Exhibit 4.7
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Barnes Group Inc.
Note Agreement
$60,000,000
8.59% Senior Notes Due November 21, 2008
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Table of Contents
Section Heading Page
Section 1. Purchase and Sale of Notes................................ 1
Section 1.1. Issue of Notes............................................ 1
Section 1.2. The Closing............................................... 1
Section 1.3. Purchase for Investment................................... 2
Section 1.4. Failure to Deliver........................................ 3
Section 1.5. Transaction Expenses...................................... 3
Section 1.6. Other Purchasers.......................................... 4
Section 2. Warranties and Representations............................ 4
Section 2.1. Subsidiaries.............................................. 4
Section 2.2. Corporate Organization and Authority...................... 4
Section 2.3 Business, Property, Indebtedness and Liens................ 5
Section 2.4. Financial Statements...................................... 5
Section 2.5. Full Disclosure........................................... 5
Section 2.7. Title to Properties....................................... 6
Section 2.8. Patents and Trademarks.................................... 6
Section 2.9. Sale is Legal and Authorized.............................. 6
Section 2.10. No Defaults............................................... 7
Section 2.11. Governmental Consent...................................... 7
Section 2.12. Taxes..................................................... 7
Section 2.13. Use of Proceeds........................................... 7
Section 2.14. Private Offering.......................................... 8
Section 2.15. Foreign Assets Control Regulations, Etc................... 8
Section 2.17. ERISA..................................................... 8
Section 2.18. Environmental Matters..................................... 9
Section 3. Closing Conditions........................................ 9
Section 3.1. Opinions of Counsel....................................... 9
Section 3.2. Warranties and Representations True as of Closing Date.... 10
Section 3.3. Compliance with this Agreement............................ 10
Section 3.4. Officers' Certificate..................................... 10
Section 3.5. Proceedings Satisfactory.................................. 10
Section 3.6. Sales To Other Purchasers................................. 10
Section 3.7. Private Placement Number.................................. 10
Section 3.8. Legal Investment.......................................... 10
Section 4. Direct Payment............................................ 10
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Section 5. Prepayments......................................................................... 11
Section 5.1. Option to Prepay.................................................................... 11
Section 5.2. Notice of Optional Prepayment....................................................... 11
Section 5.3. Partial Payment Pro Rata............................................................ 11
Section 6. Registration; Substitution of Notes................................................. 11
Section 6.1. Registration of Notes............................................................... 11
Section 6.2. Exchange of Notes................................................................... 12
Section 6.3. Replacement of Notes................................................................ 12
Section 7. Company Business Covenants.......................................................... 12
Section 7.1. Payment of Taxes and Claims......................................................... 12
Section 7.2. Maintenance of Properties, Insurance, Corporate Existence and Compliance with Law... 13
Section 7.3. Maintenance of Office............................................................... 14
Section 7.4. Sale of Assets or Merger............................................................ 14
Section 7.5. Leases.............................................................................. 14
Section 7.6. Liens and Encumbrances.............................................................. 15
Section 7.7. Indebtedness........................................................................ 16
Section 7.8. Net Worth........................................................................... 16
Section 7.10. Transactions with Affiliates........................................................ 17
Section 7.11. Tax Consolidation................................................................... 17
Section 7.12. Acquisition of Notes................................................................ 17
Section 7.13. Lines of Business................................................................... 17
Section 7.14. Restricted Payments and Restricted Investments...................................... 18
Section 7.15. Limitation on Restrictions on Dividends by Subsidiaries, Etc........................ 19
Section 8. Information as to Company........................................................... 19
Section 8.1. Financial and Business Information.................................................. 19
Section 8.2. Officers' Certificates.............................................................. 22
Section 8.3. Accountants' Certificates........................................................... 22
Section 8.4. Inspection.......................................................................... 22
Section 9. Events of Default................................................................... 23
Section 9.1. Nature of Events.................................................................... 23
Section 9.2. Default Remedies.................................................................... 24
Section 9.3. Annulment of Acceleration of Notes.................................................. 24
Section 10. Interpretation of This Agreement.................................................... 25
Section 10.1. Terms Defined....................................................................... 25
Section 10.2. Accounting Principles............................................................... 31
Section 10.3. Directly or Indirectly.............................................................. 31
Section 10.4. Governing Law....................................................................... 31
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Section 11. Miscellaneous........................................ 32
Section 11.1. Notices.............................................. 32
Section 11.2. Reproduction of Documents............................ 32
Section 11.3. Survival............................................. 32
Section 11.4. Successors and Assigns............................... 32
Section 11.5. Amendment and Waiver................................. 33
Section 11.6. Powers and Rights Not Waived; Remedies Cumulative.... 33
Section 11.7. Severability......................................... 33
Section 11.8. Payment.............................................. 33
Section 11.9. Duplicate Originals.................................. 33
Section 11.10. Confidentiality...................................... 33
Section 11.11. Headings, Etc........................................ 34
Signatures............................................................... 35
Exhibit A -- Principal Amounts, Payment Information and
Addresses
Exhibit B -- Form of 8.59% Senior Note due November 21, 2008
Exhibit C -- Form of Opinion of General Counsel to the Company
Exhibit D -- Form of Opinion of Special Counsel for the
Purchasers
Schedule 2.1 -- List of Subsidiaries and Affiliates
Schedule 2.3 -- List of Indebtedness and Liens
Schedule 7.2(b) -- Licenses
Schedule 7.5 -- Leases
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Barnes Group Inc.
123 Main Street
P.O. Box 489
Bristol, CT 06011
___________________
Note Agreement
$60,000,000
8.59% Senior Notes due November 21, 2008
___________________
To each of the Purchasers
Listed on the Attached
Exhibit A:
As of November 21, 2000
Dear Sirs:
Barnes Group Inc., a Delaware corporation (the "Company"), hereby agrees
with the Purchasers as follows:
Section 1. Purchase and Sale of Notes.
Section 1.1. Issue of Notes. The Company will issue $60,000,000 in
aggregate principal amount of its 8.59% Senior Notes due November 21, 2008
(herein called the "Notes"). Each Note will bear interest on the unpaid
principal balance thereof from the date of such Note at the rate of 8.59% per
annum (computed on the basis of a 360-day year of twelve 30-day months), payable
semi-annually on the 21/st/ day of May and November in each year, commencing
with the payment date next succeeding the date of such 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 applicable law) on any overdue payment of
interest at a 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) 10.59% per annum (but in no event higher than
the maximum rate permitted by law); and will mature on November 21, 2008. The
Notes will be registered notes substantially in the form set out in Exhibit B.
Section 1.2. The Closing. The Company agrees to sell to the Purchasers
and the Purchasers agree to purchase from the Company, in accordance with the
provisions of this Agreement; the principal amount of the Notes set forth
opposite their respective names on Exhibit A hereto at 100% of the principal
amount thereof.
The closing of the sale of the Notes shall be held at 11 a.m. EST on
November 21, 2000 (the "Closing Date") at the office of Bingham Dana LLP, One
State Street, Hartford,
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Connecticut 06103. At the closing the Company will deliver to each Purchaser a
single Note (or such greater number of Notes in denominations of at least
$500,000 as each Purchaser may request) in the aggregate principal amount of its
purchase, dated the Closing Date and payable to such Purchaser, or its nominee,
as set forth in Exhibit A, against payment in immediately available funds.
Section 1.3. Purchase for Investment. (a) Each Purchaser represents
to the Company that (i) it is an "accredited investor" within the meaning of
Rule 501 of Regulation D promulgated under the Act and (ii) it is purchasing the
Notes for investment for its own account and the account of its affiliated
entities and with no present intention of distributing or reselling the Notes or
any part thereof to anyone other than an affiliated entity. Each Purchaser
understands that the Notes have not been registered under the Act and may be
resold only if registered pursuant to the provisions of the Act or if an
exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by applicable law,
and that the Company is not required to register the Notes. Each Purchaser
acknowledges receipt of the Private Placement Memorandum and the opportunity to
ask questions of Senior Management of the Company in the course of conducting
its due diligence. 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
each Purchaser's representation as aforesaid.
(b) Source of Funds. Each Purchaser represents that at least one of the
following statements is an accurate representation as to each source of funds (a
"Source") to be used by it to pay the purchase price of the Notes to be
purchased by it hereunder:
(i) if such Purchaser is an insurance company, the Source does
not include assets allocated to any separate account maintained by it in
which any employee benefit plan (or its related trust) has any interest,
other than a separate account that is maintained solely in connection with
its fixed contractual obligations under which the amounts payable, or
credited, to such plan and to any participant or beneficiary of such plan
(including any annuitant) are not affected in any manner by the investment
performance of the separate account; or
(ii) the Source is either (A) an insurance company pooled separate
account, within the meaning of Prohibited Transaction Exemption ("PTE") 90-
1 (issued January 29, 1990), or (B) a bank collective investment fund,
within the meaning of the PTE 91-38 (issued July 12, 1991) and, except as
such Purchaser has disclosed to the Company in writing pursuant to this
paragraph (ii), no employee benefit plan or group of plans maintained by
the same employer or employee organization beneficially owns more than 10%
of all assets allocated to such pooled separate account or collective
investment fund; or
(iii) the Source constitutes assets of an "investment fund" (within
the meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the
QPAM Exemption), no employee benefit plan's assets that are included in
such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same
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employer or by an affiliate (within the meaning of Section V(c)(1) of the
QPAM Exemption) of such employer or by the same employee organization and
managed by such QPAM, exceed 20% of the total client assets managed by such
QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are
satisfied, neither the QPAM nor a person controlling or controlled by the
QPAM (applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (A) the identity
of such QPAM and (B) the names of all employee benefit plans whose assets
are included in such investment fund have been disclosed to the Company in
writing pursuant to this paragraph (iii); or
(iv) the Source is a governmental plan; or
(v) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each
of which has been identified to the Company in writing pursuant to this
paragraph (v); or
(vi) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 1.3, the terms "employee benefit plan", "governmental
plan", "party in interest" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
Section 1.4. Failure to Deliver. If, at the closing, the Company
fails to tender to any Purchaser the Notes to be purchased by it or if the
conditions specified in Section 3 have not been fulfilled, such Purchaser 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 the Purchasers' rights against the
Company.
