EXHIBIT 10.3
AMENDMENT NUMBER FOUR
This Amendment Number Four 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 (National Association) (now The Chase Manhattan Bank) as
Agent, dated as of February 28, 1996 and amended by Amendment Number One dated
as of August 1, 1997, Amendment Number Two dated as of December 11, 2000 and
Amendment Number Three 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 Four 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 deduction of the Earnings Charge.
Notwithstanding anything to the contrary as 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 the
minimum Consolidated Tangible New 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. 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.
6. Upon the execution of this Amendment Number Four, the Borrower shall
pay to the Agent an amendment fee in the amount of Five Thousand Three Hundred
Twenty-Five Dollars ($5,325.00).
7. This Amendment Number Four 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 Four by
signing any such counterpart.
8. Other than as set forth in this Amendment Number Four, the terms and
conditions of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Amendment Number Four
to be executed by their duly authorized officers as of the day and year first
above written.
HARDINGE INC.
By: /s/ J.PATRICK ERVIN
-------------------------------------
J. Patrick Ervin, President
and Chief Executive Officer
AGENT:
THE CHASE MANHATTAN BANK
Successor by merger to The Chase Manhattan
Bank (National Association)
By: /s/ CHRISTINE M. McLEOD
-------------------------------------
Christine M. McLeod, Vice President
BANKS:
THE CHASE MANHATTAN BANK,
Successor by merger 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
HSBC BANK USA
f/k/a/ Marine Midland Bank
By: /s/ RONALD W. LESCH
-------------------------------------
Ronald W. Lesch, Vice President