EXHIBIT 10.1
Execution Copy
[JPMORGAN CHASE LOGO]
MULTICURRENCY CREDIT AGREEMENT
Dated as of October 24, 2002
among
HARDINGE INC.
(the "Borrower")
the Banks signatory hereto
JPMORGAN CHASE BANK
as Sole Administrative Agent
and
KEYBANK NATIONAL ASSOCIATION
as Documentation Agent
----------
JPMORGAN CHASE BANK
as Exclusive Advisor, Sole Bookrunner and
Sole Lead Arranger
TABLE OF CONTENTS
TITLE PAGE
----- ----
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.......................................................................1
Section 1.01. Definitions....................................................................................1
Section 1.02. Accounting Terms..............................................................................12
ARTICLE 2. THE CREDIT.........................................................................................12
Section 2.01. The Loans.....................................................................................12
Section 2.02. The Notes.....................................................................................13
Section 2.03. Purpose.......................................................................................13
Section 2.04. Borrowing Procedures..........................................................................13
Section 2.05. Prepayments...................................................................................13
Section 2.06. Interest Periods..............................................................................14
Section 2.07. Interest......................................................................................14
Section 2.08. Certain Notices...............................................................................15
Section 2.09. Changes in Commitment.........................................................................15
Section 2.10. Minimum Amounts...............................................................................15
Section 2.11. Fees..........................................................................................16
Section 2.12. Payments Generally............................................................................16
Section 2.13. Alternative Currencies........................................................................17
Section 2.14. Judgment Currency.............................................................................17
ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC..................................................................17
Section 3.01. Additional Costs..............................................................................17
Section 3.02. Limitation on Types of Loans..................................................................19
Section 3.03. Illegality....................................................................................19
Section 3.04. Certain Variable Rate Loans pursuant to Sections 3.01 and 3.03................................19
Section 3.05. Compensation..................................................................................20
Section 3.06. Survival......................................................................................20
ARTICLE 4. CONDITIONS PRECEDENT...............................................................................20
Section 4.01. Documentary Conditions Precedent..............................................................20
Section 4.02. Additional Conditions Precedent...............................................................21
Section 4.03. Deemed Representations........................................................................21
ARTICLE 5. REPRESENTATIONS AND WARRANTIES.....................................................................22
Section 5.01. Incorporation, Good Standing and Due Qualification............................................22
Section 5.02. Corporate Power and Authority: No Conflicts...................................................22
i
Section 5.03. Governmental Approval.........................................................................22
Section 5.04. Legally Enforceable Agreements................................................................22
Section 5.05. Financial Statements..........................................................................22
Section 5.06. Litigation....................................................................................22
Section 5.07. Margin Stock..................................................................................23
Section 5.08. Use of Loan Proceeds..........................................................................23
Section 5.09. Tax Returns...................................................................................23
Section 5.10. ERISA.........................................................................................23
Section 5.11. Subsidiaries..................................................................................23
Section 5.12. Ownership and Liens...........................................................................23
Section 5.13. Hazardous Materials...........................................................................23
Section 5.14. No Default on Other Agreements................................................................24
Section 5.15. Partnerships..................................................................................24
Section 5.16. No Forfeiture.................................................................................24
Section 5.17. Solvency......................................................................................24
Section 5.18. Operation of Business.........................................................................25
Section 5.19. No Defaults on Outstanding Judgments or Orders................................................25
Section 5.20. No Defaults on Other Agreements...............................................................25
Section 5.21. Labor Disputes and Acts of God................................................................26
Section 5.22. Governmental Regulation.......................................................................26
ARTICLE 6. AFFIRMATIVE COVENANTS..............................................................................26
Section 6.01. Compliance with Laws, Corporate Existence.....................................................26
Section 6.02. Reporting Requirements........................................................................26
Section 6.03. Notice of Proceedings.........................................................................28
Section 6.04. Insurance.....................................................................................28
Section 6.05. Environmental Laws............................................................................28
Section 6.06. Access to Premises and Records................................................................28
Section 6.07. Notice of Default.............................................................................28
Section 6.08. Subsidiaries..................................................................................29
Section 6.09. Material Adverse Changes......................................................................29
Section 6.10. Reports to Other Creditors....................................................................29
Section 6.11. General Information...........................................................................29
ARTICLE 7. NEGATIVE COVENANTS.................................................................................29
Section 7.01. Liens, Etc....................................................................................29
Section 7.02. Lease Obligations.............................................................................31
Section 7.03. Prohibited Transactions.......................................................................31
Section 7.04. Margin Stock..................................................................................31
Section 7.05. Consolidations, Mergers, Acquisitions and Sales of Assets.....................................31
Section 7.06. Affiliate Transactions........................................................................32
Section 7.07. Loans and Advances............................................................................32
Section 7.08. Guaranties....................................................................................32
ii
Section 7.09. No Activities Leading to Forfeiture...........................................................32
ARTICLE 8. FINANCIAL COVENANTS................................................................................32
Section 8.01. Working Capital...............................................................................33
Section 8.02. Net Worth.....................................................................................33
Section 8.03. Funded Debt...................................................................................33
Section 8.04. Earnings......................................................................................33
Section 8.05. Fixed Charge Ratio............................................................................33
Section 8.06. Customer Notes................................................................................33
ARTICLE 9. EVENTS OF DEFAULT..................................................................................33
Section 9.01. Events of Default.............................................................................33
Section 9.02. Remedies......................................................................................35
ARTICLE 10. THE AGENT; RELATIONS AMONG BANKS AND BORROWER......................................................35
Section 10.01. Appointment, Powers and Immunities of Agent...................................................35
Section 10.02. Reliance by Agent.............................................................................36
Section 10.03. Defaults......................................................................................36
Section 10.04. Rights of Agent as a Bank.....................................................................36
Section 10.05. Indemnification of Agent......................................................................37
Section 10.06. Documents.....................................................................................37
Section 10.07. Non-Reliance on Agent and Other Banks.........................................................37
Section 10.08. Failure of Agent to Act.......................................................................38
Section 10.09. Resignation or Removal of Agent...............................................................38
Section 10.10. Amendments Concerning Agency Function.........................................................38
Section 10.11. Liability of Agent............................................................................38
Section 10.12. Transfer of Agency Function...................................................................39
Section 10.13. Non-Receipt of Funds by the Agent.............................................................39
Section 10.14. Withholding Taxes.............................................................................39
Section 10.15. Several Obligations and Rights of Banks.......................................................40
Section 10.16. Pro Rata Treatment of Loans, Etc..............................................................40
Section 10.17. Sharing of Payments Among Banks...............................................................40
Section 10.18. Other Agents; Advisors and Arrangers..........................................................41
ARTICLE 11. MISCELLANEOUS......................................................................................41
Section 11.01. Amendments and Waivers........................................................................41
Section 11.02. Usury.........................................................................................42
Section 11.03. Expenses and Indemnification..................................................................42
Section 11.04. Survival......................................................................................42
Section 11.05. Assignment; Participations....................................................................42
Section 11.06. Notices.......................................................................................43
Section 11.07. Setoff........................................................................................44
Section 11.08. Jurisdiction; Immunities......................................................................44
iii
Section 11.09. Table of Contents; Headings...................................................................45
Section 11.10. Severability..................................................................................45
Section 11.11. Counterparts..................................................................................45
Section 11.12. Integration...................................................................................45
Section 11.13. Governing Law.................................................................................45
Section 11.14. Confidentiality...............................................................................45
Section 11.15. Treatment of Certain Information..............................................................46
Section 11.16. Currency......................................................................................46
iv
v
vi
EXHIBITS
Exhibit A Form of Note
Exhibit B Authorization Letter
Exhibit C Opinion of Counsel for Borrower
Exhibit D Confidentiality Agreement
SCHEDULES
Schedule I Subsidiaries of Borrower
Schedule II Hazardous Materials
vii
MULTICURRENCY CREDIT AGREEMENT
CREDIT AGREEMENT dated as of October 24, 2002 among
HARDINGE INC., a
corporation organized under the laws of
New York (the "Borrower"), each of the
banks which is a signatory hereto (individually a "Bank" and collectively the
"Banks"), JPMORGAN CHASE BANK, a
New York banking corporation, as sole
administrative agent for the Banks (in such capacity, together with its
successors in such capacity, the "Agent"), and KEYBANK NATIONAL ASSOCIATION, a
national banking association organized and existing under the laws of the United
States of America as Documentation Agent (the "Documentation Agent").
The Borrower desires that the Banks extend credit as provided herein and
the Banks are prepared to extend such credit upon the terms hereof. Accordingly,
the Borrower, the Banks and the Agent and the Documentation Agent agree as
follows:
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.
Section 1.01. DEFINITIONS. As used in this Agreement the following terms
have the following meanings (terms defined in the singular to have a correlative
meaning when used in the plural and vice versa):
"Additional Costs" has the meaning given to such term in Section 3.01
hereof.
"Adjustment Date" means a date which is the earlier of (a) the date on
which financial statements are delivered to the Banks pursuant to Section 6.02
hereof or (b) the 45th day after the end of each of the first three quarters of
each Fiscal Year or the 90th day after the end of each Fiscal Year, as the case
may be.
"Administrative Questionnaire" means the administrative questionnaire in
the form supplied by the Agent.
"Affected Loans" shall have the meaning given to such term in Section 3.04
hereof.
"Affected Type" shall have the meaning given to such term in Section 3.04
hereof.
"Affiliate" means any Person: (a) which directly or indirectly controls, or
is controlled by, or is under common control with, the Borrower or any of its
Subsidiaries; (b) which directly or indirectly beneficially owns or holds 5% or
more of any class of voting stock of the Borrower or any such Subsidiary; (c) 5%
or more of the voting stock of which is directly or indirectly beneficially
owned or held by the Borrower or such Subsidiary; or (d) which is a partnership
in which the Borrower or any of its Subsidiaries is a general partner. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract, or otherwise.
1
"Agent's Account" means account number 000-0-00000 maintained by the Agent
and any other account designated by the Agent.
"Agreement" means this Multicurrency Credit Agreement, as amended or
supplemented from time to time. References to Articles, Sections, Exhibits,
schedules and the like refer to the Articles, Sections, Exhibits, schedules and
the like of this Agreement unless otherwise indicated.
"Alternative Currency" shall mean at any time any of Canadian Dollars, Euro
Units, Pounds Sterling, Swiss Francs and Yen, so long as at such time as (a)
such Currency is dealt with in the London interbank deposit market, (b) such
Currency is transferrable and convertible into Dollars in the London Foreign
Exchange Market, and (c) no central bank or other governmental authorization in
the country of issue of such Currency is required to permit use of such Currency
by any Bank for the making of any Loan hereunder and/or to permit the Borrower
to borrow and repay the principal amount thereof and to pay the interest
thereon, unless such authorization has been previously obtained.
"Alternative Currency Sublimit" means $10,000,000. The Alternative Currency
Sublimit is a part of, and not in addition to, the Commitments.
"Authorization Letter" means the letter agreement executed by the Borrower
in the form of EXHIBIT B hereto.
"Basis Point" means one one-hundredth of one percent.
"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in
New York City are authorized or required by law to
remain closed; provided that (a) when used in connection with a Eurocurrency
Loan, the term "Business Day" shall also exclude any day on which banks are not
open for dealings in deposits in the applicable currency in the London interbank
market, (b) when used in connection with any Loan denominated in Euros, the term
"Business Day" shall also exclude any day on which the TARGET payment system is
not open for the settlement of payment in Euro and (c) when used in connection
with any Loan denominated in Yen, the term "Business Day" shall also exclude any
day on which banks are not open for dealings in deposits in Yen in the interbank
market in Tokyo.
"Canadian Dollars" and the sign "C$" means the lawful currency of Canada.
"Capital Lease" means any lease which has been or should be capitalized on
the books of the lessee in accordance with GAAP.
"Change in Control" means (a) except as to (i) officers and directors in
office as of the date of this Agreement, and (ii) the
Hardinge Inc. Pension
Plan,
Hardinge Inc. Savings Plan or other compensation plan of Borrower, the
acquisition of ownership, directly or indirectly, beneficially or of
2
record, of any Person or group (within the meaning of the Securities 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 percent (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 are neither (i) nominated by the board of directors of the Borrower nor (ii)
appointed by the directors so nominated.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment" means, with respect to each Bank, the obligation of such Bank
to make a Loan under this Agreement in the aggregate principal Dollar amount
following or the Dollar Equivalent thereof in one or more Alternative
Currencies, as such amount may be modified from time to time:
Aggregate Alternative Currency
Amount Sublimit
------ --------
JPMorgan Chase Bank $ 9,339,623 $ 3,437,500
KeyBank National Association 8,915,094 3,281,250
Manufacturers and Traders Trust Company 8,915,094 3,281,250
NBT Bank, National Association 2,830,189 0
------------ -----------
Total: $ 30,000,000 $ 10,000,00
============ ===========
"Consolidated Assets" means all assets of Borrower and its Consolidated
Subsidiaries treated as assets in accordance with GAAP.
"Consolidated Capital Expenditures" means for any period, the Dollar amount
of gross expenditures (including obligations under Capital Leases) made for
fixed assets, real property, plant and equipment, and all renewals, improvements
and replacements thereto, (but not repairs thereof) incurred during such period
for the Borrower and its Consolidated Subsidiaries, as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Current Assets" means all assets of the Borrower and its
Consolidated Subsidiaries, treated as current assets in accordance with GAAP.
"Consolidated Current Liabilities" means all liabilities of the Borrower
and its Consolidated Subsidiaries, treated as current liabilities in accordance
with GAAP, including without limitation (a) all obligations payable on demand or
within one (1) year after the date in which the determination is made, and (b)
installment and sinking fund payments required to be made within one (1) year
after the date on which determination is made, but excluding any such
indebtedness renewable or extendable at the option of the obligor under, or
payable from the proceeds of other indebtedness
3
which may be incurred pursuant to the provisions of any revolving credit
agreements (including this Agreement) or other similar agreement.
"Consolidated Interest Expense" means for any period, the sum for the
Borrower and its Consolidated Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP) of the following: (a) all interest
with respect of Debt (including, without limitation, the interest component of
any payments in respect of Capital Leases and Synthetic Lease Obligations)
accrued or capitalized during such period (whether or not actually paid during
such period), plus (b) the net amount payable (or minus the net amount
receivable) under Interest Rate Protection Agreements during such period
(whether or not actually paid or received during such period).
"Consolidated Net Income" means for any period the net income of the
Borrower and its Consolidated Subsidiaries for such period determined on a
consolidated basis without duplication, in accordance with GAAP.
"Consolidated Subsidiary" means any Subsidiary whose accounts are or are
required to be consolidated with the accounts of the Borrower in accordance with
GAAP.
"Consolidated Tangible Net Worth" means Net Worth prior to any cumulative
foreign currency translation adjustments minus any decrease or plus any increase
in the value of intangible assets related to translation of adjustments minus
intangible assets.
"Controlled Group" shall have the meaning given to such term in Section
6.02(f) hereof.
"Currency" means Dollars or any Alternative Currency.
"Customer Notes" means any and all notes and other evidence of indebtedness
(except accounts receivable arising in the ordinary course of business) in favor
of the Borrower and its Consolidated Subsidiaries for the payment obligations of
customers for goods or services provided in the ordinary course of business.
"Debt" means, with respect to any Person: (a) indebtedness of such Person
for borrowed money; (b) obligations of such Person as lessee under Capital
Leases or Synthetic Lease Obligations, (c) obligations under direct or indirect
guarantees in respect of, and obligations (contingent or otherwise) to purchase
or otherwise acquire, or otherwise to assure a creditor against loss in respect
of, indebtedness or obligations of others of the kinds referred to in clause (a)
and (b) above, (not otherwise reserved for) and (d) defined benefit pension
liabilities in respect of unfunded vested benefits under plans covered by ERISA
calculated consistently with GAAP.
"Default" means any event which with the giving of notice or lapse of time,
or both, would become an Event of Default.
"Default Rate" means, with respect to the principal of any Loan and, to the
extent permitted by law, any other amount payable by the Borrower under this
Agreement or any Note that is not paid when due (whether at stated maturity, by
acceleration or otherwise), a rate per annum during the
4
period from and including the due date, to, but excluding the date on which such
amount is paid in full equal to two percent (2.0%) above the Variable Rate as in
effect from time to time plus the Margin (if any) (provided that, if the amount
so in default is principal of a Eurocurrency Loan and the due date thereof is a
day other than the last day of the Interest period therefor, the "Default Rate"
for such principal shall be, for the period from and including the due date and
to but excluding the last day of the Interest period therefor, two percent
(2.0%) above the interest rate for such Loan as provided in section 2.07 hereof
and, thereafter, the rate provided for above in this definition).
"Dollar Equivalent" means with respect to any Loan denominated in an
Alternative Currency as at any date of determination thereof, the amount of
Dollars that would be required to purchase the amount of the Alternative
Currency of such Loan on the date three (3) Business Days prior to the date of
such Loan, based on the arithmetic mean (rounded upwards) if necessary, to the
nearest one one-hundredth of one percent), as determined by the Agent, of the
spot selling rate at which the Reference Bank offers to sell such Alternative
Currency for Dollars in London at approximately 11:00 a.m. prevailing London
time for delivery on the date of such Loan.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"Domestic Subsidiaries" means any Subsidiary formed and currently existing
under the laws of the United States of America or a State thereof.
"Earnings Before Interest, Taxes, Depreciation and Amortization" means
Consolidated Net Income prior to the deduction of Consolidated 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 MINUS, to the extent included in the statement of Consolidated Net
Income for such period, the sum of (a) interest income (except to the extent
deducted in determining Consolidated Interest Expense), (b) any extraordinary,
unusual or non-recurring income or gains (including, whether or not otherwise
includable as a separate item in the statement of Consolidated Net Income for
such, gains on the sales of assets outside the ordinary course of business), and
(c) any other non-cash income, all as determined on a consolidated basis.
"Effective Date" means October 24, 2002 or, if later, the date on which the
conditions contained in Article 4 have been satisfied.
"EMU" means the economic and monetary union as contemplated in the Treaty
on European Union.
"EMU Legislation" means legislative measures of the European Counsel for
the introduction of changeover to or operation of a single or unified European
currency (whether known as the Euro or otherwise) being a part the
implementation of the third stage of EMU.
"Entitled Person" has the meaning given to such term in Section 11.16
hereof.
5
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing
distribution, use, treatment, storage, disposal, transport, or handling-of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.
"Euro" means the single currency of Participating Member States of the EMU.
"Euro Unit" means the currency unit of the Euro.
"Eurocurrency Loan" means any Loan denominated in Dollars or an Alternative
Currency when and to the extent the interest rate therefore is determined on the
basis of the definition of "LIBO Rate".
"Eurocurrency Rate" means for any Interest Period for any Eurocurrency Loan
a rate per annum determined by the Agent to be equal to the relevant LIBO Rate
for the Eurocurrency Loan, adjusted for any applicable Reserve Requirement.
"Event of Default" has the meaning given such term in Section 9.01 hereof.
"Facility Documents" means this Agreement, the Notes, the Authorization
Letter and the Security Documents.
"Federal Funds Rate" means, for any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions as
published by the Federal Reserve Bank of
New York for such day (or for any day
that is not a Business Day, for the immediately preceding Business Day).
"Fiscal Year" means the twelve month period ending on December 31 of each
year.
"Fixed Charge Ratio" means for the period of calculation the ratio of
Earnings Before Interest, Taxes, Depreciation and Amortization divided by the
sum of all scheduled principal payments, interest payments, taxes, capital
expenditures, dividends and all other distributions.
"Foreign Taxes" has the meaning given such term in Section 10.14(b) hereof.
"Forfeiture Proceeding" means any action, proceeding or investigation
affecting the Borrower or any of its Subsidiaries or Affiliates before any
court, governmental department, commission,
6
board, bureau, agency or instrumentality, domestic or foreign, or the receipt of
notice by any such party that any of them is a suspect in or a target of any
governmental inquiry or investigation, which may result in an indictment of any
of them or the seizure or forfeiture of any of their property.
"Funded Debt" means, with respect to any Person, all Debt of such Person
for borrowed money and for guarantees of borrowed money.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time, applied on a basis consistent with
those used in the preparation of the financial statements referred to in Section
5.05 (except for changes concurred in by the Borrower's independent public
accountants).
"Hazardous Materials" means any substance regulated under any Environmental
Laws.
"Indemnified Liability" has the meaning given to such term in Section 11.03
hereof.
"Interest Period" means the period commencing on the date a Loan is made
and ending, as the Borrower may select pursuant to Section 2.06: (a) in the case
of Variable Rate Loans, the period commencing on the date such Variable Rate
Loan is made and ending on the Quarterly Date next succeeding such date; and (b)
in the case of Eurocurrency Loans, on the numerically corresponding day in the
first, second, third, or sixth calendar month thereafter, PROVIDED that each
such Interest Period which commences on the last Business Day of a calendar
month (or any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month.
"Interest Rate Protection Agreement" means for any Person, an interest rate
swap, cap or collar agreement or similar arrangement between such Person and one
or more financial institutions providing for the transfer or mitigation of
interest risks, either generally or under specific contingencies.
"Lending Office" means, for each Bank and for each type of Loan, the
lending office of such Bank (or of an affiliate of such Bank) designated as such
for such type of Loan on its signature page hereof or such other office of such
Bank (or of an affiliate of such Bank) as such Bank may from time to time
specify to the Agent and the Borrower as the office by which its Loans of such
type are to be made and maintained.
"LIBO Rate" means, with respect to any Eurocurrency Loan for any Interest
Period, the rate appearing on Page 3750 of the Telerate screen (or on any
successor or substitute page of such Page, or any successor to or substitute for
such Page, providing rate quotations comparable to those currently provided on
such page of such Page, as determined by the principal London branch of the
Reference Bank from time to time for purposes of providing quotations of
interest rates applicable to deposits in the relevant Currency in the London
interbank
7
market) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurocurrency Loan for such Interest Period shall be the rate at which deposits
in the relevant currency and for a maturity comparable to such Interest Period
are offered to the principal London office of the Reference Bank in immediately
available funds in the London interbank market at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period.
"Lien" has the meaning given to such term in Section 7.01 hereof.
"Loans" means the loans made by the Banks pursuant to Section 2.01
(each a "Loan).
"Margin" means for each Variable Rate Loan and Eurocurrency Loan the
lowest applicable margin on the table next following, based upon Borrower's
financial statements for the immediately preceding four fiscal quarters for
income statement items and the most recent fiscal quarter for balance sheet
items computed as of the date of this Agreement, and adjusted thereafter on each
Adjustment Date.
Ratio of Funded Debt to Earnings Before Variable Rate Loans Eurocurrency Loans
Interest, Taxes,
Depreciation & Amortization
-------------------------------------------------------------------------------------------------
Equal to or less than 1.5 0 Basis Points 150 Basis Points
Greater than 1.5 and less than or equal to 2.0 25 Basis Points 175 Basis Points
Greater than 2.0 and less than or equal to 2.5 25 Basis Points 200 Basis Points
Greater than 2.5 50 Basis Points 250 Basis Points
"Multiemployer Plan" means a Plan defined as such in Section 3(37) of
ERISA to which contributions have been made by the Borrower or any ERISA
Affiliate and which is covered by Title IV of ERISA.
"National Currency Unit" means the unit of currency (other than a Euro
Unit) of a Participating Member State.
"Net Worth" means, at any date of determination thereof, the sum for
the Borrower and its Consolidated Subsidiaries (determined on a consolidated
basis without duplication in accordance with GAAP) of (a) the amount of common
stock; plus (b) the amount of any preferred stock that does not have any
requirement for the Borrower to purchase, redeem, retire or otherwise acquire
the same; plus (c) the amount of additional paid-in-capital and retained
earnings (or, in the case of an additional paid-in-capital or retained earnings
deficit, minus the amount of such deficit);
8
plus (d) cumulative pension liability adjustments (or, in the case of negative
adjustments, minus the amount of such adjustments); plus (e) cumulative foreign
currency translation adjustments (or, in the case of negative adjustments, minus
the amount of such adjustments); plus (f) any other items which under GAAP are
included in shareholders equity (or, in the case of items excluded from
shareholders equity, minus such items); and minus (g) the cost of treasury
stock.
"Notes" mean the Promissory Notes of the Borrower to each of the Banks
in the principal amount of their respective Commitment, in the form of EXHIBIT A
hereto evidencing the Loans made by the Banks hereunder (each a "Note") as the
same may be amended, modified, extended, renewed, restated, consolidated and
replaced from time to time.
"Participant" has the meaning given to such term in Section 11.05(c)
hereof.
"Participating Member State" means each state so described in any EMU
Legislation.
"Payor" has the meaning given to such term in Section 10.13 hereof.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other entity of whatever
nature.
"Plan" has the meaning given to such term in Section 6.02 (e) hereof.
"Pledge Agreement" means the Pledge
Security Agreement (Customer
Notes) dated as of the date hereof given by the Borrower in favor of the Agent
for the benefit of the Banks granting a first security interest in domestic
Customer Notes as amended, supplemented or modified from time to time.
"Pounds Sterling" and the sign "L" means the lawful currency of
the United Kingdom.
"Prime Rate" means that rate of interest from time to time announced
by the Reference Bank at its Principal Office in the United States as its prime
commercial lending rate.
"Principal Office" means the principal office of the Agent, presently
located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and with respect to any
Loan denominated in an Alternative Currency, the office presently located at 000
Xxxxxx Xxxx, Xxxxxx, Xxxxxxx XX0X 5AJ.
"Quarterly Dates" means the last day of March, June, September, and
December in each year, the first of which shall be the first such day after the
date of this Agreement.
9
"Reference Bank" means JPMorgan Chase Bank and its successors.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulatory Change" means, with respect to any Bank, any change after
the date of this Agreement in United States federal, state, municipal or foreign
laws or regulations (including without limitation Regulation D) or the adoption
or making after such date of any interpretations, directives or requests
applying to a class of banks including such Bank of or under any United States,
federal, state, municipal or foreign laws or regulations (whether or not having
the force of law) by any court or governmental or monetary authority charged
with the interpretation or administration thereof.
"Required Banks" means, at any time while no Loans are outstanding,
Banks having at least 75% of the aggregate amount of the Commitment and, at any
time while Loans are outstanding, Banks holding at least 75% of the aggregate
outstanding principal amount of the Loans.
"Required Payment" has the meaning given to such term in Section 10.13
hereof.
"Reserve Requirement" means, for any Interest Period for any
Eurocurrency Loan, the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during the Interest Period for such Loan under Regulation D by member banks of
the Federal Reserve System in
New York City with deposits exceeding
$1,000,000,000 against "Eurocurrency liabilities" (as such term is used in
Regulation D). Without limiting the effect of the foregoing, the Reserve
Requirement shall also reflect any other reserves required to be maintained by
such member banks by reason of any Regulatory Change against (i) any category of
liabilities which includes deposits by reference to which the LIBO Rate for
Eurocurrency Loans is to be determined as provided in the definition of "LIBO
Rate" in this Section 1.01 or (ii) any category of extensions of credit or other
assets which include Euro-currency Loans.
"Second Currency" has the meaning given to such term in Section 11.16
hereof.
"
Security Agreement" means the
Security Agreement dated as of the date
hereof given by the Borrower in favor of the Agent for the benefit of the Banks
creating a first security interest in certain of their respective assets as more
particularly described therein, as amended, supplemented or modified from time
to time.
"Security Documents" means collectively the Pledge Agreement, the
Security Agreement and the Subsidiary Stock Pledge.
"Specified Currency" has the meaning given to such term in Section
11.16 hereof.
10
"Specified Place" has the meaning given to such term in Section 11.16
hereof.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which at least a majority of the securities or other ownership
interests having ordinary voting power (absolutely or contingently) for the
election of directors or other persons performing similar functions are at the
time owned directly or indirectly by such Person.
"Subsidiary Stock Pledge" means the Pledge
Security Agreement (Stock
of Domestic and Foreign Subsidiaries) dated as of the date hereof given by the
Borrower in favor of the Agent for the benefit of the Banks creating a first
security interest in certain shares of stock and ownership interests in certain
Subsidiaries and affiliated entities, as amended, supplemented or modified from
time to time.
"Swiss Francs" and the sign "Sfr" means the lawful currency of
Switzerland.
"Synthetic Lease Obligations" means all monetary obligations of a
Person under (a) a so-called synthetic, off-balance sheet or tax retention
lease, or (b) an agreement for the use or possession of property creating
obligations which do not appear on the balance sheet of such Person but which,
upon the insolvency or bankruptcy of such Person, would be characterized as the
Debt of such Person (without regard to accounting treatment).
"Termination Date" means October 31, 2005.
"Term Loan Agreement" means the Term Loan Agreement dated as of the
date hereof among the Borrower, the Agent as Administrative Agent and the bank's
signatory thereto as amended, supplemented or modified from time to time.
"Treaty on European Union" means the Treaty of Rome as of March 25,
1957, as amended by the Single European Act of 1986 and the Maastricht Treaty
(which was signed at Maastricht on February 7, 1992, and came into force on
November 1, 1993) as amended from time to time.
"Unfunded Benefit Liabilities" means, with respect to any Plan, the
amount (if any) by which the present value of all benefit liabilities (within
the meaning of section 4001(a)(16) of ERISA) under the Plan exceeds the fair
market value of all Plan assets allocable to such benefit liabilities, as
determined on the most recent valuation date of the Plan and in accordance with
the provisions of ERISA for calculating the potential liability of the Borrower
or any ERISA Affiliate under Title IV of ERISA.
"Variable Rate" means, for any day, the higher of (a) the Federal
Funds Rate for such day plus fifty (50) Basis Points, and (b) the Prime Rate for
such day.
11
"Variable Rate Loan" means any Loan denominated in Dollars when and to
the extent the interest rate for such Loan is determined in relation to the
Variable Rate.
"Yen" and the sign "Y" means the lawful currency of Japan.
Section 1.02. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, and all financial
data required to be delivered hereunder shall be prepared in accordance with
GAAP.
ARTICLE 2. THE CREDIT.
Section 2.01. THE LOANS. Subject to the terms and conditions set forth
in this Agreement, the Borrower may borrow, repay and reborrow from time to time
from the date hereof to but excluding the Termination Date in an aggregate
principal amount not to exceed at any one time outstanding the amount of the
Commitment. Each of the Banks severally agree to make Loans to the Borrower from
time to time from and including the date hereof to but excluding the Termination
Date, up to but not exceeding the amount of its Commitment. The Loans may be
outstanding as Variable Rate Loans or Eurocurrency Loans (each a "type" of
Loan). The Loan of each Bank in Dollars shall be maintained as a Variable Rate
Loan and/or a Eurocurrency Loan pro rata according to the amount of its
respective Commitment and the Loan of each lending Bank in Alternative
Currencies shall be maintained as Eurocurrency Loan pro rata according to the
amount of its respective Alternative Currency Sublimit. The Loans of each type
of each Bank shall be made and maintained at such Bank's Lending Office for such
type of Loan.
(b) Each Loan shall be due and payable on the last day of the
Interest Period thereof.
(c) For purposes of determining at the time of borrowing whether the
amount of the borrowing would, together with all other outstanding Loans, exceed
the aggregate amount of the Banks' Commitment, and for purposes of determining
the unused portion of the Commitment, the amount of each Eurocurrency Loan in an
Alternative Currency shall be deemed to be the Dollar Equivalent of the amount
of the Alternative Currency of such Eurocurrency Loan. For purposes of this
Section 2.01 and all other provisions of this Article 2, the equivalent in any
Alternate Currency of an amount in Dollars shall be determined in accordance
with Section 2.13.
(d) ALTERNATIVE CURRENCY SUBLIMIT ADJUSTMENT. In the event the
Borrower requests a Loan in an Alternative Currency which when added to the
outstanding Loans would not exceed the aggregate Commitments of the Banks, but
which if made by the Banks offering the Alternative Currency Sublimit would
cause them to exceed their respective Commitment, the outstanding principal
amount of the Loan in Dollars by NBT Bank, National Association shall be
adjusted in an amount equal to the overage so as to permit the Banks offering
Loans in an Alternative Currency to lend in Alternative Currencies.
Notwithstanding the foregoing or any other provision of
12
this Agreement, under no circumstances shall the aggregate outstanding principal
balance of the Loans made by a Bank exceed its Commitment.
Section 2.02. THE NOTES. (a) The Loan of each Bank shall be evidenced
by the Borrower's Note in favor of such Bank substantially in the form of
EXHIBIT A hereto, dated the date of this Agreement, payable to the order of such
Bank and otherwise duly completed and executed by the Borrower.
(b) The date, amount, Currency (in the case of Eurocurrency Loans)
interest rate and duration of Interest Period for the Loan made by each Bank to
the Borrower, and each payment made on account of the principal thereof, shall
be recorded by such Bank on its books and, on the schedule attached to each Note
or any continuation thereof; provided, however, that the failure of such Bank to
make, or any error in making, any such recordation shall not affect the
obligations of Borrower to make a payment when due of any amount owing hereunder
or under such Note in respect of the Loan evidenced by such Note.
Section 2.03. PURPOSE. The Borrower shall use the proceeds of the
Loans for working capital requirements and other general corporate purposes.
Provided, however, and notwithstanding any provision herein to the contrary, the
proceeds of the Loans shall not be used for the purpose, whether immediately,
incidental or ultimate, of buying or carrying "margin stock" within the meaning
of Regulation U.
Section 2.04. BORROWING PROCEDURES. The Borrower shall give the Agent
notice of each borrowing to be made hereunder as provided in Section 2.08. Not
later than 1:00 p.m.
New York time (in the case of Loans denominated in Dollars)
or 11:00 a.m. local time in the location of the Agent's Account (in the case of
Eurocurrency Loans denominated in an Alternative Currency) on the date of such
borrowing, each Bank shall, through its Lending Office and subject to the
conditions of this Agreement, make the amount of the Loan to be made by it on
such day available to the Agent at the Principal Office and in immediately
available funds for the account of the Borrower. The amount so received by the
Agent shall, subject to the conditions of this Agreement, be made available to
the Borrower, in immediately available funds, by the Agent crediting an account
of the Borrower designated by the Borrower and maintained with the Agent at a
banking office designated by the Agent.
Section 2.05. PREPAYMENTS. The Borrower shall have the right to prepay
the Loans at any time or from time to time provided that each prepayment of
principal shall be in an amount of at least One Million Dollars ($1,000,000) and
shall be in incremental multiples of Five Hundred Thousand Dollars ($500,000),
to be applied to principal in inverse order of maturity; provided that: (a) the
Borrower shall give the Agent notice of each such prepayment as provided in
Section 2.08; (b) Eurocurrency Loans may not be prepaid, except that if after
giving effect to any reduction or termination of the Commitments pursuant to
Section 2.09 hereof, the outstanding aggregate principal amount of the Loans
exceeds the aggregate amount of the Commitments, the Borrower shall pay or repay
the Loans on the date of such reduction or termination in an aggregate principal
amount equal
13
to the excess, together with interest thereon accrued to the date of such
payment or repayment and any amounts payable pursuant to Section 3.05 in
connection therewith; and (c) in the event the outstanding aggregate principal
balance of the Loans payable in Dollars and the Dollar Equivalent of all Loans
payable in Alternative Currency exceeds the aggregate amount of the Commitments,
Borrower shall pay the Loans in the aggregate principal amount equal to the
excess, together with interest thereon accrued to the date of payment and any
amounts payable pursuant to Section 3.05 in connection therewith.
Section 2.06. INTEREST PERIODS. In the case of each Loan, the Borrower
shall select an Interest Period of any duration in accordance with the
definition of Interest Period in Section 1.01 hereof, subject to the following
limitations: (a) no Interest Period may extend beyond the Termination Date; (b)
notwithstanding clause (a) above, no Interest Period for a Eurocurrency Loan
shall have a duration less than one month and if any such proposed Interest
Period would otherwise be for a shorter period, such Interest Period shall not
be available; and (c) if an Interest Period would end on a day which is not a
Business Day, such Interest Period shall be extended to the next Business Day,
unless, in the case of a Eurocurrency Loan, such Business Day would fall in the
next calendar month in which event such Interest Period shall end on the
immediately preceding Business Day.
Section 2.07. INTEREST. (a) Interest shall accrue on the outstanding
and unpaid principal amount of each Loan for the period from and including the
date of such Loan to but excluding the date such Loan is paid at the following
rates per annum: (i) for a Variable Rate Loan, at a rate per annum equal to the
Variable Rate plus any Margin, and (ii) for a Eurocurrency Loan, at a fixed rate
equal to the Eurocurrency Rate plus the Margin. If the principal amount of any
Loan and any other amount payable by the Borrower hereunder or under a Note
shall not be paid when due (at stated maturity, by acceleration or otherwise),
interest shall accrue at the Default Rate on such amount to the full extent
permitted by law from and including such due date to but excluding the date such
amount is paid in full.
(b) The interest rate on each Eurocurrency Loan denominated in Pounds
Sterling shall be calculated on the basis of a year of 365 or 366 days, as the
case may be, for the actual number of days elapsed. The interest rate on each
Eurocurrency Loan other than a Eurocurrency Loan denominated in Pounds Sterling
and on each Variable Rate Loan shall be calculated on the basis of a year of 360
days for the actual number of days elapsed. Promptly after the determination of
any interest rate provided for herein or any change therein, the Agent shall
notify the Borrower and the Banks thereof.
(c) Accrued interest shall be due and payable upon any payment of
principal and on the last day of the Interest Period with respect thereto, in
the case of an Interest Period greater than three (3) months at three month
intervals after the first day of such Interest Period; provided that interest
accruing at the Default Rate shall be due and payable from time to time on
demand of the Agent.
Section 2.08. CERTAIN NOTICES. Notices by the Borrower to the Agent of
each borrowing pursuant to Section 2.04, each prepayment pursuant to Section
2.05 and each reduction or
14
termination of the Commitments pursuant to Section 2.09(b) shall be irrevocable
and shall be effective only if received by the Agent (a) in the case of
borrowings and prepayments before 10:00 a.m.
New York time on the day of
borrowing or prepayment for Variable Rate Loans, (b) before 12:00 noon
New York
time three (3) Business Days prior to the date of borrowing or required
prepayment for Eurocurrency Loans in Dollars, (c) before 12:00 noon
New York
time four (4) Business Days prior to the date of borrowing or required
prepayment for Eurocurrency Loans in an Alternative Currency; and (d) in the
case of reductions or terminations of the Commitment, three (3) Business Days
prior thereto. Each such notice shall specify the Loans to be borrowed or
prepaid, (subject to Section 2.10) the amount in Dollars (or in the case of
Loans in Alternative Currencies, the Dollar Equivalent), the type of the Loans
to be borrowed or prepaid and the date of borrowing or prepayment (which shall
be a Business Day), and in the case of Eurocurrency Loans, the Currency or
Currencies in which such Loan are to be denominated and, if required by the
Agent, the account of the Borrower maintained with a commercial bank in the
country in whose Currency such Eurocurrency Loans are denominated. Each such
notice of reduction or termination shall specify the amount of the Commitment to
be reduced or terminated. The Agent shall promptly notify the Banks of the
contents of each such notice.
Section 2.09. CHANGES IN COMMITMENT. (a) The aggregate amount of each
Bank's Commitment shall automatically terminate at the open of business on the
Termination Date.
(b) The Borrower shall have the right to reduce or terminate the
amount of unused Commitments at any time or from time to time, provided that (i)
the Borrower shall give notice of each reduction or termination to the Agent as
provided in Section 2.08; and (ii) each partial reduction shall be in an
aggregate amount of at least Two Million Five Hundred Thousand Dollars
($2,500,000).
(c) The Commitment once reduced or terminated may not be reinstated.
Section 2.10. MINIMUM AMOUNTS. Except for borrowings which exhaust the
full remaining amount of the Commitment, and prepayments (in the case of
Variable Rate Loans) which result in the prepayment of all Loans, each borrowing
and prepayment of principal shall be in an amount of at least equal to One
Million Dollars ($1,000,000) and shall be in incremental multiples of Five
Hundred Thousand Dollars ($500,000).
Section 2.11. FEES. (a) The Borrower shall pay to the Agent for the
account of each Bank a commitment fee on the daily average unused Commitment of
such Bank for the period from and including the date hereof to the earlier of
the date the Commitments are terminated or the Termination Date at a rate per
annum equal to fifty (50) Basis Points if the ratio of Total Funded Debt to
Earnings Before Interest, Taxes, Depreciation and Amortization is less than 3.0
to 1.0, and sixty-five (65) Basis Points if the ratio of Funded Debt to Earnings
Before Interest, Taxes, Depreciation and Amortization is equal to or greater
than 3.0 to 1.0. The accrued commitment fee shall be due and payable in arrears
upon any reduction or termination of the Commitments and on each Quarterly Due
Date commencing on the first such date after the Effective Date, and shall be
15
calculated on the basis of a year of 360 days for the actual number of days
elapsed. Computation shall be made on each Adjustment Date based upon Borrower's
financial statements for the immediately preceding four (4) fiscal quarters for
income statement items and the most recent fiscal quarter for balance sheet
items. For purposes of determining the unused portion of the Commitment, the
Dollar Equivalent of each Loan made in an Alternative Currency as determined on
the date of the making of such Loan shall be the amount of the Commitment used
in connection with such Loan, and no further adjustment shall be made with
respect to the unused portion of the Commitment based on fluxuations thereafter
in the value of the Alternative Currency of such Loan.
(b) The Borrower shall pay to the Agent on the Effective Date for the
account of each Bank a facility fee equal to twenty (20) Basis Points of the
Commitment.
(c) The Borrower shall pay directly to the Agent for its own account
the fees, in the amounts and at the times set forth in the Fee Letter between
the Borrower and the Agent dated August 26, 2002.
Section 2.12. PAYMENTS GENERALLY. Except to the extent otherwise
provided herein, all payments of principal of and interest on Loans made in
Dollars, and other amounts (other than the principal of and interest on Loans
made in an Alternative Currency) payable by the Borrower under this Agreement
and the Note shall be made in Dollars, and all payments of principal and
interest on Loans made in an Alternative Currency shall be made in such
Alternative Currency in immediately available funds not later than 1:00 p.m.
New
York time (in the case of Loans denominated in Dollars) or 11:00 a.m. local time
in the location of the Agent's Account (in the case of Loans denominated in an
Alternative Currency) on the date on which such payments shall become due (each
such payment made after such time on such date to be deemed to have been made on
the next succeeding Business Day); provided that, when a new Loan is to be made
by each Bank on the date the Borrower is to repay any principal of an
outstanding Loan in the same Currency, such Bank shall apply the proceeds
thereof to the payment of the principal to be repaid and only an amount equal to
the difference between the principal to be borrowed and the principal to be
repaid shall be made available by the Bank to the Borrower as provided in
Section 2.04 or paid by the Borrower to such Bank pursuant to this Section 2.12,
as the case may be. The Agent, or any Bank for whose account such payment is to
be made, may (but shall not be obligated to) debit the amount of any such
payment which is not made by such time to any ordinary deposit account of the
Borrower with the Agent or such Bank, as the case may be, and any Bank so doing
shall promptly notify the Agent. The Borrower shall, at the time of making each
payment under this Agreement or the Note, specify to the Agent the principal or
other amount payable by the Borrower under this Agreement or the Notes to which
such payment is to be applied and in the event that it fails to so specify, or
if a Default or Event of Default has occurred and is continuing, the Agent may
apply such payment as it may elect in its sole and absolute discretion (subject
to Section 10.16). If the due date of any payment under this Agreement or the
Notes would otherwise fall on a day which is not a Business Day, such date shall
be extended to the next succeeding Business Day and interest shall be payable
for any principal so extended for the period of such extension. Each payment
received by the Agent
16
hereunder or under the Notes for the account of a Bank shall be paid promptly to
such Bank, in immediately available funds, for the account of such Bank's
Lending Office.
Section 2.13. ALTERNATIVE CURRENCIES. (a) For purposes of the
provision of this Agreement the equivalent in any Alternative Currency of
Dollars shall be determined by using the quoted spot rate at which the Principal
Office of the Reference Bank in London, England offers to exchange such
Alternate Currency for Dollars in London at 11:00 a.m. prevailing London time
three (3) Business Days prior to the date on which such equivalent is to be
determined.
(b) The determination of each spot rate of exchange pursuant to this
Agreement shall be conclusive in the absence of manifest error.
Section 2.14. JUDGMENT CURRENCY. The Currency in which each Loan is
made hereunder is denominated and the place of payment designated therefore is
of the essence. The payment obligation of the Borrower hereunder in any
designated Currency and designated place of payment shall not be discharged by
an amount paid in another Currency or in another place, whether pursuant to a
judgment or otherwise, to the extent that the amount so paid on prompt
conversion to the Currency in which such Loan is denominated and transferred to
the designated place of payment under normal banking procedures does not yield
the amount owing hereunder at the designated place of payment. In the event that
any payment by the Borrower whether pursuant to a judgment or otherwise, upon
such conversion and transfer does not result in payment of such amount in the
Currency in which the Loan is denominated at the designated place of payment,
the Bank shall be entitled to demand immediate payment of, and shall have a
separate cause of action against the Borrower for, the additional amount
necessary to yield the amount of such Currency owing hereunder.
ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01. ADDITIONAL COSTS. (a) The Borrower shall pay directly to
each Bank from time to time on demand such amounts as such Bank may reasonably
determine to be necessary to compensate it for any costs which such Bank
determines are attributable to its making or maintaining any Eurocurrency Loans
under this Agreement or its Note or its obligation to make any such Loans
hereunder, or any reduction in any amount receivable by such Bank hereunder in
respect of any such Loans or such obligation (such increases in costs and
reductions in amounts receivable being herein called "Additional Costs"),
resulting from any Regulatory Change, or any Reserve Requirement for any such
Loans which: (i) changes the basis of taxation of any amounts payable to such
Bank under this Agreement or its Note in respect of any of such Loans (other
than taxes imposed on the overall net income of such Bank or of its Lending
Office for any of such Loans by the jurisdiction in which such Bank has its
principal office or such Lending Office); or (ii) imposes or modifies any
reserve, special deposit, deposit insurance or assessment, minimum capital,
capital ratio or similar requirements relating to any extensions of credit or
other assets of, or any deposits with or other liabilities of, such Bank
(including any of such Loans or any deposits referred to in the
17
definition of "LIBO Rate" in Section 1.01); or (iii) imposes any other condition
affecting this Agreement or its Note (or any of such extensions of credit or
liabilities). Each Bank will notify the Borrower of any event occurring after
the date of this Agreement which will entitle such Bank to compensation pursuant
to this Section 3.01(a) as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation. The amount payable to any
such Bank shall be computed from the date of the occurrence giving rise to
Additional Cost, or the date that is 120 days prior to the date of demand by
such Bank, whichever is later. If any Bank requests compensation from the
Borrower under this section 3.01(a), or under section 3.01(c), the Borrower may,
by notice to such Bank (with a copy to the Agent), suspend the obligation of
such Bank to maintain Loans of the type with respect to which such compensation
is requested (in which case the provisions of section 3.04 shall be applicable).
(b) Without limiting the effect of the foregoing provisions of this
Section 3.01, in the event that, by reason of any Regulatory Change, any Bank
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
such Bank which includes deposits by reference to which the interest rate on
Eurocurrency Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Bank which includes Eurocurrency
Loans or (ii) becomes subject to restrictions on the amount of such a category
of liabilities or assets which it may hold, then, if such Bank so elects by
notice to the Borrower (with a copy to the Agent), the obligation of such Bank
to make Loans of such type hereunder shall be suspended until the date such
Regulatory Change ceases to be in effect (in which case the provisions of
Section 3.04 shall be applicable).
(c) Without limiting the effect of the foregoing provisions of this
Section 3.01 (but without duplication), the Borrower shall pay directly to each
Bank from time to time on request such amounts as such Bank may reasonably
determine to be necessary to compensate such Bank for any costs which it
determines are attributable to the maintenance of capital by it or any of its
Affiliates pursuant to any future law or regulation of any jurisdiction or any
interpretation, directive or request (whether or not having the force of law and
whether in effect on the date of this Agreement or thereafter) of any court or
governmental or monetary authority in respect of its Loan hereunder or its
obligation to make its Loan hereunder (such compensation to include, without
limitation, an amount equal to any reduction in return on assets or equity of
such Bank to a level below that which it could have achieved but for such law,
regulation, interpretation, directive or request). Each Bank will notify the
Borrower if it is entitled to compensation pursuant to this Section 3.01(c) as
promptly as practicable after it determines to request such compensation. The
amount payable to any Bank shall be computed from the date of the occurrence
entitling such Bank to compensation, or the date that is one hundred twenty
(120) days prior to the date of demand by such Bank, whichever is later.
(d) Determinations and allocations by a Bank for purposes of this
Section 3.01 of the effect of any Regulatory Change pursuant to subsections (a)
or (b), or of the effect of capital maintained pursuant to subsection (c), on
its costs of making or maintaining Loans or its obligation to make Loans, or on
amounts receivable by, or the rate of return to, it in respect of Loans or such
obligation, and of the additional amounts required to compensate such Bank under
this Section 3.01,
18
shall be conclusive, provided that such determinations and allocations are made
on a reasonable basis.
Section 3.02. LIMITATION ON TYPES OF LOANS. Anything herein to the
contrary notwithstanding, if:
(a) the Agent determines (which determination shall be conclusive)
that quotations of interest rates for the relevant deposits referred to in the
definition of "Base Rate" in Section 1.01 are not being provided in the relevant
amounts or for the relevant maturities for purposes of determining the rate of
interest for any type of Eurocurrency Loans as provided in this Agreement; or
(b) the Required Banks determine (which determination shall be
conclusive) and notify the Agent and the Borrower (which notice shall include
each Bank's respective calculation of cost) that the relevant rates of interest
referred to in the definition of "LIBO Rate" in Section 1.01 upon the basis of
which the rate of interest for any type of Eurocurrency Loans is to be
determined do not adequately cover the cost to the Banks of making or
maintaining such Loans;
then the Agent shall give the Borrower and each Bank prompt notice thereof, and
so long as such condition remains in effect, the Banks shall be under no
obligation to make or maintain a Loan of such type.
Section 3.03. ILLEGALITY. Notwithstanding any other provision in this
Agreement, in the event that it becomes unlawful for any Bank or its Lending
Office to honor its obligation to make or maintain a Eurocurrency Loan
hereunder, then such Bank shall promptly notify the Borrower thereof (with a
copy to the Agent) and such Bank's obligation to make or maintain a Eurocurrency
Loan hereunder shall be suspended until such time as such Bank may again make
and maintain such affected Loan (in which case the provisions of Section 3.04
shall be applicable).
Section 3.04. CERTAIN VARIABLE RATE LOANS PURSUANT TO SECTIONS 3.01
AND 3.03. If the obligations of any Bank to make a Loan of a particular type
(Loans of such type being herein called "Affected Loans" and such type being
herein called the "Affected Type") shall be suspended pursuant to Section 3.01
or 3.03, a Loan which would otherwise be maintained by such Bank as a Loan of
the Affected Type shall be made instead as Variable Rate Loan and, if an event
referred to in Section 3.01(b) or 3.03 has occurred and such Bank so requests by
notice to the Borrower (with a copy to the Agent), the Affected Loan of such
Bank then outstanding shall be automatically converted into Variable Rate Loan
on the date specified by such Bank in such notice.
Section 3.05. COMPENSATION. The Borrower shall pay to the Agent for
the account of each Bank, upon the request of such Bank through the Agent, such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Bank) to compensate it for any loss, cost or expense which such Bank reasonably
determines is attributable to (a) any payment to such Bank of a Eurocurrency
Loan made by such Bank on a date other than the last day of an Interest Period
for such Loan (whether by reason of acceleration or otherwise); or (b) any
failure by the Borrower (for
19
whatever reason) to borrow a Eurocurrency Loan to be made by a Bank on the date
specified therefore in the relevant notice given under Section 2.04 or on the
day specified therefore in such notice.
Without limiting the foregoing, such compensation shall include an
amount equal to the excess, if any, of: (i) the amount of interest which
otherwise would have accrued on the principal amount so paid or not borrowed for
the period from and including the date of such payment or failure to borrow to
but excluding the last day of the Interest Period for such Loan (or, in the case
of a failure to borrow, to but excluding the last day of the Interest Period for
such Loan which would have commenced on the date specified therefor in the
relevant notice) at the applicable rate of interest for such Loan provided for
herein; over (ii) the amount of interest (as reasonably determined by such Bank)
such Bank would have bid in the London interbank market for deposits in the
relevant Currency for amounts comparable to such principal amount and maturities
comparable to such period.
Section 3.06. SURVIVAL. The obligations of the Borrower under this
Article 3 shall survive the repayment of the Loans and the termination of the
Commitment.
ARTICLE 4. CONDITIONS PRECEDENT.
Section 4.01. DOCUMENTARY CONDITIONS PRECEDENT. The obligations of the
Banks to make the Loans constituting the borrowing hereunder are subject to the
condition precedent that the Agent shall have received on or before the date of
such Loans each of the following, in form and substance satisfactory to the
Agent and its counsel:
(a) the Notes duly executed by the Borrower;
(b) the Security Documents duly executed by the parties thereto;
(c) the Authorization Letter duly executed by the Borrower;
(d) a certificate of the Secretary or Assistant Secretary of the
Borrower, dated the Effective Date, attesting to all corporate action taken by
the Borrower, including resolutions of its Board of Directors authorizing the
execution, delivery and performance of the Facility Documents to which it is a
party and each other document to be delivered pursuant to this Agreement;
(e) a certificate of the Secretary or Assistant Secretary of the
Borrower, dated the Effective Date, certifying the names and true signatures of
the officers of the Borrower authorized to sign the Facility Documents to which
it is a party and the other documents to be delivered by the Borrower under this
Agreement;
20
(f) a certificate of a duly authorized officer of the Borrower, dated
the Closing Date, stating that the representations and warranties in Article 5
are true and correct on such date as though made on and as of such date and that
no event has occurred and is continuing which constitutes a Default or Event of
Default;
(g) a favorable opinion of counsel for the Borrower, dated the Closing
Date, in substantially the form of EXHIBIT C and as to such other matters as the
Agent or any Bank may reasonably request;
(h) a recently dated certificate of the Secretary of State of the
State of Borrower's formation as to its good standing.
Section 4.02. ADDITIONAL CONDITIONS PRECEDENT. The obligations of the
Banks to make the Loans shall be subject to the further conditions precedent
that on the date of such Loan:
(a) the following statements shall be true: (i) the representations
and warranties contained in Article 5 are true and correct on and as of the
Effective Date as though made on and as of such date; and (ii) no Default or
Event of Default has occurred and is continuing, or would result from such Loan;
and
(b) the Agent shall have received such approvals, opinions or
documents as the Agent or any Bank may reasonably request.
Section 4.03. DEEMED REPRESENTATIONS. Each notice of a Loan and
acceptance by the Borrower of the proceeds thereof shall constitute a
representation of warranty that the statements contained in Section 4.02(a)
hereof are true and correct both on the date of such notice and, unless the
Borrower otherwise notifies the Agent prior to such Borrowing, as of the date of
such Loan.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants that:
Section 5.01. INCORPORATION, GOOD STANDING AND DUE QUALIFICATION. The
Borrower and each of its Subsidiaries is a corporation duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
formation, has all power and authority to carry on its business as now being
conducted and to own its properties and is duly licensed or qualified and in
good standing or a foreign corporation in each other jurisdiction in which its
properties are located or in which failure to qualify would materially and
adversely affect the conduct of its business or the enforceability of
contractual rights of the Borrower.
Section 5.02. CORPORATE POWER AND AUTHORITY: NO CONFLICTS. The
execution, delivery and performance by the Borrower of the Facility Documents
are within the Borrower's corporate
21
powers, have been duly authorized by all necessary corporate action, and do not
contravene (a) the Borrower's charter or by-laws,or (b) any law or any
contractual restriction or provision binding on or affecting the Borrower.
Section 5.03. GOVERNMENTAL APPROVAL. No authorization or approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
the Borrower of the Facility Documents to which the Borrower is a party.
Section 5.04. LEGALLY ENFORCEABLE AGREEMENTS. Each Facility Document
to which Borrower is a party is, or when delivered hereunder will be, legal,
valid and binding obligations of the Borrower enforceable against the Borrower
in accordance with their respective terms.
Section 5.05. FINANCIAL STATEMENTS. The balance sheets of the Borrower
and its Subsidiaries as at December 31, 2001, and the related statements of
income and retained earnings of the Borrower and its Subsidiaries for the fiscal
year then ended, and the unaudited balance sheets of the Borrower and its
Subsidiaries as at June 30, 2002 and the related statements of income and
retained earnings, copies of which have been furnished to each Bank, fairly
present the financial condition of the Borrower and its Subsidiaries at such
date and the results of the operations of the Borrower and its subsidiaries for
the period ended on such date, all in accordance with GAAP, and since June 30,
2002, there has been no material adverse change in such condition or operations.
Section 5.06. LITIGATION. There is no pending or threatened action or
proceeding affecting the Borrower or any of its Subsidiaries before any court,
governmental agency or arbitrator, which may materially adversely affect the
financial condition or operations of the Borrower or any Subsidiary.
Section 5.07. MARGIN STOCK. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the Board of Governors of
the Federal Reserve System).
Section 5.08. USE OF LOAN PROCEEDS. No part of the proceeds of the
Loans will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, (a) to purchase or to carry margin stock or to
extend credit to others for the purpose of purchasing or carrying margin stock,
or to refund indebtedness originally incurred for such purpose, or (b) for any
purpose which violates or is inconsistent with the provisions of the Regulations
G, T, U or X of the Board of Governors of the Federal Reserve System.
Section 5.09. TAX RETURNS. Each of the Borrower and its Subsidiaries
has filed (or has obtained extensions of the time by which it is required to
file) all United States federal income tax returns and all other material tax
returns required to be filed by it and has paid all taxes shown due on the
returns so filed as well as all other taxes, assessments and governmental
charges which
22
have become due, except such taxes, if any, as are being contested in good faith
and as to which adequate reserves have been provided.
Section 5.10. ERISA. Each member of the Controlled Group has fulfilled
its obligations under the minimum funding standards of ERISA and the Code with
respect to each Plan subject to the provisions thereof and is in compliance in
all material respects with the presently applicable provisions of ERISA and the
Code, and has not incurred any liability to the PBGC or a Plan under Title IV of
ERISA.
Section 5.11. SUBSIDIARIES. The Borrower has no Subsidiaries other
than those set forth on SCHEDULE I attached hereto as amended from time to time.
Section 5.12. OWNERSHIP AND LIENS. Each of the Borrower and its
Subsidiaries has good and marketable title to its material properties and assets
reflected on the balance sheet referred to in Section 5.05 hereof, except for
such properties and assets of a nonmaterial nature as have been disposed of
since the date of such balance sheet as no longer used or useful in the conduct
of its business or as have been disposed of in the ordinary course of business,
and all such properties and assets are free and clear of mortgages, pledges,
liens, charges and other encumbrances, except (a) mortgages encumbering real
property located in (i) Switzerland in the approximate principal amount of Sfr.
15,100,000 and (ii) the United Kingdom in the approximate principal amount of L
1,080,000, (b) encumbrances that do not materially interfere with the use or
operation of such property or assets, and (c) as required or permitted by the
provisions hereof or as disclosed in the balance sheet referred to in Section
5.05 hereof.
Section 5.13. HAZARDOUS MATERIALS. Except as set forth in SCHEDULE II
hereof, and qualified in each instance whereby a breach of this representation
set forth in this Section 5.13 would materially and adversely affect the
business, operations, assets or financial condition of the Borrower, the
Borrower is in compliance in all material respects with all Environmental Laws
governing Hazardous Materials and the Borrower has not used Hazardous Materials
on, from, or affecting any property now owned or occupied or hereafter owned or
occupied by the Borrower in any manner which violates Federal, state or local
laws, ordinances, rules, regulations, or policies governing the use, storage,
treatment, transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials, and that, to the best of the Borrower's
knowledge, no prior owner of any such property or any tenant, subtenant, prior
tenant or prior subtenant have used Hazardous Materials on, from, or affecting
such property in any manner which violates Federal, state or local laws,
ordinances, rules, regulations, or policies governing the use, storage,
treatment, transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials; without limiting the foregoing, the Borrower
shall not cause or permit any property owned or occupied by it to be used to
generate, manufacture, refine, transport, treat, store, handle, dispose,
transfer, produce or process Hazardous Materials, except in compliance with all
applicable Federal, state and local laws or regulations, nor shall the Borrower
cause or permit, as a result of any intentional or unintentional act or omission
on its part or any tenant or subtenant, a release of Hazardous Materials onto
any property owned or occupied by the Borrower or onto any other property; the
Borrower shall comply
23
with and ensure compliance by all tenants and subtenants with all applicable
Environmental Laws, whenever and by whomever triggered, and shall obtain and
comply with any and all approvals, registrations or permits required thereunder.
Section 5.14. NO DEFAULT ON OTHER AGREEMENTS. Neither the Borrower or any
of its Subsidiaries is in default in any manner which would materially and
adversely affect the business, properties or assets, operations or condition
(financial or otherwise) of the Borrower in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument to which it is a party.
Section 5.15. PARTNERSHIPS. Neither the Borrower nor any of its
Subsidiaries is a partner in any partnership.
Section 5.16. NO FORFEITURE. Neither the Borrower nor any of its
Subsidiaries or to the knowledge of Borrower Affiliates, is engaged in or
proposes to be engaged in the conduct of any business or activity which could
result in a Forfeiture Proceeding and no Forfeiture Proceeding against any of
them is pending or threatened, which would individually or in the aggregate
materially and adversely affect the business, operations, assets or financial
condition of the Borrower or any of its Subsidiaries.
Section 5.17. SOLVENCY. (a) The present fair saleable value of the assets
of the Borrower after giving effect to all the transactions contemplated by the
Facility Documents and the funding of all Commitments hereunder exceeds the
amount that will be required to be paid on or in respect of the existing debts
and other liabilities (including contingent liabilities) of the Borrower and its
Subsidiaries as they mature.
(b) The property of the Borrower does not constitute unreasonably small
capital for the Borrower to carry out its business as now conducted and as
proposed to be conducted including the capital needs of the Borrower.
(c) The Borrower does not intend to, nor does it believe that it will,
incur debts beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be received by the Borrower, and of
amounts to be payable on or in respect of debt of the Borrower). The cash
available to the Borrower after taking into account all other anticipated uses
of the cash of the Borrower, is anticipated to be sufficient to pay all such
amounts on or in respect of debt of the Borrower when such amounts are required
to be paid.
(d) The Borrower does not believe that final judgments against it in
actions for money damages will be rendered at a time when, or in an amount such
that, the Borrower will be unable to satisfy any such judgments promptly in
accordance with their terms (taking into account the maximum reasonable amount
of such judgments in any such actions and the earliest reasonable time at which
such judgments might be rendered). The cash available to the Borrower after
taking into account all other anticipated uses of the cash of the Borrower
(including the payments on or in
24
respect of debt referred to in paragraph (c) of this Section 5.17), is
anticipated to be sufficient to pay all such judgments promptly in accordance
with their terms.
Section 5.18. OPERATION OF BUSINESS. The Borrower and its Subsidiaries
possess all licenses, permits, franchises, patents, copyrights, trademarks and
trade names, or rights thereto, to conduct its business substantially as now
conducted and as presently proposed to be conducted, and neither the Borrower
nor any of its Subsidiaries is in violation of any valid rights of others with
respect to any of the foregoing.
Section 5.19. NO DEFAULTS ON OUTSTANDING JUDGMENTS OR ORDERS. The
Borrower and its Subsidiaries has satisfied all judgments and neither the
Borrower nor any of its Subsidiaries is in default with respect to any judgment,
writ, injunction, decree, rule or regulation of any court, arbitrator or
federal, state, municipal or other governmental authority, commission, board,
bureau, agency or instrumentality, domestic or foreign.
Section 5.20. NO DEFAULTS ON OTHER AGREEMENTS. Neither the Borrower nor
any of its Subsidiaries is a party to any indenture, loan or credit agreement or
any lease or other agreement or instrument or subject to any charter or
corporate restriction which could have a material adverse effect on the
business, properties, assets, operations or conditions, financial or otherwise,
of the Borrower or any of its Subsidiaries, or the ability of the Borrower to
carry out its obligations under this Agreement or any of the Notes. Neither the
Borrower nor any of its Subsidiaries is in default in any material respect in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any agreement or instrument material to a business to
which it is a party.
Section 5.21. LABOR DISPUTES AND ACTS OF GOD. Neither the business nor
the properties of the Borrower or any of its Subsidiaries are affected by any
fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God, or of the public enemy or other
casualty (whether or not covered by insurance), materially and adversely
affecting such business or properties or the operation of the Borrower or such
Subsidiary.
