EXHIBIT 10.15

 

FRAMEWORK AGREEMENT FOR MORTGAGE LOAN

between

 

L. Kellenberger & Co. AG, Heiligkreuzstrasse 28, 9009 St. Gallen

(hereinafter referred to as the “Borrower”)

 

and

 

CREDIT SUISSE AG

Mailing address: P.O. Box 358, 9001 St. Gallen

Contact address: St. Leonhardstrasse 3, 9000 St. Gallen

(the lender, hereinafter referred to as the “Bank”)

 

	
Amount   of Credit Facility
    	
 
    	
CHF   3,000,000.00 

 

The   amount of the credit facility is reduced by the sum of the amortizations and   other loan repayments made.

 
    
	
Utilization  
    	
 
    	
Within the limits   of the available credit facility, the Borrower and the Bank mutually agree on   one or more credit products and, if applicable, their fixed terms. For   individual credit products, the fixed term can consist of an aggregate term   that is divided into several partial terms. 

 

The relevant   agreements are made without complying with any requirements as to form; an   oral agreement, in particular, is sufficient to be binding. The agreements   will be confirmed by the Bank in writing, but without a signature.

 
    
	
Repayment   / Prolongation  
    	
 
    	
Fixed-term loans   must be repaid at the end of the term or the aggregate term unless the   Borrower has entered into a new agreement with the Bank at least   two bank working days before this date. If no such agreement has been   made and the framework agreement has not been terminated, the Bank is   entitled, but not obliged, to convert the loan into an adjustable-rate   mortgage; this is made known to the Borrower in writing, however without a   signature. 

 

For a credit   product with an aggregate term, if the Borrower did not agree with the Bank a   new partial term for the continued use of the product or the use of another   mortgage product by three bank working days before the expiry of a partial   term at the latest, the product is automatically prolonged with an adjusted   interest rate (see “Interest Rate” below) and the same partial term, which   may not, however, exceed the final date of the aggregate term 

 

The mortgage   amortization shall be CHF 150’000.00 per half year, the first time at 30   June 2012.

 
    
	
Amortization
    	
 
    	
 

If the final   valuation of the mortgaged property shows a lower value than the current   estimation, the Bank may request a higher installment than mentioned before.   Otherwise, installments and method of payment as well as modifications to the   amortization amount are mutually agreed. This agreement is made without   complying with any requirements as to form; an oral agreement, in particular,   is sufficient to be binding. The agreement will be confirmed by the Bank in   writing, but without a signature.

 
    
	
Interest   rate
    	
 
    	
The interest rate   of loans that do not have a fixed term is determined by the Bank. The   interest rate is based on the prevailing conditions in the money and capital
    


 











 

	
 
    	
 
    	
markets, the risk   assessment of the Bank and the margin determined by the Bank. The Bank may at   any time and with immediate effect adjust the interest rate to reflect   changes in these elements. 

 

The interest rate   of fixed-term loans is mutually agreed by the Borrower and the Bank. This   agreement is made without complying with any requirements as to form; an oral   agreement, in particular, is sufficient to be binding. 

 

For credit   products with an aggregate term, the calculation of the interest rate is   based on the basic rate to be agreed (e.g. LIBOR) for the currency in   question and the applicable partial term. The basic rate is increased by an   agreed surcharge which takes account of the Bank’s margin as well as the risk   assessment. In the event of automatic prolongation, the basic rate valid for   the currency and new partial term in question and the surcharge for this   basic rate apply. 

 

The interest rates   will be confirmed in each case in writing by the Bank but without a signature.  

 

If the currently   valid equity capital requirements are increased through measures by   authorities or provisions of law, the Bank is entitled to increase the   applicable interest rate by the amount of the resulting additional borrowing   costs.

 
    
	
Interest due dates
    	
 
    	
March 31,   June 30, September 30, and December 31, or in accordance with the separate   agreements (see “Utilization” above)

 
    
	
Interest on arrears
    	
 
    	
If the Borrower   does not pay the interest by the interest due date, an interest penalty of 2%   above the agreed interest rate shall be paid as from the due date.

 
    
	
Interest   payments and amortization payments
    	
 
    	
On the due date,   interest payments and amortization payments shall be debited to an account   with the bank. 

 

The Borrower   undertakes to make the applicable amount available in this account on the due   date. 

