Exhibit 10.1

 

GRAPHIC [g13901ki01i001.gif]

 

REPLACEMENT REVOLVING LIBOR GRID NOTE

(LIBOR ONLY)

New York

 

December 29, 2010

 

$10,000,000.00

 

BORROWER (Name):  Hardinge Inc.

(Organizational Structure):  Corporation

(State Law organized under):  New York

(Address of residence/chief executive office):  One Hardinge Drive, Elmira, New
York 14902

 

BANK:  MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation
with its principal banking office at One M&T Plaza, Buffalo, NY 14203. 
Attention: Office of General Counsel

 

1.     DEFINITIONS.  Each capitalized term shall have the meaning specified
herein and the following terms shall have the indicated meanings:

 

a.     “Agreement” shall mean the Credit Agreement between Borrower and Bank
dated on or about December 10, 2009 as the same may be amended from time to
time.

 

b.     “Authorized Person” shall mean, Edward J. Gaio as Vice President and CFO,
Doug Malone as Corporate Controller, or Beth Trantor as Assistant Corporate
Controller.

 

Mention of the Authorized Person’s name is for reference purposes only and the
Bank may rely on a person’s title to ascertain whether someone is an Authorized
Person who may act on behalf of the Borrower in connection herewith.

 

c.     “Automatic Adjustment Rate Determination Date”, when applicable, shall
mean:

 

(i)    If the Interest Period duration selected for such LIBOR Rate Loan is “one
day”:  the first day of the applicable Interest Period.

 

(ii)   If the Interest Period duration selected for such LIBOR Rate Loan is
other than “one day”:  two (2) London Business Days before the first day of the
applicable Interest Period.

 

d.     “Automatic Continuation Option” shall, with respect to any LIBOR Rate
Loan, mean the option to have the then-current Interest Period duration, as
previously selected by Borrower, remain the same for the succeeding Interest
Period.

 

e.     “Base Rate” shall mean 1.0 percentage point(s) above the rate of interest
announced by the Bank from time to time as its prime rate of interest (“Prime
Rate”).

 

f.     “Base Rate Loan” shall mean a Loan which bears interest at the Base Rate.

 

g.     “Continuation Date” shall mean the date that Borrower’s election to
continue a LIBOR Rate Loan for another Interest Period becomes effective in
accordance with this Note.

 

h.     “Draw Date” shall mean, in relation to each Loan, the date that such Loan
is made or deemed to be made to Borrower pursuant to this Note.

 

i.      “Expiration Date” shall mean March 31, 2012.

 

j.      “Interest Period” shall mean, with respect to any LIBOR Rate Loan, the
period commencing on the Draw Date or Continuation Date for such LIBOR Rate Loan
and ending on the date that shall be:

 

(i)    If the Interest Period duration selected for such LIBOR Rate Loan is “one
day”:  the following day; provided, however, that if an Interest Period would
end on a day that is neither a London Business Day nor a New York Business Day,
such Interest Period shall be extended to the next succeeding day that is either
a London Business Day or a New York Business Day.

 

(ii)   If the Interest Period duration selected for such LIBOR Rate Loan is
other than “one day”:  the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) of the calendar month that is
one (1), two (2), three (3) or six (6) months after the commencement of such
period, in accordance with Borrower’s election made pursuant to the terms of
this Note; provided, however, that if an Interest Period would end on a day that
is not a Joint Business Day, such Interest Period shall be extended to the next
succeeding Joint Business Day, unless such next succeeding Joint Business Day
would fall in the next calendar month, in which case such Interest Period shall
end on the immediately preceding Joint Business Day.  To the extent that the
preceding clause results in either the extension or shortening of an Interest
Period for a particular Loan, the Bank shall have the right (but not the
obligation) to shorten or extend, respectively, the succeeding Interest Period
so that it shall end on a day that numerically corresponds to the Draw Date for
such Loan.

 

k.     “Interest Rate Floor” shall mean 5.5%.

 

l.      “Joint Business Day” shall mean a day that is both a New York Business
Day and a London Business Day.

