)

Note 5 Capitalized software

	2012		2011		2010
Accumulated acquisition value:
At beginning of year		1,727		1,508		1,197
New acquisitions		129		221		309
Translation differences for the year		21
		1,877		1,727		1,506

Accumulated amortization according to plan

At beginning of year	(1,389	)	(1,100	)	(835	)
Amortization	(196	)	(269	)	(267	)
Translation differences for the year	5		(20	)	2
	(1,590	)	(1,389	)	(1,100	)
Net value at year-end	287		338		406

C-11

Note 6 Goodwill

	2012		2011	2010
Accumulated acquisition value:
At beginning of year	5,778		2,770	2,770
New acquisitions	344		3,008	-
Divestment / closure of business	(5	)	-	-
	6,117		5,778	2,770

Accumulated amortization

At beginning of year	(2,826	)	(2,330	)	(2,081	)
Amortisation	(808	)	(496	)	(249	)
	(3,634	)	(2,826	)	(2,330	)
Net value at year-end	2,483		2,952		440

In 2011, the Group acquired 100% of the business in Sportsground AB of which 49% were sold in 2012. The Group also acquired the remaining 35.6% of the shares in AKI Sports s.r.o, Czech in 2011 after which they were wholly owned. Goodwill acquired in 2012 relates to an acquisition made in Finland.

C-12

Note 7 Equipment, tools, fixtures and fittings

	2012			2011		2010

Accumulated acquisition value:
At beginning of year		14,770			13,047		10,787
New acquisitions		5,615			1,723		2,376
Translation differences for the year		(61	)		21		(471	)
		20,385			14,770		13,047

Accumulated depreciation according to plan

At beginning of year	(11,007	)	(9,458	)	(8,087	)
Depreciation	(2,134	)	(1,538	)	(1,581	)
Translation differences for the year	(17	)	(11	)	(210	)
	(13,158	)	(11,007	)	(9,458	)
Net value at year-end	7,166		3,784		3,594

Note 8 Leasehold improvements

	2012			2011		2010
Accumulated acquisition value:
At beginning of year		332			331		331
Translation differences for the year		(2	)		1		-
		330			332		331

Accumulated depreciation

At beginning of year	(265	)	(198	)	(132	)
Depreciation	(65	)	(67	)	(66	)
	(330	)	(265	)	(198	)
Net value at year-end	-		66		133

Note 9 Investment in associated companies

	2012		2011			2010
Accumulated acquisition value:
At beginning of year		-		-			6,335
Acquisitions		-		2,518			4,614
Impairment		-		(2,518	)		(4,614	)
Translation differences for the year		-		-			-

Net value at year-end		-		-			-

The group has accounted for investments in associated companies based on the equity method. The charge to earnings in 2011 also included a receivable totalling 4,950.

C-13

Note 10 Other long-term receivables

	2012			2011			2010
Accumulated acquisition value:
At beginning of year		431			710			795
Additional receivables		315			12			19
Payments received		(236	)		(5	)		(82	)
Reclassifications to current receivables		(162	)		(286	)		-
Exchange rate differences for the year		-			-			(22	)

Net value at year-end		348			431			710

Note 11 Prepaid and accrued income / accrued expenses and deferred income

	31/12/2012		31/12/2011		31/12/2010
Prepaid expenses and accrued income
Prepaid expenses		2,127		1,395		1,063
Accrued income		4,567		1,283		746
Other items		-		-		372
		6,694		2,678		2,181

Accrued expenses and deferred income

Accrued salary costs	2,361	1,669	1,044
Prepaid income - agreement	1,206	1,132	865
Other items	1,995	4,774	3,123
	5,562	7,575	-9,458

Note 12 Equity

	Share equity		Restricted reserves			Non-restricted reserves			Total

Equity 2009-12-31		122		4,667			2,819			7,608
New share issue		-		4,975			-			4,975
Foreign currency translation adj.		-		-			(208	)		(208	)
Reclassification between restricted and non-restricted equity		-		(459	)		459			-
Profit/loss for the year		-		-			(737	)		(737	)
Equity 2010-12-31		122		9,183			2,333			11,638

Equity 2010-12-31		122		9,183			2,333			11,638
New share issue		32		2,988			-			3,020
Dividends		-		-			(1,900	)		(1,900	)
Foreign currency translation adj.		-		-			(20	)		-20
Reclassification between restricted and non-restricted equity		-		(12,151	)		12,151			-
Profit/loss for the year		-		-			(12,385	)		(12,385	)
Equity 2011-12-31		154		20			180			354

C-14

Equity 2011-12-31	154	20	180		354
Dividends	-	-
Foreign currency translation adj.	-	-	(132	)	(132	)
Reclassification between restricted and non-restricted equity	-	165	(165	)
Profit/loss for the year	-	-	7,728		7,728
Equity 2012-12-31	154	185	7,611		7,950

As of December 31, 2012 there were 1,539 shares issued and outstanding with a quotient of 100 SEK.

Note 13 Interest bearing borrowings

Short term	31/12/2012			31/12/2011			31/12/2010

Granted credit limit		(3,645	)		(3,000	)		(2,000	)
Non-utilised portion		1,076			337			109
Utilised credit amount		(2,569	)		(2,663	)		(1,891	)
Other bank loans		(1,169	)		(-	)		(-	)
		(3,738	)		(-	)		(-	)

Long term	31/12/2012		31/12/2011		31/12/2010

Amounts expected to paid after more than 12 months		949		1,823		1,060
Amounts expected to paid after more than 5 years		-		-		-
		949		1,823		1,060

C-15

Note 14 US GAAP Information

The accompanying consolidated financial statements have been prepared in accordance with Swedish GAAP which differs in certain significant respects from generally accepted accounting principles in the United States of America (US GAAP).

Those differences which have a significant effect on net income and shareholders’ equity are as follows:

a)	Business combinations and goodwill

In accounting for business combinations under Swedish GAAP, all of the value of consideration transferred in excess of the fair value of the assets and liabilities acquired have been classified as goodwill and is amortized over 5 years.

In accordance with US GAAP, the identifiable assets and liabilities acquired are measured at their fair values at the acquisition date including intangible assets other than goodwill such as software and customer relations. Goodwill is measured as a residual value and recognized as an asset. Goodwill and other intangible assets with an indefinite useful life are not amortized, but instead are subject to impairment testing at least annually.

Software and customer relations have been amortized under US GAAP based on a useful life of five years.

The increase in ownership of a subsidiary in 2011 was accounted for by increasing goodwill under Swedish GAAP. Under US GAAP, it would be accounted for as an equity transaction with an adjustment to the carrying amount of the non-controlling interest to reflect the change in ownership of the subsidiary. The difference in the fair value of the consideration paid and the change in the carrying amount of the non-controlling interests is recognized in equity attributable to the parent rather than as an increase in goodwill.

b)	Changes in ownership interest in subsidiaries

Changes in the ownership of two subsidiaries in 2012 through a rights issue and sale of shares to unrelated parties creating non-controlling interests have been accounted for in current earnings as other income under Swedish GAAP. Under US GAAP, it would be accounted for as an equity transaction with an adjustment to the carrying amount of the no controlling interest to reflect the change in ownership of the subsidiary. The difference in the fair value of the consideration received and the change in the carrying amount of the non-controlling interests is recognized in equity. No adjustment to equity is required for US GAAP.

c)	Capitalized software development costs

Under Swedish GAAP, certain costs incurred for software development in a subsidiary have been capitalized and are amortized over a useful life of five years. These costs are for software in the post implementation/operation stage. Under US GAAP, costs incurred for internal use-software that is acquired, internally developed or modified solely to meet the entity’s internal needs are capitalized depending on the stage of development.

Costs incurred during the post-implementation/operation stage are expensed as incurred.

d)	Income taxes

Under Swedish GAAP, deferred taxes are calculated based on certain temporary differences but not on unused tax loss carry forward. Under US GAAP, deferred tax is recognized for the estimated future tax effects of temporary differences and unused tax losses carried forward.

Additionally all deferred tax assets are recognized and a valuation allowance is recognized to the extent that it is more likely than not that the deferred tax assets will not be usable.

C-16

Note 14 Continued

Leases

Under Swedish GAAP, all leases have been accounted for as operating leases with lease payments being recognized in current earnings as they fall due.

Under US GAAP, a lease is classified as a capital (finance) lease or an operating lease. The classification depends on whether substantially all of the risks and rewards incidental to ownership of the leased asset have been transferred from the lessor to the lessee. At the commencement of a capital lease, the leased asset and leased liability are recognized. The asset under a capital lease is depreciated in accordance with the depreciation policy used for comparable owned assets. The lease liability is amortized over the period of the lease by allocating lease payments to principle and interest.

f)	Accounting for associated companies

Under Swedish GAAP, the equity method of accounting is used for the investment in an associated company and the proportionate share of losses are recorded as a reduction in the investment in the associated company but not loans or other receivables.

Under US GAAP, the investors proportionate share of losses would also be recorded as a reduction in loans and other advances after the capital stock investment has been reduced to zero.

The following is a summary of the significant adjustments to net income (loss) and shareholders’ equity that would be required if US GAAP were to be applied instead of Swedish GAAP:

	For the years ended December 31
		2012		2011		2010
Net income (loss) under Swedish GAAP		7,728		(12,385	)	(737	)
Business combinations and goodwill (a)		683		268		146
Changes in ownership interest in subsidiaries (b)		(785	)	-		-
Software development costs (c)		51		68		(44	)
Leases (e)		225		(21	)	66
Accounting for associated companies (f)		-		(560	)	1,470
Income taxes (d)		(1,323	)	1,463		12
Tax effect of US GAAP adjustments		(68	)	(7	)	(9	)
Net income (loss) under US GAAP		6,510		(11,175	)	904

C-17

Note 14 Continued

	2012			2011			2010

Shareholders’ equity under Swedish GAAP		7,950			354			11,639
Business combinations and goodwill (a)		36			(650	)		839
Development costs (c)		(287	)		(338	)		(406	)
Income taxes (d)		152			1,475			12
Leases (e)		270			45			66
Accounting for associated companies (f)		-			-			560
Tax effect of US GAAP adjustments		(16	)		53			60
Shareholders’ equity under US GAAP		8,106			938			12,769

US GAAP requires that other comprehensive income is disclosed separately in the financial statements which are not required under Swedish GAAP. The following table presents other comprehensive income separately based on Swedish GAAP. In Swedish GAAP, the amounts are included in non-restricted reserves.

Other comprehensive income

Opening balance January 1, 2010	(128	)
Foreign currency translation adjustment 2010	(208	)
Closing balance December 31, 2010	(336	)
Foreign currency translation adjustment 2011	(20	)
Closing balance December 31, 2011	(356	)
Foreign currency translation adjustment 2012	(132	)
Closing balance December 31, 2012	(488	)

C-18

Note 14 Continued

Financial statement presentation in accordance with US GAAP

The accompanying consolidated financial statements are presented in accordance with Swedish GAAP which differs in certain respects as to the presentation which would be commonly applied by entities reporting in accordance with US GAAP.

The consolidated financial statements of Hego AB are presented in Swedish kronor (“SEK”). In preparing the translation of the Swedish kronor to the U.S. dollar as the reporting currency, the assets and liabilities have been translated from Swedish kronor to U.S. dollar (USD) at the exchange rate prevailing on December 31, 2012. The income and expenses are translated at average exchange rates which approximates the exchange rate for the respective transaction. The exchange differences arising on the translation are recognized directly in equity. The translation to USD in the tables below has been performed using the Swedish Central Bank’s exchange rates. The exchange rates used were 6.5156 SEK/USD for December 31, 2012, and the average rate for 2012 was 6.7754 SEK/USD.

The following table present the assets, liabilities and shareholders’ equity as reclassified and presented under a typical US GAAP format. In addition to the revised presentation, the significant US GAAP adjustments noted above have been included to illustrate the balance sheet as it would be presented under US GAAP.

Balance sheet

	Swedish kronor							US dollar
As of December 31, 2012	Revised presentation based on Swedish GAAP		US GAAP Adjustments			Balance sheet in accordance with US GAAP		Balance sheet in accordance with US GAAP

Assets
Cash and cash equivalents		5,148		-			5,148		790
Accounts receivable, net		11,132		-			11,132		1,709
Inventories, net		5		-			5		1
Other receivables		1,376		-			1,376		211
Prepaid expenses and other current assets		6,694		-			6,694		1,027
Total current assets		24,355		-			24,355		3,738

Property and equipment, net		7,166		-			7,166		1,100
Assets held under capital lease		-		4,019			4,019		617
Intangible assets, net		287		(287	)		-		-
Goodwill		2,483		36			2,519		387
Deferred taxes		109		136			245		36
Other assets		355		-			355		54
Total non-current assets		10,400		3,904			14,304		2,195
TOTAL ASSETS		34,755		3,904			38,659		5,932

Liabilities and Shareholders’ equity
Accounts payable		6,631		-			6,631		1,018
Deferred revenue and accrued expenses		5,751		-			5,751		883
Due to associated companies		4,458		-			4,458		684
Taxes payable		595		-			595		91
Current portion of bank loan		3,738		-			3,738		572
Current portion of capital lease obligations		-		1,377			1,377		211
Other current liabilities		3,206		-			3,206		492
Total current liabilities		24,379		1,377			25,756		3,951

C-19

Note 14 Continued

Deferred taxes	58	-	58	9
Noncurrent bank loans	949	-	949	145
Non-current portion of capital lease obligations	-	2,372	2,372	364
Total liabilities	25,386	3,749	29,135	4,469

Share capital	154	-	154	24
Other paid in capital	8,931	-	8,931	1,371
Other comprehensive income	(488)		(488)	(74)
Retained earnings	(647)	155	(492)	(77)
Non-controlling interest	1,419	-	1,419	218
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	34,755	3,904	38,659	5,932

C-20

Note 14 Continued

The primary difference in the presentation under US GAAP of the income statements relates to the classification of expenses by function rather than nature which have been adopted for Swedish GAAP.

The following table presents the income and expenses as reclassified and presented under a typical US GAAP format. In addition to the revised presentation, the significant US GAAP adjustments noted above have been included to illustrate the income statement as it would be presented under US GAAP.

Income statement

	Swedish kronor									US dollar
For the year ended December 31, 2012	Revised presentation based on Swedish GAAP			US GAAP Adjustments			Income statement in accordance with US GAAP			Income statement in accordance with US GAAP

- Total revenues		100,295			-			100,295			14,802
- Cost of sales		(48,991	)		-			(48,991	)		(7,231	)
Gross profit		51,304			-			51,304			7,572
Operating expenses
- Selling, general and administrative		(21,227	)		1,140			(20,087	)		(2,965	)
- Research and development		(22,596	)		51			(22,545	)		(3,327	)
Total operating expenses		(43,823	)		1,191			(42,632	)		(6,292	)
Operating income (loss)		7,481			1,191			8,672			1,279
- Other income		3,316			(785	)		2,531			373
- Interest income		253			-			253			37
- Interest expense		(2,290	)		(232	)		(2,522	)		(372	)
Income (loss) before taxes		8,760			174			8,934			1,319

- Income tax benefit (expense), net		(919	)		(1,391	)		(2,310	)		(341	)
- Minority share of profit for the year		(113	)		-			(113	)		(17	)
Net income (loss)		7,728			(1,217	)		6,510			960

The following table presents the cash flows as reclassified and presented under a typical US GAAP format.

In addition the revised presentation, the significant US GAAP adjustments noted above have been included to illustrate the cash flows as they would be presented under US GAAP.

