Exhibit 4-C
REVOLVING PROMISSORY NOTE
$10,000,000.00
June 18, 2001
Farrel Corporation
25 Main Street
Ansonia, Connecticut 06401
and
Farrel Limited
25 Main Street
Ansonia, Connecticut 06401
(Individually and collectively "Borrower")
First Union National Bank
300 Main Street
Stamford, Connecticut 06904
(Hereinafter referred to as "Bank")
Borrower promises to pay to the order of Bank, at its office indicated above or
wherever else Bank may specify to the Borrower in writing, the sum of Ten
Million and No/100 Dollars ($10,000,000.00) in lawful money of the United States
of America, the United Kingdom, or in the applicable Alternative Currency (as
defined in the Loan Agreement, hereafter defined) as the case may be, and in
immediately available funds, or such lesser sum as may be advanced and
outstanding from time to time, with interest on the unpaid principal balance at
the rate and on the terms provided in this Promissory Note (including all
renewals, extensions or modifications hereof, this "Note") and in a certain
Revolving and Term Loan Credit Agreement between Bank and Borrower dated as of
the date hereof, as the same may be modified and amended from time to time (the
"Loan Agreement").
LIMITATION OF LIABILITY OF FARREL LIMITED. It is expressly understood and agreed
that (a) the amounts loaned to Farrel Corporation hereunder are solely the
obligation of Farrel Corporation and that Farrel Limited shall have no liability
to Bank with respect to such amounts loaned to Farrel Corporation, and (b) the
amounts loaned to Farrel Limited hereunder are the joint and several obligation
of Farrel Corporation and Farrel Limited, each Borrower hereby expressly
agreeing that Farrel Corporation shall be fully liable for all amounts loaned by
Bank to Farrel Limited.
INTEREST RATE DEFINITIONS.
LIBOR-Based Rate means 1-month, 2-month, 3-month, 6-month or 12-month LIBOR.
"LIBOR" is the rate for U.S. dollar/Sterling deposits with a maturity equal to
the number of months specified above, as reported on Telerate page 3750 as of
11:00 a.m., London time, on the second London business day before the relevant
Interest Period begins (or if not so reported, then as determined by Bank from
another recognized source or interbank quotation).
Prime-Based Rate. The rate of Bank's Prime Rate, as that rate may change from
time to time with changes to occur on the date Bank's Prime Rate changes
("Prime-Based Rate"). "Bank's Prime Rate" shall be that rate announced by Bank
from time to time as its prime rate and is one of several interest rate bases
used by Bank. Bank lends at rates both above and below Bank's Prime Rate, and
Borrower acknowledges that Bank's Prime Rate is not represented or intended to
be the lowest or most favorable rate of interest offered by Bank.
Mandatory Costs Rate means in relation to any Interest Period or other period,
the cost to the Bank of complying with all reserve, special deposit, capital
adequacy, solvency, liquidity ratios, fees or other
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requirements of or imposed by the Bank of England, the Financial Services
Authority, the European Central Bank or any other governmental or regulatory
authority for the time being attributable to each Advance or any unpaid sum
(rounded up if necessary to 4 decimal places) as conclusively determined by the
Bank.
Margin means 2.70% per annum with respect to the LIBOR-Based Rate and 0% with
respect to the Prime-Based Rate.
INTEREST RATE SELECTION AND ADJUSTMENT.
Interest Rate Options. At the election of Borrower, the unpaid principal balance
of each Advance (as defined herein) shall bear interest from the date such
Advance is made available to the Borrower, at the LIBOR-Based Rate or the
Prime-Based Rate selected by Borrower in accordance herewith, plus: (i) for
Advances made in Dollars, the Margin; or (ii) for Advances made in Pounds
Sterling only, the Margin plus the Mandatory Costs Rate (each, an "Interest
Rate"). Borrower shall select the Interest Rate and for each Interest Rate
except the Prime-Based Rate, the period of time such Interest Rate will
continuously apply (each, an "Interest Period") pursuant to the subparagraph
entitled "Notice and Manner of Borrowing and Rate Conversion" below. There shall
be no more than one Interest Rate for an Advance in effect at any time.