 

m.   “LIBOR” shall mean the rate per annum (rounded upward, if necessary, to the
nearest 1/16th of 1%) obtained by dividing (i) the applicable London Interbank
Offered Rate (in accordance with the LIBOR Rate selected by Borrower for each
Loan; see LIBOR Rate definition below) as fixed by the British Bankers
Association for United States dollar deposits in the London interbank market at
approximately 11:00 a.m. London, England time (or as soon thereafter as
practicable), as determined by the Bank from any broker, quoting service or
commonly available source utilized by the Bank, by (ii) a percentage equal to
100% minus the stated maximum rate of all reserves required to be maintained
against “Eurocurrency Liabilities” as specified in Regulation D (or against any
other category of liabilities which includes deposits by reference to which the
interest rate on any LIBOR Rate Loan or Loans is determined or any category of
extensions of credit or other assets which includes loans by a non-United
States’ office of a bank to United States’ residents) on such date to any member
bank of the Federal Reserve System.  Notwithstanding any provision above, the
practice of rounding to determine LIBOR may be discontinued at any time in the
Bank’s sole discretion.

 

n.     “LIBOR Rate” shall mean, as selected by Borrower, for each LIBOR Rate
Loan and/or as otherwise applicable, in accordance with the terms of this Note,
the greater of one of the following rates: (i) 5.0 percentage point(s) above the
one-month LIBOR, each with an Interest Period duration of one day; or (ii) the
Interest Rate Floor.

 

CLB-171-NY (4/09)

 

©Manufacturers and Traders Trust Company, 2009

 

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o.     “LIBOR Rate Loan” shall mean a Loan that bears interest at a LIBOR Rate. 
Each advance of funds hereunder, to the extent originally priced at the LIBOR
Rate, shall be treated as a separate LIBOR Rate Loan.

 

p.     “Loan” shall mean a loan made to Borrower by the Bank pursuant to this
Note.

 

q.     “London Business Day” shall mean any day on which dealings in United
States dollar deposits are carried on by banking institutions in the London
interbank market.

 

r.     “Maximum Principal Amount” shall mean Ten Million and 00/100 dollars
($10,000,000.00).

 

s.     “New York Business Day” shall mean any day other than a Saturday, Sunday
or other day on which commercial banking institutions in New York, New York are
authorized or required by law or other governmental action to remain closed for
business.

 

t.      “Outstanding Principal Amount” shall mean, at any point in time, the
actual outstanding principal amount under this Note.

 

2.     PAYMENT OF PRINCIPAL, INTEREST AND EXPENSES.

 

a.     Promise to Pay.  For value received, and intending to be legally bound,
Borrower promises to pay to the order of the Bank, on or before the Expiration
Date, the Maximum Principal Amount or the Outstanding Principal Amount, if less;
plus interest as set forth below and all fees and costs (including without
limitation the Bank’s attorneys’ fees and disbursements, whether for internal or
outside counsel) the Bank incurs in order to collect any amount due under this
Note, to negotiate or document a workout or restructuring, or to preserve its
rights or realize upon any guaranty or other security for the payment of this
Note (“Expenses”).

 

b.     Interest.  Each Loan shall earn interest on the Outstanding Principal
Amount thereof calculated on the basis of a 360-day year for the actual number
of days of each year (365 or 366) as follows:

 

i.              LIBOR Rate Loans.  Interest shall accrue each day on each LIBOR
Rate Loan from and including the first day of each Interest Period applicable
thereto until, but not including, the last day of each such Interest Period or
the day the LIBOR Rate Loan is paid in full (if sooner) at a rate per annum
equal to the LIBOR Rate, as determined using LIBOR in effect on the following
dates, as applicable:  (a) for new LIBOR Rate Loans, the Draw Date (if the
Interest Period selected is one day) or two (2) London Business Days before the
Draw Date (if the Interest Period selected is other than one day); (b) for
continuations of LIBOR Rate Loans (other than as provided for in subsection
4(c) below), the Joint Business Day the Bank receives (or is deemed to receive)
the Notice of Continuation in accordance with the terms of this Note; (c) for
LIBOR Rate Loans where the Automatic Continuation Option is in effect, the
applicable Automatic Adjustment Rate Determination Date for such LIBOR Rate
Loan.

 

ii.            Base Rate Loans.  Interest shall accrue on a Base Rate Loan from
and including the first date a Loan becomes a Base Rate Loan to, but not
including, the day such Base Rate Loan is paid in full, at the rate per annum
equal to the Base Rate.  Any change in the Base Rate resulting from a change in
the Prime Rate shall be effective on the date of such change.

 

c.     Maximum Legal Rate.  It is the intent of the Bank and Borrower that in no
event shall interest be payable at a rate in excess of the maximum rate
permitted by applicable law (the “Maximum Legal Rate”).  Solely to the extent
necessary to prevent interest under this Note from exceeding the Maximum Legal
Rate, any amount that would be treated as excessive under a final judicial
interpretation of applicable law shall be deemed to have been a mistake and
automatically canceled, and, if received by the Bank, shall be refunded to
Borrower.