Section 1.5. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and
expenses (including reasonable attorneys' fees of a special counsel) incurred by
each Purchaser in connection with such transactions and in connection with any
amendments, waivers or consents under or in respect of this Agreement or the
Notes (whether or not such amendment, waiver or consent becomes effective),
including, without limitation (a) the costs and expenses incurred in enforcing
or defending (or determining whether or how to enforce or defend) any rights
under this Agreement or the Notes or in connection with any investigative demand
issued in connection with this Agreement or the Notes, or by reason of being a
holder of any Note, and (b) the costs and expenses incurred in connection with
the insolvency or bankruptcy of the Company or in connection with any work-out
or restructuring of the transactions contemplated hereby and by the Notes. The
Company will pay, and will save each Purchaser harmless from all claims in
respect of any fees, costs or expenses of any brokers and finders (other than
those retained by such Purchaser).
The obligations of the Company under this Section 1.5 shall survive the
payment of the Notes and the termination of this Agreement.
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Section 1.6. Other Purchasers. The purchase made by each Purchaser
hereunder is to be a separate purchase from the Company, and each sale and
delivery of Notes to each 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 each Purchaser that:
Section 2.1. Subsidiaries. (a) Schedule 2.1 to this Agreement
correctly identifies (i) each of the Company's Subsidiaries, its jurisdiction of
incorporation and the percentage of its Voting Stock owned by the Company, and
(ii) each of the Company's Affiliates 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.
(b) Each of the Company and the Subsidiaries 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 of Voting
Stock have been duly issued and are fully paid and non-assessable.
Section 2.2. Corporate Organization and Authority. (a) The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation; it is duly qualified and authorized to do
business 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, other than those jurisdictions where the failure to be
so qualified would not have a material adverse effect on the Company's business
or financial position; and it 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, other than where the failure to have such
licenses, permits, franchises or other governmental authorizations would not
have a material adverse effect on (i) the Company's business or financial
position or (ii) the ability of the Company to perform its obligations under
this Agreement and the Notes.
(b) Each Subsidiary of the Company is a corporation duly organized and
validly existing under the laws of the jurisdiction of incorporation; it is duly
qualified and authorized to do business 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, other than those
jurisdictions where the failure to be so qualified would not have a material
adverse effect on the Company's business or financial position; and it 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, other than where the failure to have such licenses, permits,
franchises or other governmental authorizations would not have a material
adverse effect on (i) the Company's business or financial position or (ii) the
ability of the Company to perform its obligations under this Agreement and the
Notes.
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Section 2.3 Business, Property, Indebtedness and Liens. (a) The
Private Placement Memorandum previously delivered to each Purchaser fairly
describes in all material respects the general nature of the business and
principal Properties of the Company and its Subsidiaries.
(b) Schedule 2.3 correctly lists all outstanding Indebtedness for borrowed
money (including all Capitalized Leases) of, and all Liens (other than those (x)
permitted by clauses (i) through (v) of Section 7.6(a) and (y) on Property of
the Company and its Subsidiaries 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). Neither the Company nor any of its
Subsidiaries 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).
Section 2.4. Financial Statements. (a) The consolidated balance sheets of
the Company and its Consolidated Subsidiaries as of December 31 in the years
1995, 1996, 1997, 1998, and 1999 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, by Pricewaterhouse Coopers LLP, independent certified
public accountants, and the consolidated balance sheets of the Company and its
Consolidated Subsidiaries as of September 30, 2000 and the related statements of
income, retained earnings and cash flows for the 9 month period then ended,
certified by the Company's chief financial officer or chief accounting officer,
have been prepared in accordance with GAAP consistently applied, and present
fairly in all material respects the financial position of the Company and its
Consolidated Subsidiaries as of such dates and the results of their operations
for such periods; provided, however, that the financial statements as of and for
the period ended September 30, 2000 have been prepared in accordance with GAAP
for interim financial statements.
(b) Since December 31, 1999, there has been no materially adverse change
in the Properties, business, prospects, profits or financial condition of the
Company and its Consolidated Subsidiaries, taken as a whole.
Section 2.5. Full Disclosure. The financial statements referred to in
Section 2.4 do not, nor does this Agreement, the Private Placement Memorandum or
any other written statement furnished by the Company to any Purchaser in
connection with the negotiation of the sale of the Notes contain any untrue
statement of a material fact or omit a material fact necessary to make the
statements contained herein or therein not misleading in light of the
circumstances under which they were made. The assumptions used in preparation of
the projected financial statements of the Company were reasonable when made and
continue to be reasonable, and correctly apply the appropriate pro forma
adjustments to the respective historical financial information; such projections
project the business judgment of management of the Company when made, and are
good faith estimates and as such actual results may vary from such projections.
There is no agreement, restriction or other factual matter which the Company has
not disclosed to each Purchaser in writing which, so far as the Company can now
reasonably foresee, will have a material adverse impact on (i) the long-term
financial condition or prospects
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of the Company or (ii) the ability of the Company to perform its obligations
under this Agreement and the Notes.
Section 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 of its Subsidiaries 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 long-term
financial condition or prospects of the Company and its Subsidiaries taken as a
whole, or would impair the ability of the Company to perform its obligations
under this Agreement. Neither the Company nor any of its Subsidiaries 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 (i) the long-
term financial condition or prospects of the Company and its Subsidiaries taken
as a whole, or (ii) the ability of the Company to perform its obligations under
this Agreement and the Notes.
Section 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 and its Subsidiaries taken as
a whole, the Company, and each of its Subsidiaries as applicable, 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).
Section 2.8. Patents and Trademarks. Each of the Company and its
Subsidiaries 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.
Section 2.9. Sale is Legal and Authorized. The sale of the Notes by the
Company and compliance by the Company with the provisions of this Agreement and
of the Notes:
(a) have been duly authorized, executed and delivered and are within
the corporate powers of the Company; and
(b) are legal, valid, binding and enforceable in accordance with
their terms and will not violate any provisions of any law or any order of
any court or governmental authority or agency 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 of its Subsidiaries under the provisions of,
any agreement, charter instrument, by-law or other instrument to which the
Company or any of its Subsidiaries is a party or by which any of them or
their respective Properties may be bound.
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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 identified in
Schedule 2.3.
Section 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 of any term of any charter instrument
or by-law and neither the Company nor any of its Subsidiaries is in default of
any term under any agreement or other instrument with respect to borrowed money.
Neither the Company nor any of its Subsidiaries 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 might reasonably be expected to
have a materially adverse impact on (i) the long-term business or prospects of
the Company and its Subsidiaries taken as a whole or (ii) the ability of the
Company to perform its obligations under this Agreement and the Notes.
Section 2.11. Governmental Consent. No consent, withholding of objection on
the part of, approval or authorization of, or filing, registration or
qualification with, any governmental authority is required on the part of the
Company or any of its Subsidiaries in connection with the execution, delivery
and performance of this Agreement or the offer, issue, sale or delivery of the
Notes.
Section 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, 1995. The Company
and each of its Domestic Subsidiaries has filed or caused to be filed all
Federal, provincial, 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 such Subsidiary, as
applicable, has set aside on its books adequate reserves to the extent the
Company or such 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, 1995 have been discharged, reserved against or will not impair the
Company's ability to repay the Notes.
Section 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 Exchange Act or any
regulations issued pursuant thereto, including, without limitation, Regulations
T, U or X of the Board of Governors of the Federal Reserve System, 12 C.F.R.,
Chapter 11. Neither the Company nor any Subsidiary owns or intends to carry or
purchase any "margin stock" within the meaning of Regulation U. None of the
proceeds from the sale of the Notes will be used to
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purchase or refinance any borrowing the proceeds of which were used to purchase
any "security" within the meaning of the Exchange Act.
Section 2.14. Private Offering. Neither the Company nor Fleet Securities
Inc. (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) 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 30 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
Act.
Section 2.15. Foreign Assets Control Regulations, Etc. Neither the sale of
the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto.
Section 2.16. Status under Certain Statutes. Neither the Company nor any of
its Subsidiaries is subject to regulation under the Investment Company Act of
1940, as amended, the Public Utility Holding Company Act of 1935, as amended, or
the Federal Power Act, as amended.
Section 2.17. ERISA.
(a) Relationship of Vested Benefits to Pension Plan Assets. The present
aggregate value of all benefits vested under all "employee pension benefit
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, 2000, the last annual
valuation date, exceed the actuarial 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 Code, 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.
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(c) Reportable Events. Since December 31, 1990, neither any of the
Pension Plans nor any such trusts have been terminated, nor have there been any
"reportable events," as that 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 since the effective date of ERISA.
Section 2.18. Environmental Matters. Neither the Company nor any of its
Subsidiaries has knowledge of any claim or has received any notice of any claim,
and no proceeding has been instituted raising any claim, against the Company or
any of its Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other assets, alleging any
damage to the environment or violation of any Environmental Laws, except, in
each case, such as could not reasonably be expected to result in a material
adverse effect on (i) the Company and its Subsidiaries taken as a whole or (ii)
the ability of the Company to perform its obligations under this Agreement and
the Notes. Except as otherwise disclosed to each Purchaser in writing,
(a) neither the Company nor any of its Subsidiaries has knowledge of
any facts which would give rise to any claim, public or private, of
violation of Environmental Laws or damage to the environment emanating
from, occurring on or in any way related to real properties now or formerly
owned, leased or operated by any of them or any other assets or their use,
except, in each case, such as could not reasonably be expected to result in
a material adverse effect on the Company and its Subsidiaries taken as a
whole;
(b) neither the Company nor any of its Subsidiaries has stored any
Hazardous Materials on real properties now or formerly owned, leased or
operated by any of them and has not disposed of any Hazardous Materials in
a manner contrary to any Environmental Laws in each case in any manner that
could reasonably be expected to result in a material adverse effect on the
Company and its Subsidiaries taken as a whole, and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in compliance with
applicable Environmental Laws, except where failure to comply could not
reasonably be expected to result in a material adverse effect on the
Company and its Subsidiaries taken as a whole.
Section 3. Closing Conditions.
The obligation of each Purchaser to purchase and pay for the Notes to be
delivered to it at the closing shall be subject to the following conditions
precedent:
Section 3.1. Opinions of Counsel. Such Purchaser shall have received from
Signe S. Gates, Esq., General Counsel of the Company and Bingham Dana LLP,
special counsel to the Purchasers, the closing opinions described in Exhibits C
and D, respectively.
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Section 3.2. Warranties and Representations True as of Closing Date. (a)
The warranties and representations (a) of the Company 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 of its Subsidiaries 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, 1999 to and including the Closing Date.
Section 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.
Section 3.4. Officers' Certificate. Such Purchaser 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 as to
the Company.
Section 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 such Purchaser and its special counsel. Such Purchaser and
its special counsel shall have received copies of such documents and papers as
it or they may reasonably request in connection therewith, all in form and
substance reasonably satisfactory to such Purchaser and its special counsel.