Section 5.22. GOVERNMENTAL REGULATION. Neither the Borrower nor any of
its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Investment Company Act of 1940, the Interstate Commerce
Act, the Federal Power Act or any statute or regulation limiting its ability to
incur indebtedness for borrowed money as contemplated hereby.
ARTICLE 6. AFFIRMATIVE COVENANTS.
The Borrower agrees with the Agent and each Bank that so long as any of
the Notes shall remain unpaid or any Bank shall have any Commitment under this
Agreement, unless the Required Banks shall otherwise consent in writing:
25
Section 6.01. COMPLIANCE WITH LAWS, CORPORATE EXISTENCE. The Borrower
shall (a) Comply, and cause each of its Subsidiaries to comply, in all material
respects with all applicable laws, rules, regulations and orders of any
governmental authority, the breach of which would materially and adversely
affect the business, operations, prospects or assets or the financial condition
or otherwise of the Borrower. Such compliance shall include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges or levies imposed upon it or on its income or profits or upon its
property except to the extent (i) such payment is being contested in good faith
and by proper proceedings, and (ii) adequate reserves are being maintained with
respect thereto; and (b) do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence, rights, franchises,
trade names and preserve all of its property used or useful in the conduct of
its business and keep same in good repair and working condition except for
property it deems no longer useful.
Section 6.02. REPORTING REQUIREMENTS. The Borrower shall furnish directly
to each of the Banks:
(a) as soon as available and in any event within 45 days after the end of
each of the first three quarters of each Fiscal Year of the Borrower,
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as of the end of such quarter and statements of income and retained
earnings and changes in financial position of the Borrower and its Subsidiaries
for the period commencing at the end of the previous Fiscal Year and ending with
the end of such quarter, with a certification by the chief financial officer of
the Borrower that such financial statements fairly present the financial
condition and results of operations of the Borrower in accordance with GAAP, at
the dates and for the periods set forth therein;
(b) as soon as available and in any event within 90 days after the end of
each Fiscal Year of the Borrower, a copy of the annual report for such year for
the Borrower and its Subsidiaries, containing consolidated and consolidating
financial statements for such year certified in a manner acceptable to the
Required Banks by Ernst & Young LLP or other independent public accountants
acceptable to the Required Banks;
(c) with the statements submitted under subsections (a) and (b) above, a
certificate signed by the chief financial officer of the Borrower or the
certified public accountants, as the case may be, stating (i) the requirements
of Section 4.02 hereof and (ii) the calculation of all financial covenants and
ratios required under Article 8 hereof;
(d) promptly upon receipt thereof, copies of any reports submitted to the
Borrower or any of its Subsidiaries by the independent certified public
accountant in connection with the examination of the financial statements of the
Borrower or any such Subsidiary made by such accountants;
(e) promptly after the sending or filing thereof, copies of all reports
which the Borrower sends to any of its security holders, and copies of all
reports and registration statements which the
26
Borrower or any Subsidiary files with the Securities and Exchange Commission or
any national securities exchange;
(f) promptly after the filing or receiving thereof, if and when the
Borrower or any member of the Controlled Group (as defined below) (i) gives or
is required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan (as defined below) under Title
IV of ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the notice of
such reportable event given or required to be given to PBGC; (ii) receives
notice of complete or partial withdrawal liability under Title IV of ERISA,
promptly followed by a copy of such notice to the Bank; or (iii) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate or appoint a
trustee to administer any Plan, promptly followed by a copy of such notice to
the Bank.
As used in this Subsection 6.02(f), "Controlled Group" means all members
of a control group of corporations and all trades or businesses (whether or not
incorporated) under common control, which together with the Borrower, are
treated as a single employer under Section 414(b) or 414(c) of the Code of 1954,
and "Plan" means at any time an employee pension benefit plan which is covered
by Title IV of ERISA or is subject to the minimum funding standards under
Section 412 of the Code and is either (x) maintained by the Borrower or any
member of the Controlled Group for employs of the Borrower or any member of the
Controlled Group, or (xx) maintained pursuant to a collective bargaining
agreement or similar arrangement under which more than one employer makes
contributions and to which the Borrower or any member of the Controlled Group is
then making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions;
(g) prior to the end of each Fiscal Year of the Borrower, a budget (in
format satisfactory to the Banks) for the succeeding Fiscal Year of the
Borrower, plus from time to time any revisions or modifications to such budget
within 15 days of the adoption of such revision or modification; and
(h) such other information respecting the condition or operations,
financial or otherwise, of the Borrower or any of its Subsidiaries as any Bank
through the Agent may from time to time reasonably request.
Section 6.03. NOTICE OF PROCEEDINGS. The Borrower shall promptly give
notice in writing to the Agent and each of the Banks of all litigation, arbitral
proceedings, regulatory proceedings and Forfeiture Proceedings affecting the
Borrower or any Subsidiary, except litigation or proceedings which, if adversely
determined, could not materially and adversely affect the consolidated financial
condition or the business taken as a whole of the Borrower and its Subsidiaries.
Section 6.04. INSURANCE. The Borrower shall, and shall cause each
Subsidiary to, maintain insurance with insurance companies or associations rated
"A-" or better by A.M. Best & Company or a comparable rating agency in such
amounts and against such risks as is usually carried by owners of similar
businesses and properties in the same general areas in which the Borrower and
its Subsidiaries operate.
27
Section 6.05. ENVIRONMENTAL LAWS. The Borrower shall comply in all
material respects with all Environmental Laws and provide to the Agent all
documentation in connection with such compliance that the Agent may reasonably
request.
Section 6.06. ACCESS TO PREMISES AND RECORDS. The Borrower shall at any
reasonable time and from time to time, but only to the extent relevant to the
loan transaction hereunder and the Borrower's ability to perform under this
Agreement, upon reasonable notice and during normal business hours, permit the
Agent and each of the Banks, or any agent or representative thereof to examine
the records and books of account and visit the properties of the Borrower or its
subsidiaries and to discuss the affairs, finances and accounts of the Borrower
and any Consolidated Subsidiary with any of the Borrower's officers and
directors.
Section 6.07. NOTICE OF DEFAULT. The Borrower shall in the event any
financial officer of the Borrower knows of any default or event of default under
any material agreement to which the Borrower is a party or any Event of Default
which shall have occurred or knows of the occurrence of any event which, upon
notice or lapse of time or both, would constitute an Event of Default, promptly
and in any event within ten (10) days after the occurrence of each Event of
Default, furnish to the Agent a written statement as to such occurrence
specifying the nature and extent thereof and the action (if any) which is
proposed to be taken with respect thereto.
Section 6.08. SUBSIDIARIES. The Borrower shall within ten (10) days of
the creation or acquisition of any new Domestic Subsidiary having assets with a
book value of One Million Dollars ($1,000,000) or more, or any Foreign
Subsidiary having assets with a book value of Two Million Dollars ($2,000,000)
or more, or the acquisition of assets by or the transfer of assets to any
existing Domestic Subsidiary which after such transfer will have assets with a
book value of One Million Dollars ($1,000,000) or more, or any existing Foreign
Subsidiary which after such transfer will have assets with a book value of Two
Million Dollars ($2,000,000) or more, deliver or cause to be delivered to the
Agent a guaranty from such Subsidiary in form and substance acceptable to the
Agent and a
security agreement in substantially the same form as the
Security
Agreement by such Subsidiary, provided, however, nothing contained in this
Section 6.08 shall be deemed to be consent by the Agent or any Bank of such
creation, acquisition or transfer.
Section 6.09. MATERIAL ADVERSE CHANGES. The Borrower shall promptly
notify the Agent and the Banks of any litigation matter, investigation, audit,
business development or change in financial condition, which has resulted in, or
which the Borrower or its Subsidiaries reasonably believes will result in an
Event of Default.
Section 6.10. REPORTS TO OTHER CREDITORS. The Borrower shall promptly
after the furnishing thereof, deliver to the Agent copies of any statement or
report furnished to any other party pursuant to the terms of any indenture, loan
or credit or similar agreement and not otherwise required to be furnished to the
Agent or the Banks pursuant to any clause of this Article 6.
28
Section 6.11. GENERAL INFORMATION. The Borrower shall provide the Agent
such other information respecting the condition or operations, financial or
otherwise, of the Borrower or any of its Subsidiaries as the Agent may from time
to time reasonably request.
ARTICLE 7. NEGATIVE COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank shall have
any Commitment under this Agreement, the Borrower shall not without the written
consent of the Banks:
Section 7.01. LIENS, ETC. Create or suffer to exist, or permit any of its
Subsidiaries to create or suffer to exist, any Lien, or any other type of
preferential arrangement, upon or with respect to any of its properties, whether
now owned or hereafter acquired, or assign, or permit any of its Subsidiaries to
assign, any right to receive income, in each case to secure any Debt of any
Person or entity, other than:
(a) Liens securing the Loans hereunder and the obligations under the Term
Loan Agreement;
(b) Liens securing the payment of taxes, assessments or governmental
charges or levies or the demands of suppliers, mechanics, carriers, warehousers,
landlords and other like Persons, provided that (i) they do not in the aggregate
materially reduce the value of any properties subject to the Liens or materially
interfere with their use in the ordinary conduct of the owning business, and
(ii) all claims which the Liens secure are being actively contested in good
faith and by appropriate proceedings;
(c) Liens incurred or deposits made in the ordinary course of business
(i) in connection with worker's compensation, unemployment insurance, social
security and other like laws, or (ii) to secure the performance of letters of
credit, bids, tenders, sales contract, leases, statutory obligations, surety,
appeal and performance bonds and other similar obligations, in each case not
incurred in connection with the borrowing of money, the obtaining of advances or
the payment of the deferred purchase price of property;
(d) attachment, judgment and other similar Liens arising in connection
with court proceedings provided that (i) execution and other enforcement are
effectively stayed, and (ii) all claims which the Liens secure are being
actively contested in good faith and by appropriate proceedings;
(e) Liens on property of a Subsidiary provided that they secure only
obligations owing to the Borrower or another Subsidiary;
(f) Liens related to lease obligations, and within the limitations,
described in Section 7.02;
29
(g) Liens against Customer Notes, which are created in connection with
the sale, pledge or discounting of such customer notes, provided that
immediately after giving effect thereto the Borrower's aggregate liabilities on
account of such Debt secured by such Liens does not exceed $6,000,000; and
(h) Liens against property leased pursuant to Capital Leases and
Synthetic Lease Obligations, provided that the aggregate amount of Debt secured
by such Liens does not exceed $3,000,000.
(i) Liens not exceeding $500,000 in the aggregate against property other
than inventory and receivables and Liens against receivables of HTT Xxxxxx
Xxxxxx Xxxxxxxx XX and X. Xxxxxxxxxxxx & Co. AG.
(j) Liens securing certain credit facilities made available by JPMorgan
Chase Bank to the Borrower for foreign exchange, letters of credit and Interest
Rate Protection Agreements.
For the purposes of this Agreement, the term "Lien" shall mean any
interest in property securing any Debt or obligation owed to, or a claim by, a
Person other than the owner of the property, whether the interest is based on
common law, statute or contract (including the security interest or lien arising
from a mortgage, encumbrance, pledge, conditional sale or trust receipt or a
lease, consignment or bailment for security purposes). The term "Lien" shall not
include minor reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions and other minor title exceptions affecting
property, provided that they do not constitute security for a monetary
obligation. For the purposes of this Agreement, the Borrower or a Subsidiary
shall be deemed to be the owner of any property which it has acquired or holds
subject to a conditional sale agreement, Capital Lease and Synthetic Lease
Obligations or other arrangement pursuant to which title to the property has
been retained by or vested in some other Person for security purposes, and such
retention or vesting shall be deemed to be a Lien. In connection with any sale,
pledge or discounting of Borrower's or its Subsidiaries' Customer Notes, a
"Lien" or "Liens" shall be deemed to exist to the extent of (i) the amount of
any sums withheld from the Borrower or any Subsidiary in any such transaction,
plus (ii) the amount of any obligation of the Borrower or any Subsidiary
resulting from the non-payment of any Customer Notes involved in any such
transaction.
Section 7.02. LEASE OBLIGATIONS. Create or suffer to exist, or permit any
of its Subsidiaries to create or suffer to exist, any obligations for the
payment of rental for any property under leases or agreements to lease, other
than Capital Leases and Synthetic Lease Obligations, which would cause the
liabilities of the Borrower and its Subsidiaries, on a consolidated basis, in
respect of all such obligations to exceed $5,000,000 payable in any period of 12
months.
Section 7.03. PROHIBITED TRANSACTIONS. Use the proceeds of any Loan to
acquire any security in any transaction which is subject to Sections 13 and 14
of the Securities Exchange Act of
30
1934 or use the proceeds of any Loan to otherwise acquire any public company
other than on a friendly basis.
Section 7.04. MARGIN STOCK. Use the proceeds of any Loan to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.
Section 7.05. CONSOLIDATIONS, MERGERS, ACQUISITIONS AND SALES OF ASSETS.
Consolidate or merge with or into, or sell, lease or otherwise dispose of any of
its assets to any Person, or acquire all or any substantial portion of the
properties, assets or shares of stock of any other entity or permit any
Subsidiary to do any of the above, except that:
(a) any Subsidiary may consolidate or merge with the Borrower or any
wholly-owned Subsidiary of the Borrower;
(b) the Borrower or any Subsidiary may sell, lease or otherwise dispose
of any of its inventory in the ordinary course of business and any of its assets
which are obsolete, excess or unserviceable;
(c) the Borrower or any Subsidiary may sell, pledge or discount Customer
Notes in accordance with the terms of the Pledge Agreement;
(d) the Borrower or any Subsidiary may sell, lease or otherwise dispose
of any of its assets (other than as permitted by clauses (a) to (c) inclusive),
PROVIDED that the aggregate net book value of all assets of the Borrower and its
Subsidiaries sold, leased or otherwise disposed of during any Fiscal Year of the
Borrower pursuant to this clause (d) shall not exceed 5% of the Consolidated
Tangible Net Worth of the Borrower and its Subsidiaries at the end of the
preceding Fiscal Year.
All sales, leases or other disposition of assets pursuant to clauses (b),
(c) or (d) shall be not less than at fair market value.
Section 7.06. AFFILIATE TRANSACTIONS. Enter into or permit any Subsidiary
to enter into any transaction (including the purchase, sale or exchange of
Property or the rendering of any service) with any Affiliate except upon fair
and reasonable terms which are at least as favorable to the Borrower or the
Subsidiary as would be obtained in a comparable arms-length transaction with a
non-Affiliate.
Section 7.07. LOANS AND ADVANCES. Make or permit to exist any loans or
advances to any Person, except that loans or advances incurred in the normal
course of business (including employee advances and Customer Notes not exceeding
$20,000,000 in the aggregate at any one time outstanding) are permitted.
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
31
with the sale, pledge or discounting of customer notes, provided that
immediately after giving effect thereto the Borrower's aggregate liability under
such guaranties does not exceed $6,000,000. 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).
Section 7.09. NO ACTIVITIES LEADING TO FORFEITURE. Neither the Borrower
nor any of its Subsidiaries or to the Borrower's knowledge Affiliates, is
engaged in or proposes to be engaged in the conduct of any business or activity
which could result in a Forfeiture Proceeding, which would, individually or in
the aggregate, materially and adversely affect the business, operations, assets
or financial condition of the Borrower or any of its Subsidiaries.
ARTICLE 8. FINANCIAL COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank shall have
any Commitment under this Agreement:
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.
Section 8.02. NET WORTH. The Borrower shall maintain a Consolidated
Tangible Net Worth of not less than $130,000,000, at all times through December
31, 2002 and, which sum shall increase by $1,000,000 as of the end of each
Fiscal Year thereafter.
Section 8.03. FUNDED DEBT. The Borrower shall maintain a ratio of Funded
Debt to Earnings Before Interest, Taxes, Depreciation and Amortization as
measured as of the last day of each fiscal quarter for the immediately preceding
twelve (12) months of not greater than (i) 3.75 to 1 for the fiscal quarters
ending December 31, 2002 and March 31, 2003; (ii) 3.5 to 1 for the fiscal
quarter ending June 30, 2003; (iii) 3.25 to 1 for the fiscal quarter ending
September 30, 2003; (iv) 3.0 to 1 for the fiscal quarters ending December 31,
2003 and March 31, 2004; and (v) 2.5 to 1 for each fiscal quarter thereafter.
Section 8.04. EARNINGS. The Borrower shall maintain a ratio of Earnings
Before Interest, Taxes, Depreciation and Amortization to interest of not less
than 3.25 to 1, measured as of the last day of each fiscal quarter for the
immediately preceding twelve (12) months through June 30, 2003 and 3.75 to 1 as
of the last day of each fiscal quarter thereafter.
Section 8.05. FIXED CHARGE RATIO. The Borrower shall maintain a Fixed
Charge Ratio as of the last day of each Fiscal Quarter for the immediately
preceding twelve (12) months of not less than 1.1 to 1.
Section 8.06. CUSTOMER NOTES. The amount of Customer Notes outstanding at
any one time shall not exceed $20,000,000 in the aggregate.
32
ARTICLE 9. EVENTS OF DEFAULT.
Section 9.01. EVENTS OF DEFAULT. Any of the following events shall be an
"Event of Default":
(a) The Borrower shall fail to pay when due any installment of principal
of, or interest on, any Loan or any amount of a fee or any other amount payable
under this Agreement, as and when due and payable; or
(b) Any representation or warranty made by the Borrower herein or in any
other Facility Document, or by the Borrower (or any of its officers) in
connection with this Agreement shall prove to have been incorrect in any
material respect when made; or
(c) The Borrower shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement or in any other Facility
Document on its part to be performed or observed and any such failure shall
remain unremedied for 10 days after written notice thereof shall have been given
to the Borrower by the Agent or any Bank; or
(d) The Borrower or any of its Subsidiaries shall fail to pay any Debt
(but excluding Debt evidenced by the Notes) of the Borrower or such Subsidiary
as the case may be, or any interest or premium thereon, when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) and
such failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Debt; or any other default under
any agreement or instrument relating to any such Debt, or any other event, shall
occur and shall continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of such Debt; or any
such Debt shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof; or
(e) The Borrower or any of its Subsidiaries shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Borrower or
any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property; or the
Borrower or any of its Subsidiaries shall take any corporate action to authorize
any of the actions set forth above in this subsection (e); or
33
(f) Any judgment or order for the payment of money in excess of
$2,500,000 shall be rendered against the Borrower or any of its Subsidiaries,
and either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of 20 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
(g) Any member of the Controlled Group shall fail to pay when due an
amount or amounts aggregating in excess of $250,000 which it shall have become
liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of
intent to terminate a Plan or Plans having aggregate Unfunded Benefit
Liabilities in such amount or amounts which would at such time create a
liability in excess of liabilities of such Plan or Plans recognized prior
thereto on the Borrower's financial statements and which liability would cause a
violation of any of the covenants under Article 7 (collectively, a "Material
Plan") shall be filed under Title IV of ERISA by any member of the Controlled
Group, any plan administrator any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate or to cause a
trustee to be appointed to administer any Material Plan or a proceeding shall be
instituted by a fiduciary of any Material Plan against any member of the
Controlled Group to enforce Section 515 of ERISA and such proceeding shall not
have been dismissed within 30 days thereafter; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree adjudicating that
any Material Plan must be terminated; or
(h) Any Forfeiture Proceeding shall have been commenced or the Borrower
shall have given any Bank written notice of the commencement of any Forfeiture
Proceeding, which would, individually or in the aggregate, materially and
adversely affect the business, operations, assets or financial condition of the
Borrower or any of its Subsidiaries, or any Bank has a good faith basis to
believe that a Forfeiture Proceeding has been threatened or commenced, which
would, individually or in the aggregate, materially and adversely affect the
business, operations, assets or financial condition of the Borrower or any of
its subsidiaries; or
(i) A Change in Control shall occur.
Section 9.02. REMEDIES. If any Event of Default shall occur and be
continuing, the Agent shall, upon request of the Required Banks, by notice to
the Borrower, (a) declare the Commitments to be terminated, whereupon the same
shall forthwith terminate, and (b) declare the outstanding principal of the
Notes, all interest thereon and all other amounts payable under this Agreement
and the Notes to be forthwith due and payable, whereupon the Notes, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided that, in the case of an
Event of Default referred to in Section 9.01(e) or Section 9.01(h) above, the
Commitments shall be immediately terminated, and the Notes, all interest thereon
and all other amounts payable under this Agreement shall be immediately due and
payable without notice, presentment, demand protest or other formalities of any
kind, all of which are hereby expressly waived by the Borrower.
34
ARTICLE 10. THE AGENT; RELATIONS AMONG BANKS AND BORROWER.
Section 10.01. APPOINTMENT, POWERS AND IMMUNITIES OF AGENT. Each Bank
hereby irrevocably (but subject to removal by the Required Banks pursuant to
Section 10.09) appoints and authorizes the Agent to act as its agent hereunder
and under any other Facility Document with such powers as are specifically
delegated to the Agent by the terms of this Agreement and any other Facility
Document, together with such other powers as are reasonably incidental thereto.
The Agent shall have no duties or responsibilities except those expressly set
forth in this Agreement and any other Facility Document, and shall not by reason
of this Agreement be a trustee for any Bank. The Agent shall not be responsible
to the Banks for any recitals, statements, representations or warranties made by
the Borrower or any officer or official of the Borrower or any other Person
contained in this Agreement or any other Facility Document, or in any
certificate or other document or instrument referred to or provided for in, or
received by any of them under, this Agreement or any other Facility Document, or
for the value, legality, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Facility Document or any other
document or instrument referred to or provided for herein or therein, for the
perfection or priority of any collateral security for the Loans or for any
failure by the Borrower to perform any of its obligations hereunder or
thereunder. The Agent may employ agents and attorneys-in-fact and shall not be
responsible, except as to money or securities received by it or its authorized
agents, for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. Neither the Agent nor any of its directors,
officers, employees or agents shall be liable or responsible for any action
taken or omitted to be taken by it or them hereunder or under any other Facility
Document or in connection herewith or therewith, except for its or their own
gross negligence or willful misconduct. The Borrower shall pay any fee agreed to
by the Borrower and the Agent with respect to the Agent's services hereunder.
Section 10.02. RELIANCE BY AGENT. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent. The Agent may deem and treat each Bank as
the holder of the Loan made by it for all purposes hereof unless and until a
notice of the assignment or transfer thereof satisfactory to the Agent signed by
such Bank shall have been furnished to the Agent together with the assignment
fee referred to in Section 11.05(b), but the Agent shall not be required to deal
with any Person who has acquired a participation in any Loan from a Bank. As to
any matters not expressly provided for by this Agreement or any other Facility
Document, the Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions signed by the
Required Banks, and such instructions of the Required Banks and any action taken
or failure to act pursuant thereto shall be binding on all of the Banks and any
other holder of all or any portion of any Loan.
35
Section 10.03. DEFAULTS. The Agent shall not be deemed to have knowledge
of the occurrence of a Default or Event of Default (other than the non-payment
of principal of or interest on the Loans to the extent the same is required to
be paid to the Agent for the account of the Banks) unless the Agent has received
notice from a Bank or the Borrower specifying such Default or Event of Default.
In the event that the Agent receives such a notice of the occurrence of a
Default or Event of Default, the Agent shall give prompt notice thereof to the
Banks (and shall give each Bank prompt notice of each such non-payment). The
Agent shall (subject to Section 10.08) take such action with respect to such
Default or Event of Default which is continuing as shall be directed by the
Required Banks; provided that, unless and until the Agent shall have received
such directions, the Agent may take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Banks; and provided further that the Agent
shall not be required to take any such action which it determines to be contrary
to law.
Section 10.04. RIGHTS OF AGENT AS A BANK. With respect to its Commitment
and the Loan made by it, the Agent in its capacity as a Bank hereunder shall
have the same rights and powers hereunder as any other Bank and may exercise the
same as though it were not acting as the Agent, and the term "Bank" or "Banks"
shall, unless the context otherwise indicates, include the Agent in its capacity
as a Bank. The Agent and its affiliates may (without having to account therefor
to any Bank) accept deposits from, lend money to (on a secured or unsecured
basis), and generally engage in any kind of banking, trust or other business
with, the Borrower (and any of its affiliates) as if it were not acting as the
Agent, and the Agent may accept fees and other consideration from the Borrower
for services in connection with this Agreement or otherwise without having to
account for the same to the Banks. Although the Agent and its affiliates may in
the course of such relationships and relationships with other Persons acquire
information about the Borrower, its Affiliates and such other Persons, the Agent
shall have no duty to disclose such information to the Banks except to the
extent, if any, expressly required by this Agreement or any other Facility
Documents.
Section 10.05. INDEMNIFICATION OF AGENT. The Banks agree to indemnify the
Agent (to the extent not reimbursed under Section 11.03 or under the applicable
provisions of any other Facility Document, but without limiting the obligations
of the Borrower under Section 11.03 or such provisions), ratably in accordance
with the aggregate unpaid principal amount of the Loans made by the Banks
(without giving effect to any participations, in all or any portion of such
Loans, sold by them to any other Person) (or, if no Loans are at the time
outstanding, ratably in accordance with their respective Commitment), for any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of this Agreement, any other Facility
Document or any other documents contemplated by or referred to herein or the
transactions contemplated hereby or thereby (including, without limitation, the
costs and expenses which the Borrower is obligated to pay under Section 11.03 or
under the applicable provisions of any other Facility Document but excluding,
unless a Default or Event of Default has occurred, normal administrative costs
and expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other
36
documents or instruments; provided that no Bank shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the party to be indemnified.
Section 10.06. DOCUMENTS. The Agent will forward to each Bank, promptly
after the Agent's receipt thereof, a copy of each report, notice or other
document required by this Agreement or any other Facility Document to be
delivered to the Agent for such Bank.
Section 10.07. NON-RELIANCE ON AGENT AND OTHER BANKS. Each Bank agrees
that it has, independently and without reliance on the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Borrower and its Subsidiaries and decision to
enter into this Agreement and that it will, independently and without reliance
upon the Agent or any other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any other
Facility Document. The Agent shall not be required to keep itself informed as to
the performance or observance by the Borrower of this Agreement or any other
Facility Document or any other document referred to or provided for herein or
therein or to inspect the properties or books of the Borrower or any Subsidiary.
Except for notices, reports and other documents and information expressly
required to be furnished to the Banks by the Agent hereunder, the Agent shall
not have any duty or responsibility to provide any Bank with any credit or other
information concerning the affairs, financial condition or business of the
Borrower or any Subsidiary (or any of their Affiliates) which may come into the
possession of the Agent or any of its affiliates. The Agent shall not be
required to file this Agreement, any other Facility Document or any document or
instrument referred to herein or therein, for record or give notice of this
Agreement, any other Facility Document or any document or instrument referred to
herein or therein, to anyone.
Section 10.08. FAILURE OF AGENT TO ACT. Except for action expressly
required of the Agent hereunder, the Agent shall in all cases be fully justified
in failing or refusing to act hereunder unless it shall have received further
assurances (which may include cash collateral) of the indemnification
obligations of the Banks under Section 10.05 in respect of any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.
Section 10.09. RESIGNATION OR REMOVAL OF AGENT. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving written notice thereof to the Banks and the
Borrower, and the Agent may be removed at any time with or without cause by the
Required Banks; provided that the Borrower and the other Banks shall be promptly
notified thereof. Upon any such resignation or removal, the Required Banks shall
have the right to appoint a successor Agent. If no successor Agent shall have
been so appointed by the Required Banks and shall have accepted such appointment
within 30 days after the retiring Agent's giving of notice of resignation or the
Required Banks' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a bank which has
an office in New York, New York. The Required Banks or the retiring Agent, as
the case may be, shall upon the appointment of a successor Agent promptly so
notify the Borrower and the other Banks. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, such successor
37
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article 10
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent.
Section 10.10. AMENDMENTS CONCERNING AGENCY FUNCTION. The Agent shall not
be bound by any waiver, amendment, supplement or modification of this Agreement
or any other Facility Document which affects its duties hereunder or thereunder
unless it shall have given its prior consent thereto.
Section 10.11. LIABILITY OF AGENT. The Agent shall not have any
liabilities or responsibilities to the Borrower on account of the failure of any
Bank to perform its obligations hereunder or to any Bank on account of the
failure of the Borrower to perform its obligations hereunder or under any other
Facility Document. This Section 10.11 shall not be construed to limit the
Agent's liability or responsibility where the Agent is acting as a Bank under
this Agreement.
Section 10.12. TRANSFER OF AGENCY FUNCTION. Without the consent of the
Borrower or any Bank, the Agent may at any time or from time to time transfer
its functions as Agent hereunder to any of its offices wherever located,
provided that the Agent shall promptly notify the Borrower and the Banks
thereof.
Section 10.13. NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Agent shall
have been notified by a Bank or the Borrower (either one as appropriate being
the "Payor") prior to the date on which such Bank is to make payment hereunder
to the Agent of the proceeds of a Loan or the Borrower is to make payment to the
Agent, as the case may be (either such payment being a "Required Payment"),
which notice shall be effective upon receipt, that the Payor does not intend to
make the Required Payment to the Agent, the Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption (but shall not
be required to), make the amount thereof available to the intended recipient on
such date and, if the Payor has not in fact made the Required Payment to the
Agent, the recipient of such payment (and, if such recipient is the Borrower and
the Payor Bank fails to pay the amount thereof to the Agent forthwith upon
demand, the Borrower) shall, on demand, repay to the Agent the amount made
available to it together with interest thereon for the period from the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to the average daily Federal Funds Rate for
such period.
38
Section 10.14. WITHHOLDING TAXES. (a) Each Bank represents that it is
entitled to receive any payments to be made to it hereunder without the
withholding of any U.S. tax and will furnish to the Agent such forms,
certifications, statements and other documents as the Agent may request from
time to time to evidence such Bank's exemption from the withholding of any U.S.
tax imposed by any domestic jurisdiction or to enable the Agent to comply with
any applicable laws or regulations relating thereto. Without limiting the effect
of the foregoing, if any Bank is not created or organized under the laws of the
United States of America or any state thereof, in the event that the payment of
interest by the Borrower is treated for U.S. income tax purposes as derived in
whole or in part from sources from within the U.S., such Bank will furnish to
the Agent Form W-8BEN or Form W-8ECI of the Internal Revenue Service, or such
other forms, certifications, statements or documents, duly executed and
completed by such Bank as evidence of such Bank's exemption from the withholding
of U.S. tax with respect thereto. The Agent shall not be obligated to make any
payments hereunder to such Bank in respect of any Loan or such Bank's Commitment
until such Bank shall have furnished to the Agent the requested form,
certification, statement or document.
(b) The Borrower agrees to pay each Bank such additional amounts as are
necessary in order that the net payment of any amount payable by Borrower to
such Bank hereunder and under its Note, after deduction for or withholding in
respect of any future tax, assessment or other charge or levy imposed by or on
behalf of the government of the country of the Alternative Currency in which a
Eurocurrency Loan is made (other than taxes imposed on the overall net income of
the Bank or of its applicable Lending Office by this jurisdiction in which the
Bank's principal office or Lending Office is located) ("Foreign Taxes") on or
with respect to such payment, will not be less than the amount stated herein and
in such Note to be payable. The amount payable to any Bank shall be computed
from the date of the assessment of the Foreign Taxes, or the date that is one
hundred twenty (120) days prior to the date of demand by the Bank, whichever is
later. Without affecting Borrower's obligations under this Section 10.14(b), if
the Borrower is required by applicable law or regulation to make any deduction
or withholding of any Foreign Taxes with respect of any payment hereunder to any
Bank, Borrower agrees to furnish such Bank (i) within forty-five (45) days of
such payment the originals or certified copies of all governmental tax receipts
in respect of such Foreign Taxes, and (ii) promptly at the request of such Bank,
any other information, documents and receipts that such Bank may reasonably
require to establish to its satisfaction the full and timely payment of such
Foreign Taxes and to permit such Bank to claim such Foreign Taxes as a credit or
deduction in the computation of income taxes imposed on such Bank.
Section 10.15. SEVERAL OBLIGATIONS AND RIGHTS OF BANKS. The failure of
any Bank to make the Loan to be made by it on the date specified therefor shall
not relieve any other Bank of its obligation to make its Loan on such date, but
no Bank shall be responsible for the failure of any other Bank to make the Loan
to be made by such other Bank. The amounts payable at any time hereunder to each
Bank shall be a separate and independent debt, and each Bank shall be entitled
to protect and enforce its rights arising out of this Agreement, and it shall
not be necessary for any other Bank to be joined as an additional party in any
proceeding for such purpose.
39
Section 10.16. PRO RATA TREATMENT OF LOANS, ETC. Except to the extent
otherwise expressly provided in this Agreement (a) the borrowings in Dollars
under Section 2.01 and reductions under Section 2.09(b) shall be made from the
Banks pro rata according to the amounts of their respective Commitment; (b) the
borrowings in Alternative Currencies under Section 2.01 and reductions under
Section 2.09(b) shall be made from the Banks pro rata according to the amounts
of their respective Alternative Currency Sublimit; and (c) each prepayment and
payment of principal of or interest on Loans of a particular type and a
particular Interest Period shall be made to the Agent for the account of the
Banks pro rata in accordance with the respective unpaid principal amounts of
such Loans held by such Banks.
Section 10.17. SHARING OF PAYMENTS AMONG BANKS. If a Bank shall obtain
payment of any principal of or interest on any Loan made by it through the
exercise of any right of setoff, banker's lien, counterclaim, or by any other
means (including any payment obtained from or charged against any Third Party),
it shall promptly purchase from the other Banks participations in (or, if and to
the extent specified by such Bank, direct interests in) the Loans made by the
other Banks in such amounts, and make such other adjustments from time to time
as shall be equitable to the end that all the Banks shall share the benefit of
such payment (net of any expenses which may be incurred by such Bank in
obtaining or preserving such benefit) pro rata in accordance with the unpaid
principal and interest on the Loans held by each of them. To such end the Banks
shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored. The Borrower agrees that any Bank so purchasing a participation (or
direct interest) in the Loans made by other Banks may exercise all rights of
setoff, banker's lien, counterclaim or similar rights with respect to such
participation (or direct interest). Nothing contained herein shall require any
Bank to exercise any such right or shall affect the right of any Bank to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness of the Borrower.
Section 10.18. OTHER AGENTS; ADVISORS AND ARRANGERS. None of the Banks or
other Persons identified on the facing page or signature pages of this Agreement
as a "documentation agent", "exclusive advisor", "sole bookrunner" or "sole lead
arranger" shall have any right, power, obligation, liability, responsibility or
duty under this Agreement other than, in the case of such Banks, those
applicable to all Banks as such. Without limiting the foregoing, none of the
Banks or the Persons so identified shall have or be deemed to have any fiduciary
relationship with any Bank. Each Bank acknowledges that it has not relied, and
will not rely, on any of the Banks or other Persons so identified in deciding to
enter into this Agreement or in taking or not taking action hereunder.
ARTICLE 11. MISCELLANEOUS.
Section 11.01. AMENDMENTS AND WAIVERS. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may be amended or
modified only by an instrument in writing signed by the Borrower, the Agent and
the Required Banks, or by the Borrower and the
40
Agent acting with the consent of the Required Banks and any provision of
this Agreement may be waived by the Required Banks or by the Agent acting with
the consent of the Required Banks; PROVIDED that no amendment, modification or
waiver shall, unless by an instrument signed by all of the Banks or by the Agent
acting with the consent of all of the Banks: (a) increase or extend the term, or
extend the time or waive any requirement for the reduction or termination, of
the Commitments, (b) extend the date fixed for the payment of principal of or
interest on any Loan or any fee payable hereunder, (c) reduce the amount of any
payment of principal thereof or the rate at which interest is payable thereon or
any fee payable hereunder, (d) alter the terms of this Section 11.01, (e) amend
the definition of the term "Required Banks" or (f) waive any of the documentary
conditions precedent set forth in Section 4.01 hereof and PROVIDED, FURTHER,
that any amendment of Article 10 hereof or any amendment which increases the
obligations of the Agent hereunder shall require the consent of the Agent. No
failure on the part of the Agent or any Bank to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof or preclude
any other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
Section 11.02. USURY. Anything herein to the contrary notwithstanding,
the obligations of the Borrower under this Agreement and the Notes shall be
subject to the limitation that payments of interest shall not be required to the
extent that receipt thereof would be contrary to provisions of law applicable to
a Bank limiting rates of interest which may be charged or collected by such
Bank.
Section 11.03. EXPENSES AND INDEMNIFICATION. The Borrower shall reimburse
the Agent and the Banks on demand for all costs, expenses, and charges
(including, without limitation, fees and charges of external legal counsel for
the Agent and each Bank and costs allocated by their respective internal legal
departments) incurred by the Agent or the Banks in connection with the
enforcement of this Agreement or the Notes by reason of any Event of Default or
any event which, after the giving of notice or passage of time, or both, would
constitute an Event of Default. The Borrower agrees to indemnify and hold
harmless the Agent and each Bank from and against any and all claims, damages,
liabilities and expenses (including, without limitation, fees and disbursements
of counsel) (each an "Indemnified Liability") which may be incurred by or
asserted against the Agent or such Bank in connection with or arising out of any
threatened or actual litigation, or proceeding related to any acquisition or
proposed acquisition by the Borrower, or by any Subsidiary, of all or any
portion of the stock of substantially all the assets of any Person whether or
not the Agent or such Bank is a party thereto. The Borrower agrees that any
Indemnified Liability will be promptly paid to the Person to be indemnified upon
the written demand of such Person.
Section 11.04. SURVIVAL. The obligations of the Borrower under Sections
3.01, 3.05 and 11.03 shall survive the repayment of the Loans and the
termination of the Commitments.
Section 11.05. ASSIGNMENT; PARTICIPATIONS.
41
(a) This Agreement shall be binding upon, and shall inure to the benefit
of, the Borrower, the Agent, the Banks and their respective successors and
assigns, except that the Borrower may not assign or transfer its rights or
obligations hereunder.
(b) Each Bank may, with the consent of the Agent and the Borrower (which
consent will not be unreasonably withheld or delayed) assign all or any part of
its Commitments, its Note or Loans to another bank or other Person provided,
however, that (i) no consent of the Borrower shall be required if an Event of
Default under Section 9.01 hereof shall have occurred and is continuing; (ii) no
such consent by the Borrower or the Agent shall be required in the case of any
assignment to a Bank; and (iii) any such partial assignment shall be made in an
amount of at least $5,000,000. Upon execution and delivery by the assignee to
the Borrower and the Agent of an instrument in writing pursuant to which such
assignee agrees to become a "Bank" hereunder (if not already a Bank) having the
Commitment and Loan specified in such instrument, and upon consent thereto by
the Borrower and the Agent, to the extent required above, the assignee shall
have, to the extent of such assignment (unless otherwise provided in such
assignment with the consent of the Borrower and the Agent), the obligations,
rights and benefits of a Bank hereunder holding the Commitment and Loans (or
portions thereof) assigned to it (in addition to the Commitment and Loans, if
any, theretofore held by such Assignee) and the assigning Bank shall, to the
extent of assignment, be released from the Commitment (or portion thereof) so
assigned. Upon each such assignment the assignee shall pay the Agent an
assignment fee of $3,500 and if the assignee shall not be a Bank, deliver to the
Agent an Administrative Questionnaire.
(c) A Bank may sell or agree to sell to one or more banks or other
Persons a participation in all or any part of any Loans held by it, or in its
Commitment, in which event each purchaser of a participation (a "Participant")
shall not, except as otherwise provided in Section 10.17 hereof, have any rights
or benefits under this Agreement or any Note (the participant's rights against
such Bank in respect of such participation to be those set forth in the
agreements executed by such Bank in favor of the Participant). All amounts
payable by the Borrower to any Bank under Article 2 hereof in respect of Loans
held by it and its Commitment, shall be determined as if such Bank had not sold
or agreed to sell any participations in such Loan and Commitment, and as if such
Bank were funding each of such Loan and Commitment in the same way that it is
funding the portion of such Loan and Commitment in which no participations have
been sold. The agreement executed by such Bank in favor of the Participant shall
not give the Participant the right to require such Bank to take or omit to take
any action hereunder except action directly relating to (i) the extension of the
Maturity Date, (ii) the extension of a payment date with respect to any fees
payable hereunder or any portion of the principal of or interest on any amount
outstanding hereunder allocated to such participant, (iii) the reduction of the
principal amount outstanding hereunder, or (iv) the reduction of the rate of
interest payable on such amount or any amount of fees payable hereunder to a
rate or amount, as the case may be, below that which the Participant is entitled
to receive under its agreement with such Bank.
(d) In addition to the assignments and participations permitted under
paragraphs (b) and (c) above, any Bank may assign and pledge all or any portion
of its Loan and Note to (i) any affiliate of such Bank, or (ii) any Federal
Reserve Bank as collateral security pursuant to Regulation A of the
42
Board of Governors of the Federal Reserve System and any operating Circular
issued by such Federal Reserve Bank. No such assignment shall release the
assigning Bank from its obligations hereunder.
(e) A Bank may furnish any information concerning the Borrower or any of
its Subsidiaries in the possession of such Bank from time to time to assignees
and participants (including prospective assignees and participants), provided
that such Bank shall require any assignee or participant (prospective or
otherwise) to agree in writing to maintain the confidentiality of such
information.
Section 11.06. NOTICES. All notices, requests and other communications
provided for herein (including, and not by way of limitation, any modifications
of, or waivers, requests or consents under, this Agreement) shall be given or
made in writing (including and not by way of limitation by telecopy), or, with
respect to notices given pursuant to Section 2.04 hereof, by telephone confirmed
in writing by telecopier or other writing by the close of business on the day
notice is given, delivered (or telephoned, as the case may be) to the intended
recipient at the "Address for Notices" specified below its name on the signature
pages hereof); or, as to any party, at such other address as shall be designated
by such party in a notice to each other party. Except as otherwise provided in
this Agreement, (a) notices shall be given to the Agent by telephone, confirmed
by telecopy or other writing by the close of business on the day notice is
given, and (b) notices to the Banks and to the Borrower by telecopy, commercial
overnight courier service, or ordinary mail, or addressed to such party at its
address on the signature page of this Agreement. Notices shall be effective: (i)
if given by mail, three (3) days after deposit in the mails with first class
postage prepaid, addressed as aforesaid; and (ii) in all other cases when
delivered or received. Provided, however, that notices to the Agent and the
Banks shall be effective upon receipt.
Section 11.07. SETOFF. The Borrower agrees that, in addition to (and
without limitation of) any right of setoff, banker's lien or counterclaim a Bank
may otherwise have, each Bank shall be entitled, at its option, to offset
balances (general or special, time or demand, provisional or final) held by it
for the account of the Borrower at any of such Bank's offices, in Dollars or in
any other Currency, against any amount payable by the Borrower to such Bank
under this Agreement or such Bank's Note which is not paid when due (regardless
of whether such balances are then due to the Borrower), in which case it shall
promptly notify the Borrower and the Agent thereof; provided that such Bank's
failure to give such notice shall not affect the validity thereof. Payments by
the Borrower hereunder shall be made without setoff or counterclaim.
SECTION 11.08. JURISDICTION; IMMUNITIES. (a) THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES
FEDERAL COURT SITTING IN NEW YORK COUNTY OVER ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE NOTES, AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT. THE BORROWER
43
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO THE BORROWER AT ITS
ADDRESS SPECIFIED IN SECTION 11.06. THE BORROWER AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
THE BORROWER FURTHER WAIVES ANY OBJECTION TO VENUE IN SUCH STATE AND ANY
OBJECTION TO AN ACTION OR PROCEEDING IN SUCH STATE ON THE BASIS OF FORUM NON
CONVENIENS. THE BORROWER FURTHER AGREES THAT ANY ACTION OR PROCEEDING BROUGHT
AGAINST THE AGENT SHALL BE BROUGHT ONLY IN NEW YORK STATE OR UNITED STATES
FEDERAL COURT SITTING IN NEW YORK COUNTY. THE BORROWER WAIVES ANY RIGHT IT MAY
HAVE TO JURY TRIAL.
(b) Nothing in this Section 11.08 shall affect the right of the Agent or
any Bank to serve legal process in any other manner permitted by law or affect
the right of the Agent or any Bank to bring any action or proceeding against the
Borrower or its property in the courts of any other jurisdictions.
(c) To the extent that the Borrower has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether from
service or notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to itself or its property, the Borrower
hereby irrevocably waives such immunity in respect of its obligations under this
Agreement and the Notes.
Section 11.09. TABLE OF CONTENTS; HEADINGS. Any table of contents and the
headings and captions hereunder are for convenience only and shall not affect
the interpretation or construction of this Agreement.
Section 11.10. SEVERABILITY. The provisions of this Agreement are
intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 11.11. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any party hereto may execute this Agreement by signing any such
counterpart.
Section 11.12. INTEGRATION. The Facility Documents set forth the entire
agreement among the parties hereto relating to the transactions contemplated
thereby and supersede any prior oral or written statements or agreements with
respect to such transactions.
44
SECTION 11.13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT EXCLUDING
ALL OTHER CONFLICT-OF-LAW RULES.
Section 11.14. CONFIDENTIALITY. Each Bank and the Agent agrees (on behalf
of itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable pre cautions to keep confidential, in
accordance with safe and sound banking practices, any non-public information
supplied to it by the Borrower pursuant to this Agreement which is identified by
the Borrower as being confidential at the time the same is delivered to the
Banks or the Agent, provided that nothing herein shall limit the disclosure of
any such information (a) to the extent required by statute, rule, regulation or
judicial process, (b) to counsel for any of the Banks or the Agent, (c) to bank
examiners, auditors or accountants, (d) in connection with any litigation to
which any one or more of the Banks is a party, (e) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first executes and delivers
to the respective Bank a Confidentiality Agreement in substantially the form of
EXHIBIT D hereto; or (f) to the extent such information becomes publicly
available other than as a result of disclosure by a Bank; and provided further
that in no event shall any Bank or the Agent be obligated or required to return
any materials furnished by the Borrower.
Section 11.15. TREATMENT OF CERTAIN INFORMATION. The Borrower (a)
acknowledges that services may be offered or provided to it (in connection with
this Agreement or otherwise) by each Bank or by one or more of their respective
subsidiaries or affiliates and (b) acknowledges that any information delivered
to each Bank or its subsidiaries or affiliates regarding the Borrower may be
shared among such Bank and such subsidiaries and affiliates. This Section 11.15
shall survive the repayment of the Loans and the termination of the Commitments.
Section 11.16. CURRENCY. This is an international loan transaction in
which the specification of Dollars, or an Alternative Currency, as the case may
be (the "Specified Currency"), any payment in the State of New York or the
country of the Specified Currency, as the case may be (the "Specified Place"),
is of the essence, and the Specified Currency shall be the Currency of account
in all events relating to the Loans denominated in the Specified Currency. The
payment obligations of the Borrower under this Agreement and the Notes shall not
be discharged by an amount paid in another currency or in another place, whether
pursuant to a judgment or otherwise, to the extent that the amount so paid on
conversion to Specified Currency and transferred to the Specified Place of
payment under normal banking procedures does not yield the amount of the
Specified Currency at the Specified Place due hereunder. If for the purpose of
obtaining a judgment in any court it is necessary to convert a sum due hereunder
in the Specified Currency into another Currency (the "Second Currency"), the
rate of exchange which shall be applied shall be that at which in accordance
with the normal banking procedures the Agent could purchase Dollars with the
Second Currency on the Business Day next preceding that on which such judgment
is rendered. The obligation of the Borrower in respect of any sum due from it to
the Agent or any Bank hereunder (an "Entitled Person") shall, notwithstanding
the rate of exchange actually applied in rendering such judgment, be discharged
only to the extent that on the Business Day following receipt by such
45
Entitled Person of any sum adjudged to be due hereunder or under the Notes in
the Second Currency, such Entitled Person may in accordance with normal banking
procedures purchase and transfer to the Specified Place, the Specified Currency
with the amount of the Second Currency so adjudged to be due; and the Borrower
hereby, as a separate obligation and notwithstanding any judgment, agrees to
indemnify such Entitled Person against, and to pay such Entitled Person on
demand in Dollars, any difference between the sum originally due to such
Entitled Person in Specified Currency in the amount of Specified Currency so
purchase and transferred.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
HARDINGE INC.
By: /s/ J. XXXXXXX XXXXX
--------------------------------------------
J. Xxxxxxx Xxxxx, President and Chief
Executive Officer
Address for Notices:
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Chief Financial Officer
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
46
55801.5
47
AGENT:
JPMORGAN CHASE BANK
By: /s/ XXXXXXXXX X. XXXXXX
------------------------------------
Xxxxxxxxx X. XxXxxx, Vice President
Address For Notices Under Section 2.08 With
Respect Variable Rate and Eurocurrency
Loans Denominated in Dollars:
JPMorgan Chase Bank
Loan and Agency Services Group
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mo Lin Sum, Vice President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Address For Notices Under Section 2.08 for all
Eurocurrency Loans Denominated in an
Alternative Currency:
X.X. Xxxxxx Europe Limited
000 Xxxxxx Xxxx
Xxxxxx, Xxxxxxx XX0X 0XX
Attention: Xxxxxx Xxxx, Loans Agency Group
Telephone No.: x00 000 000 0000
Telecopier No.: x00 000 000 0000
Address For All Other Notices:
JPMorgan Chase Bank
0000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. XxXxxx, Vice President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
48
DOCUMENTATION AGENT:
KEYBANK NATIONAL ASSOCIATION
By: /s/ XXXXXX X. XXXXX, III
--------------------------------------------
Xxxxxx X. Xxxxx, III, Senior Vice President
Address for Notices:
KeyBank National Association
0000 Xxxxxx xxx Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, III,
Senior Vice President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
49
BANKS:
JPMORGAN CHASE BANK
By: /s/ XXXXXXXXX X. XXXXXX
-----------------------------------
Xxxxxxxxx X. XxXxxx, Vice President
Lending Office for all Variable Rate and
Eurocurrency
Loans Denominated in Dollars:
JPMorgan Chase Bank
Loan and Agency Services Group
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mo Lin Sum, Vice President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Lending Office for all Eurocurrency Loans
Denominated in an Alternative Currency:
JPMorgan Chase Bank
Nassau Branch
c/o International Loans Operations
0 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxxxx, Vice President
Telephone No.: (000) 000-0000
Telecopier No.:(000) 000-0000
Address for Notices for all Variable Rate and
Eurocurrency Loans Denominated in Dollars:
JPMorgan Chase Bank
Loan and Agency Services Group
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mo Lin Sum, Vice President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
50
Address for Notices for all Eurocurrency Loans
Denominated in an Alternative Currency:
X. X. Xxxxxx Europe Limited
000 Xxxxxx Xxxx
Xxxxxx, Xxxxxxx XX0X 0XX
Attention: Xxxxxx Xxxx, Loans Agency Group
Telephone No.: x00 000 000 0000
Telecopier No.: x00 000 000 0000
Address for all other Notices:
JPMorgan Chase Bank
0000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. XxXxxx, Vice President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
51
KEYBANK NATIONAL ASSOCIATION
By: /s/ XXXXXX X. XXXXX, III
---------------------------------------------
Xxxxxx X. Xxxxx, III, Senior Vice President
Lending Office and Address for Notices:
KeyBank National Association
0000 Xxxxxx xxx Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, III,
Senior Vice President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
52
MANUFACTURERS AND TRADERS TRUST COMPANY
By: /s/ XXXXX X. XXXXXX
-----------------------------------------
Xxxxx X. Xxxxxx, Vice President
Lending Office and Address for Notices:
Manufacturers and Traders Trust Company
0 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Vice President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
53
NBT BANK, NATIONAL ASSOCIATION
By: /s/ XXXXXX X. XXXXXXX
----------------------------------------
Xxxxxx X. Xxxxxxx, Vice President
Lending Office and Address for Notices:
NBT Bank, National Association
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Vice President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
54
EXHIBIT A
[FORM OF NOTE]
PROMISSORY NOTE
$__________________ ____________, 20__
New York, New York
HARDINGE INC. (the "Borrower"), a corporation organized under the laws of
New York, for value received, hereby promises to pay to the order of
_________________(the "Bank") at the office of JPMorgan Chase Bank at Xxx Xxxxx
Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other place as required by
the Credit Agreement referred to below, for the account of the appropriate
Lending Office of the Bank, the principal amount of $__________________ in
lawful money of the United States of America and in immediately available funds,
on the date(s) and in the manner provided in the Credit Agreement referred to
below. The Borrower also promises to pay interest on the unpaid principal
balance of the Loan in like money, for the period such balance is outstanding,
at said principal office for the account of said Lending Office of the Bank, at
the rates of interest as provided in the Credit Agreement, on the dates and in
the manner provided in said Credit Agreement.
The date and amount of the Loan made by the Bank to the Borrower under the
Credit Agreement referred below, interest rate, Currency, Interest Period,
maturity date and each payment of principal thereof, shall be recorded by the
Bank on its books and, prior to any transfer of this Note (or, at the discretion
of the Bank, at any other time), endorsed by the Bank on the schedule attached
hereto or any continuation thereof; provided, however, the failure of the Bank
to make any such recordation or endorsement shall not affect the obligations of
the Borrower to make payment when due of any amount owing under the Credit
Agreement or hereunder in respect of the Loans made by the Bank.
This is one of the Notes referred to in that certain Multicurrency Credit
Agreement (as amended from time to time the "Credit Agreement") dated as of
_______________, 2002 among the Borrower, the Banks named therein (including the
Bank), the Documentation Agent and the Agent and evidences the Loan made by the
Bank thereunder. All terms not defined herein shall have the meanings given to
them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence of certain Events of Default and for prepayments
on the terms and conditions specified therein.
The Borrower waives presentment, notice of dishonor, protest and any other
notice or formality with respect to this Note. THE BORROWER WAIVES TO THE FULL
EXTENT PERMITTED BY
A-1
APPLICABLE LAW THE RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS NOTE.
This Note shall be governed by, and interpreted and construed in accordance
with, the laws of the State of New York, including Section 5-1401 of the New
York General Obligations Law (or any similar successor provision thereto) but
excluding all other conflict-of-law rules.
HARDINGE INC.
By
Name:
Title:
A-2
SCHEDULE TO NOTE
Principal
Date Made, Amount & InterestMaturity Balance Notation
or Repaid Currency Rate Date Outstanding By
A-3
EXHIBIT B
[FORM OF AUTHORIZATION LETTER]
_________________, 20__
JPMorgan Chase Bank
Loan and Agency Services Group
One Chase Xxxxxxxxx Xxxxx 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Multicurrency Credit Agreement dated as of ___________, 2002 (the
"Credit Agreement") among
Hardinge Inc. the Banks named therein,
KeyBank National Association as Documentation Agent and JPMorgan
Chase Bank as Administrative Agent for said Banks
Ladies and Gentlemen:
In connection with the captioned Credit Agreement, we hereby
designate any one of the following persons to give to you instructions,
including notices required pursuant to the Agreement, orally or by telephone or
teleprocess:
NAME (TYPEWRITTEN)
----------------------------------
----------------------------------
----------------------------------
----------------------------------
Instructions may be honored on the oral, telephonic or teleprocess
instructions of anyone purporting to be any one of the above designated persons
even if the instructions are for the benefit of the person delivering them. We
will furnish you with confirmation of each such instruction in writing signed by
any person designated above (including any telecopy which appears to bear the
signature of any person designated above) on the same day that the instruction
is provided to you but your responsibility with respect to any instruction shall
not be affected by your failure to receive such confirmation or by its contents.
You shall be fully protected in, and shall incur no liability to us
for, acting upon any instructions which you in good faith believe to have been
given by any person designated above, and in no event shall you be liable for
special, consequential or punitive damages. In addition, we agree to hold you
and your agents harmless from any and all liability, loss and expense arising
directly or indirectly out of instructions that we provide to you in connection
with the Credit Agreement except
B-1
for liability, loss or expense occasioned by the gross negligence or willful
misconduct of you or your agents.
Upon notice to us, you may, at your option, refuse to execute any
instruction, or part thereof, without incurring any responsibility for any loss,
liability or expense arising out of such refusal if you in good faith believe
that the person delivering the instruction is not one of the persons designated
above or if the instruction is not accompanied by an authentication method that
we have agreed to in writing.
We will promptly notify you in writing of any change in the persons
designated above and, until you have actually received such written notice and
have had a reasonable opportunity to act upon it, you are authorized to act upon
instructions, even though the person delivering them may no longer be
authorized.
Very truly yours,
HARDINGE INC.
By
----------------------------------
Name:
Title:
B-2
EXHIBIT C
[Letterhead of counsel to the Borrower]
[Closing Date]
To The Banks,
Administrative Agent and
Documentation Agent, parties to the
Credit Agreement referred to below
c/o JPMorgan Chase Bank
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as counsel to
Hardinge Inc. (the "Borrower") in
connection with the execution and delivery of that certain Multicurrency Credit
Agreement (the "Credit Agreement") dated as of October 24, 2002 among the
Borrower, the Banks signatory thereto, KeyBank National Association as
Documentation Agent and JPMorgan Chase Bank as Administrative Agent. Except as
otherwise defined herein, all terms used herein and defined in the Credit
Agreement or any agreement delivered thereunder shall have the meanings assigned
to them therein.
In connection with the preparation of this Opinion, we have examined
originals or counterparts, executed on behalf of the Borrower, of the Facility
Documents and the exhibits attached thereto in originals or copies, certified to
our satisfaction, of such records, certificates and documents as we deemed
relevant and necessary as a basis for rendering this Opinion.
Based upon the foregoing, and having regard to such legal
considerations as we deem relevant, we are of the opinion that:
1. The Borrower and to the best of our knowledge, each of its
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, has all power
and authority to carry on its business as presently being conducted and to own
its properties, and is duly licensed or qualified and in good standing as a
foreign corporation in each other jurisdiction in which its properties are
located or in which failure to qualify would materially and adversely affect
either the conduct or its business or the enforceability of contractual rights
of the Borrower.
C-1
2. The execution, delivery and performance by the Borrower of the
Facility Documents to which it is a party have been duly authorized by all
necessary corporate action and do not and will not: (a) require any consent or
approval of its stockholders; (b) contravene its charter or by-laws; (c)
contravene any law or to the best of our knowledge contractual restriction or
provision binding on or affecting the Borrower.
3. No authorization or approval or other action by, and no notice to
or filing with any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Borrower of the Facility
Documents.
4. The Credit Agreement is, and the other Facility Documents when
executed thereunder will be, legal, valid and binding obligations enforceable in
accordance with their respective terms, except that (a) the availability of
equitable remedies may be limited by principals of equity, and (b) enforcement
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application relating to or affecting the enforcement of
the rights of creditors generally.
5. Each Facility Document to which the Borrower is a party is, or
when delivered under the Credit Agreement will be, a legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms, except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency and other similar laws affecting creditors'
rights generally.
6. There is no pending, or to our knowledge threatened actions,
suits or proceedings against or affecting the Borrower or any of its
Subsidiaries before any court, governmental agency or arbitrator, which may, in
any one case or in the aggregate, materially adversely affect the financial
condition or operations of the Borrower or of any such Subsidiary, or the
ability of the Borrower to perform its obligations under the Facility Documents
to which it is a party.
Very truly yours,
C-2
EXHIBIT D
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and
Address of Prospective
Participant or Assignee]
Re: Multicurrency Credit Agreement dated as of ___________, 2002 (the
"Credit Agreement") between Hardinge Inc., the Banks party
thereto, KeyBank National Association as Documentation Agent and
JPMorgan Chase Bank as Administrative Agent.
Dear ________________
As a Bank, party to the above-referenced Credit Agreement (the "Credit
Agreement"), we have agreed with Hardinge Inc. (the "Borrower") pursuant to
Section 11.14 of the Credit Agreement to use reasonable precautions to keep
confidential, except as otherwise provided therein, all non-public information
identified by the Borrower as being confidential at the time the same is
delivered to us pursuant to the Credit Agreement.
As provided in said Section 11.14, we are permitted to provide you, as
a prospective [holder of a participation in the Loans (as defined in the Credit
Agreement)] [assignee Bank], with certain of such non-public information subject
to the execution and delivery by you, prior to receiving such non-public
information, of a Confidentiality Agreement in this form. Such information will
not be made available to you until your execution and return to us of this
Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you agree (on behalf
of yourself and each of your affiliates, directors, officers, employees and
representatives) that (A) such information will not be used by you except in
connection with the proposed [participation] [assignment] mentioned above and
(B) you shall use reasonable precautions, in accordance with your customary
procedures for handling confidential information and in accordance with safe and
sound banking practices, to keep such information confidential, provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to your
counsel or to counsel for any of the Banks or the Agent, (iii) to bank
examiners, auditors or accountants, (iv) in connection with any litigation to
which you or any one or more of the Banks is a party; or (v) to the extent such
information becomes publicly available other than as a result of disclosure
other than as a result of disclosure by a Bank. Provided further, that, unless
D-1
specifically prohibited by applicable law or court order, you agree, prior to
disclosure thereof, to notify the Borrower of any request for disclosure of any
such non-public information (x) by any governmental agency or representative
thereof (other than any such request in connection with an examination of your
financial condition by such governmental agency) or (y) pursuant to legal
process; and provided finally that in no event shall you be obligated to return
any materials furnished to you pursuant to this Confidentiality Agreement.
Would you please indicate your agreement to the foregoing by signing
at the place provided below the enclosed copy of this Confidentiality Agreement.
Very truly yours,
[Insert Name of Bank]
By: ------------------------
The foregoing is agreed to as of the date of this letter.
[Insert name of prospective participant or assignee]
By: ---------------------------
D-2
SCHEDULE I
Subsidiaries of Borrower
Jurisdiction Percentage
Name and Address of Incorporation of Ownership
---------------- ---------------- ------------
Hardinge Credit Co., Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000 New York 100%
Hardinge Technology Systems, Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000 New York 100%
Xxxxxxxx Machine Products, Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000 New York 100%
Canadian Hardinge Machine Tools, Ltd.
Toronto, Canada Canada 100%
Hardinge Machine Tools, Ltd.
Exeter, England United Kingdom 100%
Hardinge Brothers GmbH
Krefield, West Germany Federal Republic of Germany 100%
X. Xxxxxxxxxxxx & Co., A.G. Switzerland 100%
St. Gallen, Switzerland
Hansvedt Industries, Inc. Illinois 100%
Urbana, Illinois
Hardinge, Shanghai Company Republic of China 100%
China Limited
Shanghai, China
Hardinge Brothers Inc. New York 100%
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000
HTT Xxxxxx Xxxxxx Xxxxxxxx XX Switzerland 100%
Biel, Switzerland
Hardinge China Limited Hong Kong 100%
Shanghai, PRC
Hardinge Taiwan Precision Machinery Limited Taiwan ROC 51%
Nan Tou City, Taiwan ROC
Hardinge Emag GmbH Federal Republic of Germany 50%
Leipzig, (East) Germany
SCHEDULE II
Hazardous Materials
In December, 1992, Hardinge removed an underground waste oil tank at its
College Avenue facility. Environmental sampling following the removal of the
tank disclosed the presence of hydrocarbon contamination in surrounding soils.
An environmental consultant retained by Hardinge prepared a site assessment and
an action plan for on-site remediation which were adopted and approved by the
New York State Department of Environmental Conservation (DEC). The project is on
site. Remediation commenced in the Fall of 1995, and by letter of August 31,
1998 from the DEC, Hardinge was able to decommission the groundwater pump and
treat system, and address only the "hot spots" on site by various methods which
have yet to have a major impact on the petroleum product remaining. Hardinge is
now addressing other alternatives with the DEC in an effort to close out the
site.
[JPMORGAN CHASE LOGO]
SECURITY AGREEMENT
The undersigned executes and delivers this
Security Agreement (the
"
SECURITY AGREEMENT") to JPMORGAN CHASE BANK, having an office located at 0000
Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000, as agent for the Lenders (as defined below)
(the "AGENT") in consideration of one or more loans, letters of credit or other
financial accommodation made, issued or extended by the Lenders or any of them
to the undersigned or to any person in respect of whose Liabilities (as defined
below) the undersigned now or hereafter guarantees or otherwise becomes liable
for payment. Accordingly, the Agent shall have the rights, remedies and benefits
hereinafter set forth.
