EXHIBIT 10.2
AMENDMENT NUMBER THREE
This Amendment Number Three is dated as of September 20, 2001 and is to
the Credit Agreement among Hardinge Inc., the Bank's signatory thereto and The
Chase Manhattan Bank as Agent, dated August 1, 1997 and amended by Amendment
Number One dated as of December 11, 2000 and Amendment Number Two dated as of
February 5, 2001 (as amended the "Agreement"). Terms used but not otherwise
defined herein shall have the meanings ascribed thereto in the Agreement.
The Borrower has determined to make certain adjustments to its
financial statements and to recognize a nonrecurring charge to its earnings for
the fiscal year ending December 31, 2001 in an amount not to exceed Thirty-nine
Million Dollars ($39,000,000.00) (the "Earnings Charge").
In order to further amend the Agreement, the parties agree as follows:
1. The definition of "Earnings Before Interest, Taxes, Depreciation and
Amortization" as set forth in Section 1.01 of the Agreement shall be amended
effective as of the date of this Amendment Number Three, 2001 to read as
follows:
"Earnings Before Interest, Taxes, Depreciation and
Amortization" means Consolidated Net Income prior to the
deduction of interest expense, prior to the deduction of
federal or foreign corporate income and corporate franchise
taxes, prior to the deduction of depreciation and amortization
and prior to the Earnings Charge. Notwithstanding anything to
the contrary set forth herein, for the twelve (12) months
following the Acquisition Date, Earnings Before Interest,
Taxes, Depreciation and Amortization shall be calculated as if
the Acquisition Date was January 1, 2000.
2. The definition of "Margin" as set forth in Section 1.01 of the
Agreement shall be amended effective as of the date of this Amendment Number
Four to read as follows:
"Margin" means for each Variable Rate Loan zero (0) Basis
Points and for each Eurodollar Loan one hundred fifty (150)
Basis Points.
3. The sale, lease, or other disposition of assets related to the
Earnings Charge shall be exempt from the limitations of Section 7.05 of the
Agreement.
4. Section 8.02 of the Agreement shall be amended to require that the
minimum Consolidated Tangible Net Worth for the fiscal year ending December 31,
2001 and for each fiscal year thereafter, shall at all times be at least One
Hundred Thirty Million Dollars ($130,000,000.00).
5. Upon execution of this Amendment Number Three, the Borrower shall
pay to the Agent an amendment fee in the amount of Fifty Thousand Dollars
($50,000.00).
6. Section 8.03 of the Agreement shall be amended to the effect that
Borrower shall maintain a ratio of Funded Debt to Earnings Before Interest,
Taxes, Depreciation and Amortization of not greater than 3.25 to 1 through June
29, 2002 and 3.0 to 1 from June 30, 2002 and thereafter, as measured as of the
last day of each fiscal quarter for the immediately preceding twelve (12)
months.
7. This Amendment Number Three may be executed in any number of
counterparts, all of which taken together shall constitute one and the same the
instrument, and any parties hereto may execute this Amendment Number Three by
signing any such counterpart.
8. Other than as set forth in this Amendment Number Three, the terms
and conditions of this Agreement, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Amendment Number Three
to be executed by their duly authorized officers as of the day and year first
above written.
HARDINGE INC.
By: /s/ J. PATRICK ERVIN
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J. Patrick Ervin, President
and Chief Executive Officer
AGENT:
THE CHASE MANHATTAN BANK
By: /s/ CHRISTINE M. McLEOD
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Christine M. McLeod, Vice President
BANKS:
THE CHASE MANHATTAN BANK
By: /s/ CHRISTINE M. McLEOD
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Christine M. McLeod, Vice President
FLEET NATIONAL BANK
Successor to Fleet Bank
By: /s/ JOANNE TEASDALE
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Joanne Teasdale, Vice President
MANUFACTURERS AND TRADERS
TRUST COMPANY
By: /s/ SUSAN A. BURTIS
-------------------------------------
Susan A. Burtis, Vice President