 

The Bank’s rights   under the collateral agreement extend to cover any debit balance on such an   account arising from the amounts debited for the interest payments or   amortization payments.

 
    
	
Fees
    	
 
    	
The Bank may   charge fees for reviewing, changing, monitoring and managing the credit   facility and the individual loans as well as for extraordinary expenses. The   Bank is entitled to introduce or amend fees at any time. The Bank will inform   the Borrower of its fees and any amendments thereof in an appropriate manner.   The applicable fees   may be viewed at the Bank.

 
    
	
Mortgage collateral
    	
 
    	
Collateral   Agreement: The Bank owns or acquires the creditors’ rights to the bearer,   registered or paperless mortgage notes or bearer bonds with mortgage   assignment given below (hereinafter: mortgage notes): 

 

CHF 3’000’00.00   bearer mortgage note (“Inhaberschuldbrief”), first ranking bearer mortgage   note, no prior ranking, 

 

on the building at   Gärtliszälg, 8590 Romanshorn, land register Romanshorn, land register   No. 1668

 
    
	
Scope of security
    	
 
    	
The claims for   capital payment from the mortgage notes provide the Bank with security for   all claims against the Borrower(s) [as individual debtor(s) and/or   joint debtor(s)] which arise from contracts already concluded or contracts to   be
    


 











 

	
 
    	
 
    	
concluded in the   future within the scope of the business relationship with the Bank, as well   as for all costs connected with such claims and their interest, as well as   the commissions, fees, charges, costs, and early repayment   penalties, etc. (hereinafter referred to as secured claims). In   contrast, the interest on the mortgage note claims provides the Bank with   security for all interest on the secured claims.

 
    
	
Multiple claims
    	
 
    	
In the event of multiple   secured claims against one or several Borrowers, the Bank shall determine to   which of these claims the mortgage notes or their realization proceeds are to   be allocated.

 
    
	
Acknowledgement of debt
    	
 
    	
The   Provider(s) of Collateral hereby explicitly acknowledge(s) his/   her/their personal (joint, in the event of several Providers of Collateral) financial liability   arising from the mortgage notes assigned to the Bank amounting to the sum of   the claims for capital payment, in addition to the current and three-year   accrued interest. This acknowledgement of debt is valid irrespective of any   stipulations in the mortgage deeds (if any). If the Provider(s) of   Collateral is/are not the mortgage note debtor(s), he/she/they hereby declare   joint and several liability for the debt to the extent detailed above. The   interest rate of the mortgage note claims is stipulated to be 5%; should a   higher interest or maximum interest rate have been determined for a mortgage   note, this shall be regarded as the interest rate of the mortgage note claim.

 
    
	
Deed   claims and credit claims
    	
 
    	
The Bank may   enforce the mortgage note claims instead of the secured claims. The Bank is   also entitled to enforce the secured claims prior to and independently of the   mortgage note claims.

 
    
	
Calling   in mortgage note claims
    	
 
    	
Should the   Borrower default on at least one of the secured claims, the Bank is entitled   to call in the mortgage notes with a period of notice of three months to the   end of a month. Insofar as the Borrower(s) default(s) on the   payment of interest or amortization, the Bank is entitled to call in the   payment with immediate effect. This shall apply irrespective of any   stipulations in the mortgage deeds (if any).

 
    
	
Increase   and conver-sion of mortgage notes
    	
 
    	
In the event that   a mortgage note is increased or converted into another type of mortgage note,   this Agreement shall also apply.

 
    
	
Reassignment of   mortgage notes
    	
 
    	
As soon as the   Bank is no longer in possession of any secured claim(s) against the   Borrower, the Bank is obliged to transfer the mortgage notes back to the   Provider(s) of Collateral. Should a third party who has provided   personal or tangible security (e.g. surety bond, third-party pledge) satisfy   the Bank’s claims, the Bank shall be entitled to transfer the mortgage notes to   this third party.

 
    
	
Financial Ratios
    	
 
    	
The Borrower’s   adherence to the following financial ratios is mandatory:  

 

Minimum Equity  
    The   minimum equity means, (share capital, plus reserves, plus retained earnings,   minus long term intercompany accounts, minus other intercompany accounts   except intercompany trade accounts) must at no time fall below 35% of the   balance sheet total assets (according to the auditors’ report in accordance   with Swiss Auditing Standards) during the entire term of the credit   relationship.

