EXHIBIT 10.2


 





 


REVOLVING
LIBOR GRID NOTE


(LIBOR ONLY)


New
York


 


	
  December 10, 2009

  	
  $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 the date
hereof 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, 2011.


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.


 


©Manufacturers and Traders Trust Company, 2009


 


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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.


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, 2010 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 


 


4

















 


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

















 


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.


 


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

  	
   

  
						



 


 


ACKNOWLEDGMENT


 


	
  STATE OF NEW YORK

  	
  )

  
	
   

  	
  :SS.

  
	
  COUNTY OF CHEMUNG

  	
  )

  



 


On      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

  



 


6

















 


FOR BANK USE ONLY


 


	
  Authorization Confirmed:

  	
   

  



Product Code: 22660


Disbursement of Funds:


 


	
  Credit A/C

  	
  #

  	
  Off Ck

  	
  #

  	
  Payoff Obligation

  	
  #

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  



 


7