C-21

Note 14 Continued

Consolidated statement of cash flows

	Swedish kronor									US dollar
2012	Revised presentation based on Swedish GAAP			US GAAP Adjustments			Cash flow in accordance with US GAAP			Cash flow in accordance with US GAAP in USD

CASH FLOWS FROM OPERATING ACTIVITIES
Net profit (loss)		7,728			(1,217	)		6,510			960
Non-controlling interest share		113			-			113			17
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
- Depreciation and amortization		2,756			963			3,719			549
- Deferred income tax expense		153			1,391			1,544			228
Changes in operating assets and liabilities:
- Accounts receivable		(1,264	)		-			(1,264	)		(187	)
- Inventories		71			-			71			10
- VAT and other receivables		(175	)		-			(175	)		(26	)
- Prepaid expenses and other assets		(4,016	)		-			(4,016	)		(593	)
- Accounts payable and accrued expenses		(1,858	)		-			(1,858	)		(274	)
- Deferred revenue and accrued expense		74			-			74			11
- Other liabilities		968			-			968			145
Net cash (used in) provided by operating activities		4,550						5,686			840

CASH FLOWS FROM INVESTING ACTIVITIES
Payments on capital lease obligations		-			(1,137	)		(1,137	)		(168	)
Acquisition of property and equipment		(6,088	)		-			(6,088	)		(896	)
Investments in other non-current assets		22			-			22			3
Net cash used in investing activities		(6,066	)		(1,137	)		(7,203	)		(1,061	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loans issued		186			-			186			27
Proceeds from stocks rights issues to non-
controlling shareholders		1,262			-			1,262			186
Net cash used in financing activities		1,448			-			1,448			213

Change in cash and cash equivalents		(68	)		-			(68	)		(10	)
Cash and cash equivalents at beginning of year		5,216			-			5,216			770
Exchange rate effect in cash											30
Cash and cash equivalents at end of year		5,148			-			5,148			760

SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid		2,290			232			2,522			372
Taxes paid		1,488			-			1,488			220

C-22

Annex D

March 9, 2013

STRICTLY CONFIDENTIAL

Board of Directors

Chyron Corporation

5 Hub Drive

Melville, NY 11747

Madam and Gentlemen:

You have requested our opinion as to the fairness from a financial point of view to Chyron Corporation (“Chyron”) and its shareholders of the Consideration (as defined below) to be paid by Chyron pursuant to the Stock Purchase Agreement, dated as of March 9, 2013 (the “Agreement”), by and among Chyron, Chyron Holdings, Inc., Chyron Aktiebolag (“Chyron AB”), Hego Aktiebolag (“Hego”), Hego’s shareholders and Hego’s shareholders’ representative. The transaction contemplated by the Agreement, pursuant to which Chyron will acquire indirectly all of the issued and outstanding capital stock of Hego, is referred to herein as the “Transaction.”

The Agreement provides for, among other things, Chyron AB’s acquisition of 100% of the shares outstanding of Hego in exchange for a number of shares of Chyron’s common stock, par value $0.01 per share, which will represent 40.0% of the sum of (i) Chyron’s issued and outstanding common stock as of the date that is ten (10) calendar days prior to the closing of the Transaction, (ii) any options or warrants to purchase Chyron’s common stock that have an exercise price less than or equal to $1.25 per share, and (iii) the contemplated shares to be issued at the closing of the Transaction (together, (i), (ii) and (iii) are referred to as the “Outstanding Closing Shares”), plus a $1,000 cash payment. In addition, upon achieving certain revenue targets, Hego’s shareholders are entitled to receive additional consideration in the form of Chyron’s common stock (the “Earn-Out Shares”), such that the aggregate amount of Chyron’s common stock issued in the Transaction will equal 50.0% of the sum of the Outstanding Closing Shares and the Earn-Out Shares (the “Consideration”).

Morpheus Capital Advisors LLC and its affiliates (collectively, “MCA”, “we” or “us”), as part of our investment banking business, may engage in performing financial analyses with respect to businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and other transactions as well as for estate, corporate and other purposes. MCA may also engage in private equity activities and other financial services, and in the ordinary course of these activities, MCA may from time to time acquire, hold or sell, for their own accounts and for the accounts of their customers, equity, debt and other securities (or related derivative securities) and financial instruments (including bank loans and other obligations) of Chyron, Hego and any of their respective affiliates and the other matters contemplated by the Agreement. In addition, MCA and certain of its employees, including members of the team performing services in connection with the Transaction, as well as certain private equity funds associated or affiliated with MCA in which they may have financial interests, may from time to time acquire, hold or make direct or indirect investments in or otherwise finance a wide variety of companies, including Chyron, Hego, other prospective purchasers and their respective affiliates.

D-1

MCA will receive a fee upon delivery of this opinion, which is not contingent upon the consummation of the Transaction, and Chyron has agreed to reimburse MCA’s expenses and indemnify MCA against certain liabilities arising out of our engagement. MCA has not acted as financial advisor to Chyron in connection with the Transaction (except for the rendering of this opinion), has not participated in either the negotiating or structuring of the Transaction and will not receive an additional fee for financial advisory services upon the consummation of the Transaction. MCA has not been authorized to solicit and has not solicited indications of interest from any third party with respect to any other possible transaction involving Chyron.

Our opinion does not address Chyron’s underlying business decision to effect the Transaction or the relative merits of the Transaction as compared to any alternative business strategies or transactions that might be available with respect to Chyron and does not constitute a recommendation to any stockholder of Chyron as to how such stockholder should vote or act with respect to the Transaction or any other matter. We have not been asked to, nor do we, offer any opinion as to any terms of the Agreement or any aspect or implication of the Transaction, other than the fairness from a financial point of view, as of the date hereof, of the Consideration specified in the Agreement. We are not expressing any opinion as to the price at which the shares of Chyron Common Stock will trade at any time. We do not express any view on, and our opinion does not address the fairness of the Transaction to, or any consideration received in connection therewith by, the holders of any class of securities, creditors or other constituencies of Chyron or Hego, other than expressly set forth herein, nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of Chyron or Hego, or any class of such persons, in connection with the Transaction, whether relative to the Consideration specified in the Agreement or otherwise.

We are not tax, legal, regulatory or accounting experts and have assumed and relied upon, without independent verification, the assessments of Chyron and its other advisors with respect to tax, legal, regulatory and accounting matters. In rendering this opinion, we have assumed, with your consent, that the final executed form of the Agreement will not differ in any material respect from the draft that we have reviewed, that the Transaction will be consummated in accordance with its terms and that the parties to the Agreement will comply with all the material terms of the Agreement. We also have assumed, with your consent, that all governmental, regulatory or other consents and approvals necessary for the consummation of the Transaction will be obtained without the imposition of any delay, limitation, restriction, divestiture or condition that would have an adverse effect on Chyron, Hego or the Transaction.

D-2

In arriving at our opinion, we have, among other things: (i) reviewed certain publicly available business and financial information relating to Chyron and Hego; (ii) reviewed certain internal information relating to the business, earnings, cash flow, assets, liabilities and prospects of Chyron furnished by the management of Chyron, consisting of financial forecasts; (iii) reviewed certain internal information relating to the business, earnings, cash flow, assets, liabilities and prospects of Hego furnished by the management of Chyron, consisting of financial forecasts ; (iv) reviewed certain internal information relating to cost savings, synergies and related expenses expected to result from the Transaction (the “Expected Synergies”) furnished by the management of Chyron; (v) conducted discussions with members of the senior managements and representatives of Chyron and Hego concerning the information described in clauses (i) - (iv) of this paragraph, as well as the businesses and prospects of Chyron and Hego generally; (vi) reviewed publicly available financial and stock market data of certain other companies in lines of business that we deemed relevant; (vii) reviewed the financial terms of certain other transactions that we deemed relevant; (viii) reviewed a draft, dated March 5, 2013, of the Agreement; and (ix) conducted such other financial studies and analyses and took into account such other information as we deemed appropriate.

For purposes of our opinion, we have assumed and relied upon, without assuming any responsibility for independent verification, the accuracy and completeness of all of the financial, accounting, legal, tax and other information provided to, discussed with or reviewed by or for us, or publicly available. In connection with our review, we have not assumed any responsibility for independent verification of any of the information supplied to, discussed with or reviewed by us for the purpose of this opinion and have, with your consent, relied on such information being complete and accurate in all material respects. Our opinion does not address any legal, regulatory, tax or accounting matters. In addition, with your consent, we have not made any independent evaluation or appraisal of any of the assets or liabilities (contingent, derivative, off-balance-sheet, or otherwise) of Chyron or Hego, nor have we been furnished with any such evaluation or appraisal. With respect to the financial forecasts and other information relating to Chyron and Hego, Expected Synergies and other pro forma financial effects referred to above, we have assumed, at your direction, that they have been reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of Chyron, as to the future performance of Chyron and Hego, respectively, the Expected Synergies (including the amount, timing and achievability thereof) and such other pro forma financial effects. We also have assumed, at your direction, that the future financial results (including Expected Synergies) reflected in such forecasts and other information will be achieved at the times and in the amounts projected. In addition, at your direction, we have relied on the assessments of the managements of Chyron and Hego as to Chyron’s ability to retain key employees and to integrate the businesses of Chyron and Hego.

D-3

Our opinion is necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to us as of, the date hereof. We assume no obligation to update, revise or reaffirm our opinion and expressly disclaim any responsibility to do so based on circumstances, developments or events occurring after the date hereof. This opinion has been reviewed and approved by our fairness opinion committee.

This opinion is for the use and benefit of the Board of Directors of Chyron (in its capacity as such) in its evaluation of the Transaction and may not be disclosed without our prior written consent, which consent is hereby given to the inclusion of this opinion in the Proxy Statement to be filed by Chyron with the Securities and Exchange Commission in connection with the Transaction (the “Proxy Statement”). Additionally, other than the text of this opinion, any language in the Proxy Statement describing our opinion, us or any analysis prepared by us needs to be approved by us.

Based upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Consideration to be paid in the Transaction by Chyron pursuant to the Agreement is fair from a financial point of view to Chyron and its shareholders.

Very truly yours,

/s/ Mitchell I. Gordon

Mitchell I. Gordon

President

Morpheus Capital Advisors LLC

D-4

Annex E

TRANSACTION SUPPORT and LOCK-UP AGREEMENT

THIS TRANSACTION SUPPORT AND LOCK-UP AGREEMENT (this “Agreement”) is made and entered into as of March 8, 2013, by and among Chyron Corporation, a New York corporation (“Chyron”), the undersigned officer, director or stockholder (“Stockholder”) of Chyron, Hego Aktiebolag (corp. reg. no. 556074-9730), a Swedish company (“Hego”), and the Sellers (as defined below) of the shares in Hego to Chyron.

RECITALS

A. Concurrently with the execution and delivery hereof, Chyron, Chyron Holdings, Inc., a Delaware corporation, Chyron Aktiebolag, a Swedish company (“Chyron AB”), Hego, the Sellers (as defined in the Purchase Agreement (as defined below)) and the Sellers’ Representative (as defined in the Purchase Agreement) are entering into a Stock Purchase Agreement of even date herewith (as it may be amended or supplemented from time to time pursuant to the terms thereof, the “Purchase Agreement”), which provides for the sale (the “Stock Sale”) by the Sellers of all of their shares of the capital stock of Hego to Chyron AB, in consideration for Chyron AB transferring that certain amount of Chyron Common Stock (as defined in the Purchase Agreement) and $1,000 in cash as set forth in the Purchase Agreement to the Sellers, in accordance with its terms.

B. Stockholder is the owner of such number of shares of each class of capital stock of Chyron as well as of other securities in Chyron as are indicated on the signature page of this Agreement.

C. As a condition and inducement to the willingness of the Sellers to enter into the Purchase Agreement, Stockholder has agreed to enter into this Agreement.

NOW, THEREFORE, intending to be legally bound, the parties hereby agree as follows:

1. Certain Definitions.

(a) Capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Purchase Agreement. For all purposes of and under this Agreement, the following terms shall have the following respective meanings:

“Constructive Sale” means with respect to any security, a short sale with respect to such security, entering into or acquiring a derivative contract with respect to such security, entering into or acquiring a futures or forward contract to deliver such security or entering into any other hedging or other derivative transaction that has the effect of either directly or indirectly materially changing the economic benefits or risks of ownership of such security.

“Shares” means (i) all shares of capital stock of Chyron or any other securities in Chyron owned, beneficially or of record, by Stockholder as of the date hereof, (ii) all additional shares of capital stock of Chyron or any other securities in Chyron acquired by Stockholder, beneficially or of record, during the period commencing with the execution and delivery of this Agreement and expiring upon the termination of this Agreement in accordance with Section 6 (the “Term”).

E-1

“Transfer” means, with respect to any security, the direct or indirect assignment, sale, transfer, tender, exchange, pledge, hypothecation, or the grant, creation or suffrage of a lien, security interest or encumbrance in or upon, or the gift, grant or placement in trust, or the Constructive Sale or other disposition of such security (including transfers by testamentary or intestate succession, by domestic relations order or other court order, or otherwise by operation of law) or any right, title or interest therein (including any right or power to vote to which the holder thereof may be entitled, whether such right or power is granted by proxy or otherwise), or the record or beneficial ownership thereof, and each agreement, arrangement or understanding, whether or not in writing, to effect any of the foregoing.

2. Transfer and Voting Restrictions.

(a) At all times, until the date that is the later of (1) fifteen (15) months following the Closing Date and (2) the date on which the Registration Statement is declared effective:

Stockholder shall not, except as permitted by the immediately following sentence, Transfer or suffer a Transfer of any of the Shares. Notwithstanding the immediately preceding sentence, the Stockholder may transfer Shares for bona fide estate planning purposes to his or her spouse, child (natural or adopted), or any other direct lineal descendant of the Stockholder (or his or her spouse) (all of the foregoing collectively referred to as “family members”), or to any custodian or trustee of any trust, partnership or limited liability company for the benefit of, or the ownership interests of which are owned wholly by, the Stockholder or any such family members; provided that, before any such Transfer permitted by this sentence, the transferee executes and delivers to the Sellers’ Representative a form of this Agreement providing that such transferee shall be bound by the same terms and conditions with respect to such Shares that the Stockholder is bound by pursuant to this Agreement.

ii.

Any transfer or purported transfer in violation of this Section 2 shall be voidable by Chyron, and Chyron shall not register any transfer of any shares of Chyron Common Stock in violation of this Section 2. Chyron shall instruct its transfer agent to place such stop transfer orders as may be required on the transfer books of Chyron in order to ensure compliance with this Section 2.

iii.

Except as otherwise permitted by this Agreement or by order of a court of competent jurisdiction, Stockholder shall not commit any act that could reasonably be expected to restrict or affect, or has the effect of restricting or affecting, Stockholder’s legal power, authority and right to vote all of the Shares then owned of record or beneficially by Stockholder or otherwise prevent or disable Stockholder from performing any of his/her/its obligations under this Agreement. Without limiting the generality of the foregoing, except for this Agreement and as otherwise permitted by this Agreement, Stockholder shall not enter into any voting agreement with any person or entity with respect to any of the Shares, grant any person or entity any proxy (revocable or irrevocable) or power of attorney with respect to any of the Shares, deposit any of the Shares in a voting trust or otherwise enter into any agreement or arrangement with any person or entity restricting Stockholder’s legal power, authority or right to vote the Shares in favor of the approval of the matters set forth in Section 3 hereof.

E-2

iv.

If Shares are sold by Stockholder in violation of this provision, the Stockholder shall pay a penalty to Chyron amounting to the purchase price for the Shares or if the Shares were sold below market value, a penalty amounting to the market value of the sold Shares.