When the Prime-Based Rate is selected for an Advance, it shall be adjusted daily
as applicable to reflect Bank's Prime Rate and the Prime-Based Rate shall
continue to apply until another Interest Rate option for that Advance is
selected pursuant to the subparagraph entitled "Notice and Manner of Borrowing
and Rate Conversion". When the LIBOR-Based Rate is selected for an Advance, such
rate shall be fixed for the Interest Period and shall apply for that Advance for
successive Interest Periods at the then prevailing successive rate until another
Interest Rate option for that Advance is selected pursuant to the subparagraph
entitled "Notice and Manner of Borrowing and Rate Conversion."
Interest Periods. In connection with a LIBOR-Based Rate Advance, Borrower, by
giving notice at the times described in the subparagraph entitled "Notice and
Manner of Borrowing and Rate Conversion" below, shall select an Interest Period
to be applicable thereto, which Interest Period shall be a period corresponding
to one of the Interest Rate options. No Interest Period selection is required
for a Prime-Based Rate Advance.
Notice and Manner of Borrowing and Rate Conversion or Continuation. Borrower
shall give Bank irrevocable telephonic notice of each proposed Advance or rate
conversion or continuation not later than 11:00 a.m. local time at the office of
Bank first shown above (a) on the same business day as each proposed Advance or
rate conversion or continuation to the Prime-Based Rate and (b) at least 2
business days before each proposed Advance or rate conversion or continuation to
the LIBOR-Based Rate. Each such notice shall specify (i) the date of such
Advance or rate conversion or continuation, which shall be a business day and,
in the case of a conversion from the LIBOR-Based Rate Advance, the last day of
an Interest Period, (ii) the amount of each Advance or the amount to be
converted or continued, (iii) the Interest Rate selected by Borrower, and (iv)
except for the Prime-Based Rate, the duration of any Interest Period applicable
thereto, which Interest Period must correspond to one of the Interest Rate
options. Notices received after 11:00 a.m. local time at the office of Bank
first shown above shall be deemed received on the next business day.
DEFAULT RATE. In addition to all other rights contained in this Note, if a
Default (as defined herein) occurs and as long as a Default continues, all
outstanding Obligations shall bear interest at the Interest Rate plus 3%
("Default Rate"). The Default Rate shall also apply from acceleration until the
Obligations or any judgment thereon is paid in full.
INTEREST AND FEE(S) COMPUTATION (ACTUAL/360/and in the case of Sterling 365).
Interest and fees, if any, shall be computed on the basis of a 360/and in the
case of Sterling 365-day year for the actual number of days in the applicable
period ("Actual/360/and in the case of Sterling 365 Computation"). The
Actual/360/and in the case of Sterling 365 Computation determines the annual
effective yield by taking the stated (nominal) rate for a year's period and then
dividing said rate by 360/and in the case of Sterling 365 to determine the daily
periodic rate to be applied for each day in the applicable period. Application
of the
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Actual/360/and in the case of Sterling 365 Computation produces an annualized
effective interest rate exceeding the nominal rate.
REVOLVING CREDIT ADVANCES. This is a revolving credit note. Until the
Termination Date of this Note, Borrower may borrow, repay and reborrow, and Bank
may advance and readvance under this Note respectively from time to time (each
an "Advance" and together the "Advances"), subject to the limitations set forth
in the Loan Agreement.
REPAYMENT TERMS. This Note shall be due and payable in consecutive monthly
payments of accrued interest only, commencing on July 18, 2001, and continuing
on the same day of each month thereafter until fully paid. In any event, all
principal and accrued interest shall be due and payable on June 18, 2003.
AUTOMATIC DEBIT OF CHECKING ACCOUNT FOR LOAN PAYMENT. Borrower authorizes Bank
to debit Farrel Corporation's demand deposit account number 2000006058397 and
Farrel Limited's demand deposit account number 04635036 or any other account
with Bank designated in writing by Borrower, beginning July 18, 2001 for any
payments due under this Note. Borrower further certifies that Borrower holds
legitimate ownership of this account and preauthorizes this periodic debit as
part of its right under said ownership.