 
    
	
Borrower’s Affirmative Obligations
    	
 
    	
·                  Obligation to provide information  

The Borrower is obliged to inform the Bank without delay of current   business developments and significant changes in its management and in its   direct and/or indirect ownership/control as well as other significant changes   that could influence the Borrower’s financial situation.
    


 











 

	
 
    	
 
    	
In particular, the Borrower will submit the following documents to the   Bank:

 
    
	
 
    	
 
    	
 ·  2 month after completion   of the building:

 · a final statement of building costs   signed by the Borrower and the architect

 · the final building insurance assessment

 · 2-3 photographs of the building

 

 ·  Quarterly:

 ·  Statements including   balance sheet, income statement, bookings and actual backlog of the Borrower   not later than 60 days after the end of each quarter.

 

 ·  Annually:

 · Annual report   including balance sheet, profit and loss statement as well as appendices and   auditor’s report of the Borrower within six months after the end of each   financial year.

 · Budget figures,   including the capital expenditure budget of the Borrower within the first   month of the budget year.

 · Group financial   statements of Hardinge Inc. with auditors’ report within six months after the   end of each financial year. 

 
    
	
 
    	
 
    	
·                  Pari Passu  
    The Borrower undertakes to provide   collateral for its current and future obligations vis-à-vis third parties in   their favour only if the Borrower simultaneously provides the same   collateral, or collateral accepted by the Bank as being equivalent, for all   current and future obligations under this framework agreement.

 
    
	
Borrower’s Negative Obligations
    	
 
    	
·                  Negative Pledge   Clause  
    The Borrower undertakes, to the extent   permitted by law, to refrain from providing new or additional collateral in   favour of a third party to secure existing or future liabilities or the   Borrower or a third party except cash credits up to an amount of CHF   5’000’000.00 secured by mortgage notes (“Namenschuldbriefe”) on Land Register   Biel no. 9443, Mohnweg 5, 2500 Biel/Bienne.  

 

·                  The Borrower   undertakes not to distribute any dividends in case of negative net profit   during the entire term of the credit relationship.

 

·                  The Borrower   undertakes to ensure that loans or other credits granted by the Borrower to   any subsidiaries of Hardinge Inc., Elmira (USA), and/or shareholders and/or   associated persons (i.e. all intercompanies) do not exceed CHF 10’000’000.00   cumulatively during the entire term of the credit relationship without the   prior consent of the Bank. 

 

·                  Furthermore, the Borrower informs the bank before granting any new   loan to intercompanies above the sum of CHF 2’000’000.00.

 
    
	
Termination   of the  framework agreement
    	
 
    	
This framework   agreement may be terminated by either party at any time with immediate   effect. Upon termination of the framework agreement, maturing loans are not   renewed and no new loans will be granted. However, loans that were previously   agreed will remain unaffected by the termination of this framework agreement.
    


 











 

	
 
    	
 
    	
The termination of   a loan granted under this framework agreement does not automatically result   in the termination of the framework agreement.

 
    
	
Termination   of individual loans

Ordinary   termination
    	
 
    	
Fixed-term loans   granted under this framework agreement can not be terminated before the end of the term or the aggregate term, unless otherwise agreed   in writing. Loans with unspecified terms can be terminated by either party at   any time with 3 months’ notice.

 
    
	
Extraordinary   termination
    	
 
    	
The Bank reserves   the right to terminate all loans granted under this agreement with immediate   effect at any time if:

 · the Borrower or pledgor goes bankrupt or   is granted a bankruptcy moratorium;

 · the Borrower is in arrears on interest   payments or mortgage amortizations for more than 30 calendar days after they   are due;

 · the mortgaged property is insufficiently   insured against fire and damage caused by natural hazards;

 · the value of the mortgaged property is   significantly impaired, especially due to insufficient maintenance;

 · the use of the mortgaged property is   altered without the Bank’s consent;

 · in the Bank’s view, asset and/or revenue   situation of the Borrower or, in the case of more than one borrower, one of   them has deteriorated significantly;

 · there has been a change in direct or   indirect ownership/control in respect of the Borrower to the extent of 50 %   ownership/control except for internal restructuring action within Hardinge   Inc.;

 · there has been a change in direct or   indirect ownership/control in respect of Hardinge Inc. to the extent of 50%   ownership/control;

 · owing to default and/or maturity clauses,   another loan or similar obligation entered into by the Borrower has been   terminated early;

 · in the Bank’s view, the Borrower’s asset   and/or revenue situation has deteriorated significantly;

 
    
	
Transfer   of ownership or forced sale
    	
 
    	
In the event of   transfer of ownership or forced sale of the mortgaged property, all claims in   connection with this framework agreement shall fall due for repayment on the   date of transfer of ownership or on the date of the public auction, as   applicable.