 

d.     Payments; Late Charge; Default Rate.  Payments shall be made in
immediately available United States funds at any banking office of the Bank. 
Interest only shall be due and payable beginning on January 1, 2011 and then on
the first day of each month thereafter until the Expiration Date.  Upon the
Expiration Date, this Note shall mature and Borrower shall pay to the Bank the
Outstanding Principal, plus all accrued and unpaid interest, fees and expenses
in full, without presentation, demand, or further notice of any kind.  If
payment is not received within five days of its due date, Borrower shall pay a
late charge equal to the greatest of (a) 5% of the delinquent amount, (b) the
Bank’s then current late charge as announced by the Bank from time to time, or
(c) $50.00.  In addition, if the Bank has not actually received any payment due
under this Note within thirty days after its due date, from and after such
thirtieth day the interest rate for all amounts outstanding under this Note
shall automatically increase to 5 percentage points above the higher of the Base
Rate or the LIBOR Rate (“Default Rate”), and any judgment entered hereon or
otherwise in connection with any suit to collect amounts due hereunder shall
bear interest at such Default Rate. Payments may be applied in any order in the
sole discretion of the Bank, but prior to demand, shall be applied first to past
due interest, Expenses, late charges, and principal payments, if any, which are
past due, then to current interest and Expenses and late charges, and last to
remaining principal.

 

e.     Prepayment; Breakage Fee.  Subject to the following, during the term of
this Note, Borrower shall have the option of paying the Outstanding Principal
Amount to the Bank in advance of the Expiration Date, in whole or in part, at
any time and from time to time upon written notice received by the Bank at least
thirty (30) days prior to making such payment; provided, however, that if
(i) except pursuant to a refinance of the Loan with the Bank, Borrower prepays,
in whole or in part, any Outstanding Principal Amount, when the Applicable Rate
is the LIBOR Rate, on any day other than the last day of an Interest Period, or
(ii) the Applicable Rate is converted from the LIBOR Rate to the Base Rate
before the end of an Interest Period in accordance with the terms of this Note,
then Borrower shall be liable for and shall pay the Bank, on demand, the higher
of $250.00 or the actual amount of the liabilities, expenses, reasonable costs
or funding losses that are a direct or indirect result of such prepayment or
other condition described above, whether such liability, expense, cost or loss
is by reason of (a) any reduction in yield, by reason of the liquidation or
reemployment of any deposit or other funds acquired by the Bank, (b) the fixing
of the interest rate payable on any LIBOR Rate loan or (c) otherwise
(collectively, the “Breakage Fee”).  The determination by the Bank of the
foregoing amount shall, in the absence of manifest error, be conclusive and
binding upon Borrower.

 

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3.     LOANS.

 

a.     General.  Except as otherwise provided herein, each Loan advanced
hereunder shall be in the form of a LIBOR Rate Loan.  The Bank may make any Loan
in reliance upon any oral, telephonic, written, teletransmitted or other request
(the “Request(s)”) that the Bank in good faith believes to be valid and to have
been made by Borrower or on behalf of Borrower by an Authorized Person.  The
Bank may act on the Request of any Authorized Person until the Bank shall have
received from Borrower, and had a reasonable time to act on, written notice
revoking the authority of such Authorized Person.  The Bank shall incur no
liability to Borrower or to any other person as a direct or indirect result of
making any Loan pursuant to this paragraph.

 

b.     Request for LIBOR Rate Loans.  Borrower shall give the Bank its
irrevocable Request for each LIBOR Rate Loan specifying:

 

i.      the Draw Date for the LIBOR Rate Loan, which shall be at least two
(2) Joint Business Days following the date of the Request (except in the case of
a LIBOR Rate Loan with an Interest Period of one day, for which the Draw Date
may be the same day as the date of the Request; provided, however, if a Request
is received by the Bank after 2:00 p.m. (Eastern Standard Time), the Request for
such LIBOR Rate Loan shall be deemed to have been received on the next New York
Business Day;

 

ii.     the aggregate amount of such LIBOR Rate Loan, which amount shall not be
less than the Minimum Borrowing Amount;

 

iii.    the applicable LIBOR Rate selection and corresponding Interest Period
duration (see LIBOR Rate definition above); and

 

iv.    whether the Automatic Continuation Option will be in effect for such
LIBOR Rate Loan.  The Automatic Continuation Option shall be in effect for each
LIBOR Rate Loan, unless otherwise specified by Borrower in writing.