1. DEFINITIONS. The term "LIABILITIES" shall include any and all
indebtedness, obligations and liabilities of the undersigned to any of the Banks
(as defined below) and/or the Agent and/or other financial institutions and also
to others to the extent of their participations granted to or interests therein
created or acquired for them by the Banks or Agent, arising under (i) that
certain Multicurrency Credit Agreement dated as of the date hereof, among
Hardinge Inc. and the Agent and the Banks signatory thereto and each other
financial institution which from time to time becomes a party thereto
(individually a "BANK" and collectively, the "BANKS"), and as the same may be
amended from time to time (the "CREDIT AGREEMENT"), (ii) certain credit
facilities made available by JPMorgan Chase Bank or KeyBank National Association
to Hardinge Inc. for foreign exchange, letters of credit and derivative products
and exposures, including without limitation interest rate swap agreements or
other rate protection or hedge agreements or mechanisms and the documents
executed in connection with any of the above now or hereafter existing, and
(iii) certain guarantees to JPMorgan Chase Bank and/or its subsidiaries and
affiliates, including without limitation, JPMorgan Leasing, in connection with
the purchase of the undersigned's customer notes by such entity and the
documents executed in connection with any of the above now existing (the Banks
and those other banks and financial institutions set forth above shall be
collectively referred to as the "Lenders" and each individually, a "Lender").
The term "COLLATERAL" means all of the following personal property of the
undersigned, whether now or hereafter existing or now owned or hereafter
acquired and wherever located, of every kind and description, tangible or
intangible, including: the balance of every deposit account, now or hereafter
existing, of the undersigned with any of the Banks and any other claim of the
undersigned against any of the Banks or Agent, now or hereafter existing, all
moneys, including without limitation, investment property, securities and other
property and the proceeds thereof, now or hereafter held or received by, or in
transit to the Agent, or any of the Lenders, and all of the undersigned's
accounts, contract rights, goods (including equipment, machinery and inventory),
instruments (including customer notes), documents, chattel paper, letter of
credit rights, and general intangibles, including, without limitation, (i) all
inventions used by the undersigned in the undersigned's business, including
without limitation, all inventions described on SCHEDULE A attached hereto
(collectively, the "INVENTIONS"), (ii) all letters patent issued on and
applications for letters patent filed in connection with the Inventions whether
issued to or filed by the undersigned or to or by another and subsequently
assigned to the undersigned, including without limitation, all
-2-
letters patent described on SCHEDULE A, together with any reissue, continuation,
continuation-in-art or extension thereof (collectively, the "LETTERS PATENT"),
(iii) the applications therefor, including without limitation, all applications
described on Schedule A (collectively, the "APPLICATIONS"), (iv) all licenses
for the use of the Letters Patent, including without limitation, all licenses
described on Schedule A (collectively, the "LICENSES") and all proceeds of (i)
through (iv) in any form collectively, including without limitation, any claim
by the undersigned against third parties for past, present or future
infringement or dilution of any of the Letters Patent, (v) all marks used by the
undersigned in the undersigned's business, including without limitation, all
marks listed on SCHEDULE B hereto (collectively, the "MARKS" whether trademarks
or service marks), (vi) all licenses for the use of the Marks, including without
limitation, all licenses described on Schedule B (collectively, the "LICENSES"),
(vii) all goodwill associated with the Marks or with the use of each Xxxx and
License, (viii) all registrations, certificates of registrations (and similar
documents) and applications for registrations of the Marks, whether issued or
pending before the United States Patent and Trademark Office, the Secretary of
State of the State of New York, a governmental body of any other state,
commonwealth, district or territory of the United States, whether issued to or
filed by the undersigned or to or by another and subsequently assigned to the
undersigned, including without limitation, all registration, certificates of
registration and applications for registration described on Schedule B, together
with any renewals thereof (collectively, the "REGISTRATIONS") and all proceeds
of (v) through (viii) in any form, including without limitation, any claim by
the undersigned against third parties for past, present or future infringement
or dilution of any of the Marks and of any Marks licensed under any License, or
for injury to the goodwill associated with the Marks, Registrations or Marks
licensed under any License, and including any other property, rights and
interests of the undersigned with respect to any of the foregoing and shall
include any insurance policies therefor and the supporting obligations,
proceeds, products and accessions of and to any thereof.
The term "OBLIGOR" means the undersigned or any maker, drawer, acceptor,
indorser, guarantor, surety, accommodation party or other person liable upon or
for any of the Liabilities or Collateral.
Unless the context otherwise requires, all terms used herein which are
defined in the Uniform Commercial Code shall have the meanings therein stated.
2. GRANT OF SECURITY INTEREST. As security for the payment of the
Liabilities, the undersigned hereby grant(s) to the Agent, for the benefit of
the Lenders and itself as Agent, a security interest in, a general lien upon
and/or right of set-off against the Collateral.
3. MAINTENANCE OF COLLATERAL. At any time and from time to time, the
undersigned will: (a) deliver and pledge to the Agent, indorsed and/or
accompanied by such instruments of assignment and transfer in such form and
substance as the Agent may request, any and all instruments, documents and/or
chattel paper as the Agent may specify in its demand; (b) give, execute,
deliver, file, authorize to file and/or record any notice, statement,
instrument, document, agreement or other
-3-
papers that may be necessary or desirable, or that the Agent may request, in
order to create, preserve, perfect, or validate any security interest granted
pursuant hereto or to enable the Agent to exercise and enforce its rights
hereunder or with respect to such security interest; (c) keep and stamp or
otherwise xxxx any and all documents and chattel paper and its individual books
and records relating to inventory, accounts and contract rights in such manner
as the Agent may require; (d) permit representatives of the Agent at any time to
inspect its inventory and to inspect and make abstracts from the undersigned
books and records pertaining to inventory, accounts, contract rights, chattel
paper, instruments and documents; (e) obtain the Agent's consent prior to any
change of name, address, legal entity status, state of organization, location of
books and records or location of Collateral other than with respect to a change
in location of goods (including inventory, equipment and machinery) in the
ordinary course of the undersigned's business; (f) defend the Collateral against
all claims and demands of third parties at any time claiming the same or any
interest therein, except buyers of inventory in the ordinary course of the
undersigned's business and, at its own expense, will bring suit in the name of
the undersigned at the request of the Agent for infringement against infringers
of the letters patent and any letters patent then granted on the Applications,
provided, the Agent, if the Agent finds it necessary or desirable, may prosecute
others for infringement and may join the undersigned as party-plaintiffs; (g)
will notify the Agent of (i) the material loss or damage to the Collateral or of
any material adverse change in the undersigned's business or the Collateral,
(ii) any suit for infringement brought against the undersigned with respect to
the Letters Patent, the Applications or the Marks and in each instance shall
promptly furnish the Agent copies of all documents in connection with any such
suit, (iii) any application for reissue of any Letters Patent and any letters
patent when issued and of any interference or other proceeding involving any of
the Collateral and (iv) if the Marks are registered, notice of such fact in the
manner prescribed by Section 1111 of Title 15 of the United States Code, or by
state law, if applicable; (h) xxxx or cause to be marked all articles, devices
and machines made or sold by it, covered by letters patent and any letters
patent when issued, with the word "Patent" and the number of any such patent or
patents applicable thereto except where such marking would damage the article,
device or machine, or if such article or device is an internal part of another
machine or device, or such other notices required by law; and (i) cooperate with
the Agent in obtaining control of collateral consisting of deposit accounts or
electronic chattel paper, including, but not limited to entering into one or
more control agreements or assignments as the Agent may request. The right is
expressly granted to the Agent, at its discretion, to notify warehousemen or any
other persons in possession of Collateral of the Agent's security interest
therein and to obtain an acknowledgment thereof from such third person and to
file one or more financing statements under the Uniform Commercial Code naming
the undersigned as debtor and the Agent as secured party and indicating therein
the types or describing the items of Collateral herein specified. A photographic
or other reproduction of this Security Agreement shall be sufficient as a
financing statement. Without the prior written consent of the Agent, the
undersigned will not file or authorize or permit to be filed in any jurisdiction
any such financing or like statement in which the Agent is not named as the sole
secured party. With respect to the Collateral, or any part thereof, which at any
time shall come into the possession or custody or under the control of the Agent
or any of its agents, associates or correspondents, for any purpose, the right
is expressly granted to the Agent, at its reasonable discretion, to transfer to
or register in the name of
-4-
itself or its nominee any of the Collateral; to exchange any of the Collateral
for other property upon any reorganization, recapitalization or other
readjustment and in connection therewith to deposit any of the Collateral with
any committee or depositary upon such terms as it may determine; to notify any
account debtor or obligor on an instrument to make payment to the Agent for the
benefit of the Banks; and to enforce obligations of such account debtor or
obligor and to exercise or cause its nominee to exercise all or any powers with
respect to the Collateral with same force and effect as an absolute owner
thereof; all without notice (except such notice as may be required by applicable
law and cannot be waived) and without liability except to account for property
actually received by it. The Collateral will remain personalty and will not be
permanently affixed to real estate without the prior consent of the Agent.
SCHEDULE C attached hereto sets forth all of the currently operating leased
locations of Collateral of the undersigned. The undersigned will provide
disclaimers of interest and removal agreements from each landlord of a location
set forth in Schedule C, in form satisfactory to the Agent, signed by such
Landlord within thirty (30) days from the date hereof. In the event the
undesigned enters into any leases after the date of this Security Agreement, the
undersigned, simultaneously with the execution and delivery of such lease, will
deliver to Agent a disclaimer of interest and removal agreement from such
landlord, in form satisfactory to Agent. In addition, prior to any closing of
mortgage financing on any real property of the undersigned, the undersigned will
provide a disclaimer of interest and removal agreement from the proposed
mortgagee with respect to such real property in form satisfactory to the Agent.
4. INSURANCE. The undersigned shall keep insured all Collateral which is
tangible property for full value, with such coverage as the Agent may approve,
at the undersigned's expense, and, upon the Agent's request, the policies shall
be duly endorsed in the Agent's favor as its interest may appear and delivered
to the Agent. If the undersigned shall default in this regard, the Agent shall
have the right to insure and charge the cost to the undersigned. The Agent
assumes no risk or responsibility in connection with the payment or nonpayment
of losses, the Agent's only responsibility being to credit the undersigned with
any insurance payment received on account of losses. In the event of any default
under this Security Agreement, the Agent shall have power of attorney to cancel,
assign or surrender any insurance policy or policies and to collect the return
premiums due thereon and to apply the proceeds thereof to the Liabilities
secured hereby. The undersigned will immediately notify the Agent in writing of
any damage to or loss of any of the Collateral which is tangible property.
5. COLLECTION AND DISPOSITION. The Agent at its discretion may, or upon
direction of the Banks shall, whether any of the Liabilities be due, in its name
or in the name of the undersigned or otherwise, demand, xxx for, collect or
receive any money or property at any time payable or receivable on account of or
in exchange for, or make any compromise or settlement deemed desirable with
respect to, any of the Collateral, but shall be under no obligation to do so, or
the Agent may, or upon direction of the Banks shall, extend the time of payment,
arrange for payment in installments, or otherwise modify the terms of, or
release, any of the Collateral, without thereby incurring responsibility to, or
discharging or otherwise affecting any liability of, the undersigned. The Agent
shall not be required to take any steps necessary to preserve any rights against
prior
-5-
parties to any of the Collateral. The Agent may use or operate any of the
Collateral for the purpose of preserving the Collateral or its value in the
manner and to the extent the Agent deems appropriate, and the Agent may render
the Collateral unusable or dispose of the Collateral in a commercially
reasonable manner.
Upon default hereunder or in connection with any of the Liabilities
(whether such default be that of the undersigned or of any other party obligated
thereon), the undersigned shall, at the request of the Agent, assemble the
Collateral at such place or places as the Agent designates in its request, and,
to the extent permitted by applicable law, the Agent shall have the right, with
or without legal process and with or without prior notice or demand, to take
possession of the Collateral or any part thereof and to enter any premises for
the purpose of taking possession thereof. The Agent shall have the rights and
remedies with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not such Code is in effect in the jurisdiction where
the rights and remedies are asserted).
In addition, upon default hereunder or in connection with any of the
Liabilities, with respect to the Collateral, or any part thereof, which shall
then be or shall thereafter come into the possession or custody of the Agent or
any of its agents, associates or correspondents, the Agent may sell or cause to
be sold at any location selected by it and reasonable under the circumstances,
in one or more sales or parcels, at such price as the Agent may deem best, and
for cash or on credit or for future delivery, without assumption of any credit
risk, all or any of the Collateral, at any broker's board or at public or
private sale, in any reasonable manner permissible under the Uniform Commercial
Code (except that, to the extent permitted thereunder, the undersigned hereby
waives the requirements of said Code), and the Agent or any of the Lenders or
anyone else may be the purchaser of any or all of the Collateral so sold and
thereafter hold the same absolutely, free from any claim or right of whatsoever
kind, including any equity or redemption, of the undersigned, any such demand,
notice or right and equity being hereby expressly waived and released. The Agent
(i) shall have no obligation to clean up or otherwise prepare the Collateral for
sale, (ii) may comply with any applicable law requirements in connection with
the disposition of the Collateral, (iii) may sell the Collateral without giving
any warranties, and any of such actions or inaction will not be considered
adversely to affect the commercial reasonableness of any sale of the Collateral.
The undersigned will pay to the Agent all reasonable expenses (including
reasonable attorneys' fees and legal expenses incurred by the Agent) of, or
incidental to, the enforcement of any of the provisions hereof or of any of the
Liabilities, or any actual or attempted sale, or any exchange, enforcement,
collection, compromise or settlement of any of the Collateral or receipt of the
proceeds thereof, by litigation or otherwise, including expense of insurance;
and all such expenses shall be Liabilities secured by this Security Agreement.
The Agent, at any time, at its option may, or upon direction of the Banks shall,
apply the net cash receipts from the Collateral to the payment of principal of
and/or interest on any of the Liabilities, whether or not then due, making
proper rebate of interest or discount. Notwithstanding that the Agent, whether
in its own behalf and/or on behalf of another or others, may continue to hold
the Collateral and regardless of the value thereof, the undersigned shall be and
remain liable for the payment in full, principal and interest, of any balance of
the Liabilities and expenses at any time
-6-
unpaid. The Agent may exercise its rights with respect to the Collateral without
resorting to or regard to other collateral or sources of reimbursement for the
Liabilities.
6. REPRESENTATIONS AND WARRANTIES. If the undersigned is other than an
individual, the undersigned represents and warrants that: (a) it is duly
organized and validly existing under the laws of the jurisdiction of its
organization or incorporation as such is set forth on signature pages hereto
along with its tax identification or organizational number, if necessary, and,
if relevant under such laws, in good standing; (b) it has the power to execute
and deliver this Security Agreement and to perform its obligations hereunder and
has taken all necessary action to authorize such execution, delivery and
performance; (c) such execution, delivery and performance do not violate or
conflict with any law applicable to it, any provision of its organizational
documents, any order or judgment of any court or other agency of government
applicable to it or any of its assets or any material contractual restriction
binding on or materially affecting it or any of its assets; (d) to the best of
the undersigned's knowledge, all governmental and other consents that are
required to have been obtained by it with respect to this Security Agreement
have been obtained and are in full force and effect and all conditions of any
such consents have been complied with; (e) its obligations under this Security
Agreement constitute its legal, valid and binding obligations, enforceable in
accordance with its terms except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency or other similar laws affecting
creditors' rights generally; (f) the undersigned is the owner of the Collateral
with good and indefeasible title thereto, free and clear of all liabilities,
mortgages, security interests, liens, pledges or encumbrances, and the Letters
Patent, the Applications and the Marks are subsisting and there are no suits or
actions commenced or threatened against the undersigned with respect to the
Letters Patent the Applications or the Marks; (g) all financial statements and
related information furnished and to be furnished to the Agent or the Lenders
from time to time by the undersigned are true and complete and fairly present
the financial or other information stated therein as at such dates or for the
periods covered thereby; (h) there are no actions, suits, proceedings or
investigations pending or, to the knowledge of the undersigned, threatened
against or affecting the undersigned before any court, governmental agency or
arbitrator, which involve forfeiture of any assets of the undersigned or which
may materially adversely affect the financial condition, operations, properties
or business of the undersigned or the ability of the undersigned to perform its
obligation under this Security Agreement; and (i) there has been no material
adverse change in the financial condition of the undersigned since the last such
financial statements or information.
7. DEFAULT. IF any of the following events of default shall occur (each
an "EVENT OF DEFAULT"):
(a) any Obligor shall default and there shall be a continuance thereof in
the performance of any of its agreements herein after twenty (20) days
notice thereof by Agent or in the Credit Agreement or in any
instrument or document delivered pursuant to this Security Agreement
or the Liabilities (including a failure to comply with the preceding
paragraph) beyond any applicable notice and grace periods;
(b) any Obligor
-7-
(i) shall generally not, or be unable to, or shall admit in
writing its inability to, pay its debts as such debts become
due;
(ii) shall make an assignment for the benefit of creditors;
(iii) shall file a petition in bankruptcy or for any relief under
any law of any jurisdiction relating to reorganization,
arrangement, readjustment of debt, dissolution or liquidation;
(iv) shall have any such petition filed against it and the same
shall remain undismissed for a period of 90 days or shall
consent or acquiesce thereto; or
(v) shall have had a receiver, custodian or trustee appointed for
all or a substantial part of its property.
THEN, unless and to the extent that the Lenders shall otherwise elect, all of
the Liabilities shall become and be due and payable forthwith. THE RIGHTS OF THE
AGENT AND THE LENDERS SET FORTH IMMEDIATELY ABOVE ARE WITHOUT LIMITATION OF, AND
IN ADDITION TO, ANY OTHER RIGHT OF THE AGENT OR THE LENDERS UNDER ANY OTHER
DOCUMENT EVIDENCING OR EXECUTED IN CONNECTION WITH THE LIABILITIES (INCLUDING
BUT NOT LIMITED TO ANY RIGHT OF ACCELERATION OF PAYMENT PURSUANT TO THE
PROVISIONS THEREOF OR ANY RIGHT OF THE AGENT OR THE LENDERS TO MAKE DEMAND FOR
PAYMENT THEREUNDER WITHOUT REFERENCE TO ANY PARTICULAR CONDITION OR EVENT).
8. SETOFF. In the event that any amount becomes due and payable hereunder
and the Agent shall have demanded payment thereof from the undersigned, in
addition to all other rights and remedies, the Agent and each of the Lenders
(including subsidiaries and each and every affiliate) is hereby irrevocably
authorized, without prior notice to the undersigned, to set off any balances
held for the account of or any other liability owing by any such Lender or Agent
or any such affiliate to the undersigned at any of the Agent's or Lenders' (or
such subsidiary's or affiliate's) offices, in dollars or any other currency,
against any of the obligations of the undersigned to the Lenders or Agent, as
the such Lender or Agent may elect.
9. NOTICES. All notices, requests, demands or other communications to or
upon the undersigned or the Agent shall be in writing and shall be deemed to be
delivered upon receipt if delivered by hand or overnight courier or five days
after mailing to the address (a) of the undersigned set forth below the
undersigned's execution of this Security Agreement, (b) of the Agent as first
set forth above, or (c) of the undersigned or the Agent at such other address as
the undersigned or the Agent shall specify to the other in writing.
10. ENTIRE AGREEMENT, AMENDMENT AND WAIVER. This Security Agreement
constitutes the entire agreement between the undersigned and the Agent in
respect of the subject matter hereof and may be amended only by a writing signed
on behalf of each party and shall be effective only to the extent set forth in
that writing. No delay by the Agent or any of the Lenders in exercising any
power or right hereunder shall operate as a waiver thereof or of any other power
or right; nor shall
-8-
any single or partial exercise of any power or right preclude other or future
exercise thereof, or the exercise of any other power or right hereunder.
11. GENERAL WAIVERS. The undersigned hereby waives presentment, notice of
dishonor and protest of all instruments included in or evidencing the
Liabilities or the Collateral and any and all other notices and demands
whatsoever, whether or not relating to such instruments (the "SECURED
DOCUMENTS"). The undersigned waives all demands, notices and protests of every
kind which are not expressly required under this Security Agreement which are
permitted by law to be waived, and which would, if not waived, impair the
Agent's enforcement of this Security Agreement or release any Collateral from
the Agent's security interest hereunder. By way of example, but not in
limitation of the Agent's rights under this Security Agreement, the Agent does
not have to give the undersigned notice of any of the following:
(a) notice of acceptance of this Security Agreement;
(b) notice of loans made, credit extended, Collateral received or
delivered;
(c) any Event of Default (except as otherwise expressly provided herein);
(d) any action which the Agent does or does not take regarding any Obligor
or any other person or any other collateral securing the Liabilities;
(e) except as otherwise provided herein, enforcement of this Security
Agreement against the Collateral; or
(f) any other action taken in reliance on this Security Agreement.
The undersigned waives all rules of suretyship law and any other law
whatsoever which is legally permitted to be waived and which would, if not
waived, impair the Agent's enforcement of its security interests. By way of
example, but not in limitation of the Agent's rights under this Security
Agreement, the Agent or the Banks, as set forth in the Credit Agreement, may do
any of the following without notice to the undersigned except to the extent that
notice to the undersigned is required under another Secured Document or in each
case in which the agreement of such undersigned is required because such
undersigned is a principal party to a Liability and, as a matter of contract,
the agreement of such undersigned is required:
(a) change, renew or extend the time for repayment of all or any part of
the Liabilities;
(b) change the rate of interest or any other provisions with respect to
all or any part of the Liabilities;
(c) release, surrender, sell or otherwise dispose of any money or property
which is in the Agent's possession as collateral security for the
Liabilities;
(d) fail to perfect any security interest in any Collateral;
(e) release or discharge any party liable to the Agent or any of the Banks
in whole or in part for the Liabilities, or accept any additional
parties or guarantors;
(f) delay or refrain from exercising any of the Agent's or the Banks'
rights;
(g) settle or compromise any and all claims pertaining to the Liabilities
and the Collateral; and
-9-
(h) apply any money or property of the undersigned or that of any other
party liable to the Agent for any part of the Liabilities in any order
the Banks choose.
THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO
THE FULL EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT TO A TRIAL BY JURY OF ANY
DISPUTE ARISING UNDER OR RELATING TO THIS SECURITY AGREEMENT, AND AGREES THAT
ANY SUCH DISPUTE SHALL, AT THE AGENT'S OPTION, BE TRIED BEFORE A JUDGE SITTING
WITHOUT A JURY.
IN ADDITION, THE UNDERSIGNED WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE
BASED UPON ANY STATUTE OF LIMITATIONS OR ANY CLAIM OF DELAY BY THE AGENT AND ANY
SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.
12. RIGHTS CUMULATIVE. The rights, powers and remedies granted to the
Agent or the Lenders herein shall be cumulative and in addition to any rights,
powers and remedies to which the Agent or the Lenders may be entitled either by
operation of law or pursuant to any other document or instrument delivered or
from time to time to be delivered to the Agent in connection with any of the
Liabilities.
13. GOVERNING LAW; JURISDICTION. This Security Agreement shall be governed
by and construed in accordance with the laws of the State of New York. The
undersigned consent(s) to the nonexclusive jurisdiction and venue of the state
or federal courts located in such state. In the event of a dispute hereunder,
suit may be brought against the undersigned in such courts or in any
jurisdiction where the undersigned or any of its assets may be located. Service
of process by the Agent in connection with any dispute shall be binding on the
undersigned if sent to the undersigned by registered mail at the address(es)
specified below or to such further address(es) as the undersigned may specify to
the Agent in writing.
14. ASSIGNMENT. In accordance with the terms of the Credit Agreement, the
Banks and the Agent may assign, transfer and/or deliver to any transferee of any
of the Liabilities any or all of the Collateral, and thereafter shall be fully
discharged from all responsibility with respect to the Collateral so assigned,
transferred and/or delivered. Such transferee shall be vested with all the
powers and rights of such party hereunder with respect to such Collateral, but
such party shall retain all rights and powers hereby given with respect to any
of the Collateral not so assigned, transferred or delivered.
15. WAIVER OF PRESENTMENT, ETC. The undersigned hereby waive(s)
presentment, notice of dishonor and protest of all instruments included in or
evidencing the Liabilities or the Collateral and any and all other notices and
demands whatsoever, whether or not relating to such instruments.
16. MISCELLANEOUS. The undersigned, if more than one, shall be jointly and
severally liable hereunder and all provisions hereof regarding the Liabilities
or Collateral of the undersigned
-10-
shall apply to any Liability or any Collateral of any or all of them. JPMorgan
Chase Bank shall act for itself and its affiliates and the Lenders as collateral
agent hereunder. This Security Agreement shall be binding upon the heirs,
executors, administrators, assigns or successors of the undersigned; shall
constitute a continuing agreement, applying to all existing as well as future
transactions between the Agent and the undersigned that shall be at any time
closed; and shall so continue in force notwithstanding any change in any
partnership party hereto, whether such change occurs through death, retirement
or otherwise.
17. INTERCREDITOR AGREEMENT. Certain provisions of this Security Agreement
are subject to the provisions of the Intercreditor Agreement between JPMorgan
Chase Bank, as Agent for the Banks under that certain Term Loan Agreement with
Hardinge, Inc. dated as of the date hereof, as amended from time to time ("TERM
LOAN AGREEMENT") and the Agent dated of even date herewith, as the same may be
amended from time to time ("INTERCREDITOR AGREEMENT"). In the event of any
conflict between the express terms and conditions of this Security Agreement and
the express terms and conditions of the Intercreditor Agreement, the
Intercreditor Agreement shall control, PROVIDED that this paragraph shall in no
way benefit the undersigned or any successor or assign of the undersigned,
including, without limitation, a debtor in possession or any trustee for the
estate created by the commencement of any Insolvency or Liquidation Proceeding.
All capitalized terms used in this paragraph, but not otherwise defined in this
Security Agreement, shall have the meanings set forth in the Intercreditor
Agreement.
[Signature Page Follows]
-11-
IN WITNESS WHEREOF, the undersigned has executed this instrument or has
caused this instrument to be duly executed by its proper officer(s) as of the
24th day of October, 2002.
HARDINGE INC.
Address for notices:
Hardinge Inc. By: /s/ J. XXXXXXX XXXXX
One Hardinge Drive --------------------------------
Xxxxxx, Xxx Xxxx 00000 J. Xxxxxxx Xxxxx, President
Attn: Chief Financial Officer and Chief Executive Officer
Telecopier No. (000) 000-0000
State of Organization: New York
Tax ID/Organizational Number: 00-0000000
SCHEDULE A
Patents
HARDINGE:
U.S. PATENT DATE ISSUED INVENTION
----------- ----------- ---------
4,506,569 3/26/85 Multiple Axis Slantbed Machine
4,656,708 4/14/87 Live Tooling Turret
4,829,861 5/16/89 Headstock Assembly for a Chucker and Bar Machine
4,858,938 8/22/89 Two Piece Collet w/Interlocking Collet Assembly
Des. 303,805 10/3/89 Combined Chucker and Bar Machine
4,893,532 1/16/90 Breakaway Tool Element & Method of Mounting
Des. 306,865 3/27/90 Combined Chucker & Bar Machine
Des. 311,407 10/16/90 Machine Tool Bed
5,096,213 3/17/92 Collet Assembly
5,113,558 5/19/92 Bed Cooler & Chip Flusher for a Machine Tool
5,190,421 3/2/93 Coolant Supply System for a Machine Tool
5,213,019 5/25/93 Headstock Cooling System for a Machine Tool
5,221,098 6/22/93 Collet Closer
Des. 338,476 8/17/93 Chucker and Bar Machine
5,282,402 2/1/94 Machine Tool Tailstock
5,303,458 4/19/94 Method & Apparatus for Detecting & Comp. Thermal Growth
5,325,750 7/5/94 Machine Tool Assembly Having Replicated Support Surface
5,330,224 7/19/94 Xxxxxx Xxxxx
5,349,731 9/27/94 Temp. Compensated & Shock Resistant Machine Tool
5,367,754 11/29/94 Gang Tooling for CNC Lathe
5,397,135 3/14/95 Expanding Collet Assembly
5,325,749 7/5/95 Machine Tool Having a Quick Release Draw Tube
5,617,769 4/8/97 Thermally Compliant Bar Feeding Machine
5,948,177 9/7/99 Collet Metal Treating Process
6,036,415 3/14/00 Spindle for Gripping & Closing a Mounting Member
U.S. PATENT DATE ISSUED INVENTION
----------- ----------- ---------
6,257,595 7/10/01 Xxxxxx Xxxxx With Quick-Change Cap
6,264,210 7/24/01 Quick-Change Jaw Xxxxx System
5,104,237 4/14/92 Self-Compensating Hydrostatic Linear Motion Bearing and Method
5,281,032 1/25/94 Self-Compensating Hydrostatic Bearings for Supporting Shafts
and Spindles and The Like for Rotary and Translational
Motion and Methods Therefor
5,466,071 11/14/95 High Speed Hydrostatic Spindle Design
5,533,814 7/9/96 Low Profile Self-Compensated Hydrostatic Thrust Bearing
5,700,092 12/23/97 Integrated Shaft Self-Compensating Hydrostatic Bearing
5,674,032 10/7/97 Tooling System and Method with
Integral Hydrostatic Bearings and Turbine Power Source
EXPIRED PATENTS:
---------------
4,423,993 1/3/84 Retractable Bar Stock Feeder
4,463,634 8/7/84 Parts Catcher for an Automatic Machine
Des. 275,860 10/9/84 Combined Chucker and Bar Machine
4,477,095 10/16/84 Collet Adapter
Des. 278,245 4/2/85 Collet Holder
Des. 278,344 4/9/85 Collet Holder
4,524,655 6/25/85 Indexable Machine Tool Turret & Attachments Therefor
4,907,478 3/13/90 Apparatus & Process for Assembling a Machine Tool and Formed
4,981,056 1/1/91 Apparatus & Process for Assembling a Machine Tool and Formed
5,087,059 2/11/92 Tool for Installing or Removing a Collet Head
4,478,117 10/23/84 Slant Bed for Chucker Machine
D271,977 12/27/83 Master Collet for Machine Tools
4,413,939 11/8/83 Bar Stock Feeder
4,387,905 6/14/83 Machine Tool Xxxxx
4,329,785 5/18/82 Presetter Gauge
4,312,105 1/26/82 Programmable Turret-type Machine Tool
4,309,041 1/5/82 Machine Tool Collet
4,262,563 4/21/81 Turret Indexing Assembly for Machine Tools
4,255,056 3/10/81 Pre-setter for positioning tooling on turrets
4,249,748 2/10/81 One-piece collet and process for making same
4,245,846 1/20/81 One-piece collet
4,226,322 10/7/80 Machine tool guard door assembly
4,210,040 4/1/80 Apparatus for turning machines and the like for simultaneous
axial and radial profiling of work
D255,693 7/1/80 Font of characters
4,195,538 4/1/80 Machine tool feed screw assembly
4,143,564 3/13/79 Apparatus for simultaneously forming selected circumferential
and axial profiles on a workpiece
4,129,220 12/12/78 Bar stock feed apparatus
4,080,854 3/28/78 Adjustable tool holder
RE29,533 2/7/78 Self-centering jaw xxxxx
4,044,650 8/30/77 Milling attachment for a lathe
D245,007 4/12/77 Automatic chucking machine
D243,664 3/15/77 Index ring for a machine tool
3,961,800 6/8/76 Stub collet
3,952,693 4/27/76 Machine tool dial assembly
APPLICATIONS PENDING:
APPLICATION # APPLICATION DATE DESCRIPTION
------------- -------------------------------------
9/389051 9/2/99 Indexing Tool Turret
9/939795 8/28/01 Three Piece Coupling Arrangement for a Turret Indexing
Mechanism for a Machine Tool Assembly
60/406933 8/30/02 Hydrostatic Bearing for Linear Motion Guidance
10/231382 8/30/02 Expanding Collet Assumbly
10/156694 5/29/02 Dead Length Xxxxxx Xxxxx Assembly
10/202671 7/25/02 Driving Connection Arrangement & Sealing arrangement for a live
tool and method for sealing the same.
10/228256 8/27/02 Collet adapter xxxxx assembly w/axially fixed collet head
SCHEDULE B
Trademarks and Service Marks
ACTIVE:
TRADEMARK SERIAL NUMBER REGISTRATION NUMBER
--------- ------------- -------------------
(Step-up design) 76165657
LEADER BY DESIGN 76345949
KEL-VISTA 76167588 2492633
(Xxxxx/W-H Design) 75634382
QUEST 75731597 2451904
SUPER-PRECISION2 75652345
ACCEL 75501399
TWINTURN 75501398 2356062
KEL-VARIA 75376187 2207179
KEL-VISION 75368632 2207121
XXXXXXXXXXXX 75368631 2231733
COBRA 75086875 2209431
SUPER-PRECISION 75079009 2289167
SURE-GRIP 75075356 2263899
CONQUEST 75028199 2015567
SURE-GRIP 74490861 1921498
AUTOLOAD 74289208 1848983
HQC 74261255 1782411
HARCRETE 73831955 1616425
CONQUEST 73797279 1569282
HAR-MATIC 73775760 1553488
HARDINGE 73740907 1534250
CHNC 73639684 1451786
HARDINGE CHNC II SUPER-PRECISION 73575864 1407385
TFB 73541047 1418936
HSL FIVE-NINE 73401351 1261488
DV FIVE-NINE 73389600 1262848
DSM FIVE-NINE 73379432 1259831
HLV 73379222 1250969
SUPERSLANT 73350813 1227337
"A TOOLMAKER'S DREAM" 73315539 1212164
TRADEMARK SERIAL NUMBER REGISTRATION NUMBER
--------- ------------- -------------------
VARI-GRIP 73123324 1089575
SUPER-PRECISION 73024104 1062090
HARDINGE (Name) 71541930 514077
LEANTURN 76430235
ELITE 76386432
NOT ACTIVE:
TRADEMARK SERIAL NUMBER REGISTRATION NUMBER
--------- ------------- -------------------
HARDMILLING 75501397
(Tool-Room Lathe Design) 74424847
ULTRA-PRECISION 74420703
VERSA-FLEX 74269550
DEAD-LENGTH 73213329 1144756
IMPACT SERVICES IMAGERY-
MEDIA-PRODUCTION-AUDIO/
VIDEO-COMMUNICATIONS- TRAINING 73685703 1509966
HARDINGE CHNC II+ SUPER-PRECISION 73648865 1460645
HARDINGE CHNC I PRECISION 73648864 1460644
PTM 4000 73518329 1361448
DSM-A 73506283 1338814
THRU-HOLE 73485576 1369807
TUTOR/TURN 73444314 1296085
DO THE HARDINGE SLANT 73379301 1262844
HXL 73377847 1250966
DOVETAIL BED 73196437
HLV 73191944
AHC 73188161 1139400
HNC 73157878 1100041
HF 73148813 1104208
LENSMASTER 72396339 944609
CATARACT 72360071 926778
CASCADE 72057954 679205
ELECTRICAL EAR 71400459 358544
PATROL 71061263 97768
ALERT 71061262 86587
TRIUMPH 76339490
CHNC 73255277 1164398
PERFORMANCE HAS ESTABLISHED
LEADERSHIP FOR HARDINGE 73138219 1151472
SCHEDULE C
Leased Locations
1. 0000 - 0 Xxxxxx Xxxx Xxxxxxx
Xxxxxxxxxx, Xxxx 00000-0000
2. 0000 X. Xxxx Xxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
[JPMORGAN CHASE LOGO]
PLEDGE SECURITY AGREEMENT
(STOCK OF DOMESTIC AND FOREIGN SUBSIDIARIES)
The undersigned executes and delivers this Pledge Security Agreement (the
"AGREEMENT") to JPMORGAN CHASE BANK, as agent for the Lenders (as defined below)
(the "AGENT"), having an office located at 0000 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx
00000, in consideration of one or more loans, letters of credit or other
financial accommodation made, issued or extended by the Lenders to the
undersigned or to any person in respect of whose Liabilities (as defined below)
the undersigned now or hereafter guarantees or otherwise becomes liable for
payment. Accordingly, the Agent shall have the rights, remedies and benefits
hereinafter set forth.
1. DEFINITIONS. The term "LIABILITIES" shall include any and all indebtedness,
obligations and liabilities of the undersigned to any of the Banks (as defined
below) and/or the Agent and/or other financial institutions and also to others
to the extent of their participations granted to or interest therein created or
acquired for them by the Banks or Agent arising under (i) that certain
Multicurrency Credit Agreement dated as of the date hereof, among Hardinge Inc.
and the Agent and the Banks signatory thereto and each other financial
institution which from time to time becomes a party thereto (individually a
"BANK" and collective the "BANKS"), and as the same may be amended from time to
time (the "CREDIT AGREEMENT"), (ii) certain credit facilities made available by
JPMorgan Chase Bank and/or KeyBank National Association to Hardinge Inc. for
foreign exchange, letters of credit and derivative products and exposures,
including without limitation, interest rate swap agreements or other rate
protection or hedge agreements or mechanisms and the documents executed in
connection with any of the above now or hereafter existing, and (iii) certain
guarantees to JPMorgan Chase Bank and/or its subsidiaries and affiliates,
including without limitation, JPMorgan Leasing, in connection with the purchase
of the undersigned's customer notes by such entity and the documents executed in
connection with any of the above now existing (the Banks and those other banks
and financial institutions set forth above shall be collectively referred to as
the "LENDERS" and each individually a "LENDER").
The term "COLLATERAL" means all property in which the undersigned grants a
security interest pursuant to the "Grant of Security Interest" paragraph set
forth below.
The term "DOMESTIC SUBSIDIARY" means any Subsidiary that is organized under
the laws of any political subdivision of the United States.
The term "FOREIGN SUBSIDIARY" means any Subsidiary other than a Domestic
Subsidiary.
-2-
The term "OBLIGOR" means the undersigned or any maker, drawer, acceptor,
indorser, guarantor, surety, accommodation party or other person liable upon or
for any of the Liabilities or Collateral.
The term "SUBSIDIARY" means a corporation or other entity of which at least
a majority of the securities or other ownership interest having ordinary voting
power (absolutely or contingently) for the election of directors or other
persons performing similar functions are owned directly or indirectly.
The term "THRESHOLD AMOUNT" means with respect to a Domestic Subsidiary,
assets with a book value of at least $1,000,000 and with respect to a Foreign
Subsidiary, assets with a book value of at least $2,000,000.
2. GRANT OF SECURITY INTEREST.
(a) As security for the payment of the Liabilities, the undersigned hereby
grants to the Agent, for the benefit of the Lenders and itself as Agent, a
security interest in, a general lien upon and/or right of set-off against (as
applicable) the following Collateral and in all increases, profits or rights
received from it, in all substitutions and additions, all supporting obligations
thereof, together with any proceeds:
(i) 53,333 Shares of stock of Canadian Hardinge Machine Tools
Limited, a corporation organized under the laws of Canada, as indicated on
SCHEDULE A attached hereto, and any amendments, replacements or supplements to
such SCHEDULE A.
(ii) 87,593 Shares of stock of Hardinge Machine Tools, Limited, a
corporation organized under the laws of the United Kingdom, as indicated on
SCHEDULE A attached hereto, and any amendments, replacements or supplements to
such SCHEDULE A.
(iii) 2,000 Shares of stock of X. Xxxxxxxxxxxx & Co. AG, a
corporation organized under the laws of Switzerland, as indicated on SCHEDULE A
attached hereto, and any amendments, replacements or supplements to such
SCHEDULE A.
(vi) 33,333 Shares of stock of HTT Xxxxxx Tripet Xxxxxxxx XX, a
corporation organized under the laws of Switzerland, as indicated on SCHEDULE A
attached hereto, and any amendments, replacements or supplements to such
SCHEDULE A.
(v) 100 Shares of stock of Hardinge Technology Systems, Inc, a
corporation organized under the laws of the State of New York, as indicated on
SCHEDULE A attached hereto and any amendments, replacements or supplements to
such SCHEDULE A.
-3-
(b) As additional collateral security for the payment of the Liabilities,
the undersigned, subject to the condition precedent that the applicable
Subsidiary attains the requisite Threshold Amount, hereby grants to the Agent,
for the benefit of the Lenders and itself as Agent, a security interest in,
general lien upon, and/or right of setoff against (as applicable) 66-2/3% of any
and all shares of securities or other interests having voting power for the
election of directors or other governing body of each and every Foreign
Subsidiary and 100% of any and all shares of securities or interests having
ordinary voting power for the election of directors or governing body of each
and every Domestic Subsidiary, as may be now owned or hereafter acquired and in
all increases, profits or rights received from it, and all substitutions and
additions, all supporting obligations thereof, and together with any proceeds.
The undersigned agrees to advise the Agent promptly upon any Subsidiary
acquiring or achieving the Threshold Amount and further agrees to execute any
and all documents as may be necessary or desirable in order to perfect the
security interest herein granted.
(c) The undersigned agrees that the Agent's records will be the accurate
record of any substitutions in and additions to the Collateral.
3. COVENANTS. As long as any part of the Liabilities remain unpaid the
undersigned agrees:
(a) to defend the Collateral against all claims, keep the collateral free
from other security interests and not dispose of any portion of the
Collateral without the Agent's written consent;
(b) to notify the Agent promptly of any changes in the undersigned's name
or address;
(c) to notify the Agent of any change in legal entity structure or change
in state of organization, if applicable;
(d) to execute and deliver and hereby authorizes Agent to file any
financing statements or other documents, pay any costs of title
searches and filing fees, and take any other action the Agent requests
in relation to the security interest;
(e) to pay all taxes and other charges which may be levied against the
Collateral;
(f) to notify the Agent of the creation or acquisition of any new
Subsidiary and of the acquisition of assets by or the transfer of
assets to any Subsidiary, and within ten (10) days of such creation,
acquisition or transfer, deliver to Agent the stock certificates
representing 66-2/3% of any such Foreign Subsidiary or 100% of any
such Domestic Subsidiary along with corresponding stock powers
executed in blank; provided, however, nothing contained in this
provision shall be deemed to be consent by the Agent or any Bank, of
any such creation, acquisition or transfer;
(g) that without the Agent's prior written consent, issue any additional
shares or ownership interests in any of the companies whose stock or
interests constitute Collateral hereunder;
(h) that it shall not grant a security interest in, assign or otherwise
encumber the securities or other ownership interests in any of its
Subsidiaries.
-4-
4. WARRANTIES. As long as any part of the Liabilities remain unpaid the
undersigned warrant to the Agent and each of the Lenders that:
(a) each document representing the Collateral is genuine;
(b) the undersigned owns the Collateral;
(c) the undersigned is fully authorized to enter into this Agreement.
(d) SCHEDULE A sets forth all of the Borrower's Subsidiaries, which have
any material assets.
5. VOTING RIGHTS. If the Collateral is investment securities, the undersigned
authorizes the Agent to transfer them into the Agent's name or the name of any
nominee. So long as no Event of Default occurs, the Agent will mail the
undersigned all communications and proxies addressed to the Agent, within a
reasonable time. After default, the Agent does not have to send the undersigned
further communications and any proxies issued by the undersigned will be
invalid. the Agent shall then have the right to vote in person or by proxy
without any direction from the undersigned.
6. DEFAULT. Any of the following will constitute an Event of Default:
(a) any Obligor shall default in the performance of any of its agreements
herein after twenty (20) days notice thereof by Agent or in the Credit
Agreement or in any instrument or document delivered pursuant to this
Agreement or the Liabilities beyond any applicable notice or grace
period;
(b) any Obligor
(i) shall generally not, or be unable to, or shall admit in
writing its inability to, pay its debts as such debts become
due;
(ii) shall make an assignment for the benefit of creditors;
(iii) shall file a petition in bankruptcy or for any relief under
any law of any jurisdiction relating to reorganization,
arrangement, readjustment of debt, dissolution or liquidation;
(iv) shall have any such petition filed against it and the same
shall remain undismissed for a period of 90 days or shall
consent or acquiesce thereto; or
(v) shall have had a receiver, custodian or trustee appointed for
all or a substantial part of its property.
Upon the occurrence of an Event of Default, unless and to the extent that
the Lenders shall otherwise elect, all of the Liabilities shall become and be
due and payable forthwith. THE RIGHTS OF THE AGENT AND THE LENDERS SET FORTH
IMMEDIATELY ABOVE ARE WITHOUT LIMITATION OF, AND IN ADDITION TO, ANY OTHER RIGHT
OF THE AGENT OR THE LENDERS UNDER ANY OTHER DOCUMENT EVIDENCING OR EXECUTED IN
CONNECTION WITH THE LIABILITIES (INCLUDING BUT NOT LIMITED TO ANY RIGHT OF
ACCELERATION OF PAYMENT PURSUANT TO THE PROVISIONS THEREOF OR ANY RIGHT OF THE
AGENT OR THE LENDERS TO MAKE DEMAND FOR PAYMENT THEREUNDER WITHOUT REFERENCE TO
ANY PARTICULAR CONDITION OR EVENT).
-5-
7. DIVIDENDS/INCOME. So long as no Event of Default occurs, the undersigned
shall have the right to receive all cash income and/or dividends from the
Collateral. If the Agent receives any cash income and/or dividends before the
occurrence of an Event of Default, the Agent agrees to turn it over to the
undersigned. Once an Event of Default occurs, the undersigned will no longer be
entitled to receive any cash income and/or dividends and if the undersigned
receives any, the undersigned agrees to turn it over to the Agent for the
benefit of the Lenders. The Agent may apply the net cash payments to the
Liabilities but the Agent will account for it and pay over to the undersigned
any cash which remains on hand after the Liabilities are satisfied.
8. GENERAL WAIVERS. Without affecting the undersigned's liability to the Agent
or the Banks, as set forth in the Credit Agreement, any of the following may be
done without notice to the undersigned:
(a) change, renew or extend the time for repayment or any part of the
Liabilities;
(b) change the rate of interest or any other provisions with respect to
any part of the Liabilities;
(c) surrender, sell or otherwise dispose of any money or property which is
in the Agent's possession as collateral security for the Liabilities;
(d) release or discharge any party liable to the Agent or the Banks in
whole or in part for the Liabilities or accept any additional parties
or guarantors;
(e) delay or refrain from exercising any of the Agent's or the Banks'
rights;
(f) settle or compromise any and all claims;
(g) apply any money or property of the undersigned or that of any other
party liable to the Agent for any part of the Liabilities, to the
Liabilities in any order the Banks choose.
9. CUSTODY OF COLLATERAL. The Agent agrees to use reasonable care to protect
any Collateral in its possession. However, the Agent shall not be required to:
(a) vote the stock;
(b) collect any debt;
(c) exercise any conversion rights;
(d) take any steps necessary to preserve rights against prior parties;
(e) notify the undersigned of any maturities, calls, conversions, or other
similar matters concerning the Collateral, except for forwarding to
the undersigned those communications which are addressed to the
undersigned.
(f) act upon any request the undersigned may send the Agent.
10. CHANGES IN COLLATERAL. Whether or not an Event of Default has occurred, the
undersigned authorizes the Agent to:
(a) receive and hold as additional collateral any non-cash increases in or
profits or distributions, or non-cash dividends on the Collateral;
(b) surrender the Collateral and receive any payment or distribution upon
redemption, dissolution or liquidation of the issuer of the
Collateral;
-6-
If the undersigned receives any of the payments or distributions described
above, the undersigned agrees to turn them over to the Agent for the benefit of
the Lenders.
11. FURTHER ASSURANCES. The undersigned appoints the Agent as its attorney to
take any necessary steps, including the filing of financing statements, to
perfect the Agent's security interest without first obtaining the undersigned's
signatures. Upon the Agent's request, the undersigned will execute any
amendments, and hereby authorizes Agent to file any amendments or continuations,
which are necessary to perfect and continue the security interest in the
Collateral.
12. FEES AND EXPENSES. The undersigned agrees to pay all the Agent's reasonable
costs, including reasonable attorneys' fees for necessary court process in
enforcing this Agreement or realizing upon the Collateral.
13. MODIFICATION. This Agreement cannot be modified except by a written
agreement.
14. NOTICES. The undersigned waives any right to notice of any action the Agent
may take with respect to the Collateral. If the Agent shall provide such notice,
the undersigned agrees that notice will be sufficiently given if sent to the
undersigned's address shown in this Agreement or to a new address which the
undersigned shall have notified the Agent of in writing. The undersigned agrees
that notice of foreclosure sale sent at least five days before the sale provides
the undersigned with a reasonable opportunity to exercise our right of
redemption of the Collateral and any other legal rights.
15. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. The undersigned
consents to the nonexclusive jurisdiction and venue of the state or federal
courts located in the State of New York. In the event of a dispute hereunder,
suit may be brought against the undersigned in such courts or in any
jurisdiction where the undersigned or any of its assets may be located. Service
of process by the Agent in connection with any dispute shall be binding on the
undersigned if sent to the undersigned by registered mail at the address
specified below or to such further address as the undersigned may specify to the
Agent in writing.
16. INTERCREDITOR AGREEMENT. Certain provisions of this Agreement are subject
to the provisions of the Intercreditor Agreement between JPMorgan Chase Bank, as
Agent for the Banks under that certain Term Loan Agreement with Hardinge Inc.
dated as of the date hereof, as amended from time to time ("TERM LOAN
AGREEMENT") and the Agent dated of even date herewith, as the same may be
amended from time to time ("INTERCREDITOR AGREEMENT"). In the event of any
conflict between the express terms and conditions of this Agreement and the
express terms and conditions of the Intercreditor Agreement, the Intercreditor
Agreement shall control, PROVIDED that this paragraph shall in no way benefit
the Borrower or any successor or assign of the Borrower, including, without
limitation, a debtor in possession or any trustee for the estate created by the
commencement of an
-7-
Insolvency or Liquidation Proceeding. All capitalized terms used in this
paragraph but not otherwise defined in this Agreement shall have the meanings
set forth in the Intercreditor Agreement.
17. WAIVER OF TRIAL BY JURY. THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES (TO THE FULL EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT
TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS SECURITY
AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL, AT THE AGENT'S OPTION BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY. IN ADDITION, THE UNDERSIGNED WAIVES THE
RIGHT TO INTERPOSE ANY DEFENSE BASED UPON ANY STATUTE OF LIMITATIONS OR ANY
CLAIM DELAY BY THE AGENT AND ANY SETOFF OR COUNTERCLAIM OF ANY NATURE OR
DESCRIPTION.
IN WITNESS WHEREOF, the undersigned has executed this instrument or has
caused this instrument to be duly executed as of the 24th day of October, 2002.
Address for Notices: HARDINGE INC.
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000 By: /s/ J. XXXXXXX XXXXX
Attn: Chief Financial Officer -------------------------------
J. Xxxxxxx Xxxxx, President
and Chief Executive Officer
SCHEDULE A
TO
PLEDGE SECURITY AGREEMENT
(STOCK OF DOMESTIC AND FOREIGN SUBSIDIARIES)
BETWEEN
JPMORGAN CHASE BANK, AS AGENT
AND
HARDINGE INC.
DATED AS OF OCTOBER 24, 2002
COLLATERAL:
53,333 Shares of stock, representing not less than sixty-six and two-thirds
percent (66-2/3%) of the issued and outstanding capital stock of Canadian
Hardinge Machine Tools Limited.
87,593 Shares of stock, representing not less than sixty-six and two-thirds
percent (66-2/3%) of the issued and outstanding capital stock of Hardinge
Machine Tools, Limited.
2,000 Shares of stock, representing not less than sixty-six and two-thirds
percent (66-2/3%) of the issued and outstanding capital stock of X. Xxxxxxxxxxxx
& Co. AG.
33,333 Shares of stock, representing not less than sixty-six and two-thirds
percent (66-2/3%) of the issued and outstanding capital stock of HTT Xxxxxx
Tripet Xxxxxxxx XX.
100 Shares of stock, representing not less than one hundred percent (100%) of
the issued and outstanding capital stock of Hardinge Technology Systems, Inc.
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
STATEMENT OF PURPOSE FOR AN EXTENSION OF CREDIT
SECURED BY MARGIN STOCK
JPMORGAN CHASE BANK, AS AGENT
Name of Bank
(Federal Reserve Form U-1)
This form is required by law (15 U.S.C.Sections 78g and 78W; 12 CFR 221).
INSTRUCTIONS
1. This form must be completed when a bank extends credit in excess of $100,000
secured directly or indirectly, in whole or in part, by any margin stock.
2. The term "margin stock" is defined in Regulation U (12 CFR 221) and includes,
principally: (1) stocks that are registered on a national securities exchange
or that are on the Federal Reserve Board's List of Marginable OTC Stocks; (2)
debt securities (bonds) that are convertible into margin stocks; (3) any
over-the-counter security designated as qualified for trading in the National
market System under a designation plan approved by the Securities and
Exchange Commission (NMS security); and (4) shares of mutual funds, unless 95
per cent of the assets of the fund are continuously invested in U.S.
government, agency, state, or municipal obligations.
3. Please print or type (if space is inadequate, attach separate sheet).
PART 1. TO BE COMPLETED BY BORROWER(S).
1. What is the amount of the credit being extended? $30,000,000 REVOLVING CREDIT
FACILITY
2. Will any part of this credit be used to purchase or carry margin stock?
/ / Yes /X/ No
IF THE ANSWER IS "NO", describe the specific purpose of the credit. TO PROVIDE
WORKING CAPITAL AND FOR OTHER PROPER GENERAL CORPORATE PURPOSES
I (we) have read this form and certify that to the best of my (our) knowledge
and belief the information given is true, accurate, and complete, and that the
margin stock and any other securities collateralizing this credit are authentic,
genuine, unaltered and not stolen, forged or counterfeit.
Signed: Signed:
HARDINGE INC.
/s/ J. XXXXXXX XXXXX 10/24 /02
---------------------- ------------------------------------------
Borrower's Signature Date Borrower's Signature Date
J. Xxxxxxx Xxxxx, President and
Chief Executive Officer
------------------------------- ------------------------------------------
Print or Type Name Print or Type Name
THIS FORM SHOULD NOT BE SIGNED IF BLANK
A BORROWER WHO FALSELY CERTIFIES THE PURPOSE OF A CREDIT ON THIS
FORM OR OTHERWISE WILLFULLY OR INTENTIONALLY EVADES THE PROVISIONS
OF REGULATION U WILL ALSO VIOLATE FEDERAL RESERVE REGULATION X,
"BORROWERS OF SECURITIES CREDIT".
PART II. TO BE COMPLETED BY BANK ONLY IF THE PURPOSE OF THE CREDIT IS TO
PURCHASE OR CARRY MARGIN STOCK (PART 1(2) ANSWERED "YES").
1. List the margin stock securing this credit; do not include debt securities
convertible into margin stock. The maximum loan value of margin stock is 50 per
cent of its current market value under the current Supplement to Regulation U.
Date and source of
No. of Issue Market price per valuation Total market value
shares share (See note below) per issue
------ ----- ---------------- ------------------ ------------------
2. List the debt securities convertible into margin stock securing this
credit. The maximum loan value of such debt securities is 50 per cent of the
current market value under the current Supplement to Regulation U.
Date and source of
Principal Issue Market price valuation Total market value per
Amount (See note below) issue
-------- ----- ------------ ------------------ ----------------------
3. List other collateral including nonmargin stock securing this credit.
Date and Source of Good faith
valuation
Describe briefly Market price (See note below) loan value
---------------- ------------ ------------------ ----------
Note: Bank need not complete "Date and source of valuation" if the market value
was obtained from regularly published information in a journal of general
circulation or an automated quotation system.
PART III. TO BE SIGNED BY A BANK OFFICER IN ALL INSTANCES.
I am a duly authorized representative of the bank and understand that this
credit secured by margin stock may be subject to the credit restrictions of
Regulation U. I have read this form and any attachments, and I have accepted the
customer's statement in Part I in good faith as required by Regulation U*; and I
certify that to the best of my knowledge and belief, all the information given
is true, accurate and complete. I also certify that if any securities that
directly secure the credit are not or will not be registered in the name of the
borrower or its nominee.
I have or will cause to have examined the written consent of the registered
owner to pledge such securities. I further certify that any securities that have
been or will be physically delivered to the bank in connection with this credit
have been or will be examined, that all validation procedures required by bank
policy and the Securities Exchange Act of 1934 (section 17(f), as amended) have
been or will be performed, and that I am satisfied to the best of my knowledge
and belief that such securities are genuine and not stolen or forged and their
faces have been altered.
Signed:
As of October 24, 2002 JPMORGAN CHASE BANK, AS AGENT
Date Bank officer's signature
VICE PRESIDENT /s/ XXXXXXXXX X. XXXXXX
------------------------------
Title Xxxxxxxxx X. XxXxxx
* To accept the customer's statement in good faith, the officer of the bank must
be alert to the circumstances surrounding the credit and, if in possession of
any information that would cause a prudent person not to accept the statement
without inquiry, must have investigated and be satisfied that the statement is
truthful. Among the facts which would require such investigation are receipt of
the statement through the mail or from a third party.
THIS FORM MUST BE RETAINED BY THE LENDER FOR THREE YEARS AFTER THE CREDIT
IS EXTINGUISHED.
03-1084 (MMBG 11/01)
[JPMORGAN CHASE LOGO]
PLEDGE SECURITY AGREEMENT
(CUSTOMER NOTES)
The undersigned executes and delivers this Pledge Security Agreement (the
"AGREEMENT") to JPMORGAN CHASE BANK, as agent for the Lenders (as defined below)
(the "AGENT"), having an office located at 0000 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx
00000, in consideration of one or more loans, letters of credit or other
financial accommodation made, issued or extended by the Lenders to the
undersigned or to any person in respect of whose Liabilities (as defined below)
the undersigned now or hereafter guarantees or otherwise becomes liable for
payment. Accordingly, the Agent shall have the rights, remedies and benefits
hereinafter set forth.
1. DEFINITIONS. The term "LIABILITIES" shall include any and all indebtedness,
obligations and liabilities of the undersigned to any of the Banks (as defined
below) and/or the Agent and/or other financial institutions and also to others
to the extent of their participations granted to or interest therein created or
acquired for them by the Banks or Agent arising under (i) that certain
Multicurrency Credit Agreement dated as of the date hereof, among Hardinge Inc.
and the Agent and the Banks signatory thereto and each other financial
institution which from time to time becomes a party thereto (individually a
"BANK" and collective the "BANKS"), as the same may be amended from time to time
(the "CREDIT AGREEMENT"), (ii) certain credit facilities made available by
JPMorgan Chase Bank and/or KeyBank National Association to Hardinge Inc. for
foreign exchange, letters of credit and derivative products and exposures,
including without limitation, interest rate swap agreements or other rate
protection or hedge agreements or mechanisms and the documents executed in
connection with any of the above now or hereafter existing, and (iii) certain
guarantees to JPMorgan Chase Bank and/or its subsidiaries and affiliates,
including without limitation, JPMorgan Leasing, in connection with the purchase
of the undersigned's customer notes by such entity and the documents executed in
connection with any of the above now existing (the Banks and those other banks
and financial institutions set forth above shall be collectively referred to as
the "LENDERS" and each individually, a "LENDER").
The term "COLLATERAL" means all property in which the undersigned grants a
security interest pursuant to the "Grant of Security Interest" paragraph set
forth below.
The term "OBLIGOR" means the undersigned or any maker, drawer, acceptor,
indorser, guarantor, surety, accommodation party or other person liable upon or
for any of the Liabilities or Collateral.
2. GRANT OF SECURITY INTEREST. As security for the payment of the Liabilities,
the undersigned hereby grants to the Agent, for the benefit of the Lenders and
itself as Agent, a security interest in, a general lien upon and/or right of
set-off against (as applicable) the following Collateral and in all
-2-
increases, profits or rights received from it, in all substitutions and
additions, all supporting obligations thereof together with any proceeds:
Any and all notes and other instruments in favor of Borrower for the
payment of obligations of domestic customers of the Borrower for goods or
services provided by Borrower in the ordinary course of Borrower's business
whether now existing or hereafter obtained, including, without limitation,
certain notes as indicated on SCHEDULE A attached hereto, and any amendments,
replacements or supplements to such SCHEDULE A (collectively, the "CUSTOMER
NOTES" and each a "CUSTOMER NOTE").
The undersigned agrees that records of Chemung Canal Trust Company, as
bailee for the benefit of the Agent (or any other successor bailee, the
"BAILEE") will be the accurate record of any substitutions in and additions to
the Collateral.
3. COVENANTS. As long as any part of the Liabilities remain unpaid the
undersigned agrees to:
(a) defend the Collateral against all claims, keep the collateral free
from other security interests and not dispose of any portion of the
Collateral without the Agent's written consent or in accordance with
the terms hereof;
(b) notify the Agent promptly of any changes in the undersigned's name or
address;
(c) notify the Agent of any change in legal entity structure or change in
state of organization, if applicable;
(d) execute and deliver and hereby authorizes Agent to file any financing
statements or other documents, pay any costs of title searches and
filing fees, and take any other action the Agent requests in relation
to the security interest;
(e) pay all taxes and other charges which may be levied against the
Collateral.
(f) deliver to Agent and the Bailee, as requested by Agent, but in any
event at least quarterly, an updated SCHEDULE A reflecting all
outstanding Customer Notes and deliver to the Bailee within 15 days of
each month end, the original of any such Customer Note not previously
delivered to the Bailee.
4. WARRANTIES. As long as any part of the Liabilities remain unpaid the
undersigned warrants to the Agent and each of the Lenders that:
(a) each document representing the Collateral is genuine;
(b) the undersigned owns the Collateral;
(c) the undersigned is fully authorized to enter into this Agreement.
(d) SCHEDULE A sets forth all of the Borrower's Customer Notes as of
September 30, 2002 and any replacement SCHEDULE A will set forth all
of the Borrower's Customer Notes at such time which have not otherwise
been released by the Agent as set forth below.
5. RELEASE OF COLLATERAL. From time to time, provided there exists no Event of
Default, Agent shall, upon written request by Borrower to Bailee therefor,
release from its security interest one or
-3-
more Customer Notes for a Permitted Purpose (hereafter defined) within five (5)
business days from the receipt of such request and will authorize its Bailee to
release to Borrower such original Customer Note at such time. "PERMITTED
PURPOSE" as used herein shall mean (i) the sale of one or more Customer Notes at
fair market value to a bonafide third party, or (ii) the use of such Customer
Notes for substitutions in conjunction with such sales or any prior sales.
From time to time, provided there exists no Event of Default, Agent shall,
upon written request by Borrower to Bailee therefor, authorize the release from
the Bailee's possession within five (5) business days from the receipt of such
request one or more Customer Notes for the commencement by Borrower and
continuation of a foreclosure or repossession proceeding with respect to such
Customer Note, provided, however, the Agent's security interest in such Customer
Note and any proceeds thereof shall remain in full force and effect and shall
not be deemed to be released by such delivery.
6. DEFAULT. Any of the following will constitute an Event of Default:
(a) any Obligor shall default in the performance of any of its agreements
herein after twenty (20) days notice thereof by Agent or in the Credit
Agreement or in any instrument or document delivered pursuant to this
Agreement or the Liabilities beyond any applicable notice or grace
period.
(b) any Obligor
(i) shall generally not, or be unable to, or shall admit in
writing its inability to, pay its debts as such debts become
due;
(ii) shall make an assignment for the benefit of creditors;
(iii) shall file a petition in bankruptcy or for any relief under
any law of any jurisdiction relating to reorganization,
arrangement, readjustment of debt, dissolution or liquidation;
(iv) shall have any such petition filed against it and the same
shall remain undismissed for a period of 90 days or shall
consent or acquiesce thereto; or
(v) shall have had a receiver, custodian or trustee appointed for
all or a substantial part of its property.
Upon the occurrence of an Event of Default, unless and to the extent that
the Lenders shall otherwise elect, all of the Liabilities shall become and be
due and payable forthwith. THE RIGHTS OF THE AGENT AND THE LENDERS SET FORTH
IMMEDIATELY ABOVE ARE WITHOUT LIMITATION OF, AND IN ADDITION TO, ANY OTHER RIGHT
OF THE AGENT OR THE LENDERS UNDER ANY OTHER DOCUMENT EVIDENCING OR EXECUTED IN
CONNECTION WITH THE LIABILITIES (INCLUDING BUT NOT LIMITED TO ANY RIGHT OF
ACCELERATION OF PAYMENT PURSUANT TO THE PROVISIONS THEREOF OR ANY RIGHT OF THE
AGENT OR THE LENDERS TO MAKE DEMAND FOR PAYMENT THEREUNDER WITHOUT REFERENCE TO
ANY PARTICULAR CONDITION OR EVENT).
-4-
7. INCOME. So long as no Event of Default occurs, the undersigned shall have
the right to receive all cash income (whether principal or interest) from the
Collateral. If the Agent receives any cash income before the occurrence of an
Event of Default, the Agent agrees to turn it over to the undersigned. Once an
Event of Default occurs, the undersigned will no longer be entitled to receive
any cash income and if the undersigned receives any, the undersigned agrees to
turn it over to the Agent for the benefit of the Lenders. The Agent may apply
the net cash payments to the Liabilities but the Agent will account for it and
pay over to the undersigned any cash which remains on hand after the Liabilities
are satisfied.