(b) The restrictions set forth in Section 2(a) shall immediately terminate with respect to (i) Roger Ogden, Michael Wheeler, Peter Frey or Susan Clark-Johnson, respectively, if such individual ceases to be employed by Chyron or ceases to be a Director of Chyron and (ii) any Stockholder that is affiliated with such individual.

3. Agreement to Vote Shares.

(a) During the Term, at every meeting of the stockholders of Chyron called, and at every adjournment or postponement thereof, Stockholder (in Stockholder’s capacity as such) shall appear at the meeting or otherwise cause the Shares to be present thereat for purposes of establishing a quorum and, to the extent not voted by the persons appointed as proxies pursuant to this Agreement, vote (i) in favor of the approval of the transactions contemplated by the Purchase Agreement (the “Proposed Transaction”), (ii) against the approval or adoption of any proposal made in opposition to, or in competition with, the Proposed Transaction, and (iii) in favor of an amendment to Chyron’s 2008 Long-Term Incentive Plan to increase the number of shares available for issuance thereunder by an amount that is not less than 15% of Chyron’s Pre-Closing Outstanding Shares.

(b) During the Term, each Stockholder who is also a Director of Chyron agrees to vote to appoint Johan Apel and one other designee of Hego who qualifies as an independent director under the rules of the Nasdaq Stock Market, Inc. to the Board of Directors of Chyron (“Board”) effective upon the Closing (representing two of nine Board seats immediately following the Closing).

(c) If Stockholder is the beneficial owner, but not the record holder, of the Shares, Stockholder agrees to take all actions necessary to cause the record holder and any nominees to vote all of the Shares in accordance with Section 3(a).

4. Grant of Irrevocable Proxy and Covenant by Chyron.

(a) Stockholder hereby irrevocably appoints Chyron and each of its executive officers or other designees (the “Proxyholders”) as Stockholder’s proxy and attorney-in-fact (with full power of substitution and re-substitution) solely with respect to the matters set forth in Section 3(a), and grants to the Proxyholders full authority, for and in the name, place and stead of Stockholder, to vote the Shares, to instruct nominees or record holders to vote the Shares, or grant a consent or approval in respect of such Shares, in each case in accordance with Section 3(a) hereof and, in the discretion of the Proxyholders with respect to any proposed adjournments or postponements of any meeting of Stockholders at which any of the matters described in Section 3(a) hereof is to be considered. Chyron undertakes towards Hego and the Sellers to use this proxy and power of attorney in the manner set forth in this Section 4 (a).

E-3

(b) Stockholder hereby revokes any proxies heretofore given by Stockholder in respect of the Shares.

(c) Stockholder hereby affirms that the irrevocable proxy set forth in this Section 4 is given in connection with the execution of the Purchase Agreement, and that such irrevocable proxy is given to secure the performance of the duties of Stockholder under this Agreement. Stockholder hereby further affirms that the irrevocable proxy is coupled with an interest, is intended to be irrevocable, and may under no circumstances be revoked during the Term. The irrevocable proxy granted by Stockholder herein is a durable power of attorney and shall survive the dissolution, bankruptcy or incapacity of Stockholder.

(d) Notwithstanding anything to the contrary provided in this Agreement, this proxy shall only be effective if Stockholder fails to appear, or otherwise fails to cause the Shares to be counted as present for purposes of calculating a quorum, at a meeting of the stockholders of Chyron that occurs during the Term and at which any of the matters set forth in Section 3(a) are to be considered, and to vote the Shares in accordance with Section 3(a) at such meeting, and the parties hereto hereby acknowledge that the proxy granted hereby shall not be effective for any other purpose. The Proxyholders may not exercise this irrevocable proxy on any matter except as provided above, and Stockholder may vote the Shares on all other matters.

(e) This proxy shall terminate, without the requirement of any further action, upon the termination of this Agreement in accordance with Section 6.

5. Representations and Warranties of Stockholder. Stockholder hereby represents and warrants to Hego and the Sellers as follows:

(a) (i) Stockholder is the beneficial or record owner of the shares of capital stock of Chyron indicated on the signature page of this Agreement free and clear of any and all pledges, liens, security interests, mortgage, claims, charges, restrictions, options, title defects or encumbrances, other than restrictions on transfer imposed by the securities laws; and (ii) Stockholder does not beneficially own, or have the right to acquire, any securities of Chyron other than the shares of capital stock and rights to purchase shares of capital stock of Chyron set forth on the signature page of this Agreement.

(b) As of the date hereof and for so long as this Agreement remains in effect (including as of the date of the special meeting of the stockholders of Chyron to be held for the purpose of approving the Proposed Transaction, if it occurs during the Term, which, for purposes of this Agreement, includes any adjournment or postponement thereof), except as otherwise provided in this Agreement, Stockholder has full power and authority to (i) make, enter into and carry out the terms of this Agreement and to grant the irrevocable proxy as set forth in Section 4; and (ii) vote all of the Shares in the manner set forth in this Agreement without the consent or approval of, or any other action on the part of, any other person or entity (including any Governmental Entity). Without limiting the generality of the foregoing, Stockholder has not entered into any voting agreement (other than this Agreement) that is still in effect as of the date of this Agreement with any person with respect to any of the Shares, granted any person any proxy (revocable or irrevocable) or power of attorney with respect to any of the Shares, deposited any of the Shares in a voting trust or entered into any arrangement or agreement with any person limiting or affecting Stockholder’s legal power, authority or right to vote the Shares on any matter.

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(c) This Agreement has been duly and validly executed and delivered by Stockholder and constitutes a valid and binding agreement of Stockholder enforceable against Stockholder in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally or by general equitable principles. The execution and delivery of this Agreement and the performance by Stockholder of the agreements and obligations hereunder will not result in any breach or violation of or be in conflict with or constitute a default under any term of any contract to or by which Stockholder is a party or bound, or any judgment, injunction, order, decree, statute, law, ordinance, rule or regulation to which Stockholder (or any of Stockholder’s assets) is subject or bound, except for any such breach, violation, conflict or default which, individually or in the aggregate, would not impair or adversely affect Stockholder’s ability to perform Stockholder’s obligations under this Agreement or render inaccurate any of the representations made herein.

(d) Stockholder understands and acknowledges that the Sellers are entering into the Purchase Agreement in reliance upon Stockholder’s execution and delivery of this Agreement and the representations and warranties of Stockholder contained herein.

6. Termination. This Agreement shall terminate and be of no further force or effect whatsoever as of the later of (1) fifteen (15) months following the Closing Date and (2) the date on which the Registration Statement is declared effective, or if earlier, on such date and time as the Purchase Agreement shall have been terminated pursuant to its terms; provided, however, that (i) Section 7 shall survive the termination of this Agreement, and (ii) the termination of this Agreement shall not relieve Stockholder from any liability for any material inaccuracy in or breach of any representation, warranty or undertaking contained in this Agreement.

7. Miscellaneous Provisions.

(a) Amendments. No amendment of this Agreement shall be effective against any party unless it shall be in writing and signed by Hego, Chyron and Stockholder.

(b) Waivers. No action taken pursuant to this Agreement, including any investigation by or on behalf of any party, or any failure or delay on the part of any party in the exercise of any right hereunder, shall be deemed to constitute a waiver by the party taking such action of compliance with any representations, warranties, or covenants contained in this Agreement. The waiver by any party of a breach of any provision hereunder shall not operate or be construed as a waiver of any prior or subsequent breach of the same or any other provision hereunder. Any waiver by a party of any provision of this Agreement shall be valid only if set forth in a written instrument signed on behalf of such party.

(c) Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto and supersedes any prior understandings, agreements or representations by and among the parties hereto, or any of them, written or oral, with respect to the subject matter hereof.

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(d) Governing Law. This Agreement shall be governed by the laws of Sweden, without reference to any conflict of laws principles. The parties hereto agree that the legal place of any arbitration at the London Court of International Arbitration shall be London, United Kingdom (the “LCIA”), under the Rules of the LCIA for non-domestic arbitration, as the means for resolving any disputes arising in connection with this Agreement, the Stock Sale or any of the other transactions contemplated hereby; provided that any party hereto disagreeing with another party hereto as to any matter related to this Agreement, the Stock Sale or any of the other transactions contemplated hereby shall first notify the other party of such disagreement by written notice, stating the matter or matters in dispute and the notifying party’s basis for disagreement. The parties in disagreement shall thereafter mutually diligently and in good faith endeavor to resolve the disagreement through discussion; provided that, if they are unable to do so within thirty (30) days after the receipt of such notice, any party to such dispute may then submit the matter or matters in dispute to the LCIA for resolution, by written notice to the other party and the LCIA. Unless the parties in disagreement agree to a single arbitrator, each party in disagreement shall appoint one (1) arbitrator, and one (1) additional arbitrator shall be appointed by LCIA (together, the “Arbitration Panel”). The single arbitrator or the Arbitration Panel shall be authorized to award fees and expenses in accordance with the single arbitrator’s or the Arbitration Panel’s determination as to the relative extent to which the parties respectively prevailed in the arbitration of the matter or matters in dispute and such other factors or considerations as the single arbitrator or the Arbitration Panel may determine relevant, in the single arbitrator’s or the Arbitration Panel’s sole judgment; provided that, if and to the extent that the single arbitrator or the Arbitration Panel declines to award fees and expenses, the parties in disagreement shall bear their respective fees and expenses incurred in connection with such arbitration. The language to be used in the arbitration proceedings shall be English. The arbitration proceedings and any outcome thereof shall be kept confidential except as Chyron, Hego and the Sellers’ Representative may agree or as any party, after consultation with its outside legal counsel, determines is required by law or legal process. The parties in disagreement shall enter into any engagement letter reasonably required by the LCIA. A determination by the single arbitrator or the Arbitration Panel as to the resolution of any matter or matters in dispute (including any procedural matter) and any additional determination as to the award of fees and expenses shall be binding and conclusive upon the parties. Notwithstanding the foregoing, any party may seek and, if entitled, obtain from a court of competent jurisdiction, interim relief, such as an injunction or order requiring another party to perform or observe its obligations under this Agreement.

(e) Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise by any of the parties hereto without the prior written consent of the other parties, and any such assignment without such prior written consent shall be null and void. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and permitted assigns.

(f) No Third Party Beneficiaries. This Agreement is not intended, and shall not be deemed, to confer any rights or remedies upon any other person other than the parties hereto and their respective successors and permitted assigns, to create any agreement of employment with any person or to otherwise create any third-party beneficiary hereto.

(g) Further Assurances. Stockholder agrees to execute and deliver such further documents, certificates, agreements and instruments and to take such other actions as may be reasonably requested by Chyron or Hego to evidence or reflect the transactions contemplated by this Agreement and to carry out the intent and purpose of this Agreement.

(h) No Ownership Interest. All rights, ownership and economic benefits of and relating to the Shares shall remain vested in and belong to Stockholder, and this Agreement shall not confer any right, power or authority upon any other person to direct Stockholder in the voting of any of the Shares, except as otherwise provided herein.

(i) Adjustments. Additional Shares. In the event of any stock dividend, stock split, merger, recapitalization, reclassification, combination, exchange of shares or the like of the capital stock of Chyron on, of or affecting the Shares, then the terms of this Agreement shall apply to the shares of capital stock or other instruments or documents that the Stockholder owns or has the right to vote immediately following the effectiveness of such event as though they were Shares hereunder.

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(j) Severability. In the event that any provision of this Agreement or the application thereof becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement shall continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.

(k) Remedies. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy expressly conferred by this Agreement. The parties hereto agree that the Shares are unique and that money damages are an inadequate remedy for breach of this Agreement because of the difficulty of ascertaining the amount of damage that will be suffered by the Sellers, Chyron or Hego in the event that this Agreement is breached. Therefore, the Stockholder agrees that in addition to and not in lieu of any other remedies available to Chyron, Hego or the Sellers at law or in equity, Chyron, Hego or the Sellers may obtain specific performance of this Agreement.

(l) Notices. All notices and other communications hereunder shall be in writing and shall be deemed delivered (i) upon receipt if delivered personally, (ii) three (3) business days (or five (5) business days if notice is from a party in one national jurisdiction to a party in another national jurisdiction) after being mailed by airmail, postage prepaid, or (iii) one (1) business day after being sent by commercial overnight courier service, in each case to the intended recipient at the following address (or at such other address for a party as shall be specified by like notice): (A) if to Hego, Chyron, any Seller or the Sellers’ Representative, to the address provided in the Purchase Agreement, including to the persons designated therein to receive copies; and (B) if to Stockholder, to Stockholder’s address shown below Stockholder’s signature on the last page hereof. Any party to this Agreement may give any notice or other communication hereunder using any other means (including personal delivery, messenger service, telecopy, ordinary mail or electronic mail), but no such notice or other communication shall be deemed to have been duly given unless and until it actually is received by the party for whom it is intended.

(m) Counterparts and Signature. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties hereto and delivered to the other parties, it being understood that all parties need not sign the same counterpart. This Agreement may be executed and delivered by facsimile or “PDF” transmission.

(n) Indemnification. Chyron agrees to indemnify and hold harmless each Stockholder against any losses, claims, damages or liabilities to which such Stockholder may become subject arising out of or relating to its compliance with the provisions of this Agreement.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed as of the date first above written.

CHYRON:

STOCKHOLDER:

CHYRON CORPORATION

By:

Its:

Address:

Telephone:

(

)

Facsimile:

(

)

E-Mail Address:

Shares Beneficially Owned by Stockholder:

shares of Company Common Stock

Options to acquire Company Common Stock

Restricted Stock Units to acquire Company Common Stock

HEGO:

[Sellers]

HEGO AKTIEBOLAG

By:

Its:

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Annex F

New York State Department of State

Division of Corporations, State Records and Uniform Commercial Code

One Commerce Plaza, 99 Washington Avenue

Albany, NY 12231

www.dos.state.ny.us

CERTIFICATE OF AMENDMENT

OF THE

CERTIFICATE OF INCORPORATION

CHRYON CORPORATION

(Insert Name of Domestic Corporation)

Under Section 805 of the Business Corporation Law

FIRST: The name of the corporation is:

CHYRON CORPORATION

If the name of the corporation has been changed, the name under which it was formed is:

THE COMPUTER EXCHANGE, INC.

SECOND: The date of filing of the certificate of incorporation with the Department of State is:

April 8, 1966

THIRD: The amendment effected by this certificate of amendment is as follows:

(Set forth each amendment in a separate paragraph providing the subject matter and full text of each amended paragraph. For example, an amendment changing the name of the corporation would read as follows: Paragraph First of the Certificate of Incorporation relating to the corporation name is hereby amended to read as follows: First: The name of the corporation is (new name) ... )

Paragraph FIRST of the Certificate of Incorporation relating to

the name of the Corporation.

is hereby amended to read in its entirety as follows:

FIRST: The name of the corporation is ChyronHego Corporation.

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Paragraph of the Certificate of Incorporation relating to

is hereby amended to read in its entirety as follows:

FOURTH: The certificate of amendment was authorized by: (Check the appropriate box)

ý The vote of the board of directors followed by a vote of a majority of all outstanding shares entitled to vote thereon at a meeting of shareholders.

¨ The vote of the board of directors followed by the unanimous written consent of the holders of all outstanding shares.


