EXHIBIT 4.8
BARNES GROUP INC,
NOTE AGREEMENT
Dated as of September 16, 1991
$40,000,000
9.47% SENIOR NOTES DUE 2001
TABLE OF CONTENTS
PAGE
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SECTION 1. PURCHASE AND SALE OF NOTES .................................... 1
1.1 Issue of Notes ................................................ 1
1.2 The Closing ................................................... 2
1.3 Purchase for Investment ....................................... 2
1.4 Failure to Deliver ............................................ 2
1.5 Expenses; Issue Taxes ......................................... 2
1.6 Other Agreements .............................................. 3
SECTION 2. WARRANTIES AND REPRESENTATIONS ................................ 4
2.1 Subsidiaries .................................................. 4
2.2 Corporate Organization and Authority .......................... 4
2.3 Business, Property, Indebtedness and Liens .................... 5
2.4 Financial Statements .......................................... 5
2.5 Full Disclosure ............................................... 6
2.6 Pending Litigation; Compliance with Law ....................... 6
2.7 Title to Properties ........................................... 6
2.8 Patents and Trademarks ........................................ 7
2.9 Sale is Legal and Authorized .................................. 7
2.10 No Defaults ................................................... 7
2.11 Governmental Consent .......................................... 8
2.12 Taxes ......................................................... 8
2.13 Use of Proceeds ............................................... 8
2.14 Private Offering .............................................. 9
2.15 ERISA ......................................................... 9
SECTION 3. CLOSING CONDITIONS ............................................ 10
3.1 Opinions of Counsel ........................................... 10
3.2 Warranties and Representations True as of Closing Date ........ 10
3.3 Compliance with this Agreement ................................ 10
3.4 Officers' Certificate ......................................... 10
3.5 Proceedings Satisfactory ...................................... 11
3.6 Sales Under Other Agreements .................................. 11
3.7 Private Placement Number ...................................... 11
3.8 Legal Investment .............................................. 11
SECTION 4. DIRECT PAYMENT ................................................ 11
SECTION 5. PREPAYMENTS ................................................... 11
5.1 Required Prepayments .......................................... 11
5.2 Option to Prepay .............................................. 12
5.3 Notice of Optional Prepayment ................................. 12
5.4 Partial Payment Pro Rata ...................................... 13
SECTION 6. REGISTRATION; SUBSTITUTION OF NOTES ........................... 13
6.1 Registration of Notes ......................................... 13
6.2 Exchange of Notes ............................................. 13
6.3 Replacement of Notes .......................................... 13
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SECTION 7. COMPANY BUSINESS COVENANTS .................................... 14
7.1 Payment of Taxes and Claims ................................... 14
7.2 Maintenance of Properties and Corporate Existence ............. 15
7.3 Maintenance of Office ......................................... 16
7.4 Sale of Assets or Merger ...................................... 16
7.5 Leases ........................................................ 17
7.6 Liens and Encumbrances ........................................ 17
7.7 Indebtedness .................................................. 19
7.8 Net Worth ..................................................... 19
7.9 ERISA Compliance .............................................. 20
7.10 Transactions with Affiliates .................................. 20
7.11 Tax Consolidation ............................................. 20
7.12 Acquisition of Notes .......................................... 20
7.13 Lines of Business ............................................. 21
SECTION 8. INFORMATION AS TO COMPANY ..................................... 21
8.1 Financial and Business Information ............................ 21
8.2 Officers' Certificates ........................................ 24
8.3 Accountants' Certificates ..................................... 24
8.4 Inspection .................................................... 25
SECTION 9. EVENTS OF DEFAULT ............................................. 25
9.1 Nature of Events .............................................. 25
9.2 Default Remedies .............................................. 27
9.3 Annulment of Acceleration of Notes ............................ 27
SECTION 10. INTERPRETATION OF THIS AGREEMENT ............................. 28
10.1 Terms Defined ................................................. 28
10.2 Accounting Principles ......................................... 32
10.3 Directly or Indirectly ........................................ 32
10.4 Governing Law ................................................. 32
SECTION 11. MISCELLANEOUS ................................................ 33
11.1 Notices ....................................................... 33
11.2 Reproduction of Documents ..................................... 33
11.3 Survival ...................................................... 33
11.4 Successors and Assigns ........................................ 34
11.5 Amendment and Waiver .......................................... 34
11.6 Duplicate Originals ........................................... 35
Exhibit A -- Principal Amounts, Payment Information and Addresses
Exhibit B -- Form of 9.47% Senior Note Due September 15, 2001
Exhibit C -- List of Subsidiaries, Affiliates, Debt and Liens
Exhibit D -- Description of Company Counsel's Closing Opinion
Exhibit E -- Description of Special Counsel's Closing Opinion
Exhibit F -- Certain Documents Furnished to Purchasers
Schedule I -- Schedule of Leases
BARNES GROUP INC.
123 MAIN STREET
BRISTOL, CONNECTICUT 06010
NOTE AGREEMENT
$40,000,000
9.47% Senior Notes due September 16, 2001
The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06115
Attn: Securities Department - Capital
Finance Division, 9PB
As of September 16, 1991
Dear Sirs:
Barnes Group Inc. (the "Company"), a Delaware corporation,
hereby agrees with you as follows:
SECTION 1. PURCHASE AND SALE OF NOTES
1.1 Issue of Notes.
The Company will issue $40,000,000 in aggregate principal
amount of its 9.47% Senior Notes due September 16, 2001 (herein called the
"Notes"). Each Note will bear interest on the unpaid principal balance thereof
from the date of the Note at the rate of 9.47% per annum, payable semi-annually
on the sixteenth day of March and the sixteenth day of September in each year,
commencing with the payment date next succeeding the date of the Note, until the
principal amount shall be due and payable, and will bear interest, payable on
demand, on any overdue payment (including any overdue prepayment) of principal
or premium and (to the extent permitted by law) on any overdue payment of
interest at a fluctuating rate per annum, to be adjusted daily, equal to the
greater of (a) the rate announced publicly by Citibank, N.A. in New York, New
York from time to time as its prime rate and (b) 11.47% per annum (but in no
event higher than the maximum rate permitted by law); and will mature on
September 16, 2001. The Notes will be registered notes in the form set out in
Exhibit B.
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1.2 The Closing.
The Company agrees to sell to you and you agree to purchase
from the Company, in accordance with the provisions of this Agreement, the
principal amount of the Notes set forth opposite your name on Exhibit A hereto
at 100% of the principal amount thereof.
The closing of your purchase shall be held at 9:00 a.m. on
September 16, 1991 ("Closing Date") at the office of Day, Berry & Howard,
CityPlace I, 25th Floor, Hartford, Connecticut 06103-3499. At the closing the
Company will deliver to you, unless you otherwise request, a single Note in the
principal amount of your purchase, dated the Closing Date and payable to you, or
your nominee, as set forth in Exhibit A, against payment in immediately
available funds.
1.3 Purchase for Investment.
You represent to the Company that you are purchasing the Notes
for investment for your own account and the account of your affiliated entities
and with no present intention of distributing or reselling the Notes or any part
thereof to anyone other than an affiliated entity, but without prejudice,
however, to your right at all times to sell or otherwise dispose of all or any
part of the Notes under a registration under the Securities Act of 1933, as
amended, or under a registration exemption available under that Act. It is
understood that, in making the representations set out in Sections 2.9 and 2.11,
the Company is relying, to the extent applicable, upon your representation as
aforesaid.
1.4 Failure to Deliver.
If, at the closing, the Company fails to tender to you the
Notes to be purchased by you or if the conditions specified in Section 3 have
not been fulfilled, you may thereupon elect to be relieved of all further
obligations under this Agreement. Nothing in this Section shall operate to
relieve the Company from any of its obligations hereunder or to waive any of
your rights against the Company.
1.5 Expenses; Issue Taxes.
Whether or not the Notes are sold, the Company will pay all
expenses relating to this Agreement, including but not limited to:
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(a) the cost of reproducing this Agreement and the Notes;
(b) the reasonable fees and disbursements of your special
counsel;
(c) your out-of-pocket expenses;
(d) the cost of delivering to or from your home office,
insured to your satisfaction, the Notes purchased by
you at the closing, any Note surrendered by you to
the Company pursuant to this Agreement and any Note
issued to you in substitution or replacement for a
surrendered Note;
(e) the cost of obtaining the Private Placement Number
referred to in Section 3.7;
(f) all expenses, including attorneys' fees, relating to
any amendments or waivers pursuant to the provisions
hereof; and
(g) all costs and expenses, including attorneys' fees,
incurred by the holder of any Note in enforcing any
rights under this Agreement or the Notes or in
responding to any subpoena or other legal process
issued in connection with this Agreement or the
transactions contemplated hereby, including without
limitation, costs and expenses incurred in any
bankruptcy case.
The Company will pay all taxes in connection with the issuance
and sale of the Notes and in connection with any modification of the Notes and
will save you harmless against any and all liabilities with respect to such
taxes. The obligations of the Company under this Section 1.5 shall survive the
payment of the Notes and the termination of this Agreement.
1.6 Other Agreements.
Simultaneously herewith the Company is executing separate
agreements (the "Other Agreements") with the other purchasers named in Exhibit A
(the "Other Purchasers") similar in all respects hereto, under which each of the
Other Purchasers agrees to purchase from the Company Notes in the principal
amount set forth opposite its name on Exhibit A and makes the same
representations to the Company as you have made in Section 1.3. The purchase
made by each purchaser is to be a separate purchase from the Company, and each
sale and delivery of Notes to each
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purchaser is to be a separate sale and delivery by the Company to such
purchaser.
SECTION 2. WARRANTIES AND REPRESENTATIONS
The Company warrants and represents to you that:
2.1 Subsidiaries.
Exhibit C to this Agreement correctly identifies (i) each of
the Company's active Subsidiaries (indicating which Subsidiaries are Domestic
Subsidiaries), its Jurisdiction of incorporation and the percentage of its
Voting Stock owned by the Company and each other Subsidiary and (ii) each of the
Company's Affiliates (other than Subsidiaries) which is a corporation or
partnership or which is a holder of 5% or more of the Voting Stock of the
Company and the nature of the affiliation. The Company and each Subsidiary is
the legal and beneficial owner of all of the shares of Voting Stock it purports
to own of each Subsidiary, free and clear in each case of any Lien. All such
shares have been duly issued and are fully paid and non-assessable.