 
    
	
Statement   of costs in the event of early termination of fixed-term loans
    	
 
    	
If fixed-term loans are terminated prematurely before the end of the   term or aggregate term, the Bank will credit or debit the Borrower with the interest   gain or interest shortfall accrued thereon. 

 

For credit products with a fixed term, the interest gain or interest   shortfall is calculated based on the difference between the contractual   interest rate which applies at the time of termination and the interest rate   that, in the Bank’s view, can be earned at this date on a replacement   investment with the same residual term on the money or capital markets for   the outstanding credit amount. 

 

For credit products with an aggregate term, the interest gain or   interest shortfall for the remaining partial term is calculated in accordance   with the above paragraph. In addition, the Borrower must pay the surcharge to   the basic interest rate that applies on the date of termination for the   remaining period until the end of the aggregate term. 

 

Any surplus in favor of the Borrower is set off against the fee for   the Bank’s expenses described below. 

 

In addition a flat   fee of 0.1% of the loan amount, but not less than CHF 1’000.00, is owed for   the Bank’s expenses.
    


 











 

	
Insurance
    	
 
    	
The mortgaged   property shall be adequately insured against fire and natural hazards.

 
    
	
Transferability
    	
 
    	
The Bank is   authorized to transfer or assign all or any part of this loan relationship,   with all collateral and ancillary rights, to a third party in Switzerland or   abroad, for example, for the purposes of securitization or outsourcing. The   right to further transfer the relationship or to transfer it back remains   reserved. 

 

The Bank may at   any time make data and information associated with the loan relationship   available to such a third party and other involved parties, such as rating   agencies and trust companies; these parties shall be obliged to keep such   information confidential. The Borrower expressly declares his/her agreement   with the procedure described above.

 
    
	
Additional   agreements and special contractual terms
    	
 
    	
The additional   agreements that will be concluded or have already been concluded in   accordance with the terms of this framework agreement and the agreed loan   products (including the special contractual terms applicable to the   individual loans) form an integral part of this framework agreement.

 
    
	
General Conditions
    	
 
    	
The Bank’s   “General Conditions including the Safe Custody Regulations” supplement this   framework agreement.

 
    
	
Place of performance
    	
 
    	
The place of   performance is the location of the Swiss branch of the Bank with which the   Borrower has a contractual relationship. For borrowers whose present or   future domicile is outside Switzerland, the place of performance is also the   place of debt enforcement (“special domicile” as defined in Art. 50 par. 2 of   the Federal Law on Debt Collection and Bankruptcy).

 
    
	
Applicable   law and place of jurisdiction
    	
 
    	
This framework   agreement and the agreements based on this framework agreement are subject to   and shall be construed in accordance with Swiss law. The Borrower recognizes   the exclusive jurisdiction of the courts of Zurich   or of the location of the branch of the Bank with which the contractual   relationship exists. The Bank also has the right to bring legal action   against the Borrower before any other competent court.

 
    
	
Issuance/Signing of   Agreement
    	
 
    	
This framework   agreement has been drawn up and signed in duplicate. The Borrower and the Bank   each receive one copy.

 
    


 











 

	
CREDIT SUISSE AG
    	
 
    	
L.   Kellenberger & Co. AG
    
	
 
    	
 
    	
 
    
	
 /s/ Armin Sianer
    	
 
    	
/s/ Jurg Kellenberger
    
	
Armin Signer
    	
 
    	
Jurg Kellenberger
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Christian Kunz
    	
 
    	
/s/ Peter Hursch
    
	
Christian Kunz
    	
 
    	
Peter Hursch  
    
	
 
    	
 
    	
Borrower’s   signature
    
	
 
    	
 
    	
 
    
	
St. Gallen,   20.12.2011
    	
 
    	
St. Gallen,   21.12.2011
    
	
Place and Date
    	
 
    	
Place and Date
    


 

“General Conditions incl. Safe Custody Regulations”