APPLICATION OF PAYMENTS. Monies received by Bank from any source for application
toward payment of the Obligations shall be applied to accrued interest and then
to principal. If a Default occurs, monies may be applied to the Obligations in
any manner or order deemed appropriate by Bank.
If any payment received by Bank under this Note or other Loan Documents is
rescinded, avoided or for any reason returned by Bank because of any adverse
claim or threatened action, the returned payment shall remain payable as an
obligation of all persons liable under this Note or other Loan Documents as
though such payment had not been made.
IF THE UNITED KINGDOM AT ANY TIME PARTICIPATES IN ECONOMIC AND MONETARY UNION
("EMU") IN ACCORDANCE WITH ARTICLE 109J OF THE TREATY, THEN:
any amount expressed to be payable under this Agreement in Sterling shall be
made in euros; and any amount so required to be paid in euros shall be converted
from Sterling at the rate stipulated pursuant to Article 109l(4) of the Treaty
and payment of the amount in euros derived from such conversion shall discharge
the obligation of the relevant party to pay such Sterling Amount in accordance
with, and subject to, the regulations made pursuant to Article 109l(4) of the
Treaty.
TREATY means the treaty establishing the European Community, being the Treaty of
Rome of 25th March 1957, as amended by the Single European Act 1986 and the
Maastricht Treaty (which was signed at Maastricht on 7th February 1992 and came
into force on 1st November 1993), as further amended from time to time.
STERLING AMOUNT means in relation to any Advance that is or is to be denominated
in Sterling the principal amount thereof and in relation to any Advance that is
or is to be denominated in any other currency the principal amount of Sterling
that would be required to purchase the amount of such Advance in such currency
at the Bank's spot rate for the purchase of such currency with Sterling in the
London Interbank Market at 11am on the third business day prior to the day on
which such Advance was or, as the case may be, is to be made.
"Sterling" or "£" means the lawful currency of the United Kingdom.
LOAN AGREEMENT; DEFINITIONS. This Note is subject to the terms and conditions of
the Loan Agreement. All capitalized terms not otherwise defined herein shall
have such meaning as assigned to them in the Loan Agreement. The term
"Obligations" used in this Note refers to any and all Indebtedness and other
obligations under this Note, the Term Note between Bank and Borrower and defined
in the Loan Agreement,
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all other indebtedness as defined in the respective Loan Documents, and all
obligations under any swap agreements as defined in 11 U.S.C. §101 between
Bank and Borrower whenever executed.
LATE CHARGE. If any payments are not timely made, Borrower shall also pay to
Bank a late charge equal to 5% of each payment past due for 10 or more days.
Acceptance by Bank of any late payment without an accompanying late charge shall
not be deemed a waiver of Bank's right to collect such late charge or to collect
a late charge for any subsequent late payment received.
ATTORNEYS' FEES AND OTHER COLLECTION COSTS. Borrower shall pay all of Bank's
reasonable expenses incurred to enforce or collect any of the Obligations
including, without limitation, reasonable arbitration, paralegals', attorneys'
and experts' fees and expenses, whether incurred without the commencement of a
suit, in any trial, arbitration, or administrative proceeding, or in any
appellate or bankruptcy proceeding.
USURY. If at any time the effective interest rate under this Note would, but for
this paragraph, exceed the maximum lawful rate, the effective interest rate
under this Note shall be the maximum lawful rate, and any amount received by
Bank in excess of such rate shall be applied to principal and then to fees and
expenses, or, if no such amounts are owing, returned to Borrower.
DEFAULT. If any Event of Default as defined in the Loan Agreement shall occur, a
default ("Default") under this Note shall exist.
REMEDIES UPON DEFAULT. If a Default occurs under this Note or any Loan
Documents, Bank may at any time thereafter, take the following actions:
Acceleration Upon Default. Accelerate the maturity of this Note and, at Bank's
option, any or all other Obligations, whereupon this Note and the accelerated
Obligations shall be immediately due and payable; provided, however, if the
Default is based upon a bankruptcy or insolvency proceeding commenced by or
against Borrower or any guarantor or endorser of this Note, all Obligations
shall automatically and immediately be due and payable. Cumulative. Exercise any
rights and remedies as provided under the Note and other Loan Documents, or as
provided by law or equity.