2.2 Corporate Organization and Authority.
The Company, and each Subsidiary,
(a) is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction
of incorporation,
(b) has all requisite power and authority and all
necessary licenses, permits, franchises and other
governmental authorizations to own and operate its
Properties and to carry on its business as now
conducted and as presently proposed to be conducted,
and
(c) has duly qualified and is authorized to do business
and in good standing as a foreign corporation in each
jurisdiction where the character of its Properties or
the nature of its activities makes such qualification
necessary and where the failure to be so qualified
would have a material adverse effect on the Company's
or Subsidiary's business or financial position.
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2.3 Business, Property, Indebtedness and Liens.
(a) The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1990 filed by the Company with the Securities and
Exchange Commission and previously delivered to you correctly describes the
general nature of the business and principal Properties of the Company and its
Subsidiaries.
(b) Exhibit C correctly lists all outstanding Indebtedness for
borrowed money (including all Capitalized Leases) of, and all Liens (other than
those (x) permitted by clauses (i) - (v) of Section 7.6(a) and (y) those on
Property which individually does not have a fair market value in excess of
$500,000 and which, when aggregated with other Property subject to Liens not
included pursuant to this clause (y), does not have a fair market value in
excess of $2,000,000) on Property of, the Company and its Subsidiaries. Neither
the Company nor any Subsidiary has agreed or consented to cause or permit in the
future (upon the happening of a contingency or otherwise) any of its Property,
whether now owned or hereafter acquired, to be subject to a Lien not permitted
by Section 7.6(a).
2.4 Financial Statements.
(a) The consolidated balance sheets of the Company and its
Consolidated Subsidiaries as of December 31 in the years 1986, 1987, 1988, 1989,
and 1990 and the related statements of income, retained earnings and changes in
financial position or cash flows for the fiscal years ended on such dates, all
accompanied by reports thereon containing opinions without qualification, except
as therein noted, by Ernst & Young (or its predecessor, Arthur Young & Company),
independent certified public accountants, and the consolidated balance sheets of
the Company and its Consolidated Subsidiaries as of June 30, 1991 and the
related statements of income, retained earnings and cash flows for the 6-month
period then ended, certified by the Company's chief financial officer or chief
accounting officer, have been prepared in accordance with generally accepted
accounting principles consistently applied, and present fairly the financial
position of the Company and its Consolidated Subsidiaries as of such dates and
the results of their operations for such periods.
(b) Since December 31, 1990 there have been no materially
adverse changes in the Properties, business, prospects, profits or financial
condition of the Company or the Company and its Subsidiaries taken as a whole.
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2.5 Full Disclosure.
The financial statements referred to in Section 2.4 do not,
nor does this Agreement or the Private Placement Memorandum contain any untrue
statement of a material fact or omit a material fact necessary to make the
statements contained therein or herein not misleading. The descriptions set
forth in Exhibit F of certain other written materials which may have been
furnished to you by the Company is correct. There is no agreement, restriction
or other factual matter which the Company has not disclosed to you in writing
which so far as the Company can now reasonably foresee, will have a material
adverse impact on the longterm financial condition or prospects of the Company
and its Subsidiaries or the ability of the Company to perform this Agreement.
2.6 Pending Litigation; Compliance with Law.
There are no proceedings or investigations pending, or to the
knowledge of the Company threatened, against or affecting the Company or any
Subsidiary in or before any court, governmental authority or agency or
arbitration board or tribunal which, so far as the Company can now reasonably
foresee, individually or in the aggregate, will have a material adverse impact
on the longterm financial condition or prospects of the Company and its
Subsidiaries, or would impair the ability of the Company to perform this
Agreement. Neither the Company nor any Subsidiary is in default with respect to
any order of any court, governmental authority or agency or arbitration board or
tribunal or in violation of any laws or governmental rules or regulations where,
so far as the Company can now reasonably foresee, such default or violation will
have a material adverse impact on the longterm financial condition or prospects
of the Company and its Subsidiaries, or the ability of the Company to perform
this Agreement.
2.7 Title to Properties.
Except where the failure to possess good and marketable title
in fee simple or good title, as the case may be, would not have a material
adverse impact on the Company or on the Company and its Subsidiaries taken as a
whole, the Company, and each Subsidiary, has good and marketable title in fee
simple (or its equivalent under applicable law) to all the real Property, and
has good title to all the other Property, it purports to own, including that
reflected in the most recent balance sheet referred to in Section 2.4 (except as
sold or otherwise disposed of in the ordinary course of business), free from
Liens not permitted by Section 7.6(a).
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2.8 Patents and Trademarks.
The Company, and each Subsidiary, owns or possesses all the
patents, trademarks, service marks, trade names, copyrights, licenses and rights
with respect to the foregoing necessary for the present and planned future
conduct of its business, without any conflict with the rights of others known by
Senior Management.
2.9 Sale is Legal and Authorized.
The sale of the Notes by the Company and compliance by the
Company and each Subsidiary with all of the provisions of this Agreement and of
the Notes:
(a) have been duly authorized and are within the
corporate powers of the Company and each Subsidiary;
and
(b) are legal and will not conflict with, constitute a
violation of, or result in the creation of any Lien
upon any Property of the Company or any Subsidiary
under the provisions of, any agreement, charter
instrument, by-law or other instrument to which the
Company or any Subsidiary is a party or by which any
of them or their respective Properties may be bound.
The Company is not a party to any agreement, or subject to any charter or other
corporate restriction, which restricts its right or ability to incur
Indebtedness, other than this Agreement and the agreements listed on Exhibit C.
2.10 No Defaults.
No event has occurred and no condition exists which, upon the
issue of the Notes, would constitute a Default or an Event of Default. The
Company is not in violation (whether or not temporarily waived) of any term of
any charter instrument or by-law and neither the Company nor any Subsidiary is
in default under any agreement or other instrument with respect to borrowed
money. Neither the Company nor any Subsidiary is in violation of any term of any
other agreement or instrument to which it is a party or by which it or any of
its Property may be bound which violation, individually or in the aggregate with
other violations, will have a materially adverse impact on the longterm business
or prospects of the Company or the Company and its Subsidiaries taken as a
whole.
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2.11 Governmental Consent.
Neither the nature of the Company or of any Subsidiary, or of
any of their respective businesses or Properties, nor any relationship between
the Company or any Subsidiary and any other Person, nor any circumstance in
connection with the offer, issue, sale or delivery of the Notes or the
execution, delivery and performance of this Agreement is such as to require a
consent, approval or authorization of, or filing, registration or qualification
with, any governmental authority on the part of the Company or any Subsidiary in
connection with the execution, delivery and performance of this Agreement or the
offer, issue, sale or delivery of the Notes.
2.12 Taxes.
Consolidated Federal income tax returns for the Company and
its Domestic Subsidiaries have been examined by the Internal Revenue Service for
all years up to and including the year ended December 31, 1987. The Company and
each of its Subsidiaries have filed or caused to be filed all Federal, state and
local tax returns which, to the knowledge of Senior Management are required to
be filed and have paid or caused to be paid all taxes as shown on such returns
or on any assessment received by it or by any of them, to the extent that such
taxes have become due, except any such tax or assessment the validity of which
is being contested in good faith by appropriate proceedings and with respect to
which the Company or a Subsidiary, as appropriate, has set aside on its books
adequate reserves to the extent the Company or any Subsidiary and a nationally
recognized independent certified public accountant believes such reserves are
necessary. To the extent that the Company in good faith believes is necessary,
the Company and its Subsidiaries have set up reserves which are believed by the
Company to be adequate for the payment of additional taxes. All assessed
deficiencies resulting from examinations by the Internal Revenue Service up to
and including the year ended December 31, 1987 have been discharged, reserved
against or will not impair the Company's ability to repay the Loans.
2.13 Use of Proceeds.
The Company will apply the proceeds from the sale of the Notes
to refinance outstanding Indebtedness for borrowed money. None of the
transactions contemplated in this Agreement (including, without limitation
thereof, the use of the proceeds from the sale of the Notes) will violate or
result in a violation of Section 7 of the Securities Exchange Act of 1934, as
amended, or any regulations issued pursuant thereto, including, without
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limitation, Regulations G, T and X of the Board of Governors of the Federal
Reserve System, 12 C.F.R., Chapter II.
2.14 Private Offering.
Neither the Company nor Chemical Bank (the only Person
authorized or employed by the Company as agent, broker, dealer or otherwise in
connection with the offering or sale of the Notes or any similar Security of the
Company) has offered any of the Notes or any similar Security of the Company for
sale to, or solicited offers to buy any thereof from, or otherwise approached or
negotiated with respect thereto with, any prospective purchaser, other than the
purchasers of the Notes and not more than twenty-five other institutional
investors, each of whom was offered all or a portion of the Notes at private
sale for investment. The Company agrees that neither the Company nor anyone
acting on its behalf will offer the Notes or any part thereof or any similar
Securities for issue or sale to, or solicit any offer to acquire any of the same
from, anyone so as to bring the issuance and sale of the Notes within the
provisions of Section 5 of the Securities Act of 1933, as amended.
2.15 ERISA.
(a) Relationship of Vested Benefits to Pension Plan Assets.
The present aggregate value of all benefits vested under all qualified "defined
benefit pension plans", as such term is defined in Section 3 of ERISA,
maintained by the Company and its Related Persons, or in which employees of the
Company or any Related Person are entitled to participate, as from time to time
in effect (herein called the "Pension Plans"), did not, as of January 1, 1990,
the last annual valuation date, exceed the actuarial or market value of the
assets of the Pension Plans allocable to such vested benefits.
(b) Prohibited Transactions. Neither the Company or any
Related Person nor any of the Pension Plans nor any trusts created thereunder,
nor any trustee or administrator thereof, has engaged in a "prohibited
transaction", as such term is defined in Section 4975 of the Internal Revenue
Code of 1986, as amended, or described in Section 406 of ERISA, which could
subject the Company, any Related Person, any of the Pension Plans, any such
trust, or any trustee or administrator thereof, or any party dealing with the
Pension Plans or any such trust to the tax or penalty on prohibited transactions
imposed by said Section 4975 or by Section 502(i) of ERISA.
(c) Reportable Events. Since December 31, 1986, neither any of
the Pension Plans nor any such trusts have been terminated, nor have there been
any "reportable events", as that
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term is defined in Section 4043 of ERISA, since the effective date of ERISA.