8. GENERAL WAIVERS. Without affecting the undersigned's liability to the Agent
or the Banks, as set forth in the Credit Agreement, any of the following may be
done without notice to the undersigned:
(a) change, renew or extend the time for repayment or any part of the
Liabilities;
(b) change the rate of interest or any other provisions with respect to
any part of the Liabilities;
(c) surrender, sell or otherwise dispose of any money or property which is
in the Agent's possession as collateral security for the Liabilities;
(d) release or discharge any party liable to the Agent or the Banks in
whole or in part for the Liabilities or accept any additional parties
or guarantors;
(e) delay or refrain from exercising any of the Agent's or the Banks'
rights;
(f) settle or compromise any and all claims;
(g) apply any money or property of the undersigned or that of any other
party liable to the Agent for any part of the Liabilities, to the
Liabilities in any order the Banks choose;
(h) change any of the terms of its agreements with the Bailee.
9. CUSTODY OF COLLATERAL. The Agent agrees to use reasonable care to protect
any Collateral in its possession. However, neither the Agent nor the Bailee
shall be required to:
(a) collect any debt;
(b) exercise any conversion rights;
(c) take any steps necessary to preserve rights against prior parties;
(d) notify the undersigned of any maturities, calls, conversions, or other
similar matters concerning the Collateral, except for forwarding to
the undersigned those communications which are addressed to the
undersigned;
(e) act upon any request the undersigned may send the Agent.
10. CHANGES IN COLLATERAL. The undersigned authorizes the Agent whether through
its Bailee or otherwise to:
(a) whether or not an Event of Default has occurred, to receive and hold
as additional collateral any non-cash increases in or profits or
distributions, or non-cash dividends on the Collateral;
-5-
(b) if an Event of Default has occurred, surrender the Collateral and
receive any payment or distribution upon redemption, dissolution or
liquidation of the issuer of the Collateral;
If the undersigned receives any of the payments or distributions contrary to the
provisions described above, the undersigned agrees to turn them over to the
Agent for the benefit of the Lenders.
11. FURTHER ASSURANCES. The undersigned appoints the Agent as its attorney to
take any necessary steps, including the filing of financing statements, to
perfect the Agent's security interest without first obtaining the undersigned's
signatures. Upon the Agent's request, the undersigned will execute any
amendments, and hereby authorizes Agent to file any amendments or continuation
forms, which are necessary to perfect and continue the Agent's security interest
in the Collateral.
12. FEES AND EXPENSES. The undersigned agrees to pay all the Agent's reasonable
costs, including reasonable attorneys' fees for necessary court process in
enforcing this Agreement or realizing upon the Collateral.
13. MODIFICATION. This Agreement cannot be modified except by a written
agreement.
14. NOTICES. The undersigned waives any right to notice of any action the Agent
may take with respect to the Collateral. If the Agent shall provide such notice,
the undersigned agrees that notice will be sufficiently given if sent to the
undersigned's address shown in this Agreement or to a new address which the
undersigned shall have notified the Agent of in writing. The undersigned agrees
that notice of foreclosure sale sent at least five (5) days before the sale
provides the undersigned with a reasonable opportunity to exercise our right of
redemption of the Collateral and any other legal rights.
15. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. The undersigned
consents to the nonexclusive jurisdiction and venue of the state or federal
courts located in the State of New York. In the event of a dispute hereunder,
suit may be brought against the undersigned in such courts or in any
jurisdiction where the undersigned or any of its assets may be located. Service
of process by the Agent in connection with any dispute shall be binding on the
undersigned if sent to the undersigned by registered mail at the address
specified below or to such further address as the undersigned may specify to the
Agent in writing.
16. INTERCREDITOR AGREEMENT. Certain provisions of this Agreement are subject
to the provisions of the Intercreditor Agreement between JPMorgan Chase Bank, as
agent for the banks under that certain Term Loan Agreement with Hardinge Inc.,
dated as of the date hereof as amended from time to time ("Term Loan Agreement")
and the Agent dated of even date herewith, as the same may be amended from time
to time ("INTERCREDITOR AGREEMENT"). In the event of any conflict
-6-
between the express terms and conditions of this Agreement and the express terms
and conditions of the Intercreditor Agreement, the Intercreditor Agreement shall
control, PROVIDED that this paragraph shall in no way benefit the Borrower or
any successor or assign of the Borrower, including, without limitation, a debtor
in possession or any trustee for the estate created by the commencement of an
Insolvency or Liquidation Proceeding. All capitalized terms used in this
paragraph but not otherwise defined in this Agreement shall have the meanings
set forth in the Intercreditor Agreement.
17. WAIVER OF TRIAL BY JURY. THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES (TO THE FULL EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT
TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS SECURITY
AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL, AT THE AGENT'S OPTION BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY. IN ADDITION, THE UNDERSIGNED WAIVES THE
RIGHT TO INTERPOSE ANY DEFENSE BASED UPON ANY STATUTE OF LIMITATIONS OR ANY
CLAIM DELAY BY THE AGENT AND ANY SETOFF OR COUNTERCLAIM OF ANY NATURE OR
DESCRIPTION.
IN WITNESS WHEREOF, the undersigned has executed this instrument or has
caused this instrument to be duly executed as of the 24th day of October, 2002.
Address for Notices: HARDINGE INC.
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000 By: /s/ J. XXXXXXX XXXXX
Attn: Chief Financial Officer --------------------------------
J. Xxxxxxx Xxxxx, President
and Chief Executive Officer
SCHEDULE A
TO
PLEDGE SECURITY AGREEMENT
(CUSTOMER NOTES)
BETWEEN
JPMORGAN CHASE BANK, AS AGENT
AND
HARDINGE INC.
DATED AS OF OCTOBER 24, 2002
CUSTOMER NOTES RECEIVABLE
Outstanding
Principal
Balance at
Note # Customer Name September 30, 2002
------ ------------- ------------------
1981 Advance Machine Corp 34,349.00
1112 Aircraft Ducting Repair Inc 45,925.00
2140 Astro Seal Inc 515,136.00
1122 Badge Machine Products Inc 111,302.00
1172 Badge Machine Products Inc 198,969.00
1182 Xxxx Engineering 33,580.00
3998 C M V Industries 50,624.09
4917 C M V Industries 20,760.56
2551 Cleveland Special Tool Inc 41,605.00
3787 Code Engineering Co 56,012.00
2449 Custom Brackets 127,191.37
2521 Custom Heliarc Welding & Mach 46,627.00
5618 D & E Specialties 95,244.00
1002 D & K Machine Co Inc 56,550.00
2248 D S Precision 46,040.58
1292 Digital Machine 12,988.12
1675 Eagle Industries Inc 117,896.81
1062 Eastaboga Tackle Mfg Co Inc 144,549.88
2516 Edco Machine Co Inc 59,954.28
2200 Elco Enterprises Inc 64,715.00
1072 Xxxxx Enterprises Inc 212,656.86
2679 X X Xxxx Industries Inc 28,595.00
2689 X X Xxxx Industries Inc 29,109.00
2829 X X Xxxx Industries Inc 30,034.00
2839 X X Xxxx Industries Inc 31,415.00
2071 Firstar Precision Corp 174,704.97
1012 Full Spectrum Design 118,872.00
1591 Glass Processing Co Inc 15,939.00
2241 Greenfield Machine Works 190,435.00
2251 Greenfield Machine Works 60,568.16
2509 In Tenths Industries Inc 97,933.00
3328 J Xxxx Xxxxxxxx Machining 72,396.20
5758 J Xxxx Xxxxxxxx Machining 71,596.38
2531 X X Tool & Die Co Inc 26,419.00
1759 Mahoning Valley Machining 33,335.00
6018 Major Tooling Inc 59,306.00
1152 Metal Industries 56,527.00
2541 Metrologic Instruments Inc 84,931.31
1055 Xxxxxx Xxxxxx C N C Inc 72,541.00
3118 On-Line Services Inc 68,729.60
2726 Phoenix Logistics inc 56,491.00
1022 Precision Machinists Co Inc 105,560.00
1082 Proform Mfg Inc 54,604.00
5858 Quality Tolerance Inc 35,752.00
1132 Xxxxx Precision Products 44,360.00
5108 Southern Machine & Tool Co 83,716.32
3899 Specialty Machines & Mfg 3,344.00
1778 Sto-Kar Enterprises Inc 34,725.00
3739 Sure Tight Mfg Inc 25,079.00
0000 Xxxxxxxx Inc 90,608.29
1730 T N B LLC 312,805.00
1142 T N T Machine Co Inc 169,827.30
1202 Tempco Mfg Co Inc 302,148.00
1222 V S Precision 38,610.00
1232 V S Precision 123,945.00
2577 Victory 1 Performance 810.00
1042 Volker Precision Products 49,371.50
2028 Xxxxxx Technologies Inc 104,538.00
2963 Xxxxxx Technologies Inc 14,494.00
1092 Youngstown Aluminnum Prods 51,093.77
sub total holder 1 5,117,945.35
3938 A & P Machine & Tool Inc 38,250.00
3419 A B Engineering & Molding 167,304.12
3528 A H Metal Works Inc 38,375.00
2450 Xxxxx Machine & Tool Inc 128,550.00
1627 Xxxx Machine Products Inc 7,461.00
2173 American Plas-Tech Inc 8,160.60
3958 Ameritool Manufacturing 15,981.00
1659 Automatic System Developers 66,232.00
1825 B H Instrument Co Inc 5,062.00
3479 Beaver Equipment Worldwide 53,193.00
0000 Xxxx Xxxxx Precision Machine 54,005.64
1920 Bluebonnet Precision Inst 130,188.81
1376 California Precision Machining 5,019.25
2603 Custom Machining Inc 2,629.92
2228 D & B Industries Inc 28,343.03
4957 D & E Specialties 44,305.68
4967 D & S Machine Inc 23,764.00
4008 D T C Engineering 54,142.70
4018 Diamond Dental Mfg Corp 111,550.30
4787 Discharge Machining Inc 6,762.81
0000 X & X Xxxxxxx Xx 68,292.50
5678 Elmira Grinding Works Inc 102,384.00
4987 Enrex Corp 6,725.00
2006 Excel Machine Products Inc 62,383.76
1887 X X Xxxx Industries Inc 23,273.50
1527 Fas-Tronics Inc 74,099.75
3206 G M J Machine Co Inc 6,166.34
3618 G S P Components Inc 38,445.00
2406 Har Technologies Inc 25,079.00
2416 Har Technologies Inc 31,219.50
2426 Har Technologies Inc 25,617.00
2436 Har Technologies Inc 24,512.00
2566 Har Technologies Inc 25,079.00
3046 Har Technologies Inc 62,534.00
3716 Har Technologies Inc 33,721.00
3746 Har Technologies Inc 33,721.00
3936 Har Technologies Inc 35,725.00
3956 Har Technologies Inc 35,275.00
4026 Har Technologies Inc 35,275.00
2717 Xxxxxx Precision Machining 27,392.00
1719 Xxxxxx, Kit Tooling Inc 50,000.00
1656 Husa Accurate Mach Works Inc 23,511.00
2728 Husa Accurate Mach Works Inc 125,902.00
4588 Husa Accurate Mach Works Inc 16,764.00
4088 Iron Man Machine 31,082.00
4098 J & D Machine Inc 66,655.45
5768 J E F Precision Sheetmetal 44,348.77
3088 Jemco Components & Fab Inc 69,676.85
3600 Xxxxxxx Machine & Fibre Prods 240,727.00
2576 K & S Manufacturing Co 2,593.00
3008 Kno Mar Tool & Mold Inc 60,084.00
4968 Kno Mar Tool & Mold Inc 38,717.70
1958 Xxxxx High Desert Racing 102,828.00
1990 Lincoln Die & Mfg Co Inc 98,920.00
3079 M C S Inc 84,997.00
5397 M K D Machining Inc 33,750.00
0000 Xxxxxxxx Xxxxxx Machining 44,188.40
4778 Major Tooling Inc 57,720.00
1554 Micro Machine Shop 3,832.61
5028 Millennium Hydraulics Inc 46,928.00
1644 Output Dynamice 13,964.16
2736 Pol-Tek Industries Ltd Inc 2,600.00
1558 Premier Tool & Mold Inc 66,592.00
2305 Professional Precision Prods 168,724.50
4120 Prolyx LLC 39,761.75
1988 Pulley Industries 63,495.00
1146 Quality Tolerance Inc 5,272.00
2418 Quality Tolerance Inc 135,919.00
3877 Quality Tolerance Inc 59,444.00
5048 Quality Tolerance Inc 106,930.00
4178 R M Precison Tech 120,752.60
2547 R P M Associates 99,210.02
4368 R P M Machine Inc 49,735.83
2227 R S Precision Inc 43,661.00
5358 Reliable Tool & Machine Inc 91,304.74
2984 Resco Precision 49,028.40
2567 Xxxxxx Mfg Inc 67,908.77
2826 Xxxxxx Mfg Inc 60,426.05
4126 Xxxxxx Mfg Inc 103,720.97
2969 Richmond Engineering 5,853.26
1469 Xxxxxx Aerospace Products 41,236.00
1680 Xxxxxx Aerospace Products 11,049.00
1418 Romstar Engineering 86,485.00
3488 Ronson Mfg Inc 55,069.00
3768 Xxxxx Precision Products Inc 32,514.49
2756 S H E Industries Inc 31,442.26
2503 S P M Company 13,818.76
2360 Sandia Services Co 102,958.41
1890 Xxxxx Machine Tool 120,441.18
3139 Smart Technologies Inc 318,636.00
2097 Star Instrument Co 45,484.03
4668 Star Instrument Co 74,271.00
4687 Star Instrument Co 76,161.00
4697 Star Instrument Co 73,899.00
5378 Star Instrument Co 92,115.75
2606 Triangle Automatic Inc 2,173.00
4278 Turbodyne Systems Inc 54,133.68
3546 Twintec Inc 22,027.50
1439 Xxxxxx, Xxxxxxx H 65,235.00
2000 Xxxxxx, Xxxxxxx H 53,825.51
3099 Xxxxxx, Xxxxxxx H 39,664.00
3014 Van Cort Instruments Inc 111,274.15
sub total holder 2 5,887,643.76
1869 Aplicaciones Industriales 24,748.50
2887 Asesores Tecnicos Indust 18,732.00
5587 Asesoria Manufactura Y Proy 51,709.39
5647 Asesoria Manufactura Y Proy 226,800.00
3836 Auto & Partes Y Maquinados 44,578.50
1568 Auto Partes Y Maquinados 2,054.72
5478 Auto Partes Y Maquinados 59,128.00
1079 Xxxxxx, Xxxxx 26,125.43
3530 Xxxxxx, Xxxxx 76,738.35
1910 Combustion Diesel 15,695.46
1578 Commercializadora Mifisa 11,130.00
1052 Compania Industrial Xxxxxxx 66,642.00
3359 Xxxxxx Xxxxxxxxx Xxxxxx 43,736.00
2803 Diseno Industrial Y Fab 5,549.80
3890 Disenos Y Proyectos Indus 40,655.00
1941 Doga Maquinados Y Fab 184,326.05
1361 Fabricaciones Industriales 34,782.24
2538 Fabricantes Y Servicio's Ind 40,860.00
3789 Xxxxxxxx Pages Xxxxxxxxxx 15,802.96
4347 Formag S A CV 22,920.00
2410 Xxxxxxxx, Xxxxxx Mancha 48,621.00
1629 Grupo Palancas SA DE CV 40,768.00
3369 Herramientas Y Moldes Ind 9,806.61
2191 Hidraulica Y Mecanica 135,488.90
2670 Industrial Source 30,894.00
1460 Industrias Valgo 25,763.16
1951 Industrias Valgo 29,536.00
1371 Ingeneiria Integrada Indust 52,020.00
1470 Interfil S A DE C V 27,512.00
3379 Interfil S A DE C V 22,410.00
3540 Interfil S A DE C V 42,674.60
2409 X X Mold & Die 8,787.84
1889 Manufacturas Xxxxxx 33,035.40
2159 Manufacturas Especializadas 28,210.00
2451 Maquinados De Prec Pages 62,335.00
3389 Maquinados De Precision 6,058.50
2411 Maquinados Industriales Bega 31,250.00
2110 Maquinados Laser Mach Shop 19,516.00
1070 Maquinados Valgo 37,696.00
2599 Maquinados Valgo 20,496.00
1780 Maquinados Y Accesorios 31,278.00
3714 Maquinados Y Representacione 180,148.54
1490 Maquinados Y Servicios 12,214.16
2120 Maquysi S De X X 28,288.00
1381 Xxxxxxx X X De C V 69,748.00
6008 Xxxxxxx X X De C V 20,618.75
1080 Xxxxxxxx Xxxxxxx Xxxxx 43,438.00
2759 Xxxxxxxx Xxxxxxx Xxxxx 42,869.41
3550 Xxxxxxxx Xxxxxxx Xxxxx 76,682.00
1102 Metaloplasticos Aural S A DE C V 38,944.00
1821 Microscopios SA 54,924.00
5098 Microscopios SA 17,161.50
2169 Modelos Tecnicos Xxxxx 940.00
2929 Mold-Tec De Cuernavaca 19,987.50
3560 Moldes Y Plasticos Monterry 35,954.88
1212 Oscar Xxxxxx Xxxxxxxxxx Xxxxxxxx 32,680.80
2068 Plastic Molds & Dies 18,690.00
5488 Precision Jesa 1,496.00
1141 Precision Jhesa SA DE CV 17,652.00
3570 Precision Moderna 45,645.00
3908 Precision Tensa 13,768.00
1220 Presotec S A DE C V 26,793.78
3580 Presotec S A DE C V 17,569.28
3399 Productos Winner S A DE C V 10,297.50
0000 Xxxxxxx, Xxxx Xxxx 41,203.89
1899 Xxxx Xxxxx Xxxxxx Xxxxxxx 4,078.10
1831 Xxxx, Xxxx 44,639.25
1987 Talleres Diversificados 7,842.00
2285 Tecnologia Y Mecanismos 25,980.16
2440 Xxxxxxx Xxxxxxxxxx Xxxxxx 25,480.00
sub total holder 3 2,732,605.91
3590 Peak Precision Inc holder 4 561,438.68
Total 14,299,633.70
[JPMORGAN CHASE LOGO]
GUARANTY
This Guaranty is granted by the each of the undersigned (hereinafter
collectively and individually referred to as the "Guarantor") to JPMORGAN CHASE
BANK, having an office located at 0000 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000
("Business Office"), as agent for the Lenders (as defined below), (hereinafter
with its respective successors and assigns, collectively or individually, as the
context may require, referred to as "Agent").
1. RECITALS. Hardinge Inc., a New York corporation (the "Borrower")
has obtained or desires or may desire at some time and/or from time to time to
obtain financial accommodation arising under (i) that certain Multicurrenty
Credit Agreement dated as of the date hereof, among Hardinge Inc. and the Agent
and the Banks signatory thereto and each other financial institution which from
time to time becomes a party thereto (individually a "Bank" and collectively,
the "Banks"), and as the same may be amended from time to time (the "Credit
Agreement"), (ii) certain credit facilities made available by JPMorgan Chase
Bank and/or KeyBank National Association to Hardinge Inc. for foreign exchange,
letters of credit and derivative products and exposures, including without
limitation interest rate swap agreements or other rate protection or hedge
agreements or mechanisms and the documents executed in connection with any of
the above now or hereafter existing, and (iii) certain arrangements with
JPMorgan Chase Bank and/or its subsidiaries and affiliates, including without
limitation, JPMorgan Leasing, in connection with the purchase of the
undersigned's customer notes by such entity and the documents executed in
connection with any of the above now or hereafter existing (collectively and
each individually, a "Credit Arrangement") (the Banks and the other banks and
institutions set forth above are collectively referred to as the "Lenders", and
each individually, a "Lender"); and each of the undersigned represents that it
is financially interested in the Borrower's affairs and expects to derive
advantage from each and every such accommodation;
2. CONSIDERATION. To induce Agent and the Lenders, at their option,
at any time or from time to time, to extend such Credit Arrangements, the
Guarantor hereby agrees as follows:
3. GUARANTY. The Guarantor (and if there is more than one Guarantor,
jointly and severally) absolutely and unconditionally guarantees to Agent, for
the benefit of the Lenders and itself as Agent that the Borrower will promptly
perform and observe every agreement and condition contained in any instrument,
writing or arrangement relating to or the subject of any such Credit Arrangement
to be performed or observed by the Borrower, that all sums stated to be payable
in, or which become payable under, any Credit Arrangement will be promptly paid
in full when due, whether at maturity or earlier by reason of acceleration or
otherwise, or, if now due, when payment thereof shall be demanded by Agent or
any Lender in accordance with the terms thereof, together with interest and any
and all legal and other costs and expenses paid or incurred in connection
therewith by Agent (collectively, the "Guaranteed Obligations"), and, in case of
one or more extensions of time of payment or renewals, in whole or in part, of
any Credit Arrangement or obligation, that the same will be promptly paid or
performed when due, according to each such extension or renewal, whether at
maturity or earlier by reason of acceleration or otherwise. The
Guarantor agrees that, as between the Guarantor and Agent, the Guaranteed
Obligations may be declared to be due and payable for purposes of this Guaranty
notwithstanding any stay, injunction or other prohibition which may prevent,
delay or vitiate any such declaration as against the Borrower and that, in the
event of any such declaration (or attempted declaration), the Guaranteed
Obligations (whether or not due and payable by the Borrower) shall forthwith
become due and payable by the Guarantor for purposes of this Guaranty. The
Guarantor further guarantees that all payments made by the Borrower to Agent for
the benefit of the Lenders or itself as Agent of any Guaranteed Obligation will,
when made, be final and agrees that if any such payment is recovered from, or
repaid by, Agent or any of the Lenders in whole or in part by reason of any
bankruptcy, insolvency or similar proceeding instituted by or against the
Borrower, this Guaranty shall continue to be fully applicable to such obligation
to the same extent as though the payment so recovered or repaid had never been
originally made on such obligation.
This is a guaranty of payment and performance and not a guaranty of
collection only.
This Guaranty is enforceable irrespective of the validity, regularity
or enforceability of any instrument, writing or arrangement relating to or the
subject of a Credit Arrangement or the obligations thereunder and irrespective
of any present or future law or order of any government (whether of right or in
fact and whether Agent shall have consented thereto) or of any agency thereof
purporting to reduce, amend, restructure or otherwise affect any obligation of
the Borrower or other obligor or to vary the terms of payment.
4. CONSENTS AND WAIVERS. The Guarantor hereby consents that from
time to time, without notice to or further consent of the Guarantor, the
performance or observance by the Borrower of any Credit Arrangement or
Guaranteed Obligation may be waived or the time of performance thereof extended
by Agent, and payment of any Guaranteed Obligation may be accelerated in
accordance with any agreement governing the same, or may be extended, or any
Credit Arrangement may be renewed in whole or in part, or the terms of any
Credit Arrangement or any part thereof may be changed, including increase or
decrease in the rate of interest thereon, or any collateral therefor may be
exchanged, surrendered or otherwise dealt with as Agent may determine, or any
co-guarantor or any other party liable upon or in respect of any obligation may
be released, and any of the acts mentioned in any Credit Arrangement may be
done, all without notice to or affecting the liability of the Guarantor
hereunder. The Guarantor waives notice of acceptance of this Guaranty and of the
creation of any Guaranteed Obligations. The Guarantor hereby waives presentment
of any instrument, demand for payment, protest and notice of non-payment or
protest thereof or of any exchange, sale, surrender or other handling or
disposition of any such collateral, and any requirement that Agent or any Lender
exhaust any right, power or remedy or proceed against the Borrower under any
Credit Arrangement or against any other person under any other guaranty of, or
security for, any of the Guaranteed Obligations. The Guarantor hereby further
waives any defense whatsoever which might constitute a defense available to, or
discharge of, the Borrower or a guarantor. No payment by the Guarantor pursuant
to any provision hereunder shall entitle the Guarantor, by subrogation to the
rights of Agent or any of the Lenders or otherwise, to any payment by the
Borrower (or out of the property of the Borrower) except after payment in full
of all sums
2
(including interest, costs and expenses) which may be or become payable by the
Borrower to such party at any time or from time to time, unless the Guaranteed
Obligations shall be paid in full.
5. CONTINUING GUARANTY; TERMINATION. This Guaranty shall be a
continuing guaranty, and Agent may continue to act in reliance hereon until the
receipt by Agent of written notice from the Guarantor not to give further
financial accommodation in reliance hereon, provided that such notice shall not
affect the obligations, absolute or contingent, of the Guarantor hereunder with
respect to any such accommodation given prior to such notice. Such notice shall
be effective only after receipt by Agent at its Business Office, and Agent shall
have had a reasonable time to act upon such notice at each of its offices
extending financial accommodation to Borrower.
6. FINANCIAL STATEMENTS. The Guarantor shall furnish to Agent, after
the end of the Guarantor's fiscal year or at such other times or intervals as
Agent may request, financial statements certified by the Guarantor showing the
Guarantor's financial condition at the end of and for the entire fiscal year.
Such statements shall fairly present the financial condition of the Guarantor as
at the end of such fiscal year or periods in accordance with generally accepted
accounting principles consistently applied. Upon demand by Agent, the Guarantor
shall retain an independent certified public accountant acceptable to Agent to
prepare such financial statements, on an audited, review or compilation basis,
as selected by Agent, and as to audited statements, accompanied by a
satisfactory report of such accountants which shall not contain any
qualification of opinion or disclaimer by reason of audit limitations imposed by
the Guarantor. Further, Guarantor agrees to furnish to Agent copies of its tax
returns, as soon as available and in any event not later than 15 days after such
tax returns are required to be filed.
7. FOREIGN CURRENCIES. With respect to each obligation (or portion
thereof) hereby guaranteed that is payable in a foreign currency, the following
provisions shall apply: the Guarantor shall be obligated to pay to Agent for the
benefit of the Lenders the unpaid amount of such Guaranteed Obligation in the
same foreign currency and place in which such Guaranteed Obligation is payable
by its terms; provided, however, that the Guarantor may, at its option (or, if
for any reason whatsoever the Guarantor is unable to effect payment of such
unpaid amount as aforesaid, the Guarantor shall be obligated to) pay to Agent
for the benefit of the Lenders at JPMorgan Chase Bank's principal office in New
York City the equivalent of such unpaid amount in United States currency
computed at JPMorgan Chase Bank's selling rate, most recently in effect on or
prior to the date such Guaranteed Obligation becomes due, for cable transfers of
such foreign currency to the place where such Guaranteed Obligation is payable.
In any case in which the Guarantor shall make or shall be obligated to make such
payment in United States currency, the Guarantor shall hold Agent and the
Lenders harmless from any loss incurred by such party arising from any change in
the value of United States currency in relation to such foreign currency between
the date such Guaranteed Obligation becomes due and the date Agent is actually
able, following the conversion of the United States currency paid by the
Guarantor into such foreign currency and remittance of such foreign currency to
the place where such Guaranteed Obligation is payable, to apply such foreign
currency to such obligation. The term "foreign currency' as used herein shall be
deemed to refer to that type of
3
such currency which under applicable laws and regulations may be used to pay and
discharge such Guaranteed Obligation.
8. RIGHTS CUMULATIVE. The rights, powers and remedies granted to the
Agent and the Lenders herein shall be cumulative and in addition to any rights,
powers and remedies to which Agent or Lenders may be entitled either by
operation of law or pursuant to any other document or instrument delivered or
from time to time to be delivered to Agent or Lenders in connection with any
Credit Arrangement.
9. SECURITY. As collateral security for the payment of any and all
obligations and liabilities of the Guarantor to Agent and/or the Lenders, now
existing or hereafter arising, the Guarantor grants to Agent for the benefit of
the Lenders and itself as Agent a security interest in and a lien upon and right
of offset against all moneys, deposit balances, securities or other property or
interest therein of the Guarantor now or at any time hereafter held or received
by or for or left in the possession or control of Agent or any Lender or any of
their respective affiliates, whether for safekeeping, custody, transmission,
collection, pledge or for any other or different purpose.
10. REPRESENTATIONS AND WARRANTIES. Each Guarantor which is other
than an individual represents and warrants that: (a) it is duly organized and
validly existing under the laws of the jurisdiction of its organization or
incorporation and, if relevant under such laws, in good standing; (b) it has the
power to execute and deliver this Guaranty and to perform its obligations
hereunder and has taken all necessary action to authorize such execution,
delivery and performance; (c) such execution, delivery and performance do not
violate or conflict with any law applicable to it, any provision of its
organizational documents, any order or judgment of any court or other agency of
government applicable to it or any of its assets or any material contractual
restriction binding on or materially affecting it or any of its assets; (d) to
the best of Guarantor's knowledge, all governmental and other consents that are
required to have been obtained by it with respect to this Guaranty have been
obtained and are in full force and effect and all conditions of any such
consents have been complied with; (e) its obligations under this Guaranty
constitute its legal, valid and binding obligations, enforceable in accordance
with its terms except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency or other similar laws affecting creditors'
rights generally; (f) all financial statements and related information furnished
and to be furnished to Agent from time to time by the Guarantor are true and
complete and fairly present the financial or other information stated therein as
at such dates or for the periods covered thereby; (g) there are no actions,
suits, proceedings or investigations pending or, to the knowledge of the
Guarantor, threatened against or affecting the Guarantor before any court,
governmental agency or arbitrator, which involve forfeiture of any assets of the
Guarantor or which may materially adversely affect the financial condition,
operations, properties or business of the Guarantor or the ability of the
Guarantor to perform its obligation under this Guaranty; and (h) there has been
no material adverse change in the financial condition of the Guarantor since the
last such financial statements or information. If the Guarantor is an
individual, the Guarantor represents and warrants the correctness of clauses
(c), (d), (e), (f), (g) and (h) above to the extent applicable to an individual.
4
11. COSTS. The Guarantor agrees to reimburse Agent on demand for all
costs, expenses and charges (including, without limitation, fees and charges of
external legal counsel for Agent and costs allocated by its internal legal
department) in connection with the enforcement of this Guaranty.
12. ENTIRE AGREEMENT, AMENDMENT AND WAIVERS. This Guaranty
constitutes the entire agreement between the Guarantor and Agent in respect of
the subject matter hereof and may be amended only by a writing signed on behalf
of each party and shall be effective only to the extent set forth in that
writing. No delay by Agent in exercising any power or right hereunder shall
operate as a waiver thereof or of any other power or right; nor shall any single
or partial exercise of any power or right preclude other or future exercise
thereof, or the exercise of any other power or right hereunder. No waiver shall
be deemed to be made by Agent of any of its rights hereunder unless the same
shall be in writing signed on behalf of Agent, and each waiver, if any, shall be
a waiver only with respect to the specific instance involved and shall not
impair the rights of Agent or the Lenders or the obligations of the Guarantor to
Agent or the Lenders in any other respect at any other time.
13. SUCCESSORS. This agreement shall be immediately binding upon the
Guarantor, and the successors of the Guarantor. Agent, in accordance with the
terms of the Credit Agreement, may assign this Guaranty or any of its rights and
powers hereunder, with all or any of the obligations hereby guaranteed, and may
assign and/or deliver to any such assignee any of the security herefor and, in
the event of such assignment, the assignee hereof or of such rights and powers
and of such security, if any such security be so assigned and/or delivered,
shall have the same rights and remedies as if originally named herein in place
of Agent, and Agent shall be thereafter fully discharged from all responsibility
with respect to any such Security so assigned and/or delivered.
14. GOVERNING LAW; JURISDICTION. This Guaranty shall be governed by
and construed in accordance with the laws of the State of New York. The
undersigned consent(s) to the nonexclusive jurisdiction and venue of the state
or federal courts located in such state. In the event of a dispute hereunder,
suit may be brought against the undersigned in such courts or in any
jurisdiction where the undersigned or any of its assets may be located. Service
of process by Agent in connection with any dispute shall be binding on the
undersigned if sent to the undersigned by registered mail at the address(es)
specified below or to such further address(es) as the undersigned may specify to
Agent in writing.
15. GUARANTOR WAIVERS. EACH GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY
RIGHT TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
GUARANTY, AND AGREES THAT ANY SUCH DISPUTE SHALL, AT AGENT'S OPTION, BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
IN ADDITION, EACH GUARANTOR WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE
BASED UPON ANY STATUTE OF LIMITATIONS OR ANY CLAIM OF
5
DELAY BY AGENT AND ANY SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.
IN WITNESS WHEREOF, the Guarantor has executed this instrument or has
caused this instrument to be duly executed by its proper officer(s) or
partner(s) the 24th day of October, 2002.
HARDINGE TECHNOLOGY SYSTEMS, INC.
Address for notices:
One Hardinge Drive By: /s/ J. XXXXXXX XXXXX
Xxxxxxxxxx, Xxx Xxxx 00000 ---------------------------------
Attn: Chief Executive Officer J. Xxxxxxx Xxxxx, President
Telecopier No.: (000) 000-0000
6
STATE OF NEW YORK )
ss.:
COUNTY OF CHEMUNG )
On the 23rd day of October, in the year 2002, before me, the
undersigned, a Notary Public in and for said State, personally appeared J.
Xxxxxxx Xxxxx, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.
/s/ XXXXXXX X. XXXXX
----------------------------------------
Notary Public
7
[JPMORGAN CHASE LOGO]
SECURITY AGREEMENT
The undersigned executes and delivers this Security Agreement (the
"SECURITY AGREEMENT") to JPMORGAN CHASE BANK, having an office located at 0000
Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000, as agent for the Lenders (as defined below)
(the "AGENT") in consideration of one or more loans, letters of credit or other
financial accommodation made, issued or extended by the Lenders or any of them
to HARDINGE INC., a New York corporation (the "BORROWER") or to any person in
respect of whose Liabilities (as defined below) the undersigned now or hereafter
guarantees or otherwise becomes liable for payment. Accordingly, the Agent shall
have the rights, remedies and benefits hereinafter set forth.
1. DEFINITIONS. The term "LIABILITIES" shall include any and all
indebtedness, obligations and liabilities of the Borrower to any of the Banks
(as defined below) and/or the Agent and/or other financial institutions and also
to others to the extent of their participations granted to or interests therein
created or acquired for them by the Banks or Agent, arising under (i) that
certain Multicurrency Credit Agreement dated as of the date hereof, among
Hardinge Inc. and the Agent and the Banks signatory thereto and each other
financial institution which from time to time becomes a party thereto
(individually a "BANK" and collectively, the "BANKS"), and as the same may be
amended from time to time (the "CREDIT AGREEMENT"), (ii) certain credit
facilities made available by JPMorgan Chase Bank or KeyBank National Association
to Hardinge Inc. for foreign exchange, letters of credit and derivative products
and exposures, including without limitation interest rate swap agreements or
other rate protection or hedge agreements or mechanisms and the documents
executed in connection with any of the above now or hereafter existing, and
(iii) certain guarantees to JPMorgan Chase Bank and/or its subsidiaries and
affiliates, including without limitation, JPMorgan Leasing, in connection with
the purchase of the undersigned's customer notes by such entity and the
documents executed in connection with any of the above now or hereafter existing
(the Banks and those other banks and financial institutions set forth above
shall be collectively referred to as the "Lenders" and each individually, a
"Lender").
The term "COLLATERAL" means all of the following personal property of the
undersigned, whether now or hereafter existing or now owned or hereafter
acquired and wherever located, of every kind and description, tangible or
intangible, including: the balance of every deposit account, now or hereafter
existing, of the undersigned with any of the Banks and any other claim of the
undersigned against any of the Banks or Agent, now or hereafter existing, all
moneys, including without limitation, investment property, securities and other
property and the proceeds thereof, now or hereafter held or received by, or in
transit to the Agent, or any of the Lenders, and all of the undersigned's
accounts, contract rights, goods (including equipment, machinery and inventory),
instruments (including customer notes), documents, chattel paper, letter of
credit rights, and general intangibles, including, without limitation, (i) all
inventions used by the undersigned in the undersigned's business, including
without limitation, all inventions described on SCHEDULE A
-2-
attached hereto (collectively, the "INVENTIONS"), (ii) all letters patent issued
on and applications for letters patent filed in connection with the Inventions
whether issued to or filed by the undersigned or to or by another and
subsequently assigned to the undersigned, including without limitation, all
letters patent described on SCHEDULE A, together with any reissue, continuation,
continuation-in-art or extension thereof (collectively, the "LETTERS PATENT"),
(iii) the applications therefor, including without limitation, all applications
described on Schedule A (collectively, the "APPLICATIONS"), (iv) all licenses
for the use of the Letters Patent, including without limitation, all licenses
described on Schedule A (collectively, the "LICENSES") and all proceeds of (i)
through (iv) in any form collectively, including without limitation, any claim
by the undersigned against third parties for past, present or future
infringement or dilution of any of the Letters Patent, (v) all marks used by the
undersigned in the undersigned's business, including without limitation, all
marks listed on SCHEDULE B hereto (collectively, the "MARKS" whether trademarks
or service marks), (vi) all licenses for the use of the Marks, including without
limitation, all licenses described on Schedule B (collectively, the "LICENSES"),
(vii) all goodwill associated with the Marks or with the use of each Xxxx and
License, (viii) all registrations, certificates of registrations (and similar
documents) and applications for registrations of the Marks, whether issued or
pending before the United States Patent and Trademark Office, the Secretary of
State of the State of New York, a governmental body of any other state,
commonwealth, district or territory of the United States, whether issued to or
filed by the undersigned or to or by another and subsequently assigned to the
undersigned, including without limitation, all registration, certificates of
registration and applications for registration described on Schedule B, together
with any renewals thereof (collectively, the "REGISTRATIONS") and all proceeds
of (v) through (viii) in any form, including without limitation, any claim by
the undersigned against third parties for past, present or future infringement
or dilution of any of the Marks and of any Marks licensed under any License, or
for injury to the goodwill associated with the Marks, Registrations or Marks
licensed under any License, and including any other property, rights and
interests of the undersigned with respect to any of the foregoing and shall
include any insurance policies therefor and the supporting obligations,
proceeds, products and accessions of and to any thereof.
The term "OBLIGOR" means the undersigned or any maker, drawer, acceptor,
indorser, guarantor, surety, accommodation party or other person liable upon or
for any of the Liabilities or Collateral.
Unless the context otherwise requires, all terms used herein which are
defined in the Uniform Commercial Code shall have the meanings therein stated.
2. GRANT OF SECURITY INTEREST. As security for the payment of the
Liabilities and as security for the undersigned's guarantee of such Liabilities,
the undersigned hereby grant(s) to the Agent, for the benefit of the Lenders and
itself as Agent, a security interest in, a general lien upon and/or right of
set-off against the Collateral.
-3-
3. MAINTENANCE OF COLLATERAL. At any time and from time to time, the
undersigned will: (a) deliver and pledge to the Agent, indorsed and/or
accompanied by such instruments of assignment and transfer in such form and
substance as the Agent may request, any and all instruments, documents and/or
chattel paper as the Agent may specify in its demand; (b) give, execute,
deliver, file, authorize to file and/or record any notice, statement,
instrument, document, agreement or other papers that may be necessary or
desirable, or that the Agent may request, in order to create, preserve, perfect,
or validate any security interest granted pursuant hereto or to enable the Agent
to exercise and enforce its rights hereunder or with respect to such security
interest; (c) keep and stamp or otherwise xxxx any and all documents and chattel
paper and its individual books and records relating to inventory, accounts and
contract rights in such manner as the Agent may require; (d) permit
representatives of the Agent at any time to inspect its inventory and to inspect
and make abstracts from the undersigned books and records pertaining to
inventory, accounts, contract rights, chattel paper, instruments and documents;
(e) obtain the Agent's consent prior to any change of name, address, legal
entity status, state of organization, location of books and records or location
of Collateral other than with respect to a change in location of goods
(including inventory, equipment and machinery) in the ordinary course of the
undersigned's business; (f) defend the Collateral against all claims and demands
of third parties at any time claiming the same or any interest therein, except
buyers of inventory in the ordinary course of the undersigned's business and, at
its own expense, will bring suit in the name of the undersigned at the request
of the Agent for infringement against infringers of the letters patent and any
letters patent then granted on the Applications, provided, the Agent, if the
Agent finds it necessary or desirable, may prosecute others for infringement and
may join the undersigned as party-plaintiffs; (g) will notify the Agent of (i)
the material loss or damage to the Collateral or of any material adverse change
in the undersigned's business or the Collateral, (ii) any suit for infringement
brought against the undersigned with respect to the Letters Patent, the
Applications or the Marks and in each instance shall promptly furnish the Agent
copies of all documents in connection with any such suit, (iii) any application
for reissue of any Letters Patent and any letters patent when issued and of any
interference or other proceeding involving any of the Collateral and (iv) if the
Marks are registered, notice of such fact in the manner prescribed by Section
1111 of Title 15 of the United States Code, or by state law, if applicable; (h)
xxxx or cause to be marked all articles, devices and machines made or sold by
it, covered by letters patent and any letters patent when issued, with the word
"Patent" and the number of any such patent or patents applicable thereto except
where such marking would damage the article, device or machine, or if such
article or device is an internal part of another machine or device, or such
other notices required by law; and (i) cooperate with the Agent in obtaining
control of collateral consisting of deposit accounts or electronic chattel
paper, including, but not limited to entering into one or more control
agreements or assignments as the Agent may request. The right is expressly
granted to the Agent, at its discretion, to notify warehousemen or any other
persons in possession of Collateral of the Agent's security interest therein and
to obtain an acknowledgment thereof from such third person and to file one or
more financing statements under the Uniform Commercial Code naming the
undersigned as debtor and the Agent as secured party and indicating therein the
types or describing the items of Collateral herein specified. A photographic or
other reproduction of this Security Agreement shall be sufficient as a financing
statement. Without the prior written consent of the Agent, the
-4-
undersigned will not file or authorize or permit to be filed in any jurisdiction
any such financing or like statement in which the Agent is not named as the sole
secured party. With respect to the Collateral, or any part thereof, which at any
time shall come into the possession or custody or under the control of the Agent
or any of its agents, associates or correspondents, for any purpose, the right
is expressly granted to the Agent, at its reasonable discretion, to transfer to
or register in the name of itself or its nominee any of the Collateral; to
exchange any of the Collateral for other property upon any reorganization,
recapitalization or other readjustment and in connection therewith to deposit
any of the Collateral with any committee or depositary upon such terms as it may
determine; to notify any account debtor or obligor on an instrument to make
payment to the Agent for the benefit of the Banks; and to enforce obligations of
such account debtor or obligor and to exercise or cause its nominee to exercise
all or any powers with respect to the Collateral with same force and effect as
an absolute owner thereof; all without notice (except such notice as may be
required by applicable law and cannot be waived) and without liability except to
account for property actually received by it. The Collateral will remain
personalty and will not be permanently affixed to real estate without the prior
consent of the Agent. SCHEDULE C attached hereto sets forth all of the currently
operating leased locations of Collateral of the undersigned. The undersigned
will provide disclaimers of interest and removal agreements from each landlord
of a location set forth in Schedule C, in form satisfactory to the Agent, signed
by such Landlord within thirty (30) days from the date hereof. In the event the
undesigned enters into any leases after the date of this Security Agreement, the
undersigned, simultaneously with the execution and delivery of such lease, will
deliver to Agent a disclaimer of interest and removal agreement from such
landlord, in form satisfactory to Agent. In addition, prior to any closing of
mortgage financing on any real property of the undersigned, the undersigned will
provide a disclaimer of interest and removal agreement from the proposed
mortgagee with respect to such real property in form satisfactory to the Agent.
4. INSURANCE. The undersigned shall keep insured all Collateral which is
tangible property for full value, with such coverage as the Agent may approve,
at the undersigned's expense, and, upon the Agent's request, the policies shall
be duly endorsed in the Agent's favor as its interest may appear and delivered
to the Agent. If the undersigned shall default in this regard, the Agent shall
have the right to insure and charge the cost to the undersigned. The Agent
assumes no risk or responsibility in connection with the payment or nonpayment
of losses, the Agent's only responsibility being to credit the undersigned with
any insurance payment received on account of losses. In the event of any default
under this Security Agreement, the Agent shall have power of attorney to cancel,
assign or surrender any insurance policy or policies and to collect the return
premiums due thereon and to apply the proceeds thereof to the Liabilities
secured hereby. The undersigned will immediately notify the Agent in writing of
any damage to or loss of any of the Collateral which is tangible property.
5. COLLECTION AND DISPOSITION. The Agent at its discretion may, or upon
direction of the Banks shall, whether any of the Liabilities be due, in its name
or in the name of the undersigned or otherwise, demand, xxx for, collect or
receive any money or property at any time payable or receivable on account of or
in exchange for, or make any compromise or settlement deemed
-5-
desirable with respect to, any of the Collateral, but shall be under no
obligation to do so, or the Agent may, or upon direction of the Banks shall,
extend the time of payment, arrange for payment in installments, or otherwise
modify the terms of, or release, any of the Collateral, without thereby
incurring responsibility to, or discharging or otherwise affecting any liability
of, the undersigned. The Agent shall not be required to take any steps necessary
to preserve any rights against prior parties to any of the Collateral. The Agent
may use or operate any of the Collateral for the purpose of preserving the
Collateral or its value in the manner and to the extent the Agent deems
appropriate, and the Agent may render the Collateral unusable or dispose of the
Collateral in a commercially reasonable manner.
Upon default hereunder or in connection with any of the Liabilities
(whether such default be that of the undersigned or of any other party obligated
thereon), the undersigned shall, at the request of the Agent, assemble the
Collateral at such place or places as the Agent designates in its request, and,
to the extent permitted by applicable law, the Agent shall have the right, with
or without legal process and with or without prior notice or demand, to take
possession of the Collateral or any part thereof and to enter any premises for
the purpose of taking possession thereof. The Agent shall have the rights and
remedies with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not such Code is in effect in the jurisdiction where
the rights and remedies are asserted).
In addition, upon default hereunder or in connection with any of the
Liabilities, with respect to the Collateral, or any part thereof, which shall
then be or shall thereafter come into the possession or custody of the Agent or
any of its agents, associates or correspondents, the Agent may sell or cause to
be sold at any location selected by it and reasonable under the circumstances,
in one or more sales or parcels, at such price as the Agent may deem best, and
for cash or on credit or for future delivery, without assumption of any credit
risk, all or any of the Collateral, at any broker's board or at public or
private sale, in any reasonable manner permissible under the Uniform Commercial
Code (except that, to the extent permitted thereunder, the undersigned hereby
waives the requirements of said Code), and the Agent or any of the Lenders or
anyone else may be the purchaser of any or all of the Collateral so sold and
thereafter hold the same absolutely, free from any claim or right of whatsoever
kind, including any equity or redemption, of the undersigned, any such demand,
notice or right and equity being hereby expressly waived and released. The Agent
(i) shall have no obligation to clean up or otherwise prepare the Collateral for
sale, (ii) may comply with any applicable law requirements in connection with
the disposition of the Collateral, (iii) may sell the Collateral without giving
any warranties, and any of such actions or inaction will not be considered
adversely to affect the commercial reasonableness of any sale of the Collateral.
The undersigned will pay to the Agent all reasonable expenses (including
reasonable attorneys' fees and legal expenses incurred by the Agent) of, or
incidental to, the enforcement of any of the provisions hereof or of any of the
Liabilities, or any actual or attempted sale, or any exchange, enforcement,
collection, compromise or settlement of any of the Collateral or receipt of the
proceeds thereof, by litigation or otherwise, including expense of insurance;
and all such expenses shall be Liabilities secured by this Security Agreement.
The Agent, at any time, at its option may, or upon direction of the Banks shall,
apply the
-6-
net cash receipts from the Collateral to the payment of principal of and/or
interest on any of the Liabilities, whether or not then due, making proper
rebate of interest or discount. Notwithstanding that the Agent, whether in its
own behalf and/or on behalf of another or others, may continue to hold the
Collateral and regardless of the value thereof, the undersigned shall be and
remain liable for the payment in full, principal and interest, of any balance of
the Liabilities and expenses at any time unpaid. The Agent may exercise its
rights with respect to the Collateral without resorting to or regard to other
collateral or sources of reimbursement for the Liabilities.
6. REPRESENTATIONS AND WARRANTIES. If the undersigned is other than an
individual, the undersigned represents and warrants that: (a) it is duly
organized and validly existing under the laws of the jurisdiction of its
organization or incorporation as such is set forth on signature pages hereto
along with its tax identification or organizational number, if necessary, and,
if relevant under such laws, in good standing; (b) it has the power to execute
and deliver this Security Agreement and to perform its obligations hereunder and
has taken all necessary action to authorize such execution, delivery and
performance; (c) such execution, delivery and performance do not violate or
conflict with any law applicable to it, any provision of its organizational
documents, any order or judgment of any court or other agency of government
applicable to it or any of its assets or any material contractual restriction
binding on or materially affecting it or any of its assets; (d) to the best of
the undersigned's knowledge, all governmental and other consents that are
required to have been obtained by it with respect to this Security Agreement
have been obtained and are in full force and effect and all conditions of any
such consents have been complied with; (e) its obligations under this Security
Agreement constitute its legal, valid and binding obligations, enforceable in
accordance with its terms except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency or other similar laws affecting
creditors' rights generally; (f) the undersigned is the owner of the Collateral
with good and indefeasible title thereto, free and clear of all liabilities,
mortgages, security interests, liens, pledges or encumbrances, and the Letters
Patent, the Applications and the Marks are subsisting and there are no suits or
actions commenced or threatened against the undersigned with respect to the
Letters Patent the Applications or the Marks; (g) all financial statements and
related information furnished and to be furnished to the Agent or the Lenders
from time to time by the undersigned are true and complete and fairly present
the financial or other information stated therein as at such dates or for the
periods covered thereby; (h) there are no actions, suits, proceedings or
investigations pending or, to the knowledge of the undersigned, threatened
against or affecting the undersigned before any court, governmental agency or
arbitrator, which involve forfeiture of any assets of the undersigned or which
may materially adversely affect the financial condition, operations, properties
or business of the undersigned or the ability of the undersigned to perform its
obligation under this Security Agreement; and (i) there has been no material
adverse change in the financial condition of the undersigned since the last such
financial statements or information.
-7-
7. DEFAULT. IF any of the following events of default shall occur (each
an "EVENT OF DEFAULT"):
(a) any Obligor shall default and there shall be a continuance thereof in
the performance of any of its agreements herein after twenty (20) days
notice thereof by Agent or in the Credit Agreement or in any
instrument or document delivered pursuant to this Security Agreement
or the Liabilities (including a failure to comply with the preceding
paragraph) beyond any applicable notice and grace periods;
(b) any Obligor
(i) shall generally not, or be unable to, or shall admit in
writing its inability to, pay its debts as such debts become
due;
(ii) shall make an assignment for the benefit of creditors;
(iii) shall file a petition in bankruptcy or for any relief under
any law of any jurisdiction relating to reorganization,
arrangement, readjustment of debt, dissolution or liquidation;
(iv) shall have any such petition filed against it and the same
shall remain undismissed for a period of 90 days or shall
consent or acquiesce thereto; or
(v) shall have had a receiver, custodian or trustee appointed for
all or a substantial part of its property.
THEN, unless and to the extent that the Lenders shall otherwise elect, all of
the Liabilities shall become and be due and payable forthwith. THE RIGHTS OF THE
AGENT AND THE LENDERS SET FORTH IMMEDIATELY ABOVE ARE WITHOUT LIMITATION OF, AND
IN ADDITION TO, ANY OTHER RIGHT OF THE AGENT OR THE LENDERS UNDER ANY OTHER
DOCUMENT EVIDENCING OR EXECUTED IN CONNECTION WITH THE LIABILITIES (INCLUDING
BUT NOT LIMITED TO ANY RIGHT OF ACCELERATION OF PAYMENT PURSUANT TO THE
PROVISIONS THEREOF OR ANY RIGHT OF THE AGENT OR THE LENDERS TO MAKE DEMAND FOR
PAYMENT THEREUNDER WITHOUT REFERENCE TO ANY PARTICULAR CONDITION OR EVENT).
8. SETOFF. In the event that any amount becomes due and payable hereunder
and the Agent shall have demanded payment thereof from the undersigned, in
addition to all other rights and remedies, the Agent and each of the Lenders
(including subsidiaries and each and every affiliate) is hereby irrevocably
authorized, without prior notice to the undersigned, to set off any balances
held for the account of or any other liability owing by any such Lender or Agent
or any such affiliate to the undersigned at any of the Agent's or Lenders' (or
such subsidiary's or affiliate's) offices, in dollars or any other currency,
against any of the obligations of the undersigned to the Lenders or Agent, as
the such Lender or Agent may elect.
9. NOTICES. All notices, requests, demands or other communications to or
upon the undersigned or the Agent shall be in writing and shall be deemed to be
delivered upon receipt if delivered by hand or overnight courier or five days
after mailing to the address (a) of the undersigned set forth below the
undersigned's execution of this Security Agreement, (b) of the Agent as first
set
-8-
forth above, or (c) of the undersigned or the Agent at such other address as the
undersigned or the Agent shall specify to the other in writing.
10. ENTIRE AGREEMENT, AMENDMENT AND WAIVER. This Security Agreement
constitutes the entire agreement between the undersigned and the Agent in
respect of the subject matter hereof and may be amended only by a writing signed
on behalf of each party and shall be effective only to the extent set forth in
that writing. No delay by the Agent or any of the Lenders in exercising any
power or right hereunder shall operate as a waiver thereof or of any other power
or right; nor shall any single or partial exercise of any power or right
preclude other or future exercise thereof, or the exercise of any other power or
right hereunder.
11. GENERAL WAIVERS. The undersigned hereby waives presentment, notice of
dishonor and protest of all instruments included in or evidencing the
Liabilities or the Collateral and any and all other notices and demands
whatsoever, whether or not relating to such instruments (the "SECURED
DOCUMENTS"). The undersigned waives all demands, notices and protests of every
kind which are not expressly required under this Security Agreement which are
permitted by law to be waived, and which would, if not waived, impair the
Agent's enforcement of this Security Agreement or release any Collateral from
the Agent's security interest hereunder. By way of example, but not in
limitation of the Agent's rights under this Security Agreement, the Agent does
not have to give the undersigned notice of any of the following:
(a) notice of acceptance of this Security Agreement;
(b) notice of loans made, credit extended, Collateral received or
delivered;
(c) any Event of Default (except as otherwise expressly provided herein);
(d) any action which the Agent does or does not take regarding any Obligor
or any other person or any other collateral securing the Liabilities;
(e) except as otherwise provided herein, enforcement of this Security
Agreement against the Collateral; or
(f) any other action taken in reliance on this Security Agreement.
The undersigned waives all rules of suretyship law and any other law
whatsoever which is legally permitted to be waived and which would, if not
waived, impair the Agent's enforcement of its security interests. By way of
example, but not in limitation of the Agent's rights under this Security
Agreement, the Agent or the Banks, as set forth in the Credit Agreement, may do
any of the following without notice to the undersigned except to the extent that
notice to the undersigned is required under another Secured Document or in each
case in which the agreement of such undersigned is required because such
undersigned is a principal party to a Liability and, as a matter of contract,
the agreement of such undersigned is required:
(a) change, renew or extend the time for repayment of all or any part of
the Liabilities;
(b) change the rate of interest or any other provisions with respect to
all or any part of the Liabilities;
-9-
(c) release, surrender, sell or otherwise dispose of any money or property
which is in the Agent's possession as collateral security for the
Liabilities;
(d) fail to perfect any security interest in any Collateral;
(e) release or discharge any party liable to the Agent or any of the Banks
in whole or in part for the Liabilities, or accept any additional
parties or guarantors;
(f) delay or refrain from exercising any of the Agent's or the Banks'
rights;
(g) settle or compromise any and all claims pertaining to the Liabilities
and the Collateral; and
(h) apply any money or property of the undersigned or that of any other
party liable to the Agent for any part of the Liabilities in any order
the Banks choose.
THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO
THE FULL EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT TO A TRIAL BY JURY OF ANY
DISPUTE ARISING UNDER OR RELATING TO THIS SECURITY AGREEMENT, AND AGREES THAT
ANY SUCH DISPUTE SHALL, AT THE AGENT'S OPTION, BE TRIED BEFORE A JUDGE SITTING
WITHOUT A JURY.
IN ADDITION, THE UNDERSIGNED WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE
BASED UPON ANY STATUTE OF LIMITATIONS OR ANY CLAIM OF DELAY BY THE AGENT AND ANY
SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.
12. RIGHTS CUMULATIVE. The rights, powers and remedies granted to the
Agent or the Lenders herein shall be cumulative and in addition to any rights,
powers and remedies to which the Agent or the Lenders may be entitled either by
operation of law or pursuant to any other document or instrument delivered or
from time to time to be delivered to the Agent in connection with any of the
Liabilities.
13. GOVERNING LAW; JURISDICTION. This Security Agreement shall be governed
by and construed in accordance with the laws of the State of New York. The
undersigned consent(s) to the nonexclusive jurisdiction and venue of the state
or federal courts located in such state. In the event of a dispute hereunder,
suit may be brought against the undersigned in such courts or in any
jurisdiction where the undersigned or any of its assets may be located. Service
of process by the Agent in connection with any dispute shall be binding on the
undersigned if sent to the undersigned by registered mail at the address(es)
specified below or to such further address(es) as the undersigned may specify to
the Agent in writing.
14. ASSIGNMENT. In accordance with the terms of the Credit Agreement, the
Banks and the Agent may assign, transfer and/or deliver to any transferee of any
of the Liabilities any or all of the Collateral, and thereafter shall be fully
discharged from all responsibility with respect to the Collateral so assigned,
transferred and/or delivered. Such transferee shall be vested with all the
powers and rights of such party hereunder with respect to such Collateral, but
such party shall retain
-10-
all rights and powers hereby given with respect to any of the Collateral not so
assigned, transferred or delivered.
15. WAIVER OF PRESENTMENT, ETC. The undersigned hereby waive(s)
presentment, notice of dishonor and protest of all instruments included in or
evidencing the Liabilities or the Collateral and any and all other notices and
demands whatsoever, whether or not relating to such instruments.
16. MISCELLANEOUS. The undersigned, if more than one, shall be jointly and
severally liable hereunder and all provisions hereof regarding the Liabilities
or Collateral of the undersigned shall apply to any Liability or any Collateral
of any or all of them. JPMorgan Chase Bank shall act for itself and its
affiliates and the Lenders as collateral agent hereunder. This Security
Agreement shall be binding upon the heirs, executors, administrators, assigns or
successors of the undersigned; shall constitute a continuing agreement, applying
to all existing as well as future transactions between the Agent and the
undersigned that shall be at any time closed; and shall so continue in force
notwithstanding any change in any partnership party hereto, whether such change
occurs through death, retirement or otherwise.
17. INTERCREDITOR AGREEMENT. Certain provisions of this Security Agreement
are subject to the provisions of the Intercreditor Agreement between JPMorgan
Chase Bank, as Agent for the Banks under that certain Term Loan Agreement with
Hardinge, Inc. dated as of the date hereof, as amended from time to time ("TERM
LOAN AGREEMENT") and the Agent dated of even date herewith, as the same may be
amended from time to time ("INTERCREDITOR AGREEMENT"). In the event of any
conflict between the express terms and conditions of this Security Agreement and
the express terms and conditions of the Intercreditor Agreement, the
Intercreditor Agreement shall control, PROVIDED that this paragraph shall in no
way benefit the undersigned or any successor or assign of the undersigned,
including, without limitation, a debtor in possession or any trustee for the
estate created by the commencement of any Insolvency or Liquidation Proceeding.
All capitalized terms used in this paragraph, but not otherwise defined in this
Security Agreement, shall have the meanings set forth in the Intercreditor
Agreement.
[Signature Page Follows]
-11-
IN WITNESS WHEREOF, the undersigned has executed this instrument or has
caused this instrument to be duly executed by its proper officer(s) as of this
24th day of October, 2002.
HARDINGE TECHNOLOGY SYSTEMS, INC.
Address for notices:
One Hardinge Drive By: J. XXXXXXX XXXXX
Xxxxxxxxxx, Xxx Xxxx 00000 -----------------------------
Attn: Chief Executive Officer J. Xxxxxxx Xxxxx
Telecopier No.: (000) 000-0000
State of Organization: New York
Tax ID/Organizational Number: 00-0000000
SCHEDULE A
Patents
None
SCHEDULE B
Trademarks and Service Marks
None
SCHEDULE C
Leased Locations
PROMISSORY NOTE
$2,830,189.00 October 24, 0000
Xxx Xxxx, Xxx Xxxx
HARDINGE INC. (the "Borrower"), a corporation organized under the laws of
New York, for value received, hereby promises to pay to the order of NBT BANK,
NATIONAL ASSOCIATION (the "Bank") at the principal office of JPMorgan Chase Bank
at Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other place as
required by the Credit Agreement referred to below, for the account of the
appropriate Lending Office of the Bank, the principal amount of Two Million
Eight Hundred Thirty Thousand One Hundred Eighty-nine and no/100 Dollars
($2,830,189.00) in lawful money of the United States of America and in
immediately available funds, on the date(s) and in the manner provided in the
Credit Agreement referred to below. The Borrower also promises to pay interest
on the unpaid principal balance of the Loan in like money, for the period such
balance is outstanding, at said principal office for the account of said Lending
Office of the Bank, at the rates of interest as provided in the Credit
Agreement, on the dates and in the manner provided in said Credit Agreement.
The date and amount of the Loan made by the Bank to the Borrower under
the Credit Agreement referred below, interest rate, Currency, Interest Period,
maturity date and each payment of principal thereof, shall be recorded by the
Bank on its books and, prior to any transfer of this Note (or, at the discretion
of the Bank, at any other time), endorsed by the Bank on the schedule attached
hereto or any continuation thereof; provided, however, the failure of the Bank
to make any such recordation or endorsement shall not affect the obligations of
the Borrower to make payment when due of any amount owing under the Credit
Agreement or hereunder in respect of the Loans made by the Bank.
This is one of the Notes referred to in that certain Multicurrency
Credit Agreement (as amended from time to time the "Credit Agreement") dated as
of October 24, 2002 among the Borrower, the Banks named therein (including the
Bank), the Documentation Agent and the Agent and evidences the Loan made by the
Bank thereunder. All terms not defined herein shall have the meanings given to
them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence of certain Events of Default and for prepayments
on the terms and conditions specified therein.
The Borrower waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note. THE BORROWER WAIVES TO THE
FULL EXTENT PERMITTED BY APPLICABLE LAW THE RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.
This Note shall be governed by, and interpreted and construed in
accordance with, the laws of the State of New York, including Section 5-1401 of
the New York General Obligations Law (or any similar successor provision
thereto) but excluding all other conflict-of-law rules.
HARDINGE INC.
By /s/ J. XXXXXXX XXXXX
-------------------------------------
J. Xxxxxxx Xxxxx, President
and Chief Executive Officer
SCHEDULE TO NOTE
Date Made or Principal Amount Interest Rate Maturity Date Balance Notation By
Repaired & Currency Outstanding
------------ ---------------- ------------- ------------- ----------- -----------
PROMISSORY NOTE
$9,339,623.00 October 24, 0000
Xxx Xxxx, Xxx Xxxx
HARDINGE INC. (the "Borrower"), a corporation organized under the
laws of New York, for value received, hereby promises to pay to the order of
JPMORGAN CHASE BANK (the "Bank") at its principal office at Xxx Xxxxx Xxxxxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other place as required by the Credit
Agreement referred to below, for the account of the appropriate Lending Office
of the Bank, the principal amount of Nine Million Three Hundred Thirty-nine
Thousand Six Hundred Twenty-three and no/100 Dollars ($9,339,623.00) in lawful
money of the United States of America and in immediately available funds, on the
date(s) and in the manner provided in the Credit Agreement referred to below.
The Borrower also promises to pay interest on the unpaid principal balance of
the Loan in like money, for the period such balance is outstanding, at said
principal office for the account of said Lending Office of the Bank, at the
rates of interest as provided in the Credit Agreement, on the dates and in the
manner provided in said Credit Agreement.
The date and amount of the Loan made by the Bank to the Borrower under
the Credit Agreement referred below, interest rate, Currency, Interest Period,
maturity date and each payment of principal thereof, shall be recorded by the
Bank on its books and, prior to any transfer of this Note (or, at the discretion
of the Bank, at any other time), endorsed by the Bank on the schedule attached
hereto or any continuation thereof; provided, however, the failure of the Bank
to make any such recordation or endorsement shall not affect the obligations of
the Borrower to make payment when due of any amount owing under the Credit
Agreement or hereunder in respect of the Loans made by the Bank.
This is one of the Notes referred to in that certain Multicurrency
Credit Agreement (as amended from time to time the "Credit Agreement") dated as
of October 24, 2002 among the Borrower, the Banks named therein (including the
Bank), the Documentation Agent and the Agent and evidences the Loan made by the
Bank thereunder. All terms not defined herein shall have the meanings given to
them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence of certain Events of Default and for prepayments
on the terms and conditions specified therein.
The Borrower waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note. THE BORROWER WAIVES TO THE
FULL EXTENT PERMITTED BY APPLICABLE LAW THE RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.
