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 10th day of
December, 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 10th day
of December 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 CURREN

  
	
   

  	
  Notary Public –
  Nancy Curren

  



 

















 


	
  ACKNOWLEDGMENTS

  	
   

  
	
  STATE OF NEW YORK

  	
  )

  
	
   

  	
  : SS.

  
	
  COUNTY OF CHEMUNG

  	
  )

  



 


On the 10th day
of December 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 CURREN

  
	
   

  	
  Notary Public –
  Nancy Curren

  



 

















 


SCHEDULE
A


 


Town of Horseheads


Tax
Map Nos. 69.05-2-3.1, 69.05-2-3.4, and a portion of 69.09-4-62


 


Town of Horseheads


Portion
of Tax Map No. 69.09-4-62


 


Town of Horseheads


Tax
Map No. 69.04-4-34


 


Town of Horseheads


Tax
Map Nos. 69.09-4-59.1 & 69.09-4-59.2


 


Town of Horseheads


Tax
Map No. 69.10-2-67


 


Town of Horseheads


Tax
Map No. 69.10-2-25