(d) Accumulated Funding Deficiency. Neither any of the Pension
Plans nor any such trusts have incurred any "accumulated funding deficiency",
as such term is defined in Section 302 of ERISA (whether or not waived), since
the effective date of ERISA.
SECTION 3. CLOSING CONDITIONS
Your obligation to purchase and pay for the Notes to be
delivered to you at the closing shall be subject to the following conditions
precedent:
3.1 Opinions of Counsel.
You shall have received from John E. Besser, Esq., General
Counsel of the Company, and Day, Berry & Howard, your special counsel, the
closing opinions described in Exhibits D and E.
3.2 Warranties and Representations True as of Closing Date.
(a) The warranties and representations contained in Section 2
shall (except as affected by transactions contemplated by this Agreement) be
true in all material respects on the Closing Date with the same effect as though
made on and as of that date.
(b) Neither the Company nor any Subsidiary shall have taken
any action or permitted any condition to exist which would have been prohibited
by Section 7 if such Section had been binding and effective at all times during
the period from December 31, 1990 to and including the Closing Date.
3.3 Compliance with this Agreement.
The Company shall have performed and complied with all
agreements and conditions contained herein which are required to be performed or
complied with by the Company before or at the closing.
3.4 Officers' Certificate.
You shall have received a certificate dated the Closing Date
and signed by the President or a Vice President and the Treasurer or an
Assistant Treasurer of the Company, certifying that the conditions specified in
Sections 3.2 and 3.3 have been fulfilled.
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3.5 Proceedings Satisfactory.
All proceedings taken in connection with the sale of the Notes
and all documents and papers relating thereto shall be satisfactory to you and
your special counsel. You and your special counsel shall have received copies of
such documents and papers as you or they may reasonably request in connection
therewith or as a basis for your special counsel's closing opinion, all in form
and substance satisfactory to you and your special counsel.
3.6 Sales Under Other Agreements.
The Company shall have sold or shall simultaneously sell to
the Other Purchasers pursuant to the terms and provisions of the Other
Agreements (and shall have received or simultaneously receive the purchase price
for) the remainder of the $40,000,000 aggregate principal amount of the Notes.
3.7 Private Placement Number.
The Company shall have obtained from Standard & Poor's
Corporation and provided to you a Private Placement Number for the Notes.
3.8 Legal Investment.
Each Note to be purchased by you shall qualify as a legal
investment for life insurance companies under the New York Insurance Law and any
other law applicable to you (other than under any "basket" or leeway provisions
thereof), and the Company shall have delivered to you such officer's
certificates or other evidence as you may request to establish compliance with
this condition.
SECTION 4. DIRECT PAYMENT
The Company agrees that, notwithstanding any provision in this
Agreement or the Notes to the contrary, it will pay all sums becoming due to any
institutional holder of Notes in the manner provided in Exhibit A or in any
other reasonable manner as any institutional holder may designate to the Company
in writing (without presentment of or notation on the Notes).
SECTION 5. PREPAYMENTS
5.1 Required Prepayments.
(a) In addition to paying the entire remaining principal
amount and interest due on the Notes at
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maturity, the Company will prepay, and there shall become due and payable,
$3,076,923.08 principal amount of the Notes on March 16 and September 16 in each
year beginning on September 16, 1995 and ending March 16, 2001, inclusive. Each
such prepayment shall be at 100% of the principal amount to be prepaid, together
with interest accrued thereon to the date of prepayment.
(b) The acquisition of any Notes by the Company shall not
reduce or otherwise affect its obligation to make any prepayment required by
Section 5.1(a). Upon any exercise by the Company of the prepayment option in
Section 5.2, each remaining scheduled payment of principal shall be reduced on a
pro rata basis to reflect such reduction in outstanding principal amount.
5.2 Option to Prepay.
The Company may make optional prepayments to prepay the Notes
in whole or in part, in multiples of $1,000,000, at any time at a price equal to
the greater of (i) the principal amount to be prepaid together with accrued
interest on the principal amount so prepaid to the prepayment date, and (ii) the
Makewhole Price applicable at such time with respect to the amount of the Notes
being prepaid.
5.3 Notice of Optional Prepayment.
The Company will give notice of any optional prepayment of the
Notes to each holder of the Notes not less than 10 Business Days nor more than
60 days before the date fixed for prepayment, specifying (a) such date, (b) the
section of this Agreement under which the prepayment is to be made, (c) the
principal amount of the Notes and of such holder's Notes to be prepaid on such
date, and (d) the accrued interest applicable to the prepayment, and setting
forth a detailed calculation of what the Makewhole Price would be if the Notes
were being prepaid on the date of such notice. Notice of prepayment having been
so given, the principal amount of the Notes specified in such notice, together
with the premium, if any, and accrued interest thereon, shall become due and
payable on the prepayment date. The Company will provide a supplemental notice
by courier or facsimile confirmed by telephone to be received by each holder of
the Notes by 2:00 p.m., Hartford, Connecticut time, on the Business Day
immediately preceding the date fixed for prepayment which will set forth a
detailed calculation of the Makewhole Price.
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5.4 Partial Payment Pro Rata.
If there is more than one Note outstanding at any time the
aggregate principal amount of each required or optional partial payment of the
Notes shall be allocated among the outstanding Notes in proportion, as nearly as
practicable, to the respective unpaid principal amounts of the Notes. For the
purpose of this Section 5.4 only, any Notes reacquired by the Company shall be
deemed to be outstanding.
SECTION 6. REGISTRATION; SUBSTITUTION OF NOTES
6.1 Registration of Notes.
The Company will cause to be kept at its office maintained
pursuant to Section 7.3, a register for the registration and transfer of the
Notes. The names and addresses of the holders of the Notes, the transfer thereof
and the names and addresses of the transferees of any of the Notes will be
registered in the register. The Person in whose name any Note is registered
shall be deemed and treated as the owner and holder thereof for all purposes of
this Agreement, and the Company shall not be affected by any notice or knowledge
to the contrary.
6.2 Exchange of Notes.
Upon surrender of any Note to the Company at its office
maintained pursuant to Section 7.3, the Company, upon request, will execute and
deliver, at its expense (except as provided below), new Notes in exchange
therefor, in denominations of at least $100,000 (except as may be necessary to
reflect any principal amount not evenly divisible by $100,000), in an aggregate
principal amount equal to the unpaid principal amount of the surrendered Note.
Each such new Note (a) shall be payable to such Person as the surrendering
holder may request, and (b) shall be dated and bear interest from the date to
which interest has been paid on the surrendered Note or dated the date of the
surrendered Note if no interest has been paid thereon. The Company may require
payment of a sum sufficient to cover any stamp tax or governmental charge
imposed in respect of any transfer.
6.3 Replacement of Notes.
Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of any Note and,
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(a) in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to it (provided, if
the holder of the Note is an institutional investor,
its own agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and
cancellation of the Note,
the Company at its expense will execute and deliver a new Note of like tenor,
dated and bearing interest from the date to which interest has been paid on the
lost, stolen, destroyed or mutilated Note or dated the date of such lost,
stolen, destroyed or mutilated Note if no interest has been paid thereon.
SECTION 7. COMPANY BUSINESS COVENANTS
The Company covenants that on and after the date of this
Agreement until the Notes are paid in full:
7.1 Payment of Taxes and Claims.
Except in situations where the failure to pay would not result
in a material adverse impact on the Company or the Company and its Subsidiaries
taken as a whole, the Company, and each Subsidiary, will pay, before they become
delinquent,
(a) all taxes, assessments and governmental charges or
levies imposed upon it or its Property, and
(b) all claims or demands of any kind (including but not
limited to those of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons)
which, if unpaid, might result in the creation of a
Lien upon its Property,
provided that items of the foregoing description need not be paid while being
contested in good faith and by appropriate proceedings, if and for so long as
book reserves reasonably believed by the Company and independent certified
public accountants of recognized national standing to be adequate have been
established with respect thereto; provided further that notwithstanding the
foregoing provisions of this Section 7.1, the Company and each Subsidiary will
pay all taxes known by Senior Management to be due and payable no later than
fifteen days after the date such taxes are due.
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7.2 Maintenance of Properties and Corporate Existence.
(a) Except where the failure to do so would not have a
material adverse impact on the Company or the Company and its Subsidiaries taken
as a whole, the Company, and each Subsidiary, will:
(i) Property -- maintain its Property in good
condition and make all necessary renewals,
replacements, additions, betterments and
improvements thereto;
(ii) Insurance -- keep its properties adequately
insured at all times, by financially sound
and reputable insurers; maintain such other
insurance, to such extent and against such
risks, including fire and other risks
insured against by extended coverage as is
customary with companies in the same or
similar businesses located or operating in
areas with similar geological conditions;
maintain in full force and effect public
liability insurance against claims for
personal injury or death or property damage
occurring upon, in, about or in connection
with the use of any properties owned,
occupied or controlled by it, in such
amounts as the Company or any Subsidiary, as
the case may be, shall reasonably deem
necessary; and maintain such other insurance
as may be required by law;
(iii) Financial Records -- keep true books of
records and accounts in which full and
correct entries will be made of all its
business transactions, and will reflect in
its financial statements adequate accruals
and appropriations to reserves, all in
accordance with generally accepted
accounting principles, consistently applied;
and
(iv) Corporate Existence and Rights -- do or
cause to be done all things necessary to
preserve and keep in full force and effect
its existence, rights and franchises, except
as otherwise permitted by Section 7.4,
provided, however that the Company may
liquidate or sell any Subsidiary if the
transaction is permitted by Section 7.4.
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(b) Except where the failure to do so would not have a
material adverse effect on the Company or any Subsidiary, the Company and each
Subsidiary will not be in violation of any laws, ordinances, or governmental
rules and regulations to which it is subject and will not fail to maintain any
licenses, permits, franchises or other governmental authorizations necessary to
the ownership of its Properties or to the conduct of its business.
7.3 Maintenance of Office.
The Company will maintain an office in the State of
Connecticut where notices, presentations and demands in respect of this
Agreement or the Notes may be made upon it. Such office shall be maintained at
123 Main Street, Bristol, Connecticut 06010 until such time as the Company shall
notify the holders of the Notes of a change of location.
7.4 Sale of Assets or Merger.
(a) Sale of Assets -- The Company will not, nor will it permit
any of its Subsidiaries to, directly or indirectly, except in the ordinary
course of business, sell, lease, transfer or otherwise dispose of any of its
Property or assets, now owned or hereafter acquired, if, as a result of such
sale, lease, transfer or disposition, the aggregate net book value or fair
market value, whichever shall be higher, of all Property and assets sold,
leased, transferred or otherwise disposed of by the Company and its Subsidiaries
in the then current fiscal year of the Company would exceed an amount equal to
10% of the book value (computed in accordance with GAAP) of all Property and
assets of the Company and its Consolidated Subsidiaries at the end of the
preceding fiscal year.