 

c.     Delivery of Requests and Notices.  Delivery of a Notice or Request for a
LIBOR Rate Loan shall be made to the Bank at the following address, or such
other address designated by the Bank from time to time:

 

Manufacturers and Traders Trust Company

68 Exchange Street

Binghamton, New York  13901

Attn: Susan A. Burtis

 

Fax No.  (607) 779-2346

Telephone No.  (607) 779-5902

 

d.     Events of Default.  The following constitute an event of default (“Event
of Default”): (i) failure by Borrower to make any payment when due (whether at
the stated maturity, by acceleration or otherwise) of any of the amounts due
under this Note, or any part thereof, or to pay any interest thereon or any fee
or other amount payable under this Note and such failure continues unremedied
for a period of three (3) business days or there occurs any event or condition
which after notice, lapse of time or both will permit such acceleration;
(ii) Borrower defaults in the performance of any covenant or other provision
with respect to this Note or any other agreement between Borrower and the Bank
or any of its affiliates or subsidiaries (collectively, “Affiliate”);
(iii) Borrower fails to pay when due (whether at the stated maturity, by
acceleration or otherwise) any material indebtedness for borrowed money owing to
the Bank (other than under this Note), any third party or Affiliate or the
occurrence of any event which results in acceleration of payment of any such
indebtedness or the failure to perform any agreement with any third party or
Affiliate; (iv) the reorganization, merger, consolidation or dissolution of
Borrower (or the making of any agreement therefore); the sale, assignment,
transfer or deliver of all or substantially all of the assets of Borrower to a
third party; or the cessation by Borrower as a going business concern; (v) the
death or judicial declaration of incompetency of Borrower, if an individual;
(vi) failure to pay, withhold or collect any tax as required by law; the service
or filing against Borrower or any of its assets of any lien (other than a lien
permitted in writing by the Bank), one or more judgments, garnishments, orders
or awards in an aggregate amount of $500,000.00 over and above any insurance
coverage which has been determined by the insurance carrier to be applicable to
the claim underlying the judgment, garnishment, order or award, and any such
judgments, garnishments, orders or awards remain unbonded, unstayed or
undismissed for a period of thirty (30) consecutive days; (vii) if Borrower
becomes insolvent or is generally not paying its debts as such debts become due;
(viii) the making of any general assignment by Borrower for the benefit of
creditors; the appointment of a receiver or similar trustee for Borrower or its
assets; or the making of any, or sending notice of any intended, bulk sale;
(ix) Borrower commences, or has commenced against it, any proceeding or request
for relief under any bankruptcy, insolvency or similar laws now or hereafter in
effect in the United States of America or any state or territory thereof or any
foreign jurisdiction of any formal or informal proceeding for the dissolution or
liquidation of, settlement of claims against or winding up of affairs of
Borrower which is not dismissed or stayed within sixty (60) days of
commencement; (x) any representation or warranty made in this Note, any related
document, any agreement between Borrower and the Bank or any Affiliate or if any
financial statement of Borrower proves to have been misleading in any material
respect when made; Borrower omits to state a material fact necessary to make the
statements made in this Note, any related document, any agreement between
Borrower and the Bank or any Affiliate or any financial statement of Borrower
not misleading in light of the circumstances in which they were made; or, if
upon the date of execution of this Note, there shall have been any material
adverse change in any of the facts disclosed in any financial statement,
representation or warranty that was not disclosed in writing to the Bank at or
prior to the time of execution hereof; (xi) any pension plan of Borrower fails
to comply with applicable law or has vested unfunded liabilities that, in the
opinion of the Bank, might have a material adverse effect on Borrower’s ability
to repay its debts; (xii) an adverse change in the Borrower, its business,
assets, operations, management, ownership, affairs or condition (financial or
otherwise) from the status shown on any financial statement or other document
submitted to the Bank or any Affiliate, and which the Bank reasonably determines
will have a material adverse effect on (a) the Borrower, its business, assets,
operations or condition (financial or otherwise), or (b) the ability of the
Borrower to pay or perform any obligation to the Bank; and (xiii) the occurrence
of any event described in subparagraph (i) through and including (xii) hereof
with respect to any guarantor or any other party liable for, or whose assets or
any interest therein secures, payment of any of the amounts due under this Note
(“Guarantor”).

