EXHIBIT 10.6

 

POST CLOSING AGREEMENT Hardinge Holdings GmbH

 

THIS POST-CLOSING AGREEMENT (“Agreement”) is made as of March 16, 2009, by and
between HARDINGE INC., a New York corporation having an address of One Hardinge
Drive, Elmira, New York 14902 (“Borrower”), HARDINGE TECHNOLOGY SYSTEMS, INC., a
New York corporation having an address of One Hardinge Drive, Elmira, New York
14902 (“Guarantor”), and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York
banking corporation with banking offices at One M&T Plaza, Buffalo, New York
14240, Attention: Office of General Counsel (“Lender”).

 

Pursuant to the terms of a certain commitment letter dated March 13, 2009
(“Commitment Letter”), Lender agreed to make a loan to Borrower in the amount of
Ten Million and 00/100 Dollars ($10,000,000.00) (the “Loan”).  The Loan will be
evidenced by a note in the total principal amount of $10,000,000.00 by Borrower
to the order of Lender (the “Note”).  The Note is secured by, among other
things, a Credit Agreement, a Guaranty, a Negative Pledge Agreement, and a
General Security Agreement, all of even date herewith (collectively with the
Note, the “Loan Documents”).

 

A.          Borrower acknowledges that as part of the consideration for the
Loan, Lender is to receive a pledge of 2/3rds of the stock of Hardinge Holdings
GmbH, a foreign subsidiary of Borrower (the “Holding Co.”) (the “Pledge”).  It
is the understanding of the parties hereto that all of the stock in Borrower’s
foreign subsidiaries is currently held by Holding Co.

B.           Borrower and Guarantor acknowledge that Lender and its counsel have
requested certain due diligence items in preparation for the Loan as set forth
on Exhibit A hereto and that not all of the items have been provided as of the
closing date.

C.           Borrower acknowledges and agrees that Lender will not make the Loan
in the absence of this Agreement.

 

NOW, THEREFORE, for and in consideration of Lender making the Loan to Borrower
and for other good and valuable consideration, the receipt, adequacy and
sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.              The above recitals are true and correct and are incorporated
herein by reference.

 

2.             Borrower and Guarantor acknowledge and agree to provide any and
all items on Exhibit A that have not been provided to Lender or Lender’s counsel
prior to the closing date.  Such items shall be delivered within fifteen (15)
days of the date hereof.  In addition, Borrower and Guarantor acknowledge and
agree to provide any additional information and documentation that Lender may
reasonably request in connection with the Loan and the subsequent Pledge.

 

3.              Pledge.  Borrower acknowledges that it owns 100% of the stock of
Holding Co.  which holds all of the foreign stock of the foreign subsidiaries of
Borrower.  Borrower acknowledges and agrees that in consideration for the Loan,
it agrees to execute within fifteen (15) days of the date hereof, a Pledge
Agreement pledging 2/3rds of its stock in Holding Co. along with any and all
other documents needed to

 

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effectuate the Pledge.  Borrower further agrees that it shall provide and cause
Holding Co. to provide all of the documentation pertaining to the formation,
authority, stock holdings, etc. of Holding Co. as is required by Lender, in its
reasonable judgment.  Borrower further agrees that if Lender or Lender’s counsel
shall deem it necessary, Borrower shall cause Holding Co. to execute any and all
documents necessary to effectuate the Pledge.  Borrower agrees to obtain an
opinion letter from New York counsel in substantially the form attached hereto
as Exhibit B regarding the authority and enforcement of the Pledge by Borrower. 
Borrower shall obtain legal counsel in the foreign country or organization for
Holding Co. to opine as to authority and enforceability of a Pledge by Holding
Co. relative to the foreign stock or assets of Holding Co.

 

4.              It is understood and agreed to by the parties hereto that the
current stock certificates that Borrower is required to deliver to Lender are
being held by JPMorgan Chase Bank in connection with the prior financing. 
Borrower acknowledges and agrees that if it is unable to provide the
certificates prior to or at the time of closing, it shall deliver those
certificates immediately upon the release thereof by JPMorgan Chase Bank and
within fifteen (15) days of the date hereof.