Section 3.6. Sales To Other Purchasers. The Company shall have sold or
shall simultaneously sell to the other Purchasers (and shall have received or
simultaneously receive the purchase price for) the aggregate principal amount of
the Notes to be purchased by them.
Section 3.7. Private Placement Number. The Company shall have obtained
from Standard & Poor's Corporation and provided to such Purchaser a Private
Placement Number for the Notes.
Section 3.8. Legal Investment. The Company acknowledges that each Note to
be purchased by such Purchaser must qualify as a legal investment for life
insurance companies under the New York Insurance Law and any other law
applicable to it (other than under any "basket" or leeway provisions thereof),
and the Company will deliver to such Purchaser such officer's certificates or
other evidence as it may reasonably 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); provided
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that after payment or prepayment in full of any Note, the holder thereof shall
surrender such Note for cancellation, reasonably promptly after such payment or
prepayment to the Company at its principal office.
Section 5. Prepayments.
Section 5.1. Required Payments. On November 21, 2006, November 21, 2007
and November 21, 2008 the Company will pay $20,000,000 principal amount (or such
lesser principal amount as shall then be outstanding) of the Notes at par and
without payment of the Makewhole Price or any premium, provided that upon any
partial payment of the Notes pursuant to Section 5.2 the principal amount of
each required payment of the Notes becoming due under this Section 5.1 on or
after the date of such payment shall be reduced in the inverse order of the
maturity thereof, and provided, further, that any outstanding principal amount
of the Notes shall be paid on November 21, 2008.
Section 5.2. Option to Prepay. The Company, at its sole discretion, may
make optional prepayments of the Notes in whole or in part, in integral
multiples of $1,000,000, at any time at a price equal to the sum 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 principal amount of the Notes being
prepaid.
Section 5.3. Notice of Optional Prepayment. The Company will give notice
of any optional prepayment of the Notes pursuant to Section 5.2 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
Makewhole Price, 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
calculation of the Makewhole Price.
Section 5.4. Partial Payment Pro Rata. If there is more than one Note
outstanding at any time the aggregate principal amount of each 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.
Section 6. Registration; Substitution of Notes.
Section 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
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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.
Section 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 $500,000 (except as may be
necessary to reflect any principal amount not evenly divisible by $500,000), 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.
Section 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,
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided, if the holder of the Note is a
Purchaser or an institutional investor, its own unsecured 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:
Section 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 and
its Subsidiaries taken as a whole, the Company and each such 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)
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which, if unpaid, might result in the creation of a Lien upon its Property
not permitted by Section 7.6,
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, unless contesting in
good faith in accordance with the provisions hereof, notwithstanding the
foregoing provisions of this Section 7.1, the Company and each such 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.
Section 7.2. Maintenance of Properties, Insurance, Corporate Existence and
Compliance with Law. (a) Except where the failure to do so would not have a
material adverse impact on the Company and its Subsidiaries taken as a whole,
the Company will, and will cause each of its Subsidiaries to:
(i) Property -- maintain its Property in good condition,
reasonable wear and tear excepted, and make all necessary renewals,
replacements, additions, betterments and improvements thereto required to
keep such Property in good condition and in compliance with all
requirements of law;
(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 of its Subsidiaries, as the case may be, shall reasonably
deem necessary; and maintain such other insurance as may be required by
applicable 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 -- 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.
(b) The Company will and will cause each of its Subsidiaries to comply
with all laws, ordinances or governmental rules or regulations to which each of
them is subject, including, without limitation, Environmental Laws, and, except
as disclosed on Schedule 7.2(b), will obtain and maintain in effect all
licenses, certificates, permits, franchises and other governmental
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authorizations necessary to the ownership of their respective properties or to
the conduct of their respective businesses, in each case to the extent failure
to so comply, maintain or obtain could, individually or in the aggregate,
reasonably be expected to have a material adverse effect on (i) the Company or
any of its Subsidiaries or (ii) the ability of the Company to perform its
obligations under this Agreement and the Notes.
Section 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 of each 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.
Section 7.4. Sale of Assets or Merger.
(a) Sale of Assets -- The Company will not and will not 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 and will not 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 of its
Subsidiaries may merge or consolidate with another Person or business, if the
Company or such Subsidiary, as the case may be, is the surviving corporation, or
(iii) the Company or any of its Subsidiaries may consolidate with or merge with
another Person or business in a transaction where the Company or the 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, pursuant to documentation in form and substance reasonably acceptable
to the holders of the Notes, (2) the continuing or surviving entity shall have
caused to be delivered to each holder of the Notes an opinion of nationally
recognized independent counsel, or other independent counsel reasonably
satisfactory to the holders of the Notes, to the effect that all agreements or
instruments effecting such assumption are enforceable in accordance with their
terms and comply with the terms hereof, (3) immediately after such merger or
consolidation, no Default or Event of Default shall exist and (4) the continuing
or surviving entity shall be a corporation organized under the laws of the
United States or any state thereof.
Section 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
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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 7.5 hereto.
Section 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;
(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, either
(1) not delinquent, or (2) being contested in good faith by appropriate
proceedings;
(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
perfected 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; or
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(vii) other liens, that in the aggregate, when combined with all
Indebtedness of Subsidiaries permitted to exist by Section 7.7(a) would
not, at any time, exceed 15% of Consolidated Tangible Assets determined as
of the end of the then most recently completed fiscal year of the Company.
(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, its
Subsidiaries and its 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).
Section 7.7. Indebtedness. (a) The Company will not permit any of its
Subsidiaries to, directly or indirectly incur, create, assume or permit to exist
any Indebtedness unless (i) all Indebtedness, plus the aggregate liquidation
preference or redemption value of all Preferred Stock, of Subsidiaries (other
than Indebtedness owing to, or Preferred Stock held by, the Company or other
Subsidiaries, and other than the Nova Scotia Notes), plus (ii) all Indebtedness
of the Company secured by Liens permitted to exist by Section 7.6(a)(vii), shall
not at any time exceed 15% of Consolidated Tangible Assets determined as of the
end of the then most recently completed fiscal year of the Company.
(b) The Company shall not, and shall not permit any Subsidiary to, make
any Investment in, or otherwise transfer any Property to or guaranty or
otherwise assume or be liable for any Indebtedness or other obligations of,
3031786 Nova Scotia Company so long as the Nova Scotia Notes shall be
outstanding, provided, however, that this Section 7.7(b) shall not (i) prevent
or restrict 3031786 Nova Scotia Company from continuing to operate as a special
purpose financing vehicle company in compliance with the laws and regulations of
Canada and the United States of America or (ii) prevent or restrict the Company
or any Subsidiary from transferring funds to 3031786 Nova Scotia Company in an
amount equal to, but not more than, the amount necessary (x) to pay interest on
and fees in respect of, or repay the principal of, the Nova Scotia Notes in
accordance with the terms thereof, and (y) to pay fees and expenses of 3031786
Nova Scotia Company so long as it operates solely as a special purpose financing
vehicle company in compliance with the laws and regulations of Canada and the
United States of America. The amount necessary to make any such payment, or to
pay any such fees or expenses, may not be so transferred more than five Business
Days before the due date thereof, except that up to $500,000 of any such amount
may be so transferred more than five Business Days before such due date.
Section 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 $201,000,000
plus 50% of Consolidated Net Income for each fiscal year beginning after
December 31, 1999 (but without deduction for any fiscal year in which
Consolidated Net Income is a negative amount), with the annual
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adjustments to be applicable as of December 31, 2000 and as of the end of each
subsequent fiscal year.
Section 7.9. Fixed Charges Coverage Ratio. The Company will not, at any
time, permit the Fixed Charges Coverage Ratio to be less than 1.90 to 1.
Section 7.10. Consolidated Leverage Ratio. The Company will not permit the
Consolidated Leverage Ratio to exceed (a) 1.55 to 1 at any time on or prior to
December 31, 2001, and (b) 1.35 to 1 at any time on or after January 1, 2002.
Section 7.11. ERISA Compliance. Neither the Company nor any Related Person
will at any time permit any Pension Plan maintained by it to:
(a) engage in any "prohibited transaction" as such term is defined
in Section 4975 of the Code or described in Section 406 of ERISA;
(b) incur any "accumulated funding deficiency" as such term is
defined in Section 302 of ERISA, whether or not waived; or
(c) terminate under circumstances which could result in the
imposition of a Lien on the Property of the Company or any of its
Subsidiaries pursuant to Section 4068 of ERISA.
Section 7.12. Transactions with Affiliates. Neither the Company nor any of
its Subsidiaries 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 of its Affiliates 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.
Section 7.13. 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.
Section 7.14. Acquisition of Notes. Neither the Company nor any Subsidiary
nor Affiliate thereof 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 any of such parties acquires any Note(s), the holder shall
surrender such Note for cancellation, reasonably promptly after request by the
Company, in which case such Notes shall thereafter be cancelled and no Notes
shall be issued in substitution therefor.
Section 7.15. Lines of Business. Neither the Company nor any of its
Subsidiaries will engage in any line of business if as a result thereof the
business of the Company and its
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Subsidiaries taken as a whole would be substantially different from what it was
at December 31, 1999 as described in the Private Placement Memorandum.
Section 7.16. Restricted Payments and Restricted Investments. The Company
shall not, and shall not permit any of its Subsidiaries to, at any time make or
permit to exist any loans or advances to, or purchase any stock, other
securities or evidences of indebtedness of, or make or permit to exist any
Investment or acquire any interest whatsoever in, any other Person, except
(a) the purchase of the Company's common or preferred stock,
(b) loans or advances made by the Company or any of its Subsidiaries
(in addition to loans or advances permitted by clauses (d) and (e) of this
Section 7.16) not in excess of $10,000,000 aggregate principal amount for
the Company and its Subsidiaries at any time outstanding,
(c) Investments of its cash by the Company or any such Subsidiary in
(i) marketable direct obligations of, or marketable obligations guaranteed
by, the United States of America, or Canada, or marketable obligations of
any instrumentality or agency thereof the payment of the principal and
interest of which is unconditionally guaranteed by the United States of
America or Canada, (ii) certificates of deposit or other obligations issued
by, or bankers' acceptances of, any bank or trust company organized under
the laws of the Federal Republic of Germany, France, the United Kingdom,
Japan, Canada or the United States of America or any state thereof
(including foreign branches of any such bank or trust company) and having
capital, surplus and undivided profits in excess of $100,000,000, (iii)
open market commercial paper with a maturity not in excess of 270 days from
the date of acquisition thereof and having the highest credit rating by
either Standard & Poor's Corporation or Moody's Investors Service, Inc., or
(iv) in the case of any Foreign Subsidiary of the Company, but only with
respect to countries in which a Subsidiary exists, such Investments of a
comparable quality and term to the other Investments permitted by this
clause (c) as are usually made in the jurisdiction or jurisdictions in
which the business of such Foreign Subsidiary is principally conducted by
prudent corporate investors in like circumstances,
(d) loans or advances made by the Company to any of its Subsidiaries
and loans or advances made by any Subsidiary of the Company to the Company
or another such Subsidiary,
(e) purchases of stock or other Securities of any corporations,
associations or other business entities; provided, however, that the
aggregate cost to, or Fair Market Value of the consideration paid by, the
Company and its Subsidiaries for such stock or Securities of all such
corporations, associations or other business entities shall not exceed the
sum of (A) $25,000,000, plus (B) 50% of Consolidated Net Income for the
period commencing on December 31, 1999 and ending on the date of such stock
or Securities purchase (or minus 100% of Consolidated Net Income for such
period if Consolidated Net Income for such period is a loss), or
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(f) such other Investments in an aggregate amount not to exceed
$250,000 as the Company or a Subsidiary may elect, in its sole discretion.