(b) Consolidation, Merger -- The Company will not, nor will it
permit any of its Subsidiaries to, directly or indirectly, consolidate with or
merge into any other corporation, or permit another corporation to merge into
it, provided, however, that (i) any Subsidiary of the Company may be merged into
the Company or another wholly-owned Subsidiary, (ii) the Company or any
Subsidiary of the Company may merge or consolidate with another Person or
business, if the Company or such Subsidiary, as the case may be, is the
surviving corporation, (iii) the Company or any Subsidiary may consolidate with
or merge with another Person or business in a transaction where the Company or
Subsidiary is not the surviving entity if (1) the continuing or surviving entity
shall assume in writing all of the obligations of the Company under this
Agreement and the Notes, (2) the continuing or surviving entity shall not,
immediately after such merger or consolidation, be in default of any of the
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Company's obligations under this Agreement or the Notes, (3) the continuing or
surviving entity shall be a corporation organized under the laws of the United
States or any state thereof, and (4) after giving effect to such consolidation
or merger, the continuing or surviving entity could incur $1 of additional
Indebtedness under Section 7.7.
7.5 Leases.
The Company will not, nor will it permit any of its
Subsidiaries, directly or indirectly, to incur, create or assume any commitment
to make any direct or indirect payment, whether as rent or otherwise, under any
lease, rental or other arrangement for the use of real or personal Property or
both of any other Person unless (a) after giving effect to such lease the
aggregate rental obligations of the Company and its Subsidiaries (exclusive of
obligations to pay taxes and rental increments attributable to escalator
clauses) during any fiscal year shall not exceed an amount equal to 15% of the
book value (computed in accordance with GAAP) of all Properties and assets of
the Company and its Consolidated Subsidiaries at the end of the preceding fiscal
year or (b) such lease was in existence as of the Closing Date and disclosed on
Schedule I hereto.
7.6 Liens and Encumbrances.
(a) Negative Pledge. The Company will not, nor will it permit
any of its Subsidiaries to, directly or indirectly incur, create, assume or
permit to exist any mortgage, pledge, security interest, lien, charge or other
encumbrance of any nature whatsoever (including conditional sales or other title
retention agreements) on any of its Property or assets, whether owned at the
date hereof or hereafter acquired, or assign, or permit any of its Subsidiaries
to assign, any right to receive income, except:
(i) liens incurred or pledges and deposits made
in connection with workers' compensation,
unemployment insurance, old-age pensions,
social security and public liability and
similar legislation;
(ii) liens securing the performance of bids,
tenders, leases, contracts (other than for
the repayment of borrowed money), statutory
obligations, surety and appeal bonds and
other obligations of like nature, incurred
as an incident to and in the ordinary course
of business;
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(iii) statutory liens of landlords and other liens
imposed by law, such as carriers',
warehousemen's, mechanics', materialmen's
and vendors' liens, incurred in good faith
in the ordinary course of business;
(iv) liens securing the payment of taxes,
assessments and governmental charges or
levies, either (1) not delinquent, or (2)
being contested in good faith by appropriate
proceedings;
(v) zoning restrictions, easements, licenses,
reservations, restrictions on the use of
real property or minor irregularities
incident thereto which do not in the
aggregate materially detract from the value
of the Property or assets of the Company or
such Subsidiary, as the case may be, or
impair the use of such Property in the
operation of its business;
(vi) purchase money liens on real Property or
equipment (which are filed against the real
Property or equipment within 180 days of
purchase) that do not exceed 100% of the
fair market value of the related Property;
and
(vii) other liens, that in the aggregate, do not
exceed 15% of the book value (computed in
accordance with GAAP) of all Properties and
assets of the Company and its Consolidated
Subsidiaries at the end of the preceding
fiscal year.
(b) Equal and Ratable Lien: Equitable Lien. In case any
Property is subjected to a Lien in violation of Section 7.6(a), the Company will
make or cause to be made provision whereby the Notes will be secured pursuant to
documents reasonably satisfactory to the holders of at least 51% in outstanding
principal amount of the Notes (exclusive of Notes owned by the Company,
Subsidiaries and Affiliates) equally and ratably with all other obligations
secured thereby, and in any case the Notes shall have the benefit, to the full
extent that, and with such priority as, the holders may be entitled thereto
under applicable law, of an equitable Lien on such Property securing the Notes.
Such violation of Section 7.6(a) shall constitute an Event of Default hereunder,
whether or not any such provision is made pursuant to this Section 7.6(b).
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7.7 Indebtedness.
The Company will not, nor will it permit any of its
Subsidiaries to, directly or indirectly incur, create, assume or permit to exist
any Indebtedness other than:
(a) Indebtedness incurred by the Company under the
Revolving Credit and Term Loan Agreement;
(b) Indebtedness incurred by the Company under the Term
Loan and Rollover Loan Agreement;
(c) the Notes;
(d) Indebtedness of the Company which constitutes
extensions, renewals or replacements on substantially
the same terms and conditions (and does not increase
the amount outstanding) of (a) through (c) above; and
(e) additional Indebtedness of the Company and its
Subsidiaries;
provided, however, that (i) the total Indebtedness of the Company's Subsidiaries
shall not at any time exceed S50 million; (ii) total Indebtedness of the
Company's Domestic Subsidiaries shall not at any time exceed $10 million
(excluding from the calculation thereof for all purposes except compliance with
Section 7.4(b)(4) any pre-existing indebtedness of a newly acquired Domestic
Subsidiary for a period not exceeding 30 days after acquisition of such Domestic
Subsidiary), and (iii) the aggregate amount of all Indebtedness of the Company
and its Subsidiaries at any time outstanding shall not exceed an amount equal to
155% of Consolidated Net Worth at such time.
7.8 Net Worth.
The Company will not permit Consolidated Net Worth of the
Company and its Subsidiaries at any time to be less than $120 million plus 50%
of Consolidated Net Income for each fiscal year beginning after December 31,
1991 (but without deduction for any fiscal year in which Consolidated Net Income
is a negative amount), with the annual adjustments to be applicable as of
December 31, 1992 and as of the end of each subsequent fiscal year.
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7.9 ERISA Compliance.
Neither the Company nor any Related Person will at any time
permit any Pension Plan maintained by it to:
(i) engage in any "prohibited transaction" as
such term is defined in Section 4975 of the
Internal Revenue Code of 1986, as amended,
or described in Section 406 of ERISA;
(ii) incur any "accumulated funding deficiency"
as such term is defined in Section 302 of
ERISA, whether or not waived; or
(iii) terminate under circumstances which could
result in the imposition of a Lien on the
Property of the Company or any Subsidiary
pursuant to Section 4068 of ERISA.
7.10 Transactions with Affiliates.
Neither the Company nor any Subsidiary will enter into any
transaction (except transactions which do not in any one calendar year involve
in the aggregate an amount in excess of $500,000), including, without
limitation, the purchase, sale or exchange of Property or the rendering of any
service, with any Affiliate except in the ordinary course of and pursuant to the
reasonable requirements of the Company's or such Subsidiary's business and upon
fair and reasonable terms no less favorable to the Company or such Subsidiary
than would obtain in a comparable arm's-length transaction with a Person not an
Affiliate.
7.11 Tax Consolidation.
The Company will not file or consent to the filing of any
consolidated income tax return with any Person other than a Subsidiary.
7.12 Acquisition of Notes.
Neither the Company nor any Subsidiary nor any Affiliate will,
directly or indirectly, acquire or make any offer to acquire any Notes unless
the Company or such Subsidiary or Affiliate has offered to acquire Notes, pro
rata, from all holders of the Notes and upon the same terms. In case the Company
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acquires any Notes, such Notes shall thereafter be cancelled and no Notes shall
be issued in substitution therefor.
7.13 Lines of Business.
Neither the Company nor any Subsidiary will engage in any line
of business if as a result thereof the business of the Company and its
Subsidiaries taken as a whole would be substantially different from what it was
at December 31, 1990 as described in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1990.