 

5.              Borrower shall pay any and all expenses related to any
post-closing items contained in this Agreement, including, but not limited to,
expenses incurred in complying with Paragraph 3 herein and any Lender’s counsel
fees for services rendered in connection with this Agreement incurred after
March 17, 2009.

 

6.              Event of Default.  Borrower’s and Guarantor’s failure to perform
their obligations by the dates stated herein shall be an Event of Default under
the Loan Documents.

 

IN WITNESS WHEREOF, the parties below have entered into this Agreement as of the
day and year first above written.

 

 

BORROWER:

 

 

 

HARDINGE INC.

 

 

 

By:

/S/ EDWARD J. GAIO

 

 

Name: Edward J. Gaio

 

 

Title:   Chief Financial Officer

 

 

 

GUARANTOR:

 

 

 

HARDINGE TECHNOLOGY SYSTEMS, INC.

 

 

 

By:

/S/ RICHARD L. SIMONS

 

 

Name: Richard L. Simons

 

 

Title:  President

 

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LENDER:

 

 

 

MANUFACTURERS AND TRADERS TRUST COMPANY

 

 

 

By:

/S/ SUSAN A. BURTIS

 

 

Name: Susan A. Burtis

 

 

Title:   Vice President

 

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EXHIBIT A – LIST OF REQUIREMENTS

 

EXHIBIT A-1: REQUEST FOR INFORMATION SHEET

EXHIBIT A-2: CLOSING CHECKLIST

 

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EXHIBIT A-1: REQUEST FOR INFORMATION SHEET

HARDINGE INC.

 

1.             The following information as to the Borrower – Hardinge Inc.:

 

A.           Full and proper name of Borrower and State of Formation

B.             Address of Borrower

C.             Federal Identification Number

D.            Copy of Certificate of Incorporation and filing receipt, along
with any amendments thereto

E.              Copy of By-laws, along with any amendments thereto

F.              Long Form Certificate of Good Standing, dated within (60) days
of closing

G.             Franchise tax search, dated within (60) days of closing

H.            Name and title of person who will be executing bank documents

I.                 Name and title of second person to sign authorization for
person in (H) above to sign documents

J.                The following searches against Borrower:

· Bankruptcy search

· Judgment search

· Lien search

· UCC Search – in the State where entity was formed

K.            SEC filing

L.              Copies of all financing documents including loan payoff

M.         Information as to whether publicly traded

N.            Security Agreement Questionnaire

 

2.             The following information as to: all material direct and indirect
subsidiaries that are Guarantors or are pledging stock as collateral for the
loan

 

A.         Full and proper name

B.             Jurisdiction of Formation

C.             Address

D.            Identification Number

E.              Copy of Articles of Organization or applicable organizational
document and filing receipt, and any amendments thereto

F.              Copy of operational documents, and any amendments thereto

G.             Long Form Certificate of Good Standing (showing Proof of
Publication where required), dated within sixty (60) days of closing

H.            Name and title of person who will be executing documents

I                    Name and title of second person to sign authorization for
person in (H) above to sign documents

J.                The following searches (as applicable):

· Bankruptcy search

· Judgment search

· Lien search

· Franchise Tax Search

L.              SEC filings or any similar filings in any other jurisdictions,
if applicable

M.         Information as to whether or not stock is publicly traded

 

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N.            For Guarantors:  List of all shareholders, the amount of voting
shares they own and the total amount of outstanding shares of voting stock

 

3.              The following information as to the property or properties known
as the Company’s headquarters located at One Hardridge Drive, Elmira, Chemung
County, New York:

 

A.                                                                            
Information regarding Owner and Proof of Ownership;

B.                                                                            
Title Search;

C.                                                                            
Tax Map Identification Number;

D.                                                                           
Copy of Negative Pledge Agreement from previous financing;

E.                                                                             
Information as to any tenants and copies of any leases.

