EXHIBIT 10.5


 


NEGATIVE PLEDGE AGREEMENT


 


	
  Pledgor:

  	
  Hardinge Technology Systems, Inc.

  



 


	
  Borrower:

  	
   Hardinge Inc.

  



 


Bank:            Manufacturers and
Traders Trust Company, a New York banking
corporation with its principal banking office at One M&T Plaza, Buffalo,
New York 14203.  Attention: Office of
General Counsel


 


For good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound, Pledgor and Borrower hereby agree as follows:


 


1.            Until such time as all Indebtedness
has been irrevocably paid in full, Pledgor will not cause or permit, whether
upon the happening of any contingency or otherwise, any of Pledgor’s assets
indicated below (check appropriate box(es) below):


 


o    all Pledgor’s personal property assets,
including, without limitation, all accounts, chattel paper, investment
property, deposit accounts, documents, equipment, farm products, fixtures,
general intangibles (including intellectual property), instruments, inventory,
causes of action (including tort claims), and all proceeds and products
thereof,


 


x          Pledgor’s interest in the real property
located at One Hardinge Drive, Elmira, New York,
and/or as more particularly described on the attached Schedule A,


 


o            certain assets of Pledgor, more particularly
described as follows or on the attached Schedule A:


 


whether now owned or
hereafter acquired, and wherever located (collectively, the AProperty@), to be
transferred or conveyed, or to become subject to any lien, mortgage, security
interest, tax lien, warrant or any other encumbrance, except in favor of the
Bank.


 


2.            “Indebtedness” shall mean either
(check appropriate box below):


 


x             any and all
indebtedness owed by Borrower to the Bank, whether now existing or hereafter
incurred, of every kind and character, direct or indirect, and whether such
indebtedness is from time to time reduced and thereafter increased, or entirely
extinguished and thereafter reincurred, including, without limitation:  (i) indebtedness not yet outstanding,
but contracted for, or with respect to which any other commitment by the Bank
exists; (ii) all interest provided in any instrument, document, or
agreement which accrues on any indebtedness until payment of such indebtedness
in full; (iii) any credit or financial accommodations extended by the Bank
to Borrower after the commencement of a bankruptcy proceeding by or against
Borrower under Title 11 of the United States Code, or otherwise, and (iv) any
sums owed by Borrower to others which the Bank has obtained, or may obtain, by
assignment or otherwise.


 


o     any and all indebtedness owed by Borrower
to the Bank pursuant to a certain note dated                                     ,
20         , in the original
principal amount of $                                          ,
given by Borrower to the Bank, and any amendments, modifications or
replacements thereto.


 

















 


3.                                     Borrower understands and acknowledges
that the Bank is relying upon this Agreement as additional security in
connection with the Indebtedness, and that any breach of this Agreement by
Pledgor shall constitute an event of default under the terms of any agreement
evidencing the Indebtedness and Borrower’s obligations for the payment thereof
(collectively, the “Loan Documents”). Upon the breach of this Agreement by
Pledgor, the Bank may take such actions and enforce such remedies as the Bank
may deem necessary or appropriate, under the terms of any Loan Document or
pursuant to applicable law. 
Notwithstanding the foregoing, nothing in this Agreement shall be
construed to alter the demand nature of the Indebtedness (if applicable) or any
financial accommodation provided by the Bank to Borrower in connection
therewith.


 


4.                                     All the rights and remedies of the Bank
pursuant to this Agreement and any other document executed by Pledgor or
Borrower shall be cumulative, and no such right or remedy shall be exclusive of
any other such right or remedy.


 


5.                                     Pledgor agrees that the Bank, after the occurrence of an Event of Default under the Loan Documents,
may record this Agreement in the real property records or other governmental
offices wherever any Property is located.


 


6.                                     If Pledgor and Borrower are not the same
person or entity, then the term “Pledgor”, as used in this Agreement, shall be
deemed to include, individually and collectively, Pledgor and Borrower.


 


WITNESS the due execution
hereof as a SEALED instrument, and the delivery hereof to the Bank this 16th day of March, 2009.


 


 


	
  HARDINGE TECHNOLOGY SYSTEMS,
  INC.

  
	
   

  
	
   

  
	
  By:

  	
  /S/
  RICHARD L. SIMONS

  	
   

  
	
  Name:

  	
  Richard L. Simons

  
	
  Title:

  	
  President

  
	
   

  
	
  HARDINGE INC.

  
	
   

  
	
   

  
	
  By:

  	
  /S/
  EDWARD J. GAIO

  	
   

  
	
  Name:

  	
  Edward J. Gaio

  
	
  Title:

  	
  Vice President and CFO

  
						



 


ACKNOWLEDGMENTS


	
  STATE OF NEW YORK

  	
   

  	
  )

  
	
   

  	
   

  	
    : SS.

  
	
  COUNTY OF CHEMUNG

  	
   

  	
  )

  



 


On the 16th day of
March in the year 2009 before me, the undersigned, a Notary Public in and
for said State, personally appeared RICHARD L. SIMONS
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

  
	
   

  	
  Notary Public

  



 

















 


ACKNOWLEDGMENTS


	
  STATE OF NEW YORK

  	
   

  	
  )

  
	
   

  	
   

  	
  : SS.

  
	
  COUNTY OF CHEMUNG

  	
   

  	
  )

  



 


On the 16th day of
March in the year 2009 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

  
	
   

  	
  Notary Public