 

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e.               Rights and Remedies upon Default.  Upon the occurrence of any
Event of Default, the Bank without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law) to or upon the Borrower or any other person (all and each of
which demands, presentments, protests, advertisements and notices are hereby
waived), may exercise all rights and remedies under the Borrower’s agreements
with the Bank or its Affiliates, applicable law, in equity or otherwise and may
declare all or any part of any amounts due hereunder not payable on demand to be
immediately due and payable without demand or notice of any kind and terminate
any obligation it may have to grant any additional loan, credit or other
financial accommodation to the Borrower.  All or any part of any amounts due
hereunder whether or not payable on demand, shall be immediately due and payable
automatically upon the occurrence of an Event of Default in sub-paragraph
3(d)(ix) above, or at the Bank’s option, upon the occurrence of any other Event
of Default.  The provisions hereof are not intended in any way to affect any
rights of the Bank with respect to any amounts due hereunder which may now or
hereafter be payable on demand.

 

4.              CONTINUATION AND CONVERSION.

 

a.               Election.  An Authorized Person may, upon irrevocable Request
to the Bank in accordance with subsection (b) below, elect to continue, as of
the last day of the applicable Interest Period, any or a portion (subject to the
Minimum Borrowing Amount limitation) of any LIBOR Rate Loan with the same or a
different Interest Period, provided no partial continuation of a LIBOR Rate Loan
with a different Interest Period shall reduce the outstanding principal amount
of the remaining LIBOR Rate Loan with the same Interest Period to less than the
Minimum Borrowing Amount.

 

b.               Notice of Continuation.

 

i.                  For an election under Section 4(a) above, an Authorized
Person must deliver to the Bank, by 2:00 p.m. (Eastern Standard Time) on a New
York Business Day, a Notice of Continuation for an election under Section 4(a)
(“Notice of Continuation” or “Notice”), specifying:

 

(a)          the aggregate amount of each LIBOR Rate Loan to be continued;

 

(b)         the applicable LIBOR Rate selection and corresponding Interest
Period duration for each LIBOR Rate Loan to be continued (see LIBOR Rate
definition above); and

 

(c)          whether the Automatic Continuation Option will be in effect for
each such LIBOR Rate Loan.  The Automatic Continuation Option shall be in effect
for each LIBOR Rate Loan, unless otherwise specified by Borrower in writing.

 

ii.               For any election in accordance with Section 4(b)(i) above, the
Continuation Date shall be the later of (A) the last day of the applicable
Interest Period, or (B) two (2) Joint Business Days following the date the Bank
receives the Notice of Continuation, except as otherwise determined by the Bank
in its sole discretion.  If a Notice is received after 2:00 p.m. (Eastern
Standard Time) on any New York Business Day, such Notice will be deemed to have
been received on the next New York Business Day.   Accordingly, as an example,
if Borrower has a LIBOR Rate Loan with a one month Interest Period ending on
June 15 and wants to continue the LIBOR Rate Loan with a two month Interest
Period, Borrower must deliver to the Bank an appropriate Notice of Continuation
by no later than 2:00 p.m. (Eastern Standard Time) on June 13 (assuming that
June 13 is a New York Business Day and June 14 and 15 are Joint Business Days).

 

iii.            For LIBOR Rate Loans with the Automatic Continuation Option in
effect, the Bank shall, at the end of each Interest Period, automatically
continue such LIBOR Rate Loan with the same Interest Period.

 

iv.           The Bank may take action on any Notice in reliance upon any oral,
telephonic, written or teletransmitted Notice that the Bank in good faith
believes to be valid and to have been made by Borrower or on behalf of Borrower
by an Authorized Person.  No Notice may be delivered by e-mail.  The Bank may
act on the Notice from any Authorized Person until the Bank shall have received
from Borrower, and had a reasonable time to act on, written notice revoking the
authority of such Authorized Person. The Bank shall incur no liability to
Borrower or to any other person as a direct or indirect result of acting on any
Notice under this Note.  The Bank, in its sole discretion, may reject any Notice
that is incomplete.

 

c.               Expiration of Interest Period.  With respect to any LIBOR Rate
Loan for which an Automatic Continuation Option is not in effect, if Borrower
does not deliver to the Bank an appropriate Notice of Continuation (in
accordance with the terms hereof) at least two (2) Joint Business Days before
the end of an Interest Period, the Bank shall have the right (but not the
obligation) to immediately, and without notice, convert such LIBOR Rate Loan
into a Base Rate Loan and such Loan shall accrue interest at the Base Rate until
two (2) Joint Business Days after the Bank receives an appropriate Notice (in
accordance with the terms hereof) electing to convert the Loan from a Base Rate
Loan to a LIBOR Rate Loan.  A Notice of Continuation received one (1) Joint
Business Day before the end of an Interest Period may not effectuate a
continuation of such Loan as a LIBOR Rate Loan as of the last day of the
Interest Period.  Rather, such LIBOR Rate Loan may be converted (in the manner
described above) to a Base Rate Loan on the last day of the Interest Period. 
Such Notice of Continuation, however, will be effective two (2) Joint Business
Days from the date it is received (or deemed to be received) by the Bank.

