NEW FINANCING ARRANGEMENT	6 Months Ended
NEW FINANCING ARRANGEMENT	Jun. 30, 2013
NEW FINANCING ARRANGEMENT
NEW FINANCING ARRANGEMENT	NOTE 3. NEW FINANCING ARRANGEMENT On May 9, 2013, the Company, Usach Technologies, Inc. (“Usach”), a direct wholly owned subsidiary of the Company, and Forkardt amended and restated the existing $25.0 million domestic revolving credit agreement (the “Amendment”). The Amendment added Usach and Forkardt as additional borrowers and extended the maturity of the credit facility from March 31, 2014 to May 1, 2018. The revolving credit facility is guaranteed by Hardinge Technology Systems Inc. (“Technology”), a direct wholly owned subsidiary and owner of the real property comprising the Company’s world headquarters in Elmira, New York, and is secured by liens on all of the U.S. assets (exclusive of real property) of the Company, Usach, Forkardt and Technology, a pledge of 65% of the Company’s investment in Holdings GmbH, and a negative pledge on the Company’s world headquarters in Elmira, New York. Also on May 9, 2013, the Company and Holdings GmbH entered into a term loan agreement with a bank. This term loan agreement, which has a maturity date of May 9, 2018, provides for a $23.0 million senior secured term loan facility for the acquisition of Forkardt. The agreement calls for scheduled annual principal repayment in the amount of $0.8 million, $2.0 million, $3.2 million, $4.0 million, $4.0 million and $9.0 million in 2013, 2014, 2015, 2016, 2017, and 2018 respectively. The term loan is secured by the same collateral as the revolving credit facility and is guaranteed by Usach, Forkardt, and Technology. The interest rate on the revolving credit facility and the term loan is determined from pricing grids with London Interbank Offered Rate (“Libor”) and base rate options based on the Company’s leverage ratio and is initially set at Libor plus 2.75%. The interest rate was 3.0% at June 30, 2013. Both the revolving credit facility and term loan have financial covenants requiring a minimum Fixed Charge Coverage Ratio of not less than 1.15 to 1.00 (tested quarterly on a rolling four-quarter basis), a maximum consolidated Total Leverage Ratio of 3.0 to 1.0 (tested quarterly on a rolling four-quarter basis), and maximum annual consolidated capital expenditures of $10,000,000 along with other customary representations, affirmative and negative covenants, prepayment provisions and events of default.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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