This Note shall be governed by, and interpreted and construed in
accordance with, the laws of the State of New York, including Section 5-1401 of
the New York General Obligations Law (or any similar successor provision
thereto) but excluding all other conflict-of-law rules.
HARDINGE INC.
By /s/ J. XXXXXXX XXXXX
------------------------------------
J. Xxxxxxx Xxxxx, President
and Chief Executive Officer
SCHEDULE TO NOTE
Date Made or Principal Amount Interest Rate Maturity Date Balance Notation By
Repaired & Currency Outstanding
------------ ---------------- ------------- ------------- ----------- -----------
PROMISSORY NOTE
$8,915,094.00 October 24, 0000
Xxx Xxxx, Xxx Xxxx
HARDINGE INC. (the "Borrower"), a corporation organized under the laws
of New York, for value received, hereby promises to pay to the order of KEYBANK
NATIONAL ASSOCIATION (the "Bank") at the principal office of JPMorgan Chase Bank
at Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other place as
required by the Credit Agreement referred to below, for the account of the
appropriate Lending Office of the Bank, the principal amount of Eight Million
Nine Hundred Fifteen Thousand Ninety-four and no/100 Dollars ($8,915,094.00) in
lawful money of the United States of America and in immediately available funds,
on the date(s) and in the manner provided in the Credit Agreement referred to
below. The Borrower also promises to pay interest on the unpaid principal
balance of the Loan in like money, for the period such balance is outstanding,
at said principal office for the account of said Lending Office of the Bank, at
the rates of interest as provided in the Credit Agreement, on the dates and in
the manner provided in said Credit Agreement.
The date and amount of the Loan made by the Bank to the Borrower under
the Credit Agreement referred below, interest rate, Currency, Interest Period,
maturity date and each payment of principal thereof, shall be recorded by the
Bank on its books and, prior to any transfer of this Note (or, at the discretion
of the Bank, at any other time), endorsed by the Bank on the schedule attached
hereto or any continuation thereof; provided, however, the failure of the Bank
to make any such recordation or endorsement shall not affect the obligations of
the Borrower to make payment when due of any amount owing under the Credit
Agreement or hereunder in respect of the Loans made by the Bank.
This is one of the Notes referred to in that certain Multicurrency
Credit Agreement (as amended from time to time the "Credit Agreement") dated as
of October 24, 2002 among the Borrower, the Banks named therein (including the
Bank), the Documentation Agent and the Agent and evidences the Loan made by the
Bank thereunder. All terms not defined herein shall have the meanings given to
them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence of certain Events of Default and for prepayments
on the terms and conditions specified therein.
The Borrower waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note. THE BORROWER WAIVES TO THE
FULL EXTENT PERMITTED BY APPLICABLE LAW THE RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.
This Note shall be governed by, and interpreted and construed in
accordance with, the laws of the State of New York, including Section 5-1401 of
the New York General Obligations Law (or any similar successor provision
thereto) but excluding all other conflict-of-law rules.
HARDINGE INC.
By /s/ J. XXXXXXX XXXXX
------------------------------------
J. Xxxxxxx Xxxxx, President
and Chief Executive Officer
SCHEDULE TO NOTE
Date Made or Principal Amount Interest Rate Maturity Date Balance Notation By
Repaired & Currency Outstanding
------------ ---------------- ------------- ------------- ----------- -----------
PROMISSORY NOTE
$8,915,094.00 October 24, 0000
Xxx Xxxx, Xxx Xxxx
HARDINGE INC. (the "Borrower"), a corporation organized under the laws
of New York, for value received, hereby promises to pay to the order of
MANUFACTURERS AND TRADERS TRUST COMPANY (the "Bank") at the principal office of
JPMorgan Chase Bank at Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at
such other place as required by the Credit Agreement referred to below, for the
account of the appropriate Lending Office of the Bank, the principal amount of
Eight Million Nine Hundred Fifteen Thousand Ninety-four and no/100 Dollars
($8,915,094.00) in lawful money of the United States of America and in
immediately available funds, on the date(s) and in the manner provided in the
Credit Agreement referred to below. The Borrower also promises to pay interest
on the unpaid principal balance of the Loan in like money, for the period such
balance is outstanding, at said principal office for the account of said Lending
Office of the Bank, at the rates of interest as provided in the Credit
Agreement, on the dates and in the manner provided in said Credit Agreement.
The date and amount of the Loan made by the Bank to the Borrower under
the Credit Agreement referred below, interest rate, Currency, Interest Period,
maturity date and each payment of principal thereof, shall be recorded by the
Bank on its books and, prior to any transfer of this Note (or, at the discretion
of the Bank, at any other time), endorsed by the Bank on the schedule attached
hereto or any continuation thereof; provided, however, the failure of the Bank
to make any such recordation or endorsement shall not affect the obligations of
the Borrower to make payment when due of any amount owing under the Credit
Agreement or hereunder in respect of the Loans made by the Bank.
This is one of the Notes referred to in that certain Multicurrency
Credit Agreement (as amended from time to time the "Credit Agreement") dated as
of October 24, 2002 among the Borrower, the Banks named therein (including the
Bank), the Documentation Agent and the Agent and evidences the Loan made by the
Bank thereunder. All terms not defined herein shall have the meanings given to
them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence of certain Events of Default and for prepayments
on the terms and conditions specified therein.
The Borrower waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note. THE BORROWER WAIVES TO THE
FULL EXTENT PERMITTED BY APPLICABLE LAW THE RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.
This Note shall be governed by, and interpreted and construed in
accordance with, the laws of the State of New York, including Section 5-1401 of
the New York General Obligations Law (or any similar successor provision
thereto) but excluding all other conflict-of-law rules.
HARDINGE INC.
BY /s/ J. XXXXXXX XXXXX
------------------------------------
J. Xxxxxxx Xxxxx, President
and Chief Executive Officer
SCHEDULE TO NOTE
Date Made or Principal Amount Interest Rate Maturity Date Balance Notation By
Repaired & Currency Outstanding
------------ ---------------- ------------- ------------- ----------- -----------
Execution Copy
[JPMORGAN CHASE LOGO]
TERM LOAN AGREEMENT
Dated as of October 24, 2002
among
HARDINGE INC.
(the "Borrower")
the Banks signatory hereto
JPMORGAN CHASE BANK
as Sole Administrative Agent
and
KEYBANK NATIONAL ASSOCIATION
as Documentation Agent
----------
JPMORGAN CHASE BANK
as Exclusive Advisor, Sole Bookrunner
and Sole Lead Arranger
TABLE OF CONTENTS
TITLE PAGE
----- ----
ARTICLE 1 DEFINITIONS; ACCOUNTING TERMS.........................................................................1
Section 1.01. Definitions....................................................................................1
Section 1.02. Accounting Terms..............................................................................10
ARTICLE 2 THE CREDIT...........................................................................................10
Section 2.01. The Loans.....................................................................................10
Section 2.02. The Notes.....................................................................................11
Section 2.03. Purpose.......................................................................................11
Section 2.04. Borrowing Procedures..........................................................................11
Section 2.05. Prepayments...................................................................................11
Section 2.06. Interest Periods..............................................................................11
Section 2.07. Interest......................................................................................12
Section 2.08. Certain Notices...............................................................................12
Section 2.09. Payments Generally............................................................................12
Section 2.10. Fees..........................................................................................13
ARTICLE 3 YIELD PROTECTION; ILLEGALITY; ETC....................................................................13
Section 3.01. Additional Costs..............................................................................13
Section 3.02. Limitation on Types of Loans..................................................................14
Section 3.03. Illegality....................................................................................15
Section 3.04. Certain Variable Rate Loans pursuant to Sections 3.01 and 3.03................................15
Section 3.05. Compensation..................................................................................15
Section 3.06. Survival......................................................................................15
ARTICLE 4 CONDITIONS PRECEDENT.................................................................................16
Section 4.01. Documentary Conditions Precedent..............................................................16
Section 4.02. Additional Conditions Precedent...............................................................16
ARTICLE 5 REPRESENTATIONS AND WARRANTIES.......................................................................17
Section 5.01. Incorporation, Good Standing and Due Qualification............................................17
Section 5.02. Corporate Power and Authority: No Conflicts...................................................17
Section 5.03. Governmental Approval.........................................................................17
Section 5.04. Legally Enforceable Agreements................................................................17
Section 5.05. Financial Statements..........................................................................17
Section 5.06. Litigation....................................................................................17
Section 5.07. Margin Stock..................................................................................18
Section 5.08. Use of Loan Proceeds..........................................................................18
Section 5.09. Tax Returns...................................................................................18
Section 5.10. ERISA.........................................................................................18
i
Section 5.11. Subsidiaries..................................................................................18
Section 5.12. Ownership and Liens...........................................................................18
Section 5.13. Hazardous Materials...........................................................................19
Section 5.14. No Default on Other Agreements................................................................19
Section 5.15. Partnerships..................................................................................19
Section 5.16. No Forfeiture.................................................................................19
Section 5.17. Solvency......................................................................................20
Section 5.18. Operation of Business.........................................................................20
Section 5.19. No Defaults on Outstanding Judgments or Orders................................................20
Section 5.20. No Defaults on Other Agreements...............................................................20
Section 5.21. Labor Disputes and Acts of God................................................................21
Section 5.22. Governmental Regulation.......................................................................21
ARTICLE 6 AFFIRMATIVE COVENANTS................................................................................21
Section 6.01. Compliance with Laws, Corporate Existence.....................................................21
Section 6.02. Reporting Requirements........................................................................21
Section 6.03. Notice of Proceedings.........................................................................23
Section 6.04. Insurance.....................................................................................23
Section 6.05. Environmental Laws............................................................................23
Section 6.06. Access to Premises and Records................................................................23
Section 6.07. Notice of Default.............................................................................23
Section 6.08. Subsidiaries..................................................................................24
Section 6.09. Material Adverse Changes......................................................................24
Section 6.10. Reports to Other Creditors....................................................................24
Section 6.11. General Information...........................................................................24
ARTICLE 7 NEGATIVE COVENANTS...................................................................................24
Section 7.01. Liens, Etc....................................................................................24
Section 7.02. Lease Obligations.............................................................................26
Section 7.03. Prohibited Transactions.......................................................................26
Section 7.04. Margin Stock..................................................................................26
Section 7.05. Consolidations, Mergers, Acquisitions and Sales of Assets.....................................26
Section 7.06. Affiliate Transactions........................................................................27
Section 7.07. Loans and Advances............................................................................27
Section 7.08. Guaranties....................................................................................27
Section 7.09. No Activities Leading to Forfeiture...........................................................27
ARTICLE 8 FINANCIAL COVENANTS..................................................................................28
Section 8.01. Working Capital...............................................................................28
Section 8.02. Net Worth.....................................................................................28
Section 8.03. Funded Debt...................................................................................28
Section 8.04. Earnings......................................................................................28
Section 8.05. Fixed Charge Ratio............................................................................28
Section 8.06. Customer Notes................................................................................28
ii
ARTICLE 9 EVENTS OF DEFAULT....................................................................................28
Section 9.01. Events of Default.............................................................................28
Section 9.02. Remedies......................................................................................30
ARTICLE 10 THE AGENT; RELATIONS AMONG BANKS AND BORROWER........................................................30
Section 10.01. Appointment, Powers and Immunities of Agent..................................................30
Section 10.02. Reliance by Agent............................................................................31
Section 10.03. Defaults.....................................................................................31
Section 10.04. Rights of Agent as a Bank....................................................................32
Section 10.05. Indemnification of Agent.....................................................................32
Section 10.06. Documents....................................................................................32
Section 10.07. Non-Reliance on Agent and Other Banks........................................................32
Section 10.08. Failure of Agent to Act......................................................................33
Section 10.09. Resignation or Removal of Agent..............................................................33
Section 10.10. Amendments Concerning Agency Function........................................................34
Section 10.11. Liability of Agent...........................................................................34
Section 10.12. Transfer of Agency Function..................................................................34
Section 10.13. Non-Receipt of Funds by the Agent............................................................34
Section 10.14. Withholding Taxes............................................................................34
Section 10.15. Several Obligations and Rights of Banks......................................................35
Section 10.16. Pro Rata Treatment of Loans, Etc.............................................................35
Section 10.17. Sharing of Payments Among Banks..............................................................35
Section 10.18. Other Agents; Advisors and Arrangers.........................................................36
ARTICLE 11 MISCELLANEOUS........................................................................................36
Section 11.01. Amendments and Waivers.......................................................................36
Section 11.02. Usury........................................................................................37
Section 11.03. Expenses and Indemnification.................................................................37
Section 11.04. Survival.....................................................................................37
Section 11.05. Assignment; Participations...................................................................37
Section 11.06. Notices......................................................................................39
Section 11.07. Setoff.......................................................................................39
Section 11.08. Jurisdiction; Immunities.....................................................................39
Section 11.09. Table of Contents; Headings..................................................................40
Section 11.10. Severability.................................................................................40
Section 11.11. Counterparts.................................................................................40
Section 11.12. Integration..................................................................................40
Section 11.13. Governing Law................................................................................40
Section 11.14. Confidentiality..............................................................................40
Section 11.15. Treatment of Certain Information.............................................................41
Section 11.16. Currency.....................................................................................41
iii
vi
v
EXHIBITS
Exhibit A Form of Note
Exhibit B Authorization Letter
Exhibit C Opinion of Counsel for Borrower
Exhibit D Confidentiality Agreement
SCHEDULES
Schedule I Subsidiaries of Borrower
Schedule II Hazardous Materials
iv
TERM LOAN AGREEMENT
TERM LOAN AGREEMENT dated as of October 24, 2002 among HARDINGE INC., a
corporation organized under the laws of New York (the "Borrower"), each of the
banks which is a signatory hereto (individually a "Bank" and collectively the
"Banks"), JPMORGAN CHASE BANK, a New York banking corporation, as sole
administrative agent for the Banks (in such capacity, together with its
successors in such capacity, the "Agent"), and KEYBANK NATIONAL ASSOCIATION, a
national banking association as Documentation Agent for the Banks (in such
capacity, the "Documentation Agent").
The Borrower desires that the Banks extend credit as provided herein and
the Banks are prepared to extend such credit upon the terms hereof. Accordingly,
the Borrower, the Banks, the Agent and the Documentation Agent agree as follows:
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.
Section 1.01. DEFINITIONS. As used in this Agreement the following terms
have the following meanings (terms defined in the singular to have a correlative
meaning when used in the plural and VICE VERSA):
"Additional Costs" shall have the meaning given to such term in Section
3.01 hereof.
"Adjustment Date" means the date which is earlier of (a) the date on which
financial statements are delivered to the Banks as required under Section 6.02
hereof, or (b) the forty-fifth (45th) day after the end of each of the first
three (3) fiscal quarters of each Fiscal Year and the ninetieth (90th) day after
the end of each Fiscal Year, as the case may be.
"Administrative Questionnaire" means the administrative questionnaire in
the form supplied by the Agent.
"Affected Loan" shall have the meaning given to such term in Section 3.04
hereof.
"Affected Type" shall have the meaning given to such term in Section 3.04
hereof.
"Affiliate" means any Person: (a) which directly or indirectly controls, or
is controlled by, or is under common control with, the Borrower or any of its
Subsidiaries; (b) which directly or indirectly beneficially owns or holds 5% or
more of any class of voting stock of the Borrower or any such Subsidiary; (c) 5%
or more of the voting stock of which is directly or indirectly beneficially
owned or held by the Borrower or such Subsidiary; or (d) which is a partnership
in which the Borrower or any of its Subsidiaries is a general partner. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract, or otherwise.
"Agent's Account" means account number 000-0-00000 maintained by the Agent
and any other account designated by the Agent.
"Agreement" means this Term Loan Agreement, as amended or supplemented from
time to time. References to Articles, Sections, Exhibits, schedules and the like
refer to the Articles, Sections, Exhibits, schedules and the like of this
Agreement unless otherwise indicated.
"Authorization Letter" means the letter agreement executed by the Borrower
in the form of Exhibit B hereto.
"Banking Day" means (a) any day on which commercial banks are not
authorized or required to close in New York City, and (b) whenever such day
relates to a Eurodollar Loan or notice with respect to any Eurodollar Loan, a
day on which dealings in Dollar deposits are also carried out in the London
interbank market.
"Base Rate" means with respect to any Eurodollar Loan, the rate per annum
(rounded upwards, if necessary, to the nearest one-sixteenth of one percent)
quoted by the Reference Bank at approximately 11:00 a.m. London time at the
principal London branch of the Reference Bank two (2) Banking Days prior to the
first day of the Interest Period for such Loan for the offering to leading banks
in the London interbank market of Dollar deposits in immediately available funds
for a period, in an amount, comparable to the Interest Period for, and principal
amount, of the Eurodollar Loan which shall be made and outstanding during such
Interest Period.
"Basis Point" means one one-hundredth of one percent.
"Capital Lease" means any lease which has been or should be capitalized on
the books of the lessee in accordance with GAAP.
"Change in Control" means (a) except as to (i) officers and directors in
office as of the date of this Agreement, and (ii) the Hardinge Inc. Pension
Plan, Hardinge, Inc. Savings Plan, or other compensation plan of Borrower, the
acquisition of ownership, director 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%) percent 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 ere neither (i) nominated by the board of directors of the Borrower nor (ii)
appointed by the directors so nominated.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment" means, with respect to each Bank, the obligation of such Bank
to make a Loan under this Agreement in the aggregate principal Dollar amount
following, as such amount may be modified from time to time:
JPMorgan Chase Bank: $ 7,160,377
KeyBank National Association 6,834,906
Manufacturers and Traders Trust Company 6,834,906
NBT Bank, National Association 2,169,811
-------------
Total: $ 23,000,000
=============
"Consolidated Assets" means all assets of Borrower and its Consolidated
Subsidiaries treated as assets in accordance with GAAP.
"Consolidated Capital Expenditures" means for any period, the Dollar amount
of gross expenditures (including obligations under Capital Leases) made for
fixed assets, real property, plant and equipment, and all renewals, improvements
and replacements thereto, (but not repairs thereof) incurred during such period
for the Borrower and its Consolidated Subsidiaries, as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Current Assets" means all assets of the Borrower and its
Consolidated Subsidiaries, treated as current assets in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, the sum, for the
Borrower and its Consolidated Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP), the following: (a) all interest in
respect of Debt (including, without limitation, the interest component of any
payments in respect of Capital Leases) accrued or capitalized during such period
(whether or not actually paid during such period), plus (b) the net amount
payable (or minus the net amount receivable) under Interest Rate Protection
Agreements during such period (whether or not actually paid or received during
such period).
"Consolidated Current Liabilities" means all liabilities of the Borrower
and its Consolidated Subsidiaries, treated as current liabilities in accordance
with GAAP, including without limitation (a) all obligations payable on demand or
within one (1) year after the date in which the determination is made, and (b)
installment and sinking fund payments required to be made within one (1) year
after the date on which determination is made, but excluding any such
indebtedness renewable or extendable at the option of the obligor under, or
payable from the proceeds of other indebtedness which may be incurred pursuant
to the provisions of any revolving credit agreements or other similar agreement.
"Consolidated Net Income" means for any period the net income of the
Borrower and its Consolidated Subsidiaries for such period determined on a
consolidated basis without duplication, in accordance with GAAP.
"Consolidated Subsidiary" means any Subsidiary whose accounts are or are
required to be consolidated with the accounts of the Borrower in accordance with
GAAP.
3
"Consolidated Tangible Net Worth" means Net Worth prior to any cumulative
foreign currency translation adjustments minus any decrease or plus any increase
in the value of intangible assets related to translation adjustments minus
intangible assets.
"Controlled Group" shall have the meaning given to such term in Section
6.02(f) hereof.
"Credit Agreement" means the Multicurrency Credit Agreement dated as of the
date hereof among the Borrower, the Agent, as Administrative Agent and the banks
signatory thereto, as the same may be amended, supplemented or modified from
time to time.
"Customer Notes" means any and all notes and other evidence of indebtedness
(except accounts receivable arising in the ordinary course of business) in favor
of the Borrower and its Consolidated Subsidiaries for the payment obligations of
customers for goods or services provided in the ordinary course of business.
"Debt" means, with respect to any Person: (a) indebtedness of such Person
for borrowed money; (b) obligations of such Person as lessee under Capital
Leases or Synthetic Lease Obligations, (c) obligations under direct or indirect
guarantees in respect of, and obligations (contingent or otherwise) to purchase
or otherwise acquire, or otherwise to assure a creditor against loss in respect
of, indebtedness or obligations of others of the kinds referred to in clause (a)
and (b) above, (not otherwise reserved for) and (d) defined benefit pension
liabilities in respect of unfunded vested benefits under plans covered by ERISA
calculated consistently with GAAP.
"Default" means any event which with the giving of notice or lapse of time,
or both, would become an Event of Default.
"Default Rate" means, with respect to the principal of any Loan and, to the
extent permitted by law, any other amount payable by the Borrower under this
Agreement or any Note that is not paid when due (whether at stated maturity, by
acceleration or otherwise), a rate per annum during the period from and
including the due date, to, but excluding the date on which such amount is paid
in full equal to two percent (2.0%) above the Variable Rate as in effect from
time to time plus the Margin (if any) (provided that, if the amount so in
default is principal of a Eurodollar Loan and the due date thereof is a day
other than the last day of the Interest period therefor, the "Default Rate" for
such principal shall be, for the period from and including the due date and to
but excluding the last day of the Interest period therefor, two percent (2%)
above the interest rate for such Loan as provided in section 2.10 hereof and,
thereafter, the rate provided for above in this definition).
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"Domestic Subsidiaries" means any Subsidiary formed and currently existing
under the laws of the United States of America or a State thereof.
"Earnings Before Interest, Taxes, Depreciation and Amortization" means
Consolidated Net Income prior to the deduction of Consolidated Interest Expense,
prior to the deduction of federal or foreign corporate income and corporate
franchise taxes, prior to the deduction of depreciation and MINUS to the extent
included in the statement of Consolidated Net Income for such period, the sum of
4
(a) interest income (except to the extent deducted in determining Consolidated
Interest Expense), (b) any extraordinary, unusual or non-recurring income or
gains (including, whether or not otherwise includable as a separate item in the
statement of Consolidated Net Income for such period, gains on the sales of
assets outside the ordinary course of business, and (c) any other non-cash
income, all as determined on a consolidated basis.
"Effective Date" means October 24, 2002 or, if later, the date on which the
conditions contained in Article IV hereof have been satisfied.
"Entitled Person" has the meaning given to such term in Section 11.16
hereof.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing
distribution, use, treatment, storage, disposal, transport, or handling-of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.
"Eurodollar Loan" means any Loan when and to the extent the interest rate
therefor is determined on the basis of the definition "LIBO Base Rate."
"Event of Default" has the meaning given such term in Section 9.01 hereof.
"Facility Documents" means this Agreement, the Notes, the Authorization
Letter and the Security Documents.
"Federal Funds Rate" means, for any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions as
published by the Federal Reserve Bank of New York for such day (or for any day
that is not a Banking Day, for the immediately preceding Banking Day).
"Fiscal Year" means the twelve (12) month period ending on December 31 of
each year.
"Fixed Charge Ratio" means for the period of calculation the ratio of
Earnings Before Interest, Taxes, Depreciation and Amortization divided by all
scheduled principal payments, interest payments, taxes, capital expenditures,
dividends and all other distributions.
"Foreign Taxes" has the meaning given to such term in Section 10.14(b)
hereof.
"Forfeiture Proceeding" means any action, proceeding or investigation
affecting the Borrower or any of its Subsidiaries or Affiliates before any
court, governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or the receipt of notice by any such
5
party that any of them is a suspect in or a target of any governmental inquiry
or investigation, which may result in an indictment of any of them or the
seizure or forfeiture of any of their property.
"Funded Debt" means, with respect to any Person, all Debt of such Person
for borrowed money and guarantees for borrowed money.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time, applied on a basis consistent with
those used in the preparation of the financial statements referred to in Section
5.05 (except for changes concurred in by the Borrower's independent public
accountants).
"Hazardous Materials" means any substance regulated under any Environmental
Laws.
"Indemnified Liability" has the meaning given to such term in Section 11.03
hereof.
"Interest Period" means the period initially commencing on the Effective
Date and ending on December 20, 2002 and thereafter commencing on the last day
of each Interest Period and ending, as the Borrower may select pursuant to
Section 2.06 on the twentieth (20th) day in the first, second, third or sixth
calendar month thereafter, provided that each such Interest Period which
commences on the last Banking Day of a calendar month (or on any day for which
there is no numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last Banking Day of the appropriate subsequent calendar
month. In the case of Variable Rate Loans for adjustments for the applicable
Margin and interest payment dates, the Interest Period shall be the period
commencing on the date such Variable Rate Loan is made and ending on the
Quarterly Date next succeeding such date and thereafter, each succeeding
Quarterly Date.
"Interest Rate Protection Agreement" means for any Person, an interest rate
swap, cap or collar agreement or similar arrangement between such Person and one
or more financial institutions providing for the transfer or mitigation of
interest risks, either generally or under specific contingencies.
"Lending Office" means, for each Bank and for each type of Loan, the
lending office of such Bank (or of an Affiliate of such Bank) designated as such
for such type of Loan on its signature page hereof or such other office of such
Bank (or of an Affiliate of such Bank) as such Bank may from time to time
specify to the Agent and the Borrower as the office by which its Loans of such
type are to be made and maintained.
"Liens" has the meaning given to such term in Section 7.01 hereof.
"LIBO Rate" means, for any Eurodollar Loan, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined by the Agent to be
equal to the quotient of (a) the Base Rate for such Loan for the Interest Period
therefor, divided by (b) one minus the Reserve Requirement for such Loan for
such Interest Period.
"Loans" means the loans made by the Banks pursuant to Section 2.01 (each a
"Loan).
6
"Margin" means for each Variable Rate Loan and Eurodollar Loan the lowest
applicable margin on the table next following, based upon Borrower's financial
statements for the immediately preceding four fiscal quarters for income
statement items and the most recent fiscal quarter for balance sheet items
computed on the date of this Agreement and adjusted thereafter on each
Adjustment Date.
Ratio of Funded Debt to Earnings Before Variable Rate Loans Eurodollar Loans
Interest & Taxes
--------------------------------------- -------------------------------- --------------------------------
Equal to less than 1.5 25 Basis Points 175 Basis Points
Greater than 1.5 and less than or equal 50 Basis Points 200 Basis Points
to 2.0
Greater than 2.0 and less than or equal 50 Basis Points 225 Basis Points
to 2.5
Greater than 2.5 75 Basis Points 275 Basis Points
"Multiemployer Plan" means a Plan defined as such in Section 3(37) of ERISA
to which contributions have been made by the Borrower or any ERISA Affiliate and
which is covered by Title IV of ERISA.
"Maturity Date" means December 20, 2007; provided, however, that if the
Borrower does not extend, renew or replace the revolving credit facility under
the Credit Agreement by no later than May 31, 2005 on terms and conditions
satisfactory and acceptable to the Banks in their sole and absolute discretion
then, in such event, the Maturity Date shall automatically and without notice or
further action on the part of the Agent or the Banks be October 31, 2005.
Nothing contained herein shall constitute or be deemed to constitute a covenant,
promise or agreement any kind or character, express or implied on the part of
the Agent or Banks to consent or agree to any such extension, renewal,
replacement, or the terms and conditions thereof.
"Net Worth" means, at any date of determination thereof, the sum for the
Borrower and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP) of (a) the amount of common stock; plus (b)
the amount of any preferred stock that does not have any requirement for the
Borrower to purchase, redeem, retire or otherwise acquire the same; plus (c) the
amount of additional paid-in-capital and retained earnings (or, in the case of
an additional paid-in-capital or retained earnings deficit, minus the amount of
such deficit); plus (d) cumulative pension liability adjustments (or, in the
case of negative adjustments, minus the amount of such adjustments); plus (e)
cumulative foreign currency translation adjustments (or, in the case of negative
adjustments, minus the amount of such adjustments); plus (f) any other items
which under GAAP are included in shareholders equity (or, in the case of items
excluded from shareholders equity, minus such items); and minus (g) the cost of
treasury stock.
"Note" means individually and collectively the Notes of the Borrower to
each of the Banks in the principal amount of their respective Commitment, in the
form of EXHIBIT A hereto evidencing the Loans made by the Banks hereunder as the
same may be amended, modified, extended, renewed, restated, consolidated and
replaced from time to time.
7
"Participant" has the meaning given to such term in Section 11.05(c)
hereof.
"Payor" has the meaning given to such term in Section 10.13 hereof.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, governmental authority or other entity of whatever nature.
"Plan" has the meaning given to such term in Section 6.02 (e) hereof.
"Pledge Agreement" means the Pledge Security Agreement (Customer Notes)
dated as of the date hereof given by the Borrower in favor of the Agent for the
benefit of the Banks granting a first security interest in domestic Customer
Notes, as amended, supplemented or modified from time to time.
"Prime Rate" means that rate of interest from time to time announced by the
Reference Bank at its principal office as its prime commercial lending rate.
"Principal Office" means the principal office of the Agent, presently
located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Quarterly Dates" means the 20th day of September, December, March and June
in each year, the first of which shall be the first such day after the date of
this Agreement.
"Reference Bank" means JPMorgan Chase Bank and its successors.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as the same may be amended or supplemented from time to time.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as the same may be amended or supplemented from time to time.
"Regulatory Change" means, with respect to any Bank, any change after the
date of this Agreement in United States federal, state, municipal or foreign
laws or regulations (including without limitation Regulation D) or the adoption
or making after such date of any interpretations, directives or requests
applying to a class of banks including such Bank of or under any United States,
federal, state, municipal or foreign laws or regulations (whether or not having
the force of law) by any court or governmental or monetary authority charged
with the interpretation or administration thereof.
"Required Banks" means, at any time while no Loans are outstanding, Banks
having at least 75% of the aggregate amount of the Commitment and, at any time
while Loans are outstanding, Banks holding at least 75% of the aggregate
outstanding principal amount of the Loans.
8
"Required Payment" has the meaning given to such term in Section 10.13
hereof.
"Reserve Requirement" means, for any Interest Period for any Eurodollar
Loan, the average maximum rate at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during the
Interest Period for such Loan under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding $1,000,000,000 against
in the case of Eurodollar Loans, "Eurocurrency liabilities" (as such term is
used in Regulation D). Without limiting the effect of the foregoing, the Reserve
Requirement shall also reflect any other reserves required to be maintained by
such member banks by reason of any Regulatory Change against (i) any category of
liabilities which includes deposits by reference to which the Base Rate for
Eurodollar Loans is to be determined as provided in the definition of "Base
Rate" in this Section 1.01 or (ii) any category of extensions of credit or other
assets which include Eurodollar Loans.
"Second Currency" has the meaning given to such term in Section 11.16
hereof.
"Security Agreement" means the Security Agreement dated as of the date
hereof given by the Borrower in favor of the Agent for the benefit of the Banks
granting a first security interest in certain of their respective assets as more
particularly described therein, as amended, supplemented or modified from time
to time.
"Security Documents" means collectively the Pledge Agreement, the Security
Agreement and the Subsidiary Stock Pledge.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which at least a majority of the securities or other ownership
interests having ordinary voting power (absolutely or contingently) for the
election of directors or other persons performing similar functions are at the
time owned directly or indirectly by such Person.
"Subsidiary Stock Pledge" means the Pledge Security Agreement (Stock of
Domestic and Foreign Subsidiaries) dated as of the date hereof given by the
Borrower in favor of the Agent for the benefit of the Banks granting a first
security interest in certain shares of stock and ownership interests in certain
Subsidiaries and its related entities, as amended, supplemented or modified from
time to time.
"Synthetic Lease Obligations" means all monetary obligations of a Person
under (a) a so- called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations
which do not appear on the balance sheet of such Person but which, upon the
insolvency or bankruptcy of such Person, would be characterized as the Debt of
such Person (without regard to accounting treatment).
"Unfunded Benefit Liabilities" means, with respect to any Plan, the amount
(if any) by which the present value of all benefit liabilities (within the
meaning of section 4001(a)(16) of ERISA) under the Plan exceeds the fair market
value of all Plan assets allocable to such benefit liabilities, as
9
determined on the most recent valuation date of the Plan and in accordance with
the provisions of ERISA for calculating the potential liability of the Borrower
or any ERISA Affiliate under Title IV of ERISA.
"Variable Rate" means, for any day, the higher of (a) the Federal Funds
Rate for such day plus fifty (50) Basis Points, and (b) the Prime Rate for such
day.
"Variable Rate Loan" means any Loan when and to the extent the interest
rate for such Loan is determined in relation to the Variable Rate.
Section 1.02. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, and all financial
data required to be delivered hereunder shall be prepared in accordance with
GAAP.
ARTICLE 2. THE CREDIT.
Section 2.01. THE LOANS. (a) Subject to the terms and conditions set forth
in this Agreement, each of the Banks severally agrees to make a Loan to the
Borrower in the amount of its Commitment on the Effective Date. The Loans may be
outstanding as Variable Rate Loans or Eurodollar Loans (each a "type" of Loan).
The Loan of each Bank shall be maintained as a Variable Rate Loan and/or a
Eurodollar Loan pro rata according to the amount of its respective Commitment.
The Loans of each type of each Bank shall be made and maintained at such Bank's
Lending Office for such type of Loan.
(b) The principal of the Loans shall be payable in nineteen (19) quarterly
principal installments of $1,200,000 each commencing on March 20, 2003 and
continuing on each Quarterly Date thereafter to the Maturity Date and one (1)
final installment on the Maturity Date in an amount equal to the entire unpaid
principal balance and accrued and unpaid interest thereon. Any payment date
which is not a Banking Day shall be extended to the next Banking Day unless, in
the case of a Eurodollar Loan, such Banking Day would fall in the next calendar
month, in which event payment shall be due on the immediately preceding Banking
Day.
Section 2.02. THE NOTES. (a) The Loan of each Bank shall be evidenced by
the Borrower's promissory note in favor of such Bank substantially in the form
of Exhibit A hereto, dated the date of this Agreement, payable to the order of
such Bank and otherwise duly completed and executed by the Borrower.
(b) The date, amount, interest rate and duration of Interest Period for the
Loan made by each Bank to the Borrower and each payment made on account of the
principal thereof, shall be recorded by such Bank on its books and, on the
schedule attached to each Note or any continuation thereof; provided, however,
that the failure of such Bank to make, or any error in making, any such
recordation shall not affect the obligations of Borrower to make a payment when
due of any amount owing hereunder or under such Note in respect of the Loan
evidenced by such Note.
10
Section 2.03. PURPOSE. The Borrower shall use the proceeds of the Loans to
refinance certain indebtedness of the Borrower.
Section 2.04. BORROWING PROCEDURES. On the Effective Date each Bank shall,
through its Lending Office and subject to the conditions of this Agreement, make
the amount of the Loan to be made by it on such day available to the Agent at
the Principal Office and in immediately available funds for the account of the
Borrower. The amount so received by the Agent shall, subject to the conditions
of this Agreement, be made available to the Borrower, in immediately available
funds, by the Agent crediting an account of the Borrower designated by the
Borrower and maintained with the Agent at the Principal Office.
Section 2.05. PREPAYMENTS. The Borrower shall have the right to prepay the
Loans at any time or from time to time in a minimum amount of at least One
Million Dollars ($1,000,000) and in incremental multiples of Five Hundred
Thousand Dollars ($500,000), to be applied to principal in inverse order of
maturity; provided that: (a) the Borrower shall give the Agent notice of each
such prepayment as provided in Section 2.08; (b) Eurodollar Loans may not be
prepaid, except on the last day of the Interest Period for such Loan, and (c)
all such prepayments shall be applied as provided in Section 10.16.
Section 2.06. INTEREST PERIODS. Prior to the expiration of each Interest
Period, Borrower may select a new Interest Period of any duration in accordance
with the definition of Interest Period in Section 1.01, subject to the following
limitations: (a) no Interest Period may extend beyond the Maturity Date; (b) no
Interest Period for a Eurodollar Loan shall have a duration less than one month
and if any such proposed Interest Period would otherwise be for a shorter
period, such Interest Period shall not be available; and (c) if an Interest
Period would end on a day which is not a Banking Day, such Interest Period shall
be extended to the next Banking Day, unless, in the case of a Eurodollar Loan,
such Banking Day would fall in the next calendar month in which event such
Interest Period shall end on the immediately preceding Banking Day.
Section 2.07. INTEREST. (a) Interest shall accrue on the outstanding and
unpaid principal amount of each Loan for the period from and including the
Effective Date at the following rates per annum: (i) for a Variable Rate Loan,
at a variable rate per annum equal to the Variable Rate plus any Margin, and
(ii) for a Eurodollar Loan, at a fixed rate equal to the LIBO Rate plus the
Margin. If the principal amount of any Loan and any other amount payable by the
Borrower hereunder or under a Note shall not be paid when due (at stated
maturity, by acceleration or otherwise), interest shall accrue at the Default
Rate on such amount to the full extent permitted by law from and including such
due date to but excluding the date such amount is paid in full.
(b) The interest rate on each Variable Rate Loan shall change when the
Variable Rate changes and interest on each such Loan shall be calculated on the
basis of a year of 360 days for the actual number of days elapsed. Interest on
each Eurodollar Loan shall be calculated on the basis of a year of 360 days for
the actual number of days elapsed. Promptly after the determination of any
11
interest rate provided for herein or any change therein, the Agent shall notify
the Borrower and the Banks thereof.
(c) Accrued interest shall be due and payable upon each Quarterly Date and
upon any payment of principal and on the last day of the Interest Period with
respect thereto, in the case of an Interest Period greater than three (3) months
at three month intervals after the first day of such Interest Period; provided
that interest accruing at the Default Rate shall be due and payable from time to
time on demand of the Agent.
Section 2.08. CERTAIN NOTICES. (a) Notices by the Borrower to the Agent of
each prepayment pursuant to Section 2.05, the Interest Period pursuant to
Section 2.06 and the interest rate election to be made pursuant to Section 2.07,
shall be irrevocable and shall be effective only if received by the Agent before
(i) 10:00 a.m. New York time on the day thereof with respect to Variable Rate
Loans, and (ii) 12:00 noon New York time three Banking Days prior thereto with
respect to Eurodollar Loans. (b) Each such notice shall specify the Interest
Period and rate selection, and in the case of prepayment, the date of prepayment
(which shall be a Banking Day). If Borrower shall fail to give the Agent notice
as required in this Section 2.08, each Loan shall be a Variable Rate Loan for an
Interest Period continuing to the first day following the next Quarterly Date.
Section 2.09. PAYMENTS GENERALLY. Borrower hereby unconditionally promises
to pay to the Agent, all payments under this Agreement and the Note in Dollars
and in immediately available funds not later than 1:00 p.m. New York time on the
relevant dates specified above (each such payment made after such time on such
due date to be deemed to have been made on the next succeeding Banking Day) to
the Agent's Account for the account of each Bank. If the due date of any payment
under this Agreement or the Notes would otherwise fall on a day which is not a
Banking Day, such date shall be extended to the next succeeding Banking Day and
interest shall be payable for any principal so extended for the period of such
extension. Each payment received by the Agent hereunder or under any Note for
the account of a Bank shall be paid promptly to such Bank, in immediately
available funds, for the account of such Bank's Lending Office.
Section 2.10. FEES. (a) The Borrower shall pay to the Agent on the
Effective Date for the account of each Bank a Facility Fee equal to twenty (20)
Basis Points of the Commitment; (b) the Borrower shall pay directly to the Agent
for its own account the fees, in the amounts and at the time set forth in the
Fee Letter between the Borrower and the Agent dated August 26, 2002.
ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01. ADDITIONAL COSTS. (a) The Borrower shall pay directly to
each Bank from time to time on demand such amounts as such Bank may reasonably
determine to be necessary to compensate it for any costs which such Bank
determines are attributable to its making or maintaining any Eurodollar Loans
under this Agreement or its Note or its obligation to make any such Loans
hereunder, or any reduction in any amount receivable by such Bank hereunder in
respect of any such Loans or such obligation (such increases in costs and
reductions in amounts receivable being herein called "Additional Costs"),
resulting from any Regulatory Change, or any Reserve Requirement for
12
any such Loans which: (i) changes the basis of taxation of any amounts payable
to such Bank under this Agreement or its Note in respect of any of such Loans
(other than taxes imposed on the overall net income of such Bank or of its
Lending Office for any of such Loans by the jurisdiction in which such Bank has
its principal office or such Lending Office); or (ii) imposes or modifies any
reserve, special deposit, deposit insurance or assessment, minimum capital,
capital ratio or similar requirements relating to any extensions of credit or
other assets of, or any deposits with or other liabilities of, such Bank
(including any of such Loans or any deposits referred to in the definition of
"Base Rate" in Section 1.01); or (iii) imposes any other condition affecting
this Agreement or its Note (or any of such extensions of credit or liabilities).
Each Bank will notify the Borrower of any event occurring after the date of this
Agreement which will entitle such Bank to compensation pursuant to this Section
3.01(a) as promptly as practicable after it obtains knowledge thereof and
determines to request such compensation. The amount payable to any such Bank
shall be computed from the date of the occurrence giving rise to Additional
Cost, or the date that is 120 days prior to the date of demand by such Bank,
whichever is later. If any Bank requests compensation from the Borrower under
this section 3.01(a), or under section 3.01(c), the Borrower may, by notice to
such Bank (with a copy to the Agent), suspend the obligation of such Bank to
maintain Loans of the type with respect to which such compensation is requested
(in which case the provisions of section 3.04 shall be applicable).
(b) Without limiting the effect of the foregoing provisions of this Section
3.01, in the event that, by reason of any Regulatory Change, any Bank either (i)
incurs Additional Costs based on or measured by the excess above a specified
level of the amount of a category of deposits or other liabilities of such Bank
which includes deposits by reference to which the interest rate on Eurodollar
Loans is determined as provided in this Agreement or a category of extensions of
credit or other assets of such Bank which includes Eurodollar Loans or (ii)
becomes subject to restrictions on the amount of such a category of liabilities
or assets which it may hold, then, if such Bank so elects by notice to the
Borrower (with a copy to the Agent), the obligation of such Bank to make Loans
of such type hereunder shall be suspended until the date such Regulatory Change
ceases to be in effect (in which case the provisions of Section 3.04 shall be
applicable).
(c) Without limiting the effect of the foregoing provisions of this Section
3.01 (but without duplication), the Borrower shall pay directly to each Bank
from time to time on request such amounts as such Bank may reasonably determine
to be necessary to compensate such Bank for any costs which it determines are
attributable to the maintenance of capital by it or any of its Affiliates
pursuant to any future law or regulation of any jurisdiction or any
interpretation, directive or request (whether or not having the force of law and
whether in effect on the date of this Agreement or thereafter) of any court or
governmental or monetary authority in respect of its Loan hereunder or its
obligation to make its Loan hereunder (such compensation to include, without
limitation, an amount equal to any reduction in return on assets or equity of
such Bank to a level below that which it could have achieved but for such law,
regulation, interpretation, directive or request). Each Bank will notify the
Borrower if it is entitled to compensation pursuant to this Section 3.01(c) as
promptly as practicable after it determines to request such compensation. The
amount payable to any Bank shall be computed from the date of the occurrence
entitling such Bank to compensation, or the date that is one hundred twenty
(120) days prior to the date of demand by such Bank, whichever is later.
13
(d) Determinations and allocations by a Bank for purposes of this Section
3.01 of the effect of any Regulatory Change pursuant to subsections (a) or (b),
or of the effect of capital maintained pursuant to subsection (c), on its costs
of making or maintaining Loans or its obligation to make Loans, or on amounts
receivable by, or the rate of return to, it in respect of Loans or such
obligation, and of the additional amounts required to compensate such Bank under
this Section 3.01, shall be conclusive, provided that such determinations and
allocations are made on a reasonable basis.
Section 3.02. LIMITATION ON TYPES OF LOANS. Anything herein to the contrary
notwithstanding, if:
(a) the Agent determines (which determination shall be conclusive) that
quotations of interest rates for the relevant deposits referred to in the
definition of "Base Rate" in Section 1.01 are not being provided in the relevant
amounts or for the relevant maturities for purposes of determining the rate of
interest for any type of Eurodollar Loans as provided in this Agreement; or
(b) the Required Banks determine (which determination shall be conclusive)
and notify the Agent and the Borrower (which notice shall include each Bank's
respective calculation of cost) that the relevant rates of interest referred to
in the definition of "Base Rate" in Section 1.01 upon the basis of which the
rate of interest for any type of Eurodollar Loans is to be determined do not
adequately cover the cost to the Banks of making or maintaining such Loans;
then the Agent shall give the Borrower and each Bank prompt notice thereof,
and so long as such condition remains in effect, the Banks shall be under no
obligation to make or maintain a Loan of such type.
Section 3.03. ILLEGALITY. Notwithstanding any other provision in this
Agreement, in the event that it becomes unlawful for any Bank or its Lending
Office to honor its obligation to make or maintain a Eurodollar Loan hereunder,
then such Bank shall promptly notify the Borrower thereof (with a copy to the
Agent) and such Bank's obligation to make or maintain a Eurodollar Loan
hereunder shall be suspended until such time as such Bank may again make and
maintain such affected Loan (in which case the provisions of Section 3.04 shall
be applicable).
Section 3.04. CERTAIN VARIABLE RATE LOANS PURSUANT TO SECTIONS 3.01 AND
3.03. If the obligations of any Bank to make a Loan of a particular type (Loans
of such type being herein called "Affected Loans" and such type being herein
called the "Affected Type") shall be suspended pursuant to Section 3.01 or 3.03,
a Loan which would otherwise be maintained by such Bank as a Loan of the
Affected Type shall be made instead as Variable Rate Loan and, if an event
referred to in Section 3.01(b) or 3.03 has occurred and such Bank so requests by
notice to the Borrower (with a copy to the Agent), the Affected Loan of such
Bank then outstanding shall be automatically converted into Variable Rate Loan
on the date specified by such Bank in such notice.
Section 3.05. COMPENSATION. The Borrower shall pay to the Agent for the
account of each Bank, upon the request of such Bank through the Agent, such
amount or amounts as shall be
14
sufficient (in the reasonable opinion of such Bank) to compensate it for any
loss, cost or expense which such Bank reasonably determines is attributable to
any payment to such Bank of a Eurodollar Loan made by such Bank on a date other
than the last day of an Interest Period for such Loan (whether by reason of
acceleration or otherwise);
Without limiting the foregoing, such compensation shall include an amount
equal to the excess, if any, of: (i) the amount of interest which otherwise
would have accrued on the principal amount so paid or not borrowed for the
period from and including the date of such payment or failure to borrow to but
excluding the last day of the Interest Period for such Loan (or, in the case of
a failure to borrow, to but excluding the last day of the Interest Period for
such Loan which would have commenced on the date specified therefor in the
relevant notice) at the applicable rate of interest for such Loan provided for
herein; over (ii) the amount of interest (as reasonably determined by such Bank)
such Bank would have bid in the London interbank market (if such Loan is a
Eurodollar Loan) for deposits in Dollars for amounts comparable to such
principal amount and maturities comparable to such period.
Section 3.06. SURVIVAL. The obligations of the Borrower under this Article
3 shall survive the repayment of the Loans and the termination of the
Commitment.
ARTICLE 4. CONDITIONS PRECEDENT.
Section 4.01. DOCUMENTARY CONDITIONS PRECEDENT. The obligations of the
Banks to make the Loans constituting the borrowing hereunder are subject to the
condition precedent that the Agent shall have received on or before the date of
such Loans each of the following, in form and substance satisfactory to the
Agent and its counsel:
(a) the Notes duly executed by the Borrower;
(b) the Security Documents duly executed by the parties thereto;
(c) the Authorization Letter duly executed by the Borrower;
(d) a certificate of the Secretary or Assistant Secretary of the Borrower,
dated the Effective Date, attesting to all corporate action taken by the
Borrower, including resolutions of its Board of Directors authorizing the
execution, delivery and performance of the Facility Documents to which it is a
party and each other document to be delivered pursuant to this Agreement;
(e) a certificate of the Secretary or Assistant Secretary of the Borrower,
dated the Effective Date, certifying the names and true signatures of the
officers of the Borrower authorized to sign the Facility Documents to which it
is a party and the other documents to be delivered by the Borrower under this
Agreement;
(f) a certificate of a duly authorized officer of the Borrower, dated the
Closing Date, stating that the representations and warranties in Article 5 are
true and correct on such date as though made
15
on and as of such date and that no event has occurred and is continuing which
constitutes a Default or Event of Default;
(g) a favorable opinion of counsel for the Borrower, dated the Closing
Date, in substantially the form of Exhibit C and as to such other matters as the
Agent or any Bank may reasonably request;
(h) a recently dated certificate of the Secretary of State of the State of
Borrower's formation as to its good standing.
Section 4.02. ADDITIONAL CONDITIONS PRECEDENT. The obligations of the Banks
to make the Loans shall be subject to the further conditions precedent that on
the date of such Loan:
(a) the following statements shall be true: (i) the representations and
warranties contained in Article 5 are true and correct on and as of the
Effective Date as though made on and as of such date; and (ii) no Default or
Event of Default has occurred and is continuing, or would result from such Loan;
and
(b) the Agent shall have received such approvals, opinions or documents as
the Agent or any Bank may reasonably request.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants that:
Section 5.01. INCORPORATION, GOOD STANDING AND DUE QUALIFICATION. The
Borrower and each of its Subsidiaries is a corporation duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
formation, has all power and authority to carry on its business as now being
conducted and to own its properties and is duly licensed or qualified and in
good standing or a foreign corporation in each other jurisdiction in which its
properties are located or in which failure to qualify would materially and
adversely affect the conduct of its business or the enforceability of
contractual rights of the Borrower.
Section 5.02. CORPORATE POWER AND AUTHORITY: NO CONFLICTS. The execution,
delivery and performance by the Borrower of the Facility Documents are within
the Borrower's corporate powers, have been duly authorized by all necessary
corporate action, and do not contravene (a) the Borrower's charter or by-laws,or
(b) any law or any contractual restriction or provision binding on or affecting
the Borrower.
Section 5.03. GOVERNMENTAL APPROVAL. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
the Borrower of the Facility Documents to which the Borrower is a party.
16
Section 5.04. LEGALLY ENFORCEABLE AGREEMENTS. Each Facility Document to
which Borrower is a party is, or when delivered hereunder will be, legal, valid
and binding obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms.
Section 5.05. FINANCIAL STATEMENTS. The balance sheets of the Borrower and
its Subsidiaries as at December 31, 2001, and the related statements of income
and retained earnings of the Borrower and its Subsidiaries for the fiscal year
then ended, and the unaudited balance sheets of the Borrower and its
Subsidiaries as at June 30, 2002 and the related statements of income and
retained earnings, copies of which have been furnished to each Bank, fairly
present the financial condition of the Borrower and its Subsidiaries at such
date and the results of the operations of the Borrower and its subsidiaries for
the period ended on such date, all in accordance with GAAP, and since June 30,
2002, there has been no material adverse change in such condition or operations.
Section 5.06. LITIGATION. There is no pending or threatened action or
proceeding affecting the Borrower or any of its Subsidiaries before any court,
governmental agency or arbitrator, which may materially adversely affect the
financial condition or operations of the Borrower or any Subsidiary.
Section 5.07. MARGIN STOCK. The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System).
Section 5.08. USE OF LOAN PROCEEDS. No part of the proceeds of the Loans
will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, (a) to purchase or to carry margin stock or to
extend credit to others for the purpose of purchasing or carrying margin stock,
or to refund indebtedness originally incurred for such purpose, or (b) for any
purpose which violates or is inconsistent with the provisions of the Regulations
G, T, U or X of the Board of Governors of the Federal Reserve System.
Section 5.09. TAX RETURNS. Each of the Borrower and its Subsidiaries has
filed (or has obtained extensions of the time by which it is required to file)
all United States federal income tax returns and all other material tax returns
required to be filed by it and has paid all taxes shown due on the returns so
filed as well as all other taxes, assessments and governmental charges which
have become due, except such taxes, if any, as are being contested in good faith
and as to which adequate reserves have been provided.
Section 5.10. ERISA. Each member of the Controlled Group has fulfilled its
obligations under the minimum funding standards of ERISA and the Code with
respect to each Plan subject to the provisions thereof and is in compliance in
all material respects with the presently applicable provisions of ERISA and the
Code, and has not incurred any liability to the PBGC or a Plan under Title IV of
ERISA.
Section 5.11. SUBSIDIARIES. The Borrower has no Subsidiaries other than
those set forth on Schedule I attached hereto as amended from time to time.
17
Section 5.12. OWNERSHIP AND LIENS. Each of the Borrower and its
Subsidiaries has good and marketable title to its material properties and assets
reflected on the balance sheet referred to in Section 5.05 hereof, except for
such properties and assets of a nonmaterial nature as have been disposed of
since the date of such balance sheet as no longer used or useful in the conduct
of its business or as have been disposed of in the ordinary course of business,
and all such properties and assets are free and clear of mortgages, pledges,
liens, charges and other encumbrances, except (a) mortgages encumbering real
property located in (i) Switzerland in the approximate principal amount of Sfr.
15,100,000 and (ii) the United Kingdom in the approximate principal amount of
(pound) 1,080,000, (b) encumbrances that do not materially interfere with the
use or operation of such property or assets, and (c) as required or permitted by
the provisions hereof or as disclosed in the balance sheet referred to in
Section 5.05 hereof.
Section 5.13. HAZARDOUS MATERIALS. Except as set forth in SCHEDULE II
hereof, and qualified in each instance whereby a breach of this representation
set forth in this Section 5.13 would materially and adversely affect the
business, operations, assets or financial condition of the Borrower, the
Borrower is in compliance in all material respects with all Environmental Laws
governing Hazardous Materials and the Borrower has not used Hazardous Materials
on, from, or affecting any property now owned or occupied or hereafter owned or
occupied by the Borrower in any manner which violates Federal, state or local
laws, ordinances, rules, regulations, or policies governing the use, storage,
treatment, transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials, and that, to the best of the Borrower's
knowledge, no prior owner of any such property or any tenant, subtenant, prior
tenant or prior subtenant have used Hazardous Materials on, from, or affecting
such property in any manner which violates Federal, state or local laws,
ordinances, rules, regulations, or policies governing the use, storage,
treatment, transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials; without limiting the foregoing, the Borrower
shall not cause or permit any property owned or occupied by it to be used to
generate, manufacture, refine, transport, treat, store, handle, dispose,
transfer, produce or process Hazardous Materials, except in compliance with all
applicable Federal, state and local laws or regulations, nor shall the Borrower
cause or permit, as a result of any intentional or unintentional act or omission
on its part or any tenant or subtenant, a release of Hazardous Materials onto
any property owned or occupied by the Borrower or onto any other property; the
Borrower shall comply with and ensure compliance by all tenants and subtenants
with all applicable Environmental Laws, whenever and by whomever triggered, and
shall obtain and comply with any and all approvals, registrations or permits
required thereunder.
Section 5.14. NO DEFAULT ON OTHER AGREEMENTS. Neither the Borrower or any
of its Subsidiaries is in default in any manner which would materially and
adversely affect the business, properties or assets, operations or condition
(financial or otherwise) of the Borrower in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument to which it is a party.
Section 5.15. PARTNERSHIPS. Neither the Borrower nor any of its
Subsidiaries is a partner in any partnership.
18
Section 5.16. NO FORFEITURE. Neither the Borrower nor any of its
Subsidiaries or to the knowledge of Borrower Affiliates, is engaged in or
proposes to be engaged in the conduct of any business or activity which could
result in a Forfeiture Proceeding and no Forfeiture Proceeding against any of
them is pending or threatened, which would individually or in the aggregate
materially and adversely affect the business, operations, assets or financial
condition of the Borrower or any of its Subsidiaries.
Section 5.17. SOLVENCY. (a) The present fair saleable value of the assets
of the Borrower after giving effect to all the transactions contemplated by the
Facility Documents and the funding of all Commitments hereunder exceeds the
amount that will be required to be paid on or in respect of the existing debts
and other liabilities (including contingent liabilities) of the Borrower and its
Subsidiaries as they mature.
(b) The property of the Borrower does not constitute unreasonably small
capital for the Borrower to carry out its business as now conducted and as
proposed to be conducted including the capital needs of the Borrower.
(c) The Borrower does not intend to, nor does it believe that it will,
incur debts beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be received by the Borrower, and of
amounts to be payable on or in respect of debt of the Borrower). The cash
available to the Borrower after taking into account all other anticipated uses
of the cash of the Borrower, is anticipated to be sufficient to pay all such
amounts on or in respect of debt of the Borrower when such amounts are required
to be paid.
(d) The Borrower does not believe that final judgments against it in
actions for money damages will be rendered at a time when, or in an amount such
that, the Borrower will be unable to satisfy any such judgments promptly in
accordance with their terms (taking into account the maximum reasonable amount
of such judgments in any such actions and the earliest reasonable time at which
such judgments might be rendered). The cash available to the Borrower after
taking into account all other anticipated uses of the cash of the Borrower
(including the payments on or in respect of debt referred to in paragraph (c) of
this Section 5.17), is anticipated to be sufficient to pay all such judgments
promptly in accordance with their terms.
Section 5.18. OPERATION OF BUSINESS. The Borrower and its Subsidiaries
possess all licenses, permits, franchises, patents, copyrights, trademarks and
trade names, or rights thereto, to conduct its business substantially as now
conducted and as presently proposed to be conducted, and neither the Borrower
nor any of its Subsidiaries is in violation of any valid rights of others with
respect to any of the foregoing.
Section 5.19. NO DEFAULTS ON OUTSTANDING JUDGMENTS OR ORDERS. The Borrower
and its Subsidiaries has satisfied all judgments and neither the Borrower nor
any of its Subsidiaries is in default with respect to any judgment, writ,
injunction, decree, rule or regulation of any court, arbitrator or federal,
state, municipal or other governmental authority, commission, board, bureau,
agency or instrumentality, domestic or foreign.
19
Section 5.20. NO DEFAULTS ON OTHER AGREEMENTS. Neither the Borrower nor any
of its Subsidiaries is a party to any indenture, loan or credit agreement or any
lease or other agreement or instrument or subject to any charter or corporate
restriction which could have a material adverse effect on the business,
properties, assets, operations or conditions, financial or otherwise, of the
Borrower or any of its Subsidiaries, or the ability of the Borrower to carry out
its obligations under this Agreement or any of the Notes. Neither the Borrower
nor any of its Subsidiaries is in default in any material respect in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument material to a business to
which it is a party.
Section 5.21. LABOR DISPUTES AND ACTS OF GOD. Neither the business nor the
properties of the Borrower or any of its Subsidiaries are affected by any fire,
explosion, accident, strike, lockout or other labor dispute, drought, storm,
hail, earthquake, embargo, act of God, or of the public enemy or other casualty
(whether or not covered by insurance), materially and adversely affecting such
business or properties or the operation of the Borrower or such Subsidiary.
Section 5.22. GOVERNMENTAL REGULATION. Neither the Borrower nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Investment Company Act of 1940, the Interstate Commerce Act,
the Federal Power Act or any statute or regulation limiting its ability to incur
indebtedness for borrowed money as contemplated hereby.
ARTICLE 6. AFFIRMATIVE COVENANTS.
The Borrower agrees with the Agent and each Bank that so long as any of the
Notes shall remain unpaid or any Bank shall have any Commitment under this
Agreement, unless the Required Banks shall otherwise consent in writing:
Section 6.01. COMPLIANCE WITH LAWS, CORPORATE EXISTENCE. The Borrower shall
(a) Comply, and cause each of its Subsidiaries to comply, in all material
respects with all applicable laws, rules, regulations and orders of any
governmental authority, the breach of which would materially and adversely
affect the business, operations, prospects or assets or the financial condition
or otherwise of the Borrower. Such compliance shall include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges or levies imposed upon it or on its income or profits or upon its
property except to the extent (i) such payment is being contested in good faith
and by proper proceedings, and (ii) adequate reserves are being maintained with
respect thereto; and (b) do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence, rights, franchises,
trade names and preserve all of its property used or useful in the conduct of
its business and keep same in good repair and working condition except for
property it deems no longer useful.
20
Section 6.02. REPORTING REQUIREMENTS. The Borrower shall furnish directly
to each of the Banks:
(a) as soon as available and in any event within 45 days after the end of
each of the first three quarters of each Fiscal Year of the Borrower,
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as of the end of such quarter and statements of income and retained
earnings and changes in financial position of the Borrower and its Subsidiaries
for the period commencing at the end of the previous Fiscal Year and ending with
the end of such quarter, with a certification by the chief financial officer of
the Borrower that such financial statements fairly present the financial
condition and results of operations of the Borrower in accordance with GAAP, at
the dates and for the periods set forth therein;
(b) as soon as available and in any event within 90 days after the end of
each Fiscal Year of the Borrower, a copy of the annual report for such year for
the Borrower and its Subsidiaries, containing consolidated and consolidating
financial statements for such year certified in a manner acceptable to the
Required Banks by Ernst & Young LLP or other independent public accountants
acceptable to the Required Banks;
(c) with the statements submitted under subsections (c) and (b) above, a
certificate signed by the chief financial officer of the Borrower or the
certified public accountants, as the case may be, stating (i) the requirements
of Section 4.02 hereof and (ii) the calculation of all financial covenants and
ratios required under Article 8 hereof;
(d) promptly upon receipt thereof, copies of any reports submitted to the
Borrower or any of its Subsidiaries by the independent certified public account
in connection with the examination of the financial statements of the Borrower
or any such Subsidiary made by such accountant;
(e) promptly after the sending or filing thereof, copies of all reports
which the Borrower sends to any of its security holders, and copies of all
reports and registration statements which the Borrower or any Subsidiary files
with the Securities and Exchange Commission or any national securities exchange;
(f) promptly after the filing or receiving thereof, if and when the
Borrower or any member of the Controlled Group (as defined below) (i) gives or
is required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan (as defined below) under Title
IV of ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the notice of
such reportable event given or required to be given to PBGC; (ii) receives
notice of complete or partial withdrawal liability under Title IV of ERISA,
promptly followed by a copy of such notice to the Bank; or (iii) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate or appoint a
trustee to administer any Plan, promptly followed by a copy of such notice to
the Bank.
As used in this Subsection 6.02(f), "Controlled Group" means all members of
a control group of corporations and all trades or businesses (whether or not
incorporated) under common control,
21
which together with the Borrower, are treated as a single employer under Section
414(b) or 414(c) of the Code of 1954, and "Plan" means at any time an employee
pension benefit plan which is covered by Title IV of ERISA or is subject to the
minimum funding standards under Section 412 of the Code and is either (x)
maintained by the Borrower or any member of the Controlled Group for employs of
the Borrower or any member of the Controlled Group, or (xx) maintained pursuant
to a collective bargaining agreement or similar arrangement under which more
than one employer makes contributions and to which the Borrower or any member of
the Controlled Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions;
(g) prior to the end of each Fiscal Year of the Borrower, a budget (in
format satisfactory to the Banks) for the succeeding Fiscal Year of the
Borrower, plus from time to time any revisions or modifications to such budget
within 15 days of the adoption of such revision or modification; and
(h) such other information respecting the condition or operations,
financial or otherwise, of the Borrower or any of its Subsidiaries as any Bank
through the Agent may from time to time reasonably request.
Section 6.03. NOTICE OF PROCEEDINGS. The Borrower shall promptly give
notice in writing to the Agent and each of the Banks of all litigation, arbitral
proceedings, regulatory proceedings and Forfeiture Proceedings affecting the
Borrower or any Subsidiary, except litigation or proceedings which, if adversely
determined, could not materially and adversely affect the consolidated financial
condition or the business taken as a whole of the Borrower and its Subsidiaries.
Section 6.04. INSURANCE. The Borrower shall, and shall cause each
Subsidiary to, maintain insurance with insurance companies or associations rated
"A-" or better by A.M. Best & Company or a comparable rating agency in such
amounts and against such risks as is usually carried by owners of similar
businesses and properties in the same general areas in which the Borrower and
its Subsidiaries operate.
Section 6.05. ENVIRONMENTAL LAWS. The Borrower shall comply in all material
respects with all Environmental Laws and provide to the Agent all documentation
in connection with such compliance that the Agent may reasonably request.
Section 6.06. ACCESS TO PREMISES AND RECORDS. The Borrower shall at any
reasonable time and from time to time, but only to the extent relevant to the
loan transaction hereunder and the Borrower's ability to perform under this
Agreement, upon reasonable notice and during normal business hours, permit the
Agent and each of the Banks, or any agent or representative thereof to examine
the records and books of account and visit the properties of the Borrower or its
subsidiaries and to discuss the affairs, finances and accounts of the Borrower
and any Consolidated Subsidiary with any of the Borrower's officers and
directors.