(Signature)			(Name of Signer)


			(Title of Signer)

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CERTIFICATE OF AMENDMENT

OF THE

CERTIFICATE OF INCORPORATION

CHRYON CORPORATION

(Insert Name of Domestic Corporation)

Under Section 805 of the Business Corporation Law

Filer's Name	Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Address	One Financial Center

City, State and Zip Code		Boston, MA 02111

NOTE: This form was prepared by the New York State Department of State. It does not contain all optional provisions under the law. You are not required to use this form. You may draft your own form or use forms available at legal stationery stores. The Department of State recommends that all documents be prepared under the guidance of an attorney. The certificate must be submitted with a $60 filing fee, plus the required tax on shares pursuant to §180 of the Tax Law, if applicable.

For Office Use Only

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Annex G

CHYRON CORPORATION

2008 LONG-TERM INCENTIVE PLAN

(Approved May 14, 2008 and amended May 19, 2010)

Chyron Corporation, a New York corporation (the “Company”), sets forth herein the terms of its 2008 Long-Term Incentive Plan (the “Plan”), as follows:

1. PURPOSE

The Plan is intended to enhance the Company’s and its Affiliates’ (as defined herein) ability to attract and retain highly qualified officers, directors, key employees and other persons, and to motivate such officers, directors, key employees and other persons to serve the Company and its Affiliates and to expend maximum effort to improve the business results and earnings of the Company, by providing to such persons an opportunity to acquire or increase a direct proprietary interest in the operations and future success of the Company. To this end, the Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, cash and other stock-based awards. Any of these awards may, but need not, be made as performance incentives to reward attainment of annual or long-term performance goals in accordance with the terms hereof. Stock options granted under the Plan may be non-qualified stock options or incentive stock options, as provided herein.

2. DEFINITIONS

For purposes of interpreting the Plan and related documents (including Award Agreements), the following definitions shall apply:

2.1. “Affiliate” means any company or other trade or business that “controls,” is “controlled by” or is “under common control” with the Company within the meaning of Rule 405 of Regulation C under the Securities Act, including, without limitation, any Subsidiary.

2.2. “Annual Incentive Award” means an Award made subject to attainment of performance goals (as described in Section 14) over a fiscal year period.

2.3. “Award” means a grant of an Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Unrestricted Stock, cash or other stock-based award under the Plan.

2.4. “Award Agreement” means a written agreement between the Company and a Grantee, or notice from the Company to a Grantee, that evidences and sets out the terms and conditions of an Award.

2.5. “Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 under the Exchange Act (including any successor to such rule).

2.6. “Board” means the Board of Directors of the Company.

2.7. “Cause” means, as determined by the Committee and unless otherwise provided in an applicable agreement with the Company or an Affiliate at or before the Grant Date: (i) engaging in any act, omission or misconduct that is injurious to the Company or its Affiliates; (ii) gross negligence or willful misconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement or misappropriation of funds or property of the Company or an Affiliate; (v) material breach of any term of any employment, consulting or other services, confidentiality, intellectual property or non-competition agreements, if any, between the Service Provider and the Company or an Affiliate; (vi) the entry of an order duly issued by any regulatory agency (including federal, state and local regulatory agencies and self-regulatory bodies) having jurisdiction over the Company or an Affiliate requiring the removal from any office held by the Service Provider with the Company or prohibiting a Service Provider from participating in the business or affairs of the Company or any Affiliate; or (vii) the revocation or threatened revocation of any of the Company’s or an Affiliate’s government licenses, permits or approvals, which is primarily due to the Service Provider’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of the Service Provider’s Services.

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2.8. “Change in Control” shall have the meaning set forth in Section 16.2.

2.9. “Code” means the Internal Revenue Code of 1986, as now in effect or as hereafter amended.

2.10. “Committee” means the Compensation Committee of the Board, or such other committee as determined by the Board. The Compensation Committee of the Board may, in its discretion, designate a subcommittee of its members to serve as the Committee (to the extent the Board has not designated another person, committee or entity as the Committee) or cause the Committee to (i) consist solely of persons who are “non-employee directors” as defined in Rule 16b-3 issued under the Exchange Act, (ii) consist solely of persons who are Outside Directors, or (iii) satisfy the applicable requirements of any stock exchange on which the Common Stock may then be listed.

2.11. “Company” means Chyron Corporation, a New York corporation, or any successor corporation.

2.12. “Common Stock” or “Stock” means common stock of the Company, par value $0.01 per share.

2.13. “Covered Employee” means a Grantee who is a “covered employee” within the meaning of Section 162(m) of the Code, as qualified by Section 14.5 herein.

2.14. “Disability” means the Grantee is unable to perform each of the essential duties of such Grantee’s position by reason of a medically determinable physical or mental impairment which is potentially permanent in character or which can be expected to last for a continuous period of not less than 12 months; provided, however, that, with respect to rules regarding expiration of an Incentive Stock Option following termination of the Grantee’s Service, Disability has the meaning as set forth in Section 22(e)(3) of the Code.

2.15. “Effective Date” means the date set forth in Section 17.10 herein.

2.16. “Exchange Act” means the Securities Exchange Act of 1934, as now in effect or as hereafter amended.

2.17. “Fair Market Value” of a share of Common Stock as of a particular date shall mean (i) the closing sale price reported for a share of Common Stock on such date on the national securities exchange or national market system on which such stock is principally traded, or if such date is not a trading day, the trading day immediately preceding such date on which a sale was reported, or (ii) if the shares of Common Stock are not then listed on a national securities exchange or national market system, or the value of such shares is not otherwise determinable, such value as determined by the Board in good faith in its sole discretion (but in any event not less than fair market value within the meaning of Section 409A).

2.18. “Family Member” means a person who is a spouse, former spouse, child, stepchild, grandchild, parent, stepparent, grandparent, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law, including adoptive relationships, of the applicable individual, any person sharing the applicable individual’s household (other than a tenant or employee), a trust in which any one or more of these persons have more than fifty percent of the beneficial interest, a foundation in which any one or more of these persons (or the applicable individual) control the management of assets, and any other entity in which one or more of these persons (or the applicable individual) own more than fifty percent of the voting interests.

2.19. “Grant Date” means, as determined by the Committee, the latest to occur of (i) the date as of which the Committee approves an Award, (ii) the date on which the recipient of an Award first becomes eligible to receive an Award under Section 6 hereof, or (iii) such other date as may be specified by the Committee in the Award Agreement.

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2.20. “Grantee” means a person who receives or holds an Award under the Plan.

2.21. “Incentive Stock Option” means an “incentive stock option” within the meaning of Section 422 of the Code, or the corresponding provision of any subsequently enacted tax statute, as amended from time to time.

2.22. “Incumbent Board” shall have the meaning set forth in Section 16.2.

2.23. “Non-Employee Director” means a director of the Company who is not otherwise an officer or employee of the Company or any Affiliate.

2.24. “Non-Qualified Stock Option” means an Option that is not an Incentive Stock Option.

2.25. “Option” means an option to purchase one or more shares of Stock pursuant to the Plan.

2.26. “Option Price” means the exercise price for each share of Stock subject to an Option.

2.27. “Outside Director” means a member of the Board who is not an officer or employee of the Company or an Affiliate, determined in accordance with the requirements of Section 162(m) of the Code.

2.28. “Outstanding Company Common Stock” shall have the meaning set forth in Section 16.2.

2.29. “Outstanding Company Voting Securities” shall have the meaning set forth in Section 16.2.

2.30. “Performance Award” means an Award made subject to the attainment of performance goals (as described in Section 14) over a performance period of up to ten (10) years.

2.31. “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d) and 14(d) thereof.

2.32. “Plan” means this Chyron Corporation 2008 Long-Term Incentive Plan.

2.33. “Purchase Price” means the purchase price for each share of Stock pursuant to a grant of Restricted Stock or Unrestricted Stock.

2.34. “Reporting Person” means a person who is required to file reports under Section 16(a) of the Exchange Act.

2.35. “Restricted Stock” means shares of Stock, awarded to a Grantee pursuant to Section 10 hereof.

2.36. “Restricted Stock Unit” means a bookkeeping entry representing the equivalent number of shares of Stock, awarded to a Grantee pursuant to Section 10 hereof.

2.37. “SAR Exercise Price” means the per share exercise price of a SAR granted to a Grantee under Section 9 hereof.

2.38. “Section 409A” shall mean Section 409A of the Code and all formal guidance and regulations promulgated thereunder.

2.39. “Securities Act” means the Securities Act of 1933, as now in effect or as hereafter amended.

2.40. “Separation from Service” means a termination of Service by a Service Provider, as determined by the Committee, which determination shall be final, binding and conclusive; provided if any Award governed by Section 409A is to be distributed on a Separation from Service, then the definition of Separation from Service for such purposes shall comply with the definition provided in Section 409A.

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2.41. “Service” means service as a Service Provider to the Company or an Affiliate. Unless otherwise stated in the applicable Award Agreement, a Grantee’s change in position or duties shall not result in interrupted or terminated Service, so long as such Grantee continues to be a Service Provider to the Company or an Affiliate.

2.42. “Service Provider” means an employee, officer or director of the Company or an Affiliate, or a consultant or adviser currently providing services to the Company or an Affiliate.

2.43. “Stock Appreciation Right” or “SAR” means a right granted to a Grantee under Section 9 hereof.

2.44. “Subsidiary” means any “subsidiary corporation” of the Company within the meaning of Section 424(f) of the Code.

2.45. “Termination Date” means the date upon which an Option shall terminate or expire, as set forth in Section 8.3 hereof.

2.46. “Ten Percent Stockholder” means an individual who owns more than ten percent (10%) of the total combined voting power of all classes of outstanding stock of the Company, its parent or any of its Subsidiaries. In determining stock ownership, the attribution rules of Section 424(d) of the Code shall be applied.

2.47. “Unrestricted Stock” means an Award pursuant to Section 11 hereof.

3. ADMINISTRATION OF THE PLAN

3.1. General.

The Committee shall have such powers and authority related to the administration of the Plan as are consistent with the Company’s certificate of incorporation and bylaws and applicable law. The Committee shall have full power and authority to take all actions and to make all determinations required or provided for under the Plan, any Award or any Award Agreement, and shall have full power and authority to take all such other actions and make all such other determinations not inconsistent with the specific terms and provisions of the Plan that the Committee deems to be necessary or appropriate to the administration of the Plan. The interpretation and construction by the Committee of any provision of the Plan, any Award or any Award Agreement shall be final, binding and conclusive. Without limitation, the Committee shall have full and final authority, subject to the other terms and conditions of the Plan, to:

(i) designate Grantees;

(ii) determine the type or types of Awards to be made to a Grantee;

(iii) determine the number of shares of Stock to be subject to an Award;

(iv) establish the terms and conditions of each Award (including, but not limited to, the Option Price of any Option, the nature and duration of any restriction or condition (or provision for lapse thereof) relating to the vesting, exercise, transfer, or forfeiture of an Award or the shares of Stock subject thereto, and any terms or conditions that may be necessary to qualify Options as Incentive Stock Options);

(v) prescribe the form of each Award Agreement; and

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(vi) amend, modify, or supplement the terms of any outstanding Award including the authority, in order to effectuate the purposes of the Plan, to modify Awards to foreign nationals or individuals who are employed outside the United States to recognize differences in local law, tax policy, or custom.

Notwithstanding the foregoing, no amendment or modification may be made to an outstanding Option or SAR that (i) causes the Option or SAR to become subject to Section 409A, (ii) reduces the Option Price or SAR Exercise Price, either by lowering the Option Price or SAR Exercise Price or by canceling the outstanding Option or SAR and granting a replacement Option or SAR with a lower Option Price or SAR Exercise Price or (iii) would be treated as a repricing under the rules of the exchange upon which the Company’s Stock trades, without, with respect to item (i), the Grantee’s written prior approval, and with respect to items (ii) and (iii), without the approval of the stockholders of the Company, provided, that, appropriate adjustments may be made to outstanding Options and SARs pursuant to Section 16.

The Company may retain the right in an Award Agreement to cause a forfeiture of the gain realized by a Grantee on account of actions taken by the Grantee in violation or breach of or in conflict with any employment agreement, non-competition agreement, any agreement prohibiting solicitation of employees or clients of the Company or any Affiliate thereof or any confidentiality obligation with respect to the Company or any Affiliate thereof or otherwise in competition with the Company or any Affiliate thereof, to the extent specified in such Award Agreement applicable to the Grantee. Furthermore, the Company may annul an Award if the Grantee is terminated for Cause as defined in the applicable Award Agreement or the Plan, as applicable. The grant of any Award may be contingent upon the Grantee executing the appropriate Award Agreement.

3.2. Deferral Arrangement.

The Committee may permit or require the deferral of any Award payment into a deferred compensation arrangement, subject to such rules and procedures as it may establish and in accordance with Section 409A, which may include provisions for the payment or crediting of interest or dividend equivalents, including converting such credits into deferred Stock units.

3.3. No Liability.

No member of the Board or of the Committee shall be liable for any action or determination made in good faith with respect to the Plan, any Award or Award Agreement.

3.4. Book Entry.

Notwithstanding any other provision of this Plan to the contrary, the Company may elect to satisfy any requirement under this Plan for the delivery of stock certificates through the use of book-entry.

4. STOCK SUBJECT TO THE PLAN

Subject to adjustment as provided in Section 16 hereof, the maximum number of shares of Stock available for issuance under the Plan shall be eight million (8,000,000). All such shares of Stock available for issuance under the Plan shall be available for issuance as Incentive Stock Options. Stock issued or to be issued under the Plan shall be authorized but unissued shares; or, to the extent permitted by applicable law, issued shares that have been reacquired by the Company. The maximum number of shares of Common Stock (constituting, or underlying, any Awards) that may be awarded to any one Grantee during any calendar year shall not exceed 200,000. In addition, the maximum cash amount that may be earned under the Plan as a final Annual Incentive Award or other cash annual Award in respect of any fiscal year by any one Grantee shall be $5,000,000, and the maximum cash amount that may be earned under the Plan as a final Performance Award or other cash Award in respect of a performance period other than an annual period by any one Grantee on an annualized basis shall be $5,000,000.

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The Committee may adopt reasonable procedures for making adjustments in accordance with Section 16. If the Option Price of any Option granted under the Plan, or if pursuant to Section 17.3 the withholding obligation of any Grantee with respect to an Option or other Award, is satisfied by tendering shares of Stock to the Company (by either actual delivery or by attestation) or by withholding shares of Stock, the number of shares of Stock issued net of the shares of Stock tendered or withheld shall be deemed delivered for purposes of determining the maximum number of shares of Stock available for delivery under the Plan. With respect to stock-based Awards, to the extent that an Award under the Plan is canceled, expired, forfeited, settled in cash, settled by issuance of fewer shares than the number underlying the Award, or otherwise terminated without delivery of shares to the Grantee, the shares retained by or returned to the Company will be available under the Plan; and shares that are withheld from such an Award or separately surrendered by the Grantee in payment of any exercise price or taxes relating to such an Award shall be deemed to constitute shares not delivered to the Grantee and will be available under the Plan. In addition, in the case of any Award granted in assumption of or in substitution for an award of a company or business acquired by the Company or a Subsidiary or Affiliate or with which the Company or a Subsidiary or Affiliate combines, shares issued or issuable in connection with such substitute Award shall not be counted against the number of shares reserved under the Plan.

5. EFFECTIVE DATE, DURATION AND AMENDMENTS

5.1. Term.

The Plan shall be effective as of the Effective Date and shall terminate on the ten (10) year anniversary of the Effective Date, unless terminated on any earlier date as provided in Section 5.2.