SECTION 8. INFORMATION AS TO COMPANY
8.1 Financial and Business Information.
The Company will deliver to you, if at the time you or your
nominee holds any Notes (or if you are obligated to purchase any Notes), and to
each other institutional holder of outstanding Notes:
(a) Quarterly Statements - within 60 days after the end
of each of the first three quarterly fiscal periods
in each fiscal year of the Company, two copies of:
(i) a consolidated balance sheet of the Company
and its Consolidated Subsidiaries as at the
end of that quarter, and
(ii) consolidated statements of income, retained
earnings and cash flows of the Company and
its Consolidated Subsidiaries, for that
quarter and (in the case of the second and
third quarters) for the portion of the
fiscal year ending with that quarter,
setting forth in each case in comparative form the
figures for the corresponding periods in the previous
fiscal year, all in reasonable detail and certified
by a principal financial officer of the Company as
presenting fairly the financial condition of the
companies being reported upon and as having been
prepared in accordance with generally accepted
accounting principles for interim statements
consistently applied;
(b) Annual Statements - within 90 days after the end of
each fiscal year of the Company, two copies of:
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(i) a consolidated balance sheet of the Company
and its Consolidated Subsidiaries, as at the
end of that year, and
(ii) consolidated statements of income, retained
earnings and cash flows of the Company and
its Consolidated Subsidiaries, for that
year,
setting forth in each case in comparative form the
figures for the previous fiscal year, and accompanied
by an opinion of independent certified public
accountants of recognized national standing stating
that such financial statements fairly present the
financial condition of the companies being reported
upon and have been prepared in accordance with
generally accepted accounting principles consistently
applied (except for changes in application in which
such accountants concur), and that the examination of
such accountants in connection with such financial
statements has been made in accordance with generally
accepted auditing standards, and which independent
auditors' report shall not identify either (A) any
departure from the consistent application of
generally accepted accounting principles (except for
identified changes in application in which such
accountants concur), or (B) any tests of the
accounting records or other auditing procedures which
were considered necessary in the circumstances and
which were not performed;
(c) Audit Reports - promptly upon receipt thereof, one
copy of each other report submitted to the Company or
any Subsidiary by independent accountants in
connection with any material interim or special audit
made by them of the books of the Company or any
material Subsidiary;
(d) SEC and Other Reports - promptly upon their becoming
available one copy of each report, notice or proxy
statement sent by the Company to stockholders
generally, and of each periodic report and any
registration statement, filed by the Company with any
securities exchange or the Securities and Exchange
Commission or any successor agency;
(e) ERISA - as soon as practicable, but in no event later
than five days, after a member of Senior Management
becoming aware of the occurrence of any
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(i) "reportable event" as such term is defined in
Section 4043 of ERISA, or (ii) "accumulated funding
deficiency" as such term is defined in Section 302
of ERISA, or (iii) "prohibited transaction", as such
term is defined in Section 4975 of the Internal
Revenue Code of 1986, as amended, or described in
Section 406 of ERISA, in connection with any Pension
Plan or any trust created thereunder, a notice
specifying the nature thereof, what action the
Company or a Related Person is taking or proposes to
take with respect thereto, and, when known, any
action taken by the Internal Revenue Service with
respect thereto;
(f) Notice of Default or Event of Default - immediately
upon becoming aware of the existence of any Default
or Event of Default a notice describing its nature
and the action the Company is taking with respect
thereto;
(g) Notice of Claimed Default - immediately upon becoming
aware that the holder of any Note or of any
Indebtedness or Security of the Company or any
Subsidiary has given notice or taken any other action
with respect to a claimed Default or Event of
Default, a notice specifying the notice given or
action taken by such holder, the nature of the
claimed Default or Event of Default and the action
the Company is taking with respect thereto;
(h) Report on Proceedings - The Company and each
Subsidiary will give each holder of the Notes (a)
notice, promptly, of any action, suit or proceeding
at law or in equity or by or before any court or
other governmental instrumentality or agency (i)
which is not fully covered by insurance without the
applicability of any co-insurance provisions or with
respect to which insurance coverage is being
contested and which has not been bonded and in which
either the aggregate specified dollar amount of all
claims (either as set forth in the complaint, demand
letters or other written communications by or on
behalf of the plaintiff or as otherwise determined in
good faith by the Company or its counsel) against the
Company and its Subsidiaries taken as a whole,
exceeds the amount of any applicable insurance
coverage by (x) $1,000,000 for any single proceeding
or (y) $5,000,000 in the aggregate during any fiscal
year of the Company; provided, however, that after
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giving notice of such claims aggregating at least
$5,000,000, notice is only required of subsequent
claims made during the same fiscal year which exceed
insurance coverage by $500,000 for any single
proceeding, or (ii) if the results thereof may have a
material adverse effect on the business or condition
of the Company or any Subsidiary of the Company, and
(b) with respect to any such action, suit or
proceeding such documentation as the holder of any
Note reasonably requests.
(i) Requested Information - with reasonable promptness,
such data and information as from time to time may be
reasonably requested.
8.2 Officers' Certificates.
Each set of financial statements delivered pursuant to Section
8.1(a) or 8.1(b) will be accompanied by a certificate of the President or a Vice
President and the Treasurer or an Assistant Treasurer of the Company setting
forth:
(a) Covenant Compliance - the information required in
order to establish compliance with the requirements
of Section 7 during the period covered by the income
statements being furnished; and
(b) Event of Default - that the signers have reviewed the
relevant terms of this Agreement and have made, or
caused to be made, under their supervision, a review
of the transactions and condition of the Company and
its Subsidiaries from the beginning of the period
covered by the income statements being furnished and
that the review has not disclosed the existence
during such period of any Default or Event of Default
or, if any such Default or Event of Default existed
or exists, describing its nature and the action the
Company has taken with respect thereto.
8.3 Accountants' Certificates.
Each set of annual financial statements delivered pursuant to
Section 8.1(b) will be accompanied by a certificate of the accountants who
certify such financial statements, stating that they have reviewed this
Agreement and whether, in making the examination necessary for their
certification of such statements, they have become aware of any Default or Event
of Default, and, if any Default or Event of Default then exists, describing its
nature.
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8.4 Inspection.
The Company will permit your representatives, while you or
your nominee holds any Note, or the representatives of any other institutional
holder of the Notes, at your or such holder's expense, to visit and inspect any
of the Properties of the Company or any Subsidiary, to examine and make copies
and abstracts of all their books of account, records, and other papers, and to
discuss their respective affairs, finances and accounts with their respective
officers, employees designated by said officers and independent public
accountants (and by this provision the Company authorizes said accountants to
discuss the finances and affairs of the Company and its Subsidiaries) all at
reasonable times, upon notice to a member of Senior Management (unless there
shall exist a Default or an Event of Default), and as often as may be reasonably
requested. Any visit or inspection made pursuant to this Section 8.4 shall be at
the expense of the holder requesting the same unless, at the time of such visit
or inspection, there shall exist a Default or Event of Default, in which event
the Company shall bear the cost thereof.
SECTION 9. EVENTS OF DEFAULT.
9.1 Nature of Events.
An "Event of Default" shall exist if any of the following occurs
and is continuing:
(a) Principal Payments - failure to pay principal on any
Note on or before the date such payment is due;
(b) Interest Payments - failure to pay interest on any
Note on or before the fifth Business Day following
the date such payment is due;
(c) Other Defaults - failure to comply with any other
provision of this Agreement, which continues for more
than 30 days after it first becomes known to any
member of Senior Management of the Company;
(d) Warranties or Representations - any warranty or
representation by or on behalf of the Company
contained in this Agreement or in any instrument
delivered under or in reference to this Agreement is
false or misleading in any material respect;
(e) Default on Other Indebtedness - a default or defaults
shall have occurred under any other
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Indebtedness or Securities of the Company having a
principal or face amount, individually or in the
aggregate, in excess of $5,000,000; or any event
shall occur or any condition shall exist, the effect
of which is to cause (or permit any holder of such
Indebtedness or Securities having a principal or face
amount, individually or in the aggregate, in excess
of $5,000,000, or a trustee to cause) such
Indebtedness or Security, or a portion thereof, to
become due prior to its stated maturity or prior to
its regularly scheduled dates of payment;
(f) Involuntary Bankruptcy Proceedings - a custodian
receiver, liquidator or trustee of the Company or of
any of its Property, is appointed or takes possession
and such appointment or possession remains in effect
for more than 30 days; or the Company is adjudicated
bankrupt or insolvent; or an order for relief is
entered under the Federal Bankruptcy Code against the
Company; or any of the Property of the Company is
sequestered by court order and the order remains in
effect for more than 30 days; or a petition is filed
against the Company under any bankruptcy,
reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, and
is not dismissed within 30 days after filing;
(g) Voluntary Petitions - the Company files a petition in
voluntary bankruptcy or seeking relief under any
provision of any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction,
whether now or hereafter in effect, or consents to
the filing of any petition against it under any such
law;
(h) Assignments for Benefit of Creditors, etc. - the
Company makes an assignment for the benefit of its
creditors, or generally fails to pay its debts as
they become due, or consents to the appointment of or
taking possession by a custodian, receiver,
liquidator or trustee of the Company or of all or any
part of the Property of the Company; or
(i) Undischarged Final Judgments - final judgment or
judgments which are not subject to appeal for the
payment of money aggregating in excess of
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$5,000,000 is or are outstanding against one or more
of the Company and its Subsidiaries and any one of
such Judgments (x) has not been stayed or paid on the
date it is finally due and payable or (y) has
resulted in the attachment of a Lien on any Property
of the Company or any Subsidiary.
9.2 Default Remedies.
(a) If an Event of Default described in Section 9.1(f) or
9.1(g) occurs, the entire outstanding principal amount of the Notes shall
automatically become due and payable, without the taking of any action on the
part of any holder of the Notes or any other Person and without the giving of
any notice with respect thereto. If an Event of Default described in Section
9.1(a) or 9.1(b) exists, any holder of Notes may, at its option, exercise any
right, power or remedy permitted by law, including but not limited to the right
by notice to the Company to declare the Notes held by such holder to be
immediately due and payable. If any other Event of Default exists, the holder or
holders of at least 51% in outstanding principal amount of the Notes (exclusive
of Notes owned by the Company, Subsidiaries and Affiliates) may exercise any
right, power or remedy permitted by law, including but not limited to the right
by notice to the Company to declare all the outstanding Notes immediately due
and payable. Upon any such acceleration the principal of the Notes declared due
or automatically becoming due shall be immediately payable together with all
interest accrued thereon without any presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived, and the Company
will immediately pay the greater of (x) the principal of and interest accrued on
such Notes and (y) the Makewhole Price applicable at such time to such Notes;
provided that the Makewhole Price shall not be applicable upon any such
declaration if the only Event of Default existing at such time is the Event of
Default described in Section 9.1(f).
(b) No course of dealing or delay or failure on the part of
any holder of the Notes to exercise any right shall operate as a waiver of such
right or otherwise prejudice such holder's rights, powers and remedies. The
Company will pay or reimburse the holders of the Notes, to the extent permitted
by law, for all costs and expenses, including but not limited to reasonable
attorneys' fees, incurred by them in collecting any sums due on the Notes or in
otherwise enforcing any of their rights.
9.3 Annulment of Acceleration of Notes.
If a declaration is made pursuant to Section 9.2(a), the
holders of at least 51% of the outstanding principal amount
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of the Notes may annul such declaration and the consequences thereof if no
judgment or decree has been entered for the payment of any monies due pursuant
to such declaration and if all sums payable under the Notes and this Agreement
(except principal, interest or premium which has become due solely by reason of
such declaration) have been duly paid. No such annulment shall extend to or
waive any subsequent Default or Event of Default.
SECTION 10. INTERPRETATION OF THIS AGREEMENT
10.1 Terms Defined.
As used in this Agreement (including Exhibits), the following
terms have the respective meanings set forth below or in the Section indicated:
Affiliate - a Person other than a Subsidiary (1) which
directly or indirectly controls, or is controlled by, or is under common control
with, the Company, (2) which owns 5% or more of the Voting Stock of the Company
or (3) 5% or more of the Voting Stock (or in the case of a Person which is not a
corporation, 5% or more of the equity interest) of which is owned by the Company
or a Subsidiary. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
Business Day - any day other than a Saturday, Sunday or a
national, Connecticut or New York holiday.
Capitalized Lease - any lease which is shown or is required to
be shown in accordance with GAAP as a liability on a balance sheet of the lessee
thereunder.