Section 7.17. Limitation on Restrictions on Dividends by
Subsidiaries, Etc. Except as provided in the Warrant Agreement, dated August
25, 1999, among 3031786 Nova Scotia Company, 3032350 Nova Scotia Limited and
Pricewaterhouse Coopers LLP and the Shareholders Agreement, dated August 25,
1999, among the Company, 3031786 Nova Scotia Company, and 3032350 Nova Scotia
Limited, the Company shall not permit any of its Subsidiaries or other Person in
which it or any of its Subsidiaries has an equity investment to be or become
subject to any restriction (except restrictions applicable to corporations
generally), whether arising by agreement, or by the articles of incorporation,
bylaws or other constituent documents of such Subsidiary or other Person or
otherwise, on the right of such Subsidiary or other Person from time to time to
(x) declare and pay Stock Payments with respect to capital stock or
other equity interests of such Subsidiary or other Persons owned by the
Company from time to time,
(y) make loans or advances to the Company or any of its Subsidiaries,
or
(z) transfer any of its properties or assets to the Company or any of
its Subsidiaries;
provided, however, that such restriction may be permitted with respect to any
Subsidiary or any such other Person in which the Company or a Subsidiary
directly or indirectly owns less than 80% of the Voting Stock and in which the
Company's or such Subsidiary's cumulative Investment since the Closing Date (in
terms of cash invested therein and/or assets contributed thereto) (i)
individually is less than 10% of the book value of the assets of the Company and
its Consolidated Subsidiaries, and (ii) when taken together with the aggregate
amount of all Investments made since the Closing Date in all such Subsidiaries
and other Persons, is less than 15% of the book value of the assets of the
Company and its Consolidated Subsidiaries (each such determination of book value
to be as of the date of the last balance sheet of the Company required to be
delivered pursuant to Section 8.1(a) or Section 8.1(b)).
Section 8. Information as to Company.
Section 8.1. Financial and Business Information. The Company will
deliver to each original Purchaser, if at the time it or its nominee holds any
Notes (or if it is 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
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(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:
(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 GAAP 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 Report -- promptly upon receipt thereof, one copy of each
other report submitted to the Company or any of its Subsidiaries 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 or
any Subsidiary to stockholders generally, and of each periodic report and
any registration statement filed by the Company or any Subsidiary with any
securities exchange or securities regulatory agency (including, without
limitation, the Securities and Exchange Commission or any successor
agency);
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(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 (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 Code or as 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 of its Subsidiaries 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 --
(i) prompt notice of the commencement of any action, suit or
proceeding at law or in equity or by or before any court or other
governmental instrumentality or agency
(A) 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 (1) $1,000,000 for any single proceeding or (2)
$5,000,000 when taken together with all such actions, suits or
proceedings commenced in the current fiscal year of the Company;
provided, however, that after giving notice of such claims
aggregating at least $5,000,000 in any fiscal year of the
Company, 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
(B) if the results thereof may have a material adverse
effect on the business or condition of the Company and its
Subsidiaries taken as a whole, and
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(ii) with respect to any such action, suit or proceeding,
such documentation as the holder of any Note reasonably requests; and.
(i) Requested Information -- with reasonable promptness, such
data and information as from time to time may be reasonably requested.
Section 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 thereof 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.
Section 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.
Section 8.4. Inspection. The Company will permit the representatives
of each Purchaser of Notes, so long as it (or its nominees) holds any Notes, or
the representatives of any other institutional holder of the Notes, at each such
holder's expense, to visit and inspect any of the Properties of the Company or
any of its Subsidiaries, 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.
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Section 9. Events of Default.
Section 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 or Makewhole
Price 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) Financial Covenant Defaults -- default in the performance of
or compliance with any term contained in Sections 7.7, 7.8, 7.9 or 8.1(f);
(d) Other Defaults -- failure of the Company 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;
(e) 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;
(f) Default on Other Indebtedness -- a default or defaults shall
have occurred under any other 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;
(g) 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;
(h) 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;
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(i) 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;
(j) Undischarged Final Judgments -- final judgment or judgments
which are not subject to appeal for the payment of money aggregating in
excess of $5,000,000 is or are outstanding against one or more of the
Company or any Subsidiary 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
of its Subsidiaries; or
(k) Change of Control -- the occurrence of a Change of Control.
Section 9.2. Default Remedies. (a) If an Event of Default described
in Section 9.1(g), 9.1(h) or 9.1(i) 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
all Notes (exclusive of Notes owned by the Company, its Subsidiaries and its
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 sum of (x) the
principal of and interest accrued on such Notes and (y) the Makewhole Price
applicable at such time to such Notes.
(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.
Section 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 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, if all sums payable under the Notes and this
Agreement (except principal, interest or Makewhole Price which has become due
solely by reason of such declaration) have been duly paid and each and every
other Default or
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Event of Default shall have been made good, cured or waived pursuant to Section
11.5. No such annulment shall extend to or waive any subsequent Default or Event
of Default.
Section 10. Interpretation of This Agreement.
Section 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:
"Act" -- the Securities Act of 1933, as amended.
"Affiliate" -- as to any Person means a Person other than a Subsidiary
(1) which directly or indirectly controls, or is controlled by, or is under
common control with, such Person, (2) which owns 5% or more of the Voting Stock
of such Person, or 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 such other Person. 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.
"Agreement" -- shall mean this Agreement as amended, modified or
restated from time to time.
"Business Day" -- any day other than a Saturday, Sunday or a U.S.
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.
"Change of Control" -- shall mean any Person or group of Persons (as
used in Sections 13 and 14 of the Exchange Act, and the rules and regulations
thereunder) shall have become the beneficial owner (as defined in Rules 13d-3
and 13d-5 promulgated by the Securities and Exchange Commission (the "SEC")
under the Exchange Act) of 30% or more of the Company's outstanding Voting Stock
provided, however, that members of the Barnes family, Fleet National Bank and
any of its affiliates, successors and assigns (to the extent that it owns stock
in which a member of the Barnes family has an interest), the Barnes Group Inc.
Guaranteed Stock Plan and Fleet National Bank, in its capacity as trustee under
such plan, or its successor or assigns in its capacity as trustee under such
plan, and employees of the Company (except employees of the Company who became
beneficial owners of more than 10% of the Company's Voting Stock prior to
becoming employees of the Company) shall not be counted as a Person for purposes
hereof.
"Closing Date" -- Section 1.2.
"Code" -- the Internal Revenue Code of 1986, as amended.
"Company" - the introductory sentence hereof.
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"Consolidated Assets" - shall mean the total assets of the Company and its
Subsidiaries which would be shown as assets on a consolidated balance sheet of
the Company and its Subsidiaries as of such time prepared in accordance with
GAAP, after eliminating all amounts properly attributable to minority interests,
if any, in the stock and surplus of Subsidiaries.
"Consolidated EBITR" - means, for any period, the sum of (a) Consolidated
Net Income for such period and (b) to the extent, and only to the extent, that
such aggregate amount was deducted in the computation of such Consolidated Net
Income, the aggregate amount of (i) Interest Charges, (ii) income tax expense
and (iii) Lease Rentals.
"Consolidated Leverage Ratio" - means, at any time, the ratio of (a) the
aggregate amount of all Indebtedness of the Company and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP, outstanding at such
time to (b) Consolidated Net Worth determined at such time.
"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 generally accepted accounting principles which are consistent
with the principles promulgated or adopted by the Financial Accounting Standards
Board and its predecessors, plus any negative (less any positive) foreign
currency translation adjustments shown in the equity section of such a
consolidated balance sheet pursuant to statement of Financial Accounting
Standards No. 52; provided, however, that such principles shall be applied
without giving effect to Statement of Financial Account Standards No. 106.
"Consolidated Subsidiary" -- shall mean any Subsidiary the accounts of
which shall at the time in question be consolidated with the Company.
"Consolidated Tangible Assets" shall mean, at any time, Consolidated Assets
at such time less
(a) patents, copyrights, trademarks, trade names, service marks,
brand names, franchises, goodwill, experimental expenses and other similar
intangibles;
(b) unamortized debt discount and expense; and
(c) all other Property which would be classified as intangible under
GAAP.
"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 under the
laws of the United States or one of the state thereof.
-26-
"Environmental Laws" -- shall mean any and all Federal, provincial, state,
local, and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, concessions, grants, franchises, licenses, agreements
or governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to, those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" -- means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Exchange Act" -- means the Securities Exchange Act of 1934, as amended.
"Event of Default" -- Section 9.1.
"Fair Market Value" -- means, at any time and with respect to any property,
the sale value of such property that would be realized in an arm's-length sale
at such time between an informed and willing buyer and an informed and willing
seller (neither being under a compulsion to buy or sell).
"Fixed Charges Coverage Ratio" - means, at any time, the ratio of (a)
Consolidated EBITR for the period of four consecutive fiscal quarters ending on,
or most recently ended prior to, such time to (b) the sum of Lease Rentals plus
Interest Charges for such period.
"Foreign Subsidiary" -- shall mean a Subsidiary organized outside the
United States.
"GAAP" -- means generally accepted accounting principles which are
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors.