5.2. Amendment and Termination of the Plan.

The Board may, at any time and from time to time, amend, suspend, or terminate the Plan as to any Awards which have not been made. An amendment shall be contingent on approval of the Company’s stockholders to the extent stated by the Board, required by applicable law or required by applicable stock exchange listing requirements. No Awards shall be made after termination of the Plan. No amendment, suspension, or termination of the Plan shall, without the consent of the Grantee, impair rights or obligations under any Award theretofore awarded.

6. AWARD ELIGIBILITY AND LIMITATIONS

6.1. Service Providers and Other Persons.

Subject to this Section 6, Awards may be made to any Service Provider as the Committee shall determine and designate from time to time in its discretion.

6.2. Non-Employee Director Awards.

Unless otherwise determined by the Board, the terms of an Award to a Non-Employee Director shall be as follows:

(i) If the exercise price per share of an Award is other than zero, the exercise price per share of Stock purchasable upon exercise of an Award to a Non-Employee Director will be equal to 100% of the Fair Market Value of a share of Stock on the date of grant of the Award.

(ii) An Award to a Non-Employee Director will expire 10 years after the date of grant, regardless of whether the Non-Employee Director ceases to serve as a director of the Company for any reason.

(iii) Each Award to a Non-Employee Director will be exercisable in full on the date of grant unless otherwise determined by the Board in a resolution adopted on or prior to the date of grant.

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(iv) If a grant of an Award to a Non-Employee Director cannot be made in full due to the limitation set forth in Section 4, such grant shall be made to the greatest extent then permitted under Section 4.

6.3. Successive Awards.

An eligible person may receive more than one Award, subject to such restrictions as are provided herein.

6.4. Stand-Alone, Additional, Tandem, and Substitute Awards.

Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution or exchange for, any other Award or any award granted under another plan of the Company, any Affiliate, or any business entity to be acquired by the Company or an Affiliate, or any other right of a Grantee to receive payment from the Company or any Affiliate. Such additional, tandem, and substitute or exchange Awards may be granted at any time. If an Award is granted in substitution or exchange for another Award, the Committee shall have the right to require the surrender of such other Award in consideration for the grant of the new Award. In addition, Awards may be granted in lieu of cash compensation, including in lieu of cash amounts payable under other plans of the Company or any Affiliate, in which the value of Stock subject to the Award is equivalent in value to the cash compensation (for example, Restricted Stock Units or Restricted Stock).

7. AWARD AGREEMENT

Each Award shall be evidenced by an Award Agreement, in such form or forms as the Committee shall from time to time determine. Without limiting the foregoing, an Award Agreement may be provided in the form of a notice which provides that acceptance of the Award constitutes acceptance of all terms of the Plan and the notice. Award Agreements granted from time to time or at the same time need not contain similar provisions but shall be consistent with the terms of the Plan. Each Award Agreement evidencing an Award of Options shall specify whether such Options are intended to be Non-Qualified Stock Options or Incentive Stock Options, and in the absence of such specification such options shall be deemed Non-Qualified Stock Options.

8. TERMS AND CONDITIONS OF OPTIONS

8.1. Option Price.

The Option Price of each Option shall be fixed by the Committee and stated in the related Award Agreement. The Option Price of each Option shall be at least the Fair Market Value of a share of Stock on the Grant Date; provided, however, that (i) in the event that a Grantee is a Ten Percent Stockholder as of the Grant Date, the Option Price of an Option granted to such Grantee that is intended to be an Incentive Stock Option shall be not less than 110 percent of the Fair Market Value of a share of Stock on the Grant Date, and (ii) with respect to Awards made in substitution for or in exchange for awards made by an entity acquired by the Company or an Affiliate, the Option Price does not need to be at least the Fair Market Value on the Grant Date.

8.2. Vesting.

Subject to Section 8.3 hereof, each Option shall become exercisable at such times and under such conditions (including without limitation performance requirements) as shall be determined by the Committee and stated in the Award Agreement. For purposes of this Section 8.2, fractional numbers of shares of Stock subject to an Option shall be rounded up to the next nearest whole number.

8.3. Term.

Unless otherwise specified in the Award Agreement, each Option shall terminate, and all rights to purchase shares of Stock thereunder shall cease, on the tenth (10th) anniversary of the Grant Date, or under such circumstances and on such date prior thereto as is set forth in the Plan or as may be fixed by the Committee and stated in the related Award Agreement (the “Termination Date”); provided, however, that in the event that the Grantee is a Ten Percent Stockholder, an Option granted to such Grantee that is intended to be an Incentive Stock Option at the Grant Date shall not be exercisable after the fifth (5th) anniversary of the Grant Date.

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8.4. Separation from Service.

Except as otherwise provided in an Award Agreement, if a Grantee’s employment with or service to the Company or Affiliate terminates for any reason other than Cause, (i) Options granted to such Grantee, to the extent that they are exercisable at the time of such termination, shall remain exercisable for a period of not more than 90 days after such termination (one year in the case of termination by reason of death or Disability), on which date they shall expire, and (ii) Options granted to such Grantee, to the extent that they were not exercisable at the time of such termination, shall expire on the date of such termination. In the event of the termination of a Grantee’s employment or service for Cause, all outstanding Options granted to such Grantee shall expire on the date of such termination. Notwithstanding the foregoing, no Option shall be exercisable after the expiration of its term.

8.5. Limitations on Exercise of Option.

Notwithstanding any other provision of the Plan, in no event may any Option be exercised, in whole or in part, after the occurrence of an event referred to in Section 16 hereof which results in termination of the Option.

8.6. Method of Exercise.

An Option that is exercisable may be exercised by the Grantee’s delivery to the Company of written notice of exercise on any business day, at the Company’s principal office, on the form specified by the Company. Such notice shall specify the number of shares of Stock with respect to which the Option is being exercised and shall be accompanied by payment in full of the Option Price of the shares for which the Option is being exercised plus the amount (if any) of federal and/or other taxes which the Company may, in its judgment, be required to withhold with respect to an Award. Except as otherwise provided by the Committee, payments hereunder shall be made in cash or cash equivalents acceptable to the Company. Notwithstanding anything contained herein to the contrary, the Committee may, solely in its discretion, approve payment in whole or in part by an alternative method, including (i) by means of any cashless exercise procedure approved by the Committee, (ii) in the form of unrestricted shares of Stock already owned by the Grantee on the date of surrender to the extent the shares of Stock have a Fair Market Value on the date of surrender equal to the aggregate Option Price of the shares as to which such Option shall be exercised, provided that, in the case of an Incentive Stock Option, the right to make payment in the form of already owned shares of Stock may be authorized only at the time of grant, (iii) in any other form that is consistent with applicable laws, regulations and rules (under certain circumstances, including, but not limited to, notes or other contractual obligations of the Grantee to make payment on a deferred basis), or (iv) any combination of the foregoing.

8.7. Rights of Holders of Options.

Unless otherwise stated in the related Award Agreement, an individual holding or exercising an Option shall have none of the rights of a stockholder (for example, the right to receive cash or dividend payments or distributions attributable to the subject shares of Stock or to direct the voting of the subject shares of Stock) until the shares of Stock covered thereby are fully paid and issued to him. Except as provided in Section 16 hereof, no adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date of such issuance.

8.8. Delivery of Stock Certificates or Other Evidence of Ownership.

Promptly after the exercise of an Option by a Grantee and the payment in full of the Option Price, such Grantee shall be entitled to the issuance of a stock certificate or other evidence of his or her ownership of the shares of Stock subject to the Option.

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8.9. Transferability of Options.

Except as provided in Section 8.10, during the lifetime of a Grantee, only the Grantee (or, in the event of legal incapacity or incompetence, the Grantee’s guardian or legal representative) may exercise an Option. Except as provided in Section 8.10, no Option shall be assignable or transferable by the Grantee to whom it is granted, other than by will or the laws of descent and distribution.

8.10. Family Transfers.

If authorized in the applicable Award Agreement, a Grantee may transfer, not for value, all or part of an Option which is not an Incentive Stock Option to any Family Member. For the purpose of this Section 8.10, a “not for value” transfer is a transfer which is (i) a gift, (ii) a transfer under a domestic relations order in settlement of marital property rights; or (iii) a transfer to an entity in which more than fifty percent of the voting interests are owned by Family Members (or the Grantee) in exchange for an interest in that entity. Following a transfer under this Section 8.10, any such Option shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer. Subsequent transfers of transferred Options are prohibited except to Family Members of the original Grantee in accordance with this Section 8.10 or by will or the laws of descent and distribution. The events of termination of Service of Section 8.4 hereof shall continue to be applied with respect to the original Grantee, following which the Option shall be exercisable by the transferee only to the extent, and for the periods specified, in Section 8.4.

8.11. Limitations on Incentive Stock Options.

An Option shall constitute an Incentive Stock Option only: (i) if the Grantee of such Option is an employee of the Company or any Subsidiary of the Company; (ii) to the extent specifically provided in the related Award Agreement; and (iii) to the extent that the aggregate Fair Market Value (determined at the time the Option is granted) of the shares of Stock with respect to which all Incentive Stock Options held by such Grantee become exercisable for the first time during any calendar year (under the Plan and all other plans of the Grantee’s employer and its Affiliates) does not exceed $100,000. This limitation shall be applied by taking Options into account in the order in which they were granted.

9. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS

9.1. Right to Payment.

A SAR shall confer on the Grantee a right to receive, upon exercise thereof, the excess of (i) the Fair Market Value of one share of Stock on the date of exercise over (ii) the SAR Exercise Price, which shall be at least the Fair Market Value of one share of Stock on the date of grant. The Award Agreement for an SAR shall specify the SAR Exercise Price, which shall be fixed on the Grant Date. SARs may be granted alone or in conjunction with all or part of an Option or at any subsequent time during the term of such Option or in conjunction with all or part of any other Award.

9.2. Other Terms.

The Committee shall determine at the Grant Date or thereafter, the time or times at which and the circumstances under which a SAR may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the time or times at which SARs shall cease to be or become exercisable following termination of Service or upon other conditions, the method of exercise, whether or not a SAR shall be in tandem or in combination with any other Award, and any other terms and conditions of any SAR.

9.3. Term of SARs. The term of a SAR granted under the Plan shall be determined by the Committee, in its sole discretion; provided, however, that such term shall not exceed ten years.

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9.4. Payment of SAR Amount. Upon exercise of a SAR, a Grantee shall be entitled to receive payment from the Company in an amount determined by multiplying:

(i) the difference between the Fair Market Value of a Share on the date of exercise over the SAR Exercise Price; by

(ii) the number of Shares with respect to which the SAR is exercised.

SARs may be settled in cash or Stock, as determined by the Committee and set forth in the Award Agreement.

10. TERMS AND CONDITIONS OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS

10.1. Restrictions.

At the time of grant, the Committee may, in its sole discretion, establish a period of time (a “restricted period”) and any additional restrictions including the satisfaction of corporate or individual performance objectives applicable to an Award of Restricted Stock or Restricted Stock Units in accordance with Section 14. Each Award of Restricted Stock or Restricted Stock Units may be subject to a different restricted period and additional restrictions. Neither Restricted Stock nor Restricted Stock Units may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the restricted period or prior to the satisfaction of any other applicable restrictions.

10.2. Restricted Stock Certificates or Other Evidence of Ownership.

The Company shall issue stock, in the name of each Grantee to whom Restricted Stock has been granted, stock certificates or other evidence of ownership representing the total number of shares of Restricted Stock granted to the Grantee, as soon as reasonably practicable after the Grant Date. The Committee may provide in an Award Agreement that either (i) the Secretary of the Company shall hold such certificates (or other evidence of ownership) for the Grantee’s benefit until such time as the Restricted Stock is forfeited to the Company or the restrictions lapse, or (ii) such certificates (or other evidence of ownership) shall be delivered to the Grantee, provided, however, that such certificates (or other evidence of ownership) shall bear a legend or legends that comply with the applicable securities laws and regulations and makes appropriate reference to the restrictions imposed under the Plan and the Award Agreement.

10.3. Rights of Holders of Restricted Stock.

Unless the Committee otherwise provides in an Award Agreement, holders of Restricted Stock shall have the right to vote such Stock and the right to receive any dividends declared or paid with respect to such Stock. The Committee may provide that any dividends paid on Restricted Stock must be reinvested in shares of Stock, which may or may not be subject to the same restrictions applicable to such Restricted Stock. All distributions, if any, received by a Grantee with respect to Restricted Stock as a result of any stock split, stock dividend, combination of shares, or other similar transaction shall be subject to the restrictions applicable to the original Award.

10.4. Rights of Holders of Restricted Stock Units.

10.4.1. Settlement of Restricted Stock Units.

Restricted Stock Units may be settled in cash or Stock, as determined by the Committee and set forth in the Award Agreement. The Award Agreement shall also set forth whether the Restricted Stock Units shall be settled (i) within the time period specified in Section 17.9 for short term deferrals or (ii) otherwise within the requirements of Section 409A, in which case the Award Agreement shall specify upon which events such Restricted Stock Units shall be settled.

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10.4.2. Voting and Dividend Rights.

Holders of Restricted Stock Units shall have no rights as stockholders of the Company. The Committee may provide in an Award Agreement that the holder of such Restricted Stock Units shall be entitled to receive, upon the Company’s payment of a cash dividend on its outstanding Stock, a cash payment for each Restricted Stock Unit held equal to the per-share dividend paid on the Stock, which may be deemed reinvested in additional Restricted Stock Units at a price per unit equal to the Fair Market Value of a share of Stock on the date that such dividend is paid to shareholders.

10.4.3. Creditor’s Rights.

A holder of Restricted Stock Units shall have no rights other than those of a general creditor of the Company. Restricted Stock Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Award Agreement.

10.5. Termination of Service.

Unless the Committee otherwise provides in an Award Agreement or in writing after the Award Agreement is issued, upon the termination of a Grantee’s Service, any Restricted Stock or Restricted Stock Units held by such Grantee that have not vested, or with respect to which all applicable restrictions and conditions have not lapsed, shall immediately be deemed forfeited, and the Grantee shall have no further rights with respect to such Award.

10.6. Purchase of Restricted Stock.

The Grantee shall be required, to the extent required by applicable law, to purchase the Restricted Stock from the Company at a Purchase Price equal to the greater of (i) the aggregate par value of the shares of Stock represented by such Restricted Stock or (ii) the Purchase Price, if any, specified in the related Award Agreement. If specified in the Award Agreement, the Purchase Price may be deemed paid by Services already rendered. The Purchase Price shall be payable in a form described in Section 13 or, in the discretion of the Committee, in consideration for past Services rendered.

10.7. Delivery of Stock.

Upon the expiration or termination of any restricted period and the satisfaction of any other conditions prescribed by the Committee, the restrictions applicable to shares of Restricted Stock or Restricted Stock Units settled in Stock shall lapse, and, unless otherwise provided in the Award Agreement, a stock certificate (or other evidence of ownership) for such shares shall be delivered, free of all such restrictions, to the Grantee or the Grantee’s beneficiary or estate, as the case may be.

11. TERMS AND CONDITIONS OF UNRESTRICTED STOCK AWARDS

The Committee may, in its sole discretion, grant (or sell at par value or such other higher purchase price determined by the Committee) an Award of Unrestricted Stock to any Grantee pursuant to which such Grantee may receive shares of Stock free of any restrictions (“Unrestricted Stock”) under the Plan. Awards of Unrestricted Stock may be granted or sold as described in the preceding sentence in respect of past Services rendered and other valid consideration, or in lieu of, or in addition to, any cash compensation due to such Grantee. Unless otherwise provided by the Committee, Awards of Unrestricted Stock shall be paid within the time period specified in Section 17.9 for short-term deferrals.