Section 6.07. NOTICE OF DEFAULT. The Borrower shall, in the event any
financial officer of the Borrower knows of any default or event of default under
any material agreement to which the
22
Borrower is a party or any Event of Default which shall have occurred or knows
of the occurrence of any event which, upon notice or lapse of time or both,
would constitute an Event of Default, promptly and in any event within ten (10)
days after the occurrence of each Event of Default, furnish to the Agent a
written statement as to such occurrence specifying the nature and extent thereof
and the action (if any) which is proposed to be taken with respect thereto.
Section 6.08. SUBSIDIARIES. The Borrower shall within ten (10) days of the
creation or acquisition of any new Domestic Subsidiary having assets with a book
value of One Million Dollars ($1,000,000) or more, or any Foreign Subsidiary
having assets with a book value of Two Million Dollars ($2,000,000) or more, or
the acquisition of assets by or the transfer of assets to any existing Domestic
Subsidiary which after such transfer will have assets with a book value of One
Million Dollars ($1,000,000) or more or any existing Foreign Subsidiary which
after such transfer will have assets with a book value of Two Million Dollars
($2,000,000) or more, deliver or cause to be delivered to the Agent a guaranty
from such Subsidiary in form and substance acceptable to the Agent and a
security agreement in substantially the same form as the Security Agreement by
such Subsidiary, provided, however, nothing contained in this Section 6.08 shall
be deemed to be consent by the Agent or any Bank of such creation, acquisition
or transfer.
Section 6.09. MATERIAL ADVERSE CHANGES. The Borrower shall promptly notify
the Agent and the Banks of any litigation matter, investigation, audit, business
development or change in financial condition, which has resulted in, or which
the Borrower or its Subsidiaries reasonably believes will result in an Event of
Default.
Section 6.10. REPORTS TO OTHER CREDITORS. The Borrower shall promptly after
the furnishing thereof, deliver to the Agent copies of any statement or report
furnished to any other party pursuant to the terms of any indenture, loan or
credit or similar agreement and not otherwise required to be furnished to the
Agent or the Banks pursuant to any clause of this Article 6.
Section 6.11. GENERAL INFORMATION. The Borrower shall provide the Agent
such other information respecting the condition or operations, financial or
otherwise, of the Borrower or any of its Subsidiaries as the Agent may from time
to time reasonably request.
ARTICLE 7. NEGATIVE COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank shall have any
Commitment under this Agreement, the Borrower shall not without the written
consent of the Banks:
Section 7.01. LIENS, ETC. Create or suffer to exist, or permit any of its
Subsidiaries to create or suffer to exist, any Lien, or any other type of
preferential arrangement, upon or with respect to any of its properties, whether
now owned or hereafter acquired, or assign, or permit any of its
23
Subsidiaries to assign, any right to receive income, in each case to secure any
Debt of any Person or entity, other than:
(a) Liens securing the Loans hereunder and securing the obligations under
the Credit Agreement;
(b) Liens securing the payment of taxes, assessments or governmental
charges or levies or the demands of suppliers, mechanics, carriers, warehousers,
landlords and other like Persons, provided that (i) they do not in the aggregate
materially reduce the value of any properties subject to the Liens or materially
interfere with their use in the ordinary conduct of the owning business, and
(ii) all claims which the Liens secure are being actively contested in good
faith and by appropriate proceedings;
(c) Liens incurred or deposits made in the ordinary course of business (i)
in connection with worker's compensation, unemployment insurance, social
security and other like laws, or (ii) to secure the performance of letters of
credit, bids, tenders, sales contract, leases, statutory obligations, surety,
appeal and performance bonds and other similar obligations, in each case not
incurred in connection with the borrowing of money, the obtaining of advances or
the payment of the deferred purchase price of property;
(d) attachment, judgment and other similar Liens arising in connection with
court proceedings provided that (i) execution and other enforcement are
effectively stayed, and (ii) all claims which the Liens secure are being
actively contested in good faith and by appropriate proceedings;
(e) Liens on property of a Subsidiary provided that they secure only
obligations owing to the Borrower or another Subsidiary;
(f) Liens related to lease obligations, and within the limitations,
described in Section 7.02;
(g) Liens against Customer Notes, which are created in connection with the
sale, pledge or discounting of such Customer Notes, provided that immediately
after giving effect thereto the Borrower's aggregate liabilities on account of
such Debt secured by such Liens does not exceed $6,000,000; and
(h) Liens against property leased pursuant to Capital Leases and Synthetic
Lease Obligations, provided that the aggregate amount of Debt secured by such
Liens does not exceed $3,000,000.
(i) Liens not exceeding $500,000 in the aggregate against personal property
other than inventory and receivables and Liens against receivables of HTT Xxxxxx
Xxxxxx Xxxxxxxx XX and X. Xxxxxxxxxxxx & Co. A.G.
(j) Liens securing certain credit facilities made available by JPMorgan
Chase Bank to the Borrower for foreign exchange, letters of credit and Interest
Rate Protection agreements.
24
For the purposes of this Agreement, the term "Lien" shall mean any interest
in property securing any Debt or obligation owed to, or a claim by, a Person
other than the owner of the property, whether the interest is based on common
law, statute or contract (including the security interest or lien arising from a
mortgage, encumbrance, pledge, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes). The term "Lien" shall not
include minor reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions and other minor title exceptions affecting
property, provided that they do not constitute security for a monetary
obligation. For the purposes of this Agreement, the Borrower or a Subsidiary
shall be deemed to be the owner of any property which it has acquired or holds
subject to a conditional sale agreement, Capital Lease and Synthetic Lease
Obligations or other arrangement pursuant to which title to the property has
been retained by or vested in some other Person for security purposes, and such
retention or vesting shall be deemed to be a Lien. In connection with any sale,
pledge or discounting of Borrower's or its Subsidiaries' Customer Notes, a
"Lien" or "Liens" shall be deemed to exist to the extent of (i) the amount of
any sums withheld from the Borrower or any Subsidiary in any such transaction,
plus (ii) the amount of any obligation of the Borrower or any Subsidiary
resulting from the non-payment of any Customer Notes involved in any such
transaction.
Section 7.02. LEASE OBLIGATIONS. Create or suffer to exist, or permit any
of its Subsidiaries to create or suffer to exist, any obligations for the
payment of rental for any property under leases or agreements to lease other
than Capital Leases and Synthetic Lease Obligations which would cause the
liabilities of the Borrower and its Subsidiaries, on a consolidated basis, in
respect of all such obligations to exceed $5,000,000 payable in any period of 12
months.
Section 7.03. PROHIBITED TRANSACTIONS. Use the proceeds of any Loan to
acquire any security in any transaction which is subject to Sections 13 and 14
of the Securities Exchange Act of 1934 or use the proceeds of any Loan to
otherwise acquire any public company other than on a friendly basis.
Section 7.04. MARGIN STOCK. Use the proceeds of any Loan to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.
Section 7.05. CONSOLIDATIONS, MERGERS, ACQUISITIONS AND SALES OF ASSETS.
Consolidate or merge with or into, or sell, lease or otherwise dispose of any of
its assets to any Person or acquire all or any substantial portion of the
properties, assets or shares of stock of any other entity or permit any
Subsidiary to do any of the above except that:
(a) any Subsidiary may consolidate or merge with the Borrower or any
wholly-owned subsidiary of the Borrower;
(b) the Borrower or any Subsidiary may sell, lease or otherwise dispose of
any of its inventory in the ordinary course of business and any of
its assets which are obsolete, excess or unserviceable;
(c) the Borrower or any Subsidiary may sell, pledge or discount customer
notes in accordance with the terms of the Pledge Agreement;
25
(d) the Borrower or any Subsidiary may sell, lease or otherwise dispose of
any of its assets (other than as permitted by clauses (a)-(c)
inclusive), PROVIDED that the aggregate net value of all assets of
the Borrower and its Subsidiary sold, leased, or otherwise disposed
of during any Fiscal Year of the Borrower pursuant to this clause
(d) shall not exceed five percent (5%) of the Consolidated Tangible
Net Worth of the Borrower and its Subsidiaries at the end of the
preceding Fiscal Year.
All sales, leases or other disposition of assets pursuant to clauses (b),
(c) or (d) shall be at not less than fair market value.
Section 7.06. AFFILIATE TRANSACTIONS. Enter into or permit any Subsidiary
to enter into any transaction (including the purchase, sale or exchange of
Property or the rendering of any service) with any Affiliate except upon fair
and reasonable terms which are at least as favorable to the Borrower or the
Subsidiary as would be obtained in a comparable arms-length transaction with a
non-Affiliate.
Section 7.07. LOANS AND ADVANCES. Make or permit to exist any loans or
advances to any Person, except that loans or advances incurred in the normal
course of business (including employee advances and Customer Notes not exceeding
$20,000,000 in the aggregate at any one time outstanding) are permitted.
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 $6,000,000. 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).
Section 7.09. NO ACTIVITIES LEADING TO FORFEITURE. Neither the Borrower nor
any of its Subsidiaries or to Borrower's knowledge Affiliates is engaged in or
proposes to be engaged in the conduct of any business or activity which could
result in a Forfeiture Proceeding, which would, individually or in the
aggregate, materially and adversely affect the business, operations, assets or
financial condition of the Borrower or any of its Subsidiaries.
ARTICLE 8. FINANCIAL COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank shall have any
Commitment under this Agreement:
26
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.
Section 8.02. NET WORTH. The Borrower shall maintain a minimum Consolidated
Tangible Net Worth of not less than One Hundred Thirty Million Dollars
($130,000,000) at all times through December 31, 2002 and which sum shall
increase by $1,000,000 as of the end of each Fiscal Year thereafter.
Section 8.03. FUNDED DEBT. The Borrower shall maintain a ratio of Funded
Debt to Earnings Before Interest, Taxes, Depreciation and Amortization, as
measured as of the last day of each fiscal quarter for the immediately preceding
twelve (12) months of not greater than (i) 3.75 to 1 for the fiscal quarters
ending December 31, 2002 and Xxxxx 00, 0000, (xx) 3.5 to 1 for the fiscal
quarter ending June 30, 2003; (iii) 3.25 to 1 for the fiscal quarter ending
September 30, 2003; (iv) 3.0 to 1 for the fiscal quarters ending December 31,
2003 and March 31, 2004; and (v) 2.5 to 1 for each fiscal quarter thereafter.
Section 8.04. EARNINGS. The Borrower shall maintain a ratio of Earnings
Before Interest, Taxes, Depreciation and Amortization to Interest of not less
than 3.25 to 1, measured as of the last day of each fiscal quarter for the
immediately preceding twelve (12) months through June 30, 2003, and 3.75 to 1 as
of the last day of each fiscal quarter thereafter.
Section 8.05. FIXED CHARGE RATIO. The Borrower shall maintain a Fixed
Charge Ratio measured as of the last day of each Fiscal Quarter for the
immediately preceding twelve (12) months of not less than 1.1 to 1.
Section 8.06. CUSTOMER NOTES. The amount of Customer Notes outstanding at
any one time shall not exceed $20,000,000 in the aggregate.
ARTICLE 9. EVENTS OF DEFAULT.
Section 9.01. EVENTS OF DEFAULT. Any of the following events shall be an
"Event of Default":
(a) The Borrower shall fail to pay when due any installment of principal
of, or interest on, any Note, Loan or any amount of a fee or any other amount
payable under this Agreement, as and when due and payable; or
(b) Any representation or warranty made by the Borrower herein or in any
other Facility Document, or by the Borrower (or any of its officers) in
connection with this Agreement shall prove to have been incorrect in any
material respect when made; or
(c) The Borrower shall fail to perform or observe any other term, covenant
or agreement contained in this Agreement or in any other Facility Document on
its part to be performed or
27
observed and any such failure shall remain unremedied for 10 days after written
notice thereof shall have been given to the Borrower by the Agent or any Bank;
or
(d) The Borrower or any of its Subsidiaries shall fail to pay any Debt (but
excluding Debt evidenced by the Notes) of the Borrower or such Subsidiary as the
case may be, or any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Debt; or any other default under
any agreement or instrument relating to any such Debt, or any other event, shall
occur and shall continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of such Debt; or any
such Debt shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof; or
(e) The Borrower or any of its Subsidiaries shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Borrower or
any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property; or the
Borrower or any of its Subsidiaries shall take any corporate action to authorize
any of the actions set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in excess of $2,500,000
shall be rendered against the Borrower or any of its Subsidiaries, and either
(i) enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 20 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(g) Any member of the Controlled Group shall fail to pay when due an amount
or amounts aggregating in excess of $250,000 which it shall have become liable
to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to
terminate a Plan or Plans having aggregate Unfunded Benefit Liabilities in such
amount or amounts which would at such time create a liability in excess of
liabilities of such Plan or Plans recognized prior thereto on the Borrower's
financial statements and which liability would cause a violation of any of the
covenants under Article 7 (collectively, a "Material Plan") shall be filed under
Title IV of ERISA by any member of the Controlled Group, any plan administrator
any combination of the foregoing; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate or to cause a trustee to be appointed to
administer any Material Plan or a proceeding shall be instituted by a fiduciary
of any Material Plan against any member of the Controlled Group to enforce
Section 515 of ERISA and such proceeding shall not have been dismissed within 30
days thereafter; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any Material Plan must be
terminated; or
28
(h) Any Forfeiture Proceeding shall have been commenced or the Borrower
shall have given any Bank written notice of the commencement of any Forfeiture
Proceeding, which would, individually or in the aggregate, materially and
adversely affect the business, operations, assets or financial condition of the
Borrower or any of its Subsidiaries, or any Bank has a good faith basis to
believe that a Forfeiture Proceeding has been threatened or commenced, which
would, individually or in the aggregate, materially and adversely affect the
business, operations, assets or financial condition of the Borrower or any of
its subsidiaries; or
(i) A Change in Control shall occur.
Section 9.02. REMEDIES. If any Event of Default shall occur and be
continuing, the Agent shall, upon request of the Required Banks, by notice to
the Borrower, (a) declare the Commitments to be terminated, whereupon the same
shall forthwith terminate, and (b) declare the outstanding principal of the
Notes, all interest thereon and all other amounts payable under this Agreement
and the Notes to be forthwith due and payable, whereupon the Notes, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided that, in the case of an
Event of Default referred to in Section 9.01(e) or Section 9.01(h) above, the
Commitments shall be immediately terminated, and the Notes, all interest thereon
and all other amounts payable under this Agreement shall be immediately due and
payable without notice, presentment, demand protest or other formalities of any
kind, all of which are hereby expressly waived by the Borrower.
ARTICLE 10. THE AGENT; RELATIONS AMONG BANKS AND BORROWER.
29
Section 10.01. APPOINTMENT, POWERS AND IMMUNITIES OF AGENT. Each Bank
hereby irrevocably (but subject to removal by the Required Banks pursuant to
Section 10.09) appoints and authorizes the Agent to act as its agent hereunder
and under any other Facility Document with such powers as are specifically
delegated to the Agent by the terms of this Agreement and any other Facility
Document, together with such other powers as are reasonably incidental thereto.
The Agent shall have no duties or responsibilities except those expressly set
forth in this Agreement and any other Facility Document, and shall not by reason
of this Agreement be a trustee for any Bank. The Agent shall not be responsible
to the Banks for any recitals, statements, representations or warranties made by
the Borrower or any officer or official of the Borrower or any other Person
contained in this Agreement or any other Facility Document, or in any
certificate or other document or instrument referred to or provided for in, or
received by any of them under, this Agreement or any other Facility Document, or
for the value, legality, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Facility Document or any other
document or instrument referred to or provided for herein or therein, for the
perfection or priority of any collateral security for the Loans or for any
failure by the Borrower to perform any of its obligations hereunder or
thereunder. The Agent may employ agents and attorneys-in-fact and shall not be
responsible, except as to money or securities received by it or its authorized
agents, for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. Neither the Agent nor any of its directors,
officers, employees or agents shall be liable or responsible for any action
taken or omitted to be taken by it or them hereunder or under any other Facility
Document or in connection herewith or therewith, except for its or their own
gross negligence or willful misconduct. The Borrower shall pay any fee agreed to
by the Borrower and the Agent with respect to the Agent's services hereunder.
Section 10.02. RELIANCE BY AGENT. The Agent shall be entitled to rely upon
any certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent. The Agent may deem and treat each Bank as
the holder of the Loan made by it for all purposes hereof unless and until a
notice of the assignment or transfer thereof satisfactory to the Agent signed by
such Bank shall have been furnished to the Agent but the Agent shall not be
required to deal with any Person who has acquired a participation in any Loan
from a Bank. As to any matters not expressly provided for by this Agreement or
any other Facility Document, the Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
signed by the Required Banks, and such instructions of the Required Banks and
any action taken or failure to act pursuant thereto shall be binding on all of
the Banks and any other holder of all or any portion of any Loan.
Section 10.03. DEFAULTS. The Agent shall not be deemed to have knowledge of
the occurrence of a Default or Event of Default (other than the non-payment of
principal of or interest on the Loans to the extent the same is required to be
paid to the Agent for the account of the Banks) unless the Agent has received
notice from a Bank or the Borrower specifying such Default or Event of Default.
In the event that the Agent receives such a notice of the occurrence of a
Default or Event of Default, the Agent shall give prompt notice thereof to the
Banks (and shall give each Bank prompt
30
notice of each such non-payment). The Agent shall (subject to Section 10.08)
take such action with respect to such Default or Event of Default which is
continuing as shall be directed by the Required Banks; provided that, unless and
until the Agent shall have received such directions, the Agent may take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interest of the Banks;
and provided further that the Agent shall not be required to take any such
action which it determines to be contrary to law.
Section 10.04. RIGHTS OF AGENT AS A BANK. With respect to its Commitment
and the Loan made by it, the Agent in its capacity as a Bank hereunder shall
have the same rights and powers hereunder as any other Bank and may exercise the
same as though it were not acting as the Agent, and the term "Bank" or "Banks"
shall, unless the context otherwise indicates, include the Agent in its capacity
as a Bank. The Agent and its affiliates may (without having to account therefor
to any Bank) accept deposits from, lend money to (on a secured or unsecured
basis), and generally engage in any kind of banking, trust or other business
with, the Borrower (and any of its affiliates) as if it were not acting as the
Agent, and the Agent may accept fees and other consideration from the Borrower
for services in connection with this Agreement or otherwise without having to
account for the same to the Banks. Although the Agent and its affiliates may in
the course of such relationships and relationships with other Persons acquire
information about the Borrower, its Affiliates and such other Persons, the Agent
shall have no duty to disclose such information to the Banks except to the
extent, if any, expressly required by this Agreement or any other Facility
Documents.
Section 10.05. INDEMNIFICATION OF AGENT. The Banks agree to indemnify the
Agent (to the extent not reimbursed under section 11.03 or under the applicable
provisions of any other Facility Document, but without limiting the obligations
of the Borrower under Section 11.03 or such provisions), ratably in accordance
with the aggregate unpaid principal amount of the Loans made by the Banks
(without giving effect to any participations, in all or any portion of such
Loans, sold by them to any other Person) (or, if no Loans are at the time
outstanding, ratably in accordance with their respective Commitments), for any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of this Agreement, any other Facility
Document or any other documents contemplated by or referred to herein or the
transactions contemplated hereby or thereby (including, without limitation, the
costs and expenses which the Borrower is obligated to pay under Section 11.03 or
under the applicable provisions of any other Facility Document but excluding,
unless a Default or Event of Default has occurred, normal administrative costs
and expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other documents
or instruments; provided that no Bank shall be liable for any of the foregoing
to the extent they arise from the gross negligence or willful misconduct of the
party to be indemnified.
Section 10.06. DOCUMENTS. The Agent will forward to each Bank, promptly
after the Agent's receipt thereof, a copy of each report, notice or other
document required by this Agreement or any other Facility Document to be
delivered to the Agent for such Bank.
31
Section 10.07. NON-RELIANCE ON AGENT AND OTHER BANKS. Each Bank agrees that
it has, independently and without reliance on the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Borrower and its Subsidiaries and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any other
Facility Document. The Agent shall not be required to keep itself informed as to
the performance or observance by the Borrower of this Agreement or any other
Facility Document or any other document referred to or provided for herein or
therein or to inspect the properties or books of the Borrower or any Subsidiary.
Except for notices, reports and other documents and information expressly
required to be furnished to the Banks by the Agent hereunder, the Agent shall
not have any duty or responsibility to provide any Bank with any credit or other
information concerning the affairs, financial condition or business of the
Borrower or any Subsidiary (or any of their Affiliates) which may come into the
possession of the Agent or any of its affiliates. The Agent shall not be
required to file this Agreement, any other Facility Document or any document or
instrument referred to herein or therein, for record or give notice of this
Agreement, any other Facility Document or any document or instrument referred to
herein or therein, to anyone.
Section 10.08. FAILURE OF AGENT TO ACT. Except for action expressly
required of the Agent hereunder, the Agent shall in all cases be fully justified
in failing or refusing to act hereunder unless it shall have received further
assurances (which may include cash collateral) of the indemnification
obligations of the Banks under Section 10.05 in respect of any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.
Section 10.09. RESIGNATION OR REMOVAL OF AGENT. Subject to the appointment
and acceptance of a successor Agent as provided below, the Agent may resign at
any time by giving written notice thereof to the Banks and the Borrower, and the
Agent may be removed at any time with or without cause by the Required Banks;
provided that the Borrower and the other Banks shall be promptly notified
thereof. Upon any such resignation or removal, the Required Banks shall have the
right to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Required Banks and shall have accepted such appointment within
30 days after the retiring Agent's giving of notice of resignation or the
Required Banks' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a bank which has
an office in New York, New York. The Required Banks or the retiring Agent, as
the case may be, shall upon the appointment of a successor Agent promptly so
notify the Borrower and the other Banks. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Article 10 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent.
Section 10.10. AMENDMENTS CONCERNING AGENCY FUNCTION. The Agent shall not
be bound by any waiver, amendment, supplement or modification of this Agreement
or any other Facility
32
Document which affects its duties hereunder or thereunder unless it shall have
given its prior consent thereto.
Section 10.11. LIABILITY OF AGENT. The Agent shall not have any liabilities
or responsibilities to the Borrower on account of the failure of any Bank to
perform its obligations hereunder or to any Bank on account of the failure of
the Borrower to perform its obligations hereunder or under any other Facility
Document. This Section 10.11 shall not be construed to limit the Agent's
liability or responsibility where the Agent is acting as a Bank under this
Agreement.
Section 10.12. TRANSFER OF AGENCY FUNCTION. Without the consent of the
Borrower or any Bank, the Agent may at any time or from time to time transfer
its functions as Agent hereunder to any of its offices wherever located,
provided that the Agent shall promptly notify the Borrower and the Banks
thereof.
Section 10.13. NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Agent shall
have been notified by a Bank or the Borrower (either one as appropriate being
the "Payor") prior to the date on which such Bank is to make payment hereunder
to the Agent of the proceeds of a Loan or the Borrower is to make payment to the
Agent, as the case may be (either such payment being a "Required Payment"),
which notice shall be effective upon receipt, that the Payor does not intend to
make the Required Payment to the Agent, the Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption (but shall not
be required to), make the amount thereof available to the intended recipient on
such date and, if the Payor has not in fact made the Required Payment to the
Agent, the recipient of such payment (and, if such recipient is the Borrower and
the Payor Bank fails to pay the amount thereof to the Agent forthwith upon
demand, the Borrower) shall, on demand, repay to the Agent the amount made
available to it together with interest thereon for the period from the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to the average daily Federal Funds Rate for
such period.
Section 10.14. WITHHOLDING TAXES. (a) Each Bank represents that it is
entitled to receive any payments to be made to it hereunder without the
withholding of any U.S. tax and will furnish to the Agent such forms,
certifications, statements and other documents as the Agent may request from
time to time to evidence such Bank's exemption from the withholding of any U.S.
tax imposed by any domestic jurisdiction or to enable the Agent to comply with
any applicable laws or regulations relating thereto. Without limiting the effect
of the foregoing, if any Bank is not created or organized under the laws of the
United States of America or any state thereof, in the event that the payment of
interest by the Borrower is treated for U.S. income tax purposes as derived in
whole or in part from sources from within the U.S., such Bank will furnish to
the Agent Form W-8BEN or Form W-8ECI of the Internal Revenue Service, or such
other forms, certifications, statements or documents, duly executed and
completed by such Bank as evidence of such Bank's exemption from the withholding
of U.S. tax with respect thereto. The Agent shall not be obligated to make any
payments hereunder to such Bank in respect of any Loan or such Bank's Commitment
until such Bank shall have furnished to the Agent the requested form,
certification, statement or document.
33
(b) The Borrower agrees to pay each Bank such additional amounts as are
necessary in order that the net payment of any amount payable by Borrower to
such Bank hereunder and under its Note, after deduction for or withholding in
respect of any future tax, assessment or other charge or levy imposed by or on
behalf of the government of the country of the Alternative Currency in which a
Eurodollar Loan is made (other than taxes imposed on the overall net income of
the Bank or of its applicable Lending Office by the jurisdiction in which the
Bank's principal office or Lending Office is located) ("Foreign Taxes") on or
with respect to such payment, will not be less than the amount stated herein and
in such Note to be payable. The amount payable to any Bank shall be computed
from the date of the assessment of the Foreign Taxes, or the date that is one
hundred twenty (120) days prior to the date of demand by the Bank, whichever is
later. Without affecting Borrower's obligations under this Section 10.14(b), if
the Borrower is required by applicable law or regulation to make any deduction
or withholding of any Foreign Taxes with respect of any payment hereunder to any
Bank, Borrower agrees to furnish such Bank (i) within forty-five (45) days of
such payment the originals or certified copies of all governmental tax receipts
in respect of such Foreign Taxes, and (ii) promptly at the request of such Bank,
any other information, documents and receipts that such Bank may reasonably
require to establish to its satisfaction the full and timely payment of such
Foreign Taxes and to permit such Bank to claim such Foreign Taxes as a credit or
deduction in the computation of income taxes imposed on such Bank.
Section 10.15. SEVERAL OBLIGATIONS AND RIGHTS OF BANKS. The failure of any
Bank to make the Loan to be made by it on the date specified therefor shall not
relieve any other Bank of its obligation to make its Loan on such date, but no
Bank shall be responsible for the failure of any other Bank to make the Loan to
be made by such other Bank. The amounts payable at any time hereunder to each
Bank shall be a separate and independent debt, and each Bank shall be entitled
to protect and enforce its rights arising out of this Agreement, and it shall
not be necessary for any other Bank to be joined as an additional party in any
proceeding for such purpose.
Section 10.16. PRO RATA TREATMENT OF LOANS, ETC. Except to the extent
otherwise expressly provided in this Agreement (a) the borrowings under Section
2.04 shall be made from the Banks pro rata according to the amounts of their
respective Commitment; and (b) each prepayment and payment of principal of or
interest on Loans of a particular type and a particular Interest Period shall be
made to the Agent for the account of the Banks pro rata in accordance with the
respective unpaid principal amounts of such Loans held by such Banks.
Section 10.17. SHARING OF PAYMENTS AMONG BANKS. If a Bank shall obtain
payment of any principal of or interest on any Loan made by it through the
exercise of any right of setoff, banker's lien, counterclaim, or by any other
means (including any payment obtained from or charged against any Third Party),
it shall promptly purchase from the other Banks participations in (or, if and to
the extent specified by such Bank, direct interests in) the Loans made by the
other Banks in such amounts, and make such other adjustments from time to time
as shall be equitable to the end that all the Banks shall share the benefit of
such payment (net of any expenses which may be incurred by such Bank in
obtaining or preserving such benefit) pro rata in accordance with the unpaid
principal and interest on the Loans held by each of them. To such end the Banks
shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is
34
rescinded or must otherwise be restored. The Borrower agrees that any Bank so
purchasing a participation (or direct interest) in the Loans made by other Banks
may exercise all rights of setoff, banker's lien, counterclaim or similar rights
with respect to such participation (or direct interest). Nothing contained
herein shall require any Bank to exercise any such right or shall affect the
right of any Bank to exercise, and retain the benefits of exercising, any such
right with respect to any other indebtedness of the Borrower.
Section 10.18. OTHER AGENTS; ADVISORS AND ARRANGERS. None of the Banks or
other Persons identified on the facing page or signature pages of this Agreement
as a "documentation agent", "exclusive advisor", "sole book runner" or "sole
lead arranger" shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than, in the case of such
Bank, those applicable to all Banks as such. Without limiting the foregoing,
none of the Banks or the Persons so identified shall have or be deemed to have
any fiduciary relationship with any Bank. Each Bank acknowledges that it has not
relied, and will not rely, on any of the Bank's or other Persons so identified
in deciding to enter into this Agreement or in taking or not taking action
hereunder.
ARTICLE 11. MISCELLANEOUS.
Section 11.01. AMENDMENTS AND WAIVERS. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may be amended or
modified only by an instrument in writing signed by the Borrower, the Agent and
the Required Banks, or by the Borrower and the Agent acting with the consent of
the Required Banks and any provision of this Agreement may be waived by the
Required Banks or by the Agent acting with the consent of the Required Banks;
PROVIDED that no amendment, modification or waiver shall, unless by an
instrument signed by all of the Banks or by the Agent acting with the consent of
all of the Banks: (a) increase or extend the term, or extend the time or waive
any requirement for the reduction or termination, of the Commitments, (b) extend
the date fixed for the payment of principal of or interest on any Loan or any
fee payable hereunder, (c) reduce the amount of any payment of principal thereof
or the rate at which interest is payable thereon or any fee payable hereunder,
(d) alter the terms of this Section 11.01, (e) amend the definition of the term
"Required Banks" or (f) waive any of the documentary conditions precedent set
forth in Section 4.01 hereof and PROVIDED, FURTHER, that any amendment of
Article 10 hereof or any amendment which increases the obligations of the Agent
hereunder shall require the consent of the Agent. No failure on the part of the
Agent or any Bank to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof or preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
Section 11.02. USURY. Anything herein to the contrary notwithstanding, the
obligations of the Borrower under this Agreement and the Notes shall be subject
to the limitation that payments of interest shall not be required to the extent
that receipt thereof would be contrary to provisions of law applicable to a Bank
limiting rates of interest which may be charged or collected by such Bank.
Section 11.03. EXPENSES AND INDEMNIFICATION. The Borrower shall reimburse
the Agent and the Banks on demand for all costs, expenses, and charges
(including, without limitation, fees and
35
charges of external legal counsel for the Agent and each Bank and costs
allocated by their respective internal legal departments) incurred by the Agent
or the Banks in connection with the enforcement of this Agreement or the Notes
by reason of any Event of Default or any event which, after the giving of notice
or passage of time, or both, would constitute an Event of Default. The Borrower
agrees to indemnify and hold harmless the Agent and each Bank from and against
any and all claims, damages, liabilities and expenses (including, without
limitation, fees and disbursements of counsel) (each an "Indemnified Liability")
which may be incurred by or asserted against the Agent or such Bank in
connection with or arising out of any threatened or actual litigation, or
proceeding related to any acquisition or proposed acquisition by the Borrower,
or by any Subsidiary, of all or any portion of the stock of substantially all
the assets of any Person whether or not the Agent or such Bank is a party
thereto. The Borrower agrees that any Indemnified Liability will be promptly
paid to the Person to be indemnified upon the written demand of such Person.
Section 11.04. SURVIVAL. The obligations of the Borrower under Sections
3.01, 3.05 and 11.03 shall survive the repayment of the Loans and the
termination of the Commitments.
Section 11.05. ASSIGNMENT; PARTICIPATIONS.
(a) This Agreement shall be binding upon, and shall inure to the benefit
of, the Borrower, the Agent, the Banks and their respective successors and
assigns, except that the Borrower may not assign or transfer its rights or
obligations hereunder.
(b) Each Bank may, with the consent of the Agent and the Borrower (which
consent will not be unreasonably withheld or delayed) assign all or any part of
its Commitments, its Note or Loans to another bank or other Person provided,
however, that (i) no such consent of the Borrower shall be required in an Event
of Default under Section 9.01 hereof shall have occurred and is continuing, (ii)
no such consent by the Borrower or the Agent shall be required in the case of
any assignment to another Bank; and (iii) any such partial assignment shall be
made in an amount of at least $2,500,000. Upon execution and delivery by the
assignee to the Borrower and the Agent of an instrument in writing pursuant to
which such assignee agrees to become a "Bank" hereunder (if not already a Bank)
having the Commitment and Loan specified in such instrument, and upon consent
thereto by the Borrower and the Agent, to the extent required above, the
assignee shall have, to the extent of such assignment (unless otherwise provided
in such assignment with the consent of the Borrower and the Agent), the
obligations, rights and benefits of a Bank hereunder holding the Commitment and
Loans (or portions thereof) assigned to it (in addition to the Commitment and
Loans, if any, theretofore held by such Assignee) and the assigning Bank shall,
to the extent of assignment, be released from the Commitment (or portion
thereof) so assigned. Upon each such assignment the assignee shall pay the Agent
an assignment fee of $3,500.00 and if the assignee shall not be a Bank, deliver
to the Agent an Administrative Questionnaire.
(c) A Bank may sell or agree to sell to one or more banks or other Persons
a participation in all or any part of any Loans held by it, or in its
Commitment, in which event each purchaser of a participation (a "Participant")
shall not, except as otherwise provided in Section 10.17 hereof, have any rights
or benefits under this Agreement or any Note (the participant's rights against
such Bank in respect of such participation to be those set forth in the
agreements executed by such Bank in
36
favor of the Participant). All amounts payable by the Borrower to any Bank under
Section 2 hereof in respect of Loans held by it and its Commitment, shall be
determined as if such Bank had not sold or agreed to sell any participations in
such Loan and Commitment, and as if such Bank were funding each of such Loan and
Commitment in the same way that it is funding the portion of such Loan and
Commitment in which no participations have been sold. The agreement executed by
such Bank in favor of the Participant shall not give the Participant the right
to require such Bank to take or omit to take any action hereunder except action
directly relating to (i) the extension of the Maturity Date, (ii) the extension
of a payment date with respect to any fees payable hereunder or any portion of
the principal of or interest on any amount outstanding hereunder allocated to
such participant, (iii) the reduction of the principal amount outstanding
hereunder, or (iv) the reduction of the rate of interest payable on such amount
or any amount of fees payable hereunder to a rate or amount, as the case may be,
below that which the Participant is entitled to receive under its agreement with
such Bank.
(d) In addition to the assignments and participations permitted under
paragraphs (b) and (c) above, any Bank may assign and pledge all or any portion
of its Loan and Note to (i) any affiliate of such Bank, or (ii) any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating Circular issued by
such Federal Reserve Bank. No such assignment shall release the assigning Bank
from its obligations hereunder.
(e) A Bank may furnish any information concerning the Borrower or any of
its Subsidiaries in the possession of such Bank from time to time to assignees
and participants (including prospective assignees and participants), provided
that such Bank shall require any assignee or participant (prospective or
otherwise) to agree in writing to maintain the confidentiality of such
information.
Section 11.06. NOTICES. All notices, requests and other communications
provided for herein (including, and not by way of limitation, any modifications
of, or waivers, requests or consents under, this Agreement) shall be given or
made in writing (including and not by way of limitation by telecopy), or, with
respect to notices given pursuant to Section 2.04 hereof, by telephone confirmed
in writing by telex, telecopier or other writing by the close of business on the
day notice is given, delivered (or telephoned, as the case may be) to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof); or, as to any party, at such other address as shall be
designated by such party in a notice to each other party. Except as otherwise
provided in this Agreement, (a) notices shall be given to the Agent by
telephone, confirmed by telex, telecopy or other writing by the close of
business on the day notice is given, and (b) notices to the Banks and to the
Borrower by telecopy, commercial overnight courier service, ordinary mail, or
telex addressed to such party at its address on the signature page of this
Agreement. Notices shall be effective: (i) if given by mail, three (3) days
after deposit in the mails with first class postage prepaid, addressed as
aforesaid; (ii) if given by telex, when the telex is transmitted to the telex
number as aforesaid, and (iii) in all other cases when delivered or received.
Provided, however, that notices to the Agent and the Banks shall be effective
upon receipt.
37
Section 11.07. SETOFF. The Borrower agrees that, in addition to (and
without limitation of) any right of setoff, banker's lien or counterclaim a Bank
may otherwise have, each Bank shall be entitled, at its option, to offset
balances (general or special, time or demand, provisional or final) held by it
for the account of the Borrower at any of such Bank's offices, in Dollars or in
any other currency, against any amount payable by the Borrower to such Bank
under this Agreement or such Bank's Note which is not paid when due (regardless
of whether such balances are then due to the Borrower), in which case it shall
promptly notify the Borrower and the Agent thereof; provided that such Bank's
failure to give such notice shall not affect the validity thereof. Payments by
the Borrower hereunder shall be made without setoff or counterclaim.
SECTION 11.08. JURISDICTION; IMMUNITIES. (A) THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES
FEDERAL COURT SITTING IN NEW YORK COUNTY OVER ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE NOTES, AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT. THE BORROWER
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO THE BORROWER AT ITS
ADDRESS SPECIFIED IN SECTION 11.06. THE BORROWER AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
THE BORROWER FURTHER WAIVES ANY OBJECTION TO VENUE IN SUCH STATE AND ANY
OBJECTION TO AN ACTION OR PROCEEDING IN SUCH STATE ON THE BASIS OF FORUM NON
CONVENIENS. THE BORROWER FURTHER AGREES THAT ANY ACTION OR PROCEEDING BROUGHT
AGAINST THE AGENT SHALL BE BROUGHT ONLY IN NEW YORK STATE OR UNITED STATES
FEDERAL COURT SITTING IN NEW YORK COUNTY. THE BORROWER WAIVES ANY RIGHT IT MAY
HAVE TO JURY TRIAL.
(b) Nothing in this Section 11.08 shall affect the right of the Agent or
any Bank to serve legal process in any other manner permitted by law or affect
the right of the Agent or any Bank to bring any action or proceeding against the
Borrower or its property in the courts of any other jurisdictions.
(c) To the extent that the Borrower has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether from
service or notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to itself or its property, the Borrower
hereby irrevocably waives such immunity in respect of its obligations under this
Agreement and the Notes.
Section 11.09. TABLE OF CONTENTS; HEADINGS. Any table of contents and the
headings and captions hereunder are for convenience only and shall not affect
the interpretation or construction of this Agreement.
38
Section 11.10. SEVERABILITY. The provisions of this Agreement are intended
to be severable. If for any reason any provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction, such provision
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 11.11. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any party hereto may execute this Agreement by signing any such
counterpart.
Section 11.12. INTEGRATION. The Facility Documents set forth the entire
agreement among the parties hereto relating to the transactions contemplated
thereby and supersede any prior oral or written statements or agreements with
respect to such transactions.
SECTION 11.13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT EXCLUDING
ALL OTHER CONFLICT-OF-LAW RULES.
Section 11.14. CONFIDENTIALITY. Each Bank and the Agent agrees (on behalf
of itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable pre cautions to keep confidential, in
accordance with safe and sound banking practices, any non-public information
supplied to it by the Borrower pursuant to this Agreement which is identified by
the Borrower as being confidential at the time the same is delivered to the
Banks or the Agent, provided that nothing herein shall limit the disclosure of
any such information (a) to the extent required by statute, rule, regulation or
judicial process, (b) to counsel for any of the Banks or the Agent, (c) to bank
examiners, auditors or accountants, (d) in connection with any litigation to
which any one or more of the Banks is a party, (e) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first executes and delivers
to the respective Bank a Confidentiality Agreement in substantially the form of
EXHIBIT D hereto; or (f) to the extent such information becomes publicly
available other than as a result of disclosure by a Bank; and provided further
that in no event shall any Bank or the Agent be obligated or required to return
any materials furnished by the Borrower.
Section 11.15. TREATMENT OF CERTAIN INFORMATION. The Borrower (a)
acknowledges that services may be offered or provided to it (in connection with
this Agreement or otherwise) by each Bank or by one or more of their respective
subsidiaries or affiliates and (b) acknowledges that any information delivered
to each Bank or its subsidiaries or affiliates regarding the Borrower may be
shared among such Bank and such subsidiaries and affiliates. This Section 11.15
shall survive the repayment of the Loans and the termination of the Commitments.
Section 11.16. CURRENCY. This is an international loan transaction in which
the specification of Dollars and payment in State of New York, is of the
essence, and Dollars shall be the currency of account in all events relating to
the Loans. The payment obligations of the Borrower under this
39
Agreement and the Notes shall not be discharged by an amount paid in another
currency or in another place, whether pursuant to a judgment or otherwise, to
the extent that the amount so paid on conversion to Dollars and transferred to
the place of payment under normal banking procedures does not yield the amount
of Dollars due hereunder. If for the purpose of obtaining a judgment in any
court it is necessary to convert a sum due hereunder in Dollars into another
Currency (the "Second Currency"), the rate of exchange which shall be applied
shall be that at which in accordance with the normal banking procedures the
Agent could purchase Dollars with the Second Currency on the Banking Day next
preceding that on which such judgment is rendered. The obligation of the
Borrower in respect of any sum due from it to the Agent or any Bank hereunder
(an "Entitled Person") shall, notwithstanding the rate of exchange actually
applied in rendering such judgment, be discharged only to the extent that on the
Banking Day following receipt by such Entitled Person of any sum adjudged to be
due hereunder or under the Notes in the Second Currency, such Entitled Person
may in accordance with normal banking procedures purchase and transfer to place
of payment, Dollars with the amount of the Second Currency so adjudged to be
due; and the Borrower hereby, as a separate obligation and notwithstanding any
judgment, agrees to indemnify such Entitled Person against, and to pay such
Entitled Person on demand in Dollars, any difference between the sum originally
due to such Entitled Person in Dollars in the amount of Dollars so purchase and
transferred.
[Signature Pages Follow]
40
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
HARDINGE INC.
By: /s/ J. XXXXXXX XXXXX
---------------------------------------
J. Xxxxxxx Xxxxx, President
and Chief Executive Officer
Address for Notices:
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Chief Financial Officer
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
41
AGENT:
JPMORGAN CHASE BANK
By: /s/ XXXXXXXXX X. XXXXXX
--------------------------------------
Xxxxxxxxx X. XxXxxx, Vice President
Address For Notices Under Section 2.08:
JPMorgan Chase Bank
Loan and Agency Services Group
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mo Lin Sum, Vice President
Telephone No.:(000) 000-0000
Telecopier No.:(000) 000-0000
Address For All Other Notices:
JPMorgan Chase Bank
0000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. XxXxxx, Vice President
Telephone No.:(000) 000-0000
Telecopier No.:(000) 000-0000
42
DOCUMENTATION AGENT:
KEYBANK NATIONAL ASSOCIATION
By: /s/ XXXXXX X. XXXXX, III
-------------------------------------------
Xxxxxx X. Xxxxx, III, Senior Vice President
Address for Notices:
KeyBank National Association
0000 Xxxxxx xxx Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, III,
Senior Vice President
Telephone No.:(000) 000-0000
Telecopier No.:(000) 000-0000
43
BANKS:
JPMORGAN CHASE BANK
By: /s/ XXXXXXXXX X. XXXXXX
---------------------------------------
Xxxxxxxxx X. XxXxxx, Vice President
Lending Office and Address for Notices
Pursuant to Section 2.08:
JPMorgan Chase Bank
Loan and Agency Services Group
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mo Lin Sum, Vice President
Telephone No.:(000) 000-0000
Telecopier No.:(000) 000-0000
Address For All Other Notices:
JPMorgan Chase Bank
0000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. XxXxxx, Vice President
Telephone No.:(000) 000-0000
Telecopier No.:(000) 000-0000
44
KEYBANK NATIONAL ASSOCIATION
By: /s/ XXXXXX X. XXXXX, III
-------------------------------------------
Xxxxxx X. Xxxxx, III, Senior Vice President
Lending Office and Address for Notices:
KeyBank National Association
0000 Xxxxxx xxx Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, III,
Senior Vice President
Telephone No.:(000) 000-0000
Telecopier No.:(000) 000-0000
45
MANUFACTURERS AND TRADERS TRUST COMPANY
By: /s/ XXXXX X. XXXXXX
----------------------------------------
Xxxxx X. Xxxxxx, Vice President
Lending Office and Address for Notices:
Manufacturers and Traders Trust Company
0 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Vice President
Telephone No.:(000) 000-0000
Telecopier No.:(000) 000-0000
46
NBT BANK, NATIONAL ASSOCIATION
By: /s/ XXXXXX X. XXXXXXX
-------------------------------------------
Xxxxxx X. Xxxxxxx, Vice President
Lending Office and Address for Notices:
NBT Bank, National Association
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx, Vice President
Telephone No.:(000) 000-0000
Telecopier No.:(000) 000-0000
47
EXHIBIT A
[FORM OF NOTE]
PROMISSORY NOTE
$__________________ ____________, 20__
New York, New York
HARDINGE INC. (the "Borrower"), a corporation organized under the laws of
New York, for value received, hereby promises to pay to the order of
____________________________(the "Bank") at the principal office of JPMorgan
Chase Bank, at Xxx Xxxxx Xxxxxxxxx Xxxxx Xxx Xxxx, Xxx Xxxx 00000 or at such
other place as required by the Term Loan Agreement referred to below, for the
account of the appropriate Lending Office of the Bank, the principal amount of
$__________________ in lawful money of the United States of America and in
immediately available funds, on the date(s) and in the manner provided in the
Term Loan Agreement referred to below. The Borrower also promises to pay
interest on the unpaid principal balance of the Loan in like money, for the
period such balance is outstanding, at said principal office for the account of
said Lending Office of the Bank, at the rates of interest as provided in the
Term Loan Agreement, on the dates and in the manner provided in said Term Loan
Agreement.
The date and amount of the Loan made by the Bank to the Borrower under the
Term Loan Agreement referred below, interest rate, Interest Period, maturity
date and each payment of principal thereof, shall be recorded by the Bank on its
books and, prior to any transfer of this Note (or, at the discretion of the
Bank, at any other time), endorsed by the Bank on the schedule attached hereto
or any continuation thereof; provided, however, the failure of the Bank to make
any such recordation or endorsement shall not affect the obligations of the
Borrower to make payment when due of any amount owing under the Term Loan
Agreement or hereunder in respect of the Variable Rate Loans made by the Bank.
This is one of the Notes referred to in that certain Term Loan Agreement
(as amended from time to time the "Term Loan Agreement") dated as of
_________________, 2002 among the Borrower, the Banks named therein (including
the Bank), the Documentation Agent and the Agent and evidences the Loan made by
the Bank thereunder. All terms not defined herein shall have the meanings given
to them in the Term Loan Agreement.
The Term Loan Agreement provides for the acceleration of the maturity of
principal upon the occurrence of certain Events of Default and for prepayments
on the terms and conditions specified therein.
The Borrower waives presentment, notice of dishonor, protest and any other
notice or formality with respect to this Note. THE BORROWER WAIVES TO THE FULL
EXTENT PERMITTED BY
A-1
APPLICABLE LAW THE RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS NOTE.
This Note shall be governed by, and interpreted and construed in accordance
with, the laws of the State of New York, including Section 5-1401 of the New
York General Obligations Law (or any similar successor provision thereto) but
excluding all other conflict-of-law rules.
HARDINGE INC.
By
-------------------------------------------
Name:
Title:
A-2
SCHEDULE TO NOTE
Duration of
Amount of Interest Amount of Balance
Date Loan Interest Rate Period Payment Outstanding Notation By
---- --------- ------------- ------------ --------- ----------- -----------
EXHIBIT B
[FORM OF AUTHORIZATION LETTER]
___________________, 20__
JPMorgan Chase Bank
Loan and Agency Services Group
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: _____________________
Re: Term Loan Agreement dated as of ________________ (the "Term Loan
Agreement") among Hardinge Inc. the Banks named therein, KeyBank
National Association as Documentation Agent and JPMorgan Chase Bank as
Administrative Agent for said Banks
Ladies and Gentlemen:
In connection with the captioned Term Loan Agreement, we hereby
designate any one of the following persons to give to you instructions,
including notices required pursuant to the Agreement, orally or by telephone or
teleprocess:
NAME (TYPEWRITTEN)
-------------------------------
-------------------------------
-------------------------------
-------------------------------
Instructions may be honored on the oral, telephonic or teleprocess
instructions of anyone purporting to be any one of the above designated persons
even if the instructions are for the benefit of the person delivering them. We
will furnish you with confirmation of each such instruction either by telex
(whether tested or untested) or in writing signed by any person designated above
(including any telecopy which appears to bear the signature of any person
designated above) on the same day that the instruction is provided to you but
your responsibility with respect to any instruction shall not be affected by
your failure to receive such confirmation or by its contents.
You shall be fully protected in, and shall incur no liability to us
for, acting upon any instructions which you in good faith believe to have been
given by any person designated above, and in no event shall you be liable for
special, consequential or punitive damages. In addition, we agree to hold you
and your agents harmless from any and all liability, loss and expense arising
directly or
B-1
indirectly out of instructions that we provide to you in connection with the
Term Loan Agreement except for liability, loss or expense occasioned by the
gross negligence or willful misconduct of you or your agents.
Upon notice to us, you may, at your option, refuse to execute any
instruction, or part thereof, without incurring any responsibility for any loss,
liability or expense arising out of such refusal if you in good faith believe
that the person delivering the instruction is not one of the persons designated
above or if the instruction is not accompanied by an authentication method that
we have agreed to in writing.
We will promptly notify you in writing of any change in the persons
designated above and, until you have actually received such written notice and
have had a reasonable opportunity to act upon it, you are authorized to act upon
instructions, even though the person delivering them may no longer be
authorized.
Very truly yours,
HARDINGE INC.
By
-----------------------------------
Name:
Title:
B-2
EXHIBIT C
[Letterhead of counsel to the Borrower]
[Closing Date]
To The Banks,
Administrative Agent and
Documentation Agent,
parties to the Term Loan Agreement
referred to below
c/o JPMorgan Chase Bank
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as counsel to Hardinge Inc. (the "Borrower") in
connection with the execution and delivery of that certain Term Loan Agreement
(the "Term Loan Agreement") dated as of __________________, 2002 among the
Borrower, the Banks signatory thereto KeyBank National Association as
Documentation Agent and JPMorgan Chase Bank as Administrative Agent. Except as
otherwise defined herein, all terms used herein and defined in the Term Loan
Agreement or any agreement delivered thereunder shall have the meanings assigned
to them therein.
In connection with the preparation of this Opinion, we have examined
originals or counterparts, executed on behalf of the Borrower, of the Facility
Documents and the exhibits attached thereto in originals or copies, certified to
our satisfaction, of such records, certificates and documents as we deemed
relevant and necessary as a basis for rendering this Opinion.
Based upon the foregoing, and having regard to such legal
considerations as we deem relevant, we are of the opinion that:
1. The Borrower and to the best of our knowledge, each of its
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, has all power
and authority to carry on its business as presently being conducted and to own
its properties, and is duly licensed or qualified and in good standing as a
foreign corporation in each other jurisdiction in which its properties are
located or in which failure to qualify would materially and adversely affect
either the conduct or its business or the enforceability of contractual rights
of the Borrower.
C-1
2. The execution, delivery and performance by the Borrower of the
Facility Documents to which it is a party have been duly authorized by all
necessary corporate action and do not and will not: (a) require any consent or
approval of its stockholders; (b) contravene its charter or by-laws; (c)
contravene any law or to the best of our knowledge contractual restriction or
provision binding on or affecting the Borrower.
3. No authorization or approval or other action by, and no notice to
or filing with any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Borrower of the Facility
Documents.
4. The Term Loan Agreement is, and the other Facility Documents when
executed thereunder will be, legal, valid and binding obligations enforceable in
accordance with their respective terms, except that (a) the availability of
equitable remedies may be limited by principals of equity, and (b) enforcement
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application relating to or affecting the enforcement of
the rights of creditors generally.
5. Each Facility Document to which the Borrower is a party is, or when
delivered under the Term Loan Agreement will be, a legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms, except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency and other similar laws affecting creditors'
rights generally.
6. There is no pending, or to our knowledge threatened actions, suits
or proceedings against or affecting the Borrower or any of its Subsidiaries
before any court, governmental agency or arbitrator, which may, in any one case
or in the aggregate, materially adversely affect the financial condition or
operations of the Borrower or of any such Subsidiary, or the ability of the
Borrower to perform its obligations under the Facility Documents to which it is
a party.
Very truly yours,
C-2
EXHIBIT D
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and
Address of Prospective
Participant or Assignee]
Re: Term Loan Agreement dated as of ___________, 2002 between
Hardinge Inc., the Banks party thereto, KeyBank National
Association as Documen- tation Agent and JPMorgan Chase Bank as
Agent.
Dear ________________
As a Bank, party to the above-referenced Term Loan Agreement (the
"Credit Agreement"), we have agreed with Hardinge Inc. (the "Borrower") pursuant
to Section 11.14 of the Term Loan Agreement to use reasonable precautions to
keep confidential, except as otherwise provided therein, all non-public
information identified by the Borrower as being confidential at the time the
same is delivered to us pursuant to the Term Loan Agreement.
As provided in said Section 11.14, we are permitted to provide you, as
a prospective [holder of a participation in the Loans (as defined in the Term
Loan Agreement)] [assignee Bank], with certain of such non-public information
subject to the execution and delivery by you, prior to receiving such non-public
information, of a Confidentiality Agreement in this form. Such information will
not be made available to you until your execution and return to us of this
Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you agree (on behalf
of yourself and each of your affiliates, directors, officers, employees and
representatives) that (A) such information will not be used by you except in
connection with the proposed [participation] [assignment] mentioned above and
(B) you shall use reasonable precautions, in accordance with your customary
procedures for handling confidential information and in accordance with safe and
sound banking practices, to keep such information confidential, provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to your
counsel or to counsel for any of the Banks or the Agent, (iii) to bank
examiners, auditors or accountants, (iv) in connection with any litigation to
which you or any one or more of the Banks is a party; or (v) to the extent such
information becomes publicly available other than as a result of disclosure
other than as a result of disclosure by a Bank. Provided further, that, unless
specifically prohibited by applicable law or court order, you agree, prior to
disclosure thereof, to notify the Borrower of any request for disclosure of any
such non-public information (x) by any
D-1
governmental agency or representative thereof (other than any such request in
connection with an examination of your financial condition by such governmental
agency) or (y) pursuant to legal process; and provided finally that in no event
shall you be obligated to return any materials furnished to you pursuant to this
Confidentiality Agreement.
Would you please indicate your agreement to the foregoing by signing
at the place provided below the enclosed copy of this Confidentiality Agreement.
Very truly yours,
[Insert Name of Bank]
By:
---------------------------
The foregoing is agreed to as of the date of this letter.
[Insert name of prospective participant or assignee]
By:
----------------------------
D-2
SCHEDULE I
Subsidiaries of Borrower
Jurisdiction Percentage
Name and Address of Incorporation of Ownership
---------------- ---------------- ------------
Hardinge Credit Co., Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000 New York 100%
Hardinge Technology Systems, Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000 New York 100%
Xxxxxxxx Machine Products, Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000 New York 100%
Canadian Hardinge Machine Tools, Ltd.
Toronto, Canada Canada 100%
Hardinge Machine Tools, Ltd.
Exeter, England United Kingdom 100%
Hardinge Brothers GmbH
Krefield, West Germany Federal Republic of Germany 100%
X. Xxxxxxxxxxxx & Co., A.G. Switzerland 100%
St. Gallen, Switzerland
Hansvedt Industries, Inc. Illinois 100%
Urbana, Illinois
Hardinge, Shanghai Company Republic of China 100%
China Limited
Shanghai, China
Hardinge Brothers Inc. New York 100%
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000
HTT Xxxxxx Xxxxxx Xxxxxxxx XX Switzerland 100%
Biel, Switzerland
Hardinge China Limited Hong Kong 100%
Shanghai, PRC
Hardinge Taiwan Precision Machinery Taiwan ROC 51%
Limited
Nan Tou City, Taiwan ROC
Hardinge Emag GmbH Federal Republic of Germany 50%
Leipzig, (East) Germany
SCHEDULE II
Hazardous Materials
In December, 1992, Hardinge removed an underground waste oil tank at its
College Avenue facility. Environmental sampling following the removal of the
tank disclosed the presence of hydrocarbon contamination in surrounding soils.
An environmental consultant retained by Hardinge prepared a site assessment and
an action plan for on-site remediation which were adopted and approved by the
New York State Department of Environmental Conservation (DEC). The project is on
site. Remediation commenced in the Fall of 1995, and by letter of August 31,
1998 from the DEC, Hardinge was able to decommission the groundwater pump and
treat system, and address only the "hot spots" on site by various methods which
have yet to have a major impact on the petroleum product remaining. Hardinge is
now addressing other alternatives with the DEC in an effort to close out the
site.
[JPMORGAN CHASE LOGO]
SECURITY AGREEMENT
The undersigned executes and delivers this Security Agreement (the
"SECURITY AGREEMENT") to JPMORGAN CHASE BANK, having an office located at 0000
Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000, as agent for the Lenders (as defined below)
(the "AGENT") in consideration of one or more loans, letters of credit or other
financial accommodation made, issued or extended by the Lenders or any of them
to the undersigned or to any person in respect of whose Liabilities (as defined
below) the undersigned now or hereafter guarantees or otherwise becomes liable
for payment. Accordingly, the Agent shall have the rights, remedies and benefits
hereinafter set forth.
1. DEFINITIONS. The term "LIABILITIES" shall include any and all
indebtedness, obligations and liabilities of the undersigned to any of the Banks
(as defined below) and/or the Agent and/or other financial institutions and also
to others to the extent of their participations granted to or interests therein
created or acquired for them by the Banks or Agent, arising under (i) that
certain Term Loan Agreement dated as of the date hereof, among Hardinge Inc. and
the Agent and the Banks signatory thereto and each other financial institution
which from time to time becomes a party thereto (individually a "BANK" and
collectively, the "BANKS"), and as the same may be amended from time to time
(the "LOAN AGREEMENT"), (ii) certain credit facilities made available by
JPMorgan Chase Bank and/or KeyBank National Association to Hardinge Inc. for
foreign exchange, letters of credit and derivative products and exposures,
including without limitation interest rate swap agreements or other rate
protection or hedge agreements or mechanisms and the documents executed in
connection with any of the above now or hereafter existing, and (iii) certain
guarantees to JPMorgan Chase Bank and/or its subsidiaries and affiliates,
including without limitation, JPMorgan Leasing, in connection with the purchase
of the undersigned's customer notes by such entity and the documents executed in
connection with any of the above now existing (the Banks and those other banks
and financial institutions set forth above shall be collectively referred to as
the "Lenders" and each individually, a "Lender").
The term "COLLATERAL" means all of the following personal property of the
undersigned, whether now or hereafter existing or now owned or hereafter
acquired and wherever located, of every kind and description, tangible or
intangible, including: the balance of every deposit account, now or hereafter
existing, of the undersigned with any of the Banks and any other claim of the
undersigned against any of the Banks or Agent, now or hereafter existing, all
moneys, including without limitation, investment property, securities and other
property and the proceeds thereof, now or hereafter held or received by, or in
transit to the Agent, or any of the Lenders, and all of the undersigned's
accounts, contract rights, goods (including equipment, machinery and inventory),
instruments (including customer notes), documents, chattel paper, letter of
credit rights, and general intangibles, including, without limitation, (i) all
inventions used by the undersigned in the undersigned's business, including
without limitation, all inventions described on SCHEDULE A attached hereto
(collectively, the "INVENTIONS"), (ii) all letters patent issued on and
applications for letters patent filed in connection with the Inventions whether
issued to or filed by the undersigned or to or by another and subsequently
assigned to the undersigned, including without limitation, all letters patent
described on SCHEDULE A, together with any reissue, continuation,
continuation-in-art or
- 2 -
extension thereof (collectively, the "LETTERS PATENT"), (iii) the applications
therefor, including without limitation, all applications described on Schedule A
(collectively, the "APPLICATIONS"), (iv) all licenses for the use of the Letters
Patent, including without limitation, all licenses described on Schedule A
(collectively, the "LICENSES") and all proceeds of (i) through (iv) in any form
collectively, including without limitation, any claim by the undersigned against
third parties for past, present or future infringement or dilution of any of the
Letters Patent, (v) all marks used by the undersigned in the undersigned's
business, including without limitation, all marks listed on SCHEDULE B hereto
(collectively, the "MARKS" whether trademarks or service marks), (vi) all
licenses for the use of the Marks, including without limitation, all licenses
described on Schedule B (collectively, the "LICENSES"), (vii) all goodwill
associated with the Marks or with the use of each Xxxx and License, (viii) all
registrations, certificates of registrations (and similar documents) and
applications for registrations of the Marks, whether issued or pending before
the United States Patent and Trademark Office, the Secretary of State of the
State of New York, a governmental body of any other state, commonwealth,
district or territory of the United States, whether issued to or filed by the
undersigned or to or by another and subsequently assigned to the undersigned,
including without limitation, all registration, certificates of registration and
applications for registration described on Schedule B, together with any
renewals thereof (collectively, the "REGISTRATIONS") and all proceeds of (v)
through (viii) in any form, including without limitation, any claim by the
undersigned against third parties for past, present or future infringement or
dilution of any of the Marks and of any Marks licensed under any License, or for
injury to the goodwill associated with the Marks, Registrations or Marks
licensed under any License, and including any other property, rights and
interests of the undersigned with respect to any of the foregoing and shall
include any insurance policies therefor and the supporting obligations,
proceeds, products and accessions of and to any thereof.
The term "OBLIGOR" means the undersigned or any maker, drawer, acceptor,
indorser, guarantor, surety, accommodation party or other person liable upon or
for any of the Liabilities or Collateral.
Unless the context otherwise requires, all terms used herein which are
defined in the Uniform Commercial Code shall have the meanings therein stated.
2. GRANT OF SECURITY INTEREST. As security for the payment of the
Liabilities, the undersigned hereby grant(s) to the Agent, for the benefit of
the Lenders and itself as Agent, a security interest in, a general lien upon
and/or right of set-off against the Collateral.
3. MAINTENANCE OF COLLATERAL. At any time and from time to time, the
undersigned will: (a) deliver and pledge to the Agent, indorsed and/or
accompanied by such instruments of assignment and transfer in such form and
substance as the Agent may request, any and all instruments, documents and/or
chattel paper as the Agent may specify in its demand; (b) give, execute,
deliver, file, authorize to file and/or record any notice, statement,
instrument, document, agreement or other papers that may be necessary or
desirable, or that the Agent may request, in order to create, preserve,
- 3 -
perfect, or validate any security interest granted pursuant hereto or to enable
the Agent to exercise and enforce its rights hereunder or with respect to such
security interest; (c) keep and stamp or otherwise xxxx any and all documents
and chattel paper and its individual books and records relating to inventory,
accounts and contract rights in such manner as the Agent may require; (d) permit
representatives of the Agent at any time to inspect its inventory and to inspect
and make abstracts from the undersigned books and records pertaining to
inventory, accounts, contract rights, chattel paper, instruments and documents;
(e) obtain the Agent's consent prior to any change of name, address, legal
entity status, state of organization, location of books and records or location
of Collateral other than with respect to a change in location of goods
(including inventory, equipment and machinery) in the ordinary course of the
undersigned's business; (f) defend the Collateral against all claims and demands
of third parties at any time claiming the same or any interest therein, except
buyers of inventory in the ordinary course of the undersigned's business, and,
at its own expense, will bring suit in the name of the undersigned at the
request of the Agent for infringement against infringers of the letters patent
and any letters patent then granted on the Applications, provided, the Agent, if
the Agent finds it necessary or desirable, may prosecute others for infringement
and may join the undersigned as party-plaintiffs; (g) will notify the Agent of
(i) the material loss or damage to the Collateral or of any material adverse
change in the undersigned's business or the Collateral, (ii) any suit for
infringement brought against the undersigned with respect to the Letters Patent,
the Applications or the Marks and in each instance shall promptly furnish the
Agent copies of all documents in connection with any such suit, (iii) any
application for reissue of any Letters Patent and any letters patent when issued
and of any interference or other proceeding involving any of the Collateral and
(iv) if the Marks are registered, notice of such fact in the manner prescribed
by Section 1111 of Title 15 of the United States Code, or by state law, if
applicable; (h) xxxx or cause to be marked all articles, devices and machines
made or sold by it, covered by letters patent and any letters patent when
issued, with the word "Patent" and the number of any such patent or patents
applicable thereto except where such marking would damage the article, device or
machine, or if such article or device is an internal part of another machine or
device, or such other notices required by law; and (i) cooperate with the Agent
in obtaining control of collateral consisting of deposit accounts or electronic
chattel paper, including, but not limited to entering into one or more control
agreements or assignments as the Agent may request. The right is expressly
granted to the Agent, at its discretion, to notify warehousemen or any other
persons in possession of Collateral of the Agent's security interest therein and
to obtain an acknowledgment thereof from such third person and to file one or
more financing statements under the Uniform Commercial Code naming the
undersigned as debtor and the Agent as secured party and indicating therein the
types or describing the items of Collateral herein specified. A photographic or
other reproduction of this Security Agreement shall be sufficient as a financing
statement. Without the prior written consent of the Agent, the undersigned will
not file or authorize or permit to be filed in any jurisdiction any such
financing or like statement in which the Agent is not named as the sole secured
party. With respect to the Collateral, or any part thereof, which at any time
shall come into the possession or custody or under the control of the Agent or
any of its agents, associates or correspondents, for any purpose, the right is
expressly granted to the Agent, at its reasonable discretion, to transfer to or
register in the name of itself or its nominee any of the Collateral; to exchange
any of the Collateral for other property upon
- 4 -
any reorganization, recapitalization or other readjustment and in connection
therewith to deposit any of the Collateral with any committee or depositary upon
such terms as it may determine; to notify any account debtor or obligor on an
instrument to make payment to the Agent for the benefit of the Banks; and to
enforce obligations of such account debtor or obligor and to exercise or cause
its nominee to exercise all or any powers with respect to the Collateral with
same force and effect as an absolute owner thereof; all without notice (except
such notice as may be required by applicable law and cannot be waived) and
without liability except to account for property actually received by it. The
Collateral will remain personalty and will not be permanently affixed to real
estate without the prior consent of the Agent. SCHEDULE C attached hereto sets
forth all of the currently operating leased locations of Collateral of the
undersigned. The undersigned will provide disclaimers of interest and removal
agreements from each landlord of a location set forth in Schedule C, in form
satisfactory to the Agent, signed by such Landlord within thirty (30) days from
the date hereof. In the event the undesigned enters into any leases after the
date of this Security Agreement, the undersigned, simultaneously with the
execution and delivery of such lease, will deliver to Agent a disclaimer of
interest and removal agreement from such landlord, in form satisfactory to
Agent. In addition, prior to any closing of mortgage financing on any real
property of the undersigned, the undersigned will provide a disclaimer of
interest and removal agreement from the proposed mortgagee with respect to such
real property in form satisfactory to the Agent.