 

d.               Conversion upon Default.  Unless the Bank shall otherwise
consent in writing, if (i) Borrower fails to pay when due, in whole or in part,
the indebtedness under the Note (whether by demand or otherwise), or (ii) there
exists any condition or event which with the passage of time, the giving of
notice or both shall constitute an event of default under any of Borrower’s
agreement with the Bank, if any, the Bank, in its sole discretion, may (i)
permit any outstanding LIBOR Rate Loans to continue until the last day of the
applicable Interest Period at which time such Loan shall automatically be
converted into a Base Rate Loan or (ii) convert any outstanding LIBOR Rate Loans
into a Base Rate Loan before the end of the applicable Interest Period
applicable to such LIBOR Rate Loan.  Nothing herein shall be construed to be a
waiver by the Bank to have any Loan

 

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accrue interest at the Default Rate of interest (which shall be calculated from
the higher of the LIBOR Rate or the Base Rate) or the right of the Bank to
charge and collect a Breakage Fee.

 

5.              SETOFF.  The Bank shall have the right to set off against the
amounts owing under this Note any property held in a deposit or other account
with the Bank or any of its affiliates or otherwise owing by the Bank or any of
its affiliates in any capacity to Borrower or any guarantor or endorser of this
Note.  Such set-off shall be deemed to have been exercised immediately at the
time the Bank or such affiliate elects to do so.

 

6.              INTENTIONALLY OMITTED.

 

7.              BANK RECORDS CONCLUSIVE.  The Bank shall set forth on a schedule
attached to this Note or maintained on computer, the date and original principal
amount of each Loan and the date and amount of each payment to be applied to the
Outstanding Principal Amount of this Note.  The Outstanding Principal Amount set
forth on any such schedule shall be presumptive evidence of the Outstanding
Principal Amount of this Note and of all Loans. No failure by the Bank to make,
and no error by the Bank in making, any annotation on any such schedule shall
affect the Borrower’s obligation to pay the principal and interest of each Loan
or any other obligation of Borrower to the Bank pursuant to this Note.

 

8.              PURPOSE.  Borrower certifies (a) that no Loan will be used to
purchase margin stock except with the Bank’s express prior written consent for
each such purchase and (b) that all Loans shall be used for a business purpose,
and not for any personal, family or household purpose.

 

9.              AUTHORIZATION.  Borrower, if a corporation, partnership, limited
liability company, trust or other entity, represents that it is duly organized
and in good standing or duly constituted in the state of its organization and is
duly authorized to do business in all jurisdictions material to the conduct of
its business; that the execution, delivery and performance of this Note have
been duly authorized by all necessary regulatory and corporate or partnership
action or by its governing instrument; that this Note has been duly executed by
an authorized officer, partner or trustee and constitutes a binding obligation
enforceable against Borrower and not in violation of any law, court order or
agreement by which Borrower is bound; and that Borrower’s performance is not
threatened by any pending or threatened litigation.

 

10.       INABILITY TO DETERMINE LIBOR RATES, INCREASED COSTS, ILLEGALITY.

 

a.               Increased Costs.  If the Bank shall determine that due to
either (a) the introduction of any change (other than any change by way of
imposition of or increase in reserve requirements included in the calculation of
the LIBOR) in or in the interpretation of any requirement of law, or (b) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), there shall be
any increase in the cost to the Bank of agreeing to make or making, funding or
maintaining any LIBOR Rate Loans, then Borrower shall be liable for, and shall
from time to time, upon demand therefor by the Bank, pay to the Bank such
additional amounts as are sufficient to compensate the Bank for such increased
costs.

 

b.               Inability to Determine Rates.  If the Bank shall determine that
for any reason adequate and reasonable means do not exist for ascertaining LIBOR
for any requested Interest Period with respect to a proposed LIBOR Rate Loan,
the Bank will give notice of such determination to Borrower.  Thereafter, the
Bank may not make or maintain LIBOR Rate Loans, as the case may be, hereunder
until the Bank revokes such notice in writing.  Upon receipt of such notice,
Borrower may revoke any pending Request or Notice with respect to a LIBOR Rate
Loan.  If Borrower does not revoke such Request or Notice, the Bank may make, or
continue the Loans, as proposed by Borrower, in the amount specified in the
applicable Request or Notice submitted by Borrower, but such Loans shall be made
or continued as Base Rate Loans instead of LIBOR Rate Loans, as the case may be.