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12. OTHER STOCK-BASED AWARDS

The Committee is authorized, subject to limitations under applicable law, to grant such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Stock, as deemed by the Committee to be consistent with the purposes of the Plan, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Stock, purchase rights for Stock, Awards with value and payment contingent upon performance of the Company or any other factors designated by the Committee, and Awards valued by reference to the book value of Stock or the value of securities of or the performance of specified subsidiaries. The Committee shall determine the terms and conditions of such Awards. Stock delivered pursuant to an Award in the nature of a purchase right granted under this Section 12 shall be purchased for such consideration, paid for at such times, by such methods, and in other such forms, including, without limitation, cash, Stock, other Awards, or other property, as the Committee shall determine.

13. FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK

13.1. General Rule.

Payment of the Option Price for the shares purchased pursuant to the exercise of an Option or the Purchase Price for Restricted Stock shall be made in cash or in cash equivalents acceptable to the Company, except as provided in this Section 13.

13.2. Surrender of Stock.

To the extent the Award Agreement so provides, payment of the Option Price for shares purchased pursuant to the exercise of an Option or the Purchase Price for Restricted Stock may be made all or in part through the tender to the Company of shares of Stock, which shares shall be valued, for purposes of determining the extent to which the Option Price or Purchase Price has been paid thereby, at their Fair Market Value on the date of exercise or surrender.

13.3. Cashless Exercise.

With respect to an Option only (and not with respect to Restricted Stock), to the extent permitted by law and to the extent the Award Agreement so provides, payment of the Option Price may be made all or in part by delivery (on a form acceptable to the Committee) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell shares of Stock and to deliver all or part of the sales proceeds to the Company in payment of the Option Price and any withholding taxes described in Section 17.3.

13.4. Other Forms of Payment.

To the extent the Award Agreement so provides, payment of the Option Price or the Purchase Price may be made in any other form that is consistent with applicable laws, regulations and rules.

14. TERMS AND CONDITIONS OF PERFORMANCE AND ANNUAL INCENTIVE AWARDS

14.1. Performance Conditions.

The right of a Grantee to exercise or receive a grant or settlement of any Award, and the timing thereof, may be subject to such performance conditions as may be specified by the Committee. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance conditions, and may exercise its discretion to reduce or increase the amounts payable under any Award subject to performance conditions, except as limited under Sections 14.2 and 14.3 hereof in the case of a Performance Award or Annual Incentive Award intended to qualify under Section 162(m) of the Code.

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14.2. Performance Awards Granted to Designated Covered Employees.

If and to the extent that the Committee determines that a Performance Award to be granted to a Grantee who is designated by the Committee as likely to be a Covered Employee should qualify as “performance-based compensation” for purposes of Section 162(m) of the Code, the grant, exercise and/or settlement of such Performance Award shall be contingent upon achievement of pre-established performance goals and other terms set forth in this Section 14.2.

14.2.1. Performance Goals Generally.

The performance goals for such Performance Awards shall consist of one or more business criteria and a targeted level or levels of performance with respect to each of such criteria, as specified by the Committee consistent with this Section 14.2. Performance goals shall be objective and shall otherwise meet the requirements of Section 162(m) of the Code and regulations thereunder, including the requirement that the level or levels of performance targeted by the Committee result in the achievement of performance goals being “substantially uncertain.” The Committee may determine that such Performance Awards shall be granted, exercised and/or settled upon achievement of any one performance goal or that two or more of the performance goals must be achieved as a condition to grant, exercise and/or settlement of such Performance Awards. Performance goals may differ for Performance Awards granted to any one Grantee or to different Grantees.

14.2.2. Business Criteria.

One or more of the following business criteria for the Company, on a consolidated basis, and/or for specified subsidiaries or business or geographical units of the Company (except with respect to the total shareholder return and earnings per share criteria), shall be used by the Committee in establishing performance goals for such Performance Awards: (1) earnings per share; (2) increase in revenues or margin; (3) increase in cash flow; (4) operating margin; (5) return on net assets, return on assets, return on investment, return on capital, return on equity; (6) economic value added; (7) direct contribution; (8) net income; pretax earnings; pretax earnings before interest, depreciation and amortization (EBITDA); pretax earnings after interest expense and before extraordinary or special items; operating income; income before interest income or expense, unusual items and income taxes (local, state or federal) and excluding budgeted and actual bonuses which might be paid under any ongoing bonus plans of the Company; (9) working capital; (10) management of fixed costs or variable costs; (11) identification or consummation of investment opportunities or completion of specified projects in accordance with corporate business plans, including strategic mergers, acquisitions or divestitures; (12) total shareholder return; (13) debt reduction; and (14) any of the above goals determined on an absolute or relative basis or as compared to the performance of a published or special index deemed applicable by the Committee including, but not limited to, the Standard & Poor’s 500 Stock Index or a group of comparator companies. One or more of the foregoing business criteria shall also be exclusively used in establishing performance goals for Annual Incentive Awards granted to a Covered Employee under Section 14.3 hereof.

14.2.3. Timing for Establishing Performance Goals.

Performance goals shall be established not later than 90 days after the beginning of any performance period applicable to such Performance Awards, or at such other date as may be required or permitted for “performance-based compensation” under Section 162(m) of the Code.

14.2.4. Performance Award Pool.

The Committee may establish a Performance Award pool, which shall be an unfunded pool, in connection with Performance Awards. The amount of such Performance Award pool shall be based upon the achievement of a performance goal or goals based on one or more of the business criteria set forth in Section 14.2.2 hereof during the given performance period, as specified by the Committee in accordance with Section 14.2.3 hereof. The Committee may specify the amount of the Performance Award pool as a percentage of any of such business criteria, a percentage thereof in excess of a threshold amount, or as another amount which need not bear a strictly mathematical relationship to such business criteria.

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14.2.5. Settlement of Performance Awards; Other Terms.

The Committee shall determine the amount, if any, of (i) the Performance Award pool, and the maximum amount of potential Performance Award payable to each Grantee in the Performance Award pool, or (ii) the amount of any potential Performance Award otherwise payable to each Grantee. Settlement of such Performance Awards shall be in cash, Stock, other Awards or other property, in the discretion of the Committee. The Committee may, in its discretion, reduce the amount of a settlement otherwise to be made in connection with such Performance Awards, but may not exercise discretion to increase any such amount payable to a Covered Employee in respect of a Performance Award subject to this Section 14.2. The Committee shall specify the circumstances in which such Performance Awards shall be paid or forfeited in the event of termination of Service by the Grantee prior to the end of a performance period or settlement of Performance Awards.

14.3. Annual Incentive Awards Granted to Designated Covered Employees.

If and to the extent that the Committee determines that an Annual Incentive Award to be granted to an Grantee who is designated by the Committee as likely to be a Covered Employee should qualify as “performance-based compensation” for purposes of Section 162(m) of the Code, the grant, exercise and/or settlement of such Annual Incentive Award shall be contingent upon achievement of pre-established performance goals and other terms set forth in this Section 14.3.

14.3.1. Annual Incentive Award Pool.

The Committee may establish an Annual Incentive Award pool, which shall be an unfunded pool, in connection with Annual Incentive Awards. The amount of such Annual Incentive Award pool shall be based upon the achievement of a performance goal or goals based on one or more of the business criteria set forth in Section 14.2.2 hereof during the given performance period, as specified by the Committee in accordance with Section 14.2.3 hereof. The Committee may specify the amount of the Annual Incentive Award pool as a percentage of any of such business criteria, a percentage thereof in excess of a threshold amount, or as another amount which need not bear a strictly mathematical relationship to such business criteria.

14.3.2. Potential Annual Incentive Awards.

Not later than the end of the 90th day of each fiscal year, or at such other date as may be required or permitted in the case of Awards intended to be “performance-based compensation” under Section 162(m) of the Code, the Committee shall determine the Grantees who will potentially receive Annual Incentive Awards, and the amounts potentially payable thereunder, for that fiscal year, either out of an Annual Incentive Award pool established by such date under Section 14.3.1 hereof or as individual Annual Incentive Awards. In the case of individual Annual Incentive Awards intended to qualify under Section 162(m) of the Code, the amount potentially payable shall be based upon the achievement of a performance goal or goals based on one or more of the business criteria set forth in Section 14.2.2 hereof in the given performance year, as specified by the Committee; in other cases, such amount shall be based on such criteria as shall be established by the Committee. In all cases, the maximum Annual Incentive Award of any Grantee shall be subject to the limitation set forth in Section 4 hereof.

14.3.3. Settlement of Annual Incentive Awards.

The Committee shall determine the amount, if any, of (i) the Annual Incentive Award pool, and the maximum amount of potential Annual Incentive Award payable to each Grantee in the Annual Incentive Award pool, or (ii) the amount of any potential Annual Incentive Award otherwise payable to each Grantee. The Committee may, in its discretion, determine that the amount payable to any Grantee as a final Annual Incentive Award shall be reduced from the amount of his or her potential Annual Incentive Award, including a determination to make no final Award whatsoever, but may not exercise discretion to increase any such amount in the case of an Annual Incentive Award intended to qualify under Section 162(m) of the Code. The Committee shall specify the circumstances in which an Annual Incentive Award shall be paid or forfeited in the event of termination of employment by the Grantee prior to the end of a fiscal year or settlement of such Annual Incentive Award.

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14.4. Written Determinations.

All determinations by the Committee as to the establishment of performance goals, the amount of any Performance Award pool or potential individual Performance Awards and as to the achievement of performance goals relating to Performance Awards, and the amount of any Annual Incentive Award pool or potential individual Annual Incentive Awards and the amount of final Annual Incentive Awards, shall be made in writing in the case of any Award intended to qualify under Section 162(m) of the Code. The Committee may not delegate any responsibility relating to such Performance Awards or Annual Incentive Awards.

14.5. Status of Performance and Annual Incentive Awards Under Section 162(m) of the Code.

It is the intent of the Company that Performance Awards and Annual Incentive Awards under Sections 14.2 and 14.3 hereof granted to persons who are designated by the Committee as likely to be Covered Employees within the meaning of Section 162(m) of the Code and the regulatory guidance thereunder shall, if so designated by the Committee, constitute “qualified performance-based compensation” within the meaning of Section 162(m) of the Code and the regulatory guidance thereunder. Accordingly, the terms of Section 14, including the definitions of Covered Employee and other terms used therein, shall be interpreted in a manner consistent with Section 162(m) of the Code and the regulatory guidance thereunder. The foregoing notwithstanding, because the Committee cannot determine with certainty whether a given Grantee will be a Covered Employee with respect to a fiscal year that has not yet been completed, the term Covered Employee as used herein shall mean only a person designated by the Committee, at the time of grant of a Performance Award or an Annual Incentive Award, as likely to be a Covered Employee with respect to that fiscal year. If any provision of the Plan or any agreement relating to such Performance Awards or Annual Incentive Awards that are designated as intended to comply with Section 162(m) of the Code does not comply or is inconsistent with the requirements of Section 162(m) of the Code or the regulatory guidance thereunder, such provision shall be construed or deemed amended to the extent necessary to conform to such requirements.

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15. REQUIREMENTS OF LAW

15.1. General.

The Company shall not be required to sell or issue any shares of Stock under any Award if the sale or issuance of such shares would constitute a violation by the Grantee, any other individual exercising an Option, or the Company of any provision of any law or regulation of any governmental authority, including without limitation any federal or state securities laws or regulations. If at any time the Company shall determine, in its discretion, that the listing, registration or qualification of any shares subject to an Award upon any securities exchange or under any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the issuance or purchase of shares hereunder, no shares of Stock may be issued or sold to the Grantee or any other individual exercising an Option pursuant to such Award unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Company, and any delay caused thereby shall in no way affect the date of termination of the Award. Specifically, in connection with the Securities Act, upon the exercise of any Option or the delivery of any shares of Stock underlying an Award, unless a registration statement under such Act is in effect with respect to the shares of Stock covered by such Award, the Company shall not be required to sell or issue such shares unless the Committee has received evidence satisfactory to it that the Grantee or any other individual exercising an Option may acquire such shares pursuant to an exemption from registration under the Securities Act. Any determination in this connection by the Committee shall be final, binding, and conclusive. The Company may, but shall in no event be obligated to, register any securities covered hereby pursuant to the Securities Act. The Company shall not be obligated to take any affirmative action in order to cause the exercise of an Option or the issuance of shares of Stock pursuant to the Plan to comply with any law or regulation of any governmental authority. As to any jurisdiction that expressly imposes the requirement that an Option shall not be exercisable until the shares of Stock covered by such Option are registered or are exempt from registration, the exercise of such Option (under circumstances in which the laws of such jurisdiction apply) shall be deemed conditioned upon the effectiveness of such registration or the availability of such an exemption.

15.2. Rule 16b-3.

During any time when the Company has a class of equity security registered under Section 12 of the Exchange Act, it is the intent of the Company that Awards and the exercise of Options granted hereunder will qualify for the exemption provided by Rule 16b-3 under the Exchange Act. To the extent that any provision of the Plan or action by the Board or Committee does not comply with the requirements of Rule 16b-3, it shall be deemed inoperative to the extent permitted by law and deemed advisable by the Board, and shall not affect the validity of the Plan. In the event that Rule 16b-3 is revised or replaced, the Board may exercise its discretion to modify this Plan in any respect necessary to satisfy the requirements of, or to take advantage of any features of, the revised exemption or its replacement.

16. EFFECT OF CHANGES IN CAPITALIZATION

16.1. Changes in Stock.

If the number of outstanding shares of Stock is increased or decreased or the shares of Stock are changed into or exchanged for a different number or kind of shares or other securities of the Company on account of any recapitalization, reclassification, stock split, reverse split, combination of shares, exchange of shares, stock dividend or other distribution payable in capital stock, or other increase or decrease in such shares effected without receipt of consideration by the Company occurring after the Effective Date, the number and kinds of shares for which grants of Options and other Awards may be made under the Plan shall be adjusted proportionately and accordingly by the Company (to the extent applicable); provided that any such adjustment shall comply with Section 409A. In addition, the number and kind of shares for which Awards are outstanding shall be adjusted proportionately and accordingly so that the proportionate interest of the Grantee immediately following such event shall, to the extent practicable, be the same as immediately before such event. Any such adjustment in outstanding Options or SARs shall not change the aggregate Option Price or SAR Exercise Price payable with respect to shares that are subject to the unexercised portion of an outstanding Option or SAR, as applicable, but shall include a corresponding proportionate adjustment in the Option Price or SAR Exercise Price per share. The conversion of any convertible securities of the Company shall not be treated as an increase in shares effected without receipt of consideration. Notwithstanding the foregoing, in the event of any distribution to the Company’s stockholders of securities of any other entity or other assets (including an extraordinary cash dividend but excluding a non-extraordinary dividend payable in cash or in stock of the Company) without receipt of consideration by the Company, the Company shall in such manner as the Company deems appropriate, adjust (i) the number and kind of shares subject to outstanding Awards and/or (ii) the exercise price of outstanding Options and Stock Appreciation Rights to reflect such distribution.

