FIRST AMENDMENT AGREEMENT
                          DATED AS OF NOVEMBER 30, 1998

                                      among

                               FARREL CORPORATION,

                                 FARREL LIMITED,

                               FARREL SHAW LIMITED

                                       AND

                            THE CHASE MANHATTAN BANK


<PAGE>


                            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.



<PAGE>


                   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


                                   2
<PAGE>


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.



                                       3
<PAGE>

                            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.


                                       4
<PAGE>


         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.



                                       5
<PAGE>



         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]