WAIVERS AND AMENDMENTS. No waivers, amendments or modifications of this Note and
other Loan Documents shall be valid unless in writing and signed by an officer
of Bank. No waiver by Bank of any Default shall operate as a waiver of any other
Default or the same Default on a future occasion. Neither the failure nor any
delay on the part of Bank in exercising any right, power, or remedy under this
Note and other Loan Documents shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.
Except as otherwise required by the Loan Agreement, each Borrower or any person
liable under this Note waives presentment, protest, notice of dishonor, demand
for payment, notice of intention to accelerate maturity, notice of acceleration
of maturity, notice of sale and all other notices of any kind. Further, each
agrees that Bank may extend, modify or renew this Note or make a novation of the
loan evidenced by this Note for any period, and grant any releases, compromises
or indulgences with respect to any collateral securing this Note, or with
respect to any other Borrower or any other person liable under this Note or
other Loan Documents, all without notice to or consent of each Borrower or each
person who may be liable under this Note or any other Loan Document and without
affecting the liability of Borrower or any person who may be liable under this
Note or any other Loan Document.
MISCELLANEOUS PROVISIONS. Assignment. This Note and the other Loan Documents
shall inure to the benefit of and be binding upon the parties and their
respective heirs, legal representatives, successors and assigns. Bank's
interests in and rights under this Note and the other Loan Documents are freely
assignable, in whole or in part, by Bank. In addition, nothing in this Note or
any of the other Loan Documents shall prohibit Bank from pledging or assigning
this Note or any of the other Loan Documents or any interest therein to any
Federal Reserve Bank. Borrower shall not assign its rights and interest
hereunder without the
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prior written consent of Bank, and any attempt by Borrower to assign without
Bank's prior written consent is null and void. Any assignment shall not release
Borrower from the Obligations. Applicable Law; Conflict Between Documents. This
Note and, unless otherwise provided in any other Loan Document, the other Loan
Documents shall be governed by and construed under the laws of the state named
in Bank's address shown above without regard to that state's conflict of laws
principles. If the terms of this Note should conflict with the terms of the Loan
Agreement the terms of the Loan Agreement shall control. Jurisdiction. Borrower
irrevocably agrees to non-exclusive personal jurisdiction in the state named in
Bank's address shown above. Severability. If any provision of this Note or of
the other Loan Documents shall be prohibited or invalid under applicable law,
such provision shall be ineffective but only to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Note or other such document. Notices. Any notice or
other communication hereunder to any party hereto shall be by hand delivery,
overnight delivery, facsimile, or registered or certified mail and unless
otherwise provided herein shall be deemed to have been given or made when
delivered or faxed (and confirmed) or as shown on the receipt for such
registered or certified mail. Any notices to Borrower shall be sufficiently
given, if delivered, faxed or mailed, as aforesaid, to the Borrower's address
shown above or such other address as provided hereunder, and to Bank, if
delivered, faxed or mailed, as aforesaid, to Bank's office address shown above
or such other address as Bank may specify in writing from time to time. In the
event that Borrower changes Borrower's address at any time prior to the date the
Obligations are paid in full, Borrower agrees to promptly give written notice of
said change of address by registered or certified mail, return receipt
requested, all charges prepaid. Plural; Captions. All references in the Loan
Documents to Borrower, guarantor, person, document or other nouns of reference
mean both the singular and plural form, as the case may be, and the term
"person" shall mean any individual, person or entity. The captions contained in
the Loan Documents are inserted for convenience only and shall not affect the
meaning or interpretation of the Loan Documents. Use of Proceeds. The proceeds
of the loan(s) evidenced by this Note shall be used for the commercial purposes
of Borrower. Advances. Bank may, in its sole discretion, make other advances
which shall be deemed to be advances under this Note, even though the stated
principal amount of this Note may be exceeded as a result thereof. Posting of
Payments. All payments received during normal banking hours after 2:00 p.m.
local time at the office of Bank first shown above shall be deemed received at
the opening of the next banking day. Fees and Taxes. Borrower shall promptly pay
all documentary, intangible recordation and/or similar taxes on this transaction
whether assessed at closing or arising from time to time.