G-16

16.2. Definition of Change in Control.

Unless an Award Agreement provides for a different meaning, a “Change in Control” shall mean the occurrence of any of the following:

(i) the acquisition, directly or indirectly, by any individual, entity, group or Person of ownership of 30% or more of either (a) the then outstanding shares of Common Stock (the “Outstanding Company Common Stock”), or (b) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”);

(ii) during any period of two consecutive years, individuals, who at the beginning of such period constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director during such period whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, as a member of the Incumbent Board, any such individual whose initial assumption of office occurs as a result of either an actual or threatened stockholder proposal pursuant to Rule 14a-8 of Regulation 14A promulgated under the Exchange Act or other solicitation of proxies or consents by or on behalf of a Person other than the Board;

(iii) approval by the stockholders of the Company of a reorganization, merger or consolidation, in each case, unless, following such reorganization, merger or consolidation, (x) more than 50% of, respectively, the then outstanding shares of common stock of the Company resulting from such reorganization, merger or consolidation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such reorganization, merger or consolidation in substantially the same proportions as their ownership, immediately prior to such reorganization, merger or consolidation of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, and (y) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation;

(iv) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company; or

(v) approval by the stockholders of the Company of the sale or other disposition of all or substantially all of the assets of the Company.

Notwithstanding the foregoing, if it is determined that an Award hereunder is subject to the requirements of Section 409A, the Company will not be deemed to have undergone a Change in Control with respect to such Award or Awards unless the Company is deemed to have undergone a change in control pursuant to the definition in Section 409A.

G-17

16.3. Effect of Change in Control; Corporate Transactions

Unless an Award Agreement explicitly provides otherwise, all outstanding Options and/or SARs shall become immediately exercisable and fully vested upon the consummation of a Change in Control, without regard to any time and/or performance vesting conditions. In addition, unless an Award Agreement explicitly provides otherwise, if the Company is to be consolidated with or acquired by another entity in a merger or a sale of all or substantially all of the Company’s assets, and such transaction also constitutes or is otherwise consummated in connection with a Change in Control (a “Corporate Transaction”), the Committee or the board of directors of any entity assuming the obligations of the Company hereunder (the “Successor Board”), shall, as to outstanding Options and/or SARs, either (i) make appropriate provision for the continuation of such Options and/or SARs by substituting on an equitable basis for the Shares then subject to such Options and/or SARs either the consideration payable with respect to the outstanding shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring entity; or (ii) terminate all Options and/or SARs in exchange for a cash payment equal to the excess of the Fair Market Value (determined as of the date of consummation of the Corporate Transaction) of the Shares subject to such Options and/or SARs over the exercise price thereof.

Unless an Award Agreement explicitly provides otherwise, in the event of a Change in Control, the Committee shall waive any or all Company vesting, repurchase and/or forfeiture rights and conditions with respect to outstanding Restricted Stock and/or Restricted Stock Units. In addition, in the event of a Corporate Transaction, unless an Award Agreement explicitly provides otherwise, with respect to outstanding grants of Restricted Stock, Restricted Stock Units and/or Unrestricted Stock, the Committee or the Successor Board, shall either (i) make appropriate provisions for the continuation of such grants of Restricted Stock, Restricted Stock Units and/or Unrestricted Stock by substituting on an equitable basis for the Shares then subject to such Restricted Stock, Restricted Stock Units and/or Unrestricted Stock either the consideration payable with respect to the outstanding Shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring entity; or (ii) terminate all grants of Restricted Stock, Restricted Stock Units and/or Unrestricted Stock in exchange for a cash payment equal to the excess of the Fair Market Value (determined as of the date of consummation of the Corporate Transaction) of the Shares subject to such Restricted Stock, Restricted Stock Units and/or Unrestricted Stock over the purchase price thereof, if any.

16.4. Reorganization Which Does Not Constitute a Change in Control.

If the Company undergoes any reorganization, merger, or consolidation of the Company with one or more other entities which does not constitute a Change in Control, any Option or SAR theretofore granted pursuant to the Plan shall pertain to and apply to the securities to which a holder of the number of shares of Stock subject to such Option or SAR would have been entitled immediately following such reorganization, merger, or consolidation, with a corresponding proportionate adjustment of the Option Price or SAR Exercise Price per share so that the aggregate Option Price or SAR Exercise Price thereafter shall be the same as the aggregate Option Price or SAR Exercise Price of the shares remaining subject to the Option or SAR immediately prior to such reorganization, merger, or consolidation. Subject to any contrary language in an Award Agreement, any restrictions applicable to such Award shall apply as well to any replacement shares received by the Grantee as a result of the reorganization, merger or consolidation.

16.5. Adjustments.

Adjustments under this Section 16 related to shares of Stock or securities of the Company shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive. No fractional shares or other securities shall be issued pursuant to any such adjustment, and any fractions resulting from any such adjustment shall be eliminated in each case by rounding upward to the nearest whole share.

16.6. No Limitations on Company.

The making of Awards pursuant to the Plan shall not affect or limit in any way the right or power of the Company to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure or to merge, consolidate, dissolve, or liquidate, or to sell or transfer all or any part of its business or assets.

G-18

17. GENERAL PROVISIONS

17.1. Disclaimer of Rights.

No provision in the Plan or in any Award Agreement shall be construed to confer upon any individual the right to remain in the employ or service of the Company or any Affiliate, or to interfere in any way with any contractual or other right or authority of the Company either to increase or decrease the compensation or other payments to any individual at any time, or to terminate any employment or other relationship between any individual and the Company. In addition, notwithstanding anything contained in the Plan to the contrary, unless otherwise stated in the applicable Award Agreement, no Award granted under the Plan shall be affected by any change of duties or position of the Grantee, so long as such Grantee continues to be a Service Provider, if applicable. The obligation of the Company to pay any benefits pursuant to this Plan shall be interpreted as a contractual obligation to pay only those amounts described herein, in the manner and under the conditions prescribed herein. The Plan shall in no way be interpreted to require the Company to transfer any amounts to a third party trustee or otherwise hold any amounts in trust or escrow for payment to any Grantee or beneficiary under the terms of the Plan.

17.2. Nonexclusivity of the Plan.

Neither the adoption of the Plan nor the submission of the Plan to the stockholders of the Company for approval shall be construed as creating any limitations upon the right and authority of the Board to adopt such other incentive compensation arrangements (which arrangements may be applicable either generally to a class or classes of individuals or specifically to a particular individual or particular individuals), including, without limitation, the granting of stock options as the Board in its discretion determines desirable.

17.3. Withholding Taxes.

The Company or an Affiliate, as the case may be, shall have the right to deduct from payments of any kind otherwise due to a Grantee any federal, state, or local taxes of any kind required by law to be withheld (i) with respect to the vesting of or other lapse of restrictions applicable to an Award, (ii) upon the issuance of any shares of Stock upon the exercise of an Option, or (iii) pursuant to an Award. At the time of such vesting, lapse, or exercise, the Grantee shall pay to the Company or the Affiliate, as the case may be, any amount that the Company or the Affiliate may reasonably determine to be necessary to satisfy such withholding obligation. Subject to the prior approval of the Company or the Affiliate, which may be withheld by the Company or the Affiliate, as the case may be, in its sole discretion, the Grantee may elect to satisfy such obligations, in whole or in part, (i) by causing the Company or the Affiliate to withhold shares of Stock otherwise issuable to the Grantee or (ii) by delivering to the Company or the Affiliate shares of Stock already owned by the Grantee. The shares of Stock so delivered or withheld shall have an aggregate Fair Market Value equal to such withholding obligations. The Fair Market Value of the shares of Stock used to satisfy such withholding obligation shall be determined by the Company or the Affiliate as of the date that the amount of tax to be withheld is to be determined. A Grantee who has made an election pursuant to this Section 17.3 may satisfy his or her withholding obligation only with shares of Stock that are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements.

17.4. Captions.

The use of captions in this Plan or any Award Agreement is for the convenience of reference only and shall not affect the meaning of any provision of the Plan or any Award Agreement.

G-19

17.5. Other Provisions.

Each Award Agreement may contain such other terms and conditions not inconsistent with the Plan as may be determined by the Committee, in its sole discretion.

17.6. Number and Gender.

With respect to words used in this Plan, the singular form shall include the plural form, the masculine gender shall include the feminine gender, etc., as the context requires.

17.7. Severability.

If any provision of the Plan or any Award Agreement shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction.

17.8. Governing Law.

The validity and construction of this Plan and the instruments evidencing the Awards hereunder shall be governed by the laws of the State of New York, without regard to any choice of law principles thereof or of any other jurisdiction.

17.9. Short-Term Deferrals.

For each Award intended to comply with the short-term deferral exception provided for under Section 409A, the related Award Agreement shall provide that such Award shall be paid out by the later of (i) the 15th day of the third month following the Grantee’s first taxable year in which the Award is no longer subject to a substantial risk of forfeiture or (ii) the 15th day of the third month following the end of the Company’s first taxable year in which the Award is no longer subject to a substantial risk of forfeiture.

17.10. Stockholder Approval; Effective Date of Plan.

The Plan shall be effective as of May 14, 2008, the date of its approval by the shareholders of the Company (the “Effective Date”), as amended and approved by the shareholders of the Company on May 19, 2010.

G-20

	By order of the Board of Directors,

	/s/ Jerry Kieliszak

	Jerry Kieliszak
	Senior Vice President, Chief Financial Officer, Treasurer and Secretary

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION	91

EQUITY COMPENSATION PLAN INFORMATION	92

AUDIT COMMITTEE REPORT	92

PROPOSAL 6 – ADVISORY VOTE ON EXECUTIVE COMPENSATION AS DISCLOSED IN THIS PROXY STATEMENT	94

Compensation Philosophy and Executive Compensation	94
Advisory Vote on Executive Compensation	94

PROPOSAL 7 – ADVISORY VOTE ON THE FREQUENCY OF AN ADVISORY VOTE ON EXECUTIVE COMPENSATION	95

Recommendation on Frequency of an Advisory Vote on Executive Compensation	95
Advisory Vote on Frequency of an Advisory Vote on Executive Compensation	96

PROPOSAL 8 – AMENDMENT OF THE 2008 LONG-TERM INCENTIVE PLAN	97

General	97
Reasons for the Proposed Amendment to the 2008 Long-Term Incentive Plan	97
Awards Granted Under the 2008 Long-Term Incentive Plan	97
New Plan Benefits	98
Material Features of the 2008 Long-Term Incentive Plan	99
Federal Income Tax Consequences	100
Vote Required	102

PROPOSAL 9 – RATIFY THE APPOINTMENT OF BDO USA LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	103

HEGO MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	105

Overview	105
Basis of Presentation	105
Statement of Operations	106
Results of Operations	106
Liquidity and Capital Resources	109
Off-Balance Sheet Arrangements	111
Contractual Obligations	112
Research and Development	112
Foreign Currency Fluctuations and Inflation	112
Significant Accounting Policies	113
U.S. GAAP Reconciliation	115

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT HEGO’S MARKET RISK	117

Foreign Currency Exchange Risk	118
Interest Rate Risk	118

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS	119

Pro Forma Adjustments	119
Hego	119
Unaudited Pro Forma Condensed Combined Balance Sheet as of December 31, 2012	120
Unaudited Pro Forma Condensed Combined Statement of Operations for the Year Ended December 31, 2012	122
Notes to Unaudited Pro Forma Condensed Combined Financial Statements	123

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	125

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF CHYRON	126

	Years Ended December 31,
	2008		2009		2010			2011			2012		2012		2011			2012
	(SEK)		(SEK)		(SEK)			(SEK)			(SEK)		($)		(SEK)			(SEK)
	(in thousands, except share and per share data and exchange rates)

	(Under Swedish GAAP)														(Under US GAAP)
Statement of Operations Data:
Net sales		60,962		58,007		66,050			70,388			100,295		14,803		70,388			100,295
Income (loss) from operations		9,284		5,551		6,558			(4,907	)		10,797		1,594		(4,540	)		8,672
Income (loss) from continuing operations		6,155		2,952		(737	)		(12,385	)		7,728		1,141		(11,175	)		6,510
Net income (loss)		6,155		2,952		(737	)		(12,385	)		7,728		1,141		(11,175	)		6,510
Net income (loss) from operations per share
Basic and Diluted		7,610		4,550		5,375			(3,410	)		7,016		1,035		(3,155	)		5,635
Income (loss) from continuing operations per share
Basic and Diluted		5,045		2,420		(604	)		(8,606	)		5,021		741		(7,766	)		4,230
Net income (loss) per share
Basic and Diluted		5,045		2,420		(604	)		(8,606	)		5,021		741		(7,766	)		4,230
Weighted average shares used in computing net income (loss) per share:
Basic and Diluted		1,220		1,220		1,220			1,439			1,539		1,539		1,439			1,539
Exchange rate from SEK to Dollars(1)		6.58		7.65		7.20			6.50			6.78		6.78		6.50			6.78

	As of December 31,
	2008		2009		2010		2011		2012		2012		2011		2012
	(SEK)		(SEK)		(SEK)		(SEK)		(SEK)		($)		(SEK)		(SEK)
	(in thousands, except share and per share data and exchange rates)

	(Under Swedish GAAP)												(Under US GAAP)
Balance Sheet Data:
Total assets		33,747		33,557		33,205		26,822		34,755		5,334		28,723		38,659
Net assets		14,169		13,944		11,639		354		7,950		1,220		938		8,106
Capital stock (excluding long term debt and redeemable preferred Stock)		122		122		122		154		154		24		154		154
Long-term obligations (including long-term debt and capital leases)		209		105		1,060		1,823		949		146		3,139		3,321
Exchange rate from SEK to Dollars(1)		7.75		7.21		6.80		6.92		6.52		6.52		6.92		6.52

	Years Ended December 31,
	2008		2009		2010		2011		2012
Dividends declared per share (SEK)		2,500		—		1,455		—		—
Dividends declared per share ($)		322		—		214		—		—

IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND VOTING	1

SUMMARY TERM SHEET	10

The Share Purchase and the Stock Purchase Agreement	10
Structure of Hego and the Share Purchase	10
The Acquired Business	11
Our Business	11
Recommendation of Our Board of Directors; Our Reasons for the Share Purchase	11
Opinion of the Financial Advisor Regarding Fairness of the Share Purchase from a Financial Point of View	12
Interests of Certain Persons in the Share Purchase	12
Vote Required to Approve the Issuance of the Share Purchase Shares; Voting Commitments	12
Conditions to the Completion of the Share Purchase	12
Termination of the Stock Purchase Agreement Under Specified Circumstances	13
Board of Directors of Chyron Following the Transaction	13
U.S. Federal Income Tax Consequences of the Share Purchase	13
Anticipated Accounting Treatment	13
Share Ownership of Directors and Executive Officers of Chyron	13
Regulatory Approvals	13
Appraisal Rights	14

SELECTED CONDENSED CONSOLIDATED FINANCIAL DATA OF HEGO	15

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA	17

COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA	19

MARKET PRICE AND DIVIDEND INFORMATION	21

Dividends	22
RISK FACTORS	23
Risks Related to the Share Purchase	23
Risks Related to Chyron	26
Risks Related to the Combined Business Following the Share Purchase	26

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	28

PROPOSAL 1 – APPROVAL OF THE ISSUANCE OF THE SHARE PURCHASE SHARES	30

Vote Required to Approve the Issuance of the Share Purchase Shares	30

THE SHARE PURCHASE	30

Background of the Share Purchase	30
Our Reasons for the Share Purchase	34
Recommendation of Our Board of Directors	36
Opinion of the Financial Advisor Regarding the Fairness of the Share Purchase from a Financial Point of View	37
Interests of Certain Persons in the Share Purchase	43
Voting Commitments	44
Share Purchase Consideration	44
Effective Time of the Share Purchase	44
Board of Directors of Chyron Following the Transaction	45
Regulatory Approvals	45
U.S. Federal Income Tax Consequences of the Share Purchase	45
NASDAQ Listing	45
Restrictions on the Resale of the Share Purchase Shares	45
Registration Rights	46

