FIRST AMENDMENT AGREEMENT
DATED AS OF NOVEMBER 30, 1998
among
FARREL CORPORATION,
FARREL LIMITED,
FARREL SHAW LIMITED
AND
THE CHASE MANHATTAN BANK
FIRST AMENDMENT AGREEMENT
FIRST AMENDMENT AGREEMENT (this "Agreement"), dated as of November 30,
1998, among FARREL CORPORATION, a corporation organized under the laws of
Delaware, FARREL LIMITED, a corporation organized under the laws of England and
Wales, FARREL SHAW LIMITED, a corporation organized under the laws of England
and Wales (each a "Borrower" and, collectively, the "Borrowers") and THE CHASE
MANHATTAN BANK, a New York banking corporation (the "Bank").
WHEREAS, the Borrowers and the Bank have entered into that certain
Amended and Restated Credit Agreement, dated as of January 23, 1998 (as in
effect prior to the effectiveness of this Agreement, the "Existing Credit
Agreement," and, as amended by this Agreement, the "Amended Credit Agreement"),
pursuant to which the Bank has extended credit to the Borrowers; and
WHEREAS, the Borrowers and the Bank have agreed to enter this
Agreement to provide for an extension of time for the availability of the
Revolving Credit Commitment and modifications of certain definitions contained
in the Existing Credit Agreement.
NOW THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1. AMENDMENTS TO EXISTING CREDIT AGREEMENT.
Each of the Borrowers and, subject to the satisfaction of the
conditions set forth in Article 3 hereof, the Bank hereby consent and agree to
the amendments to the Existing Credit Agreement set forth below:
(a) The definition of "Revolving Credit Termination Date" in Section
1.01 of the Existing Credit Agreement is hereby amended and restated in its
entirety to read as follows:
"Revolving Credit Termination Date" means December 31,
2002; provided that if such date is not a Banking Day, the
Revolving Credit Termination Date shall be the next
succeeding Banking Day (or, if such next succeeding Banking
Day falls in the next calendar month, the next preceding
Banking Day); and provided further that the Bank may extend
the Revolving Credit Termination Date by providing written
notice to the Borrowers.
(b) The definition of "Margin" in Section 1.01 of the Existing Credit
Agreement is hereby amended and restated in its entirety to read as follows:
"Margin" means, (a) for a Variable Rate Loan, 0% and (b) for a Fixed
Rate Loan, 1.25% if such Loan is a Revolving Credit Loan and 1.50% if such Loan
is a Term Loan.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES.
Each Borrower hereby represents and warrants that as of the Effective
Date:
Section 2.1. EXISTING REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties contained in Article 5 of the Amended Credit
Agreement is true and correct in all material respects; provided that if any
such representation or warranty is expressly stated to have been made as of a
specific date, such representation and warranty shall be true and correct as of
such specific date.
Section 2.2. NO DEFAULTS. No event has occurred and no condition
exists which would constitute a Default or an Event of Default under the Amended
Credit Agreement or under any other Facility Document.
Section 2.3. CORPORATE POWER AND AUTHORITY; NO CONFLICTS. Each
Borrower has all requisite corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder. The execution, delivery
and performance of this Agreement by each Borrower have been duly and validly
authorized by all requisite corporate proceedings on the part of such Borrower
and has been duly executed and delivered by such Borrower. Each of this
Agreement, the Amended Credit Agreement and each other Facility Document is a
legal, valid and binding obligation of each Borrower, enforceable against such
Borrower in accordance with its terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency and other
similar laws affecting creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law).
The execution and delivery by each Borrower of this Agreement does not, and the
consummation by such Borrower of the transactions contemplated hereby and by the
Amended Credit Agreement will not result in or constitute: (a) a default, breach
or violation of or under its organizational documents; (b) a default, breach or
violation of or under any mortgage, deed of trust, indenture, note, bond,
license, lease agreement or other instrument or obligation to which such
Borrower or any of its Subsidiaries is a party or by which any of their
properties are bound; (c) a violation of any statute, rule, regulation, order,
judgment or decree of any court, public body or authority by which such Borrower
or any of its Subsidiaries or any of their properties are bound; (d) an event
which (with notice or lapse of time or both) would permit any Person to
terminate, accelerate the performance required by, or accelerate the maturity of
any indebtedness or obligation for money borrowed of such Borrower or any of its
Subsidiaries under any agreement or commitment to which any such Person is a
party or by which any such Person is bound or by which any of their properties
are bound; (e) the creation or imposition of any Lien on any property of such
Borrower or any of its Subsidiaries under any agreement or commitment to which
such Person is a party or by which any such Person is bound or by which any of
their properties are bound; or (f) an event which would require any consent
under any agreement to which such Borrower is a party or by which such Borrower
or any of its Subsidiaries is bound or by which any of their properties are
bound.