Closing Date - Section 1.2
Consolidated Net Income - the consolidated net income of the
Company and its Subsidiaries for any period as determined in accordance with
GAAP.
Consolidated Net Worth - shall mean the assets of the Company
and its Subsidiaries less the liabilities of the Company and its Subsidiaries,
each as shown on a consolidated balance sheet of the Company and its
Subsidiaries in accordance with GAAP, plus any negative (less any positive)
foreign currency translation adjustments shown in the equity section of such a
consolidated balance sheet pursuant to FAS 52, plus any amount shown on such a
consolidated balance sheet in the equity contra account arising from the
Guaranty.
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Consolidated Subsidiary - shall mean any Subsidiary the
accounts of which shall at the time in question be consolidated with the
Company.
Default - an event or condition which will, with the lapse of
time or the giving of notice or both, become an Event of Default.
Domestic Subsidiary - shall mean a Subsidiary incorporated in
the United States.
ERISA - means the Employee Retirement Income Security Act of
1974, as amended from time to time.
Event of Default - Section 9.1
GAAP - means generally accepted accounting principles which
are consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors; provided, however, that such
principles shall be applied without giving effect to FAS 106.
Guaranty - means the Company's obligations as guarantor under
a certain Guaranty Agreement, effective as of July 28, 1989, from the Company to
The Connecticut National Bank and National Bank of Detroit.
Indebtedness - with respect to any Person, means, without
duplication, (a) all debt arising from borrowed money and similar monetary
obligations, whether direct or indirect; (b) all indebtedness of others secured
by any mortgage, pledge, security interest, lien, charge, or other encumbrance
existing on Property owned by the Company or any Subsidiary or acquired by the
Company or any Subsidiary subject thereto, whether or not the Indebtedness
secured thereby shall have been assumed; (c) all guarantees, endorsements and
other contingent obligations, in respect of Indebtedness of others, including
(x) any obligation to supply funds to or in any manner to invest in, directly or
indirectly, the debtor, to purchase Indebtedness, or to assure the owner of
Indebtedness against loss, through an agreement to purchase goods, supplies, or
services for the purpose of enabling the debtor to make payment of the
Indebtedness held by such owner or otherwise and (y) any obligation of any
partnership in which the Company or any Subsidiary is a general partner; and (d)
the obligations to reimburse the issuer in respect of any letters of credit.
Indebtedness shall not include the indebtedness of (i) a Subsidiary of the
Company to the Company or to another Subsidiary of the Company, or (ii) the
Company to a Subsidiary of the
-30-
Company; provided, however, that in the case of debt of a Subsidiary not wholly
owned by the Company and/or another Subsidiary, Indebtedness shall include a
percentage of such indebtedness equal to the percentage of the total minority
ownership.
Lien - any mortgage, lien, charge, security interest or other
encumbrance of any kind upon any Property or assets of any character, or upon
the income or profits therefrom, any conditional sale or other title retention
agreement, device or arrangement (including Capitalized Leases), or any sale
assignment, pledge or other transfer for security of any accounts, general
intangibles or chattel paper, with or without recourse.
Makewhole Price - with respect to full or partial optional
prepayments of the Notes pursuant to Section 5.2 or repayment of Notes which
have become or been declared immediately due and payable pursuant to Section
9.2, the present value of all scheduled payments of principal and interest in
respect of the Notes (or portions thereof being prepaid) which, but for such
optional prepayment or required repayment, would be required to be made
following the date of the proposed prepayment or the date on which such Notes
became or are declared due and payable, determined by discounting (on a
semi-annual basis), at a rate which is equal to the Treasury Constant Yield at
such time plus .50%, the amount of each such payment (or portion thereof) from
the date such payment would be required to be made to the prepayment or
repayment date.
Notes - Section 1.1.
Other Agreements - Section 1.6.
Other Purchasers - Section 1.6.
Pension Plans - Section 2.15(a).
Person - shall mean any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
Property - any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
Related Person - any Person (whether or not incorporated)
which is under common control with the Company
-31-
within the meaning of Section 414(c) of the Internal Revenue Code of 1986, as
amended, or of Section 4001(b) of ERISA.
Revolving Credit and Term Loan Agreement - means the
$100,000,000 Revolving Credit and Term Loan Agreement dated as of December 15,
1988 among the Company, The Connecticut Bank and Trust Company, N.A., as Agent,
and the banks signatory thereto.
Security - shall have the same meaning as in Section 2(1) of
the Securities Act of 1933, as amended.
Senior Management - shall mean any of the following officers
of the Company: President, any Group Vice President, Chief Financial Officer,
Treasurer or General Counsel.
Subsidiary - of a Person shall mean any corporation,
association or other business entity of which more than 50% of the outstanding
stock having by its terms ordinary voting power to elect a majority of the board
of directors of such corporation, or other business entity (irrespective of
whether at the time stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time owned directly or indirectly by such Person.
Term Loan and Rollover Loan Agreement - means the Term Loan
Agreement dated October 17, 1986 between the Company and Mellon Bank, N.A.
Treasury Constant Yield - at any time with respect to any
optional prepayment of the Notes pursuant to Section 5.2 or repayment of Notes
which have been declared or become immediately due and payable pursuant to
Section 9.2, means the yield to maturity at such time of United States Treasury
obligations with a remaining life to maturity (as compiled by and published in
the most recently published issue of the United States Federal Reserve Bulletin
or its successor publication) most nearly equal to the Weighted Average Life to
Maturity of the Notes (or portions thereof) to be prepaid or repaid at the time.
If there are United States Treasury obligations listed in such publication with
a remaining life to maturity equal to the Weighted Average Life to Maturity of
the Notes (or portions thereof), then the yield on such Treasury obligations
shall be the Treasury Constant Yield. If no such Treasury obligation exists,
then the Treasury obligation with the remaining life to maturity closest to and
greater than the Weighted Average Life to Maturity of the Notes (or portions
thereof) to be prepaid or repaid shall be used, along with the Treasury
obligation with a remaining life to maturity closest to and less than the
Weighted Average Life to Maturity of such Notes being prepaid or repaid
-32-
(or portions thereof) in order to calculate the Treasury Constant Yield. In this
event these two Treasury obligations will be examined together and the Treasury
Constant Yield will be calculated through interpolation of the yields on such
Treasury obligations.
Weighted Average Life to Maturity - of the Notes or any
portion thereof, at the time of the determination thereof, means the number of
years obtained by dividing the then Remaining Dollar-years of such Notes or
portion thereof by the then outstanding principal amount of such Notes or
portion thereof. The term "Remaining Dollar-years" of any indebtedness for
borrowed money means the amount obtained by (1) multiplying (A) the amount of
each then remaining required repayment or redemption (including repayment or
redemption at final maturity) by (B) the number of years (calculated at the
nearest one-twelfth) which will elapse between the date as of which the
calculation is made and the date that such required repayment is due and (2)
totaling all the products obtained in (1).
10.2 Accounting Principles.
Where the character or amount of any asset or liability or
item of income or expense is required to be determined or any consolidation or
other accounting computation is required to be made under this Agreement, this
shall be done in accordance with GAAP.
10.3 Directly or Indirectly.
Where any provision in this Agreement refers to any action
which a Person is prohibited from taking, the provision shall be applicable
whether such action is taken directly or indirectly by such Person, including
actions taken by or on behalf of any partnership in which such Person is a
general partner and all liabilities of such partnerships shall be considered
liabilities of such Person for purposes of this Agreement.
10.4 Governing Law.
This Agreement and the Notes shall be governed by and
construed in accordance with Connecticut law.
-33-
SECTION 11. MISCELLANEOUS
11.1 Notices.
(a) All notices or other communications under this Agreement or the
Notes shall be in writing and shall be mailed by first class mail, postage
prepaid,
(i) if to you, in the manner provided in Exhibit A to this Agreement, or in
any other manner as you may have advised the Company in writing, or
(ii) if to the Company, at its address shown at the beginning of this
Agreement, or at such other address as it may have furnished in writing
to you and all other holders of the Notes.
(b) Any notice so addressed and mailed by registered or certified mail
shall be deemed to be given when so mailed.
11.2 Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications which may hereafter be
executed, (b) documents received by you at the closing of your purchase of the
Notes (except the Notes themselves), and (c) financial statements, certificates
and other information previously or hereafter furnished to you, may be
reproduced by you by any photographic, photostatic, microfilm, micro-card,
miniature photographic or other similar process and you may destroy any original
document so reproduced. The Company agrees and stipulates that any such
reproduction shall, to the extent permitted by applicable law, be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by you in the regular course of business) and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
11.3 Survival.
All warranties, representations, and covenants made by the Company
herein or on any certificate or other instrument delivered by it or on its
behalf pursuant to the terms of this Agreement shall be considered to have been
relied upon by you and shall survive the delivery to you of the Notes regardless
of any investigation made by you or on your behalf. All statements
-34-
in any such certificate or other instrument shall constitute warranties and
representations by the Company hereunder.
11.4 Successors and Assigns.
This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of each of the parties, except that the Company's
right to require you to purchase the Notes in accordance with Section 1.2 shall
be personal to the Company and shall not be assignable or transferable to any
other Person (including successors at law) whether voluntarily or involuntarily.
The provisions of this Agreement are intended to be for the benefit of all
holders, from time to time, of the Notes, and shall be enforceable by any
holder, whether or not an express assignment to such holder of rights under this
Agreement has been made by you or your successor or assign.
11.5 Amendment and Waiver.
This Agreement may be amended, and the observance of any term of
this Agreement may be waived, with (and only with) the written consent of the
Company and the holders of at least 66-2/3% of the outstanding principal amount
of the Notes (exclusive of Notes owned by the Company, Subsidiaries and
Affiliates); provided that no such amendment or waiver of any of the provisions
of Sections 1 through 4 shall be effective as to you unless consented to by you
in writing; and provided further, that no such amendment or waiver shall,
without the written consent of the holders of all the outstanding Notes, (i)
subject to Section 9.3, change the amount or time of any prepayment or payment
of principal or premium or the rate or time of payment of interest, (ii) amend
Section 9, or (iii) amend this Section 11.5. Executed or true and correct copies
of any amendment or waiver effected pursuant to the provisions of this Section
11.5 shall be delivered by the Company to each holder of outstanding Notes
promptly following the date on which the same shall become effective. No such
amendment or waiver shall extend to or affect any provision or obligation not
expressly amended or waived.
11.6 Duplicate Originals.
Two or more duplicate originals of this Agreement may be signed
by the parties, each of which shall be an original but all of which together
shall constitute one and the same instrument.