 

c.               Illegality.  If the Bank shall determine that the introduction
of any law (statutory or common), treaty, rule, regulation, guideline or
determination of an arbitrator or of a governmental authority or in the
interpretation or administration thereof, has made it unlawful, or that any
central bank or other governmental authority has asserted that it is unlawful
for the Bank to make LIBOR Rate Loans, then, on notice thereof by the Bank to
Borrower, the Bank may suspend the making of LIBOR Rate Loans until the Bank
shall have notified Borrower that the circumstances giving rise to such
determination shall no longer exist.  If the Bank shall determine that it is
unlawful to maintain any LIBOR Rate Loans, Borrower shall prepay in full all
LIBOR Rate Loans then outstanding, together with accrued interest, either on the
last date of the Interest Period thereof if the Bank may lawfully continue to
maintain such LIBOR Rate Loans to such day, or immediately, if the Bank may not
lawfully continue to maintain such LIBOR Rate Loans.  If Borrower is required to
prepay any LIBOR Rate Loan immediately as set forth in this subsection, then
concurrently with such prepayment, Borrower may borrow from the Bank, in the
amount of such repayment, a Base Rate Loan.

 

11.       MISCELLANEOUS.  This Note, together with any related loan and security
agreements and guaranties, contains the entire agreement between the Bank and
Borrower with respect to the Note, and supersedes every course of dealing, other
conduct, oral agreement and representation previously made by the Bank.  All
rights and remedies of the Bank under applicable law and this Note or amendment
of any provision of this Note are cumulative and not exclusive. No single,
partial or delayed exercise by the Bank of any right or remedy shall preclude
the subsequent exercise by the Bank at any time of any right or remedy of the
Bank without notice.  No waiver or amendment of any provision of this Note shall
be effective unless made specifically in writing by the Bank. No course of
dealing or other conduct, no oral agreement or representation made by the Bank,
and no usage of trade, shall operate as a waiver of any right or remedy of the
Bank. No waiver of any right or remedy of the Bank shall be effective unless
made specifically in writing by the Bank. Borrower agrees that in any legal
proceeding a copy of this Note kept in the Bank’s course of business may be
admitted into evidence as an original.  This Note is a binding obligation
enforceable against Borrower and its successors and assigns and shall inure to
the benefit of the Bank and its successors and assigns.  If a court deems any
provision of this Note invalid, the remainder of the Note shall remain in
effect.  Section headings are for convenience only.  Singular number includes
plural and neuter gender includes masculine and feminine as appropriate.

 

12.       NOTICES.  Any demand or notice hereunder or under any applicable law
pertaining hereto shall be in writing and duly given if delivered to Borrower
(at its address on the Bank’s records) or to the Bank (at the address on page
one and separately to the Bank officer responsible for Borrower’s relationship
with the Bank). Such notice or demand shall be deemed sufficiently given for all
purposes when delivered (i) by personal delivery and shall be deemed effective
when delivered, or (ii) by mail or courier and shall be deemed effective three
(3) New York Business Days after deposit in an official depository maintained by
the United States Post Office for the collection of mail or one (1) New York
Business Day after

 

5

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delivery to a nationally recognized overnight courier service (e.g., Federal
Express).  Notice by e-mail is not valid notice under this or any other
agreement between Borrower and the Bank.

 

13.       JOINT AND SEVERAL.  If there is more than one Borrower, each of them
shall be jointly and severally liable for all amounts which become due under
this Note and the term “Borrower” shall include each as well as all of them.

 

14.       GOVERNING LAW; JURISDICTION.  This Note has been delivered to and
accepted by the Bank and will be deemed to be made in the State of New York. 
This Note will be interpreted in accordance with the laws of the State of New
York excluding its conflict of laws rules.  BORROWER HEREBY IRREVOCABLY CONSENTS
TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN THE STATE OF NEW
YORK IN A COUNTY OR JUDICIAL DISTRICT WHERE THE BANK MAINTAINS A BRANCH, AND
CONSENTS THAT THE BANK MAY EFFECT ANY SERVICE OF PROCESS IN THE MANNER AND AT
BORROWER’S ADDRESS SET FORTH ABOVE FOR PROVIDING NOTICE OR DEMAND; PROVIDED THAT
NOTHING CONTAINED IN THIS NOTE WILL PREVENT THE BANK FROM BRINGING ANY ACTION,
ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST BORROWER
INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF BORROWER WITHIN
ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC JURISDICTION.  Borrower
acknowledges and agrees that the venue provided above is the most convenient
forum for both the Bank and Borrower. Borrower waives any objection to venue and
any objection based on a more convenient forum in any action instituted under
this Note.