 

4.              HAZARD AND LIABILITY INSURANCE - requirements:

 

A.           Hazard Insurance:  Evidence of Commercial Property Insurance on the
Acord 28 Form

· Note:  Must be on the 2003 version of that certificate or must state in the
fine print at the top of the form:  “THIS IS EVIDENCE THAT INSURANCE AS
IDENTIFIED BELOW HAS BEEN ISSUED, IS IN FORCE, AND CONVEYS ALL RIGHTS AND
PRIVILEGES AFFORDED UNDER THE POLICY”

· If this is not possible, we will need an Insurance Binder

B.             Liability Insurance:  Certificate of Insurance on ACORD 25-S Form

· Note:  Must be on a version of that certificate that states in the fine print
at the top of the form:  “THIS IS EVIDENCE THAT INSURANCE AS IDENTIFIED BELOW
HAS BEEN ISSUED, IS IN FORCE, AND CONVEYS ALL RIGHTS AND PRIVILEGES AFFORDED
UNDER THE POLICY”

· If this is not possible, we will need an Insurance Binder along with the
Certificate of Insurance

C.             Both Certificates must list Borrower as the insured

D.            The amount of Hazard Insurance coverage must be for at least the
amount of the loan

E.              Both Certificates must list correct property address(es)

F.              Both Certificates must contain a 30 day cancellation notice

· Note:  Must read as follows:  “SHOULD THE POLICY BE TERMINATED, THE COMPANY
WILL GIVE THE ADDITIONAL INTEREST INDENTIFIED BELOW THIRTY (30) DAYS WRITTEN
NOTICE, AND WILL SEND NOTIFICATION OF ANY CHANGES TO THE POLICY THAT WOULD
AFFECT THAT INTEREST, IN ACCORDANCE WITH THE POLICY PROVISIONS AS REQUIRED BY
LAW.”

G.             Bank to be listed on the Hazard Insurance as “Loss Payee”

H.            Bank to be listed on the Liability Insurance as “Additional
Insured”

I.                 Bank name/address to be set forth as follows:

 

Manufacturers and Traders Trust Company

Its Successors and/or Assigns

M&T Center, One Fountain Plaza, 9th Floor

Buffalo, New York 14203-1495

 

5.              Attorney Opinion Letter required – we will send you our required
form after due diligence items are received and loan documents are finalized

 

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6.              The following information regarding the Marketable Securities to
be collateralized:

 

A.           Copies of Certificates to be pledged as marketable securities

 

7.              Please note that more information and documentation may be
required once the details of the transaction are clarified and this Request for
Information is subject to change accordingly and is also subject to review by
our client.

 

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EXHIBIT A-2: CLOSING CHECKLIST

CLOSING CHECKLIST

 

Borrower:

 

Hardinge Inc.

Type of Entity:

 

New York corporation

Address:

 

One Hardinge Drive, Elmira, New York 14902

Federal I.D. #:

 

16-0470200

 

 

 

Corporate Guarantor:

 

Hardinge Technology Systems, Inc.

Type of Entity:

 

New York corporation

Address:

 

One Hardinge Drive, Elmira, New York 14902

Federal I.D.#:

 

16-1326427

 

 

 

Lender:

 

Manufacturers and Traders Trust Company (“Lender”)

 

 

 

Property:

 

One Hardinge Drive, Town of Horseheads/City of Elmira, Chemung County, NY

 

 

Tax Map No. 69.09-4-62

 

 

 

Borrower’s Attorney:

 

Phillips Lytle LLP - Raymond H. Seitz, Esq. & David J. Murray (“Borrower”)

Lender’s Attorney:

 

Coughlin & Gerhart – Mark S. Gorgos (“C&G”)

Loan Officer:

 

Susan A. Burtis

 

 

 

Amount/Type of Loan:

 

$10,000,000.00 Term Loan

 

 

 

Closing Date:

 

March 16, 2009

 

 

 

Document

 

Responsible Party

 

Req’d

 

Rec’d

 

Comments

 

 

 

 

 

 

 

 

 

 

 

1.

 

Original Executed Commitment Letter/CLB

 

Lender

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.

 

LIBOR Term Note - $10,000,000.00

 

C&G

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.

 

Credit Agreement

 

C&G

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.

 

Negative Pledge Agreement

 

C&G

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5.

 

General Security Agreement

 

C&G

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6.

 

Stock Pledge Agreement(s) (pledging 2/3rds of foreign stock)

 

C&G

 

X

 

 

 

Post-Closing Item

 

 

 

 

 

 

 

 

 

 

 

7.

 

Trading Rider (if necessary)

 

C&G

 

X

 

 

 

Post-Closing Item

 

 

 

 

 

 

 

 

 

 

 

8.