If this Agreement is satisfactory to you, please so indicate by
signing the acceptance at the foot of a counterpart of this Agreement and return
such counterpart to the Company, whereupon this Agreement will become binding
between us in accordance with its terms.
Very truly yours,
BARNES GROUP INC.
By /s/ A. S. Wells
----------------------------
Accepted:
THE TRAVELERS INSURANCE COMPANY
By /s/ Robert M. Mills
---------------------------------
Title: Assistant Investment Officer
EXHIBIT A
PAGE 1 of 6
This Exhibit to the foregoing Agreement sets forth registration, money
transfer and notice instructions for each purchaser.
Purchaser Registration Principal Amount
- --------- ------------ ----------------
The Travelers Insurance TRAL & CO. $20,500,000
Company
In the case of all payments on account of the Notes in accordance with Section
4.1, by:
(a) crediting (in the form of federal funds bank wire transfer):
The Travelers Insurance Company -
Consolidated Private Placement
Account No. 910-2-587434
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081
ABA No. 021000021
and
(b) providing sufficient information with such wire transfer to
identify the source and application of such funds including
the Company's name, the maturity date of the Notes, the
applicable interest rate and identification of the amounts to
be applied to the payment of principal, premium and interest,
respectively;
with a notice of any such payment (and all other notices
in respect of payment) to:
The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183-2030
Attn: Securities Department - Cashier, 6 PB
In the case of all other communications:
The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06115
Attn: Securities Department - Capital Finance
Division, 9 PB
EXHIBIT A
PAGE 2 of 6
Purchaser Registration Principal Amount
- --------- ------------ ----------------
The Travelers Indemnity DUBY & CO. $4,000,000
Company
In the case of all payments on account of the Notes in
accordance with Section 4.1, by:
(a) crediting (in the form of federal funds bank wire transfer):
The Travelers Insurance Company -
Consolidated Private Placement
Account No. 910-2-587434
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081
ABA No. 021000021
and
(b) providing sufficient information with such wire transfer to
identify the source and application of such funds including
the Company's name, the maturity date of the Notes, the
applicable interest rate and identification of the amounts to
be applied to the payment of principal, premium and interest,
respectively;
with a notice of any such payment (and all other notices in respect of
payment) to:
The Travelers Indemnity Company
One Tower Square
Hartford, Connecticut 06183-2030
Attn: Securities Department - Cashier, 6 PB
In the case of all other communications:
The Travelers Indemnity Company
One Tower Square
Hartford, Connecticut 06115
Attn: Securities Department - Capital Finance
Division, 9 PB
EXHIBIT A
PAGE 3 of 6
Purchaser Registration Principal Amount
- --------- ------------ ----------------
The Travelers Indemnity EFAM & CO. $500,000
Company of Rhode Island
In the case of all payments on account of the Notes in accordance with Section
4.1, by:
(a) crediting (in the form of federal funds bank wire transfer):
The Travelers Insurance Company -
Consolidated Private Placement
Account No. 910-2-587434
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081
ABA No. 021000021
and
(b) providing sufficient information with such wire transfer to
identify the source and application of such funds including
the Company's name, the maturity date of the Notes, the
applicable interest rate and identification of the amounts to
be applied to the payment of principal, premium and interest,
respectively;
with a notice of any such payment (and all other notices
in respect of payment) to:
The Travelers Indemnity Company of Rhode Island
One Tower Square
Hartford, Connecticut 06183-2030
Attn: Securities Department - Cashier, 6 PB
In the case of all other communications:
The Travelers Indemnity Company of Rhode Island
One Tower Square
Hartford, Connecticut 06115
Attn: Securities Department - Capital Finance
Division, 9 PB
EXHIBIT A
PAGE 4 of 6
Purchaser Registration Principal Amount
- --------- ------------ ----------------
Allstate Life Allstate Life
Insurance Company Insurance Company $5,000,000
In the case of all payments on account of the
Notes in accordance with Section 4.1, by:
(a) crediting (in the form of federal funds bank wire transfer):
Allstate Life Insurance Company -
Custody Account No. 23-80524
Harris Trust and Savings Bank (ABA No. 0710-0028-8)
Chicago, IL 60690
Attention: Trust Collection Department - 5C
and
(b) providing sufficient information with such wire transfer to
identify the source and application of such funds including
the Company's name, the private placement number, the maturity
date of the Notes, the applicable interest rate and
identification of the amounts to be applied to the payment of
principal, premium and interest, respectively;
with a notice of any such payment (and all other notices in
respect of payment) to:
Allstate Life Insurance Company
Allstate Plaza West
Northbrook, IL 60062
Attention: Investment Department --
Private Placements Division J2A
(c) deliver securities to:
Harris Trust and Savings Bank
111 West Monroe Street
Master Trust Department, 5W
Chicago, IL 60690
Attention: Timothy Cummins
for Allstate Life Insurance Company
Custody Account No. 23-80524
In the case of all other communications:
Allstate Life Insurance Company
Allstate Plaza West
Northbrook, IL 60062
Attention: Investment Department --
Private Placements Division J2A
EXHIBIT A
PAGE 5 of 6
Purchaser Registration Principal Amount
- --------- ------------ ----------------
Allstate Life Allstate Life
Insurance Company Insurance Company $5,000,000
In the case of all payments on account of the Notes in
accordance with Section 4.1, by:
(a) crediting (in the form of federal funds bank wire transfer):
Allstate Life Insurance Company -
Custody Account No. 23-83531
Harris Trust and Savings Bank (ABA No. 0710-0028-8)
Chicago, IL 60690
Attention: Trust Collection Department - 5C
and
(b) providing sufficient information with such wire transfer to
identify the source and application of such funds including
the Company's name, the private placement number, the maturity
date of the Notes, the applicable interest rate and
identification of the amounts to be applied to the payment of
principal, premium and interest, respectively;
with a notice of any such payment (and all other notices
in respect of payment) to:
Allstate Life Insurance Company
Allstate Plaza West
Northbrook, IL 60062
Attention: Investment Department --
Private Placements Division J2A
(c) deliver securities to:
Harris Trust and Savings Bank
111 West Monroe Street
Master Trust Department, 5W
Chicago, IL 60690
Attention: Timothy Cummins
for Allstate Life Insurance Company
Custody Account No. 23-83531
In the case of all other communications:
Allstate Life Insurance Company
Allstate Plaza West
Northbrook, IL 60062
Attention: Investment Department --
Private Placements Division J2A
EXHIBIT A
PAGE 6 of 6
Purchaser Registration Principal Amount
- --------- ------------ ----------------
Aid Association Aid Association $5,000,000
for Lutherans for Lutherans
In the case of all payments on account of the Notes in accordance with Section
4.1, by:
(a) crediting (in the form of federal funds bank wire transfer):
Aid Association for Lutherans
Account No. 164-096-0
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, IL 60690
ABA No. 071 000 288
and
(b) providing sufficient information with such wire transfer to
identify the source and application of such funds including
the Company's name, the maturity date of the Notes, the
applicable interest rate and identification of the amounts to
be applied to the payment of principal, premium and interest,
respectively;
with a notice of any such payment (and all other notices
in respect of payment) to:
Aid Association for Lutherans
4321 North Ballard Road
Appleton, WI 54919
Attention: Investment Accounting
In the case of all other communications:
Aid Association for Lutherans
4321 North Ballard Road
Appleton, WI 54919
Attention: Investment Department
EXHIBIT B
BARNES GROUP INC.
9.47% Senior Note due September 16, 2001
$ Hartford, Connecticut
, 19
Barnes Group Inc. (the "Company"), a Delaware corporation, for
value received, hereby promises to pay to or registered assigns the principal
sum of ______ Dollars ($______) on September 16, 2001; and to pay interest
(computed on the basis of a 360-day year of twelve 30-day months) on the unpaid
principal balance hereof from the date of this Note at the rate of 9.47% per
annum, semi-annually on the sixteenth day of March and the sixteenth day of
September in each year, commencing with the payment date next succeeding the
date hereof, until the principal amount hereof shall become due and payable; and
to pay on demand interest on any overdue principal (including any overdue
prepayment of principal) and premium, if any, and (to the extent permitted by
applicable law) on any overdue payment of interest, at a fluctuating rate per
annum, to be adjusted daily, equal to the greater of (a) the rate announced
publicly by Citibank, N.A. in New York, New York from time to time as its prime
rate and (b) 11.47% per annum (but in no event higher than the maximum rate
permitted by law).
Payments of principal, premium, if any, and interest shall be
made in such coin or currency of the United States of America as at the time of
payment is legal tender for the payment of public and private debts, by check
mailed and addressed to the registered holder hereof at the address shown in the
register maintained by the Company for such purpose, or, at the option of the
holder hereof, in such manner and at such other place in the United States of
America as the holder hereof shall have designated to the Company in writing.
This Note is one of an issue of Senior Notes of the Company
issued in an aggregate principal amount limited to $40,000,000 pursuant to the
Company's Note Agreements with The Travelers Insurance Company, The Travelers
Indemnity Company, The Travelers Indemnity Company of Rhode Island, Allstate
Life Insurance Company and Aid Association for Lutherans, respectively dated as
of September 16, 1991, and is entitled to the benefits thereof. As provided in
such Agreements, this Note is subject to prepayment, in whole or in part, in
certain cases without premium and in other cases with a premium as specified in
said Agreements. The Company agrees to make required prepayments on
-2-
account of said Notes in accordance with the provisions of said Agreements.
This Note is a registered Note and is transferable only by
surrender thereof at the principal office of the Company in Bristol,
Connecticut, duly endorsed or accompanied by a written instrument of transfer
duly executed by the registered holder of this Note or his attorney duly
authorized in writing.
Under certain circumstances, as specified in said Agreement, the
principal of this Note may be declared due and payable in the manner and with
the effect provided in said Agreements.
This Note and said Agreements are governed by and construed in
accordance with Connecticut law.
BARNES GROUP INC.
(Corporate Seal)
By__________________
EXHIBIT C
I. THE COMPANY'S ACTIVE SUBSIDIARIES, EACH OF WHICH HAS ONLY A SINGLE
CLASS OF STOCK OUTSTANDING, ARE AS FOLLOWS:
Percentage of Voting
Stock* Owned by Company
Jurisdiction of and each other
Name of Subsidiary Incorporation Subsidiary**
------------------ ------------- -----------------------
Associated Spring- Singapore 100%
Asia PTE. LTD.