4. INSURANCE. The undersigned shall keep insured all Collateral which is
tangible property for full value, with such coverage as the Agent may approve,
at the undersigned's expense, and, upon the Agent's request, the policies shall
be duly endorsed in the Agent's favor as its interest may appear and delivered
to the Agent. If the undersigned shall default in this regard, the Agent shall
have the right to insure and charge the cost to the undersigned. The Agent
assumes no risk or responsibility in connection with the payment or nonpayment
of losses, the Agent's only responsibility being to credit the undersigned with
any insurance payment received on account of losses. In the event of any default
under this Security Agreement, the Agent shall have power of attorney to cancel,
assign or surrender any insurance policy or policies and to collect the return
premiums due thereon and to apply the proceeds thereof to the Liabilities
secured hereby. The undersigned will immediately notify the Agent in writing of
any damage to or loss of any of the Collateral which is tangible property.
5. COLLECTION AND DISPOSITION. The Agent at its discretion may, or upon
direction of the Banks shall, whether any of the Liabilities be due, in its name
or in the name of the undersigned or otherwise, demand, xxx for, collect or
receive any money or property at any time payable or receivable on account of or
in exchange for, or make any compromise or settlement deemed desirable with
respect to, any of the Collateral, but shall be under no obligation to do so, or
the Agent may, or upon direction of the Banks shall, extend the time of payment,
arrange for payment in installments, or otherwise modify the terms of, or
release, any of the Collateral, without thereby incurring responsibility to, or
discharging or otherwise affecting any liability of, the undersigned. The Agent
shall not be required to take any steps necessary to preserve any rights against
prior parties to any of the Collateral. The Agent may use or operate any of the
Collateral for the purpose
- 5 -
of preserving the Collateral or its value in the manner and to the extent the
Agent deems appropriate, and the Agent may render the Collateral unusable or
dispose of the Collateral in a commercially reasonable manner.
Upon default hereunder or in connection with any of the Liabilities
(whether such default be that of the undersigned or of any other party obligated
thereon), the undersigned shall, at the request of the Agent, assemble the
Collateral at such place or places as the Agent designates in its request, and,
to the extent permitted by applicable law, the Agent shall have the right, with
or without legal process and with or without prior notice or demand, to take
possession of the Collateral or any part thereof and to enter any premises for
the purpose of taking possession thereof. The Agent shall have the rights and
remedies with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not such Code is in effect in the jurisdiction where
the rights and remedies are asserted).
In addition, upon default hereunder or in connection with any of the
Liabilities, with respect to the Collateral, or any part thereof, which shall
then be or shall thereafter come into the possession or custody of the Agent or
any of its agents, associates or correspondents, the Agent may sell or cause to
be sold at any location selected by it and reasonable under the circumstances,
in one or more sales or parcels, at such price as the Agent may deem best, and
for cash or on credit or for future delivery, without assumption of any credit
risk, all or any of the Collateral, at any broker's board or at public or
private sale, in any reasonable manner permissible under the Uniform Commercial
Code (except that, to the extent permitted thereunder, the undersigned hereby
waives the requirements of said Code), and the Agent or any of the Lenders or
anyone else may be the purchaser of any or all of the Collateral so sold and
thereafter hold the same absolutely, free from any claim or right of whatsoever
kind, including any equity or redemption, of the undersigned, any such demand,
notice or right and equity being hereby expressly waived and released. The Agent
(i) shall have no obligation to clean up or otherwise prepare the Collateral for
sale, (ii) may comply with any applicable law requirements in connection with
the disposition of the Collateral, (iii) may sell the Collateral without giving
any warranties, and any of such actions or inaction will not be considered
adversely to affect the commercial reasonableness of any sale of the Collateral.
The undersigned will pay to the Agent all reasonable expenses (including
reasonable attorneys' fees and legal expenses incurred by the Agent) of, or
incidental to, the enforcement of any of the provisions hereof or of any of the
Liabilities, or any actual or attempted sale, or any exchange, enforcement,
collection, compromise or settlement of any of the Collateral or receipt of the
proceeds thereof, by litigation or otherwise, including expense of insurance;
and all such expenses shall be Liabilities secured by this Security Agreement.
The Agent, at any time, at its option may, or upon direction of the Banks shall,
apply the net cash receipts from the Collateral to the payment of principal of
and/or interest on any of the Liabilities, whether or not then due, making
proper rebate of interest or discount. Notwithstanding that the Agent, whether
in its own behalf and/or on behalf of another or others, may continue to hold
the Collateral and regardless of the value thereof, the undersigned shall be and
remain liable for the payment in full, principal and interest, of any balance of
the Liabilities and expenses at any time
- 6 -
unpaid. The Agent may exercise its rights with respect to the Collateral without
resorting to or regard to other collateral or sources of reimbursement for the
Liabilities.
6. REPRESENTATIONS AND WARRANTIES. If the undersigned is other than an
individual, the undersigned represents and warrants that: (a) it is duly
organized and validly existing under the laws of the jurisdiction of its
organization or incorporation as such is set forth on signature pages hereto
along with its tax identification or organizational number, if necessary, and,
if relevant under such laws, in good standing; (b) it has the power to execute
and deliver this Security Agreement and to perform its obligations hereunder and
has taken all necessary action to authorize such execution, delivery and
performance; (c) such execution, delivery and performance do not violate or
conflict with any law applicable to it, any provision of its organizational
documents, any order or judgment of any court or other agency of government
applicable to it or any of its assets or any material contractual restriction
binding on or materially affecting it or any of its assets; (d) to the best of
the undersigned's knowledge, all governmental and other consents that are
required to have been obtained by it with respect to this Security Agreement
have been obtained and are in full force and effect and all conditions of any
such consents have been complied with; (e) its obligations under this Security
Agreement constitute its legal, valid and binding obligations, enforceable in
accordance with its terms except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency or other similar laws affecting
creditors' rights generally; (f) the undersigned is the owner of the Collateral
with good and indefeasible title thereto, free and clear of all liabilities,
mortgages, security interests, liens, pledges or encumbrances, and the Letters
Patent, the Applications and the Marks are subsisting and there are no suits or
actions commenced or threatened against the undersigned with respect to the
Letters Patent the Applications or the Marks; (g) all financial statements and
related information furnished and to be furnished to the Agent or the Lenders
from time to time by the undersigned are true and complete and fairly present
the financial or other information stated therein as at such dates or for the
periods covered thereby; (h) there are no actions, suits, proceedings or
investigations pending or, to the knowledge of the undersigned, threatened
against or affecting the undersigned before any court, governmental agency or
arbitrator, which involve forfeiture of any assets of the undersigned or which
may materially adversely affect the financial condition, operations, properties
or business of the undersigned or the ability of the undersigned to perform its
obligation under this Security Agreement; and (i) there has been no material
adverse change in the financial condition of the undersigned since the last such
financial statements or information.
7. DEFAULT. IF any of the following events of default shall occur (each
an "EVENT OF DEFAULT"):
(a) any Obligor shall default and there shall be a continuance thereof in
the performance of any of its agreements herein after twenty (20) days
notice thereof by Agent or in the Loan Agreement or in any instrument
or document delivered pursuant to this Security Agreement or the
Liabilities (including a failure to comply with the preceding
paragraph) beyond any applicable notice and grace periods;
(b) any Obligor
- 7 -
(i) shall generally not, or be unable to, or shall admit in writing
its inability to, pay its debts as such debts become due;
(ii) shall make an assignment for the benefit of creditors;
(iii) shall file a petition in bankruptcy or for any relief under any
law of any jurisdiction relating to reorganization,
arrangement, readjustment of debt, dissolution or liquidation;
(iv) shall have any such petition filed against it and the same
shall remain undismissed for a period of 90 days or shall
consent or acquiesce thereto; or
(v) shall have had a receiver, custodian or trustee appointed for
all or a substantial part of its property.
THEN, unless and to the extent that the Lenders shall otherwise elect, all of
the Liabilities shall become and be due and payable forthwith. THE RIGHTS OF THE
AGENT AND THE LENDERS SET FORTH IMMEDIATELY ABOVE ARE WITHOUT LIMITATION OF, AND
IN ADDITION TO, ANY OTHER RIGHT OF THE AGENT OR THE LENDERS UNDER ANY OTHER
DOCUMENT EVIDENCING OR EXECUTED IN CONNECTION WITH THE LIABILITIES (INCLUDING
BUT NOT LIMITED TO ANY RIGHT OF ACCELERATION OF PAYMENT PURSUANT TO THE
PROVISIONS THEREOF OR ANY RIGHT OF THE AGENT OR THE LENDERS TO MAKE DEMAND FOR
PAYMENT THEREUNDER WITHOUT REFERENCE TO ANY PARTICULAR CONDITION OR EVENT).
8. SETOFF. In the event that any amount becomes due and payable hereunder
and the Agent shall have demanded payment thereof from the undersigned, in
addition to all other rights and remedies, the Agent and each of the Lenders
(including subsidiaries and each and every affiliate) is hereby irrevocably
authorized, without prior notice to the undersigned, to set off any balances
held for the account of or any other liability owing by any such Lender or Agent
or any such affiliate to the undersigned at any of the Agent's or Lenders' (or
such subsidiary's or affiliate's) offices, in dollars or any other currency,
against any of the obligations of the undersigned to the Lenders or Agent, as
the such Lender or Agent may elect.
9. NOTICES. All notices, requests, demands or other communications to or
upon the undersigned or the Agent shall be in writing and shall be deemed to be
delivered upon receipt if delivered by hand or overnight courier or five days
after mailing to the address (a) of the undersigned set forth below the
undersigned's execution of this Security Agreement, (b) of the Agent as first
set forth above, or (c) of the undersigned or the Agent at such other address as
the undersigned or the Agent shall specify to the other in writing.
10. ENTIRE AGREEMENT, AMENDMENT AND WAIVER. This Security Agreement
constitutes the entire agreement between the undersigned and the Agent in
respect of the subject matter hereof and may be amended only by a writing signed
on behalf of each party and shall be effective only to the extent set forth in
that writing. No delay by the Agent or any of the Lenders in exercising any
power or right hereunder shall operate as a waiver thereof or of any other power
or right; nor shall
- 8 -
any single or partial exercise of any power or right preclude other or future
exercise thereof, or the exercise of any other power or right hereunder.
11. GENERAL WAIVERS. The undersigned hereby waives presentment, notice of
dishonor and protest of all instruments included in or evidencing the
Liabilities or the Collateral and any and all other notices and demands
whatsoever, whether or not relating to such instruments (the "SECURED
DOCUMENTS"). The undersigned waives all demands, notices and protests of every
kind which are not expressly required under this Security Agreement which are
permitted by law to be waived, and which would, if not waived, impair the
Agent's enforcement of this Security Agreement or release any Collateral from
the Agent's security interest hereunder. By way of example, but not in
limitation of the Agent's rights under this Security Agreement, the Agent does
not have to give the undersigned notice of any of the following:
(a) notice of acceptance of this Security Agreement;
(b) notice of loans made, credit extended, Collateral received or
delivered;
(c) any Event of Default (except as otherwise expressly provided herein);
(d) any action which the Agent does or does not take regarding any Obligor
or any other person or any other collateral securing the Liabilities;
(e) except as otherwise provided herein, enforcement of this Security
Agreement against the Collateral; or
(f) any other action taken in reliance on this Security Agreement.
The undersigned waives all rules of suretyship law and any other law
whatsoever which is legally permitted to be waived and which would, if not
waived, impair the Agent's enforcement of its security interests. By way of
example, but not in limitation of the Agent's rights under this Security
Agreement, the Agent or the Banks, as set forth in the Loan Agreement, may do
any of the following without notice to the undersigned except to the extent that
notice to the undersigned is required under another Secured Document or in each
case in which the agreement of such undersigned is required because such
undersigned is a principal party to a Liability and, as a matter of contract,
the agreement of such undersigned is required:
(a) change, renew or extend the time for repayment of all or any part of
the Liabilities;
(b) change the rate of interest or any other provisions with respect to
all or any part of the Liabilities;
(c) release, surrender, sell or otherwise dispose of any money or property
which is in the Agent's possession as collateral security for the
Liabilities;
(d) fail to perfect any security interest in any Collateral;
(e) release or discharge any party liable to the Agent or any of the Banks
in whole or in part for the Liabilities, or accept any additional
parties or guarantors;
(f) delay or refrain from exercising any of the Agent's or the Banks'
rights;
(g) settle or compromise any and all claims pertaining to the Liabilities
and the Collateral; and
- 9 -
(h) apply any money or property of the undersigned or that of any other
party liable to the Agent for any part of the Liabilities in any order
the Banks choose.
THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO
THE FULL EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT TO A TRIAL BY JURY OF ANY
DISPUTE ARISING UNDER OR RELATING TO THIS SECURITY AGREEMENT, AND AGREES THAT
ANY SUCH DISPUTE SHALL, AT THE AGENT'S OPTION, BE TRIED BEFORE A JUDGE SITTING
WITHOUT A JURY.
IN ADDITION, THE UNDERSIGNED WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE
BASED UPON ANY STATUTE OF LIMITATIONS OR ANY CLAIM OF DELAY BY THE AGENT AND ANY
SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.
12. RIGHTS CUMULATIVE. The rights, powers and remedies granted to the
Agent or the Lenders herein shall be cumulative and in addition to any rights,
powers and remedies to which the Agent or the Lenders may be entitled either by
operation of law or pursuant to any other document or instrument delivered or
from time to time to be delivered to the Agent in connection with any of the
Liabilities.
13. GOVERNING LAW; JURISDICTION. This Security Agreement shall be governed
by and construed in accordance with the laws of the State of New York. The
undersigned consent(s) to the nonexclusive jurisdiction and venue of the state
or federal courts located in such state. In the event of a dispute hereunder,
suit may be brought against the undersigned in such courts or in any
jurisdiction where the undersigned or any of its assets may be located. Service
of process by the Agent in connection with any dispute shall be binding on the
undersigned if sent to the undersigned by registered mail at the address(es)
specified below or to such further address(es) as the undersigned may specify to
the Agent in writing.
14. ASSIGNMENT. In accordance with the terms of the Loan Agreement, the
Banks and the Agent may assign, transfer and/or deliver to any transferee of any
of the Liabilities any or all of the Collateral, and thereafter shall be fully
discharged from all responsibility with respect to the Collateral so assigned,
transferred and/or delivered. Such transferee shall be vested with all the
powers and rights of such party hereunder with respect to such Collateral, but
such party shall retain all rights and powers hereby given with respect to any
of the Collateral not so assigned, transferred or delivered.
15. WAIVER OF PRESENTMENT, ETC. The undersigned hereby waive(s)
presentment, notice of dishonor and protest of all instruments included in or
evidencing the Liabilities or the Collateral and any and all other notices and
demands whatsoever, whether or not relating to such instruments.
- 10 -
16. MISCELLANEOUS. The undersigned, if more than one, shall be jointly and
severally liable hereunder and all provisions hereof regarding the Liabilities
or Collateral of the undersigned shall apply to any Liability or any Collateral
of any or all of them. JPMorgan Chase Bank shall act for itself and its
affiliates and the Lenders as collateral agent hereunder. This Security
Agreement shall be binding upon the heirs, executors, administrators, assigns or
successors of the undersigned; shall constitute a continuing agreement, applying
to all existing as well as future transactions between the Agent and the
undersigned that shall be at any time closed; and shall so continue in force
notwithstanding any change in any partnership party hereto, whether such change
occurs through death, retirement or otherwise.
17. INTERCREDITOR AGREEMENT. Certain provisions of this Security Agreement
are subject to the provisions of the Intercreditor Agreement between JPMorgan
Chase Bank, as Agent for the Banks under that certain Multicurrency Credit
Agreement with Hardinge, Inc. dated as of the date hereof, as amended from time
to time ("CREDIT AGREEMENT") and Agent dated of even date herewith, as the same
may be amended from time to time ("INTERCREDITOR AGREEMENT"). In the event of
any conflict between the express terms and conditions of this Security Agreement
and the express terms and conditions of the Intercreditor Agreement, the
Intercreditor Agreement shall control, PROVIDED that this paragraph shall in no
way benefit the undersigned or any successor or assign of the undersigned,
including, without limitation, a debtor in possession or any trustee for the
estate created by the commencement of any Insolvency or Liquidation Proceeding.
All capitalized terms used in this paragraph, but not otherwise defined in this
Security Agreement, shall have the meanings set forth in the Intercreditor
Agreement.
[Signature Page Follows]
- 11 -
IN WITNESS WHEREOF, the undersigned has executed this instrument or has
caused this instrument to be duly executed by its proper officer(s) as of the
24th day of October, 2002.
HARDINGE INC.
Address for notices:
By: /s/ J. XXXXXXX XXXXX,
Hardinge Inc. ----------------------------------
One Hardinge Drive J. Xxxxxxx Xxxxx, President
Xxxxxx, Xxx Xxxx 00000 and Chief Executive Officer
Attn: Chief Financial Officer
Telecopier No. (000) 000-0000
State of Organization: New York
Tax ID/Organizational Number: 00-0000000
SCHEDULE A
Patents
HARDINGE:
U.S. PATENT DATE ISSUED INVENTION
----------- ----------- ---------
4,506,569 3/26/85 Multiple Axis Slantbed Machine
4,656,708 4/14/87 Live Tooling Turret
4,829,861 5/16/89 Headstock Assembly for a Chucker and
Bar Machine
4,858,938 8/22/89 Two Piece Collet w/Interlocking Collet
Assembly
Des. 303,805 10/3/89 Combined Chucker and Bar Machine
4,893,532 1/16/90 Breakaway Tool Element & Method of
Mounting
Des. 306,865 3/27/90 Combined Chucker & Bar Machine
Des. 311,407 10/16/90 Machine Tool Bed
5,096,213 3/17/92 Collet Assembly
5,113,558 5/19/92 Bed Cooler & Chip Flusher for a
Machine Tool
5,190,421 3/2/93 Coolant Supply System for a Machine
Tool
5,213,019 5/25/93 Headstock Cooling System for a
Machine Tool
5,221,098 6/22/93 Collet Closer
Des. 338,476 8/17/93 Chucker and Bar Machine
5,282,402 2/1/94 Machine Tool Tailstock
5,303,458 4/19/94 Method & Apparatus for Detecting &
Comp. Thermal Growth
5,325,750 7/5/94 Machine Tool Assembly Having
Replicated Support Surface
5,330,224 7/19/94 Xxxxxx Xxxxx
5,349,731 9/27/94 Temp. Compensated & Shock Resistant
Machine Tool
5,367,754 11/29/94 Gang Tooling for CNC Lathe
5,397,135 3/14/95 Expanding Collet Assembly
5,325,749 7/5/95 Machine Tool Having a Quick Release
Draw Tube
5,617,769 4/8/97 Thermally Compliant Bar Feeding
Machine
5,948,177 9/7/99 Collet Metal Treating Process
6,036,415 3/14/00 Spindle for Gripping & Closing a
Mounting Member
U.S. PATENT DATE ISSUED INVENTION
----------- ----------- ---------
6,257,595 7/10/01 Xxxxxx Xxxxx With Quick-Change Cap
6,264,210 7/24/01 Quick-Change Jaw Xxxxx System
5,104,237 4/14/92 Self-Compensating Hydrostatic Linear
Motion Bearing and Method
5,281,032 1/25/94 Self-Compensating Hydrostatic Bearings
for Supporting Shafts and Spindles and
The Like for Rotary and Translational
Motion and Methods Therefor
5,466,071 11/14/95 High Speed Hydrostatic Spindle Design
5,533,814 7/9/96 Low Profile Self-Compensated
Hydrostatic Thrust Bearing
5,700,092 12/23/97 Integrated Shaft Self-Compensating
Hydrostatic Bearing
5,674,032 10/7/97 Tooling System and Method with
Integral Hydrostatic Bearings and
Turbine Power Source
EXPIRED PATENTS:
---------------
4,423,993 1/3/84 Retractable Bar Stock Feeder
4,463,634 8/7/84 Parts Catcher for an Automatic Machine
Des. 275,860 10/9/84 Combined Chucker and Bar Machine
4,477,095 10/16/84 Collet Adapter
Des. 278,245 4/2/85 Collet Holder
Des. 278,344 4/9/85 Collet Holder
4,524,655 6/25/85 Indexable Machine Tool Turret &
Attachments Therefor
4,907,478 3/13/90 Apparatus & Process for Assembling a
Machine Tool and Formed
4,981,056 1/1/91 Apparatus & Process for Assembling a
Machine Tool and Formed
5,087,059 2/11/92 Tool for Installing or Removing a Collet
Head
4,478,117 10/23/84 Slant Bed for Chucker Machine
D271,977 12/27/83 Master Collet for Machine Tools
4,413,939 11/8/83 Bar Stock Feeder
4,387,905 6/14/83 Machine Tool Xxxxx
4,329,785 5/18/82 Presetter Gauge
4,312,105 1/26/82 Programmable Turret-type Machine Tool
4,309,041 1/5/82 Machine Tool Collet
4,262,563 4/21/81 Turret Indexing Assembly for Machine
Tools
4,255,056 3/10/81 Pre-setter for positioning tooling on turrets
4,249,748 2/10/81 One-piece collet and process for making
same
4,245,846 1/20/81 One-piece collet
4,226,322 10/7/80 Machine tool guard door assembly
4,210,040 4/1/80 Apparatus for turning machines and the
like for simultaneous axial and radial
profiling of work
D255,693 7/1/80 Font of characters
4,195,538 4/1/80 Machine tool feed screw assembly
4,143,564 3/13/79 Apparatus for simultaneously forming
selected circumferential and axial profiles
on a workpiece
4,129,220 12/12/78 Bar stock feed apparatus
4,080,854 3/28/78 Adjustable tool holder
RE29,533 2/7/78 Self-centering jaw xxxxx
4,044,650 8/30/77 Milling attachment for a lathe
D245,007 4/12/77 Automatic chucking machine
D243,664 3/15/77 Index ring for a machine tool
3,961,800 6/8/76 Stub collet
3,952,693 4/27/76 Machine tool dial assembly
APPLICATIONS PENDING:
APPLICATION # APPLICATION DATE DESCRIPTION
------------- -----------------------------------------
9/389051 9/2/99 Indexing Tool Turret
9/939795 8/28/01 Three Piece Coupling Arrangement
for a Turret Indexing Mechanism for
a Machine Tool Assembly
60/406933 8/30/02 Hydrostatic Bearing for Linear Motion
Guidance
10/231382 8/30/02 Expanding Collet Assumbly
10/156694 5/29/02 Dead Length Xxxxxx Xxxxx Assembly
10/202671 7/25/02 Driving Connection Arrangement &
Sealing arrangement for a live tool and
method for sealing the same.
10/228256 8/27/02 Collet adapter xxxxx assembly w/axially
fixed collet head
SCHEDULE B
Trademarks and Service Marks
ACTIVE:
TRADEMARK SERIAL NUMBER REGISTRATION NUMBER
--------- ------------- -------------------
(Step-up design) 76165657
LEADER BY DESIGN 76345949
KEL-VISTA 76167588 2492633
(Xxxxx/W-H Design) 75634382
QUEST 75731597 2451904
SUPER-PRECISION2 75652345
ACCEL 75501399
TWINTURN 75501398 2356062
KEL-VARIA 75376187 2207179
KEL-VISION 75368632 2207121
XXXXXXXXXXXX 75368631 2231733
COBRA 75086875 2209431
SUPER-PRECISION 75079009 2289167
SURE-GRIP 75075356 2263899
CONQUEST 75028199 2015567
SURE-GRIP 74490861 1921498
AUTOLOAD 74289208 1848983
HQC 74261255 1782411
HARCRETE 73831955 1616425
CONQUEST 73797279 1569282
HAR-MATIC 73775760 1553488
HARDINGE 73740907 1534250
CHNC 73639684 1451786
HARDINGE CHNC II
SUPER-PRECISION 73575864 1407385
TFB 73541047 1418936
HSL FIVE-NINE 73401351 1261488
DV FIVE-NINE 73389600 1262848
DSM FIVE-NINE 73379432 1259831
HLV 73379222 1250969
SUPERSLANT 73350813 1227337
"A TOOLMAKER'S
DREAM" 73315539 1212164
TRADEMARK SERIAL NUMBER REGISTRATION NUMBER
--------- ------------- -------------------
VARI-GRIP 73123324 1089575
SUPER-PRECISION 73024104 1062090
HARDINGE (Name) 71541930 514077
LEANTURN 76430235
ELITE 76386432
NOT ACTIVE:
TRADEMARK SERIAL NUMBER REGISTRATION NUMBER
--------- ------------- -------------------
HARDMILLING 75501397
(Tool-Room Lathe Design) 74424847
ULTRA-PRECISION 74420703
VERSA-FLEX 74269550
DEAD-LENGTH 73213329 1144756
IMPACT SERVICES IMAGERY-
MEDIA-PRODUCTION-AUDIO/
VIDEO-COMMUNICATIONS-
TRAINING 73685703 1509966
HARDINGE CHNC II+
SUPER-PRECISION 73648865 1460645
HARDINGE CHNC I
PRECISION 73648864 1460644
PTM 4000 73518329 1361448
DSM-A 73506283 1338814
THRU-HOLE 73485576 1369807
TUTOR/TURN 73444314 1296085
DO THE HARDINGE
SLANT 73379301 1262844
HXL 73377847 1250966
DOVETAIL BED 73196437
HLV 73191944
AHC 73188161 1139400
HNC 73157878 1100041
HF 73148813 1104208
LENSMASTER 72396339 944609
CATARACT 72360071 926778
CASCADE 72057954 679205
ELECTRICAL EAR 71400459 358544
PATROL 71061263 97768
ALERT 71061262 86587
TRIUMPH 76339490
CHNC 73255277 1164398
PERFORMANCE HAS
ESTABLISHED LEADERSHIP
FOR HARDINGE 73138219 1151472
SCHEDULE C
Leased Locations
1. 0000 - 0 Xxxxxx Xxxx Xxxxxxx
Xxxxxxxxxx, Xxxx 00000-0000
2. 0000 X. Xxxx Xxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
[JPMORGAN CHASE LOGO]
PLEDGE SECURITY AGREEMENT
(STOCK OF DOMESTIC AND FOREIGN SUBSIDIARIES)
The undersigned executes and delivers this Pledge Security Agreement (the
"AGREEMENT") to JPMORGAN CHASE BANK, as agent for the Lenders (as defined below)
(the "AGENT"), having an office located at 0000 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx
00000, in consideration of one or more loans, letters of credit or other
financial accommodation made, issued or extended by the Lenders to the
undersigned or to any person in respect of whose Liabilities (as defined below)
the undersigned now or hereafter guarantees or otherwise becomes liable for
payment. Accordingly, the Agent shall have the rights, remedies and benefits
hereinafter set forth.
1. DEFINITIONS. The term "LIABILITIES" shall include any and all indebtedness,
obligations and liabilities of the undersigned to any of the Banks (as defined
below) and/or the Agent and/or other financial institutions and also to others
to the extent of their participations granted to or interest therein created or
acquired for them by the Banks or Agent arising under (i) that certain Term Loan
Agreement dated as of the date hereof among Hardinge Inc. and the Agent and the
Banks signatory thereto and each other financial institution which from time to
time becomes a party thereto (individually a "BANK" and collective the "BANKS")
and as the same may be amended from time to time (the "LOAN AGREEMENT"), (ii)
certain credit facilities made available by JPMorgan Chase Bank and/or KeyBank
National Association to Hardinge Inc. for foreign exchange, letters of credit
and derivative products and exposures, including without limitation, interest
rate swap agreements or other rate protection or hedge agreements or mechanisms
and the documents executed in connection with any of the above now or hereafter
existing, and (iii) certain guarantees to JPMorgan Chase Bank and/or its
subsidiaries and affiliates, including without limitation, JPMorgan Leasing, in
connection with the purchase of the undersigned's customer notes by such entity
and the documents executed in connection with any of the above now existing (the
Banks and those other banks and financial institutions set forth above shall be
collectively referred to as the "LENDERS" and each individually a "LENDER").
The term "COLLATERAL" means all property in which the undersigned grants a
security interest pursuant to the "Grant of Security Interest" paragraph set
forth below.
The term "DOMESTIC SUBSIDIARY" means any Subsidiary that is organized under
the laws of any political subdivision of the United States.
The term "FOREIGN SUBSIDIARY" means any Subsidiary other than a Domestic
Subsidiary.
The term "OBLIGOR" means the undersigned or any maker, drawer, acceptor,
indorser, guarantor, surety, accommodation party or other person liable upon or
for any of the Liabilities or Collateral.
- 2 -
The term "SUBSIDIARY" means a corporation or other entity of which at least
a majority of the securities or other ownership interest having ordinary voting
power (absolutely or contingently) for the election of directors or other
persons performing similar functions are owned directly or indirectly.
The term "THRESHOLD AMOUNT" means with respect to a Domestic Subsidiary,
assets with a book value of at least $1,000,000 and with respect to a Foreign
Subsidiary, assets with a book value of at least $2,000,000.
2. GRANT OF SECURITY INTEREST.
(a) As security for the payment of the Liabilities, the undersigned hereby
grants to the Agent, for the benefit of the Lenders and itself as Agent, a
security interest in, a general lien upon and/or right of set-off against (as
applicable) the following Collateral and in all increases, profits or rights
received from it, and all substitutions and additions, all supporting
obligations thereof, together with any proceeds:
(i) 53,333 Shares of stock of Canadian Hardinge Machine Tools
Limited, a corporation organized under the laws of Canada, as indicated on
SCHEDULE A attached hereto, and any amendments, replacements or supplements to
such SCHEDULE A.
(ii) 87,593 Shares of stock of Hardinge Machine Tools, Limited, a
corporation organized under the laws of the United Kingdom, as indicated on
SCHEDULE A attached hereto, and any amendments, replacements or supplements to
such SCHEDULE A.
(iii) 2,000 Shares of stock of X. Xxxxxxxxxxxx & Co. AG, a
corporation organized under the laws of Switzerland, as indicated on SCHEDULE A
attached hereto, and any amendments, replacements or supplements to such
SCHEDULE A.
(iv) 33,333 Shares of stock of HTT Xxxxxx Tripet Xxxxxxxx XX, a
corporation organized under the laws of Switzerland, as indicated on SCHEDULE A
attached hereto, and any amendments, replacements or supplements to such
SCHEDULE A.
(v) 100 Shares of stock of Hardinge Technology Systems, Inc, a
corporation organized under the laws of the State of New York, as indicated on
SCHEDULE A attached hereto and any amendments, replacements or supplements to
such SCHEDULE A.
(b) As additional collateral security for the payment of the Liabilities,
the undersigned, subject to the condition precedent that the applicable
Subsidiary attains the requisite Threshold Amount, hereby grants to the Agent,
for the benefit of the Lenders and itself as Agent, a security interest in,
general lien upon, and/or right of setoff against (as applicable) 66-2/3% of any
and all
- 3 -
shares of securities or other interests having voting power for the election of
directors or other governing body of each and every Foreign Subsidiary and 100%
of any and all shares of securities or interests having ordinary voting power
for the election of directors or governing body of each and every Domestic
Subsidiary, as may be now owned or hereafter acquired and in all increases,
profits or rights received from it, and all substitutions and additions, all
supporting obligations thereof, and together with any proceeds. The undersigned
agrees to advise the Agent promptly upon any Subsidiary acquiring or achieving
the Threshold Amount and further agrees to execute any and all documents as may
be necessary or desirable in order to perfect the security interest herein
granted.
(c) The undersigned agrees that the Agent's records will be the accurate
record of any substitutions in and additions to the Collateral.
3. COVENANTS. As long as any part of the Liabilities remain unpaid the
undersigned agrees:
(a) to defend the Collateral against all claims, keep the collateral free
from other security interests and not dispose of any portion of the
Collateral without the Agent's written consent;
(b) to notify the Agent promptly of any changes in the undersigned's name
or address;
(c) to notify the Agent of any change in legal entity structure or change
in state of organization, if applicable;
(d) to execute and deliver and hereby authorizes Agent to file any
financing statements or other documents, pay any costs of title
searches and filing fees, and take any other action the Agent requests
in relation to the security interest;
(e) to pay all taxes and other charges which may be levied against the
Collateral;
(f) to notify the Agent of the creation or acquisition of any new
Subsidiary and of the acquisition of assets by or the transfer of
assets to any Subsidiary, and within ten (10) days of such creation,
acquisition or transfer, deliver to Agent the stock certificates
representing 66-2/3% of any such Foreign Subsidiary or 100% of any
such Domestic Subsidiary along with corresponding stock powers
executed in blank; provided, however, nothing contained in this
provision shall be deemed to be consent by the Agent or any Bank, of
any such creation, acquisition or transfer;
(g) that without the Agent's prior written consent, issue any additional
shares or owner- ship interests in any of the companies whose stock or
interests constitute Collateral hereunder;
(h) that it shall not grant a security interest in, assign or otherwise
encumber the securities or other ownership interests in any of its
Subsidiaries.
4. WARRANTIES. As long as any part of the Liabilities remain unpaid the
undersigned warrant to the Agent and each of the Lenders that:
(a) each document representing the Collateral is genuine;
(b) the undersigned owns the Collateral;
(c) the undersigned is fully authorized to enter into this Agreement.
- 4 -
(d) SCHEDULE A sets forth all of the Borrower's Subsidiaries, which have
any material assets.
5. VOTING RIGHTS. If the Collateral is investment securities, the undersigned
authorizes the Agent to transfer them into the Agent's name or the name of any
nominee. So long as no Event of Default occurs, the Agent will mail the
undersigned all communications and proxies addressed to the Agent, within a
reasonable time. After default, the Agent does not have to send the undersigned
further communications and any proxies issued by the undersigned will be
invalid. the Agent shall then have the right to vote in person or by proxy
without any direction from the undersigned.
6. DEFAULT. Any of the following will constitute an Event of Default:
(a) any Obligor shall default in the performance of any of its agreements
herein after twenty (20) days notice thereof by Agent or in the Loan
Agreement or in any instrument or document delivered pursuant to this
Agreement or the Liabilities beyond any applicable notice or grace
period;
(b) any Obligor
(i) shall generally not, or be unable to, or shall admit in writing
its inability to, pay its debts as such debts become due;
(ii) shall make an assignment for the benefit of creditors;
(iii) shall file a petition in bankruptcy or for any relief under any
law of any jurisdiction relating to reorganization,
arrangement, readjustment of debt, dissolution or liquidation;
(iv) shall have any such petition filed against it and the same
shall remain undismissed for a period of 90 days or shall
consent or acquiesce thereto; or
(v) shall have had a receiver, custodian or trustee appointed for
all or a substantial part of its property.
Upon the occurrence of an Event of Default, unless and to the extent that
the Lenders shall otherwise elect, all of the Liabilities shall become and be
due and payable forthwith. THE RIGHTS OF THE AGENT AND THE LENDERS SET FORTH
IMMEDIATELY ABOVE ARE WITHOUT LIMITATION OF, AND IN ADDITION TO, ANY OTHER RIGHT
OF THE AGENT OR THE LENDERS UNDER ANY OTHER DOCUMENT EVIDENCING OR EXECUTED IN
CONNECTION WITH THE LIABILITIES (INCLUDING BUT NOT LIMITED TO ANY RIGHT OF
ACCELERATION OF PAYMENT PURSUANT TO THE PROVISIONS THEREOF OR ANY RIGHT OF THE
AGENT OR THE LENDERS TO MAKE DEMAND FOR PAYMENT THEREUNDER WITHOUT REFERENCE TO
ANY PARTICULAR CONDITION OR EVENT).
7. DIVIDENDS/INCOME. So long as no Event of Default occurs, the undersigned
shall have the right to receive all cash income and/or dividends from the
Collateral. If the Agent receives any cash income and/or dividends before the
occurrence of an Event of Default, the Agent agrees to turn it over to the
undersigned. Once an Event of Default occurs, the undersigned will no longer be
entitled
- 5 -
to receive any cash income and/or dividends and if the undersigned receives any,
the undersigned agrees to turn it over to the Agent for the benefit of the
Lenders. The Agent may apply the net cash payments to the Liabilities but the
Agent will account for it and pay over to the undersigned any cash which remains
on hand after the Liabilities are satisfied.
8. GENERAL WAIVERS. Without affecting the undersigned's liability to the Agent
or the Banks, as set forth in the Loan Agreement, any of the following may be
done without notice to the undersigned:
(a) change, renew or extend the time for repayment or any part of the
Liabilities;
(b) change the rate of interest or any other provisions with respect to
any part of the Liabilities;
(c) surrender, sell or otherwise dispose of any money or property which is
in the Agent's possession as collateral security for the Liabilities;
(d) release or discharge any party liable to the Agent or the Banks in
whole or in part for the Liabilities or accept any additional parties
or guarantors;
(e) delay or refrain from exercising any of the Agent's or the Banks'
rights;
(f) settle or compromise any and all claims;
(g) apply any money or property of the undersigned or that of any other
party liable to the Agent for any part of the Liabilities, to the
Liabilities in any order the Banks choose.
9. CUSTODY OF COLLATERAL. The Agent agrees to use reasonable care to protect
any Collateral in its possession. However, the Agent shall not be required to:
(a) vote the stock;
(b) collect any debt;
(c) exercise any conversion rights;
(d) take any steps necessary to preserve rights against prior parties;
(e) notify the undersigned of any maturities, calls, conversions, or other
similar matters concerning the Collateral, except for forwarding to
the undersigned those communications which are addressed to the
undersigned.
(f) act upon any request the undersigned may send the Agent.
10. CHANGES IN COLLATERAL. Whether or not an Event of Default has occurred, the
undersigned authorizes the Agent to:
(a) receive and hold as additional collateral any non-cash increases in or
profits or distributions, or non-cash dividends on the Collateral;
(b) surrender the Collateral and receive any payment or distribution upon
redemption, dissolution or liquidation of the issuer of the
Collateral;
If the undersigned receives any of the payments or distributions described
above, the undersigned agrees to turn them over to the Agent for the benefit of
the Lenders.
- 6 -
11. FURTHER ASSURANCES. The undersigned appoints the Agent as its attorney to
take any necessary steps, including the filing of financing statements, to
perfect the Agent's security interest without first obtaining the undersigned's
signatures. Upon the Agent's request, the undersigned will execute any
amendments, and hereby authorizes Agent to file any amendments or continuations,
which are necessary to perfect and continue the security interest in the
Collateral.
12. FEES AND EXPENSES. The undersigned agrees to pay all the Agent's reasonable
costs, including reasonable attorneys' fees for necessary court process in
enforcing this Agreement or realizing upon the Collateral.
13. MODIFICATION. This Agreement cannot be modified except by a written
agreement.
14. NOTICES. The undersigned waives any right to notice of any action the Agent
may take with respect to the Collateral. If the Agent shall provide such notice,
the undersigned agrees that notice will be sufficiently given if sent to the
undersigned's address shown in this Agreement or to a new address which the
undersigned shall have notified the Agent of in writing. The undersigned agrees
that notice of foreclosure sale sent at least five days before the sale provides
the undersigned with a reasonable opportunity to exercise our right of
redemption of the Collateral and any other legal rights.
15. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. The undersigned
consents to the nonexclusive jurisdiction and venue of the state or federal
courts located in the State of New York. In the event of a dispute hereunder,
suit may be brought against the undersigned in such courts or in any
jurisdiction where the undersigned or any of its assets may be located. Service
of process by the Agent in connection with any dispute shall be binding on the
undersigned if sent to the undersigned by registered mail at the address
specified below or to such further address as the undersigned may specify to the
Agent in writing.
16. INTERCREDITOR AGREEMENT. Certain provisions of this Agreement are subject
to the provisions of the Intercreditor Agreement between JPMorgan Chase Bank, as
agent for the banks under that certain Multicurrency Credit Agreement with
Hardinge, Inc. dated as of the date hereof, as amended from time to time
("CREDIT AGREEMENT") and the Agent dated of even date herewith, as the same may
be amended from time to time ("INTERCREDITOR AGREEMENT"). In the event of any
conflict between the express terms and conditions of this Agreement and the
express terms and conditions of the Intercreditor Agreement, the Intercreditor
Agreement shall control, PROVIDED that this paragraph shall in no way benefit
the Borrower or any successor or assign of the Borrower, including, without
limitation, a debtor in possession or any trustee for the estate created by the
commencement of an Insolvency or Liquidation Proceeding. All capitalized terms
used in this paragraph but not otherwise defined in this Agreement shall have
the meanings set forth in the Intercreditor Agreement.
17. WAIVER OF TRIAL BY JURY. THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES (TO THE FULL EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT
TO A TRIAL BY JURY
- 7 -
OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS SECURITY AGREEMENT AND AGREES
THAT ANY SUCH DISPUTE SHALL, AT THE AGENT'S OPTION BE TRIED BEFORE A JUDGE
SITTING WITHOUT A JURY. IN ADDITION, THE UNDERSIGNED WAIVES THE RIGHT TO
INTERPOSE ANY DEFENSE BASED UPON ANY STATUTE OF LIMITATIONS OR ANY CLAIM DELAY
BY THE AGENT AND ANY SETOFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.
IN WITNESS WHEREOF, the undersigned has executed this instrument or has
caused this instrument to be duly executed as of the 24th day of October, 2002.
Address for Notices: HARDINGE INC.
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000 By: /s/ J. XXXXXXX XXXXX
Attn: Chief Financial Officer --------------------------------
J. Xxxxxxx Xxxxx, President
and Chief Executive Officer
SCHEDULE A
TO
PLEDGE SECURITY AGREEMENT
(STOCK OF DOMESTIC AND FOREIGN SUBSIDIARIES)
BETWEEN
JPMORGAN CHASE BANK, AS AGENT
AND
HARDINGE INC.
DATED AS OF OCTOBER 24, 2002
COLLATERAL:
53,333 Shares of stock, representing not less than sixty-six and two-thirds
percent (66-2/3%) of the issued and outstanding capital stock of Canadian
Hardinge Machine Tools Limited.
87,593 Shares of stock, representing not less than sixty-six and two-thirds
percent (66-2/3%) of the issued and outstanding capital stock of Hardinge
Machine Tools, Limited.
2,000 Shares of stock, representing not less than sixty-six and two-thirds
percent (66-2/3%) of the issued and outstanding capital stock of X. Xxxxxxxxxxxx
& Co. AG.
33,333 Shares of stock, representing not less than sixty-six and two-thirds
percent (66-2/3%) of the issued and outstanding capital stock of HTT Xxxxxx
Tripet Xxxxxxxx XX.
100 Shares of stock, representing not less than one hundred percent (100%) of
the issued and outstanding capital stock of Hardinge Technology Systems, Inc.
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
STATEMENT OF PURPOSE FOR AN EXTENSION OF CREDIT
SECURED BY MARGIN STOCK
JPMORGAN CHASE BANK, AS AGENT
Name of Bank
(Federal Reserve Form U-1)
This form is required by law (15 U.S.C. Sections 78g and 78W; 12 CFR 221).
INSTRUCTIONS
1. This form must be completed when a bank extends credit in excess of $100,000
secured directly or indirectly, in whole or in part, by any margin stock.
2. The term "margin stock" is defined in Regulation U (12 CFR 221) and includes,
principally: (1) stocks that are registered on a national securities
exchange or that are on the Federal Reserve Board's List of Marginable OTC
Stocks; (2) debt securities (bonds) that are convertible into margin stocks;
(3) any over-the-counter security designated as qualified for trading in the
National market System under a designation plan approved by the Securities
and Exchange Commission (NMS security); and (4) shares of mutual funds,
unless 95 per cent of the assets of the fund are continuously invested in
U.S. government, agency, state, or municipal obligations.
3. Please print or type (if space is inadequate, attach separate sheet).
PART 1. TO BE COMPLETED BY BORROWER(S).
1. What is the amount of the credit being extended? $23,000,000 TERM LOAN
2. Will any part of this credit be used to purchase or carry margin stock?
/ / Yes /X/ No
IF THE ANSWER IS "NO", describe the specific purpose of the credit. TO REFINANCE
EXISTING INDEBTEDNESS AND FOR OTHER PROPER GENERAL CORPORATE PURPOSES
I (we) have read this form and certify that to the best of my (our) knowledge
and belief the information given is true, accurate, and complete, and that the
margin stock and any other securities collateralizing this credit are authentic,
genuine, unaltered and not stolen, forged or counterfeit.
Signed: Signed:
HARDINGE INC.
By:/s/ J. XXXXXXX XXXXX 10/24/02
--------------------------- --------------------------------------
Borrower's Signature Date Borrower's Signature Date
J. Xxxxxxx Xxxxx, President and
Chief Executive Officer
-------------------------------- ---------------------------------------
Print or Type Name
Print or Type Name
THIS FORM SHOULD NOT BE SIGNED IF BLANK
A BORROWER WHO FALSELY CERTIFIES THE PURPOSE OF A CREDIT ON THIS
FORM OR OTHERWISE WILLFULLY OR INTENTIONALLY EVADES THE PROVISIONS
OF REGULATION U WILL ALSO VIOLATE FEDERAL RESERVE REGULATION X,
"BORROWERS OF SECURITIES CREDIT".
PART II. TO BE COMPLETED BY BANK ONLY IF THE PURPOSE OF THE CREDIT IS TO
PURCHASE OR CARRY MARGIN STOCK (PART 1(2) ANSWERED "YES").
1. List the margin stock securing this credit; do not include debt securities
convertible into margin stock. The maximum loan value of margin stock is 50 per
cent of its current market value under the current Supplement to Regulation U.
Date and source of
No. of Issue Market price per valuation Total market value
shares share (See note below) per issue
----------------- ------------------------- ------------------------ ---------------------- -----------------------
2. List the debt securities convertible into margin stock securing this credit.
The maximum loan value of such debt securities is 50 per cent of the current
market value under the current Supplement to Regulation U.
Date and source of
Principal Issue Market price valuation Total market value per
Amount (See note below) issue
----------------- ------------------------- ------------------------ ---------------------- -----------------------
3. List other collateral including nonmargin stock securing this credit.
Date and Source of
valuation Good faith
Describe briefly Market price (See note below) loan value
------------------------------------------ ------------------------ ---------------------- -------------------------
Note: Bank need not complete "Date and source of valuation" if the market value
was obtained from regularly published information in a journal of general
circulation or an automated quotation system.
PART XXX.XX BE SIGNED BY A BANK OFFICER IN ALL INSTANCES.
I am a duly authorized representative of the bank and understand that this
credit secured by margin stock may be subject to the credit restrictions of
Regulation U. I have read this form and any attachments, and I have accepted the
customer's statement in Part I in good faith as required by Regulation U*; and I
certify that to the best of my knowledge and belief, all the information given
is true, accurate and complete. I also certify that if any securities that
directly secure the credit are not or will not be registered in the name of the
borrower or its nominee.
I have or will cause to have examined the written consent of the registered
owner to pledge such securities. I further certify that any securities that have
been or will be physically delivered to the bank in connection with this credit
have been or will be examined, that all validation procedures required by bank
policy and the Securities Exchange Act of 1934 (section 17(f), as amended) have
been or will be performed, and that I am satisfied to the best of my knowledge
and belief that such securities are genuine and not stolen or forged and their
faces have been altered.
Signed:
As of October 24, 2002 JPMORGAN CHASE BANK, AS AGENT
Date Bank officer's signature
VICE PRESIDENT /s/ XXXXXXXXX X. XXXXXX
---------------------------
Title Xxxxxxxxx X. XxXxxx
* To accept the customer's statement in good faith, the officer of the bank must
be alert to the circumstances surrounding the credit and, if in possession of
any information that would cause a prudent person not to accept the statement
without inquiry, must have investigated and be satisfied that the statement is
truthful. Among the facts which would require such investigation are receipt of
the statement through the mail or from a third party.
THIS FORM MUST BE RETAINED BY THE LENDER FOR THREE YEARS AFTER THE CREDIT IS
EXTINGUISHED.
03-1084 (MMBG 11/01)
[JPMORGAN CHASE LOGO]
PLEDGE SECURITY AGREEMENT
(CUSTOMER NOTES)
The undersigned executes and delivers this Pledge Security Agreement (the
"AGREEMENT") to JPMORGAN CHASE BANK, as agent for the Lenders (as defined below)
(the "AGENT"), having an office located at 0000 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx
00000, in consideration of one or more loans, letters of credit or other
financial accommodation made, issued or extended by the Lenders to the
undersigned or to any person in respect of whose Liabilities (as defined below)
the undersigned now or hereafter guarantees or otherwise becomes liable for
payment. Accordingly, the Agent shall have the rights, remedies and benefits
hereinafter set forth.
1. DEFINITIONS. The term "LIABILITIES" shall include any and all indebtedness,
obligations and liabilities of the undersigned to any of the Banks (as defined
below) and/or the Agent and/or other financial institutions and also to others
to the extent of their participations granted to or interest therein created or
acquired for them by the Banks or Agent arising under (i) that certain Term Loan
Agreement dated as of the date hereof, among Hardinge Inc. and the Agent and the
Banks signatory thereto and each other financial institution which from time to
time becomes a party thereto (individually a "BANK" and collective the "BANKS"),
as the same may be further amended from time to time (the "LOAN AGREEMENT"),
(ii) certain credit facilities made available by JPMorgan Chase Bank and/or
KeyBank National Association to Hardinge Inc. for foreign exchange, letters of
credit and derivative products and exposures, including without limitation,
interest rate swap agreements or other rate protection or hedge agreements or
mechanisms and the documents executed in connection with any of the above now or
hereafter existing, and (iii) certain guarantees to JPMorgan Chase Bank and/or
its subsidiaries and affiliates, including without limitation, JPMorgan Leasing,
in connection with the purchase of the undersigned's customer notes by such
entity and the documents executed in connection with any of the above now
existing (the Banks and those other banks and financial institutions set forth
above shall be collectively referred to as the "LENDERS" and each individually,
a "LENDER").
The term "COLLATERAL" means all property in which the undersigned grants a
security interest pursuant to the "Grant of Security Interest" paragraph set
forth below.
The term "OBLIGOR" means the undersigned or any maker, drawer, acceptor,
indorser, guarantor, surety, accommodation party or other person liable upon or
for any of the Liabilities or Collateral.
2. GRANT OF SECURITY INTEREST. As security for the payment of the Liabilities,
the undersigned hereby grants to the Agent, for the benefit of the Lenders and
itself as Agent, a security interest in, a general lien upon and/or right of
set-off against (as applicable) the following Collateral and in all
2
increases, profits or rights received from it, in all substitutions and
additions, all supporting obligations thereof together with any proceeds:
Any and all notes and other instruments in favor of Borrower for the
payment of obligations of domestic customers of the Borrower for goods or
services provided by Borrower in the ordinary course of Borrower's business
whether now existing or hereafter obtained, including, without limitation,
certain notes as indicated on SCHEDULE A attached hereto, and any amendments,
replacements or supplements to such SCHEDULE A (collectively, the "CUSTOMER
NOTES" and each a "CUSTOMER NOTE").
The undersigned agrees that records of Chemung Canal Trust Company, as
bailee for the benefit of the Agent (or any other successor bailee, the
"BAILEE") will be the accurate record of any substitutions in and additions to
the Collateral.
3. COVENANTS. As long as any part of the Liabilities remain unpaid the
undersigned agrees to:
(a) defend the Collateral against all claims, keep the collateral free
from other security interests and not dispose of any portion of the
Collateral without the Agent's written consent or in accordance with
the terms hereof;
(b) notify the Agent promptly of any changes in the undersigned's name or
address;
(c) notify the Agent of any change in legal entity structure or change in
state of organization, if applicable;
(d) execute and deliver and hereby authorizes Agent to file any financing
statements or other documents, pay any costs of title searches and
filing fees, and take any other action the Agent requests in relation
to the security interest;
(e) pay all taxes and other charges which may be levied against the
Collateral.
(f) deliver to Agent and the Bailee, as requested by Agent, but in any
event at least quarterly, an updated SCHEDULE A reflecting all
outstanding Customer Notes and deliver to the Bailee within 15 days of
each month end, the original of any such Customer Note not previously
delivered to the Bailee.
4. WARRANTIES. As long as any part of the Liabilities remain unpaid the
undersigned warrants to the Agent and each of the Lenders that:
(a) each document representing the Collateral is genuine;
(b) the undersigned owns the Collateral;
(c) the undersigned is fully authorized to enter into this Agreement.
(d) SCHEDULE A sets forth all of the Borrower's Customer Notes as of
September 30, 2002 and any replacement SCHEDULE A will set forth all
of the Borrower's Customer Notes at such time which have not otherwise
been released by the Agent as set forth below.
5. RELEASE OF COLLATERAL. From time to time, provided there exists no Event of
Default, Agent shall, upon written request by Borrower to Bailee therefor,
release from its security interest one or more Customer Notes for a Permitted
Purpose (hereafter defined) within five (5) business days from the receipt of
such request and will authorize its Bailee to release to Borrower such original
Customer Note at such time. "PERMITTED PURPOSE" as used herein shall mean (i)
the sale of one or
3
more Customer Notes at fair market value to a bonafide third party, or (ii) the
use of such Customer Notes for substitutions in conjunction with such sales or
any prior sales.
From time to time, provided there exists no Event of Default, Agent shall,
upon written request by Borrower to Bailee therefor, authorize the release from
the Bailee's possession within five (5) business days from the receipt of such
request one or more Customer Notes for the commencement by Borrower and
continuation of a foreclosure or repossession proceeding with respect to such
Customer Note, provided, however, the Agent's security interest in such Customer
Note and any proceeds thereof shall remain in full force and effect and shall
not be deemed to be released by such delivery.
6. DEFAULT. Any of the following will constitute an Event of Default:
(a) any Obligor shall default in the performance of any of its agreements
herein after twenty (20) days notice thereof by Agent or in the Loan
Agreement or in any instrument or document delivered pursuant to this
Agreement or the Liabilities beyond any applicable notice or grace
period.
(b) any Obligor
(i) shall generally not, or be unable to, or shall admit in writing
its inability to, pay its debts as such debts become due;
(ii) shall make an assignment for the benefit of creditors;
(iii) shall file a petition in bankruptcy or for any relief under any
law of any jurisdiction relating to reorganization,
arrangement, readjustment of debt, dissolution or liquidation;
(iv) shall have any such petition filed against it and the same
shall remain undismissed for a period of 90 days or shall
consent or acquiesce thereto; or
(v) shall have had a receiver, custodian or trustee appointed for
all or a substantial part of its property.
Upon the occurrence of an Event of Default, unless and to the extent that
the Lenders shall otherwise elect, all of the Liabilities shall become and be
due and payable forthwith. THE RIGHTS OF THE AGENT AND THE LENDERS SET FORTH
IMMEDIATELY ABOVE ARE WITHOUT LIMITATION OF, AND IN ADDITION TO, ANY OTHER RIGHT
OF THE AGENT OR THE LENDERS UNDER ANY OTHER DOCUMENT EVIDENCING OR EXECUTED IN
CONNECTION WITH THE LIABILITIES (INCLUDING BUT NOT LIMITED TO ANY RIGHT OF
ACCELERATION OF PAYMENT PURSUANT TO THE PROVISIONS THEREOF OR ANY RIGHT OF THE
AGENT OR THE LENDERS TO MAKE DEMAND FOR PAYMENT THEREUNDER WITHOUT REFERENCE TO
ANY PARTICULAR CONDITION OR EVENT).
7. INCOME. So long as no Event of Default occurs, the undersigned shall have
the right to receive all cash income (whether principal or interest) from the
Collateral. If the Agent receives any cash income before the occurrence of an
Event of Default, the Agent agrees to turn it over to the undersigned. Once an
Event of Default occurs, the undersigned will no longer be entitled to receive
any cash income and if the undersigned receives any, the undersigned agrees to
turn it over to the
4
Agent for the benefit of the Lenders. The Agent may apply the net cash payments
to the Liabilities but the Agent will account for it and pay over to the
undersigned any cash which remains on hand after the Liabilities are satisfied.
8. GENERAL WAIVERS. Without affecting the undersigned's liability to the Agent
or the Banks, as set forth in the Loan Agreement, any of the following may be
done without notice to the undersigned:
(a) change, renew or extend the time for repayment or any part of the
Liabilities;
(b) change the rate of interest or any other provisions with respect to
any part of the Liabilities;
(c) surrender, sell or otherwise dispose of any money or property which is
in the Agent's possession as collateral security for the Liabilities;
(d) release or discharge any party liable to the Agent or the Banks in
whole or in part for the Liabilities or accept any additional parties
or guarantors;
(e) delay or refrain from exercising any of the Agent's or the Banks'
rights;
(f) settle or compromise any and all claims;
(g) apply any money or property of the undersigned or that of any other
party liable to the Agent for any part of the Liabilities, to the
Liabilities in any order the Banks choose;
(h) change any of the terms of its agreements with the Bailee.
9. CUSTODY OF COLLATERAL. The Agent agrees to use reasonable care to protect
any Collateral in its possession. However, neither the Agent nor the Bailee
shall be required to:
(a) collect any debt;
(b) exercise any conversion rights;
(c) take any steps necessary to preserve rights against prior parties;
(d) notify the undersigned of any maturities, calls, conversions, or other
similar matters concerning the Collateral, except for forwarding to
the undersigned those communications which are addressed to the
undersigned;
(e) act upon any request the undersigned may send the Agent.
10. CHANGES IN COLLATERAL. The undersigned authorizes the Agent whether through
its Bailee or otherwise to:
(a) whether or not an Event of Default has occurred, to receive and hold
as additional collateral any non-cash increases in or profits or
distributions, or non-cash dividends on the Collateral;
(b) if an Event of Default has occurred, surrender the Collateral and
receive any payment or distribution upon redemption, dissolution or
liquidation of the issuer of the Collateral;
If the undersigned receives any of the payments or distributions contrary to the
provisions described above, the undersigned agrees to turn them over to the
Agent for the benefit of the Lenders.
11. FURTHER ASSURANCES. The undersigned appoints the Agent as its attorney to
take any necessary steps, including the filing of financing statements, to
perfect the Agent's security interest
5
without first obtaining the undersigned's signatures. Upon the Agent's request,
the undersigned will execute any amendments, and hereby authorizes Agent to file
any amendments or continuation forms, which are necessary to perfect and
continue the Agent's security interest in the Collateral.
12. FEES AND EXPENSES. The undersigned agrees to pay all the Agent's reasonable
costs, including reasonable attorneys' fees for necessary court process in
enforcing this Agreement or realizing upon the Collateral.
13. MODIFICATION. This Agreement cannot be modified except by a written
agreement.
14. NOTICES. The undersigned waives any right to notice of any action the Agent
may take with respect to the Collateral. If the Agent shall provide such notice,
the undersigned agrees that notice will be sufficiently given if sent to the
undersigned's address shown in this Agreement or to a new address which the
undersigned shall have notified the Agent of in writing. The undersigned agrees
that notice of foreclosure sale sent at least five (5) days before the sale
provides the undersigned with a reasonable opportunity to exercise our right of
redemption of the Collateral and any other legal rights.
15. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. The undersigned
consents to the nonexclusive jurisdiction and venue of the state or federal
courts located in the State of New York. In the event of a dispute hereunder,
suit may be brought against the undersigned in such courts or in any
jurisdiction where the undersigned or any of its assets may be located. Service
of process by the Agent in connection with any dispute shall be binding on the
undersigned if sent to the undersigned by registered mail at the address
specified below or to such further address as the undersigned may specify to the
Agent in writing.
16. INTERCREDITOR AGREEMENT. Certain provisions of this Agreement are subject
to the provisions of the Intercreditor Agreement between JPMorgan Chase Bank, as
agent for the banks under that certain Multicurrency Credit Agreement with
Hardinge Inc. dated as of the date hereof, as amended from time to time ("CREDIT
AGREEMENT") and the Agent dated of even date herewith, as the same may be
amended from time to time ("INTERCREDITOR AGREEMENT"). In the event of any
conflict between the express terms and conditions of this Agreement and the
express terms and conditions of the Intercreditor Agreement, the Intercreditor
Agreement shall control, PROVIDED that this paragraph shall in no way benefit
the Borrower or any successor or assign of the Borrower, including, without
limitation, a debtor in possession or any trustee for the estate created by the
commencement of an Insolvency or Liquidation Proceeding. All capitalized terms
used in this paragraph but not otherwise defined in this Agreement shall have
the meanings set forth in the Intercreditor Agreement.
17. WAIVER OF TRIAL BY JURY. THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES (TO THE FULL EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT
TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS SECURITY
AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL, AT THE AGENT'S OPTION BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY. IN ADDITION,
6
THE UNDERSIGNED WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE BASED UPON ANY STATUTE
OF LIMITATIONS OR ANY CLAIM DELAY BY THE AGENT AND ANY SETOFF OR COUNTERCLAIM OF
ANY NATURE OR DESCRIPTION.
IN WITNESS WHEREOF, the undersigned has executed this instrument or has
caused this instrument to be duly executed as of the 24th day of October, 2002.
Address for Notices: HARDINGE INC.
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000 By: /s/ J. XXXXXXX XXXXX
Attn: Chief Financial Officer -------------------------------
J. Xxxxxxx Xxxxx, President
and Chief Executive Officer
7
SCHEDULE A
TO
PLEDGE SECURITY AGREEMENT
(CUSTOMER NOTES)
BETWEEN
JPMORGAN CHASE BANK, AS AGENT
AND
HARDINGE INC.