"Hazardous Material" -- means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"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 such Person or any of its Subsidiaries or acquired by such Person
or any of its Subsidiaries subject thereto, whether or not the Indebtedness
secured thereby shall have been assumed;
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(c) all guarantees, endorsements and other contingent obligations, in
respect of Indebtedness of others, including (i) 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 (ii) any obligation of any partnership in which
such Person or any of its Subsidiaries 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 such Person to such Person or to another Subsidiary of such
Person or (ii) such Person to a Subsidiary of such Person;
provided, however, that in the case of debt of a Subsidiary not wholly owned by
such Person and/or another Subsidiary, Indebtedness shall include a percentage
of such debt equal to the percentage of the total minority ownership.
"Interest Charges" - means, with respect to any period, the sum (without
duplication) of the following (in each case, eliminating all offsetting debits
and credits between the Company and its Subsidiaries and all other items
required to be eliminated in the course of preparation of consolidated financial
statements of the Company and its Subsidiaries in accordance with GAAP): (a) all
interest in respect of Indebtedness of the Company and its Subsidiaries
(including imputed interest on Capitalized Lease obligations) deducted in
determining Consolidated Net Income for such period, together with all interest
capitalized or deferred during such period and not deducted in determining
Consolidated Net Income for such period, and (b) all debt discounted and expense
amortized or required to be amortized in the determination of Consolidated Net
Income for such period.
"Investment" -- means any investment, made in cash or by delivery of
Property, by a Person or any of its Subsidiaries (i) in any other Person,
whether by acquisition of stock, Indebtedness or other obligation or Security,
or by loan, guaranty, advance, capital contribution or otherwise, or (ii) in any
Property.
"Lease Rentals" - means, with respect to any period, the sum of the minimum
amount of rental and other obligations required to be paid during such period by
the Company or any Subsidiary as lessee under all leases of real or personal
property (other than Capitalized Leases), except any such rental or other
obligations paid to the Company or a Subsidiary as lessor, excluding any amounts
required to be paid by the lessee (whether or not therein designated as rental
or additional rental) (a) which are on account of maintenance and repairs,
insurance, taxes, assessments, water rates and similar charges, or (b) which are
based on profits, revenues or sales realized by the lessee from the leased
property or otherwise based on the performance of the lessee.
"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
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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 any Note pursuant to Section 5.2 or repayment of any Note which has become or
been declared immediately due and payable pursuant to Section 9.2, means, an
amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Note over the
amount of such Called Principal, provided that the Makewhole Price may in no
event be less than zero. For the purposes of determining the Makewhole Price,
the following terms have the following meanings:
"Called Principal" -- means, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to Section 5.2 or has become or
is declared to be immediately due and payable pursuant to Section 9.2, as
the context requires.
"Discounted Value" -- means, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a discount
factor (applied on the same periodic basis as that on which interest on the
Notes is payable) equal to the Reinvestment Yield with respect to such
Called Principal.
"Reinvestment Yield" -- means, with respect to the Called Principal of
any Note, 0.50% over the yield to maturity implied by the yields reported,
as of 10:00 A.M. (New York City time) on the second Business Day preceding
the Settlement Date with respect to such Called Principal for actively
traded U.S. Treasury Securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date
(as shown on page "PX1" of the Bloomberg Financial Markets Service or such
other display as may replace the Bloomberg Financial Markets Service);
provided, however, that if there is no U.S. Treasury security which has a
maturity equal to the Remaining Average Life of the Notes, such yield shall
be obtained by interpolating linearly between (1) the U.S. Treasury
security for which a yield is given with the duration closest to and
greater than the Remaining Average Life and (2) the U.S. Treasury security
for which a yield is given with the duration closest to and less than the
Remaining Average Life, except that if the Remaining Average Life is less
than one year, the yield on actively traded U.S. Treasury securities
adjusted to a constant maturity of one year shall be used. The
Reinvestment Yield will be rounded to two decimal places.
"Remaining Average Life" -- means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth year)
obtained by dividing (i) such Called Principal into (ii) the sum of the
products obtained by multiplying (a) the principal component of each
Remaining Scheduled Payment with respect to such Called Principal by (b)
the number of years (calculated to the nearest one-twelfth year) that will
elapse between the Settlement Date with respect to such Called Principal
and the scheduled due date of such Remaining Scheduled Payment.
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"Remaining Scheduled Payments" -- means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date, provided that if such Settlement Date is not a date
on which interest payments are due to be made under the terms of the Notes,
then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to Sections 5.2 or
9.2.
"Settlement Date" -- means, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant
to Section 5.2 or has become or is declared to be immediately due and
payable pursuant to Section 9.2, as the context requires.
"Notes" -- Section 1.1.
"Nova Scotia Notes" - means the 7.66% Senior Notes due November 12, 2007
and the 7.80% Senior Notes due November 12, 2010 issued by 3031786 Nova Scotia
Company, and any extensions or renewals thereof, provided that the principal
amount of Indebtedness evidenced thereby is not increased.
"Pension Plans" -- Section 2.17(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.
"Preferred Stock" - means capital stock of any class of any Person which is
preferred as to the payment of dividends, or the payment of distributions upon
liquidation of such Person, to any other class of capital stock of such Person.
"Private Placement Memorandum" -- the Confidential Information Memorandum
dated September 2000 prepared by Fleet Securities Inc., acting as agent for the
Company.
"Property" -- any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible.
"PTE" - Section 1.3(b).
"Purchaser" - means each of the Persons listed on Schedule A hereto.
"Related Person" -- any Person (whether or not incorporated) which is under
common control with the Company within the meaning of Section 414(c) of the Code
or Section 4001(b) of ERISA.
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"Revolving Credit Agreement" -- means the $150,000,000 Revolving Credit,
dated as of December 1, 1991, as amended from time to time, among the Company,
Mellon Bank, N.A., as Agent, and the banks signatory thereto.
"Security" -- shall have the same meaning as in Section 2(l) of the Act.
"Senior Management" -- shall mean any of the following officers of the
Company, as the context requires: President, Chief Financial Officer, Treasurer
or General Counsel.
"Source" - Section 1.3(b).
"Stock Payment" -- by any Person shall mean any dividend, distribution or
payment of any nature (whether in cash, securities, or other property) on
account of or in respect of any shares of the capital stock or other equity
interests (or warrants, options or rights therefor) of such Person, including,
but not limited to, any payment on account of the purchase, redemption,
retirement, defeasance or acquisition of any shares of the capital stock or
other equity interests (or warrants, options or rights therefor) of such Person,
in each case regardless of whether required by the terms of such capital stock
or other equity interests (or warrants, options or rights) or any other
agreement or instrument.
"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.
"Voting Stock" -- shall mean, with respect to any corporation, the capital
stock of such corporation having the power to vote for a majority of the board
of directors of such corporation under ordinary circumstances and, with respect
to any other Person, equity interests sufficient to control such Person under
ordinary circumstances or sufficient to constitute the right to receive a
majority of the profits of such Person.
Section 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, unless otherwise
specified.
Section 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.
Section 10.4. Governing Law. This Agreement and the Notes shall be governed
by and construed in accordance with Connecticut law.
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Section 11. Miscellaneous.
Section 11.1. Notices. All notices provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(a) if to any Noteholder, at the address specified for such
communications in Schedule A, or at such other address as it shall have
specified to the Company in writing; and
(b) if to the Company at the address therefor set forth in Section
7.3 hereof to the attention of "Treasurer," or at such other address as
the Company shall have specified to the holder of each Note in writing.
Notices under this Section 11 will be deemed given only when actually
received.
Section 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 the
Purchasers at the closing of their purchase of the Notes (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to any Purchaser, may be reproduced by such
Purchaser by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process and such Purchaser 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 a Purchaser in the regular course of business) and that
any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
Section 11.3. Survival. All warranties, representations, and covenants
made by the Company herein or in 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 the Purchasers and shall survive the
delivery to the Purchasers of the Notes regardless of any investigation made by
the Purchasers or on their behalf. All statements in any such certificate or
other instrument shall constitute warranties and representations by the Company
hereunder.
Section 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 the Purchaser 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 any
Purchaser or its successor or assign.
-32-
Section 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, its Subsidiaries and its Affiliates); provided that no such amendment
or waiver of any of the provisions of Sections 1 through 4 shall be effective as
to any Purchaser unless consented to by such Purchaser 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.
Section 11.6. Powers and Rights Not Waived; Remedies Cumulative. No
delay or failure on the part of the holder of any Note in the exercise of any
power or right shall operate as a waiver thereof; nor shall any single or
partial exercise of the same preclude any other or further exercise thereof, or
the exercise of any other power or right, and the rights and remedies of the
holder of any Note are cumulative to, and are not exclusive of, any rights or
remedies any such holder would otherwise have.
Section 11.7. Severability. Should any part of this Agreement for any
reason be declared invalid or unenforceable, such decision shall not affect the
validity or enforceability of any remaining portion, which remaining portion
shall remain in force and effect as if this Agreement had been executed with the
invalid or unenforceable portion thereof eliminated and it is hereby declared
the intention of the parties hereto that they would have executed the remaining
portion of this Agreement without including therein any such part, parts or
portion which may, for any reason, be hereafter declared invalid or
unenforceable.
Section 11.8. Payment. The Company will not directly or indirectly
pay or cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, or grant any security, to any holder of
Notes as consideration for or as an inducement to the entering into by the
holder of Notes of any waiver or amendment of any of the terms and provisions
hereof unless such remuneration is concurrently paid, or security is
concurrently granted, on the same terms, ratably to each holder of Notes then
outstanding even if such holder did not consent to such waiver or amendment.
Section 11.9. 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.