 

15.       WAIVER OF JURY TRIAL.  BORROWER AND THE BANK HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY BORROWER AND THE
BANK MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION
WITH THIS NOTE OR THE TRANSACTIONS RELATED HERETO.  BORROWER REPRESENTS AND
WARRANTS THAT NO REPRESENTATIVE OR AGENT OF THE BANK HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT THE BANK WILL NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THIS JURY TRIAL WAIVER.  BORROWER ACKNOWLEDGES THAT THE BANK HAS BEEN
INDUCED TO ENTER INTO THIS NOTE BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS
SECTION.

 

16.       REVOLVING FACILITY.  This is a revolving credit facility and the
Bank’s obligation to make Loans under this Note shall be governed by the terms
of the Agreement as the same may be amended from time to time.  All amounts
hereunder shall become immediately due and payable on the Expiration Date;
provided, however, that the Outstanding Principal Amount of this Note and all
accrued and unpaid interest shall automatically become immediately due and
payable upon the occurrence of an Event of Default with regard to Borrower or
any guarantor or endorser of this Note.  Borrower hereby waives protest,
presentment and notice of any kind in connection with this Note.  The Bank may
modify, restrict, suspend or terminate the credit at any time without affective
Borrower’s then existing obligations under this Note.

 

x                                 Amended and Restated Note.  The Borrower
acknowledges, agrees and understands that this Note is given in replacement of
and in substitution for, but not in payment of, a prior Revolving LIBOR Grid
Note dated on or about December 10, 2009, in the original principal amount of
$10,000,000.00, given by Borrower in favor of the Bank (or its
predecessor-in-interest), as the same may have been amended or modified from
time to time (“Prior Note”), and further, that: (a) the obligations of the
Borrower as evidenced by the Prior Note shall continue in full force and effect,
as amended and restated by this Note, all of such obligations being hereby
ratified and confirmed by the Borrower; (b) any and all liens, pledges,
assignments and security interests securing the Borrower’s obligations under the
Prior Note shall continue in full force and effect, are hereby ratified and
confirmed by the Borrower, and are hereby acknowledged by the Borrower to
secure, among other things, all of the Borrower’s obligations to the Bank under
this Note, with the same priority, operation and effect as that relating to the
obligations under the Prior Note; and (c) nothing herein contained shall be
construed to extinguish, release, or discharge, or constitute, create, or effect
a novation of, or an agreement to extinguish, the obligations of the Borrower
with respect to the indebtedness originally described in the Prior Note or any
of the liens, pledges, assignments and security interests securing such
obligations.

 

Preauthorized Transfers from Deposit Account.  If a deposit account number is
provided in the following blank Borrower hereby authorizes the Bank to debit
available funds in Borrower’s deposit account
#                                             with the Bank automatically for
any amount which becomes due under this Note or as directed by an Authorized
Person, by telephone.

 

Acknowledgment.  Borrower acknowledges that it has read and understands all the
provisions of this Note, including the Governing Law, Jurisdiction and Waiver of
Jury Trial, and has been advised by counsel as necessary or appropriate.

 

 

 

HARDINGE INC.

 

 

 

 

 

 

 

 

 

By:

/S/ EDWARD J. GAIO

 

 

 

Name:

Edward J. Gaio

 

 

 

Title:

Vice President and CFO

/S/ DOUGLAS J. MALONE

 

 

Signature of Witness

 

 

 

 

 

Douglas J. Malone

 

 

Typed Name of Witness

 

 

 

6

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ACKNOWLEDGMENT

 

STATE OF NEW YORK

 

)

 

 

:SS.

COUNTY OF CHEMUNG

 

)

 

On 29th day of December, in the year 2010, before me, the undersigned, a Notary
Public in and for said State, personally appeared EDWARD J. GAIO, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual(s) whose name(s) is (are) subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.

 

 

 

/S/ NANCY L. CURREN

 

Nancy L. Curren

 

Notary Public, State of New York

 

Qualified in Chemung County #4944271

 

Commission expires November 14, 2014

 

 

FOR BANK USE ONLY

 

Authorization Confirmed:

Product Code: 22660

Disbursement of Funds:

 

Credit A/C

 

#

 

Off Ck

 

#

 

Payoff Obligation

 

#

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

$

 

 

 

$

 

7

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