Section 2.4. FINANCIAL STATEMENTS. The consolidated and consolidating
balance sheets of the Borrowers and their Consolidated Subsidiaries as at
December 31, 1997 and September 30, 1998, and the related consolidated and
consolidating statements of income, cash flows and changes
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in stockholders' equity of such Borrowers and Consolidated Subsidiaries for the
fiscal year and nine month period, respectively, then ended, and the
accompanying footnotes, together with the opinion, of the U.S. Company's
independent certified public accountants with respect to such balance sheets and
statements for the fiscal year ended December 31, 1997, copies of which have
been furnished to the Bank, are complete and correct in all material respects
and fairly present the financial condition of the Borrowers and their
Consolidated Subsidiaries at such dates and the results of the operations of the
Borrowers and their Consolidated Subsidiaries for the periods covered by such
statements, all in accordance with GAAP consistently applied. There are no
liabilities of the Borrowers or any of their Consolidated Subsidiaries, fixed or
contingent, which are material but are not reflected in such financial
statements or in such notes and which would be required to be recorded in such
financial statements or notes in accordance with GAAP. No information, exhibit
or report furnished by the Borrowers to the Bank in connection with the
negotiation of this Agreement contained any material misstatement of fact or
omitted to state a material fact or any fact necessary to make the statements
contained therein not materially misleading. Since December 31, 1997, there has
been no material adverse change in the condition (financial or otherwise),
business, operations or prospects of the Borrowers or any of their Subsidiaries,
taken as a whole.
ARTICLE 3. CONDITIONS PRECEDENT.
The consent and the agreement of the Bank to the amendments set forth
in Article 1 are subject to the condition precedent that the Bank shall have
received on or before November 30, 1998 (the "Effective Date") each of the
following, in form and substance satisfactory to the Bank and its counsel:
(1) counterparts of this Agreement executed by each of the
Borrowers and the Bank;
(2) certificates of the Secretary or Assistant Secretary of each
of the Borrowers, dated the Effective Date, (i) attesting to all corporate
action taken by such Borrower, including resolutions of its Board of Directors
authorizing the execution, delivery and performance of this Agreement and each
other document to be delivered pursuant to this Agreement, (ii) certifying the
names and true signatures of the officers of such Borrower authorized to sign
this Agreement and each other document to be delivered by such Borrower under
this Agreement and (iii) verifying that the Certificate of Incorporation (or
Charter) and Bylaws of such Borrower attached thereto are true, correct and
complete as of the date thereof;
(3) certified complete and correct copies of each of the financial
statements referred to in Section 2.04; and
(4) a legal opinion of Cummings & Lockwood, U.S. counsel for
Farrel Corporation, dated the Effective Date, in substantially the form of
Exhibit A.
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ARTICLE 4. MISCELLANEOUS.
Section 4.1. DEFINED TERMS. The terms used herein and not defined
herein shall have the meanings assigned to such terms in the Amended Credit
Agreement.
Section 4.2. AMENDMENTS AND WAIVERS. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may be amended or
modified only by an instrument in writing signed by each of the Borrowers and
the Bank and any provision of this Agreement may be waived by each of the
Borrowers and the Bank.
Section 4.3. EXPENSES. The Borrowers shall reimburse the Bank on
demand for all reasonable costs, expenses and charges (including, without
limitation, reasonable fees and charges of external legal counsel and costs
allocated by internal legal departments, without duplication as to billable
matters) in connection with the preparation of, and any amendment, supplement,
waiver or modification to (in each case, whether or not consummated), this
Agreement and any other documents prepared in connection herewith or therewith
and in connection with the enforcement or preservation of any rights or remedies
(including, without limitation, in connection with any restructuring or
insolvency or bankruptcy proceeding).
Section 4.4. NOTICES. Unless the party to be notified otherwise
notifies the other party in writing as provided in this Section, and except as
otherwise provided in this Agreement, notices shall be given to the Bank and to
the Borrowers by ordinary mail or telecopier addressed to such party at its
address on the signature page of this Agreement. Notices shall be effective: (a)
if given by mail, 72 hours after deposit in the mails with first class postage
prepaid, addressed as aforesaid; and (b) if given by telecopier, when the
telecopy is transmitted to the telecopier number as aforesaid.
Section 4.5. PAYMENT OF FEES. The Borrowers hereby agree to pay the
Bank a fee of $75,000 on January 4, 1999 as consideration for the execution and
delivery of this Agreement.
Section 4.6. HEADINGS. The headings and captions hereunder are for
convenience only and shall not affect the interpretation or construction of this
Agreement.
Section 4.7. SEVERABILITY. The provisions of this Agreement are
intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 4.8. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any party hereto may execute this Agreement by signing any
such counterpart.
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SECTION 4.9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CONNECTICUT.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
BORROWERS:
FARREL CORPORATION
By /s/ Rolf K. Liebergesell
-------------------------------
Name: Rolf K. Liebergesell
Title: Chairman, Chief Executive
Officer, and President
FARREL LIMITED
By /s/ Rolf K. Liebergesell
-------------------------------
Name: Rolf K. Liebergesell
Title: Chairman, Chief Executive
Officer, and President
FARREL SHAW LIMITED
By /s/ Rolf K. Liebergesell
-------------------------------
Name: Rolf K. Liebergesell
Title: Chairman, Chief Executive
Officer, and President
BANK:
THE CHASE MANHATTAN BANK
By /s/ Thomas D. McCormick
-------------------------------
Name: Thomas D. McCormick
Title: Vice President
[SIGNATURE PAGE TO FIRST AMENDMENT AGREEMENT]