Section 11.10. Confidentiality. For the purpose of this Section 11.10,
"Confidential Information" means information delivered to a Purchaser by or on
behalf of the Company or any of its Subsidiaries in connection with the
transactions contemplated by or otherwise pursuant to this Agreement that is
proprietary in nature and that, with respect to information delivered after
-33-
the Closing Date, is clearly marked or labeled or otherwise adequately
identified when received by a Purchaser as being confidential information of the
Company or any of its Subsidiaries; provided that such term does not include
information that (i) is generally known to the public, (ii) subsequently becomes
publicly known through no act or omission by a Purchaser or any person action on
its behalf, (iii) otherwise becomes known to a Purchaser other than through
disclosure by the Company or any Subsidiary so long as the source of such
information is not actually known by such Purchaser to be bound by any
confidentiality agreement with respect to such information. Each Purchaser will
use its best efforts to maintain the confidentiality of such Confidential
Information in accordance with procedures adopted by such Purchaser in good
faith to protect confidential information of third parties delivered to it;
provided that it may deliver or disclose such Confidential Information to its
directors, officers, employees, agents, professional consultants and affiliates;
any Person to which it sells or offers to sell such Note or any part thereof or
any participation therein, provided that such Person has entered into a
confidentiality agreement with the Company similar to that contained in this
Section 11.10; any Purchaser or holder of any Note; any Person from which it
offers to purchase any security of the Company, provided that such Person has
entered into a confidentiality agreement with the Company similar to that
contained in this Section 11.10; any federal or state regulatory authority
having jurisdiction over a Purchaser; the National Association of Insurance
Commissioners or any similar organization, or any nationally recognized rating
agency that requires access to information about a Purchaser's investment
portfolio; or any other Person to which delivery or disclosure may be necessary
or appropriate to effect compliance with any law, rule, regulation, or order
applicable to a Purchaser, in response to any subpoena or other legal process or
informal investigative demand, in connection with any litigation to which a
Purchaser is a party or in order to protect the investment of any holder in any
Note. Each holder of a Note, by its acceptance of a Note, will be deemed to have
agreed to be bound by and to be entitled to the benefits of this Section 11.10
as though it were a party to this Agreement.
Section 11.11. Headings, Etc. Headings used in this Agreement have
been inserted for convenience of reference only; and are not to be considered a
part hereof or thereof.
[Signatures Appear on Following Page]
-34-
If this Agreement is satisfactory, please so indicate by signing the
acceptance at the foot of a counterpart of this Agreement and return such
counterpart to the Company on or before 5:00 P.M., on November 21, 2000,
whereupon this Agreement will become binding among us in accordance with its
terms.
Very truly yours,
Barnes Group Inc.
By /s/ John J. Locher
--------------------------------
Name: John J. Locher
---------------------------
Title: Vice President, Treasurer
--------------------------
The Foregoing is hereby agreed to as of the date hereof.
The Prudential Insurance Company of America
By /s/ Kevin J.Kraska
-------------------------------
Name: Kevin J. Kraska
Title: Vice President
Allstate Life Insurance Company
By: /s/ Robert B. Bodett
------------------------------
Name: Robert B. Bodett
Title: Portfolio Manager
By /s/ David A. Walsh
-------------------------------
Name: David A. Walsh
Title: Assistant Vice President
American Heritage Life Insurance Company
By /s/ Robert B. Bodett
------------------------------
Name: Robert B. Bodett
Title: Portfolio Manager
By /s/ David A. Walsh
-------------------------------
Name: David A. Walsh
Title: Assistant Vice President
Nationwide Life Insurance Company
By /s/ Mark W. Poeppelman
-------------------------------
Name: Mark W. Poeppelman
Title: Associate Vice President
Nationwide Life and Annuity Insurance Company
By /s/ Mark W. Poeppelman
-------------------------------
Name: Mark W. Poeppelman
Title: Associate Vice President
Nationwide Indemnity Company
By /s/ Mark W. Poepplman
-------------------------------
Name: Mark W. Poepplman
Title: Associate Vice President
-35-
EXHIBIT A
INFORMATION RELATING TO PURCHASERS
================================================================================
Purchaser Name ALLSTATE LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Name in Which Note is Registered ALLSTATE LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Note Registration Number; R-1; $5,000,000
Principal Amount R-2; $5,000,000
- --------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information BBK = Harris Trust and Savings Bank
ABA #071000288
BNF = Allstate Life Insurance Company
Collection Account #168-117-0
ORG = Barnes Group Inc.
Re: (see "Accompanying Information" below)
- --------------------------------------------------------------------------------
Accompanying Information Name of Company: Barnes Group Inc.
Description of
Security: 8.59% Senior Notes
due November 21, 2008
Security Number: 067806 D@ 5
Due Date and Application (as among
principal, premium and interest) of the
payment being made:
- --------------------------------------------------------------------------------
Allstate Insurance Company
Address for Notices Related to Investment Operations - Private Placements
Payments 3075 Sanders Road, STE G4A
Northbrook, IL 60062-7127
Telephone: (847) 402-2769
Telecopy: (847) 326-5040
- --------------------------------------------------------------------------------
Address for All other Notices Allstate Life Insurance Company
Private Placements Department
3075 Sanders Road, STE G3A
Northbrook, IL 60062-7127
Telephone: (847) 402-8922
Telecopy: (847) 402-3092
================================================================================
-2-
================================================================================
Purchaser Name ALLSTATE LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Signature Block Format ALLSTATE LIFE INSURANCE COMPANY
By:____________________________
Name:
Title:
By:____________________________
Name:
Title:
- --------------------------------------------------------------------------------
Citibank, Federal Savings Bank
Instructions re Delivery of Notes U.S. Custody & Employee Benefit Trust
500 W. Madison Street
Floor 6, Zone 4
Chicago, Illinois 60661-2591
Attention: Pam Jost
For Allstate Life Insurance
Company/Safekeeping Account No. 846627
- --------------------------------------------------------------------------------
36-2554642
Tax Identification Number
================================================================================
-3-
================================================================================
Purchaser Name AMERICAN HERITAGE LIFE INSURANCE
COMPANY
- --------------------------------------------------------------------------------
Name in Which Note is Registered AMERICAN HERITAGE LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Note Registration Number; R-3; $5,000,000
Principal Amount
- --------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information BBK = Harris Trust and Savings Bank
ABA #071000288
BNF = American Heritage Life Insurance
Company Collection Account
#172-504-3
ORG = Barnes Group Inc.
Re: (see "Accompanying Information"
below)
- --------------------------------------------------------------------------------
Accompanying Information Name of Company: Barnes Group Inc.
Description of
Security: 8.59% Senior Notes
due November 21, 2008
Security Number: 067806 D@ 5
Due Date and Application (as among
principal, premium and interest) of the
payment being made:
- --------------------------------------------------------------------------------
Allstate Insurance Company
Address for Notices Related to Investment Operations - Private Placements
Payments 3075 Sanders Road, STE G4A
Northbrook, IL 60062-7127
Telephone: (847) 402-2769
Telecopy: (847) 326-5040
- --------------------------------------------------------------------------------
Address for All other Notices Allstate Life Insurance Company
Private Placements Department
3075 Sanders Road, STE G3A
Northbrook, IL 60062-7127
Telephone: (847) 402-8922
Telecopy: (847) 402-3092
================================================================================
-4-
================================================================================
Purchaser Name AMERICAN HERITAGE LIFE INSURANCE
COMPANY
- --------------------------------------------------------------------------------
Signature Block Format AMERICAN HERITAGE LIFE INSURANCE COMPANY
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
- --------------------------------------------------------------------------------
Citibank, Federal Savings Bank
Instructions re Delivery of Notes U.S. Custody & Employee Benefit Trust
500 W. Madison Street
Floor 6, Zone 4
Chicago, Illinois 60661-2591
Attention: Pam Jost
For American Heritage Life Insurance
Company/Safekeeping Account No. 846928
- --------------------------------------------------------------------------------
59-0781901
Tax Identification Number
================================================================================
-5-
================================================================================
Purchaser Name NATIONWIDE LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Name in Which Note is Registered NATIONWIDE LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Note Registration Number; R-4; $4,000,000
Principal Amount
- --------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information The Bank of New York
ABA #021-000-018
BNF: IOC566
F/A/O Nationwide Life Insurance Company
Attn: P & I Department
Re: (see "Accompanying Information" below)
- --------------------------------------------------------------------------------
Accompanying Information Name of Company: Barnes Group Inc.
Description of
Security: 8.59% Senior Notes
due November 21, 2008
Security Number: 067806 D@ 5
Due Date and Application (as among
principal, premium and interest) of the
payment being made:
- --------------------------------------------------------------------------------
Nationwide Life Insurance Company
Address for Notices Related to c/o The Bank of New York
Payments P.O. Box 19266
Attn: P & I Department
Newark, NJ 07195
With a copy to:
Nationwide Life Insurance Company
Attn: Investment Accounting
One Nationwide Plaza (1-32-05)
Columbus, Ohio 43215-2220
- --------------------------------------------------------------------------------
Address for All other Notices Nationwide Life Insurance Company
Attn: Corporate Fixed-Income Securities
One Nationwide Plaza (1-33-07)
Columbus, Ohio 43215-2220
================================================================================
-6-
================================================================================
Purchaser Name NATIONWIDE LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Signature Block Format NATIONWIDE LIFE INSURANCE COMPANY
By:______________________________
Name:
Title:
- --------------------------------------------------------------------------------
The Bank of New York
Instructions re Delivery of Notes One Wall Street
3rd Floor - Window A
New York, NY 10286
F/A/O Nationwide Life Insurance Company
Account No. 267829
- --------------------------------------------------------------------------------
Tax Identification Number 31-4156830
================================================================================
-7-
================================================================================
Purchaser Name NATIONWIDE LIFE AND ANNUITY INSURANCE
COMPANY
- --------------------------------------------------------------------------------
Name in Which Note is Registered NATIONWIDE LIFE AND ANNUITY INSURANCE
COMPANY
- --------------------------------------------------------------------------------
Note Registration Number; R-5; $2,000,000
Principal Amount
- --------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information The Bank of New York
ABA #021-000-018
BNF: IOC566
F/A/O Nationwide Life and Annuity
Insurance Company
Attn: P & I Department
Re: (see "Accompanying Information" below)
- --------------------------------------------------------------------------------
Accompanying Information Name of Company: Barnes Group Inc.
Description of
Security: 8.59% Senior Notes
due November 21, 2008
Security Number: 067806 D@ 5
Due Date and Application (as among
principal, premium and interest) of the
payment being made:
- --------------------------------------------------------------------------------
Nationwide Life and Annuity Insurance
Company
Address for Notices Related to c/o The Bank of New York
Payments P.O. Box 19266
Attn: P & I Department
Newark, NJ 07195
With a copy to:
Nationwide Life and Annuity Insurance
Company
Attn: Investment Accounting
One Nationwide Plaza (1-32-05)
Columbus, Ohio 43215-2220
- --------------------------------------------------------------------------------
Address for All other Notices Nationwide Life and Annuity Insurance
Company
Attn: Corporate Fixed-Income Securities
One Nationwide Plaza (1-33-07)
Columbus, Ohio 43215-2220
- --------------------------------------------------------------------------------
-8-
================================================================================
Purchase Name NATIONWIDE LIFE AND ANNUITY INSURANCE
COMPANY
- --------------------------------------------------------------------------------
Signature Block Format NATIONWIDE LIFE AND ANNUITY INSURANCE
COMPANY
By:______________________________
Name:
Title:
- --------------------------------------------------------------------------------
The Bank of New York
Instructions re Delivery of Notes One Wall Street
3rd Floor - Window A
New York, NY 10286
F/A/O Nationwide Life and Annuity Insurance
Company Account No. 267961
- --------------------------------------------------------------------------------
Tax Identification Number 31-1000740
================================================================================
-9-
================================================================================
Purchaser Name NATIONWIDE INDEMNITY COMPANY
- --------------------------------------------------------------------------------
Name in Which Note is Registered NATIONWIDE INDEMNITY COMPANY
- --------------------------------------------------------------------------------
Note Registration Number; R-6; $4,000,000
Principal Amount
- --------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information
The Bank of New York
ABA #021-000-018
BNF: IOC566
F/A/O Nationwide Indemnity Company
Attn: P & I Department
Re: (see "Accompanying Information" below)
- --------------------------------------------------------------------------------
Accompanying Information Name of Company: Barnes Group Inc.