 

Irrevocable Stock Power (if necessary)

 

C&G

 

X

 

 

 

Post-Closing Item

 

 

 

 

 

 

 

 

 

 

 

9.

 

Federal Reserve Form U-1 (if necessary)

 

C&G

 

X

 

 

 

Post-Closing Item

 

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Document

 

Responsible Party

 

Req’d

 

Rec’d

 

Comments

 

 

 

 

 

 

 

 

 

 

 

10.

 

Post-Closing Agreement

 

C&G

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11.

 

UCC-1 – General Security Agreement (NYS)

 

C&G

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12.

 

UCC-3 Termination (JPMorgan Chase)

 

Borrower

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13.

 

Error and Omissions Compliance Affidavit

 

C&G

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14.

 

TIN Certification

 

C&G

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15.

 

Company General Certificate with Borrowing Resolution

 

C&G

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16.

 

Corporate Guaranty – Hardinge Technology Systems, Inc.

 

C&G

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17.

 

Company General Certificate – Hardinge Technology Systems, Inc.

 

C&G

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18.

 

Resolution to Guaranty

 

C&G

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19.

 

Consent of Shareholders to Guaranty

 

C&G

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20.

 

Disbursement Closing Statement

 

C&G

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21.

 

JPMorgan Chase Credit Agreement

 

Borrower

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22.

 

Payoff statement for JPMorgan Chase loan

 

Borrower

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23.

 

Updated Title Search and underlying documents – One Hardinge Drive, Elmira, New
York

· Proof of Ownership

· Title Search

· Tax Map Identification Number

· Tenancies

 

Borrower

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

24.

 

Tax Receipts (One Hardinge Drive, Elmira, New York)

 

Borrower

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25.

 

Corporate Documents – Borrower (formation and authority)

 

Borrower

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26.

 

UCC Search – Borrower

 

Borrower

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27.

 

Bankruptcy Search – Borrower

 

Borrower

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

28.

 

Judgment Search – Borrower

 

Borrower

 

X

 

 

 

 

 

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Document

 

Responsible Party

 

Req’d

 

Rec’d

 

Comments

 

 

 

 

 

 

 

 

 

 

 

29.

 

Lien Search – Borrower

 

Borrower

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30.

 

Franchise Tax Search – Borrower

 

Borrower

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31.

 

SEC filing – Borrower

 

Borrower

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32.

 

Security Agreement Questionnaire to be filled out and returned by Borrower

 

C&G

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33.

 

Stock Detail – Borrower (including whether or not publicly traded and
information of stock detail for foreign subsidiaries and Borrower’s holdings
therein)

 

Borrower

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

34.

 

Copies of Certificates to be pledged as marketable securities

 

Borrower

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

35.

 

Corporate Documents – Hardinge Technology Systems, Inc. (formation and
authority)

 

Borrower

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

36.

 

Corporate Documents – Hardinge Holdings Co., Gmbh (formation and authority)

 

Borrower

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

37.

 

Stock Detail – Hardinge Holdings Co., Gmbh (including whether or not publicly
traded on any exchange and information of stock detail for foreign subsidiaries)

 

Borrower

 

X

 

 

 

Post-Closing Item

 

 

 

 

 

 

 

 

 

 

 

38.

 

SEC filings or similar filings in jurisdiction of formation for Hardinge
Holdings Co., Gmbh

 

Borrower

 

X

 

 

 

Post-Closing Item

 

 

 

 

 

 

 

 

 

 

 

39.

 

Certificates of Insurance

· Liability

· Property /Builders Risk

 

Borrower

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

40.

 

Opinion Letter as of closing (New York counsel)

 

Borrower

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

41.

 

Opinion Letter regarding Stock Pledge (New York counsel)

 

Borrower

 

X

 

 

 

Post-Closing Item

 

 

 

 

 

 

 

 

 

 

 

42.

 

Opinion Letter regarding Stock Pledge (foreign counsel for Hardinge Holdings Co.
Gmbh)

 

Borrower

 

X

 

 

 

Post-Closing Item

 

 

 

 

 

 

 

 

 

 

 

43.

 

Wire Authorization Form

 

Lender

 

X

 

 

 

 

 

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EXHIBIT B – FORM OF OPINION LETTER

 

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