ARBITRATION. Upon demand of any party hereto, whether made before or after
institution of any judicial proceeding, any claim or controversy arising out of
or relating to the Loan Documents between parties hereto (a "Dispute") shall be
resolved by binding arbitration conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association (the "AAA") and the Federal Arbitration Act. Disputes
may include, without limitation, tort claims, counterclaims, a dispute as to
whether a matter is subject to arbitration, claims brought as class actions, or
claims arising from documents executed in the future. A judgment upon the award
may be entered in any court having jurisdiction. Notwithstanding the foregoing,
this arbitration provision does not apply to disputes under or related to swap
agreements. Special Rules. All arbitration hearings shall be conducted in the
city named in the address of Bank first stated above. A hearing shall begin
within 90 days of demand for arbitration and all hearings shall conclude within
120 days of demand for arbitration. These time limitations may not be extended
unless a party shows cause for extension and then for no more than a total of 60
days. The expedited procedures set forth in Rule 51 et seq. of the Arbitration
Rules shall be applicable to claims of less than $1,000,000.00. Arbitrators
shall be licensed attorneys selected from the Commercial Financial Dispute
Arbitration Panel of the AAA. The parties do not waive applicable Federal or
state substantive law except as provided herein. Preservation and Limitation of
Remedies. Notwithstanding the preceding binding arbitration provisions, the
parties agree to preserve, without diminution, certain remedies that any party
may exercise before or after an arbitration proceeding is brought. The parties
shall have the right to proceed in any court of proper jurisdiction or by
self-help to exercise or prosecute the following remedies, as applicable: (i)
obtaining provisional or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment, appointment of receiver and filing an
involuntary bankruptcy proceeding; and (ii) when applicable, a judgment by
confession of judgment. Any claim or controversy with regard to any party's
entitlement to such remedies is a Dispute. Waiver of Exemplary Damages. The
parties agree that they shall not have a remedy
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of punitive or exemplary damages against other parties in any Dispute and hereby
waive any right or claim to punitive or exemplary damages they have now or which
may arise in the future in connection with any Dispute whether the Dispute is
resolved by arbitration or judicially. Waiver of Jury Trial. THE PARTIES
ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION THEY HAVE IRREVOCABLY WAIVED
ANY RIGHT THEY MAY HAVE TO JURY TRIAL WITH REGARD TO A DISPUTE.
CONNECTICUT PREJUDGMENT REMEDY WAIVER. EACH BORROWER ACKNOWLEDGES THAT THE
TRANSACTIONS REPRESENTED BY THIS NOTE ARE COMMERCIAL TRANSACTIONS AND HEREBY
VOLUNTARILY AND KNOWINGLY WAIVES ANY RIGHTS TO NOTICE OF AND HEARING ON
PREJUDGMENT REMEDIES UNDER CHAPTER 903A OF THE CONNECTICUT GENERAL STATUTES OR
OTHER STATUTES AFFECTING PREJUDGMENT REMEDIES, AND AUTHORIZES THE BANK'S
ATTORNEY TO ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT COURT ORDER, PROVIDED
THE COMPLAINT SHALL SET FORTH A COPY OF THIS WAIVER.
IN WITNESS WHEREOF, Borrower, on the day and year first above written, has
caused this Note to be executed under seal.
PLACE OF EXECUTION AND DELIVERY. Borrower hereby certifies that this Note and
the Loan Documents were executed in the State of Connecticut and delivered to
Bank in the State of Connecticut.
Farrel Corporation
Taxpayer Identification Number:
By: /s/ Rolf K Liebergesell
Rolf K. Liebergesell, President
Farrel Limited
Taxpayer Identification Number:
By: /s/ Rolf K Liebergesell
Rolf K. Liebergesell, Director
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