Associated Spring United Kingdom Note 1
SPEC Limited
Autoliaisons France France 100%
S.A.
Barnes Group Canada Canada 100%
Inc.
Motalink Limited United Kingdom 100%
Resortes Industriales Mexico 100%
del Norte, S.A.
Resortes Mecanicos, Mexico 100%
S.A.
Stumpp & Scheule Brazil 100%
Distribuidora Ltda.
Stumpp & Scheule do Brazil 100%
Brasil Industria e
Comercio Limitada
Windsor Airmotive Asia Singapore Note 2
PTD. LTD.
Note 1 - Associated Spring SPEC Limited is wholly owned by Motalink Limited.
Note 2 - Windsor Airmotive Asia PET. LTD. is wholly owned by Barnes Group
Canada Inc.
*Other than directors' qualifying shares.
**If Subsidiary, specify name and extent of ownership.
-2-
II. AFFILIATES
The Company's Affiliates, other than Subsidiaries, are as follows:
Jurisdiction of Nature and Extent
Name of Affiliate Incorporation of Affiliation
a) NHK-Associated Spring Delaware 45% of Voting
Suspension Components Inc. Stock Owned by
Company
b) Carlyle F. Barnes Have beneficial
Wallace Barnes ownership of more than
Fleet Bank of Connecticut 5% of the Company's
State Street Bank & Trust Company stock as determined
(in its capacity as Trustee for the under Rule 13d-3 of
Company's Guaranteed Stock Plan) the Securities
Exchange Act of 1934.
-3-
III. DESCRIPTION OF INDEBTEDNESS
(A) The Indebtedness for borrowed money (including
Financing Leases) of the Company and its Subsidiaries as of June 30, 1991 is as
follows:
Description Amount
----------- ------
1) Term Loan Agreement Mellon Bank, N.A. $ 20,000,000.00
2) Revolving Credit and Fleet Bank, N.A. $ 50,000,000.00
Term Loan Agreement as agent
3) Industrial Revenue Comerica Bank, N.A. $ 7,000,000.00
Bond, Saline, MI Trustee
4) Industrial Revenue Mellon Bank, N.A. $ 2,000,000.00
Bond, Meridian, MS Trustee
5) Short Term Credit Line Various $ 33,000,0O0.00
6) Bank Overdraft Various $ 481,000.00
7) Guaranty Agreement Mellon Bank, N.A. $ 2,000,000.00
8) Letter of Credit Fuji Bank, Ltd. $ 7,394,000.00
9) NASCO Guaranty LTCB Trust Co. $ 3,780,000.00
10) NASCO Guaranty Tohlease Corp. $ 3,891,000.00
11) NASCO Guaranty LTCB Trust Co. $ 5,930,000.00
12) NASCO Guaranty LTCB Trust Co. $ 1,350,000.00
13) ESOP Guaranty Ct. National Bank $ 18,403,000.00
Nat. Bank Detroit
14) Standby L/C Connecticut National $ 5,694,000.00
(Insurance) Bank
15) Commercial L/C Fleet Bank, N.A. $ 400,000.00
16) Company Guaranty Various $ 100,000.00
17) Standby L/C (Gardena) Connecticut National $ 347,000.00
Bank
Total Debt: $152,770,000. Total excludes duplication items listed:
#3) Industrial Revenue Bond, Saline, $7,000,000.00.
#7) Guaranty Agreement, Meridian, $2,000,000.00.
-4-
(B) Agreement Restricting the Company's Ability to Incur
Indebtedness
1. Term Loan Agreement, Mellon Bank, N.A., dated October 17, 1986;
2. Revolving Credit and Term Loan Agreement, Fleet Bank N.A., agent, dated
December 15, 1988;
3. Reimbursement Agreement, Fuji Bank Limited, New York Branch, dated
February 1, 1986;
4. Guarantee Agreement, Connecticut National Bank and National Bank of
Detroit, dated July 28, 1989;
5. Interest Rate Swap Agreement, Fleet Bank, N.A., dated August 28, 1989;
6. Interest Rate Swap Agreement, Chemical Bank, N.A., dated September 16,
1991;
7. Interest Rate Exchange Agreement, Mellon Bank, N.A., dated October 17,
1986;
8. Barnes Group Inc. Company Resolution, Barnes Group Inc., dated April 14,
1990.
IV. LIENS ON PROPERTY
Liens existing as of September 16, 1991 (other than Liens of the types
permitted by clauses (i) through (v) of Section 7.6(a)) on any Property of the
Company and its Subsidiaries which has a cost or market value greater than
$500,000 are as follows:
a. Capitalized lease between Barnes Group and City of Meridian, Mississippi,
dated as of July 1, 1985.
EXHIBIT D
DESCRIPTION OF COMPANY COUNSEL'S CLOSING OPINION
The closing opinion of John E. Besser, Esq., Counsel of the Company,
which is called for by Section 3.1, shall be dated the Closing Date and
addressed to you, shall be satisfactory in form and substance to you, and shall
be to the effect that:
(1) Organization, Standing, etc. of the Company--the Company
is a duly incorporated and validly existing corporation in good
standing under the laws of the State of Delaware and has all requisite
power and authority to issue, sell and deliver the Notes and to carry
on its business and own its Property;
(2) Organization, Standing, etc. of Subsidiaries--each
Subsidiary is a duly incorporated and validly existing corporation in
good standing under the laws of its jurisdiction of incorporation and
has all requisite corporate power and authority to carry on its
business and own its Property;
(3) Authority to Conduct Business--the Company, and each
Subsidiary, is duly authorized to conduct its business in each
jurisdiction in which it operates and has duly qualified and is in good
standing as a foreign corporation in each jurisdiction where the
character of its Properties or the nature of its activities makes such
qualification necessary or desirable;
(4) Agreement, Notes--the Agreement and the Notes being
delivered to you at the closing have been duly authorized by all
necessary corporate action on the part of the Company (no action by the
stockholders of the Company being required by law, by the Certificate
of Incorporation or By-Laws of the Company or otherwise), have been
duly executed and delivered by the Company, and are legal, valid and
binding obligations of the Company enforceable in accordance with their
terms except as enforcement of such terms may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors'
rights generally or by general equitable principles;
(5) No Conflict with Charter, By-Laws or Other Agreements--the
issue and sale of the Notes and compliance by the Company with the
terms of the Notes and the Agreement will not conflict with, or result
in any breach of any of the provisions of, or constitute a default
under, or result in the creation or imposition of any Lien upon any of
the Property of the Company pursuant to the provisions of, the
Certificate of Incorporation or By-Laws of the Company, or any
agreement or other instrument to which the Company is a party or by
which it is bound;
-2-
(6) Title to Stock of Subsidiaries--the Company is the legal
and beneficial owner of all of the shares it purports to own of the
capital stock of each Subsidiary, free and clear in each case of any
Lien and all such shares have been duly issued and are fully paid and
non-assessable;
(7) Governmental Consent, etc.--all consents, approvals or
authorizations, if any, of any governmental authority required on the
part of the Company in connection with the execution and delivery of
the Agreement or the offer, issue, sale or delivery of the Notes to you
have been duly obtained, and the Company has complied with any
applicable provisions of law requiring any designation, declaration,
filing, registration or qualification with any governmental authority
in connection with such offer, issue, sale or delivery;
(8) Margin Requirements--none of the transactions contemplated
in the Agreement (including, without limitation thereof, the use of the
proceeds from the sale of the Notes) will violate or result in a
violation of Section 7 of the Securities Exchange Act of 1934, as
amended, or any regulations issued pursuant thereto, including, without
limitation, Regulations G, T and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R., Chapter II; and
(9) Exempted Offering--the issuance, sale and delivery of the
Notes under the circumstances contemplated by the Agreement are
exempted transactions under the registration provisions of the
Securities Act of 1933, as amended, and do not, under existing law,
require the registration of the Notes under the Securities Act of 1933,
as amended, or qualification of an indenture under the Trust Indenture
Act of 1939.
(10) Litigation--there is no action, suit or proceeding at law
or in equity or any investigation pending, or to the best knowledge of
such counsel threatened, against or affecting the Company or any
Subsidiary in or before any court, governmental authority or agency or
arbitration board or tribunal which, individually or in the aggregate
will have a material adverse impact on the longterm financial condition
or prospects of the Company and its Subsidiaries, or the ability of the
Company to perform the Agreement.
Such opinion shall also cover such other matters incident to the
transactions contemplated hereby as you or your special counsel may reasonably
request.
EXHIBIT E
DESCRIPTION OF SPECIAL COUNSEL'S CLOSING OPINION
The closing opinion of Day, Berry & Howard, special counsel for
you, which is called for by Section 3.1 of the Agreement, shall be dated the
Closing Date and addressed to you, shall be satisfactory in form and substance
to you, and shall cover the matters referred to in paragraphs 1 (as to
incorporation and good standing only), and 4, 5 (as to Certificate of
Incorporation and By-Laws only), 7, 8 and 9 of Exhibit D. Such opinion shall
also state that based on such due investigation and inquiry as deemed relevant
and appropriate, the closing opinion of Company counsel delivered pursuant to
Section 3.1 is satisfactory in scope and form to special counsel and that in
their opinion you are justified in relying thereon, and shall cover such other
matters relating to the sale of the Notes as you may reasonably request.
EXHIBIT F
CERTAIN DOCUMENTS FURNISHED TO PURCHASERS
1. Estimated Operation By Business Segment for Three Months and Six Months
Ended June 30, 1990 and June 30, 1991 dated September 13, 1991.
Segment sales are accurate in all material respects. Numerous
adjustments to interim operating income data by business segments are made
at year-end. The data set forth in the above document reflects reasonable
estimates of operating income by segments for the periods shown.
2. The Investment Policy - Surplus Cash accurately states said policy as of
the date of the Agreement.
3. The List of certain competitors and customers of Bowman Distribution was
prepared in February, 1991 and furnished to the Company's directors as part
of a briefing book prepared for the Annual Meeting of Stockholders in
April, 1991.
4. The document reflecting 1990 sales distribution of the Aerospace Components
Group is, taken as a whole, reasonably accurate in all material respects.
5. Sales and Operating Income by Segment 1981-1991. The data for the years
1981-1990 are taken from the Company's Annual Report. See discussion in
item 1 above relating to the date for the first six months of 1991. In
addition, the numbers referenced in item 1 should be substituted for those
shown on this document.