Item 10.5
AMENDMENT NUMBER ONE
This Amendment Number One (the "Amendment") is to the Credit Agreement
among HARDINGE BROTHERS, INC. (now known as Hardinge Inc.) (the "Borrower") the
Banks signatory thereto, and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) as
Agent, dated as of August 1, 1994 (the "Agreement"). Terms used but not
otherwise defined herein shall have the same meaning set forth in the Agreement.
1. The definition of "Margin" as set forth in Section 1.01 of the Agreement
shall be modified in its entirety as follows:
"Margin" means for each Variable Rate Loan and Eurodollar Loan the lowest
applicable margin on the table next following, computed as of each Quarterly
Date based upon Borrower's financial statements for the immediately preceding
four Quarterly Dates for income statement items and the most recent Quarterly
Date for balance sheet items.
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(a) Ratio of Funded Debt to Earnings Variable Rate Loans Eurodollar Loans
Before Interest & Taxes
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Equal to or less than 1.0 0 Basis Points 45 Basis Points
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Greater than 1.0 and less than 0 Basis Points 65 Basis Points
or equal to 2.0
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Greater than 2.0 and less than 0 Basis Points 85 Basis Points
or equal to 3.0
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Greater than 3.0 0 Basis Points 100 Basis Points
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2. Section 7.01(f) of the Agreement shall be modified in its entirety as
follows:
(f) 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 $11,000,000.00; and
3. Section 7.02 of the Agreement shall be modified in its entirety as
follows:
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 which would cause the liabilities of the Borrower and its
Subsidiaries, on a consolidated basis, in respect of all such obligations to
exceed Five Million and 00/100 Dollars ($5,000,000.00) payable in any period of
twelve (12) months.
4. Section 7.05(d) of the Agreement shall be modified in its entirety as
follows:
(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
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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) should 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 dispositions of assets pursuant to clause (b), (c) or
(d) shall be at fair market value.
Notwithstanding the foregoing, the aggregate amount of acquisitions (net of
amounts paid for with the Borrower's stock) permitted under this section from
and after February 29, 1996 shall not be greater than $10,000,000.00 in any
consecutive twenty-four (24) month period without the prior written consent of
the Required Banks.
5. Section 8.02 of the Agreement shall be modified in its entirety as
follows:
Section 8.02 Net Worth. The Borrower shall maintain a Consolidated Tangible
Net Worth, at al1 times during each fiscal year of not less than an amount set
forth below opposite such fiscal year:
Fiscal Year Ending
December 31 Amount
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1995 $125,000,000
1996 $128,000,000
1997 $131,000,000
1998 $134,000,000
1999 $137,000,000
2000 $140,000,000
2001 $143,000,000
2002 $146,00O,OOO
The term "Consolidated Tangible Net Worth" shall mean the total
shareholders' equity prior to any cumulative foreign currency translation
adjustments, minus intangible assets.
6. Section 8.04 of the Agreement shall be modified in its entirety as
follows:
Section 8.04 Cash Flow. The Borrower shall maintain a Cash Flow Ratio at
all times of not less than 2.0 to l.0.
"Cash Flow Ratio" means the ratio at each Quarterly Date equal to (a) the
sum of Consolidated Net Income plus depreciation, amortization and other noncash
expenses for the previous four consecutive quarters divided by (b) the current
portion (i.e. due within one (1) year) of long term Debt.
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"Consolidated Net Income" means for any period the net income of Borrower
and its Consolidated Subsidiaries for such period determined on a consolidated
basis without duplication, in accordance with GAAP.
7. Section 9.01(f) of the Agreement shall be modified in its entirety as
follows:
(f) Any judgment or order for the payment of money in excess of Two Million
Five Hundred Thousand Dollars ($2,500,000.00) 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 10 consecutive days during which a state of
enforcement of such judgment or order, by reason of the pending appeal or
otherwise, shall not be in effect; or
8. The effective date of this Amendment Number One shall be February 29,
1996.
9. This Amendment 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 Amendment by signing any such counterpart.
10. Except as expressly set forth herein, this Amendment shall not, by
implication or otherwise, limit, constitute a waiver of, or otherwise affect the
rights and remedies of the Agent or the Banks, nor except to the extent
expressly set forth herein, alter, modify, amend, or in any way affect the
terms, conditions, obligations, covenants or agreements contained in the
Agreement, all of which shall otherwise continue in full force and effect in
accordance with their respective terms.
IN WITNESS WHEREOF, the parties have caused this Amendment Number One to be
duly executed.
HARDINGE INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇, President and
Chief Executive Officer
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AGENT:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇, Vice President
BANKS:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇, Vice President
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CHEMICAL BANK
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
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NATWEST BANIC, N.A., (formerly
National Westminster Bank, USA)
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇, Vice President