Description of
Security: 8.59% Senior Notes
due November 21, 2008
Security Number: 067806 D@ 5
Due Date and Application (as among
principal, premium and interest) of the
payment being made:
- --------------------------------------------------------------------------------
Nationwide Indemnity Company
Address for Notices Related to c/o The Bank of New York
Payments P.O. Box 19266
Attn: P & I Department
Newark, NJ 07195
With a copy to:
Nationwide Indemnity Company
Attn: Investment Accounting
One Nationwide Plaza (1-32-05)
Columbus, Ohio 43215-2220
- --------------------------------------------------------------------------------
Address for All other Notices Nationwide Indemnity Company
Attn: Corporate Fixed-Income Securities
One Nationwide Plaza (1-33-07)
Columbus, Ohio 43215-2220
================================================================================
-10-
================================================================================
Purchase Name NATIONWIDE INDEMNITY COMPANY
- --------------------------------------------------------------------------------
Signature Block Format NATIONWIDE INDEMNITY COMPANY
By:______________________________
Name:
Title:
- --------------------------------------------------------------------------------
The Bank of New York
Instructions re Delivery of Notes One Wall Street
3rd Floor - Window A
New York, NY 10286
F/A/O Nationwide Indemnity Company
Account No. 264234
- --------------------------------------------------------------------------------
Tax Identification Number 31-1399201
================================================================================
-11-
====================================================================================================================
Purchaser Name THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
- --------------------------------------------------------------------------------------------------------------------
Name in Which Notes are Registered THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
- --------------------------------------------------------------------------------------------------------------------
Note Registration Number; Principal R-7; $35,000,000
Amount
- --------------------------------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information
Bank: Bank of New York
New York, NY
ABA No.: 021-000-018
For the Account of: The Prudential Insurance Company of
America
Account No.: 890-0304-391
Account Name: Prudential Managed Account
- --------------------------------------------------------------------------------------------------------------------
Accompanying Information Name of Issuers: Barnes Group Inc.
Description of
Security: Senior Note due November 21, 2008
Security Number: 067806 D@ 5
Due Date and Application (as among principal, and interest) of the
payment being made:
- --------------------------------------------------------------------------------------------------------------------
Address for Notices Related to The Prudential Insurance Company of America
Payments c/o Prudential Capital Group
Trade Management Group
Gateway Center Four, 7th Floor
Newark, NJ 07102
Fax: (973) 802-9425
- --------------------------------------------------------------------------------------------------------------------
Address for all other Notices The Prudential Insurance Company of America
(including copies of all Notices c/o Prudential Capital Group
Related to Payments 1114 Avenue of the Americas, 30th Floor
New York, NY 10036
Fax: (212) 626-2077
- --------------------------------------------------------------------------------------------------------------------
Signature Block Format THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By_______________________
Name:
Title:
- --------------------------------------------------------------------------------------------------------------------
Instructions re Delivery of Note Philip Corsello
Assistant General Counsel
The Prudential Insurance Company of America
1114 Avenue of the Americas, 30th Floor
New York, NY 10036
- --------------------------------------------------------------------------------------------------------------------
Tax Identification Number 22-1211670
====================================================================================================================
EXHIBIT B
[FORM OF SENIOR NOTE]
BARNES GROUP INC.
8.59% Senior Note Due November 21, 2008
No. R-___ [Date]
$_______ PPN:
FOR VALUE RECEIVED, the undersigned, BARNES GROUP INC. (herein called the
"COMPANY"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to ________________________, or registered
assigns, the principal sum of ___________________ DOLLARS ($________) on
November 21, 2008 with interest (computed on the basis of a 360-day year of
twelve 30-day months) (a) on the unpaid balance thereof at the rate of 8.59% per
annum from the date hereof, payable semiannually on May 21 and November 21 of
each year, commencing with the later of May 21, 2001 and the payment date next
succeeding the date hereof, until the principal hereof shall have become due and
payable, and (b) to the extent permitted by law on any overdue payment
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Makewhole Price (as defined in the Note Agreement
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 10.59% or (ii) the rate announced publicly by
Citibank, N.A. in New York, New York from time to time as its prime rate.
Payments of principal of, interest on and any Makewhole Price with respect
to this Note are to be made in lawful money of the United States of America at
the address shown in the register maintained by the Company for such purpose or
at such other place as the Company shall have designated by written notice to
the holder of this Note as provided in the Note Agreement referred to below.
This Note is one of a series of Senior Notes (herein called the "NOTES")
issued pursuant to that certain Note Agreement, dated as of November 21, 2000
(as from time to time amended, the "NOTE AGREEMENT"), between the Company and
the Purchasers named therein and is entitled to the benefits thereof. Each
holder of this Notes will be deemed, by its acceptance hereof, (i) to have
agreed to the confidentiality provisions set forth in Section 11.10 of the Note
Agreement and (ii) to have made the representation set forth in Section 1.3(b)
of the Note Agreement.
This Note is a registered Note and, as provided in the Note Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for a like principal amount will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of transfer, the
Company may treat the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other purposes, and the
Company will not be affected by any notice to the contrary.
The Company will make required prepayments of principal on the dates and in
the amounts specified in the Note Agreement. This Note is also subject to
optional prepayment, in whole or from time to time in part, at the times and on
the terms specified in the Note Agreement, but not otherwise.
If an Event of Default, as defined in the Note Agreement, occurs and is
continuing, the principal of this Note may be declared or otherwise become due
and payable in the manner, at the price (including any applicable Makewhole
Price) and with the effect provided in the Note Agreement.
THIS NOTE AND THE NOTE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CONNECTICUT, EXCLUDING
CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
BARNES GROUP INC.
By:_________________________
Name:
Title:
Exhibit C
[FORM OF OPINION OF COMPANY]
(Letterhead of Barnes Group Inc.)
November 21, 2000
To: Each Addressee listed on Schedule A hereto
Re: Note Agreement (the "Note Agreement") dated as of November 21, 2000
among Barnes Group Inc., a Delaware corporation (the "Company"), and the
Addressees listed on Schedule A attached hereto ( the "Purchasers"). Unless
otherwise defined herein, capitalized terms used herein have the meaning set
forth in the Note Agreement.
Ladies and Gentlemen:
As General Counsel of the Company, I am familiar with the negotiation,
execution and delivery of the Note Agreement. This opinion is delivered to you
pursuant to Section 3.1 of the Note Agreement.
In connection with this opinion, I have examined a copy of the Note
Agreement, including the Schedules thereto, and the Notes, in each case in
execution form. I have also examined originals or photostatic or certified
copies of such corporate records, certificates of officers of the Company and of
public officials and such agreements, documents and instruments, and made such
investigations of law, as I have deemed relevant and necessary as the basis for
the opinion hereinafter expressed.
I have assumed, without verification, the authenticity of any document or
instrument submitted to me as original, the conformity to the original of any
document or instrument submitted to me as a copy, the legal capacity of
signatories other than the Company and the genuineness of all signatures on such
documents or instruments, other than the signatures of the Company. I have also
assumed without investigation that all documents executed by a party other than
the Company are duly and validly executed and delivered by such party, are the
legal, valid and binding obligations of such party, and are enforceable against
such party in accordance with their respective terms.
I am licensed to practice law in the State of Connecticut, and I express no
opinion concerning (a) the laws of any jurisdiction other than the State of
Connecticut, the General Corporation Law of the State of Delaware and the
federal law of the United
States, (b) choice of law matters, or (c) limitations imposed by public policy
and equity principles.
Based upon and subject to the foregoing, and the other assumptions and
qualifications set forth herein, I am of the opinion that:
1. The Company is a corporation, duly incorporated, validly existing and
in good standing under the laws of the State of Delaware, has the corporate
power and the corporate authority to execute and perform the Note Agreement and
to issue the Notes and has the full corporate power and the corporate authority
to conduct the activities in which it is now engaged and is duly licensed or
qualified and is in good standing as a foreign corporation in each jurisdiction
in which the character of the Properties owned or leased by it or the nature of
the business transacted by it makes such licensing or qualification necessary,
except where the failure to be so licensed or qualified would not have a
material adverse effect on the business or financial condition of the Company.
2. Each Subsidiary is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation and is duly
licensed or qualified and is in good standing in each jurisdiction in which the
character of the Properties owned or leased by it or the nature of the business
transacted by it makes such licensing or qualification necessary, except where
the failure to be so licensed or qualified or in good standing would not have a
material adverse effect on the business or financial condition of the Company,
and all of the issued and outstanding shares of capital stock of each such
Subsidiary have been duly issued, are fully paid and non-assessable and are
owned by the Company, by one or more Subsidiaries, or by the Company and one or
more Subsidiaries.
3. The issuance and sale of the Notes and the execution, delivery and
performance by the Company of the Note Agreement do 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 (i) any indenture, mortgage, deed of
trust, loan, purchase or credit agreement, lease or the Articles of
Incorporation or the By-laws of the Company or any agreement or other instrument
known to such counsel to which the Company is a party or by which the Company or
any of its Properties may be bound or affected, (ii) any order, judgment, decree
or ruling of any court, arbitration board or governmental authority applicable
to the Company, or (iii) any statute or other rule or regulation of any
governmental authority applicable to the Company, except where such conflict or
breach or default would not have a material adverse effect on the business or
financial condition of the Company.
4. There are no proceedings pending or, to the knowledge of such counsel,
threatened against or affecting the Company or any Subsidiary in any court or
before any governmental authority questioning the validity of the Note Agreement
or the Notes.
