AMENDMENT NUMBER ONE
This Amendment Number One is dated as of August 1, 1997 and is
to the Credit Agreement (the "Agreement") among Hardinge Inc. the Bank's
signatory thereto and The Chase Manhattan Bank (National Association) (now The
Chase Manhattan Bank) as Agent, and is dated as of February 28, 1996. Terms used
but not otherwise defined in this Amendment shall have the meanings ascribed
thereto in the Credit Agreement.
The Credit Agreement shall be amended as follows:
1. The definition of "Agent Account" as set forth in Section
1.01 shall be amended in its entirety to read as follows:
"Agent Account" means account number 323-5-05074 maintained by
the Agent and any other account designated by the Agent.
2. Section 1.01 shall be amended by adding the following
definitions:
"Change in Control" means (a) except as to (i) officers and
directors in office as of August 1, 1997, (ii) the Hardinge
Inc. Pension Plan, Hardinge, Inc. Savings Plan, or other
compensation plan of Borrower, and (iii) Chemung Canal Trust
Company, the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and Rule 13d-5
of the Securities and Exchange Commission as in effect on the
date hereof) of shares representing more than twenty-five
(25%) of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of the Borrower, or
(b) occupation of a majority of the seats (other than vacant
seats) on the board of directors of the Borrower by Persons
who were neither (i) nominated by the board of directors of
the Borrower nor (ii) appointed by the directors so nominated.
"Earnings Before Interest, Taxes, Depreciation and
Amortization" means Consolidated Net Income prior to the
deduction of interest expense, prior to the deduction for
federal, state or foreign corporate income and corporate
franchise taxes and prior to the deduction for depreciation
and amortization.
3. The definition of "Consolidated Tangible Net Worth" as set
forth in Section 1.01 of the Agreement shall be amended in its entirety to read
as follows:
"Consolidated Tangible Net Worth" means Net Worth prior to any
cumulative foreign currency translation adjustments minus
intangible assets.
4. The definition of "Margin" as set forth in Section 1.01 of
the Agreement shall be amended in its entirety to read as follows:
"Margin" means for each Variable Rate Loan and Eurodollar Loan
the lowest applicable margin on the table next following,
computed commencing on August 1, 1997, based upon Borrower's
financial statements for the immediately preceding four fiscal
quarters for income statement items in the most recent fiscal
quarter for balance sheet items, and adjusted thereafter on
the first day of each Interest Period based on information for
the immediately preceding four fiscal quarters for income
statement items and the immediately preceding fiscal quarter
for balance sheet items.
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(a) Ratio of Funded Debt to Variable Rate Loans Eurodollar Loans
Earnings Before Interest, Taxes,
Depreciation & Amortization
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Equal to less than 1.0 0 Basis Points 37.5 Basis Points
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Greater than 1.0 and less than o 0 Basis Points 50 Basis Points
equal to 2.0
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Greater than 2.0 0 Basis Points 75 Basis Points
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5. The definition of "Principal Reference Bank" as set forth
in Section 1.01 of the Agreement shall be amended in its entire to read as
follows:
"Principal Reference Bank" means The Chase Manhattan Bank, its
successors and assigns.
6. The definition of "Reference Banks" as set forth in Section
1.01 of the Agreement shall be amended in its entirety to read as follows:
"Reference Banks" means The Chase Manhattan Bank and Marine
Midland Bank.
7. Section 7.01 of the Agreement shall be amended by adding
paragraph (h) as follows:
(h) Liens not exceeding $5,000,000.00 in the aggregate against
personal property other than inventory and receivables.
8. The last paragraph of Section 7.05 of the Agreement shall
be amended in its entirety to read as follows:
Notwithstanding the foregoing, the aggregate amount of
acquisitions (net of amounts paid for with the Borrower's
stock) permitted under this section from and after the
Effective Date shall not be greater than $15,000,000.00 in any
consecutive twenty-four (24) month period without the prior
written consent of the Required Banks.
9. Section 7.08 of the Agreement shall be amended in its
entirety to read as follows:
Section 7.08. Guaranties. Become or permit any Subsidiary to
become liable for or permit any of its property to become
subject to any guaranty except guaranties given in connection
with the sale, pledge or discounting of customer notes,
provided that immediately after giving effect thereto the
Borrower's aggregate liability under such guaranties
(exclusive of guaranties to the Hardinge Inc. Pension Plan)
does not exceed $11,000,000.00. Each guaranty permitted by
this Section 7.08 must comply with the requirements of Section
8.01 (if and to the extent it is included among Consolidated
Current Liabilities) and with the requirements of Section 8.03
(if and to the extent it is included in Funded Debt).
10. Section 8.01 of the Agreement shall be amended in its
entirety to read as follows:
Section 8.01. Working Capital. The Borrower shall maintain at
all times an excess of Consolidated Current Assets over
Consolidated Current Liabilities of not less than
$85,000,000.00.
11. The minimum Consolidated Tangible Net Worth required under
Section 8.02 of the Agreement shall be amended for the fiscal year ending
December 31, 1997 and thereafter as set forth below opposite such fiscal year.
Fiscal Year Ending
December 31 Amount
1997 135,000.00
1998 138,000.00
1999 141,000.00
2000 144,000.00
2001 147,000.00
2002 150,000.00
12. Section 8.03 of the Agreement shall be deleted and
replace with the following:
Section 8.03. Funded Debt. Borrower shall maintain a ratio of
Funded Debt to Earnings Before Interest, Taxes, Depreciation
and Amortization of not greater than 2.5 to 1, measured as of
the last day of each fiscal quarter for the immediately
preceding twelve (12) months.
13. Section 8.04 of the Agreement shall be deleted and
replaced with the following:
Section 8.04. Earnings. Borrower shall maintain a ratio of
Earnings Before Interest, Taxes, Depreciation and Amortization
to interest of not less than 3.0 to 1, measured as of the last
day of each fiscal quarter for the immediately preceding
twelve (12) months.
14. Section 8.05 of the Agreement shall be deleted in its
entirety.
15. Section 9.01 shall be amended by adding subparagraph (i)
as follows:
(i) A Change in Control shall occur.
16. This Amendment Number One may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any parties hereto may execute this Amendment Number One by
signing any such counterpart.
17. Other than as set forth in this Amendment the terms and
conditions of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the day and year first above written.
HARDINGE INC.
By: /s/ Robert E. Agan
Robert E. Agan, Chairman of the Board
and Chief Executive Officer
AGENT:
THE CHASE MANHATTAN BANK
Successor to The Chase Manhattan Bank
(National Association)
By: /s/ Christine M. McLeod
Christine M. McLeod, Vice President
BANKS:
THE CHASE MANHATTAN BANK
Successor to The Chase Manhattan Bank
(National Association)
By: /s/ Christine M. McLeod
Christine M. McLeod, Vice President
THE CHASE MANHATTAN BANK
f/k/a Chemical Bank
By: /s/ Christine M. McLeod
Christine M. McLeod, Vice President
MARINE MIDLAND BANK
By: /s/ David Brooks
David Brooks, Vice President