DATED AS OF OCTOBER 24, 2002
CUSTOMER NOTES RECEIVABLE
Outstanding
Principal
Balance at
Note # Customer Name September 30, 2002
------ ------------- ------------------
1981 Advance Machine Corp 34,349.00
1112 Aircraft Ducting Repair Inc 45,925.00
2140 Astro Seal Inc 515,136.00
1122 Badge Machine Products Inc 111,302.00
1172 Badge Machine Products Inc 198,969.00
1182 Xxxx Engineering 33,580.00
3998 C M V Industries 50,624.09
4917 C M V Industries 20,760.56
2551 Cleveland Special Tool Inc 41,605.00
3787 Code Engineering Co 56,012.00
2449 Custom Brackets 127,191.37
2521 Custom Heliarc Welding & Mach 46,627.00
5618 D & E Specialties 95,244.00
1002 D & K Machine Co Inc 56,550.00
2248 D S Precision 46,040.58
1292 Digital Machine 12,988.12
1675 Eagle Industries Inc 117,896.81
1062 Eastaboga Tackle Mfg Co Inc 144,549.88
2516 Edco Machine Co Inc 59,954.28
2200 Elco Enterprises Inc 64,715.00
1072 Xxxxx Enterprises Inc 212,656.86
2679 X X Xxxx Industries Inc 28,595.00
8
2689 X X Xxxx Industries Inc 29,109.00
2829 X X Xxxx Industries Inc 30,034.00
2839 X X Xxxx Industries Inc 31,415.00
2071 Firstar Precision Corp 174,704.97
1012 Full Spectrum Design 118,872.00
1591 Glass Processing Co Inc 15,939.00
2241 Greenfield Machine Works 190,435.00
2251 Greenfield Machine Works 60,568.16
2509 In Tenths Industries Inc 97,933.00
3328 J Xxxx Xxxxxxxx Machining 72,396.20
5758 J Xxxx Xxxxxxxx Machining 71,596.38
2531 X X Tool & Die Co Inc 26,419.00
1759 Mahoning Valley Machining 33,335.00
6018 Major Tooling Inc 59,306.00
1152 Metal Industries 56,527.00
2541 Metrologic Instruments Inc 84,931.31
1055 Xxxxxx Xxxxxx C N C Inc 72,541.00
3118 On-Line Services Inc 68,729.60
2726 Phoenix Logistics inc 56,491.00
1022 Precision Machinists Co Inc 105,560.00
1082 Proform Mfg Inc 54,604.00
5858 Quality Tolerance Inc 35,752.00
1132 Xxxxx Precision Products 44,360.00
5108 Southern Machine & Tool Co 83,716.32
3899 Specialty Machines & Mfg 3,344.00
1778 Sto-Kar Enterprises Inc 34,725.00
3739 Sure Tight Mfg Inc 25,079.00
0000 Xxxxxxxx Inc 90,608.29
1730 T N B LLC 312,805.00
1142 T N T Machine Co Inc 169,827.30
1202 Tempco Mfg Co Inc 302,148.00
1222 V S Precision 38,610.00
1232 V S Precision 123,945.00
2577 Victory 1 Performance 810.00
1042 Volker Precision Products 49,371.50
2028 Xxxxxx Technologies Inc 104,538.00
2963 Xxxxxx Technologies Inc 14,494.00
1092 Youngstown Aluminnum Prods 51,093.77
sub total holder 1 5,117,945.35
3938 A & P Machine & Tool Inc 38,250.00
3419 A B Engineering & Molding 167,304.12
3528 A H Metal Works Inc 38,375.00
2450 Xxxxx Machine & Tool Inc 128,550.00
1627 Xxxx Machine Products Inc 7,461.00
9
2173 American Plas-Tech Inc 8,160.60
3958 Ameritool Manufacturing 15,981.00
1659 Automatic System Developers 66,232.00
1825 B H Instrument Co Inc 5,062.00
3479 Beaver Equipment Worldwide 53,193.00
0000 Xxxx Xxxxx Precision Machine 54,005.64
1920 Bluebonnet Precision Inst 130,188.81
1376 California Precision Machining 5,019.25
2603 Custom Machining Inc 2,629.92
2228 D & B Industries Inc 28,343.03
4957 D & E Specialties 44,305.68
4967 D & S Machine Inc 23,764.00
4008 D T C Engineering 54,142.70
4018 Diamond Dental Mfg Corp 111,550.30
4787 Discharge Machining Inc 6,762.81
0000 X & X Xxxxxxx Xx 68,292.50
5678 Elmira Grinding Works Inc 102,384.00
4987 Enrex Corp 6,725.00
2006 Excel Machine Products Inc 62,383.76
1887 X X Xxxx Industries Inc 23,273.50
1527 Fas-Tronics Inc 74,099.75
3206 G M J Machine Co Inc 6,166.34
3618 G S P Components Inc 38,445.00
2406 Har Technologies Inc 25,079.00
2416 Har Technologies Inc 31,219.50
2426 Har Technologies Inc 25,617.00
2436 Har Technologies Inc 24,512.00
2566 Har Technologies Inc 25,079.00
3046 Har Technologies Inc 62,534.00
3716 Har Technologies Inc 33,721.00
3746 Har Technologies Inc 33,721.00
3936 Har Technologies Inc 35,725.00
3956 Har Technologies Inc 35,275.00
4026 Har Technologies Inc 35,275.00
2717 Xxxxxx Precision Machining 27,392.00
1719 Xxxxxx, Kit Tooling Inc 50,000.00
1656 Husa Accurate Mach Works Inc 23,511.00
2728 Husa Accurate Mach Works Inc 125,902.00
4588 Husa Accurate Mach Works Inc 16,764.00
4088 Iron Man Machine 31,082.00
4098 J & D Machine Inc 66,655.45
5768 J E F Precision Sheetmetal 44,348.77
3088 Jemco Components & Fab Inc 69,676.85
3600 Xxxxxxx Machine & Fibre Prods 240,727.00
10
2576 K & S Manufacturing Co 2,593.00
3008 Kno Mar Tool & Mold Inc 60,084.00
4968 Kno Mar Tool & Mold Inc 38,717.70
1958 Xxxxx High Desert Racing 102,828.00
1990 Lincoln Die & Mfg Co Inc 98,920.00
3079 M C S Inc 84,997.00
5397 M K D Machining Inc 33,750.00
0000 Xxxxxxxx Xxxxxx Machining 44,188.40
4778 Major Tooling Inc 57,720.00
1554 Micro Machine Shop 3,832.61
5028 Millennium Hydraulics Inc 46,928.00
1644 Output Dynamice 13,964.16
2736 Pol-Tek Industries Ltd Inc 2,600.00
1558 Premier Tool & Mold Inc 66,592.00
2305 Professional Precision Prods 168,724.50
4120 Prolyx LLC 39,761.75
1988 Pulley Industries 63,495.00
1146 Quality Tolerance Inc 5,272.00
2418 Quality Tolerance Inc 135,919.00
3877 Quality Tolerance Inc 59,444.00
5048 Quality Tolerance Inc 106,930.00
4178 R M Precison Tech 120,752.60
2547 R P M Associates 99,210.02
4368 R P M Machine Inc 49,735.83
2227 R S Precision Inc 43,661.00
5358 Reliable Tool & Machine Inc 91,304.74
2984 Resco Precision 49,028.40
2567 Xxxxxx Mfg Inc 67,908.77
2826 Xxxxxx Mfg Inc 60,426.05
4126 Xxxxxx Mfg Inc 103,720.97
2969 Richmond Engineering 5,853.26
1469 Xxxxxx Aerospace Products 41,236.00
1680 Xxxxxx Aerospace Products 11,049.00
1418 Romstar Engineering 86,485.00
3488 Ronson Mfg Inc 55,069.00
3768 Xxxxx Precision Products Inc 32,514.49
2756 S H E Industries Inc 31,442.26
2503 S P M Company 13,818.76
2360 Sandia Services Co 102,958.41
1890 Xxxxx Machine Tool 120,441.18
3139 Smart Technologies Inc 318,636.00
2097 Star Instrument Co 45,484.03
4668 Star Instrument Co 74,271.00
4687 Star Instrument Co 76,161.00
11
4697 Star Instrument Co 73,899.00
5378 Star Instrument Co 92,115.75
2606 Triangle Automatic Inc 2,173.00
4278 Turbodyne Systems Inc 54,133.68
3546 Twintec Inc 22,027.50
1439 Xxxxxx, Xxxxxxx H 65,235.00
2000 Xxxxxx, Xxxxxxx H 53,825.51
3099 Xxxxxx, Xxxxxxx H 39,664.00
3014 Van Cort Instruments Inc 111,274.15
sub total holder 2 5,887,643.76
1869 Aplicaciones Industriales 24,748.50
2887 Asesores Tecnicos Indust 18,732.00
5587 Asesoria Manufactura Y Proy 51,709.39
5647 Asesoria Manufactura Y Proy 226,800.00
3836 Auto & Partes Y Maquinados 44,578.50
1568 Auto Partes Y Maquinados 2,054.72
5478 Auto Partes Y Maquinados 59,128.00
1079 Xxxxxx, Xxxxx 26,125.43
3530 Xxxxxx, Xxxxx 76,738.35
1910 Combustion Diesel 15,695.46
1578 Commercializadora Mifisa 11,130.00
1052 Compania Industrial Xxxxxxx 66,642.00
3359 Xxxxxx Xxxxxxxxx Xxxxxx 43,736.00
2803 Diseno Industrial Y Fab 5,549.80
3890 Disenos Y Proyectos Indus 40,655.00
1941 Doga Maquinados Y Fab 184,326.05
1361 Fabricaciones Industriales 34,782.24
2538 Fabricantes Y Servicio's Ind 40,860.00
3789 Xxxxxxxx Pages Xxxxxxxxxx 15,802.96
4347 Formag S A CV 22,920.00
2410 Xxxxxxxx, Xxxxxx Mancha 48,621.00
1629 Grupo Palancas SA DE CV 40,768.00
3369 Herramientas Y Moldes Ind 9,806.61
2191 Hidraulica Y Mecanica 135,488.90
2670 Industrial Source 30,894.00
1460 Industrias Valgo 25,763.16
1951 Industrias Valgo 29,536.00
1371 Ingeneiria Integrada Indust 52,020.00
1470 Interfil S A DE C V 27,512.00
3379 Interfil S A DE C V 22,410.00
3540 Interfil S A DE C V 42,674.60
2409 X X Mold & Die 8,787.84
1889 Manufacturas Xxxxxx 33,035.40
2159 Manufacturas Especializadas 28,210.00
12
2451 Maquinados De Prec Pages 62,335.00
3389 Maquinados De Precision 6,058.50
2411 Maquinados Industriales Bega 31,250.00
2110 Maquinados Laser Mach Shop 19,516.00
1070 Maquinados Valgo 37,696.00
2599 Maquinados Valgo 20,496.00
1780 Maquinados Y Accesorios 31,278.00
3714 Maquinados Y Representacione 180,148.54
1490 Maquinados Y Servicios 12,214.16
2120 Maquysi S De X X 28,288.00
1381 Xxxxxxx X X De C V 69,748.00
6008 Xxxxxxx X X De C V 20,618.75
1080 Xxxxxxxx Xxxxxxx Xxxxx 43,438.00
2759 Xxxxxxxx Xxxxxxx Xxxxx 42,869.41
3550 Xxxxxxxx Xxxxxxx Xxxxx 76,682.00
1102 Metaloplasticos Aural S A DE C V 38,944.00
1821 Microscopios SA 54,924.00
5098 Microscopios SA 17,161.50
2169 Modelos Tecnicos Xxxxx 940.00
2929 Mold-Tec De Cuernavaca 19,987.50
3560 Moldes Y Plasticos Monterry 35,954.88
1212 Oscar Xxxxxx Xxxxxxxxxx Xxxxxxxx 32,680.80
2068 Plastic Molds & Dies 18,690.00
5488 Precision Jesa 1,496.00
1141 Precision Jhesa SA DE CV 17,652.00
3570 Precision Moderna 45,645.00
3908 Precision Tensa 13,768.00
1220 Presotec S A DE C V 26,793.78
3580 Presotec S A DE C V 17,569.28
3399 Productos Winner S A DE C V 10,297.50
0000 Xxxxxxx, Xxxx Xxxx 41,203.89
1899 Xxxx Xxxxx Xxxxxx Xxxxxxx 4,078.10
1831 Xxxx, Xxxx 44,639.25
1987 Talleres Diversificados 7,842.00
2285 Tecnologia Y Mecanismos 25,980.16
2440 Xxxxxxx Xxxxxxxxxx Xxxxxx 25,480.00
sub total holder 3 2,732,605.91
3590 Peak Precision Inc holder 4 561,438.68
Total 14,299,633.70
[JPMORGAN CHASE LOGO]
GUARANTY
This Guaranty is granted by the each of the undersigned (hereinafter
collectively and individually referred to as the "Guarantor") to JPMORGAN CHASE
BANK, having an office located at 0000 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000
("Business Office"), as agent for the Lenders (as defined below), (hereinafter
with its respective successors and assigns, collectively or individually, as the
context may require, referred to as "Agent").
1. RECITALS. Hardinge Inc., a New York corporation (the "Borrower")
has obtained or desires or may desire at some time and/or from time to time to
obtain financial accommodation arising under (i) that certain Term Loan
Agreement dated as of the date hereof, among Hardinge Inc. and the Agent and the
Banks signatory thereto and each other financial institution which from time to
time becomes a party thereto (individually a "Bank" and collectively, the
"Banks"), and as the same may be amended from time to time (the "Credit
Agreement"), (ii) certain credit facilities made available by JPMorgan Chase
Bank and/or KeyBank National Association to Hardinge Inc. for foreign exchange,
letters of credit and derivative products and exposures, including without
limitation interest rate swap agreements or other rate protection or hedge
agreements or mechanisms and the documents executed in connection with any of
the above now or hereafter existing, and (iii) certain arrangements with
JPMorgan Chase Bank and/or its subsidiaries and affiliates, including without
limitation, JPMorgan Leasing, in connection with the purchase of the
undersigned's customer notes by such entity and the documents executed in
connection with any of the above now or hereafter existing (collectively and
each individually, a "Credit Arrangement") (the Banks and the other banks and
institutions set forth above are collectively referred to as the "Lenders", and
each individually, a "Lender"); and each of the undersigned represents that it
is financially interested in the Borrower's affairs and expects to derive
advantage from each and every such accommodation;
2. CONSIDERATION. To induce Agent and the Lenders, at their option,
at any time or from time to time, to extend such Credit Arrangements, the
Guarantor hereby agrees as follows:
3. GUARANTY. The Guarantor (and if there is more than one Guarantor,
jointly and severally) absolutely and unconditionally guarantees to Agent, for
the benefit of the Lenders and itself as Agent that the Borrower will promptly
perform and observe every agreement and condition contained in any instrument,
writing or arrangement relating to or the subject of any such Credit Arrangement
to be performed or observed by the Borrower, that all sums stated to be payable
in, or which become payable under, any Credit Arrangement will be promptly paid
in full when due, whether at maturity or earlier by reason of acceleration or
otherwise, or, if now due, when payment thereof shall be demanded by Agent or
any Lender in accordance with the terms thereof, together with interest and any
and all legal and other costs and expenses paid or incurred in connection
therewith by Agent (collectively, the "Guaranteed Obligations"), and, in case of
one or more extensions of time of payment or renewals, in whole or in part, of
any Credit Arrangement or obligation, that the same will be promptly paid or
performed when due, according to each such extension or renewal, whether at
maturity or earlier by reason of acceleration or otherwise. The
Guarantor agrees that, as between the Guarantor and Agent, the Guaranteed
Obligations may be declared to be due and payable for purposes of this Guaranty
notwithstanding any stay, injunction or other prohibition which may prevent,
delay or vitiate any such declaration as against the Borrower and that, in the
event of any such declaration (or attempted declaration), the Guaranteed
Obligations (whether or not due and payable by the Borrower) shall forthwith
become due and payable by the Guarantor for purposes of this Guaranty. The
Guarantor further guarantees that all payments made by the Borrower to Agent for
the benefit of the Lenders or itself as Agent of any Guaranteed Obligation will,
when made, be final and agrees that if any such payment is recovered from, or
repaid by, Agent or any of the Lenders in whole or in part by reason of any
bankruptcy, insolvency or similar proceeding instituted by or against the
Borrower, this Guaranty shall continue to be fully applicable to such obligation
to the same extent as though the payment so recovered or repaid had never been
originally made on such obligation.
This is a guaranty of payment and performance and not a guaranty of
collection only.
This Guaranty is enforceable irrespective of the validity, regularity
or enforceability of any instrument, writing or arrangement relating to or the
subject of a Credit Arrangement or the obligations thereunder and irrespective
of any present or future law or order of any government (whether of right or in
fact and whether Agent shall have consented thereto) or of any agency thereof
purporting to reduce, amend, restructure or otherwise affect any obligation of
the Borrower or other obligor or to vary the terms of payment.
4. CONSENTS AND WAIVERS. The Guarantor hereby consents that from
time to time, without notice to or further consent of the Guarantor, the
performance or observance by the Borrower of any Credit Arrangement or
Guaranteed Obligation may be waived or the time of performance thereof extended
by Agent, and payment of any Guaranteed Obligation may be accelerated in
accordance with any agreement governing the same, or may be extended, or any
Credit Arrangement may be renewed in whole or in part, or the terms of any
Credit Arrangement or any part thereof may be changed, including increase or
decrease in the rate of interest thereon, or any collateral therefor may be
exchanged, surrendered or otherwise dealt with as Agent may determine, or any
co-guarantor or any other party liable upon or in respect of any obligation may
be released, and any of the acts mentioned in any Credit Arrangement may be
done, all without notice to or affecting the liability of the Guarantor
hereunder. The Guarantor waives notice of acceptance of this Guaranty and of the
creation of any Guaranteed Obligations. The Guarantor hereby waives presentment
of any instrument, demand for payment, protest and notice of non-payment or
protest thereof or of any exchange, sale, surrender or other handling or
disposition of any such collateral, and any requirement that Agent or any Lender
exhaust any right, power or remedy or proceed against the Borrower under any
Credit Arrangement or against any other person under any other guaranty of, or
security for, any of the Guaranteed Obligations. The Guarantor hereby further
waives any defense whatsoever which might constitute a defense available to, or
discharge of, the Borrower or a guarantor. No payment by the Guarantor pursuant
to any provision hereunder shall entitle the Guarantor, by subrogation to the
rights of Agent or any of the Lenders or otherwise, to any payment by the
Borrower (or out of the property of the Borrower) except after payment in full
of all sums
2
(including interest, costs and expenses) which may be or become payable by the
Borrower to such party at any time or from time to time, unless the Guaranteed
Obligations shall be paid in full.
5. CONTINUING GUARANTY; TERMINATION. This Guaranty shall be a
continuing guaranty, and Agent may continue to act in reliance hereon until the
receipt by Agent of written notice from the Guarantor not to give further
financial accommodation in reliance hereon, provided that such notice shall not
affect the obligations, absolute or contingent, of the Guarantor hereunder with
respect to any such accommodation given prior to such notice. Such notice shall
be effective only after receipt by Agent at its Business Office, and Agent shall
have had a reasonable time to act upon such notice at each of its offices
extending financial accommodation to Borrower.
6. FINANCIAL STATEMENTS. The Guarantor shall furnish to Agent, after
the end of the Guarantor's fiscal year or at such other times or intervals as
Agent may request, financial statements certified by the Guarantor showing the
Guarantor's financial condition at the end of and for the entire fiscal year.
Such statements shall fairly present the financial condition of the Guarantor as
at the end of such fiscal year or periods in accordance with generally accepted
accounting principles consistently applied. Upon demand by Agent, the Guarantor
shall retain an independent certified public accountant acceptable to Agent to
prepare such financial statements, on an audited, review or compilation basis,
as selected by Agent, and as to audited statements, accompanied by a
satisfactory report of such accountants which shall not contain any
qualification of opinion or disclaimer by reason of audit limitations imposed by
the Guarantor. Further, Guarantor agrees to furnish to Agent copies of its tax
returns, as soon as available and in any event not later than 15 days after such
tax returns are required to be filed.
7. FOREIGN CURRENCIES. With respect to each obligation (or portion
thereof) hereby guaranteed that is payable in a foreign currency, the following
provisions shall apply: the Guarantor shall be obligated to pay to Agent for the
benefit of the Lenders the unpaid amount of such Guaranteed Obligation in the
same foreign currency and place in which such Guaranteed Obligation is payable
by its terms; provided, however, that the Guarantor may, at its option (or, if
for any reason whatsoever the Guarantor is unable to effect payment of such
unpaid amount as aforesaid, the Guarantor shall be obligated to) pay to Agent
for the benefit of the Lenders at JPMorgan Chase Bank's principal office in New
York City the equivalent of such unpaid amount in United States currency
computed at JPMorgan Chase Bank's selling rate, most recently in effect on or
prior to the date such Guaranteed Obligation becomes due, for cable transfers of
such foreign currency to the place where such Guaranteed Obligation is payable.
In any case in which the Guarantor shall make or shall be obligated to make such
payment in United States currency, the Guarantor shall hold Agent and the
Lenders harmless from any loss incurred by such party arising from any change in
the value of United States currency in relation to such foreign currency between
the date such Guaranteed Obligation becomes due and the date Agent is actually
able, following the conversion of the United States currency paid by the
Guarantor into such foreign currency and remittance of such foreign currency to
the place where such Guaranteed Obligation is payable, to apply such foreign
currency to such obligation. The term "foreign currency' as used herein shall be
deemed to refer to that type of
3
such currency which under applicable laws and regulations may be used to pay and
discharge such Guaranteed Obligation.
8. RIGHTS CUMULATIVE. The rights, powers and remedies granted to the
Agent and the Lenders herein shall be cumulative and in addition to any rights,
powers and remedies to which Agent or Lenders may be entitled either by
operation of law or pursuant to any other document or instrument delivered or
from time to time to be delivered to Agent or Lenders in connection with any
Credit Arrangement.
9. SECURITY. As collateral security for the payment of any and all
obligations and liabilities of the Guarantor to Agent and/or the Lenders, now
existing or hereafter arising, the Guarantor grants to Agent for the benefit of
the Lenders and itself as Agent a security interest in and a lien upon and right
of offset against all moneys, deposit balances, securities or other property or
interest therein of the Guarantor now or at any time hereafter held or received
by or for or left in the possession or control of Agent or any Lender or any of
their respective affiliates, whether for safekeeping, custody, transmission,
collection, pledge or for any other or different purpose.
10. REPRESENTATIONS AND WARRANTIES. Each Guarantor which is other
than an individual represents and warrants that: (a) it is duly organized and
validly existing under the laws of the jurisdiction of its organization or
incorporation and, if relevant under such laws, in good standing; (b) it has the
power to execute and deliver this Guaranty and to perform its obligations
hereunder and has taken all necessary action to authorize such execution,
delivery and performance; (c) such execution, delivery and performance do not
violate or conflict with any law applicable to it, any provision of its
organizational documents, any order or judgment of any court or other agency of
government applicable to it or any of its assets or any material contractual
restriction binding on or materially affecting it or any of its assets; (d) to
the best of Guarantor's knowledge, all governmental and other consents that are
required to have been obtained by it with respect to this Guaranty have been
obtained and are in full force and effect and all conditions of any such
consents have been complied with; (e) its obligations under this Guaranty
constitute its legal, valid and binding obligations, enforceable in accordance
with its terms except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency or other similar laws affecting creditors'
rights generally; (f) all financial statements and related information furnished
and to be furnished to Agent from time to time by the Guarantor are true and
complete and fairly present the financial or other information stated therein as
at such dates or for the periods covered thereby; (g) there are no actions,
suits, proceedings or investigations pending or, to the knowledge of the
Guarantor, threatened against or affecting the Guarantor before any court,
governmental agency or arbitrator, which involve forfeiture of any assets of the
Guarantor or which may materially adversely affect the financial condition,
operations, properties or business of the Guarantor or the ability of the
Guarantor to perform its obligation under this Guaranty; and (h) there has been
no material adverse change in the financial condition of the Guarantor since the
last such financial statements or information. If the Guarantor is an
individual, the Guarantor represents and warrants the correctness of clauses
(c), (d), (e), (f), (g) and (h) above to the extent applicable to an individual.
4
11. COSTS. The Guarantor agrees to reimburse Agent on demand for all
costs, expenses and charges (including, without limitation, fees and charges of
external legal counsel for Agent and costs allocated by its internal legal
department) in connection with the enforcement of this Guaranty.
12. ENTIRE AGREEMENT, AMENDMENT AND WAIVERS. This Guaranty
constitutes the entire agreement between the Guarantor and Agent in respect of
the subject matter hereof and may be amended only by a writing signed on behalf
of each party and shall be effective only to the extent set forth in that
writing. No delay by Agent in exercising any power or right hereunder shall
operate as a waiver thereof or of any other power or right; nor shall any single
or partial exercise of any power or right preclude other or future exercise
thereof, or the exercise of any other power or right hereunder. No waiver shall
be deemed to be made by Agent of any of its rights hereunder unless the same
shall be in writing signed on behalf of Agent, and each waiver, if any, shall be
a waiver only with respect to the specific instance involved and shall not
impair the rights of Agent or the Lenders or the obligations of the Guarantor to
Agent or the Lenders in any other respect at any other time.
13. SUCCESSORS. This agreement shall be immediately binding upon the
Guarantor, and the successors of the Guarantor. Agent, in accordance with the
terms of the Credit Agreement, may assign this Guaranty or any of its rights and
powers hereunder, with all or any of the obligations hereby guaranteed, and may
assign and/or deliver to any such assignee any of the security herefor and, in
the event of such assignment, the assignee hereof or of such rights and powers
and of such security, if any such security be so assigned and/or delivered,
shall have the same rights and remedies as if originally named herein in place
of Agent, and Agent shall be thereafter fully discharged from all responsibility
with respect to any such Security so assigned and/or delivered.
14. GOVERNING LAW; JURISDICTION. This Guaranty shall be governed by
and construed in accordance with the laws of the State of New York. The
undersigned consent(s) to the nonexclusive jurisdiction and venue of the state
or federal courts located in such state. In the event of a dispute hereunder,
suit may be brought against the undersigned in such courts or in any
jurisdiction where the undersigned or any of its assets may be located. Service
of process by Agent in connection with any dispute shall be binding on the
undersigned if sent to the undersigned by registered mail at the address(es)
specified below or to such further address(es) as the undersigned may specify to
Agent in writing.
15. GUARANTOR WAIVERS. EACH GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY
RIGHT TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
GUARANTY, AND AGREES THAT ANY SUCH DISPUTE SHALL, AT AGENT'S OPTION, BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
IN ADDITION, EACH GUARANTOR WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE
BASED UPON ANY STATUTE OF LIMITATIONS OR ANY CLAIM OF
5
DELAY BY AGENT AND ANY SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.
IN WITNESS WHEREOF, the Guarantor has executed this instrument or has
caused this instrument to be duly executed by its proper officer(s) or
partner(s) the 24th day of October, 2002.
HARDINGE TECHNOLOGY SYSTEMS, INC.
Address for notices:
One Hardinge Drive By: /s/ J. XXXXXXX XXXXX
Xxxxxxxxxx, Xxx Xxxx 00000 ---------------------------------
Attn: Chief Executive Officer J. Xxxxxxx Xxxxx, President
Telecopier No.: (000) 000-0000
0
XXXXX XX XXX XXXX)
ss.:
COUNTY OF CHEMUNG)
On the 23rd day of October, in the year 2002, before me, the
undersigned, a Notary Public in and for said State, personally appeared J.
Xxxxxxx Xxxxx, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.
/s/ XXXXXXX X. XXXXX
------------------------------------
Notary Public
7
[JPMORGAN CHASE LOGO]
SECURITY AGREEMENT
The undersigned executes and delivers this Security Agreement (the
"SECURITY AGREEMENT") to JPMORGAN CHASE BANK, having an office located at 0000
Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000, as agent for the Lenders (as defined below)
(the "AGENT") in consideration of one or more loans, letters of credit or other
financial accommodation made, issued or extended by the Lenders or any of them
to the HARDINGE INC., a New York corporation (the "BORROWER") or to any person
in respect of whose Liabilities (as defined below) the undersigned now or
hereafter guarantees or otherwise becomes liable for payment. Accordingly, the
Agent shall have the rights, remedies and benefits hereinafter set forth.
1. DEFINITIONS. The term "LIABILITIES" shall include any and all
indebtedness, obligations and liabilities of the Borrower to any of the Banks
(as defined below) and/or the Agent and/or other financial institutions and also
to others to the extent of their participations granted to or interests therein
created or acquired for them by the Banks or Agent, arising under (i) that
certain Term Loan Agreement dated as of the date hereof, among Hardinge Inc. and
the Agent and the Banks signatory thereto and each other financial institution
which from time to time becomes a party thereto (individually a "BANK" and
collectively, the "BANKS"), and as the same may be amended from time to time
(the "LOAN AGREEMENT"), (ii) certain credit facilities made available by
JPMorgan Chase Bank or KeyBank National Association to Hardinge Inc. for foreign
exchange, letters of credit and derivative products and exposures, including
without limitation interest rate swap agreements or other rate protection or
hedge agreements or mechanisms and the documents executed in connection with any
of the above now or hereafter existing, and (iii) certain guarantees to JPMorgan
Chase Bank and/or its subsidiaries and affiliates, including without limitation,
JPMorgan Leasing, in connection with the purchase of the undersigned's customer
notes by such entity and the documents executed in connection with any of the
above now or hereafter existing (the Banks and those other banks and financial
institutions set forth above shall be collectively referred to as the "Lenders"
and each individually, a "Lender").
The term "COLLATERAL" means all of the following personal property of the
undersigned, whether now or hereafter existing or now owned or hereafter
acquired and wherever located, of every kind and description, tangible or
intangible, including: the balance of every deposit account, now or hereafter
existing, of the undersigned with any of the Banks and any other claim of the
undersigned against any of the Banks or Agent, now or hereafter existing, all
moneys, including without limitation, investment property, securities and other
property and the proceeds thereof, now or hereafter held or received by, or in
transit to the Agent, or any of the Lenders, and all of the undersigned's
accounts, contract rights, goods (including equipment, machinery and inventory),
instruments (including customer notes), documents, chattel paper, letter of
credit rights, and general intangibles, including, without limitation, (i) all
inventions used by the undersigned in the undersigned's business, including
without limitation, all inventions described on SCHEDULE A attached hereto
(collectively, the "INVENTIONS"), (ii) all letters patent issued on and
applications for
- 2 -
letters patent filed in connection with the Inventions whether issued to or
filed by the undersigned or to or by another and subsequently assigned to the
undersigned, including without limitation, all letters patent described on
SCHEDULE A, together with any reissue, continuation, continuation-in-art or
extension thereof (collectively, the "LETTERS PATENT"), (iii) the applications
therefor, including without limitation, all applications described on Schedule A
(collectively, the "APPLICATIONS"), (iv) all licenses for the use of the Letters
Patent, including without limitation, all licenses described on Schedule A
(collectively, the "LICENSES") and all proceeds of (i) through (iv) in any form
collectively, including without limitation, any claim by the undersigned against
third parties for past, present or future infringement or dilution of any of the
Letters Patent, (v) all marks used by the undersigned in the undersigned's
business, including without limitation, all marks listed on SCHEDULE B hereto
(collectively, the "MARKS" whether trademarks or service marks), (vi) all
licenses for the use of the Marks, including without limitation, all licenses
described on Schedule B (collectively, the "LICENSES"), (vii) all goodwill
associated with the Marks or with the use of each Xxxx and License, (viii) all
registrations, certificates of registrations (and similar documents) and
applications for registrations of the Marks, whether issued or pending before
the United States Patent and Trademark Office, the Secretary of State of the
State of New York, a governmental body of any other state, commonwealth,
district or territory of the United States, whether issued to or filed by the
undersigned or to or by another and subsequently assigned to the undersigned,
including without limitation, all registration, certificates of registration and
applications for registration described on Schedule B, together with any
renewals thereof (collectively, the "REGISTRATIONS") and all proceeds of (v)
through (viii) in any form, including without limitation, any claim by the
undersigned against third parties for past, present or future infringement or
dilution of any of the Marks and of any Marks licensed under any License, or for
injury to the goodwill associated with the Marks, Registrations or Marks
licensed under any License, and including any other property, rights and
interests of the undersigned with respect to any of the foregoing and shall
include any insurance policies therefor and the supporting obligations,
proceeds, products and accessions of and to any thereof.
The term "OBLIGOR" means the undersigned or any maker, drawer, acceptor,
indorser, guarantor, surety, accommodation party or other person liable upon or
for any of the Liabilities or Collateral.
Unless the context otherwise requires, all terms used herein which are
defined in the Uniform Commercial Code shall have the meanings therein stated.
2. GRANT OF SECURITY INTEREST. As security for the payment of the
Liabilities and as security for the undersigned's guarantee of such Liabilities,
the undersigned hereby grant(s) to the Agent, for the benefit of the Lenders and
itself as Agent, a security interest in, a general lien upon and/or right of
set-off against the Collateral.
3. MAINTENANCE OF COLLATERAL. At any time and from time to time, the
undersigned will: (a) deliver and pledge to the Agent, indorsed and/or
accompanied by such instruments of assignment
- 3 -
and transfer in such form and substance as the Agent may request, any and all
instruments, documents and/or chattel paper as the Agent may specify in its
demand; (b) give, execute, deliver, file, authorize to file and/or record any
notice, statement, instrument, document, agreement or other papers that may be
necessary or desirable, or that the Agent may request, in order to create,
preserve, perfect, or validate any security interest granted pursuant hereto or
to enable the Agent to exercise and enforce its rights hereunder or with respect
to such security interest; (c) keep and stamp or otherwise xxxx any and all
documents and chattel paper and its individual books and records relating to
inventory, accounts and contract rights in such manner as the Agent may require;
(d) permit representatives of the Agent at any time to inspect its inventory and
to inspect and make abstracts from the undersigned books and records pertaining
to inventory, accounts, contract rights, chattel paper, instruments and
documents; (e) obtain the Agent's consent prior to any change of name, address,
legal entity status, state of organization, location of books and records or
location of Collateral other than with respect to a change in location of goods
(including inventory, equipment and machinery) in the ordinary course of the
undersigned's business; (f) defend the Collateral against all claims and demands
of third parties at any time claiming the same or any interest therein, except
buyers of inventory in the ordinary course of the undersigned's business, and,
at its own expense, will bring suit in the name of the undersigned at the
request of the Agent for infringement against infringers of the letters patent
and any letters patent then granted on the Applications, provided, the Agent, if
the Agent finds it necessary or desirable, may prosecute others for infringement
and may join the undersigned as party-plaintiffs; (g) will notify the Agent of
(i) the material loss or damage to the Collateral or of any material adverse
change in the undersigned's business or the Collateral, (ii) any suit for
infringement brought against the undersigned with respect to the Letters Patent,
the Applications or the Marks and in each instance shall promptly furnish the
Agent copies of all documents in connection with any such suit, (iii) any
application for reissue of any Letters Patent and any letters patent when issued
and of any interference or other proceeding involving any of the Collateral and
(iv) if the Marks are registered, notice of such fact in the manner prescribed
by Section 1111 of Title 15 of the United States Code, or by state law, if
applicable; (h) xxxx or cause to be marked all articles, devices and machines
made or sold by it, covered by letters patent and any letters patent when
issued, with the word "Patent" and the number of any such patent or patents
applicable thereto except where such marking would damage the article, device or
machine, or if such article or device is an internal part of another machine or
device, or such other notices required by law; and (i) cooperate with the Agent
in obtaining control of collateral consisting of deposit accounts or electronic
chattel paper, including, but not limited to entering into one or more control
agreements or assignments as the Agent may request. The right is expressly
granted to the Agent, at its discretion, to notify warehousemen or any other
persons in possession of Collateral of the Agent's security interest therein and
to obtain an acknowledgment thereof from such third person and to file one or
more financing statements under the Uniform Commercial Code naming the
undersigned as debtor and the Agent as secured party and indicating therein the
types or describing the items of Collateral herein specified. A photographic or
other reproduction of this Security Agreement shall be sufficient as a financing
statement. Without the prior written consent of the Agent, the undersigned will
not file or authorize or permit to be filed in any jurisdiction any such
financing or like statement in which the Agent is not named as the sole secured
party. With respect to the
- 4 -
Collateral, or any part thereof, which at any time shall come into the
possession or custody or under the control of the Agent or any of its agents,
associates or correspondents, for any purpose, the right is expressly granted to
the Agent, at its reasonable discretion, to transfer to or register in the name
of itself or its nominee any of the Collateral; to exchange any of the
Collateral for other property upon any reorganization, recapitalization or other
readjustment and in connection therewith to deposit any of the Collateral with
any committee or depositary upon such terms as it may determine; to notify any
account debtor or obligor on an instrument to make payment to the Agent for the
benefit of the Banks; and to enforce obligations of such account debtor or
obligor and to exercise or cause its nominee to exercise all or any powers with
respect to the Collateral with same force and effect as an absolute owner
thereof; all without notice (except such notice as may be required by applicable
law and cannot be waived) and without liability except to account for property
actually received by it. The Collateral will remain personalty and will not be
permanently affixed to real estate without the prior consent of the Agent.
SCHEDULE C attached hereto sets forth all of the currently operating leased
locations of Collateral of the undersigned. The undersigned will provide
disclaimers of interest and removal agreements from each landlord of a location
set forth in Schedule C, in form satisfactory to the Agent, signed by such
Landlord within thirty (30) days from the date hereof. In the event the
undesigned enters into any leases after the date of this Security Agreement, the
undersigned, simultaneously with the execution and delivery of such lease, will
deliver to Agent a disclaimer of interest and removal agreement from such
landlord, in form satisfactory to Agent. In addition, prior to any closing of
mortgage financing on any real property of the undersigned, the undersigned will
provide a disclaimer of interest and removal agreement from the proposed
mortgagee with respect to such real property in form satisfactory to the Agent.
4. INSURANCE. The undersigned shall keep insured all Collateral which is
tangible property for full value, with such coverage as the Agent may approve,
at the undersigned's expense, and, upon the Agent's request, the policies shall
be duly endorsed in the Agent's favor as its interest may appear and delivered
to the Agent. If the undersigned shall default in this regard, the Agent shall
have the right to insure and charge the cost to the undersigned. The Agent
assumes no risk or responsibility in connection with the payment or nonpayment
of losses, the Agent's only responsibility being to credit the undersigned with
any insurance payment received on account of losses. In the event of any default
under this Security Agreement, the Agent shall have power of attorney to cancel,
assign or surrender any insurance policy or policies and to collect the return
premiums due thereon and to apply the proceeds thereof to the Liabilities
secured hereby. The undersigned will immediately notify the Agent in writing of
any damage to or loss of any of the Collateral which is tangible property.
5. COLLECTION AND DISPOSITION. The Agent at its discretion may, or upon
direction of the Banks shall, whether any of the Liabilities be due, in its name
or in the name of the undersigned or otherwise, demand, xxx for, collect or
receive any money or property at any time payable or receivable on account of or
in exchange for, or make any compromise or settlement deemed desirable with
respect to, any of the Collateral, but shall be under no obligation to do so, or
the Agent may, or upon direction of the Banks shall, extend the time of payment,
arrange for payment in
- 5 -
installments, or otherwise modify the terms of, or release, any of the
Collateral, without thereby incurring responsibility to, or discharging or
otherwise affecting any liability of, the undersigned. The Agent shall not be
required to take any steps necessary to preserve any rights against prior
parties to any of the Collateral. The Agent may use or operate any of the
Collateral for the purpose of preserving the Collateral or its value in the
manner and to the extent the Agent deems appropriate, and the Agent may render
the Collateral unusable or dispose of the Collateral in a commercially
reasonable manner.
Upon default hereunder or in connection with any of the Liabilities
(whether such default be that of the undersigned or of any other party obligated
thereon), the undersigned shall, at the request of the Agent, assemble the
Collateral at such place or places as the Agent designates in its request, and,
to the extent permitted by applicable law, the Agent shall have the right, with
or without legal process and with or without prior notice or demand, to take
possession of the Collateral or any part thereof and to enter any premises for
the purpose of taking possession thereof. The Agent shall have the rights and
remedies with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not such Code is in effect in the jurisdiction where
the rights and remedies are asserted).
In addition, upon default hereunder or in connection with any of the
Liabilities, with respect to the Collateral, or any part thereof, which shall
then be or shall thereafter come into the possession or custody of the Agent or
any of its agents, associates or correspondents, the Agent may sell or cause to
be sold at any location selected by it and reasonable under the circumstances,
in one or more sales or parcels, at such price as the Agent may deem best, and
for cash or on credit or for future delivery, without assumption of any credit
risk, all or any of the Collateral, at any broker's board or at public or
private sale, in any reasonable manner permissible under the Uniform Commercial
Code (except that, to the extent permitted thereunder, the undersigned hereby
waives the requirements of said Code), and the Agent or any of the Lenders or
anyone else may be the purchaser of any or all of the Collateral so sold and
thereafter hold the same absolutely, free from any claim or right of whatsoever
kind, including any equity or redemption, of the undersigned, any such demand,
notice or right and equity being hereby expressly waived and released. The Agent
(i) shall have no obligation to clean up or otherwise prepare the Collateral for
sale, (ii) may comply with any applicable law requirements in connection with
the disposition of the Collateral, (iii) may sell the Collateral without giving
any warranties, and any of such actions or inaction will not be considered
adversely to affect the commercial reasonableness of any sale of the Collateral.
The undersigned will pay to the Agent all reasonable expenses (including
reasonable attorneys' fees and legal expenses incurred by the Agent) of, or
incidental to, the enforcement of any of the provisions hereof or of any of the
Liabilities, or any actual or attempted sale, or any exchange, enforcement,
collection, compromise or settlement of any of the Collateral or receipt of the
proceeds thereof, by litigation or otherwise, including expense of insurance;
and all such expenses shall be Liabilities secured by this Security Agreement.
The Agent, at any time, at its option may, or upon direction of the Banks shall,
apply the net cash receipts from the Collateral to the payment of principal of
and/or interest on any of the Liabilities, whether or not then due, making
proper rebate of interest or discount. Notwithstanding
- 6 -
that the Agent, whether in its own behalf and/or on behalf of another or others,
may continue to hold the Collateral and regardless of the value thereof, the
undersigned shall be and remain liable for the payment in full, principal and
interest, of any balance of the Liabilities and expenses at any time unpaid. The
Agent may exercise its rights with respect to the Collateral without resorting
to or regard to other collateral or sources of reimbursement for the
Liabilities.
6. REPRESENTATIONS AND WARRANTIES. If the undersigned is other than an
individual, the undersigned represents and warrants that: (a) it is duly
organized and validly existing under the laws of the jurisdiction of its
organization or incorporation as such is set forth on signature pages hereto
along with its tax identification or organizational number, if necessary, and,
if relevant under such laws, in good standing; (b) it has the power to execute
and deliver this Security Agreement and to perform its obligations hereunder and
has taken all necessary action to authorize such execution, delivery and
performance; (c) such execution, delivery and performance do not violate or
conflict with any law applicable to it, any provision of its organizational
documents, any order or judgment of any court or other agency of government
applicable to it or any of its assets or any material contractual restriction
binding on or materially affecting it or any of its assets; (d) to the best of
the undersigned's knowledge, all governmental and other consents that are
required to have been obtained by it with respect to this Security Agreement
have been obtained and are in full force and effect and all conditions of any
such consents have been complied with; (e) its obligations under this Security
Agreement constitute its legal, valid and binding obligations, enforceable in
accordance with its terms except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency or other similar laws affecting
creditors' rights generally; (f) the undersigned is the owner of the Collateral
with good and indefeasible title thereto, free and clear of all liabilities,
mortgages, security interests, liens, pledges or encumbrances, and the Letters
Patent, the Applications and the Marks are subsisting and there are no suits or
actions commenced or threatened against the undersigned with respect to the
Letters Patent the Applications or the Marks; (g) all financial statements and
related information furnished and to be furnished to the Agent or the Lenders
from time to time by the undersigned are true and complete and fairly present
the financial or other information stated therein as at such dates or for the
periods covered thereby; (h) there are no actions, suits, proceedings or
investigations pending or, to the knowledge of the undersigned, threatened
against or affecting the undersigned before any court, governmental agency or
arbitrator, which involve forfeiture of any assets of the undersigned or which
may materially adversely affect the financial condition, operations, properties
or business of the undersigned or the ability of the undersigned to perform its
obligation under this Security Agreement; and (i) there has been no material
adverse change in the financial condition of the undersigned since the last such
financial statements or information.
- 7 -
7. DEFAULT. IF any of the following events of default shall occur (each
an "EVENT OF DEFAULT"):
(a) any Obligor shall default and there shall be a continuance thereof in
the performance of any of its agreements herein after twenty (20) days
notice thereof by Agent or in the Loan Agreement or in any instrument
or document delivered pursuant to this Security Agreement or the
Liabilities (including a failure to comply with the preceding
paragraph) beyond any applicable notice and grace periods;
(b) any Obligor
(i) shall generally not, or be unable to, or shall admit in writing
its inability to, pay its debts as such debts become due;
(ii) shall make an assignment for the benefit of creditors;
(iii) shall file a petition in bankruptcy or for any relief under any
law of any jurisdiction relating to reorganization,
arrangement, readjustment of debt, dissolution or liquidation;
(iv) shall have any such petition filed against it and the same
shall remain undismissed for a period of 90 days or shall
consent or acquiesce thereto; or
(v) shall have had a receiver, custodian or trustee appointed for
all or a substantial part of its property.
THEN, unless and to the extent that the Lenders shall otherwise elect, all of
the Liabilities shall become and be due and payable forthwith. THE RIGHTS OF THE
AGENT AND THE LENDERS SET FORTH IMMEDIATELY ABOVE ARE WITHOUT LIMITATION OF, AND
IN ADDITION TO, ANY OTHER RIGHT OF THE AGENT OR THE LENDERS UNDER ANY OTHER
DOCUMENT EVIDENCING OR EXECUTED IN CONNECTION WITH THE LIABILITIES (INCLUDING
BUT NOT LIMITED TO ANY RIGHT OF ACCELERATION OF PAYMENT PURSUANT TO THE
PROVISIONS THEREOF OR ANY RIGHT OF THE AGENT OR THE LENDERS TO MAKE DEMAND FOR
PAYMENT THEREUNDER WITHOUT REFERENCE TO ANY PARTICULAR CONDITION OR EVENT).
8. SETOFF. In the event that any amount becomes due and payable hereunder
and the Agent shall have demanded payment thereof from the undersigned, in
addition to all other rights and remedies, the Agent and each of the Lenders
(including subsidiaries and each and every affiliate) is hereby irrevocably
authorized, without prior notice to the undersigned, to set off any balances
held for the account of or any other liability owing by any such Lender or Agent
or any such affiliate to the undersigned at any of the Agent's or Lenders' (or
such subsidiary's or affiliate's) offices, in dollars or any other currency,
against any of the obligations of the undersigned to the Lenders or Agent, as
the such Lender or Agent may elect.
9. NOTICES. All notices, requests, demands or other communications to or
upon the undersigned or the Agent shall be in writing and shall be deemed to be
delivered upon receipt if delivered by hand or overnight courier or five days
after mailing to the address (a) of the undersigned set forth below the
undersigned's execution of this Security Agreement, (b) of the Agent as first
set
- 8 -
forth above, or (c) of the undersigned or the Agent at such other address as the
undersigned or the Agent shall specify to the other in writing.
10. ENTIRE AGREEMENT, AMENDMENT AND WAIVER. This Security Agreement
constitutes the entire agreement between the undersigned and the Agent in
respect of the subject matter hereof and may be amended only by a writing signed
on behalf of each party and shall be effective only to the extent set forth in
that writing. No delay by the Agent or any of the Lenders in exercising any
power or right hereunder shall operate as a waiver thereof or of any other power
or right; nor shall any single or partial exercise of any power or right
preclude other or future exercise thereof, or the exercise of any other power or
right hereunder.
11. GENERAL WAIVERS. The undersigned hereby waives presentment, notice of
dishonor and protest of all instruments included in or evidencing the
Liabilities or the Collateral and any and all other notices and demands
whatsoever, whether or not relating to such instruments (the "SECURED
DOCUMENTS"). The undersigned waives all demands, notices and protests of every
kind which are not expressly required under this Security Agreement which are
permitted by law to be waived, and which would, if not waived, impair the
Agent's enforcement of this Security Agreement or release any Collateral from
the Agent's security interest hereunder. By way of example, but not in
limitation of the Agent's rights under this Security Agreement, the Agent does
not have to give the undersigned notice of any of the following:
(a) notice of acceptance of this Security Agreement;
(b) notice of loans made, credit extended, Collateral received or
delivered;
(c) any Event of Default (except as otherwise expressly provided herein);
(d) any action which the Agent does or does not take regarding any Obligor
or any other person or any other collateral securing the Liabilities;
(e) except as otherwise provided herein, enforcement of this Security
Agreement against the Collateral; or
(f) any other action taken in reliance on this Security Agreement.
The undersigned waives all rules of suretyship law and any other law
whatsoever which is legally permitted to be waived and which would, if not
waived, impair the Agent's enforcement of its security interests. By way of
example, but not in limitation of the Agent's rights under this Security
Agreement, the Agent or the Banks, as set forth in the Loan Agreement, may do
any of the following without notice to the undersigned except to the extent that
notice to the undersigned is required under another Secured Document or in each
case in which the agreement of such undersigned is required because such
undersigned is a principal party to a Liability and, as a matter of contract,
the agreement of such undersigned is required:
(a) change, renew or extend the time for repayment of all or any part of
the Liabilities;
(b) change the rate of interest or any other provisions with respect to
all or any part of the Liabilities;
- 9 -
(c) release, surrender, sell or otherwise dispose of any money or property
which is in the Agent's possession as collateral security for the
Liabilities;
(d) fail to perfect any security interest in any Collateral;
(e) release or discharge any party liable to the Agent or any of the Banks
in whole or in part for the Liabilities, or accept any additional
parties or guarantors;
(f) delay or refrain from exercising any of the Agent's or the Banks'
rights;
(g) settle or compromise any and all claims pertaining to the Liabilities
and the Collateral; and
(h) apply any money or property of the undersigned or that of any other
party liable to the Agent for any part of the Liabilities in any order
the Banks choose.
THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO
THE FULL EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT TO A TRIAL BY JURY OF ANY
DISPUTE ARISING UNDER OR RELATING TO THIS SECURITY AGREEMENT, AND AGREES THAT
ANY SUCH DISPUTE SHALL, AT THE AGENT'S OPTION, BE TRIED BEFORE A JUDGE SITTING
WITHOUT A JURY.
IN ADDITION, THE UNDERSIGNED WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE
BASED UPON ANY STATUTE OF LIMITATIONS OR ANY CLAIM OF DELAY BY THE AGENT AND ANY
SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.
12. RIGHTS CUMULATIVE. The rights, powers and remedies granted to the
Agent or the Lenders herein shall be cumulative and in addition to any rights,
powers and remedies to which the Agent or the Lenders may be entitled either by
operation of law or pursuant to any other document or instrument delivered or
from time to time to be delivered to the Agent in connection with any of the
Liabilities.
13. GOVERNING LAW; JURISDICTION. This Security Agreement shall be governed
by and construed in accordance with the laws of the State of New York. The
undersigned consent(s) to the nonexclusive jurisdiction and venue of the state
or federal courts located in such state. In the event of a dispute hereunder,
suit may be brought against the undersigned in such courts or in any
jurisdiction where the undersigned or any of its assets may be located. Service
of process by the Agent in connection with any dispute shall be binding on the
undersigned if sent to the undersigned by registered mail at the address(es)
specified below or to such further address(es) as the undersigned may specify to
the Agent in writing.
14. ASSIGNMENT. In accordance with the terms of the Loan Agreement, the
Banks and the Agent may assign, transfer and/or deliver to any transferee of any
of the Liabilities any or all of the Collateral, and thereafter shall be fully
discharged from all responsibility with respect to the Collateral so assigned,
transferred and/or delivered. Such transferee shall be vested with all the
powers and rights of such party hereunder with respect to such Collateral, but
such party shall retain
- 10 -
all rights and powers hereby given with respect to any of the Collateral not so
assigned, transferred or delivered.
15. WAIVER OF PRESENTMENT, ETC. The undersigned hereby waive(s)
presentment, notice of dishonor and protest of all instruments included in or
evidencing the Liabilities or the Collateral and any and all other notices and
demands whatsoever, whether or not relating to such instruments.
16. MISCELLANEOUS. The undersigned, if more than one, shall be jointly and
severally liable hereunder and all provisions hereof regarding the Liabilities
or Collateral of the undersigned shall apply to any Liability or any Collateral
of any or all of them. JPMorgan Chase Bank shall act for itself and its
affiliates and the Lenders as collateral agent hereunder. This Security
Agreement shall be binding upon the heirs, executors, administrators, assigns or
successors of the undersigned; shall constitute a continuing agreement, applying
to all existing as well as future transactions between the Agent and the
undersigned that shall be at any time closed; and shall so continue in force
notwithstanding any change in any partnership party hereto, whether such change
occurs through death, retirement or otherwise.
17. INTERCREDITOR AGREEMENT. Certain provisions of this Security Agreement
are subject to the provisions of the Intercreditor Agreement between JPMorgan
Chase Bank, as Agent for the Banks under that certain Multicurrency Credit
Agreement with Hardinge, Inc. dated as of the date hereof, as amended from time
to time ("CREDIT AGREEMENT") and Agent dated of even date herewith, as the same
may be amended from time to time ("INTERCREDITOR AGREEMENT"). In the event of
any conflict between the express terms and conditions of this Security Agreement
and the express terms and conditions of the Intercreditor Agreement, the
Intercreditor Agreement shall control, PROVIDED that this paragraph shall in no
way benefit the undersigned or any successor or assign of the undersigned,
including, without limitation, a debtor in possession or any trustee for the
estate created by the commencement of any Insolvency or Liquidation Proceeding.
All capitalized terms used in this paragraph, but not otherwise defined in this
Security Agreement, shall have the meanings set forth in the Intercreditor
Agreement.
[Signature Page Follows]
- 11 -
IN WITNESS WHEREOF, the undersigned has executed this instrument or has
caused this instrument to be duly executed by its proper officer(s) as of the
24th day of October, 2002.
HARDINGE TECHNOLOGY SYSTEMS, INC.
Address for notices:
One Hardinge Drive By: /s/ J. XXXXXXX XXXXX
Xxxxxxxxxx, Xxx Xxxx 00000 -------------------------------------
Attn: Chief Executive Officer J. Xxxxxxx Xxxxx, President
Telecopier No.: (000) 000-0000
State of Organization: New York
Tax ID/Organizational Number: 00-0000000
SCHEDULE A
Patents
None
SCHEDULE B
Trademarks and Service Marks
None
SCHEDULE C
Leased Locations
None
PROMISSORY NOTE
$2,169,811.00 October 24, 0000
Xxx Xxxx, Xxx Xxxx
HARDINGE INC. (the "Borrower"), a corporation organized under the laws
of New York, for value received, hereby promises to pay to the order of NBT
BANK, NATIONAL ASSOCIATION (the "Bank") at the principal office of JPMorgan
Chase Bank, at Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such
other place as required by the Term Loan Agreement referred to below, for the
account of the appropriate Lending Office of the Bank, the principal amount of
Two Million One Hundred Sixty-nine Thousand Eight Hundred Eleven and no/100
Dollars ($2,169,811.00) in lawful money of the United States of America and in
immediately available funds, on the date(s) and in the manner provided in the
Term Loan Agreement referred to below. The Borrower also promises to pay
interest on the unpaid principal balance of the Loan in like money, for the
period such balance is outstanding, at said principal office for the account of
said Lending Office of the Bank, at the rates of interest as provided in the
Term Loan Agreement, on the dates and in the manner provided in said Term Loan
Agreement.
The date and amount of the Loan made by the Bank to the Borrower under
the Term Loan Agreement referred below, interest rate, Interest Period, maturity
date and each payment of principal thereof, shall be recorded by the Bank on its
books and, prior to any transfer of this Note (or, at the discretion of the
Bank, at any other time), endorsed by the Bank on the schedule attached hereto
or any continuation thereof; provided, however, the failure of the Bank to make
any such recordation or endorsement shall not affect the obligations of the
Borrower to make payment when due of any amount owing under the Term Loan
Agreement or hereunder in respect of the Variable Rate Loans made by the Bank.
This is one of the Notes referred to in that certain Term Loan
Agreement (as amended from time to time the "Term Loan Agreement") dated as of
October 24, 2002 among the Borrower, the Banks named therein (including the
Bank), the Documentation Agent and the Agent and evidences the Loan made by the
Bank thereunder. All terms not defined herein shall have the meanings given to
them in the Term Loan Agreement.
The Term Loan Agreement provides for the acceleration of the maturity
of principal upon the occurrence of certain Events of Default and for
prepayments on the terms and conditions specified therein.
The Borrower waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note. THE BORROWER WAIVES TO THE
FULL EXTENT PERMITTED BY APPLICABLE LAW THE RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.
This Note shall be governed by, and interpreted and construed in
accordance with, the laws of the State of New York, including Section 5-1401 of
the New York General Obligations Law (or any similar successor provision
thereto) but excluding all other conflict-of-law rules.
HARDINGE INC.
BY /s/ J. XXXXXXX XXXXX, PRESIDENT
--------------------------------------
J. Xxxxxxx Xxxxx, President
and Chief Executive Officer
SCHEDULE TO NOTE
Duration of
Amount of Interest Amount of Balance
Date Loan Interest Rate Period Payment Outstanding Notation By
------------------ --------------- --------------- ---------------- --------------- --------------- ----------------
PROMISSORY NOTE
$7,160,377.00 October 24, 0000
Xxx Xxxx, Xxx Xxxx
HARDINGE INC. (the "Borrower"), a corporation organized under the laws
of New York, for value received, hereby promises to pay to the order of JPMORGAN
CHASE BANK (the "Bank") at its principal office at Xxx Xxxxx Xxxxxxxxx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 or at such other place as required by the Term Loan
Agreement referred to below, for the account of the appropriate Lending Office
of the Bank, the principal amount of Seven Million One Hundred Sixty Thousand
Three Hundred Seventy-seven and no/100 Dollars ($7,160,377.00) in lawful money
of the United States of America and in immediately available funds, on the
date(s) and in the manner provided in the Term Loan Agreement referred to below.
The Borrower also promises to pay interest on the unpaid principal balance of
the Loan in like money, for the period such balance is outstanding, at said
principal office for the account of said Lending Office of the Bank, at the
rates of interest as provided in the Term Loan Agreement, on the dates and in
the manner provided in said Term Loan Agreement.
The date and amount of the Loan made by the Bank to the Borrower under
the Term Loan Agreement referred below, interest rate, Interest Period, maturity
date and each payment of principal thereof, shall be recorded by the Bank on its
books and, prior to any transfer of this Note (or, at the discretion of the
Bank, at any other time), endorsed by the Bank on the schedule attached hereto
or any continuation thereof; provided, however, the failure of the Bank to make
any such recordation or endorsement shall not affect the obligations of the
Borrower to make payment when due of any amount owing under the Term Loan
Agreement or hereunder in respect of the Variable Rate Loans made by the Bank.
This is one of the Notes referred to in that certain Term Loan
Agreement (as amended from time to time the "Term Loan Agreement") dated as of
October 24, 2002 among the Borrower, the Banks named therein (including the
Bank), the Documentation Agent and the Agent and evidences the Loan made by the
Bank thereunder. All terms not defined herein shall have the meanings given to
them in the Term Loan Agreement.
The Term Loan Agreement provides for the acceleration of the maturity
of principal upon the occurrence of certain Events of Default and for
prepayments on the terms and conditions specified therein.
The Borrower waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note. THE BORROWER WAIVES TO THE
FULL EXTENT PERMITTED BY APPLICABLE LAW THE RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.
This Note shall be governed by, and interpreted and construed in
accordance with, the laws of the State of New York, including Section 5-1401 of
the New York General Obligations Law (or any similar successor provision
thereto) but excluding all other conflict-of-law rules.
HARDINGE INC.
BY /s/ J. XXXXXXX XXXXX
------------------------------
J. Xxxxxxx Xxxxx, President
and Chief Executive Officer
SCHEDULE TO NOTE
Duration of
Amount of Interest Amount of Balance
Date Loan Interest Rate Period Payment Outstanding Notation By
------------------ --------------- --------------- ---------------- --------------- --------------- ----------------
PROMISSORY NOTE
$6,834,906.00 October 24, 0000
Xxx Xxxx, Xxx Xxxx
HARDINGE INC. (the "Borrower"), a corporation organized under the laws
of New York, for value received, hereby promises to pay to the order of KEYBANK
NATIONAL ASSOCIATION (the "Bank") at the principal office of JPMorgan Chase
Bank, at Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other
place as required by the Term Loan Agreement referred to below, for the account
of the appropriate Lending Office of the Bank, the principal amount of Six
Million Eight Hundred Thirty-four Thousand Nine Hundred Six and no/100 Dollars
($6,834,906.00) in lawful money of the United States of America and in
immediately available funds, on the date(s) and in the manner provided in the
Term Loan Agreement referred to below. The Borrower also promises to pay
interest on the unpaid principal balance of the Loan in like money, for the
period such balance is outstanding, at said principal office for the account of
said Lending Office of the Bank, at the rates of interest as provided in the
Term Loan Agreement, on the dates and in the manner provided in said Term Loan
Agreement.
The date and amount of the Loan made by the Bank to the Borrower under
the Term Loan Agreement referred below, interest rate, Interest Period, maturity
date and each payment of principal thereof, shall be recorded by the Bank on its
books and, prior to any transfer of this Note (or, at the discretion of the
Bank, at any other time), endorsed by the Bank on the schedule attached hereto
or any continuation thereof; provided, however, the failure of the Bank to make
any such recordation or endorsement shall not affect the obligations of the
Borrower to make payment when due of any amount owing under the Term Loan
Agreement or hereunder in respect of the Variable Rate Loans made by the Bank.
This is one of the Notes referred to in that certain Term Loan
Agreement (as amended from time to time the "Term Loan Agreement") dated as of
October 24, 2002 among the Borrower, the Banks named therein (including the
Bank), the Documentation Agent and the Agent and evidences the Loan made by the
Bank thereunder. All terms not defined herein shall have the meanings given to
them in the Term Loan Agreement.
The Term Loan Agreement provides for the acceleration of the maturity
of principal upon the occurrence of certain Events of Default and for
prepayments on the terms and conditions specified therein.
The Borrower waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note. THE BORROWER WAIVES TO THE
FULL EXTENT PERMITTED BY APPLICABLE LAW THE RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.
This Note shall be governed by, and interpreted and construed in
accordance with, the laws of the State of New York, including Section 5-1401 of
the New York General Obligations Law (or any similar successor provision
thereto) but excluding all other conflict-of-law rules.
HARDINGE INC.
BY /s/ J. XXXXXXX XXXXX
------------------------------
J. Xxxxxxx Xxxxx, President
and Chief Executive Officer
SCHEDULE TO NOTE
Duration of
Amount of Interest Amount of Balance
Date Loan Interest Rate Period Payment Outstanding Notation By
------------------ --------------- --------------- ---------------- --------------- --------------- ----------------
PROMISSORY NOTE
$6,834,906.00 October 24, 0000
Xxx Xxxx, Xxx Xxxx
HARDINGE INC. (the "Borrower"), a corporation organized under the laws
of New York, for value received, hereby promises to pay to the order of
MANUFACTURERS AND TRADERS TRUST COMPANY (the "Bank") at the principal office of
JPMorgan Chase Bank, at Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or
at such other place as required by the Term Loan Agreement referred to below,
for the account of the appropriate Lending Office of the Bank, the principal
amount of Six Million Eight Hundred Thirty-four Thousand Nine Hundred Six and
no/100 Dollars ($6,834,906.00) in lawful money of the United States of America
and in immediately available funds, on the date(s) and in the manner provided in
the Term Loan Agreement referred to below. The Borrower also promises to pay
interest on the unpaid principal balance of the Loan in like money, for the
period such balance is outstanding, at said principal office for the account of
said Lending Office of the Bank, at the rates of interest as provided in the
Term Loan Agreement, on the dates and in the manner provided in said Term Loan
Agreement.
The date and amount of the Loan made by the Bank to the Borrower under
the Term Loan Agreement referred below, interest rate, Interest Period, maturity
date and each payment of principal thereof, shall be recorded by the Bank on its
books and, prior to any transfer of this Note (or, at the discretion of the
Bank, at any other time), endorsed by the Bank on the schedule attached hereto
or any continuation thereof; provided, however, the failure of the Bank to make
any such recordation or endorsement shall not affect the obligations of the
Borrower to make payment when due of any amount owing under the Term Loan
Agreement or hereunder in respect of the Variable Rate Loans made by the Bank.
This is one of the Notes referred to in that certain Term Loan
Agreement (as amended from time to time the "Term Loan Agreement") dated as of
October 24, 2002 among the Borrower, the Banks named therein (including the
Bank), the Documentation Agent and the Agent and evidences the Loan made by the
Bank thereunder. All terms not defined herein shall have the meanings given to
them in the Term Loan Agreement.
The Term Loan Agreement provides for the acceleration of the maturity
of principal upon the occurrence of certain Events of Default and for
prepayments on the terms and conditions specified therein.
The Borrower waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note. THE BORROWER WAIVES TO THE
FULL EXTENT PERMITTED BY APPLICABLE LAW THE RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.
This Note shall be governed by, and interpreted and construed in
accordance with, the laws of the State of New York, including Section 5-1401 of
the New York General Obligations Law (or any similar successor provision
thereto) but excluding all other conflict-of-law rules.
HARDINGE INC.
BY /s/ J. XXXXXXX XXXXX
------------------------------
J. Xxxxxxx Xxxxx, President
and Chief Executive Officer
SCHEDULE TO NOTE
Duration of
Amount of Interest Amount of Balance
Date Loan Interest Rate Period Payment Outstanding Notation By
------------------ --------------- --------------- ---------------- --------------- --------------- ----------------