5. The Note Agreement has been duly authorized by all necessary corporate
action on the part of the Company, has been duly executed and delivered by the
Company and constitutes the legal, valid and binding contract of the Company
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting creditors' rights generally, and
general principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
6. The Notes have been duly authorized by all necessary corporate action
on the part of the Company, have been duly executed and delivered by the Company
and constitute the legal, valid and binding obligations of the Company
enforceable in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting creditors' rights generally, and
general principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
7. No approval, consent or withholding of objection on the part of, or
filing, registration or qualification with, any governmental authority, is
necessary in connection with the execution, delivery or performance by the
Company of the Note Agreement or the Notes.
8. The issuance of the Notes and the use of the proceeds of the sale of
the Notes in accordance with the provisions of and contemplated by the Note
Agreement do not violate or conflict with Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
9. Neither the Company nor any Subsidiary is an "investment company", or
a company "controlled" by an "investment company", as such terms are defined in
the Investment Company Act of 1940, as amended.
10. The issuance, sale and delivery of the Notes under the circumstances
contemplated by the Note Agreement do not, under existing law, require the
registration of the Notes under the Securities Act of 1933, as amended, or the
qualification of an indenture under the Trust Indenture Act of 1939, as amended.
This opinion is rendered solely for the benefit of the Addressees hereto and
their permitted successors, assigns and transferees, and may not be relied upon
by any other person, or used, circulated, quoted or otherwise referred to,
without my prior written consent, except that Bingham Dana LLP, special counsel
to the Purchasers, may rely on this opinion for the sole purpose of rendering
their opinion to be rendered pursuant to Section 3.1 of the Note Agreement.
Very truly yours,
Schedule A
The Prudential Insurance Company of America
1114 Avenue of the Americas, 30th Floor
New York, NY 10036
Allstate Life Insurance Company
3075 Sanders Road
Northbrook, IL 60062-7127
American Heritage Life Insurance Company
c/o Allstate Life Insurance Company
3075 Sanders Road
Northbrook, IL 60062-7127
Nationwide Life Insurance Company
One Nationwide Plaza
Columbus, OH 43215
Nationwide Life and Annuity Insurance Company
One Nationwide Plaza
Columbus, OH 43215
Nationwide Indemnity Company
One Nationwide Plaza
Columbus, OH 43215
EXHIBIT D
FORM OF OPINION OF SPECIAL COUNSEL TO THE PURCHASERS
[Letterhead of Bingham Dana LLP]
November 21, 2000
To each of the Persons listed
on Annex 1 attached hereto
Re: Barnes Group Inc.
$60,000,000 8.59% Senior Notes due November 21, 2008
Ladies and Gentlemen:
We have acted as special counsel for the persons set forth on Annex 1
attached hereto (collectively, the "Purchasers") in connection with (i) the Note
Agreement (the "Note Agreement"), dated as of November 21, 2000, between Barnes
Group Inc., a Delaware corporation (the "Issuer"), and each of the Purchasers
and (ii) the transactions contemplated thereby. Capitalized terms used herein
and not otherwise defined shall have the respective meanings given such terms in
the Note Agreement.
Our representation of the Purchasers has been as special counsel for the
purposes stated above.
As to all matters of fact (including factual conclusions and
characterizations and descriptions of purpose, intention or other state of
mind), we have relied, with your permission, entirely upon (a) the
representations and warranties of the Issuer and the Purchasers set forth in the
Note Agreement and (b) certificates of certain officers of the Issuer delivered
in connection with the closing, and have assumed, without independent inquiry,
the accuracy of those representations, warranties, and certificates.
In connection with this opinion, we have examined originals or copies of
the documents identified below,
(i) the Note Agreement;
(ii) the 8.59% Senior Notes due November 21, 2008, dated the date
hereof, in the form of Exhibit B to the Note Agreement, issued by the
Issuer and registered in the names, in the principal amounts and with the
registration numbers set forth in Exhibit A to the Note Agreement
(collectively, the "Notes");
(iii) a copy of the constitutive documents of the Issuer certified by
the Secretary of the Issuer as of the date hereof as being true, complete
and correct and in full force and effect;
(iv) a certificate of the Secretary of the Issuer, dated the date
hereof, certifying that the copies attached thereto of the Issuer's
articles of incorporation and bylaws and those certain resolutions passed
by the Board of Directors of the Issuer are true, complete and correct
copies thereof and are in full force and effect, and as to the incumbency
and specimen signatures of certain officers (the articles of incorporation
of the Issuer and such bylaws are referred to herein as the "Issuer's
Governing Documents");
(v) a certificate of an officer of the Issuer, dated the date
hereof, with respect to the matters set forth therein;
(vi) a letter, dated the date hereof, addressed to us from Fleet
Securities Inc. describing the manner of the offering of the Notes (the
"Offeree Letter"); and
(vii) the opinion of Signe S. Gates, Esq., general counsel of the
Issuer, dated the date hereof and delivered to you pursuant to Section 3.1
of the Note Agreement.
In addition to the documents identified above, we have examined such
corporate and public records and agreements, instruments, certificates and other
documents as we have deemed necessary or appropriate for the purposes of this
opinion. Based on such investigation as we have deemed appropriate, the opinion
referred to in clause (vii) above is satisfactory in form and scope to us, and,
in our opinion, you are justified in relying thereon.
2
We have assumed the genuineness of all signatures, the conformity to the
originals of all documents reviewed by us as copies, the authenticity and
completeness of all original documents reviewed by us in original or copy form,
the legal competence of each individual executing any document and that each
Person executing the Note Agreement or the Notes validly exists, has the power
and authority to enter into and perform its obligations thereunder, and is
qualified to do business and is in good standing under the law of its
jurisdiction of incorporation and each jurisdiction where such qualification is
required generally or is necessary in order for such party to enforce its rights
under such documents, and that such documents have been duly authorized,
executed and delivered by, and, as to Persons other than the Issuer, are binding
upon and enforceable against, such Persons. In addition, we have relied, to the
extent we deem necessary and proper, upon the Offeree Letter.
For purposes of this opinion, we have made such examination of law as we
have deemed necessary. This opinion is limited solely to the internal
substantive laws of the State of Connecticut as applied by courts located in the
State of Connecticut without regard to choice of law and the federal laws of the
United States of America, and we express no opinion as to the laws of any other
jurisdiction. In particular, our opinion in paragraph 3 below is based solely
on a review of the Issuer's Governing Documents and not on any analysis of the
law of the jurisdiction of organization of the Issuer and its effect on the
interpretation of the Issuer's Governing Documents. In addition, we note that
the Note Agreement and the Notes contain provisions stating that they are to be
governed by the laws of the State of Connecticut (a "Chosen-Law Provision"). No
opinion is given herein as to any Chosen-Law Provision, or otherwise as to the
choice of law or internal substantive rules of law that any court or other
tribunal may apply to the transactions contemplated by the Note Agreement and
the Notes. Except as set forth in paragraph 4 below, we express no opinions as
to any securities or "blue sky" laws of any jurisdiction.
Our opinion is further subject to the following exceptions, qualifications
and assumptions, all of which we understand to be acceptable to you:
3
(a) The enforcement of any obligations of any person or entity under
the Note Agreement or the Notes or otherwise may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws and rules of law
affecting the enforcement generally of creditors' rights and remedies
(including such as may deny giving effect to waivers of debtors' or
guarantors' rights); and we express no opinion as to the status under any
fraudulent conveyance laws or fraudulent transfer laws of any of the
obligations of any person or entity, whether under the Note Agreement or
the Notes or otherwise.
(b) We express no opinion as to the availability of any specific or
equitable relief of any kind.
(c) The enforcement of any of your rights may in all cases be subject
to an implied duty of good faith and fair dealing and to general principles
of equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity).
(d) We express no opinion as to the enforceability of any particular
provision of the Note Agreement relating to (i) waivers of any applicable
defenses, setoffs, recoupments, or counterclaims, (ii) waivers or
variations of legal provisions or rights which are not capable of waiver or
variation under applicable law, or (iii) exculpation or exoneration
clauses, indemnity clauses and clauses relating to releases or waivers of
unmatured claims or rights.
(e) Our opinion in paragraph 2 below is based solely on a review of
generally applicable laws of the State of Connecticut and the United States
of America and not on any search with respect to, or review of, any orders,
decrees, judgments or other determinations specifically applicable to the
Issuer.
(f) This opinion speaks as of the date hereof and does not address
any additional or changed facts, or changes in law, of which we may become
aware after the date hereof, and we assume no responsibility to inform you
of additional or changed facts, or changes in law, of which we may become
aware.
4
Based upon the foregoing, and subject to the limitations and qualifications
set forth below, we are of the opinion that:
1. Each of the Note Agreement and the Notes constitutes a legal, valid
and binding obligation of the Issuer, enforceable against the Issuer in
accordance with its terms.
2. No consent, approval or authorization of, or designation, declaration,
filing, registration, qualification or recordation with, any governmental
authority is required under the laws of the State of Connecticut or the United
States of America in connection with the execution and delivery by the Issuer
of the Note Agreement or the Notes, or the offer, issue, sale or delivery of the
Notes by the Issuer under the circumstances contemplated by the Note Agreement.
3. The execution and delivery of each of the Note Agreement and the Notes
by the Issuer, and the consummation of the transactions contemplated thereby and
compliance by the Issuer with the provisions thereof will not constitute a
violation by the Issuer of the provisions of the Issuer's Governing Documents.
4. It is not necessary in connection with the offering, issuance, sale
and delivery of the Notes delivered to you today under the circumstances
contemplated by the Note Agreement to register the Notes under the Securities
Act of 1933, as amended, or to qualify an indenture in respect of the issuance
of the Notes under the Trust Indenture Act of 1939, as amended.
This opinion is delivered solely to you and for your benefit in connection
with the Note Agreement and may not be relied upon by you for any other purpose
or relied upon by any other person or entity (other than future holders of Notes
acquired in accordance with the terms of the Note Agreement) for any reason
without our prior written consent.
Very truly yours,
BINGHAM DANA LLP
5
Annex 1
The Prudential Insurance Company of America
1114 Avenue of the Americas, 30th Floor
New York, NY 10036
Allstate Life Insurance Company
3075 Sanders Road
Northbrook, IL 60062-7127
American Heritage Life Insurance Company
c/o Allstate Life Insurance Company
3075 Sanders Road
Northbrook, IL 60062-7127
Nationwide Life Insurance Company
One Nationwide Plaza
Columbus, OH 43215
Nationwide Life and Annuity Insurance Company
One Nationwide Plaza
Columbus, OH 43215
Nationwide Indemnity Company
One Nationwide Plaza
Columbus, OH 43215
Annex 1-1