THE STOCK PURCHASE AGREEMENT	46

General	46
Share Purchase Consideration	46
Conditions to the Completion of the Share Purchase	47
Meeting of Stockholders	49
Covenants, Conduct of Business Pending the Share Purchase	49
Additional Agreements	50
Termination of the Stock Purchase Agreement Under Specified Circumstances	52
Expenses and Reimbursement	53
Representations and Warranties	53

HEGO BUSINESS	55

Overview	55
Strategy	55
Products	56
Sales and Marketing	57
Research and Development	58
Intellectual Property	58
Manufacturing	58
Competition	58
Government Regulation	59
Legal Proceedings	59
Facilities	59
Employees	59

PROPOSAL 2 – ADJOURNMENT OR POSTPONEMENT OF THE ANNUAL MEETING OF STOCKHOLDERS	60

Vote Required	60

PROPOSAL 3 – AMENDMENT TO OUR RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED, TO CHANGE OUR CORPORATE NAME	61

Vote Required	61

PROPOSAL 4 – ADVISORY VOTE ON GOLDEN PARACHUTE COMPENSATION	62

Golden Parachute Compensation – Amount of Potential Payments and Benefits to Named Executive Officers	62
Advisory Vote on Golden Parachutes	64

PROPOSAL 5 – ELECTION OF DIRECTORS	65

Director Nominees	65
Independence of the Board of Directors	67
Attendance at Board and Shareholder Meetings	67
Committees of the Board of Directors	67
Board Leadership Structure and Role in Risk Oversight	68
Procedures for Nominating Directors	69
Shareholder Communications with the Board	69
Executive Officers	69
Code of Conduct and Ethics	70

COMPENSATION DISCUSSION AND ANALYSIS	71

COMPENSATION COMMITTEE REPORT	74

EXECUTIVE COMPENSATION	74

DIRECTOR COMPENSATION	89

INDEMNIFICATION OF DIRECTORS AND OFFICERS	91

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE	128

STOCKHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTOR	128

DELIVERY OF SECURITYHOLDER DOCUMENTS	128

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE	129

WHERE YOU CAN FIND MORE INFORMATION	129

OTHER MATTERS ARISING AT THE ANNUAL MEETING	129

ANNUAL REPORT ON FORM 10-K	130



Annex A — STOCK PURCHASE AGREEMENT	A-1

Annex B — CONSOLIDATED FINANCIAL STATEMENTS OF CHYRON	B-1

Annex C — CONSOLIDATED FINANCIAL STATEMENTS OF HEGO	C-1

Annex D — OPINION OF FINANCIAL ADVISOR	D-1

Annex E — FORM OF TRANSACTION SUPPORT AND LOCK-UP AGREEMENT	E-1

Annex F — CERTIFICATE OF AMENDMENT TO CERTIFICATE OF INCORPORATION	F-1

Annex G — 2008 LONG-TERM INCENTIVE PLAN, AS AMENDED	G-1

	12 Months Ended December 31, 2012
	(In thousands, except per share amounts) (Unaudited)
Statement of Operations Data:
Revenues	$	45,024
Operating income (loss)	$	(3,033	)
Net income (loss)	$	(21,904	)
Earnings (loss) per common share - basic and diluted	$	(0.74	)
Weighted-average shares used in computing net earnings (loss) per share -basic and diluted		29,666

	As of December 31, 2012
	(In thousands) (Unaudited)
Balance Sheet Data:
Cash and cash equivalents	$	1,531
Working capital	$	677
Total assets	$	34,543
Long-term debt, less current portion	$	543
Total shareholders’ equity	$	13,270

	12 Months Ended December 31, 2012
Chyron historical data:
Net loss per share-basic and diluted	$	(1.31	)
Book value per share as of the end of the period(1)	$	0.12

	12 Months Ended December 31, 2012
Hego historical data:
Net income per share attributable to Hego shareholders-basic and diluted	$	623.78
Book value per share as of the end of the period(1)	$	949.97

	12 Months Ended December 31, 2012
Pro Forma combined data:
Net income (loss) per common share-basic and diluted(2)	$	(0.74	)
Book value per share as of the end of the period(1)	$	0.45

	High		Low
2013
First Quarter (through March 26, 2013)	$	1.57	$	0.69

2012
First Quarter	$	2.00	$	1.33
Second Quarter	$	1.90	$	1.33
Third Quarter	$	1.42	$	0.80
Fourth Quarter	$	1.02	$	0.48

2011
First Quarter	$	3.40	$	1.94
Second Quarter	$	2.65	$	1.91
Third Quarter	$	2.80	$	1.86
Fourth Quarter	$	2.02	$	1.17

	VIZRT			Orad			Avid			Mean			Median			Chyron
Enterprise Value to:
LTM Sales		1.2	x		0.4	x		0.3	x		0.7	x		0.4	x		0.5	x
NTM Sales		1.1	x		0.4	x		0.3	x		0.6	x		0.4	x		0.4	x
2014 Estimated Sales		1.0	x		0.4	x		0.3	x		0.6	x		0.4	x		0.4	x
LTM EBITDA		5.8	x		5.2	x		25.4	x		12.1	x		5.8	x		NA
NTM EBITDA		5.5	x		4.6	x		4.6	x		4.9	x		4.6	x		NA
2014 Estimated EBITDA		4.9	x		3.6	x		3.6	x		4.1	x		3.6	x		8.9	x

	Chyron			Hego
High to High		48.5	%		51.5	%
Average to Mean		46.1	%		53.9	%
Low to Low		39.9	%		60.1	%

	% Contribution						% Contribution
	Chyron			Hego			Chyron			Hego
	FY 2012			FY 2012			FY 2013			FY 2013
Revenue		66.5	%		33.5	%		62.8	%		37.2	%
EBITDA		(321.8	%)		221.8	%		(5.8	%)		105.8	%
Net Income		(156.6	%)		56.6	%		(146.3	%)		246.3	%
Equity Book Value		57.9	%		42.1	%	NA			NA

DCF Equity Value Contribution	Chyron			Hego
Base Case		24.2	%		75.8	%
Downside Case		37.8	%		62.2	%

Name and Position	Number of Shares of Common Stock Underlying Accelerated Outstanding Awards		Value of Accelerated Awards ($)(1)

Susan Clark-Johnson, Director		47,023	$	49,374
Peter F. Frey, Director		54,861		57,604
Christopher R. Kelly, Director		54,861		57,604
Jerry Kieliszak, Senior Vice President, Chief Financial Officer, Treasurer and Secretary		25,000		26,250
Roger L. Ogden, Chairman of the Board, director		78,373		82,292
Kathleen R. Power, Senior Vice President, Sales, Service, Marketing and Field Operations		—		—
Robert A. Rayne, Director		47,023		49,374
Michael I. Wellesley-Wesley, President and CEO, Director		37,500		39,375
Michael C. Wheeler, Director		47,023		49,374
All current executive officers as a group		62,500		65,625
All current directors who are not executive officers as a group		329,164		345,622
All employees as a group (including officers who are not executive officers)		246,389		178,369

Name	Age	Position with Chyron	Year First Became Director
Robert A. Rayne	64	Director	2008
Christopher R. Kelly	53	Director	1999
Michael I. Wellesley-Wesley	60	President, Chief Executive Officer and Director	1995
Peter F. Frey	53	Director	2008
Roger L. Ogden	67	Chairman of the Board of Directors and Director	2008
Michael C. Wheeler	63	Director	2006
Susan Clark-Johnson	66	Director	2010

Name	Cash ($)(1)		Equity ($)(2)		Perquisites/ Benefits ($)(3)		Tax Reimbursements ()			Tax Gross-Up on Severance Payment ($)(5)		Total ($)
Michael Wellesley-Wesley	$	820,845	$	39,375	$	47,881	$	120,232	(4)	$	22,111	$	1,050,444
Jerry Kieliszak		391,680		26,250		38,725		0			22,111		478,766
Kathleen Power		270,000		0		31,154		0			0		301,154

Name	Company Position and Offices Held	Director of the Company Since
Susan Clark-Johnson	Director, Member of the Audit Committee and Member of the Compensation Committee	March 2010

Peter F. Frey	Director, Chairman of the Audit Committee	May 2008

Christopher R. Kelly	Director, Member of the Compensation Committee, Chairman of the Corporate Governance and Nominating Committee	August 1999

Roger L. Ogden	Chairman of the Board of Directors, Member of the Audit Committee and Chairman of the Compensation Committee	May 2008

Robert A. Rayne	Director, Member of the Corporate Governance and Nominating Committee	May 2008

Michael I. Wellesley-Wesley	President, Chief Executive Officer and Director	May 1995

Michael C. Wheeler	Director, Member of the Corporate Governance and Nominating Committee	February 2006

Position Name & Principal	Year	Salary(1)		Stock Award(2)		Option Award			Non-Equity Incentive Plan Compen-sation(4)		Change in Pension Value and Non-qualified Deferred Compen-sation Earnings(5)		All Other Compen-sation(6)		Total
		($)		($)		($)			($)		($)		($)		($)
Michael Wellesley-Wesley	2012		482,850		0		0	(3)		0		74,399		30,748		587,997
President & Chief	2011		476,186		83,625		0			0		69,881		43,164		672,856
Executive Officer	2010		464,207		64,887		0			140,346		42,171		35,387		746,998

Jerry Kieliszak	2012		244,800		0		35,582	(3)		0		76,517		9,607		366,506
SVP & Chief	2011		242,031		55,750		0			0		86,195		10,520		394,496
Financial Officer	2010		225,356		43,258		0			58,693		43,761		9,734		380,802

Kathleen Power	2012		270,000		0		17,073	(3)		0		0		10,360		297,433
SVP of Sales, Service, Marketing & Field Operations

	Commutation Allowance(1)		Tax Preparation Fees(2)		Company Match on Qualified 401(k)Plan(3)		Life Insurance Premiums(4)		Total
Name	($)		($)		($)		($)		($)
Michael Wellesley-Wesley		18,000		2,029		9,999		720		30,748
Jerry Kieliszak		0		0		8,887		720		9,607
Kathleen Power		0		0		10,000		360		10,360

		Estimated future payouts under non-equity incentive plan awards(1)							Estimated future payouts under incentive equity plan awards(2)		All other option awards: number of securities underlying options(3)		Exercise price of option awards		Grant date fair value of stock units and option awards
Name	Grant Date	Threshold ($)		Target ($)		Maximum ($)			Target (#)		(#)		($/Sh.)		($)
Michael Wellesley-Wesley	1/1/2012		0		337,995		506,993
	3/19/2012									200,000						0	(4)
Jerry Kieliszak	1/1/2012		0		146,880		220,320
	3/19/12									90,000						0	(4)
	5/23/2012											42,000		1.40		35,582	(5)
Kathleen Power	1/1/2012		0		75,000			(6)
	3/19/2012									60,000						0	(4)
	5/23/2012											20,000		1.40		17,073	(5)

	Option Awards										Stock Awards(3)
Name	Number of Securities Underlying Unexercised Options Exercisable		Number of Securities Underlying Unexercised Options Unexercisable(1)		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options(2)		Option Exercise Price		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested		Market Value of Shares or Units of Stock That Have Not Vested
	(#)		(#)		(#)		($)				(#)		($)

Michael Wellesley-Wesley		50,000		0				0.66	2/21/2013
						200,000		1.62		(2)
		78,334		0				2.01	5/18/2014
		50,000		0				1.02	6/3/2015
		50,000		0				2.76	5/18/2016
		50,000		0				2.43	5/16/2017
		75,000		0				5.48	5/19/2018
		56,250		18,750				1.31	5/13/2019
												12,500		8,875
												25,000		17,750

Jerry Kieliszak		8,334		0				1.05	11/7/2013
						90,000		1.62		(2)
		33,334		0				2.01	5/18/2014
		25,000		0				1.02	6/3/2015
		33,334		0				2.76	5/18/2016
		33,334		0				2.43	5/16/2017
		50,000		0				5.48	5/19/2018
		56,250		18,750				1.31	5/13/2019
		0		42,000				1.40	5/23/2022
												8,333		5,916
												16,667		11,834

Kathleen Power		16,666		33,334				1.46	11/7/2021
						60,000		1.62		(2)
		0		20,000				1.40	5/23/2022
												16,667		11,834

	Stock Awards
	Number of shares		Value realized
Name	acquired on vesting		on vesting
	(#)		($)
Michael Wellesley-Wesley		49,779		68,582
Jerry Kieliszak		26,320		36,624
Kathleen Power		33,333		47,833

Name	Plan Name	Number of Years of Credited Service(1)		Present Value of Accumulated Benefit		Payments During Last Fiscal Year
		(#)		($)		($)
Michael Wellesley-Wesley	Chyron Employees’ Pension Plan		8.5		310,239		0
Jerry Kieliszak	Chyron Employees’ Pension Plan		9.5		333,655		0

	Severance Salary(1)		Incentive Plan Award Severance(2)		Severance Benefits(3)		Accrued Vacation (4)		Early Vesting of Equity Awards (5)		Tax Gross Upon Severance Payment (6)		409A Excise Tax (7)		Total
Name	($)		($)		($)		($)		($)		($)		($)		($)
Michael Wellesley-Wesley		482,850		337,995		29,310		18,571		26,625		22,111		120,232		1,037,694

Jerry Kieliszak		244,800		146,880		29,310		9,415		17,750		22,111		0		470,266

Name	Fees Earned or Paid in Cash		Stock Awards(1)		Total
	($)		($)		($)
Susan Clark-Johnson(2)		20,000		29,813		49,813
Peter F. Frey(3)		25,000		34,782		59,782
Christopher R. Kelly(4)		25,000		34,782		59,782
Roger L. Ogden(5)		40,000		49,689		89,689
Robert A. Rayne(6)		20,000		29,813		49,813
Michael C. Wheeler(7)		20,000		29,813		49,813

Plan Category	Number of securities to be issued upon exercise of outstanding stock options, warrants and rights(2)		Weighted average exercise price of outstanding stock options, warrants and rights(3)		Number of securities remaining available for future issuance under equity compensation plans
	(#)		($)		(#)
Equity compensation plans approved by shareholders(1)		4,637,434		2.07		830,937
Equity compensation plans not approved by shareholders		0		0		0
Total		4,637,434		2.07		830,937

Shares authorized			5,000,000
Stock options awarded			3,778,145
Stock issued as bonuses			111,734
Restricted stock units awarded			3,373,744
Stock options forfeited			774,137
Restricted stock units forfeited			2,061,037
Shares available for future grant			571,551

Stock options exercised			19,045
Stock options outstanding			2,984,963
Restricted stock units vested			809,377
Restricted stock units outstanding			503,330

Name and Position	Dollar Value ($)

Jerry Kieliszak, Senior Vice President, Chief Financial Officer, Treasurer and Secretary		146,880
Kathleen R. Power, Senior Vice President, Sales, Service, Marketing and Field Operations		81,000
Michael I. Wellesley-Wesley, President and CEO		337,995
All current executive officers as a group		565,785
All employees as a group (including officers who are not executive officers)		269,071

Name and Position	Share Amount

Jerry Kieliszak, Senior Vice President, Chief Financial Officer, Treasurer and Secretary		90,925
Kathleen R. Power, Senior Vice President, Sales, Service, Marketing and Field Operations		50,142
Michael I. Wellesley-Wesley, President and CEO		209,235
All current executive officers as a group		350,302
All employees as a group (including officers who are not executive officers)		166,567

	For Year Ended December 31,
	2012		2011
Audit Fees(1)	$	244,090	$	234,335
Audit-Related Fees(2)		59,360		54,175
Tax Fees(3)		106,985		53,910
	$	410,435	$	342,420